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2006 Supreme(SC) 1055
Supreme Court Of India
A.R.LAKSHMANAN,TARUN CHATTERJEE
Ramchandra Mahadev Jagpat - Appellant
Versus
Chief Executive Officer - Respondent
I.A. Nos. 2-5 and 8 in Special Leave Petition © No. 10281 of 2006 and I.A. No. 1 in SLP © No. ….. Of 2006 (CC 5527)
Decided On : 11/07/2006
G.E. Vahanvati, S.G., Arun Jaitley, Ravindra Srivastava, Dushyant Dave, Harish N. Salve, L. N. Rao, U.U. Lalit, Dr. A. M. Singhvi, Jaideep Gupta, Sr. Advocates P. H. Parekh, Sumit Goel, Shashikant G. Surana,
Shekhar Naphade, Lalit Jain, Ashok K. Mahajan, Ms. Malvika Trivedi, Shekhar Kumar, Prateek Jalan, Ms. Meenakshi Grover, Goodwill Indeevar, Sanjay V. Kharde, Sunil Kumar Verma, Mrs. B. Sunita Rao, Arvind Varma, Ms. Nemika Jha, Amit Bhandari and Ms. Indra Sawhney, Advocates with them, for the Appearing Parties.
A necessary party is one whose presence is essential for the just and effective determination of a cause of action.
Headnote:
SLUM REHABILITATION SCHEME - APPOINTMENT OF DEVELOPER - TERMINATION OF AGREEMENT - ISSUANCE OF LETTER OF INTENT - NECESSARY PARTY - RECALL OF ORDER - JURISDICTION - PROCEDURE FOR SUBMISSION, PROCESSING AND APPROVAL OF SLUM REHABILITATION SCHEME - SRA GUIDELINES - CONDITIONS TO BE FULFILLED BY SLUM DWELLERS/SOCIETY/DEVELOPER - VERIFICATION OF RESOLUTION PASSED BY GENERAL BODY OF SLUM DWELLERS - VERIFICATION OF FINANCIAL CAPACITY OF DEVELOPER - DIRECTIONS TO SRA TO CONSIDER APPLICATIONS OF DEVELOPERS AND PASS APPROPRIATE ORDERS - LARGER INTEREST OF SLUM DWELLERS.
Fact of the Case:
The applicant, Sigtia Construction Company Private Limited (Sigtia), was appointed as a developer by the Vile Parle Prem Nagar Co-operative Housing Society Limited (Society) for a slum rehabilitation scheme. Sigtia submitted a proposal for redevelopment of the slum, obtained consent affidavits from slum dwellers, and filed individual agreements and consent affidavits in favor of Sigtia before the SRA. However, a writ petition was filed challenging the appointment of Sigtia as the developer, alleging that Sigtia lacked technical expertise and financial capability. The High Court dismissed the writ petition and directed the SRA to put additional conditions on Sigtia. During the pendency of the writ petition, the Society purported to terminate the development agreement with Sigtia and appointed a new developer, Keya Developers. Sigtia wrote to the SRA stating that the termination was illegal and that Sigtia was keenly interested in developing the slum. Sigtia also deposited Rs. 2.5 crores with the SRA as an interest-free deposit. The SRA did not accept the deposit, stating that there was no specific order of the High Court to accept Rs. 2.5 crores from Sigtia. The Principal Secretary, Housing Department, issued directions to the SRA to issue a Letter of Intent (LOI) in favor of Sigtia. However, the SRA did not comply with the directions. Subsequently, a writ petition was filed before the High Court seeking a direction to the SRA to issue an LOI in favor of Keya Developers. Sigtia was not made a party to the writ petition. The High Court directed the SRA to call the parties and dispose of the application of the Society according to law. Sigtia wrote to the SRA enclosing a cheque for Rs. 2.5 crores towards the interest-free deposit, but the SRA refused to accept the cheque. Sigtia filed a special leave petition before the Supreme Court against the High Court order. The Supreme Court passed an order directing the SRA to issue an LOI in favor of Keya Developers within two weeks. Sigtia filed an application for impleadment and to recall the order dated 27.06.2006 passed by the Supreme Court.
Finding of the Court:
The Supreme Court held that Sigtia was a necessary and proper party to the special leave petition filed by Ramchandra Mahadev Jagpat and Ors. The Court observed that the order dated 27.06.2006 was passed on the basis of representations made by all the respective senior counsel appearing at that time and that the order was not obtained by playing fraud on the Court. The Court further held that the SRA was required to consider the applications of both Sigtia and Keya Developers and pass appropriate orders in accordance with the Maharashtra Slum Areas Improvement, Clearance and Re-development Act, 1971 and the guidelines and conditions prescribed by the SRA. The Court directed the SRA to consider whether the guidelines and other conditions were fulfilled by the slum dwellers/society/developers and to issue a speaking order within 3 months.
Issues: 1. Whether Sigtia was a necessary party to the special leave petition filed by Ramchandra Mahadev Jagpat and Ors.? 2. Whether the order dated 27.06.2006 passed by the Supreme Court was obtained by playing fraud on the Court? 3. Whether the SRA was required to consider the applications of both Sigtia and Keya Developers and pass appropriate orders? 4. Whether the SRA was required to consider whether the guidelines and other conditions were fulfilled by the slum dwellers/society/developers?
Ratio Decidendi: 1. A necessary party is one whose presence is essential for the just and effective determination of a cause of action. In the present case, Sigtia was directly affected by the order appointing Keya Developers as the developer. Therefore, Sigtia was a necessary party to the special leave petition. 2. The Supreme Court held that the order dated 27.06.2006 was not obtained by playing fraud on the Court. The Court observed that the order was passed on the basis of representations made by all the respective senior counsel appearing at that time. 3. The Supreme Court held that the SRA was required to consider the applications of both Sigtia and Keya Developers and pass appropriate orders in accordance with the Maharashtra Slum Areas Improvement, Clearance and Re-development Act, 1971 and the guidelines and conditions prescribed by the SRA. 4. The Supreme Court held that the SRA was required to consider whether the guidelines and other conditions were fulfilled by the slum dwellers/society/developers.
Final Decision: The Supreme Court allowed the application filed by Sigtia and recalled its order dated 27.06.2006. The Court directed the SRA to consider the applications of both Sigtia and Keya Developers and pass appropriate orders in accordance with the Maharashtra Slum Areas Improvement, Clearance and Re-development Act, 1971 and the guidelines and conditions prescribed by the SRA. The Court also directed the SRA to consider whether the guidelines and other conditions were fulfilled by the slum dwellers/society/developers and to issue a speaking order within 3 months.
Judgement
DR. A. R. LAKSHMANAN, J. :-I.A. No.1 for impleadment is ordered on 10.07.2006. M/s. Sigtia Construction Company Private Limited was impleaded as respondent No. 5 in Special Leave Petition No. 10281 of 2006.
2. I.A. No. 3 of 2006 was filed by the applicant-M/s. Sigtia Construction Company Private Limited to recall the order dated 27.06.2006 passed by this Court in Special Leave Petition No. 10281 of 2006. The order passed by this Court in Special Leave Petition No. 10281/2006, dated 27.06.2006 reads thus :
"O R D E R
Heard Mr.L.N.Rao, senior advocate for the petitioners. Mr. Sanjay V. Khande, Mr.B.S.Rao and Ms. Indra Sawhney, advocates accepts notice on behalf of respondent Nos.1 to 3. We also heard their submissions.
By a prayer for interim relief, the petitioners seek direction directing the Slum Rehabilitation Authority to issue a Letter of Intent in favour of M/s. Keya Developers and Construction Company (P) Ltd. For undertaking re-development work in the slum situated at Irla Tank, S.V. Road, Vile Parle (West) Mumbai.
The grievance of the petitioners is that despite no legal impediment, the Slum Rehabilitation Authority was not issuing the Letter of Intent in favour of M/s. Keya Developers and Construction Company (P) Ltd. Despite a request made by the Society. According to them, it was merely a case of replacement of previous developers M/s. Sigtia Construction Company Pvt. Ltd. Who had not even started the project even after almost eight years and whose agreement with the Society had come to an end by efflux of time.
Mr. Sunil K.Varma, advocate, appears for the Chief Executive Officer, Slum Rehabilitation Authority, Bandra (E), Mumbai (respondent No.1). The learned counsel submits that the Slum Rehabilitation Authority will issue proper orders within two weeks from today. In view of the submission made by the learned counsel for respondent No.1, we direct the Slum Rehabilitation Authority to issue the Letter of Intent in favour of M/s. Keya Developers and Construction Company (P) Ltd. Which is also represented by Mr. Jaideep Gupta, learned senior counsel and the Society is represented by Mr. P.K. Ghosh, learned senior counsel.
The Special Leave Petition is disposed of accordingly."
3. The reasons for recalling the order as stated in I.A.No. 3 of 2006 are as under :-
The applicant Sigtia Construction Company Private Limited (in short "Sigtia") was appointed as developer by the Vile Parle Prem Nagar Co-operative Housing Society Limited (hereinafter called "Society" the respondent No.2). The applicant who is directly affected by an order appointing M/s. Keya Developers and Construction Private Limited (in short "Keya") as Developer was not made a party respondent in Writ Petition No. 1277 of 2006 and also in the Special Leave Petition No. 10281 of 2006 although the applicant was a party in the previous proceedings, namely, Writ Petition No. 988 of 2004 which was filed before the High Court and the Special Leave Petition No. 11318 of 2005 and 19848 of 2005. According to the applicant, the respondents in the Special Leave Petition No. 10281 are not contesting respondents and particularly respondent No.1-the Slum Rehabilitation Authority (in short "SRA") had taken a stand before this Court in earlier round in Special Leave Petition No. 19848 of 2005 by way of an affidavit that they will abide by any orders which may be passed by this Court. Nobody appeared for Bombay Municipal Corporation on 27.06.2006. Therefore, there was nobody present who could have opposed the passing of the order. The applicant, against whom allegations were made, was not made a party to the special leave petition. It was the duty of the petitioner in the special leave petition, to make the applicant-Sigtia, who is directly affected, a party to the special leave petition. However, instead of doing that this Court was given the impression that all the affected parties were before this Court.
4. Mr. Arun Jaitley, learned senior counsel appearing for the app
