Bombay High Court
Dinoo Baji Todiwalla And Ors vs The State Of Maharashtra & Ors on 10 December, 2010
Author: D.Y.Chandrachud
Bench: D.Y. Chandrachud, Anoop V. Mohta
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (LODGING) NO. 2641 OF 2010
Dinoo Baji Todiwalla and Ors. .....Petitioners.
Vs.
The State of Maharashtra & Ors. ......Respondents
......
Mr. Dinyar D. Madon, Sr. Advocate with Mr. Mikhial Behl, Mr. J.S.
Solomon and Ms. Shirin Hornuzdi i/by M/s. Solomon & Co. for the
Petitioners.
Mr. E.P. Bharucha, Sr. Advocate with Mr. P.G. Lad for Respondent Nos.
2 to 5.
Mr. Narendra V. Walavalkar, Sr. Advocate with Ms. V.S. Gharpure for
Respondent Nos. 6 to 9.
Mr. Fredun E. Devitre, Sr. Advocate with Mr. Vineet Naik i/by Mr.
Sangramsingh S. Yadav for Respondent Nos. 10 to 12.
Mr. V.A. Thorat, Sr. Advocate with Mr. Behram Shroff and Mr. Chandra
Naik i/by M/s. Chandra Naik & Associates for Respondent Nos. 13 and
14.
CORAM : DR. D.Y. CHANDRACHUD AND
ANOOP V. MOHTA, JJ.
DATE : DECEMBER 10 & 13, 2010
ORAL JUDGMENT (PER 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 ::: Downloaded on - 09/06/2013 16:41:15 ::: VBC 2 wpl2641.10-10/13.12 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 non-residential 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 ::: Downloaded on - 09/06/2013 16:41:15 ::: VBC 3 wpl2641.10-10/13.12 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 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.
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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 and Respondent No.10, and 6 other tenants/occupants of apartments in the property. On 3 November 1972, a registered indenture of assignment was executed between the landlords and partners of Dalal Estate as confirming parties in favour of Respondent No. 10 and 6 others. On the same day, a registered ::: Downloaded on - 09/06/2013 16:41:15 ::: VBC 5 wpl2641.10-10/13.12 declaration of Trust was executed by the Tenth Respondent and 6 others in respect of the property.
4. The case of the Petitioners is that on 15 April 1976, the Tenth Respondent and 5 others executed a declaration under the Maharashtra Apartment Ownership Act, 1970 to form a condominium known as Dalal Estate Apartment Association. The Declaration, Bye-
laws and Regulations were registered with the Sub-Registrar. On 3 July 1976, a Registered Deed of Apartment was entered into between the Tenth Respondent and other Trustees and Petitioner No. 12 in respect of Apartment M-6. According to the Petitioners, in spite of the formation of a Condominium governed by the Maharashtra Apartment Ownership Act, 1970, the Tenth Respondent and other Trustees continued to collect rent and transfer tenancies in respect of premises on the property.
5. A proposal was mooted some time in 2006 for redevelopment of the property under Development Control Regulations 33(7). Some of the occupants objected to the development of the property. On 27 November 2006, the Thirteenth Respondent, who is the Developer, outlined a proposal to the tenants ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 6 wpl2641.10-10/13.12 for redevelopment of the property. On 29 August 2006, an agreement for development was executed. On 20 February 2008 and 13 March 2008, certificates were issued under Section 88(3)(a) of the MHADA Act by the Executive Engineer of the Repair Board stating that the Board was of the opinion that the cost of repairs would exceed to Rs.
1,200/- per square meter and the building was not capable of being repaired at reasonable expense. Accordingly, the certificate stated that the building would be demolished and a new building would be constructed on the plot by MHADA. The proposal for redevelopment by the Thirteenth Respondent was thereupon processed. On 16 May 2008, the Chief Officer of the Repairs and Reconstruction Board issued a No Objection Certificate for the redevelopment of the property.
6. On 23 July 2008, the Petitioners instituted a Suit in this Court against inter-alia Respondent Nos.10 to 14. The reliefs that have been sought in the suit are inter alia a direction to execute and register deeds of apartment in favour of Plaintiffs 1 to 3, 5 to 13, 18 and 19 and to handover the charge of the property to the Association constituted under the declaration dated 15 April 1976, executed under the Maharashtra Apartment Ownership Act, 1970. Among other reliefs that are sought is a declaration that the agreement for ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 7 wpl2641.10-10/13.12 development dated 29 August 2006 executed with the Developer is null and void. On 7 October 2008, the Municipal Corporation issued a notice under Section 354, recording that the buildings were in a ruinous condition and likely to fall and called upon the owners to pull down the buildings or to carry out structural repairs. On 11 June 2010, an IOD was issued by the Municipal Corporation. These proceedings were instituted on 25 November 2010, inter-alia to impugn redevelopment. The Petitioners have impugned the legality of the certificate issued by MHADA under Section 33(8)(a), the No Objection Certificate dated 16 May 2008, together with its Corrigendum and an IOD issued by the Municipal Corporation on 11 June 2010. The Notice under Section 354 has also been challenged.
7. On behalf of the Petitioners, it has been submitted that:-
(i) In view of the declaration that has been issued under the Maharashtra Apartment Ownership Act, 1970 the Petitioners are entitled to the statutory protection which is made available inter-alia by the provisions of Sections 4,5,6,8 and 14;
(ii) In view of the provisions of Section 10(2) of the Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 once a property consisting of a ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 8 wpl2641.10-10/13.12 building is constructed subject to provisions of the Maharashtra Apartment Ownership Act, 1970, in that case, it shall not be lawful to form a co-operative society;
(iii) The plain consequence of the Deed of Assignment and the declaration executed by the Trustees, together with the declaration made under the Maharashtra Apartment Ownership Act,1970 is that the property would be subject to the regulatory provisions of that Act.
In the circumstances, there would be no warrant to form a co-
operative Society or, for that matter, to apply the provisions for development contained in DCR 33(7);
(iv) As a result of the redevelopment proposal, the developer is to reconstruct a building consisting of 72 storeys on the site of the existing property and one of the conditions that has been stipulated is that there can be no sale of rehabilitation flats for a period of 10 years. The Petitioners are opposed to the scheme for redevelopment on the ground that it prejudicially affects their rights.
8. The Petition has been opposed on behalf of the contesting Respondents, including amongst them, the Tenth, Eleventh and Twelfth Respondents, claiming to be existing Trustees and by the Thirteenth Respondent, who is the Developer. Counsel appearing on ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 9 wpl2641.10-10/13.12 behalf of MHADA and the Municipal Corporation, made submissions in support of the validity of the action that has been taken by the Regulatory Authorities.
9. On behalf of Respondent Nos.10, 11, 12 and 13, it has been submitted that: (i) The basic premise that the property has been subjected to the Maharashtra Apartment Ownership Act, 1970 is incorrect since a suit which has been instituted before this Court seeking reliefs in that respect is still pending; (ii) The initial declaration of Trust dated 3 December 1972 was by seven trustees acting for and on behalf of forty one tenants. The list of tenants disclosed in the second schedule to the declaration covered amongst the Petitioners, only Petitioner Nos.2, 6, 12, 14 and 15 respectively of whom Petitioner Nos.2 and 6 are subsequent transferees. The original assignment dated 3 November 1972, was obtained by seven trustees for and on behalf of themselves and for other tenants of Dalal Estate;
(iii) The declaration under the Maharashtra Apartment Ownership Act, 1970, dated 15 April 1976, was subscribed to by seven persons;
(iv) Only three of the Petitioners executed Deeds of Apartments under Section 5(2) of the Maharashtra Apartment Ownership Act, 1970 together with 58 others. Save and except for the three Petitioners ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 10 wpl2641.10-10/13.12 (Petitioners 4, 12 and 14-15), all the other fifty eight persons have consented to the redevelopment scheme; (v) As a matter of fact, the declaration under the Maharashtra Apartment Ownership Act, 1970 was never acted upon and the occupants of Dalal Estate continued to treat themselves as and accepted their position as tenants. After 1976, the tenants continued to pay rent. Applications were made for transfer of tenancies to the trustees, including by several of the Petitioners. One of the Petitioners, Petitioner No.9, filed a declaratory suit in the Small Causes Court while in the case of another Petitioner, a suit instituted by the trustees for possession before the same Court, was settled upon an acknowledgement of tenancy. In other words, it was asserted that for over thirty years, there was no claim on the basis of ownership until a suit was filed in this Court in 2008 by nineteen persons; (vi) 87% of the occupants are in favour of redevelopment and have moved out of their premises. 285 occupants consented, out of which 235 have vacated their structures; (vii) The provisions of the Maharashtra Apartment Ownership Act, 1970 are applicable only if deeds are executed in the manner contemplated by the statute. Prior to 1976, all the occupants were tenants. The deed of assignment was entered into by seven persons. The Act applies to owners. None of the Petitioners or the other occupants have acquired a title to the ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 11 wpl2641.10-10/13.12 premises as owners and it is ex-facie apparent that there is no document of title in favour of any of the Petitioners. All the Petitioners are parties to the suit in which until date, there are no interlocutory orders enuring to their benefit. There has been an unexplained delay on the part of the Petitioners in moving the Court and the Petition raises disputed questions of fact relating to title which is also a subject matter of the suit on the Original Side; (viii) The buildings in this case were constructed prior to 1940 and are cessed 'A' category buildings. The buildings were repaired in 1975 by the Repair Board. DCR 33(7) contemplates consent of 70% of the occupants which has been obtained. Cess has admittedly been paid on the basis that all the buildings are of cessed 'A' category and the property was repaired by the Repair Board on that basis. At no stage was an exemption under Section 18(j) availed of on the basis that the buildings were occupied by the owners.
10. Counsel appearing on behalf of MHADA and the Municipal Corporation have also submitted before the Court that there is no allegation against either of the statutory bodies of mala fides. The Certificate issued by MHADA under Section 88(3)(a) and by the Municipal Corporation under Section 354 of the Mumbai Municipal ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 12 wpl2641.10-10/13.12 Corporation Act, 1888, have been issued for valid reasons and particularly in the absence of any allegations of mala fides or perversity, this Court should not interfere in the exercise of the writ jurisdiction.
11. The narration of facts in the earlier part of this judgment and the record before the Court discloses that prior to 1976, all the occupants of Dalal Estate were tenants. On 3 November 1972, an assignment was obtained by seven persons for and on behalf of themselves and also for "other tenants" of Dalal Estate at and for a consideration of Rs.7.51 lakhs. On the same day as the Deed of Assignment, seven trustees purported to execute a Deed of Declaration of Trust stating that they had entered into an agreement for sale on behalf of themselves and the other tenants of the property who are listed out in the second schedule to the declaration. The second schedule contains a list of 48 tenants (including the seven trustees).
The premises of Petitioner Nos.2, 6, 12 and 14-15 are listed out in the second schedule. On 15 April 1976, seven trustees filed a declaration under the Maharashtra Apartment Ownership Act, 1970. Thereafter, it is an admitted position before the Court that three of the Petitioners together with 58 others had executed Deeds of Apartment under the ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 13 wpl2641.10-10/13.12 Act. The three Petitioners are respectively Petitioner No.4, 12 and 14-15 (the last among them being one unit). Of the 61 persons, who executed deeds of apartment, 58 have consented to the redevelopment of the property. Only three among them who are Petitioners are contesting the redevelopment.
12. Now, it is in this background that it would be necessary for the Court to consider the course of dealings which took place between the parties after 1976 and which eventually resulted in the institution of the suit in this Court. There is material on the record to indicate that even after 1976, the occupants of Dalal Estate continued to treat themselves as tenants and were regarded as tenants of the landlords of the properties. Some of the material to which a reference has been made during the course of the hearing, would now have to be adverted to. On 14 March 2000, the First Petitioner submitted an affidavit to the landlord, seeking a deletion of the name of his deceased father from the rent receipt and the inclusion of the names of his wife and his daughter as tenants in the tenanted accommodation. On 9 September 1992, the Second Petitioner sought a transfer of the rent receipt to his name. A supporting affidavit was filed by the original occupant-tenant. Among the other Petitioners ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 14 wpl2641.10-10/13.12 who had filed affidavits for transfer of tenancies are Petitioner Nos.1, 2, 3, 6, 7, 11 and 17. Petitioner No.9 instituted a declaratory suit in the Small Causes Court (RAD Suit 2561 of 2006) seeking a declaration of his status as a lawful tenant. A suit was instituted by the Trustees against Petitioner No.16 (RAE& R Suit 938/2407 of 1993) for possession. The suit was settled upon Consent Terms being filed on 25 June 2003 by which the status of Petitioner No.16 as a tenant was acknowledged. We have adverted to some of the materials which have been placed on the record of these proceedings to indicate that there is substance in the contention which has been urged before the Court that all along the occupants of Dalal Estate, or in any event, at least a large body of them, proceeded on the basis that the nature of their occupation was as tenants. All the buildings were constructed prior to 1940 and it is an undisputed position before the Court that repair cess was paid to MHADA on the basis that these were cessed 'A' category buildings. The Repair Board undertook the work of repair also on that basis; a position in which there was acquiescence on the part of the occupants.
13. It was in 2008 that a suit was instituted before this Court on the Original Side by nineteen persons (Suit 2405 of 2008). Among ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 15 wpl2641.10-10/13.12 the reliefs that have been sought in the suit is a direction to the Defendants therein to execute and register deeds of apartment in favour of Plaintiff Nos.1 to 3, 5 to 13, 18 and 19. The suit includes a challenge to the agreement for development dated 29 August 2006 on the basis of which, the process of redevelopment has been initiated.
The Plaintiffs to the suit were, therefore, clearly conscious of the fact that a redevelopment of the property was proposed and that a development agreement had been entered into. The suit was instituted in 2008 and until date, no interlocutory order enures to the benefit of the Plaintiffs there. These proceedings under Article 226 of the Constitution were lodged before the Court on 26 November 2010.
In the meantime, substantial progress has been achieved towards the redevelopment of the property in question. 285 out of nearly 305 of the occupants have consented to the scheme for redevelopment under DCR 33(7). 235 occupants have vacated their structures. The process of redevelopment cannot be allowed to be stalled in this background.
The redevelopment envisages that all occupants would be given an area equal to their existing areas by way of permanent alternate accommodation free of costs. The developer has agreed to pay rental compensation to each of the existing tenants, in order to enable them to secure transit accommodation during the period of redevelopment.
::: Downloaded on - 09/06/2013 16:41:16 :::VBC 16 wpl2641.10-10/13.12 The developer has stated before the Court through Counsel that the payment on account of rental compensation alone would be in the range of Rs.60 to Rs.65 crores. The majority of the tenants has also executed agreements for permanent alternate accommodation which are registered with the Sub Registrar of Assurances. Besides these steps, as we have noted earlier, the developer has paid an amount of Rs.3.54 crores as development charges to the Municipal Corporation and has undertaken the responsibility of furnishing a Bank Guarantee of Rs.25 crores as security against the construction of rehabilitation buildings. The developer is also required to furnish a Bank Guarantee of Rs.15 crores each year against post dated cheques securing the payment of future monthly compensation. The suit which has been instituted before this Court is pending and it would be inappropriate for this Court in the exercise of its writ jurisdiction to make any determination on the issues of title which would arise in the course of the trial of the suit. The condition that a rehabilitation tenement should not be alienated for a certain period is reasonable.
14. In coming to the conclusion that, for the reasons indicated earlier, the interference of this Court is not warranted under Article 226, we are also guided by the note of caution Chagla, C.J. addressed ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 17 wpl2641.10-10/13.12 in his judgment for a Division Bench of this Court in the State of Bombay vs. Morarji Cooverji:1 "But it is not sufficient that a party should come to this Court and make out a case that a particular requisition order is not valid. In order to get that relief from the Court on a writ petition, not only must he come with clean hands, not only must he not suppress any material facts, not only must he show the utmost good faith, but he must also satisfy the Court that the making of the order will do justice and that justice lies on his side." (emphasis supplied).
Justice requires that the collective will of 87% of the occupants in support of the scheme for redevelopment should not be allowed to be thwarted by a dissenting few.
15. We do not find any merit in the challenge which has been addressed before the Court to the certificate which has been granted by MHADA under Section 88(3)(a) and to the action which has been taken by the Municipal Corporation under Section 354A of the Mumbai Municipal Corporation Act. 1888. The certificate under Section 88(3)(a) of the MHADA Act contains a declaration by that regulatory authority that it is not possible to repair the premises within the ceiling prescribed by the Act. The Municipal Corporation has, while issuing a notice under Section 354, come to the conclusion 1 61 BLR 318 ::: Downloaded on - 09/06/2013 16:41:16 ::: VBC 18 wpl2641.10-10/13.12 that the premises were in a dangerous and ruinous condition. There is no allegation of mala fides: none is set up at the hearing. Whether a building, as a matter of fact, is in a ruinous or dilapidated condition is a pure question of fact. In the absence of mala fides or a capricious exercise of power, the Court, under Article 226 of the Constitution, cannot sit in judgment over a decision of the authority and decide for itself whether a building is in fact, in a ruinous condition. This has been settled by a judgment of a Division Bench of this Court in Diwanchand Gupta Vs. N.M.Shah,2 and by the earlier judgment in Nathubhai Dhulaji vs. The Municipal Corporation.3
16. Counsel appearing on behalf of the Petitioners has expressed an apprehension that MHADA may proceed to dispossess the non-consenting occupants of their existing premises without following due process of law. Counsel appearing on behalf of MHADA has stated before the Court that the apprehension is misplaced and MHADA which is a public authority, would take recourse to its powers under the law in the event that it becomes necessary to dispossess the non-consenting occupants to facilitate the process of such construction.
2 1972 Mh.L.J.524
3 60 BLR 515
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17. Therefore, having had regard to all the facts and circumstances of the case, including the delay on the part of the Petitioners in moving the Court, which has resulted in a scheme of redevelopment having been approved by an overwhelming majority of the occupants, we do not consider this to be a fit case for the exercise of the writ jurisdiction.
18. For these reasons, the Petition shall stand dismissed. There shall be no order as to costs.
(DR. D.Y. CHANDRACHUD, J.) (ANOOP V. MOHTA, J.) ::: Downloaded on - 09/06/2013 16:41:16 :::