1. Dispute over acquisition of land under Section 14 of the Slum Act for a slum rehabilitation scheme after the owner transferred title to another developer. (Para 5 , 6 , 8 , 11 , 12 , 14 , 17 , 19 , 20 )
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2025 Supreme(SC) 1988
SUPREME COURT OF INDIA
J.B. PARDIWALA, K.V. VISWANATHAN, JJ.
Jyoti Builders – Appellant
Versus
Chief Executive Officer & Ors. – Respondent
Civil Appeal No. 14512 of 2025 (arising out of S.L.P. (Civil) No. 3405 of 2025)
Decided On : 02-12-2025
Advocates appeared:
For the Petitioner(s): Mr. Shyam Divan, Sr. Adv. Mr. Kavin Gulati, Sr. Adv. Mr. Anish Agarwal, AOR Mr. Yogesh Adhia, Adv. Mr. Pratik Chakma, Adv. Ms. Natasha Bagga, Adv. Mr. Abhinav Maurya, Adv. Ms. Pooja Kane, Adv. Mr. Jitendra Jain, Adv. Mr. Yashvardhan Singh, Adv.
For the Respondent(s): Ms. Pallavi Sharma, AOR Mr. Vikas Singh, Sr. Adv. Mr. Vinay Navare, Sr. Adv. Mr. Shubhranshu Padhi, Adv. Mr. Bharat Jain, Adv. Mr. Purvesh Buttan, Adv. Mr. Karan Batura, AOR Mr. Prateek Narwar, Adv. Mr. Nikhil Vijay Adkine, Adv. Ms. Tuhina Kakkar, Adv. Mr. Himanshu Buttan, Adv. Ms. Prachi Bhutani, Adv. Mr. Abhikalp Pratap Singh, AOR Mr. Amol Nirmalkumar Suryawanshi, AOR Mr. B. Dhananjay, Adv. Ms. Srishty Pandey, Adv. Mr. K. Parameshwar, Sr. Adv. Mr. Palash Singhai, AOR Mr. Harshal Sareen, Adv. Mr. Pragya Prakash Upadhyaya, Adv.
For the Petitioner(s): Mr. Shyam Divan, Sr. Adv. Mr. Kavin Gulati, Sr. Adv. Mr. Anish Agarwal, AOR Mr. Yogesh Adhia, Adv. Mr. Pratik Chakma, Adv. Ms. Natasha Bagga, Adv. Mr. Abhinav Maurya, Adv. Ms. Pooja Kane, Adv. Mr. Jitendra Jain, Adv. Mr. Yashvardhan Singh, Adv.
For the Respondent(s): Ms. Pallavi Sharma, AOR Mr. Vikas Singh, Sr. Adv. Mr. Vinay Navare, Sr. Adv. Mr. Shubhranshu Padhi, Adv. Mr. Bharat Jain, Adv. Mr. Purvesh Buttan, Adv. Mr. Karan Batura, AOR Mr. Prateek Narwar, Adv. Mr. Nikhil Vijay Adkine, Adv. Ms. Tuhina Kakkar, Adv. Mr. Himanshu Buttan, Adv. Ms. Prachi Bhutani, Adv. Mr. Abhikalp Pratap Singh, AOR Mr. Amol Nirmalkumar Suryawanshi, AOR Mr. B. Dhananjay, Adv. Ms. Srishty Pandey, Adv. Mr. K. Parameshwar, Sr. Adv. Mr. Palash Singhai, AOR Mr. Harshal Sareen, Adv. Mr. Pragya Prakash Upadhyaya, Adv.
The court reaffirmed that the preferential right of a landowner over slum redevelopment schemes must be respected before any acquisition is initiated under relevant legislation.
Headnote:(A) Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 - Section 14 - Appeal against High Court dismissal - Appellant challenged orders regarding acquisition and implementation of slum scheme for Subject Property - High Court ruled delay by Appellant unreasonably hindered acquisition, awarding rights to subsequent owner. (Paras 24, 26, 70-78)
(B) Legal principles on preferential rights - Owner's preferential right to develop slum areas must be acknowledged; acquisition power cannot override this right unless extinguished. (Paras 66, 74)
Facts of the case:
The litigation concerns a Subject Property designated as slum land, with historical legal disputes and complex ownership entitlements. The High Court found that the Appellant had failed to act on rights derived from a 2015 order. (Paras 4, 21, 27)
Findings of Court:
High Court's decision reflects that acquisition is not warranted based on the Appellant's delay to assert its rights; the Subject Property was already sold to a new owner. (Paras 25-29, 76-78)
Issues: Determining the need for property acquisition by the State in light of conflicts in ownership rights established from slum rehabilitation orders. (Paras 54-55)
Ratio Decidendi: Courts recognized the necessity for the owner's preferential rights to be first addressed; acquisition claims cannot proceed without a valid scheme proposed by the owner. (Paras 72-74)
Result: Appeal dismissed; occupancy rights granted subject to fulfilling specific conditions regarding recreational ground. (Paras 79-81)
Legal Category Hierarchy
Table of Contents
2. Whether the state must acquire land based on a prior administrative order versus the owner's preferential right to develop the property. (Para 28 , 29 , 30 , 31 , 32 , 33 , 35 , 36 , 38 , 42 , 44 , 45 , 47 , 48 , 50 , 51 , 52 )
3. The owner's preferential right to develop slum areas takes primacy over acquisition; acquisition is only warranted after such right is extinguished. (Para 63 , 64 , 66 , 67 , 69 , 70 , 72 )
4. State power to acquire land under Section 14 of the Slum Act is subject to the owner's preferential right to redevelop the slum area. (Para 72 , 77 )
5. Mandamus for acquisition refused; occupation certificate granted subject to handing over designated recreational ground; construction prohibited on the subject property. (Para 71 , 73 , 74 , 76 , 77 )
6. Does a landowner have a preferential right to redevelop a slum rehabilitation area?
Yes, the owner possesses a preferential right over other stakeholders to develop a slum rehabilitation area. The SRA must invite the owner to submit a scheme, and acquisition under Section 14 cannot proceed until this preferential right is extinguished. (Para 63 , 64 , 72 , 77 )
7. When can the State Government exercise its power to acquire land under Section 14 of the Slum Act?
The State may acquire land to enable the SRA to execute improvement or redevelopment works, but this power is not independent. It must be exercised only after the owner's preferential right to develop the land has been extinguished. (Para 63 , 72 , 77 )
8. How is a developer compensated for rehabilitating slum dwellers on land they do not own?
A developer may be compensated by being granted equivalent or adequate Floor Space Index (FSI) for the sale component of the project in lieu of handing over rehabilitated persons to the SRA. (Para 41 , 75 , 77 )
9. Can a slum rehabilitation scheme be implemented on land reserved as a Recreational Ground?
While such land can be part of a scheme, the court may restrict construction to ensure the land remains an open green space for the public and slum dwellers, prohibiting any permanent construction. (Para 7 , 26 , 76 , 77 )
JUDGMENT
J.B. PARDIWALA, J. :
1. Leave granted.
2. This appeal arises from the judgment and order passed by the High Court of Judicature at Bombay (Original Ordinary Civil Jurisdiction) dated 18.12.2024 by which the writ petition filed by the appellant herein seeking to challenge the orders passed by the respondent No. 1 herein dated 03.10.2022 and respondent No. 3 herein dated 07.10.2024 respectively came to be dismissed.
3. Over and above the challenge to the two orders referred to above, the appellant also prayed before the High Court for a writ of mandamus directing the respondent Nos. 1 and 3 herein respectively to implement the order dated 26.02.2015 passed by the respondent No. 1 herein i.e. the Chief Executive Officer, Slum Rehabilitation Authority (CEO-SRA).
4. This litigation has a chequered history. The facts are quite complicated. In such circumstances, we need to give a fair idea about this litigation which, according to the High Court, was a third round of litigation between the parties.
FACTUAL MATRIX
5. The dispute in the present case relates to a parcel of land admeasuring 2,005 sq. mts. bearing CTS No.620/A/1A/1(Part) (now renumbered as CTS No. 620/A/1A/1B/1 and 620/A/1A/1B/2) of Village Malad in Taluka Borivali, Mumbai Suburban District (“Subject Property”).
6. The Subject Property was originally owned by F.E. Dinshaw Trust. Since there were hutments on the Subject Property and the same had no proper hygiene and sanitation, it was declared as a slum on 26th November, 1987 under Section 4 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 (for short “Slum Act”).
7. On 25th March, 1991, the Development Plan of 1991 for Mumbai was published, wherein the Subject Property was reserved for Recreational Ground (“RG”). The Subject Property even today is reserved for RG.
8. The respondent No. 5, i.e., Phuldai R. Yadav claims to have purchased the Subject Property from the Trust on 18th September, 1991 under a distressed sale for an amount of Rs. 1,06,000/-. Within a period of 6 months from the date of purchase, the respondent No. 5 is said to have entered into a Memorandum of Understanding (MOU) dated 9th February, 1992 (“1992 MOU”) for sale of the Subject Property with the appellant’s predecessor in interest viz. Harishree Enterprises (“Harishree Enterprises”). The respondent No. 5 is said to have granted her consent to Harishree Enterprises for redevelopment. It is the case of the appellant that such act on the part the respondent No. 5 is a pointer that she was not interested in developing the property herself or in any case, had waived her preferential right, if any, to redevelop the slum land i.e. the Subject Property way back in the year 1992.
9. Initially, Harishree Enterprises propounded the slum scheme on a larger property consisting of seven plots of land, admeasuring 19456.7 sq. mts. (“Larger Property”). The Subject Property is one of the said seven plots. The 1992 MOU was considered as grant of consent by the owner for the proposed redevelopment as per the prevailing law. The other six plots of land are either owned by the appellant’s predecessor (and thereafter the appellant) or the development rights/consent for the slum scheme had been given for the same.
10. Accordingly, a survey was undertaken to identify the number of slum dwellers. As per the survey, 34 slum dwellers were found to be residing on the Subject Property.
11. On 30th January 1997, Certified Annexure-II (“Annexure II”) was issued by the SRA in respect of the slum dwellers of the Larger Property including the Subject Property. Annexure II contains a plan on which slum scheme is to be implemented. The plan annexed to Annexure II includes the Subject Property and contain names/details of 34 slum dwellers who had their hutments on the Subject Property.
12. On 3rd September, 1997, a Letter of Intent (“1997 LOI”) was issued in favour of Harishree Enterprises for implementation of the Slum Scheme on Larger Property, which incl
