Bombay High Court
M/S. Darshan Jayant Builder And ... vs The State Of Maharashtra And 4 Ors on 26 November, 2015
Bench: S.C. Dharmadhikari
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.1776 OF 2014
1. M/s.Darshan Jayant Builders,
A partnership firm having its
registered office at 109/B, Shankeshwar
Darshan, Seth Motishah Lane, Mazgaon,
Mumbai-400 010.
2. Pritesh M. Jain,
Partner of Petitioner no.1,
R/o. as above. Petitioners
versus
1. The State of Maharashtra.
2. The Secretary, Housing Department,
Government of Maharashtra, Mumbai.
3. Maharashtra Housing and Area
Development Authority, Bandra (E),
Mumbai.
4. The Chief Officer,
Mumbai Building Repairs and
Reconstruction Board, Bandra (E),
Mumbai.
5. Municipal Corporation of
Greater Mumbai, Mumbai. Respondents
Mr.Virag Tulzapurkar, Senior Advocate, with Mr.Mayur
Khandeparkar, Mr.Sanjeev Kadam, Ms.Apeksha Sharma i/by
Kadam & Co. for Petitioners.
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Mr.S.S.Joshi, AGP for Respondent nos.1 and 2 State.
Ms.P.D.Anklesaria, Senior Advocate, with Mr.V.P.Sawant for
Respondent nos.3 and 4.
Ms.Surekha Sonawane for Respondent no.5 MCGM.
CORAM : S.C.DHARMADHIKARI AND
B.P.COLABAWALLA, JJ.
DATE : 26 November 2015
JUDGMENT - (Per : S.C.Dharmadhikari, J.) :-
1. Rule. Learned counsel for the Respondents waive
service. By consent, the Rule is made returnable forthwith. The
writ petition is taken up for hearing and final disposal.
2. By this writ petition under Article 226 of the
Constitution of India, the Petitioners seek a writ of certiorari or
any other appropriate writ, order or direction under Article 226
of the Constitution of India calling for the records of the
impugned order dated 4 March 2014 (Exhibit-I to the petition)
and quash and set aside the same.
3. The facts necessary to appreciate the rival
contentions are that the Petitioner no.1 is a partnership firm
registered under the Indian Partnership Act, 1932 and Petitioner
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no.2 is a partner of Petitioner no.1. The Respondent nos.1 and
2 are the State Government and the Secretary in the
Department of Housing and Special Assistance. The Respondent
no.3 is a statutory authority constituted under the Maharashtra
Housing and Area Development Act, 1976 and Respondent no.4
is the Chief Officer of the Mumbai Building Repairs and
Reconstruction Board, a unit of Respondent no.3. The
Respondent no.5 is the Municipal Corporation of Greater
Mumbai (`MCGM') constituted under the Mumbai Municipal
Corporation Act, 1888.
4. The subject matter of this petition is a land which is
part of City Survey Nos.251, 252 and 253 of Tardeo Division
and the buildings standing thereon situate at Dr.Dadasaheb
Bhadkamkar Marg, Mumbai.
5. On these city survey numbers, there are three
buildings known as Calcuttawala Estate, Jariwala Chawl and
Dwarkadas Building. The total number of occupants of these
buildings and divided into residential/commercial/non-
residential, are set out in paragraphs 2.2 to 2.4 of the petition.
6. Annexures-A and B are the plan and letter of
Respondent no.3 declaring the structures/buildings on the said
property as dangerous.
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7. It is the case of the Petitioners that 164 families are,
therefore, to be taken care of and who are the occupants of
these buildings. A reference is made to Regulation 33(7) of the
Development Control Regulations for Greater Mumbai, 1991, as
modified (`DCR'), and it is submitted that the occupants
approached the Petitioners and requested them to undertake the
redevelopment/ reconstruction of the buildings in question.
That is how, the Petitioner no.1 submitted a proposal for joint
redevelopment of the said property. It is stated that there is an
agreement appointing the Petitioner no.1 as a developer. A
reference is made to DCR 33(7) and the benefits that would
flow from the same and it is then submitted that convinced by
the proposal so submitted, the Respondent no.3 issued a Letter
of Intent (`LOI') dated 29 October 2010, which is at Annexure-
D to the paper book. Since heavy reliance is placed by both
sides on this LOI, copy whereof is at pages 38 to 40 of the paper
book, we deem it appropriate to reproduce it verbatim :
"MUMBAI BUILDING AND REPAIRS AND RECONSTRUCTION
BOARD
(A MHADA UNIT)
No.R/J.V.-LOI-33(7)/4374/MBRRB-10
Date : 29 October 2010
To,
M/s.Darshan Jayant Builders,
109, Sankeshwar Darshan,
Sheth Motisha Lane,
Mazgaon, Mumbai-400 010.
Subject : Joint Redevelopment of property bearing
C.S.No.251(pt), 252(pt) and 253(pt) of Girgaon Divn, Building
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No.71-71A Culcuttawala Chawl, 79-81 Jariwala Chawl and 91
Dwarkadas Chawl, situated at Dr.Bhadkamkarr Marg, Mumbai-
400 008 under DCR 33(7).
Reference : 1) Government of Maharashtra/Urban Development
Department Notice No.TPB 4309/968/CR-127/09/UD-11, dated
19.05.2009.
2) Your application dated 09.12.2009.
3) Executive Engineer "D2" Divn/MBRRB's letter No.EE/D-
2/1032/2010, dated 26.03.2010.
4) Dy.Chief Engineer (Zone-II)/MBRRB's office note No.1011
dated 30.03.2010.
5) Your application dated 17.08.2010.
The Government of Maharashtra, Urban Development
Department vide above referred Notice has published the
proposed modification to Regulation No.33(7) for Reconstruction
or Redevelopment of cessed buildings in the Island City of
Mumbai acquired under MHAD Act 1976 undertaken by MHADA
with Joint Venture with private developer.
In pursuance to this notice, you are hereby informed that
this office has No Objection to get the proposed building plans
approved for the Joint Venture Redevelopment Scheme of the
captioned property from MCGM with FSI for rehab + 60%
incentive FSI as per provision of DCR 33(7) subject to the
conditions mentioned in the above notice and following terms
and conditions.
1. The plans of proposed buildings shall be prepared by the
Architect and Structural Engineer appointed by you and submit
the same to the Building Proposal Department of MCGM, in
concurrence of the Dy. Chief Engineer (Zone-II)/MBRRB, a unit of
MHADA.
2. You will have to plan to rehabilitate all the existing
tenants/occupants of all the old buildings. Each occupant shall
be given the carpet area occupied by him for residential purpose
in the old buildings subject to the minimum carpet area of 27.88
sq.mtrs (300 sq.ft.) and equivalent Carpet area if it is more than
300.00 sq.ft. subject to maximum Carpet area 70.00 sq.mtrs.
(753.00 sq.ft.) as provided in the MHAD Act, 1976. In case of
non-residential occupiers, the area to be given in the
reconstructed building will be equivalent to the area occupied in
the old building.
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3. 60% incentive FSI on rehab area shall be granted to the
developer who will have to hand over 20% of the incentive FSI to
MBRRB in the form of tenements of 300 sq.ft. and remaining
80% will be available for free sale to the Developer. The actual
number of tenements to be handed over to the MBRRB will be
communicated after final approval of the policy of Joint Venture
by the Government.
4. It shall be binding upon you to display the plans of
proposed Joint Venture Scheme of Redevelopment and the list of
amenities to be provided to the existing tenants at suitable places
for the information of all tenants at the captioned property. The
said display should clearly indicate the proposed building for the
rehabilitation of existing tenants, for MBRRB and for free sale.
5. As far as possible you will plan separate building(s) for
rehabilitation of existing tenants, for MBRRB and for the purpose
of free sale, taking in to account the plot area of the captioned
property.
6. The proposal should be processed in accordance with
Development Control Regulation 33(7), D.P. Reservations etc. and
you should obtain MCGM's approval for the same.
7. The plans of the proposed building will be processed and
sent to MCGM for the approval by Dy. Chief Engineer (Zone-II)/
MBRRB and the Developer Jointly. The plans prepared shall
clearly show the rehab tenements and area to be surrendered to
MBRRB.
8. All the above terms and conditions shall exclusively be
applicable for the captioned property only.
9. Since the development of the captioned property is to be
carried out jointly, an agreement for Joint Venture Scheme will
have to be executed between you and MBRRB, such agreement
will have to be executed after final approval of the Joint Venture
policy by Government.
10. The modifications in Regulation DCR 33(7) as may be
finalised by Government, shall be conclusive and binding on you.
11. The MCGM shall not grant Commencement Certificate till
final NOC and agreement to that effect is executed by developer
with MBRRB.
12. The terms and conditions for Joint Venture Policy as may
be finalized by Government and MBRRB shall be conclusive and
binding on the developer and shall become part of the NOC and
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agreement. No third party rights shall be created without express
permission of MBRRB.
13. If it is noticed that some more additional tenants/
occupants of the old acquired buildings apart from the 12 tenants
already mentioned by you are found to have been given alternate
accommodation in newly reconstructed building under PMGP
Scheme or any other reconstructed building of MBRRB, then in
that case, you will have to hand over the equivalent number of
tenements in the new buildings to be constructed.
This Letter of Intent should not be construed as NOC but
only a letter to apply to MCGM for getting the proposed building
plans approved from the MCGM.
Sd/-
Chief Officer,
ig M.B.R. & R. Board, Mumbai."
8. On 29 October 2010, this LOI was issued and on
receipt thereof, the Petitioners claim to have taken steps
mentioned at paragraph 3.6 of the petition.
9. The Petitioners, therefore, claim that they acted in
terms of the LOI. The whole scheme was to the knowledge of
the statutory authorities. It is in these circumstances, they rely
upon the letter of Respondent no.4 dated 1st November 2011
asking the Deputy Engineer, Building Proposals of Respondent
no.4 to approve the building plans submitted jointly by the
Petitioners and Respondent no.4.
10. At the stage when the Petitioners were awaiting the
clearances and approvals in terms of this LOI and the
communication dated 1st November 2011, they were surprised
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to receive a communication/letter dated 29 November 2012. It
is claimed that this was not just any letter or communication but
there is a direction therein cancelling the LOI issued in favour of
the Petitioners.
11. Aggrieved by this order/action, the Petitioners
approached this Court and filed a Writ Petition bearing No.838
of 2013. On that writ petition, a detailed order was passed after
hearing both sides on 19 June 2013. This Court quashed the
letter/direction dated 29 November 2012 by taking a view that
before the statutory authorities reach such a conclusion, they
must issue a show cause notice to the parties like the Petitioners
and thereafter comply with the principles of natural justice.
Meaning thereby, they must be given an opportunity of a
hearing or a personal hearing or forwarding their
representations and on which the statutory authority/ies must
pass a detailed order assigning reasons.
12. The Petitioners, therefore, submit that they were
expecting a fresh action to be taken only on issuing a show
cause notice. However, that was not issued. The Petitioners
were informed in writing that there would be a hearing on 17
January 2014. The Petitioners appeared on 17 January 2014
and prayed for time. Thereafter they furnished their written
submissions raising all the contentions and objections. It is on
such material that the impugned order dated 4 March 2014
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cancelling the LOI came to be passed. It is this order, a copy of
which is at Exhibit-I of the paper book, which is challenged in
this writ petition.
13. Mr.Virag Tulzapurkar, learned Senior Advocate,
appearing for the Petitioners would submit that the impugned
order is contrary to law. The impugned order and decision is
arbitrary, unreasonable, unfair and unjust. It violates the
mandate of Article 14 of the Constitution of India. It is also
contrary to the specific order and direction of this Court in Writ
Petition No.838 of 2013. Mr.Tulzapurkar would submit that no
show cause notice containing specific grounds and allegations
was ever issued to the Petitioners. The Petitioners, therefore,
were handicapped as they had no knowledge of the grounds on
which the LOI is being cancelled. Once the order and direction
of this court is violated, then, on that ground alone, the
impugned order be quashed and set aside.
14. Mr.Tulzapurkar then submitted that the reasons
assigned in the impugned order are not supportable by the
record. In that regard, Mr.Tulzapurkar would rely upon the
averments in the writ petition and specifically the grounds. He
would submit that Resolution No.6636, dated 24 October 2013
of Respondent no.3 states that it has decided to redevelop the
properties in question acquired by it. The subject properties
were acquired by Maharashtra Housing And Area Development
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Authority (`MHADA') more than three decades back. Though
the buildings standing thereon were declared as dangerous,
MHADA was unable to take-up the redevelopment. Therefore,
the joint venture by MHADA with private developer like the
Petitioner no.1 came into effect. If the principal reason for
cancelling the LOI is the notice dated 19 May 2009, then, that
cannot be relied upon. What has been informed by the Housing
Department vide letter dated 23 August 2012 is that the
proposed modification dated 19 May 2009 to DCR 33(7) is
cancelled. The letter at Annexure-F to the writ petition does not
speak of any such cancellation. It is not possible for the
Housing Department of the Government to cancel the notice
which is issued by the Urban Development Department of State
Government. Mr.Tulzapurkar would submit that the authorities
could not have proceeded on the basis that there is any
government direction. The Government has not said that
modification is cancelled. It only says that MHADA ought to
take a policy decision. Mr.Tulzapurkar then submitted that
participation of a private developer is not ruled out by DCR
33(7). There is no directive of the Government to exclude
private developers. In these circumstances, the decision is also
contrary to the Development Control Regulations in the field.
15. It is on such a foundation that Mr.Tulzapurkar would
submit that the Petitioners have a legitimate expectation. That
legitimate expectation is that the LOI was issued and the
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Petitioners were allowed to take further steps including
presentation of plans for approval of MCGM. If MCGM were to
approve the plans and that is how even the Respondent no.4
acted, then, all that remained was a No Objection Certificate
(`NOC') from MHADA. Mr.Tulzapurkar invited our attention to
several clauses of LOI, a copy of which is at Annexure-D, to
submit that once the Petitioners were assured in terms of the
LOI, which is a written communication by a statutory authority,
that it can undertake and complete the work of redevelopment
of the properties belonging to that statutory authority, then,
legitimate expectation is that the statutory authority will allow
the Petitioners to take all steps in furtherence thereof, including
a belief that the statutory authority will not abruptly cancel such
a LOI or approval which may be conditional. The LOI is not
cancelled on the ground that any conditions were breached or
violated by the Petitioners. It is not cancelled on the ground
that the Petitioners were unfit to take-up the redevelopment
work or that any deliberate or intentional act of the Petitioners
is responsible for the delay allegedly in implementation of the
scheme. In these circumstances, the doctrine of legitimate
expectation applies with full force.
16. Alternatively and without prejudice, it is submitted
that the decision impugned in this writ petition must be given a
prospective effect. If that decision contains a policy which has
been brought into effect now, then, all the more it can have no
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retrospective effect. For these reasons, Mr.Tulzapurkar would
submit that the petition be allowed.
17. He places reliance on a decision of Hon'ble Supreme
Court of India in the case of Gorkha Security Services Vs.
Government (NCT of Delhi) and others1.
18. The contesting Respondents to this writ petition are
Respondent nos.3 and 4 MHADA. They have filed an affidavit
of their Resident Executive Engineer. That deponent of this
affidavit is working with Respondent no.4 Board. He states that
there is no dispute that the buildings in question were acquired.
There is no dispute that the Petitioners applied on 9 December
2009 for redevelopment of the complex under DCR 33(7).
However, the Government proposed to alter DCR 33(7) in
regard to permitting a joint venture. That would be undertaken
by MHADA wholly with private developer. Accordingly, a notice
at page 36 of the paper book was issued by the Government on
19 May 2009 for considering the change in DCR 33(7). The
Government invited objections and suggestions from the public
in relation to the proposed change in DCR 33(7). It is
submitted that the Development Control Regulations are framed
in accordance with the proposals of the development plan. In
that regard, they are traceable to Section 22(m) of Maharashtra
Regional and Town Planning Act, 1966 (`MRTP Act'). Any
1 (2014)9-SCC-105
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change or modification in the DCRs would tantamount to a
modification or change in the development plan itself.
Therefore, the procedure prescribed by Section 37(1)(AA) of
the MRTP Act will have to be undertaken and completed. Since
MHADA had issued a LOI to the Petitioners proposing a joint
venture for redevelopment, it has taken care to impose such
conditions as are permissible in law. There was never any firm
assurance or promise and it was for a limited purpose to enable
the Petitioners to approach MCGM for approval of building
plans, that the LOI was issued by MHADA. It was clarified that
proposed joint venture would be in accordance with the
suggested modification to DCR 33(7) and not DCR 33(9), as
erroneously alleged. It is only on the finalization of the joint
venture policy by the Government, that an agreement will be
executed between MHADA and the private developer. This
would be in consonance with the conditions stipulated in the
joint venture policy as determined by the Government.
Therefore, any modification or change in DCR 33(7) by the
Government, will bind the authorities. It was, therefore,
clarified at the end of the letter that after compliance with the
said conditions, the LOI may be issued. In such circumstances,
when a policy decision has now been taken not to allow any
private participation, but to complete the redevelopment by
MHADA itself and which MHADA is competent to undertake,
then, all the more, the order under challenge cannot be quashed
and set aside on the ground that it violates the principles of
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natural justice or that the Government's action or letter does not
prohibit undertaking of development by participation of a
private developer. Consistent with this stand on affidavit,
Ms.Anklesaria, learned Senior Advocate appearing for the
contesting Respondents, would submit that the LOI does not
create or vest any right in the Petitioners. The Petitioners are
private builders and developers. The builders and developers
may have been approached by the occupiers and residents of
the buildings in question, but the property as such belongs to
MHADA. Once the land and buildings vest in MHADA and it is
MHADA which alone can take a decision in terms of its policies
of redevelopment and reconstruction of buildings at site, then,
any private arrangement between the occupants and the
developer and the builder, will not enable it to approach a
competent Court and seek any reliefs. The foundation of the
relief itself is untenable in law. There is no right, title and
interest created in favour of the Petitioners in respect of the
three buildings or the land beneth the same.
19. Ms.Anklesaria, therefore, would submit that the
argument of Mr.Tulzapurkar by relying on the doctrine of
legitimate expectation deserves to be rejected. She relies upon
clauses 9 to 12 of the LOI. she would submit that other
argument of Mr.Tulzapurkar that the impugned order
contravenes the direction of this Court in earlier proceedings, is
equally unsound and untenable. The earlier letter dated 29
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November 2012 was received by the Petitioners. That letter was
challenged by them in Writ Petition No.838 of 2013. The
Petitioners knew as to why MHADA proposed to cancel the LOI.
Once this court quashes that letter but permits MHADA to go
ahead with its action, then, this letter dated 29 November 2012,
at page 41 of the paper book, can very well be treated as a show
cause notice. There are two reasons given by MHADA and
through out. First is that it desires to have expeditious
implementation of the project. In that regard, Ms.Anklesaria
would submit that the Petitioners could not gather support of
requisite number of occupants or percentage of the residents.
She would submit that a policy decision was taken by MHADA
and it was subject matter of the earlier order. Therefore, the
Petitioners are not taken by surprise at all. They have
participated in the hearing. They have tendered written
submissions, which have been duly considered. If the
overriding public interest demands cancellation of LOI and in
terms of DCR 33(7), the benefits can be obtained by MHADA for
itself and for the public, then, it is entitled to change its policies
and bring them in tune with the requirement of public interest.
Today, MHADA would gain in terms of FSI, which is unrestricted
and uncapped. There are several buildings and properties
acquired by MHADA which are awaiting redevelopment.
Therefore, a larger policy decision led to the impugned order
being passed. Such an order deserves to be upheld. It should
not be quashed and set aside on the spacious ground of a
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private developer's hope and expectation that he/she would
obtain commercial benefits, if permitted to redevelop the
property, either solely or partially with MHADA. With these
submissions, Ms.Anklesaria requests to dismiss the petition.
20. Ms.Anklesaria brings to our notice the decision of
Hon'ble Supreme Court of India in case of Jayant Achyut Sathe
Vs. Joseph Bain D'Souza and others2.
21. We have, with the assistance of both learned Senior
Advocates, perused the petition, the affidavit-in-reply filed by
contesting Respondents and annexures thereto. We have
carefully considered the rival contentions. We have also
perused the relevant provisions of law.
22. It is common ground that Maharashtra Housing and
Area Development Authority collects the cess on buildings
located in the Island City of Mumbai. The cess is collected to
subserve a larger public interest and public good. That is to
ensure the occupants and residents of such buildings that in the
event repairs, up keep and maintenance of these buildings is
neglected by the owners, then the Housing Board will come to
their aid and assistance. It would undertake structural repairs,
if required, to the buildings. It would equally acquire them and
redevelop the properties in terms of the powers conferred in it
2 Civil Appeal No.2970 of 2006 and connected Appeals decided on 4 September 2008
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by Maharashtra Housing and Area Development Act, 1976
(`MHAD Act'). It is, therefore, entitled to take such policy
measures and decisions so as to carry forward the object and
purpose of the MHAD Act and collection of cess. Eventually, the
State Government has enacted MHAD Act and amended it from
time to time so as to unify, consolidate and amend the laws
relating to housing, improving and reconstructing dangerous
buildings and carry out improvement works in slum areas. The
MHAD Act subserves the larger constitutional mandate
enshrined under Articles 21 and 39 (b) and (c) of the
Constitution of India.
23. In the instant case, three buildings and the land
beneath them were acquired by MHADA. True it is, the
buildings are occupied by the occupants who are using the
tenements for residential and non-residential purposes. True it
is that DCR 33(7) has been enacted and it is applicable to the
reconstruction or redevelopment of cessed buildings in the
Island City of Mumbai by co-operative housing societies or old
buildings either belonging to the MCGM or as specified in DCRs
of the category stated therein. The Government in its Urban
Development Department's Notification dated 25 January 1999
further modified this DCR. The Government has decided to
modify DCR 33(9) regarding reconstruction or redevelopment
of cessed buildings/urban renewal schemes. The Housing
Department has brought to the notice of the Government that it
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has filed an affidavit in one of the Court proceedings that
guidelines for joint venture shall be issued regarding
development of cessed buildings which are acquired under
MHAD Act, 1976. Since the modification is in the public
interest, Government finds it necessary to modify the DCRs.
That is how a notice at pages 36 and 37 of the paper book
notifying the proposed modification came to be issued. The
proposed modification sought in the notice at pages 36 and 37
reads as under :
" ...
... ... ... ...
... ... ... ... ...
.. ... ... ... ...
And whereas, Government has decided to modify the
Regulation No.33(9), regarding reconstruction or
redevelopment of cessed buildings/Urban Renewal Schemes
(hereinafter referred to as "the said proposed
modification");
And whereas, Housing Department has brought to
the notice that Housing Department has filed an affidavit in
one of the Court case matter that the guidelines for joint
venture shall be issued regarding the development of cessed
buildings which are acquired under MHADA Act, 1976;
And whereas, the modification is in public interest,
govt. finds it necessary to modify the said regulation.
Now, therefore, in exercise of the powers conferred
under sub-section (1AA) of Section 37, Government is
pleased to issue the notice for inviting
suggestions/objections from public.
The Government is further pleased to inform that any
objections/suggestions upon the said proposed modification
be forwarded within 30 days from the date of publication of
this notice in the official gazette to the Deputy Director of
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Town Planning, Greater Mumbai having his office at ENSA
Hutments, E-Block, Azad Maidan, Mahapalika Marg,
Mumbai-400 001 who is being appointed as an officer
under section 162 of the said Act. The said officer shall
submit his report to Government after scrutinising the
suggestions and objections over the proposed modification
and say of the said Corporation and after granting hearing
to the concerned persons including the said Corporation.
PROPOSED MODIFICATION
Following provisions shall be added in the Regulation
33(7).
Reconstruction or redevelopment of cessed buildings
in the Island City acquired under MHAD Act, 1976,
undertaken by MHADA with joint venture with private
developer shall be permissible subject to following
conditions -
1. Rehabilitation of all cessed buildings with
tenement size 300 sq.ft. carpet area.
2. 50% incentive FSI shall be granted to the
developer who will hand over 10% of incentive FSI to
MHADA in the form of built up tenements of 300 sq.ft.
carpet area and remaining 40% be sold as free sale by the
developer.
3. FSI remaining out of 2.5 after deducting the
rehabilitation area and incentive FSI will be shared in ratio
2:1 between MHADA (2) and the developer (1).
4. The scheme shall be completed on time bound
basis within 2 years or period prescribed by MHADA.
5. The monitoring shall be done by MHADA.
By order and in the name of Governor of
Maharashtra.
Sd/-
(Abhiraj Girkar)
Under Secretary to Government."
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24. Thus, reconstruction or redevelopment of the cessed
buildings in the Island City of Mumbai acquired by MHADA can
be undertaken by MHADA with joint venture of the private
developer, subject to the conditions proposed.
25. It is then common ground that on 29 October 2010,
MHADA through its Mumbai Building Repairs and
Reconstruction Board (`Unit') considered the application of the
Petitioners made on 9 December 2009. It considered the letter
dated 26 March 2010 of the Executive Engineer of
MuWP.1805mbai Board. It also considered the note No.1011,
dated 30 March 2010 of the Deputy Chief Engineer of Mumbai
Board and further application of the Petitioners dated 17 August
2010. It, therefore, addressed a letter/communication to the
Petitioner no.1, a copy of which is at Exhibit-D, which we have
reproduced. This letter specifically refers to the Government's
decision proposing modification or change in DCR 33(7)
whereunder reconstruction or redevelopment of the cessed
buildings in the Island of City of Mumbai acquired by MHADA
can be undertaken by MHADA, jointly with private developer.
Therefore, this letter clearly states that Petitioners can approach
for sanctioning building plans for this joint venture and that
would be subject to the conditions mentioned in the notice
dated 19 May 2009 issued by the Government, a copy of which
is at pages 36 and 37 of the paper book and on the terms and
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conditions of LOI itself. It is thus a limited no objection to get
the proposed buildings plans approved. It is only conditional
upon the Government's sanctioning and approving the proposed
changes or modifications in DCR 33(7). We are in complete
agreement with Ms.Anklesaria that such a LOI does not create
any right, title or interest in favour of the Petitioners in respect
of subject property and buildings. The buildings continued to
be owned and vest in MHADA. The policy was mooted by
MHADA on the suggestion of the Government and that is to
reconstruct the buildings and redevelop the property with
participation of a private developer. The said LOI, therefore, by
itself could not have been a foundation of the Petitioners'
grievance made to this Court either earlier or now. Pertinently,
the Petitioners raised more or less identical contentions in the
earlier round of litigation. They were satisfied with the limited
directions of this Court that the LOI will be cancelled, if at all,
only after they were issued a notice and granted an opportunity
of a personal hearing by the statutory authorities. It is that
limited request which was considered and granted by this Court
bearing in mind that the letter at Exhibit-D came to be issued on
29 October 2010. We have perused each and every condition of
the letter at Annexure-A. We find that the reliance placed on
the clauses thereof by Ms.Anklesaria is well founded. Condition
no.6 clearly refers to the proposals and its processing in
accordance with DCR 33(7). It also refers to the policy of the
Government (Condition no.9). Therefore, it mandates
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execution of an agreement after the change or modification in
DCR 33(7) is sanctioned and approved by the Government.
Pertinently, no such agreement for joint venture ever came to be
signed and executed between the Mumbai Building Repairs and
Reconstruction Board and the Petitioners. Condition no.10
clearly refers to the modifications in DCR 33(7), which were to
be finalized by the Government. The LOI also stipulates in
condition no.11 that MCGM shall not grant commencement
certificate till final NOC and agreement to that effect is executed
by the developer with Mumbai Board. Condition no.12 is also
to identical effect. The LOI ends by informing the Petitioners
that it should not be considered as a no objection certificate. It
reiterates that it is only a letter to apply to MCGM for getting
the proposed building plans approved from MCGM.
26. Now that the Government has clarified that it does
not propose to effect any change or modification in DCR 33(7)
and left it open for MHADA to take proper action, then, in terms
of the powers conferred in MHADA by the substantive
provisions of MHAD Act of 1976, it could have taken a decision
and hence passed a resolution to cancel the LOI granted to the
Petitioners. It is a policy decision. If the Government and
MHADA are of the view that greater benefit could be obtained
for the public if the Housing Board/authority itself undertakes
redevelopment of the land and reconstruction of the old and
dilapidated buildings, then, such a decision of experts in the
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field of housing, is not liable to be interfered with by the Court
in exercise of its powers under Article 226 of the Constitution of
India. It is too well settled and does not require any reiteration
that policy decisions cannot be questioned as if this Court
possesses appellate power to scrutinize and verify the same.
The wisdom of a policy decision cannot be questioned by this
Court. Unless the policy is arbitrary, capricious, discriminatory
or mala fide, it is beyond the powers of judicial review. This
Court may think of a better option but that by itself and without
anything more will not empower this Court to question the
action of the statutory authority.
27. In the circumstances, we do not find that the
impugned order which is based on a policy decision of MHADA
requires any interference in our writ jurisdiction. The doctrine
of legitimate expectation has also some limits and restrictions.
The expectation must be legitimate. The expectation loses all
its legitimacy and no action can be founded thereon, if the
overriding public interest so demands. In a decision of the
Hon'ble Supreme Court of India in case of Union of India and
others Vs. Hindustan Development Corporation and others 3,
this principle has been explained elaborately. The relevant
portion of the said decision is reproduced as under :
"33-34. On examination of some of these important
decisions it is generally agreed that legitimate expectation
3 AIR-1994-SC-988
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gives the applicant sufficient locus standi for judicial review
and that the doctrine of legitimate expectation is to be
confined mostly to right of a fair hearing before a decision
which results in negativing a promise or withdrawing an
undertaking is taken. The doctrine does not give scope to
claim relief straightway from the administrative authorities
as no crystallised right as such is involved. The protection
of such legitimate expectation does not require the
fulfillment of the expectation where an overriding public
interest requires otherwise. In other words where a person's
legitimate expectation is not fulfilled by taking a particular
decision then decision-maker should justify the denial of
such expectation by showing some overriding public
interest. Therefore even if substantive protection of such
expectation is contemplated that does not grant an absolute
right to a particular person. It simply ensures the
circumstances in which that expectation may be denied or
restricted. A case of legitimate expectation would arise
when a body by representation or by past practice aroused
expectation which it would be within its powers to fulfill.
The protection is limited to that extent and a judicial review
can be within those limits. But as discussed above a person
who bases his claim on the doctrine of legitimate
expectation, in the first instance, must satisfy that there is a
foundation and thus has locus standi to make such a claim.
In considering the same several factors which give rise to
such legitimate expectation must be present. The decision
taken by the authority must be found to be arbitrary,
unreasonable and not taken in public interest. If it is a
question of policy, even by way of change of old policy, the
courts cannot interfere with a decision. In a given case
where there are such facts and circumstances giving rise to a
legitimate expectation, it would primarily be a question of
fact. If these tests are satisfied and if the court is satisfied
that a case of legitimate expectation is made out then the
next question would be whether failure to give an
opportunity of hearing before the decision affecting such
legitimate expectation is taken, has resulted in failure of
justice and whether on that ground the decision should be
quashed. If that be so then what should be the relief is
again a matter which depends on several factors.
35. We find in Attorney General for New South Sales'
case (1994 (64) Aus LJR 327), that the entire case on the
doctrine of legitimate expectation has been considered. We
also find that on an elaborate and erudite discussion it is
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held that the courts' jurisdiction to interfere is very much
limited and much less in granting any relief in a claim based
purely on the ground of `legitimate expectation'. In Public
Law and Politics edited by Carol Harlow, we find an article
by Gabriele Ganz in which the learned author after
examining the views expressed in the cases decided by
eminent Judges to whom we have referred to above,
concluded thus :
"The confusion and uncertainty at the
heart of the concept stems from its origin. It has
grown from two separate roots, natural justice
or fairness and estoppel, but the stems have
become entwined to such an extent that it is
impossible to disentangle them. This makes it
very difficult to predict how the hybrid will
develop in future. This could be regarded as
giving the concept a healthy flexibility, for the
intention behind it is benign; it has been
fashioned to protect the individual against
administrative action which is against his
interest. On the other hand, the uncertainty of
the concept has led to conflicting decisions and
conflicting interpretations in the same decision."
36. Legitimate expectations may come in various forms
and owe their existence to different kind of circumstances
and it is not possible to give an exhaustive list in the context
of vast and fast expansion of the governmental activities.
They shift and change so far that the start of our list would
be obsolete before we reached the middle. By and large
they arise in cases of promotions which are in normal course
expected, though not guaranteed by way of a statutory
right, in cases of contracts, distribution of largesse by the
Government and in somewhat similar situations. For
instance in cases of discretionary grant of licences, permits
or the like, carries with it a reasonable expectation, though
not a legal right to renewal or non-revocation, but to
summarily disappoint that expectation may be seen as
unfair without the expectant person being heard. But there
again the Court has to see whether it was done as a policy
or in the public interest either by way of G.O; rule or by way
of a legislation. If that be so, a decision denying a
legitimate expectation based on such grounds does not
qualify for interference unless in a given case, the decision
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or action taken amounts to an abuse of power. Therefore
the limitation is extremely confined and if the according of
natural justice does not condition the exercise of power, the
concept of legitimate expectation can have no role to play
and the court must not usurp the discretion of the public
authority which is empowered to take the decisions under
law and the court is expected to apply an objective standard
which leaves to the deciding authority the full range of
choice which the legislature is presumed to have intended.
Even in a case where the decision is left entirely to the
discretion of the deciding authority without any such legal
bounds and if the decision is taken fairly and objectively, the
court will not interfere on the ground of procedural fairness
to a person whose interest based on legitimate expectation
might be affected. For instance, if an authorityy who has
full discretion to grant a licence and if he prefers an existing
licence holder to a new applicant, the decision cannot be
interfered with on the ground of legitimate expectation
entertained by the new applicant applying the principles of
natural justice. It can therefore be seen that legitimate
expectation can at the most be one of the grounds which
may give rise to judicial review but the granting of relief is
very much limited. It would thus appear that there are
stronger reasons as to why the legitimate expectation should
not be substantively protected than the reasons as to why it
should be protected. In other words, such a legal obligation
exists whenever the case supporting the same in terms of
legal principles of different sorts, is stronger than the case
against it. As observed in Attorney General for New South
Wales' case (1990 (64) Aus LJR 327). "To strike down the
exercise of administrative power solely on the ground of
avoiding the disappointment of the legitimate expectations
of an individual would be to set the courts adrift on a
featureless sea of pragmatism. Moreover, the notion of a
legitimate expectation (failing short of a legal right) is too
nebulous to form a basis for invalidating the exercise of a
power when its exercise otherwise accords with law." If a
denial of legitimate expectation in a given case amounts to
denial of right guaranteed or is arbitrary, discriminatory,
unfair or biased, gross abuse of power or violation of
principles of natural justice, the same can be questioned on
the well-known grounds attracting Art.14 but a claim based
on mere legitimate expectation without anything more
cannot ipso facto give a right to invoke these principles. It
can be one of the grounds to consider but the court must
lift the veil and see whether the decision is violative of these
27 of 31 WP.1776.2014
principles warranting interference. It depends very much on
the facts and the recognised general principles of
administrative law applicable to such facts and the concept
of legitimate expectation which is the latest recruit to a long
list of concepts fashioned by the courts for the review of
administrative action, must be restricted to the general legal
limitations applicable and binding the manner of the future
exercise of administrative power in a particular case. It
follows that the concept of legitimate expectation is "not the
key which unlocks the treasury of natural justice and it
ought not to unlock the gates which shuts the court out of
review on the merits", particularly when the element of
speculation and uncertainty is inherent in that very concept.
As cautioned in Attorney General for New South Wales' case
the courts should restrain themselves and restrict such
claims duly to the legal limitations. It is a well meant
caution. Otherwise a resourceful litigant having vested
interests in contracts, licences etc. can successfully indulge
in getting welfare activities mandated by a directive
principles thwarted to further his own interests. The
caution, particularly in the changing scenario, becomes all
the more important."
28. If one tests the argument of Mr.Tulzapurkar in the
backdrop of these principles, one finds that the Petitioners
cannot claim any right higher than the one conferred by the
communication at Exhibit-D. That itself being conditional and
wholly dependent on the Government's decision and the policy
is enunciated by the letter of Urban Development Department,
Government of Maharashtra to be implemented by the statutory
authority like MHADA, then, this argument that Petitioners' had
a legitimate expectation cannot be accepted. The Petitioners
cannot claim, on a limited authority under the LOI, a right by
which they could have undertaken the redevelopment or
reconstruction work on their own. If that was to be jointly
28 of 31 WP.1776.2014
undertaken with MHADA and MHADA being bound by the
Government's policy decision taken in larger public interest,
then all the more, the argument of Mr.Tulzapurkar cannot be
accepted.
29. The other argument of Mr.Tulzapurkar is equally
devoid of any substance. True it is that if somebody is sought to
be deprived of a right vested or created by law, then, the
principles of natural justice have to be adhered to. The
application of the principles of natural justice would apply
dependent upon number of relevant factors including the nature
of right and the lis, power vested in the statutory authorities.
Ordinarily, a show cause notice is issued so that the person
proceeded against gets to know the reasons or grounds based
on which the proposed action is taken against it. In the instant
case, we find that the Petitioners are not prejudiced at all.
They had complete knowledge of the fact that Government's
policy would be guiding the MHADA and equally them in the
redevelopment or reconstruction proposed at the site.
Therefore, once the Government does not pursue a particular
policy, then the Petitioners cannot claim to be joint developer
with MHADA. If this is the ground on which essentially the
matter proceeded, then prior communication dated 29
November 2012 furnished adequate reasons for the Petitioners
to meet them in the subsequent proceedings. That is how they
have placed on record the detailed written submissions. In the
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circumstances and when they question the merits of the
impugned order, then all the more, we do not see as to how
Mr.Tulzapurkar can place reliance on the decision in Gorkha
Security Services (supra). In Gorkha Security Services (supra),
the party approaching the Supreme Court was unaware that in
the garb of cancelling a particular contract, the authority
proposes to blacklist it. The consequences of such an action
would be extreme and the party then would be unable to obtain
any public contract. It is such a drastic act which should have
preceded a proper show cause notice and proposing such
blacklisting. That being not placed on record, the Hon'ble
Supreme Court reiterated the principles on which a blacklisting
action can be founded. Accordingly, the Supreme Court
quashed the order challenged before it. The Supreme Court
itself has clarified that the principles of natural justice cannot be
put in a straight jacket formula. The applicability of the same
would be dependent on facts of each case. In the
circumstances, this decision is wholly distinguishable on facts.
30. As a result of the above discussion, we do not find
any merit in the writ petition. We do not find any substance in
the argument of Mr.Tulzapurkar that the reasons in the
impugned order are not supportable by record. The impugned
order amply clarifies as to why MHADA has cancelled the LOI.
It assigns reasons and which refer to the Government's policy
and the earlier steps. It also refers to the Court order and duly
30 of 31 WP.1776.2014
considers the written submissions in the light of the terms and
conditions of LOI. We are, therefore, of the view that merits of
the impugned order cannot be challenged by the Petitioners.
The impugned order is essentially based on a policy decision. In
the circumstances and when the Petitioners do not have any
right which it can enforce in writ jurisdiction, then there is no
question of giving any prospective effect to the impugned order
either.
31. The writ petition, therefore, fails and is dismissed,
but without any order as to costs.
32. At this stage Mr.Kadam prays that this Court on 14
November 2014 passed ad-interim order in terms of prayer
clause (b). Inviting our attention to prayer clause (b), it was
submitted that this Court restrained the statutory authorities
from acting in furtherance of the impugned order. The ad-
interim order is continued till date and must be continued for a
reasonable period so as to enable the Petitioners to challenge
this order in a higher Court. This request is opposed by
Mr.Sawant. He would submit that MHADA cannot be restrained
from redeveloping its own properties and reconstruction of
buildings standing thereon so as to rehouse the occupants and
eligible persons. He would submit that larger public interest
would not be subserved by continuation of the ad-interim order.
31 of 31 WP.1776.2014
33. Having heard the learned counsel, we are of the
view that there is much substance in the objection of
Mr.Sawant. Now restraining MHADA or Mumbai Board from
giving effect to its order or to continue the ad-interim order
granted on 14 November 2014 and after concluding that
Petitioners' challenge to it has no merit, will be improper and
contrary to public interest. The request of Mr.Kadam is,
therefore, refused. The request of Mr.Kadam is also refused
because the buildings are dilapidated and the occupants are
evicted therefrom.
(S.C.DHARMADHIKARI, J.)
(B.P.COLABAWALLA, J.)
MST
