A developer cannot repudiate a permanent alternate accommodation agreement after benefiting from the surrender of vacant possession for redevelopment. Internal partnership disputes do not absolve a developer of statutory rehabilitation obligations, and occupancy status is validated by contemporaneous records rather than unilateral revocation.

JUDGMENT :

K. VINOD CHANDRAN, J.

Leave granted.

2. The appellants assert their status as ‘occupant’ and seek enforcement of the Permanent Alternate Accommodation Agreement (PAAA) dated 17.10.2019 produced as Annexure P4.

3. The respondent is the owner-developer of the building who obtained consent and possession from various occupants of the building; tenants continued for long in the cessed building, found unfit for human habitation by the local authority for the purpose of demolition and reconstruction/redevelopment on the assurance that all the occupants will be provided alternate premises for occupation in the reconstructed building. The 1st respondent had proceeded for such redevelopment under the Maharashtra Housing and Area Development Act, 1976 (MHAD Act) on the basis of a No Objection Certificate (NOC) issued by the Maharashtra Housing and Area Development Authority (MHADA). The MHADA has overall supervision and is the regulatory authority under the MHAD Act and Development Control Regulations for Greater Bombay, 1991 (DC Regulations) inter alia ensuring reconstruction/redevelopment of cessed buildings and also securing alternate accommodation to the occupants of the old building; who vacated the premises and gave consent for such redevelopment, as per the agreements entered into.

4. The 1st appellant was an occupant with another, Ms. Gool Peshotan Unwalla, who died leaving the appellants together, as sole legal heirs entitled to succeed to her estate; the estate being the occupancy status in Room No.5 of the Third Floor of the old building. The MHADA after completion of the redevelopment issued two orders dated 28.05.2025 & 27.06.2025 and a Show Cause Notice (SCN) dated 10.07.2025; which were challenged in a writ petition before the High Court of Bombay. The first two impugned orders directed the 1st respondent to execute the PAAA in favour of the appellants as per the certificate of probate dated 30.01.2024 and register it as specified in PAAA and handover possession of the promised premises to the appellants. The SCN was against noncompliance of the earlier orders, threatening action under Section 91A of the MHAD Act.

5. A Division Bench of the High Court in the writ petition filed by the developer found that there was complete non-application of mind by the MHADA since the original proposal was to build 34 floors now confined to 30 floors. The developer’s contention was that since the height was confined to 30 floors, the fungible Floor Space Index (FSI) was not utilized and hence the area available for reallotment would be lesser than that agreed to be accorded as a benefit to the different tenants who were in occupation earlier. It was noticed that the developer offered two flats with carpet area of 2108 sq. ft. (1054 sq. ft. each) comparable to the area occupied prior to redevelopment, which according to the appellants fell short of the agreed upon area in the PAAA. It was found that the PAAA was a private arrangement, not amenable to writ jurisdiction; an appropriate remedy being available only before the civil court. The concession made by the 1st respondent that two flats would be kept encumbrance free till appropriate orders are passed in a civil suit, the writ petition stood disposed of. The Division Bench finding non-application of mind injuncted the MHADA from taking any further coercive steps as per the impugn