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2021 Supreme(Bom) 1046

S.J.KATHAWALLA, R.I.CHAGLA
Hanuman Nagar ( Jogeshwari) Sra Chs (prop) – Appellant
Versus
Kanchi Builders And Developers – Respondent


Advocates appeared:
D. Nalawade, Advocate, Anil Mishra, Advocate, Jayesh Bhatt, Advocate, Anoop Patil, Advocate, P.K. Dhakephalkar, Advocate, J.G. Aradwad (Reddy), Advocate

Judgement Key Points
  • Invocation of Section 13(2) for termination of developer's appointment: Section 13(2) empowers the competent authority, such as CEO-SRA, to terminate a developer's appointment upon failure to implement the slum rehabilitation scheme diligently, including prolonged delays in construction beyond plinth level and non-payment of agreed compensation for transit accommodation. (!) (!) (!) (!) [4000673170025][4000673170026]

  • Procedure under Section 13(2) including show cause notice: Prior to termination, a show cause notice must be issued to the developer, requiring explanation as to why action under Section 13(2) should not be taken, followed by a hearing for both parties to present their cases. (!) (!) (!) [4000673170025][4000673170026]

  • Grounds justifying termination under Section 13(2): Termination is warranted when the scheme lingers for over a decade (e.g., 11 years), developer fails to progress construction despite obtaining plinth CC, defaults on transit rent payments causing hardship to slum dwellers, and offers to clear arrears only at the last moment, indicating lack of seriousness. (!) (!) (!) [4000673170026][4000673170027]

  • Consequences of termination under Section 13(2): Upon termination, the society gains liberty to appoint a new developer per SRA rules, with provisions for valuing and reimbursing the outgoing developer's legally incurred expenses by the new developer. (!) (!) (!) (!) (!) [4000673170026]

  • Limits on appellate interference with Section 13(2) orders: AGRC cannot set aside a CEO-SRA termination order under Section 13(2) merely to prioritize landowner-developers or avoid procedural delays, without addressing developer's defaults, financial incapacity, and lack of progress; such reversal must consider slum dwellers' hardships and include monitoring mechanisms. (!) (!) [4000673170027][4000673170028][4000673170029][4000673170031][4000673170034]

  • Developer's defenses against Section 13(2) action: Claims of external delays (e.g., height restrictions, metro work, or society interference) must be substantiated; vague excuses without particulars do not preclude termination, especially when developer admits ongoing rent arrears and inability to pay promptly. (!) (!) (!) [4000673170030]

  • Interplay of Section 13(2) with slum dwellers' rights: Section 13(2) protects slum dwellers from indefinite delays by erring developers, allowing society resolutions (with majority support) to seek termination when developers breach promises on construction timelines and rent, aligning with broader scheme objectives. (!) (!) (!) [4000673170023][4000673170024]


JUDGMENT

S.J. Kathawalla, J. - The Petitioner Hanuman Nagar ( Jogeshwari) SRA CHS [Proposed] (the 'Petitioner Society') is a Society formed by the slum dwellers residing on the plot of land bearing CTS No. 231 (part), 268 and 268(1) of Village Mogra, Hanuman Nagar, Jogeshwari (East), Mumbai - 400 060, admeasuring 2764.70 Sq. Mtrs. (the 'Subject Plot').

2. By the above Writ Petition, the Petitioner Society has impugned the Order dated 27th September, 2018, passed by the Apex Grievance Redressal Committee ('AGRC') setting aside the Order passed by the CEO - SRA dated 23rd November, 2017, terminating the appointment of the Respondent No. 1 - M/s Kanchi Builders and Developers ('Developers') as Developers of the subject Slum Rehabilitation Scheme ('S. R. Scheme') and allowing the Petitioner Society to appoint a new developer in accordance with the Rules, Regulations and Policy of the Slum Rehabilitation Authority ('SRA').

3. According to the Petitioner Society, most of its members (slum dwellers) who were residing on the Subject Plot are poor workers, working as daily wage earners and domestic workers (housemaids). In the year 2006 majority of the members of the Petitioner Society appoint

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