The main legal point established in the judgment is that the collective will of the majority of occupants in support of a redevelopment scheme can outweigh the dissent of a few, and in the absence of mala fides or capricious exercise of power by regulatory authorities, the court may not interfere in the exercise of its writ jurisdiction.

ORAL JUDGMENT: (DR. D.Y.CHANDRACHUD, J)

These proceedings have been instituted under Article 226 of the Constitution by seventeen occupants of residential tenements of an immovable property called Dalal Estate, situated at Mumbai Central. A Letter of Intent has been issued by the Maharashtra Housing and Area Development Authority under Development Control Regulation 33(7) for redevelopment of the property.

2. In the scheme of redevelopment, the developer, who is the Thirteenth Respondent, has agreed to provide accommodation to the existing occupants, including all the Petitioners under Development Agreements dated 29 August 2006, 30 April 2007 and 4 June 2010. All the existing occupants, including the Petitioners, are to be provided permanent alternate accommodation free of cost on ownership basis. In the meantime, until the permanent alternate accommodation is complete, the developer has agreed to provide monthly compensation, at the rate of Rs.60.70 per sq. ft. of carpet area for residential premises and Rs.87.75 per sq. ft. or, as the case may be, Rs.114.78 per sq. ft. for nonresidential premises, depending on whether or not they have frontage on the main road. A corpus fund of Rs. 5 crores is to be constituted by the developer. The Court has been informed that an amount of Rs.3.5 crores has been paid towards development charges to the Municipal Corporation and a Bank Guarantee of Rs.25 crores has been issued as the security for construction of rehabilitation buildings for the tenants/ occupants. The developer has to furnish a bank guarantee of Rs.15 crores each year against post dated cheques securing the payment of future monthly compensation. Out of 305 tenants/occupants, about 87% have consented to the scheme for redevelopment which has been sanctioned by the Second Respondent. Plans have been sanctioned by the Municipal Corporation. A majority of the tenants/occupants has entered into agreements for permanent alternate accommodation, which have been duly registered. A majority of the tenants/occupants has vacated the premises in the old buildings comprised of Dalal Estate. The Maharashtra Housing and Area Development Authority issued a notice under Section 88(3) of the Maharashtra Housing and Area Development Act, 1976, declaring that the buildings in question forming part of Dalal Estate are dangerous and dilapidated and cannot be repaired within the prescribed ceiling of expenses. The Municipal Corporation issued a notice under Section 354 recording that the old buildings are in a ruinous condition. Dalal Estate comprised of 4 buildings divided into 20 blocks, each consisting of a ground floor and four upper floors. All these buildings are prior to 1940 and belonging to the cessed “A” category. There is no dispute about the factual position that the repair cess was paid to the Second Respondent and the buildings were repaired in the past.

3. The challenge to the work of redevelopment is by Seventeen occupants and it would now be necessary to deal with the factual context in which the challenge has been addressed. On 17 December 1926, an indenture of lease was executed between Sir Mohamed Yusuf Haji Ismail and Pestonji Hormusji Damania granting a lease of the property for a term of 999 years. Sometime in 1930, Jehangir Sorabji Dalal, the next assignee of the leasehold rights of the property, constructed Blocks A to H and J to T and V on the property consisting of residential and commercial premises which were let out to tenants. Tribhovandas Hargovinddas and others became the next assignees of the property on 14 April 1943. In 1970, the landlords offered the property for purchase to the tenants at a consideration of Rs. 7.51 lacs. On 6 May 1970, an agreement for sale was entered into with a partner of a firm called Dalal Estate Development Syndicate. On 24 May 1971, an agreement for sale of the property was arrived at between the landlords as Vendors and the partners of Dalal Estate as confirming parties an