Issuing S.79-A MHAD Act Notices Without Prior 'Dangerous' Declaration by BMC is a 'Racket'; Bombay HC Appoints Inquiry Committee - 2025-07-31

Bombay High Court Slams MHADA for "Racket" of Illegal Redevelopment Notices, Appoints Judicial Inquiry

Mumbai: In a scathing indictment of the Maharashtra Housing and Area Development Authority (MHADA), the Bombay High Court has declared the mass issuance of redevelopment notices under Section 79-A of the MHAD Act a "colossal misuse of powers" and suggestive of a "racket/scam." The Division Bench of Justice G. S. Kulkarni and Justice Arif S. Doctor quashed the impugned notices, observing that they were issued without the mandatory legal prerequisites, and appointed a high-level committee headed by a retired High Court judge to investigate the matter.

Case Overview

The court was hearing a batch of petitions challenging hundreds of notices issued by Executive Engineers of the Mumbai Building Repairs and Reconstruction Board (MBRRB), a unit of MHADA. These notices, issued under Section 79-A of the MHAD Act, initiate a process for the redevelopment of cessed buildings, which can be highly lucrative in Mumbai's real estate market.

The core legal question was whether MHADA officials could trigger Section 79-A without a prior declaration from the Municipal Corporation of Greater Mumbai (BMC) under Section 354 of the MMC Act, or a competent authority under the MHAD Act, that the building is "dangerous."

Arguments Presented

Petitioners' Arguments: * Senior Counsels N. V. Walawalkar and G. S. Godbole, representing the petitioners, argued that the Executive Engineers of MHADA had no jurisdiction to issue notices under Section 79-A. * They highlighted that the law requires a building to be officially declared dangerous by the BMC or a designated "Competent Authority" before Section 79-A can be invoked. * It was revealed that 935 such notices were issued, often en bloc, based merely on "visual inspection" and without any structural audit, which was admitted by MHADA in its affidavit. * The petitioners contended this was a "patent abuse of the powers" designed to benefit vested interests like developers by illegitimately triggering redevelopment.

MHADA's Arguments: * Senior Counsels Janak Dwarkadas and P. G. Lad, appearing for MHADA, conceded that 46 notices issued after a previous coordinate bench ruling on the same issue ( Vimalnath Shelters Pvt. Ltd. ) would be withdrawn. * However, they stated that the remaining 889 notices would be kept in abeyance as MHADA was considering challenging the previous ruling. * They argued that MHADA has a statutory duty under Chapter VIII of the Act to repair and reconstruct dilapidated buildings.

Court's Analysis and Key Observations

The High Court decisively rejected MHADA's position, finding a "brazen non-compliance" with the law. The judgment underscored that the power to act under a statute must be exercised strictly in the manner prescribed by the legislature.

"It is clear to us... that the basic jurisdictional requirements to attract the applicability of Section 79-A(1) itself was not satisfied... It is thus beyond one’s imagination as to how in such large number the impugned notices under Section 79-A could at all be issued."

The Court was particularly critical of the fact that MHADA's own affidavit admitted the notices were issued on mere "visual inspection" by Executive Engineers.

"A fortiori we are called upon to believe that the Executive Engineer happened to be at the building, he visually noticed that the same is not in good condition, hence notwithstanding what Section 79-A would provide, he thought it appropriate to issue the Section 79-A notice. There cannot be a higher highhandedness than this. "

The bench labeled the situation a potential "racket/scam under a modus operandi of misusing the provisions of law... to foster redevelopment of the property, obviously at the behest of unscrupulous persons with vested interests."

Final Order and Implications

Citing the "magnitude of the illegality" and the severe impact on citizens' constitutional rights to property (Article 300A), the court refused to merely stay the notices and took the extraordinary step of ordering a formal inquiry.

The Court's Order:

1. Inquiry Committee Appointed: A committee headed by Shri. Justice J. P. Devadhar (Retd.) and comprising Shri. Vilas D. Dongre (Retd. Principal District Judge) was formed to examine all 935 notices and the role of the officials involved.

2. Withdrawal of Notices: MHADA was directed to formally withdraw the 46 notices issued after the Vimalnath Shelters judgment.

3. Abeyance and Stay: The remaining 889 notices are to be kept in abeyance. The specific notices challenged in the petitions are stayed.

4. Investigation into SOP: The committee will also probe the legality and intent behind a Standard Operating Procedure (SOP) issued by MHADA's Vice-Chairman in December 2024, which the court suspected was an attempt to retroactively legitimize the illegal actions.

The judgment sets a powerful precedent against the arbitrary exercise of statutory power by public authorities and reinforces that procedural safeguards, especially those affecting property rights, must be strictly adhered to. The findings of the inquiry committee are now awaited and are expected to have significant repercussions within MHADA.