Bombay High Court
Jagnnath Hanumant Sonawane vs Slum Rehabilitation Authority on 11 May, 2012
Author: A.A. Sayed
Bench: A.A. Sayed
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2488 OF 2011
1. Jagnnath Hanumant Sonawane
2. Prabhakar Hanumant Sonawane
3. Kishan T. Jadhav
All adults, Indian Inhabitants
All residing at 2/26 Krishna Kunj,
Near Vikhroli Railway Station,
Vikhroli (East),
Mumbai 400 083. ...Petitioners
Vs.
1. Slum Rehabilitation Authority
An Authority, constituted
under the provisions of
Maharashtra Slum Areas (I.C. & R.)
Act, 1971, and having its office at
Administrative Building,
Prof. Anant Kanekar Marg,
Bandra (E), Mumbai 400 051.
2. The Chief Executive Officer
Slum Rehabilitation Authority
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Having his office at
Administrative Building
Prof. Anant Kanekar Marg,
Bandra (E), Mumbai 400 051.
3. Hindustan Construction Company Ltd.
A Company incorporated under Indian
Companies Act, 1913 having its office at
Hincon House, L.B.S. Road,
Vikhroli (West), Mumbai-400 083.
4. The State of Maharashtra
(Notice to be served on Govt.
Pleader, High Court, O.S., Bombay)
5. The President
Maharashtra Slum Areas (I.C. & R.)
Special Tribunal, Having its office at
Griha Nirman Bhavan
Bandra, Mumbai. ...Respondents
Mr. Pravin Samdhani, Senior Advocate i/b Mr. S.G. Surana with Mr.
Madhur S. Surana for the Petitioners.
Mr. Ravi Kadam, Advocate General with Mr. G.D. Utangale and Mr.
B.V. Phadnis i/b M/s Utangale & Co. for Respondent Nos.1 and 2.
Mr. Sekhar Naphade, Senior Advocate alongwith Mr. Anirudh Joshi,
Miss. Pratiti Naphade, Mr. Chetan Yadav and Mr. Satyan Vora i/b
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Markand Gandhi & Co. for the Respondent No.3 .
Mr. Y.V. Divekar with G.V. Bhagat i/b Divekar & Co. for the
Intervenor Societies.
CORAM : A.A. SAYED, J.
JUDGMENT RESERVED ON 7th FEBRUARY, 2011
JUDGMENT PRONOUNCED ON 11th MAY, 2011
JUDGMENT:
1. Rule. Rule made returnable forthwith. Respective Counsel waive service. By consent and at their request the petition is heard finally at the admission stage.
2. By the above petition, the Petitioners have impugned the order dated 7th December, 2011, in Appeal No. 14 of 2011 passed by Respondent No.5 - President, Special Tribunal constituted under ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 4 Wp2488-11 the Maharashtra Slum Areas (Improvement and Redevelopment) Act, 1971 (hereinafter referred to as "the Slum Act"), confirming the order dated 11th April 2011 corrected to 4th May 2011 (by corrigendum) passed by Respondent No. 2-Chief Executive Officer, Slum Rehabilitation Authority (SRA), declaring the subject property as 'Slum Rehabilitation Area' under Section 3C(1) of the Slum Act.
3. The principal ground of challenge is that the order dated 11th April 2011 corrected to 4th May, 2011 (by corrigendum) declaring the subject property as 'Slum Rehabilitation Area' under section 3C(1) of the Slum Act is passed without issuing a Show Cause Notice and granting an opportunity of hearing to the Petitioners thereby violating the principles of natural justice.
Consequently, it is contended that the said order is required to be set aside.
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Background facts
4. The Respondent No.3 are the owners of the property bearing C.S. Nos. 33(4), 46, 48/1,49/1,49/3,50, 51/1,52/1 and 52(3) corresponding to CTS Nos. 145, 148, 188, 189, 192, 193, 198, 199, 224 and 225 situated at Village Hariyali, Vikhroli (East), Mumbai.
One Hari Fakira Kharvi was cultivating the subject property as "Kul". According to the Petitioners, the name of Shri Hari Fakira Kharvi was appearing in the 7/12 extracts. Respondent No.3 filed Suit No. 431 of 1969 in this Court against said Hari Fakira Kharvi interalia praying for possession of the property. At the interlocutory stage Respondent No.3 and Hari Fakira Kharvi filed consent terms dated 24th October, 1969, wherein Respondent No.3 admitted that said Hari Fakira Kharvi was cultivating the land bearing survey Nos.
46, 48/1, 49/1, 49/3, 52/1, 52/3. It was agreed in the consent terms, ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 6 Wp2488-11 which was signed by the Counsel, that pending the hearing and final disposal of the suit Hari Fakira Kharvi would give 1/3rd share of the annual crop from the suit land to Respondent No.3 (Plaintiff therein) as also the arrears in respect thereof. It was agreed that Hari Fakira Kharvi was a Lessee and that he had a right to sub-let the land and to receive lease money and also transfer his rights to any other person. Ultimately, at the stage of final hearing of the suit, by order dated 19th July, 1979, the Plaint was returned to Respondent No. 3 (Plaintiff therein) for presentation to the proper Court and it was recorded in the said order that this Court had no jurisdiction to entertain the suit.
5. During the pendency of the aforesaid suit, on 23rd May, 1975, by an Indenture of Lease between Hari Fakira Kharvi described as Lessor of the one part and Shri Hanumantrao Sonawane (late father of Petitioner Nos. 1 and 2 herein) and Kisan Tadoba ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 7 Wp2488-11 Jadhav (Petitioner No.3 herein) described as Lessees of the other part, the said Hari Fakira Kharvi let and demised the subject property for 999 years with effect from 7th day of December, 1954.
The said Indenture of Lease was registered with the Registrar of Assurances. The Indenture of Lease described the property as Survey Nos. 33(4), 46, 48/1, 49/1, 49/3, 50, 51/1 and 52/1. In the said Indenture of Lease, it was stated that the Lessor (Hari Fakira Kharvi) was in possession of the said property for more than 40 years and Hari Fakir Kharvi was described as owner of the said lands by adverse possession. It is further stated in the said Indenture that the Lessees shall use the said lands for any purposes including purposes of erecting buildings and structures thereon and to use and allow to be used the said buildings and structures so erected for residence and business of tenants or licensees of the Lessees and that the Lessees shall discharge all the Municipal and other rates and taxes in respect of the said premises.
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6. On 8th February, 1979, the Deputy Collector (ENC/REM) and CA, Kurla-II declared the subject property as 'slum area' under Section 4 of the Slum Act. The said order was challenged by Hanumantrao Sonawane, late father of Petitioner Nos. 1 and 2 by filing Appeal No. 84 of 1980 before the Maharashtra Slum Tribunal.
By order dated 12th March, 1982, the order of declaration of slum area dated 8th February, 1979 was set aside.
7. It is the case of the Petitioners that they continued to be the Lessees in view of the registered Lease Deed/Indenture of Lease dated 23rd May, 1975 executed by the said Hari Fakira Kharvi on one hand and late Hanumant Sonawane and Petitioner No.3 on the other hand, and after the death of Hanumant Sonawane, the Petitioners continue to be the Lessees and are in possession of the subject property and that the occupants were paying rent of their ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 9 Wp2488-11 respective rooms/structures earlier to late Hanumant Sonawane and now to them.
8. According to the Petitioners, the Respondent No. 3 tried to object to the Petitioners' use, occupation and enjoyment of the property and therefore, they filed S.C. Suit no.2688 of 2008 in this Court on 23rd July, 2008 for a declaration that they are the Lessees of the property on the basis of the registered Lease Deed dated 23rd May, 1975 and that the said Lease Deed is valid, subsisting and binding upon Respondent No.3. The other prayers in the Plaint are interalia to restrain Respondent No.3 from dealing with the tenants/occupants of the property and/or entering into agreement/s with them and demolishing/reconstructing upon the property, as also from obtaining sanction, approval for development/redevelopment in respect of the property and/or obtaining IOD/ commencement from the Municipal Corporation of Mumbai and other authorities ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 10 Wp2488-11 including SRA and getting any scheme approved for the purpose of development/redevelopment of the property.
9. On 10th November 2008, Respondent No.3 filed T.E,& R. Suit No. 248/297 of 2008 in the Small Causes Court, Mumbai, against the Petitioners interalia for vacant and peaceful possession of the property and mesne profits.
10. In the S.C. Suit no. 2688 of 2008 pending in this Court, the Petitioners took out the Notice of Motion No. 3272 of 2008. At the hearing of the motion for ad-interim reliefs on 17th November, 2008, it was pointed out to this Court by the Respondent No.3 that they had already filed T.E. & R. Suit no. 248/279 of 2008 for possession in the Small Causes Court. The learned Single Judge of this Court did not grant any ad-interim relief as the learned Judge was of the view that since Respondent No.3 has already filed a suit ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 11 Wp2488-11 against the Petitioners seeking a decree for possession of the property in the Small Causes Court, Respondent No.3 cannot enter upon the property or demolish any structure therein until Respondent No.3 obtained a decree for possession. The aforesaid suits in this Court and Small Causes Court are pending.
11. According to the Petitioners, Respondent No.3 on 6th March, 2010 submitted its proposal for redevelopment to Respondent No.1-SRA alongwith Annexure-I falsely contending that the property has been declared as slum area on 8th February, 1979, though the said declaration had already been quashed and set aside by the Slum Tribunal in the year 1982. The Petitioners through their Advocate's letter dated 24th June, 2010 objected to the acceptance of Respondent No.3's proposal by SRA. According to the Petitioners, the Respondent No.1-SRA after accepting the proposal of Respondent No.3 forwarded the draft Annexure II Certificate to ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 12 Wp2488-11 the Competent Authority notified under the Slum Act for verification, approval and certification. The Petitioners objected to the survey being carried out by the Competent Authority on the ground that the property is not declared as Slum and therefore no Annexure II Certificate could be issued. The Respondent No.3 and Slum dwellers' Society, however, could not produce the proof of declaration of Slum of the property. The Competent Authority therefore stopped further process of Annexure II Certificate and survey of the property.
12. On 13th January, 2011, one Panchkutir Developers Ltd., a subsidiary company of Respondent No. 3, applied to the Authority to declare the area being CTS No. 145(p), 148(p), 189(A), 190, 190/1 to 222, 193(p), 197(A), 198(A), 199 as Slum Rehabilitation Area under Section 3C(1) of the Slum Act. The said Panchkutir Developers Ltd. were given development rights by Respondent No.3 ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 13 Wp2488-11 to develop the property and a Resolution was also passed by the Co-
operative Housing Societies formed by the slum dwellers, selecting the said Panchkutir Developers Ltd. for rehabilitation under the Slum Rehabilitation Scheme. The property was ultimately declared as a Slum Rehabilitation Area under section 3C(1) by order dated 11th April 2011 corrected to 4th May 2011 (by corrigendum).
13. The Petitioners were thereafter informed by the Deputy Collector (Enc/Rem) & CA, Bhandup, that since the property had been declared as Slum Rehabilitation Area, the process of survey of the property for Annexure II shall be continued.
14. Being aggrieved by the declaration dated 11th April, 2011 corrected to 4th May, 2011 (by corrigendum), declaring the property as Slum Rehabilitation Area under section 3C(1), the Petitioners filed Appeal No. 14 of 2011 under section 3C(2) of the ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 14 Wp2488-11 Slum Act before the Respondent No. 5-President, Special Tribunal.
On an Application made by Respondent No.3, they were added as party Respondent to the said Appeal.
15. By the order dated 7th December, 2011, the Special Tribunal dismissed the Petitioners' Appeal No.14 of 2011, which has led to the filing of the present Petition.
16. The Respondent No.3 has filed an Affidavit in reply to the petition. The case of the Respondent No.3 is as follows:
That the Lease Deed dated 23rd May, 1975 does not create any right in favour of the Petitioners and they have no locus to file the Petition. The consent terms spells out that the property was given on lease to Hari Fakira Kharvi for cultivating it i.e. for agricultural operations only. The lease was not given to Hari Fakira Kharvi for putting up structures and therefore under the provisions of Section ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 15 Wp2488-11 108(o) of the Transfer of Property Act, 1982, Hari Fakira Kharvi was not authorized to put up any structure on the property without consent of Respondent No.3. Consequently, said Hanumantrao Sonawane, the late father of Petitioners Nos.1 and 2 could not put any structures in the property without permission of Respondent No.3. In the Lease Deed which is purported to have been executed by Hari Fakira Kharvi, the property is wrongly shown as owned by adverse possession and that ownership can be established only through a decree by the competent Civil Court and therefore the Lease Deed did not convey any right, title and interest to Hanumantrao Sonawane and/or the Petitioners. In Consent Terms dated 25th October, 1969 no period of lease is specified and same would operate for a year and, thereafter it would be a case of tenant holding over. It is stated that tenancy has been terminated by notice dated 28th February, 2008 and thereafter the suit in the Small Causes Court has been filed by them. The Revenue entries under ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 16 Wp2488-11 which the Petitioners claim that Hari Fakira Kharvi was the owner under the provisions of Bombay Agricultural and Tenancy Act, 1948 ('Tenancy Act' for short) describing Hari Fakira Kharvi to be "Kul"
have already been deleted by the order of Tahsildar dated 31st March, 1974. Even otherwise, Hari Fakira Kharvi never claimed any rights under the Tenancy Act. No proceedings under Section 32G of the Tenancy Act for declaration of Hari Fakira Kharvi as a deemed purchaser was filed by the said Hari Fakira Kharvi. Also there is no certificate issued under Section 32M of the Tenancy Act. In any event, the Village Hariyali became a part of Greater Bombay and consequently a part of the limits of Municipal Corporation of Greater Mumbai in the year 1950 by virtue of Amendment Act No.8 of 1950 to Greater Bombay Laws and therefore, in view of the provisions of Section 88 of the Tenancy Act, the provisions contained in the said Act relating to an agricultural tenant's right to purchase the land no longer applied. Moreover, since 1967, the ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 17 Wp2488-11 Development Plan for the whole of Mumbai City including Greater Bombay which included extended suburbs including Village Hariyali was prepared and notified under the Maharashtra Regional Town Planning Act and therefore, the provisions of the Tenancy Act entitling the agricultural tenant to purchase the land did not apply or ceased to apply. The Petitioners therefore do not have any right in respect of the property and therefore cannot be considered as affected parties. The entry of late Hanumantrao and consequently the present Petitioners into the property is illegal based on purported Lease Deed which is illegal and void. The Petitioners in the proceedings in Suit No. 2688 of 2008 in this Court claimed that they constructed 150 chawls consisting 1200 tenants, however, they have not produced any record to establish that the said construction was made pursuant to the sanctioned plans and no consent of Respondent No.3 has been obtained and therefore, the said structures are illegal and unauthorized. The fact that the structures have been put up ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 18 Wp2488-11 without any permission from the Corporation is admitted by the Petitioners in Appeal No. 84 of 1980 before the Slum Tribunal. The said Hanumantrao and the Petitioners are therefore 'slumlords' within the meaning of Section 2(h-a) of the Slum Act, 1971 and the provisions of the Slum Act & Rules do not recognize any right of slumlords. Even in the Written Statement before the Small Causes Court, the Petitioners have admitted that they have carried out unauthorized construction. The property was declared as slum by declaration dated 4th May, 2011. Originally, the date was wrongly mentioned as 11th April, 2011 and a corrigendum was issued clarifying that the declaration is made on 4th May, 2011. The declaration was clearly justified in view of the Report dated 11th April, 2011 of the City Survey Officer, SRA and the Report of SDO dated 19th April, 2011. The Reports indicate the conditions obtaining the property which would justify the declaration as slum.
There is no proper drainage facilities and the conditions are ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 19 Wp2488-11 unhygienic and unfit for human habitation. There are more than 2,100 structures on the property and the total population is about 10,000 to 12,000. The total area of the property is about 13.55 acres equivalent to 5.49 hectares. All the structures on the property are in a cluster. There are about 160 units of WC structures on the property and the WCs are in a bad condition and for population of 10,000 to 12,000, this facility is extremely inadequate. There are more than 2000 families residing on the property and the number of water taps are about 146, which facility is therefore also inadequate. In the year 2000, the Collectors' office (Encroachment) had carried out survey of the property and has issued photo-pass to the residents of the area for the purpose of protecting their huts on the footing that they are part of a slum area. The Respondents have submitted photographs which speak for itself and does not require any inquiry to determine the status of the property and the Petitioners have not disputed the photographs before the lower authority. The scheme of the Act does ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 20 Wp2488-11 not contemplate a hearing at the stage of making a declaration under Section 3C(1) of the Slum Act. The declaration under Section 3C(1) is preceded by a formulation of a slum rehabilitation scheme under Section 3B which is a general scheme. The legislative intent for not providing for hearing at the stage of 3C(1) is clear from Section 3B.
Under Section 3B, there is a detailed mechanism for granting hearing to the affected parties and in contrast, its absence in 3C(1), is a clear pointer to the legislative intent, that no hearing is contemplated at 3C(1). It is stated that the Appeal itself is a substantive remedy, and in the said Appeal, the affected persons can raise even disputed question of the facts before the Special Tribunal and therefore, the ground relating to the alleged breach of principles of natural justice does not survive. The CEO had received two Reports, one dated 11th April, 2011 of the City Survey Officer, SRA and another Report of the SDO dated 19th April, 2011 which are self explanatory. The Reports record the condition of the area which ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 21 Wp2488-11 satisfy the requirement of being Slum. Section 3C(1) of the Slum Act does not require any hearing to be afforded to any persons before taking the administrative decision. The Petitioners must show prejudice caused to them by such declaration of Slum. It is pointed out that in the entire Appeal Memo, the Petitioners have not disclosed the prejudice caused to them if the property was declared Slum nor they have relied upon any particulars or material justifying that the said property is not Slum and therefore, it is an admitted and undisputed fact that the area is Slum.
17. An Affidavit in reply is also filed on behalf of Respondent Nos. 1 and 2 by Deputy Collector, Slum Rehabilitation Authority. The reply interalia states as follows:
That the Petitioners have no locus-standi within the meaning Section 3C(2) of the Slum Act. The declaration is made on the basis of the survey report for the betterment of the Slum Dwellers and in the ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 22 Wp2488-11 interest of majority of the slum dwellers and their welfare. The Petitioners have not joined the Society and alleged predecessors in title of the Petitioners who are necessary and proper parties to the Petition. That the slum dwellers who are occupying the slums are staying in filthy conditions and in order to improve the standard of living and to reside in hygienic conditions and for their welfare benefits the declaration is made under Section 3C(1) of the Slum Act. No permission under section 43 of the Tenancy Act was taken by the Petitioners from the SDO. Even if the Petitioners are treated as alleged Lessees of the property, it cannot be said that they are aggrieved persons under Sections 3C(2) of the Slum Act and admittedly the Petitioners are neither occupiers nor residents and they cannot be said to be the aggrieved persons. The Petitioners cannot claim better rights than Respondent No.3, who are admittedly owners of the land. The reply sets out the relevant provisions of the Act and states that after the amendment of 1996 ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 23 Wp2488-11 and insertion of Chapter IA, a separate Authority known as Slum Rehabilitation Authority has been constituted in terms of the Scheme of the Act as it now stands. There is no necessity of affording an opportunity of hearing to the Petitioners. The Petitioners have categorically admitted that the suit lands are fully occupied by the structures and there is no land left whatsoever.
There is no rebuttal to the factual position about the existence of the slums. The Reports dated 11-04-2011 and 19-04-2011 make the factual position amply clear about the existence of slums and the conditions. No notice before issuance of the Notification is necessary for declaration under section 3C(1) of the Slum Act and the impugned order has been rightly passed after considering all facts and circumstances.
18. The Petitioners have also filed affidavit-in-rejoinder wherein it is interalia stated that at the time of passing of the order ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 24 Wp2488-11 dated 11th April, 2011, the reports dated 11th April, 2011 and 19th April, 2011 were not on record of Respondent Nos. 1 and 2 and that when the Respondent Nos. 1 and 2 came to know that the Petitioners have obtained an order of status-quo, Respondent Nos. 1 and 2 have prepared false and fabricated Report and thereafter corrected the order dated 11th April, 2011 to 4th May, 2011 by issuing corrigendum to get over the order of status quo passed by Respondent No.5.
19. I have heard learned Senior Counsel Mr. Pravin Samdhani on behalf of the Petitioners, Learned Senior Counsel Mr. Shekhar Naphade on behalf of the Respondent No.3 and learned Advocate General (as he was at the time of hearing of the Petition) on behalf of the Respondent Nos. 1 and 2. Mr. Y.V. Divekar, appearing on behalf of the Intervenor-Societies supported the submissions made on behalf of the other Respondents.
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Submissions
20. Learned Senior Counsel Mr. Pravin Samdhani on behalf of the Petitioners made the following submissions:
(i) that before order declaring the property as slum rehabilitation area under Section 3C(1) of the Slum Act was issued, principles of natural justice have not been followed, in that, the Petitioners have not been issued a show cause notice and have not been afforded a hearing;
(ii) that the order under Section 3C(1) of the Slum Act declaring the property as slum rehabilitation area is not a speaking order, in that, no reasons have been recorded by the Respondent Nos. 1 and 2 in passing the said order;::: Downloaded on - 09/06/2013 18:36:49 :::
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(iii) that the provisions of Sections 4 and 3C(1) are pari materia and the aim, object and consequences of declaration is the same. Once it is held by our Court that the principles of natural justice are required to be followed under section 4, as a consequence, principles of natural justice would also have to be followed for declaration under section 3C(1) of the Slum Act;
(iv) that the Circular No. 118 dated 16-10-2010 by Respondent Nos. 1 and 2 provides the procedure for declaration under section 3C(1) and clearly contemplates a hearing, which procedure has not been followed;
(v) that in another case the Respondent Nos. 1 and 2 had issued a public notice in the daily news paper and called ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 27 Wp2488-11 for objections and suggestions before the proposed declaration. But in this case, no public notice was given.
In case of another property, order under section 3C(1) was set aside on the ground that principles of natural justice were not followed;
(vi) that the impugned order does not deal with the judgments cited before the Tribunal.
Mr. Samdani, in support of his submissions, placed reliance upon the following judgments:
(i) The Government of Mysore Vs. J.V. Bhat, AIR 1975 SC 596.
(ii) Scheduled Caste and Weaker Section Welfare Association ::: Downloaded on - 09/06/2013 18:36:49 ::: Dmt 28 Wp2488-11 Vs. State of Karnataka, AIR 1991 SC 1117.
(iii) United Bank of India Vs. Satyawati Tondon, (2010) 8 SCC 110.
(iv) Ponkunnam Traders Vs. Additional Income-Tax Officer, Kottayam, 83 ITR 508.
(v) Papaya Chinaya Muthwas Vs. State of Maharashtra, (1993) Mh. L.J. 1131.
(vi) Roop Singh Negi Vs. Punjab National Bank, (2009) 2 SCC 570.
(vii) Devendra Ganpatlal Chamdedia Vs. Chief Officer & Competent Authority, 2011(6) Mh.LJ 226.::: Downloaded on - 09/06/2013 18:36:49 :::
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(viii) Imam Mirsaheb Nadaf Vs. State of Maharashtra, 2005 (1) Mh. L.J. 726.
(ix) State of Rajasthan Vs. Basant Nahata, (2005) 12 SCC 77.
(x) Indian National Congress (I) Vs. Institute of Social Welfare, (2002) 5 SCC 685.
21. On behalf of the Respondent No.3-owner the following submissions have been urged by learned Senior Counsel Mr Naphade:
(i) that the declaration under Section 3(1) of the Slum Act is a legislative function and therefore, neither the principles of natural justice nor right of hearing can be claimed by the Petitioners before the declaration;::: Downloaded on - 09/06/2013 18:36:50 :::
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(ii) that the provisions of Chapter 1A constitute an
independent statutory scheme of Slum Rehabilitation.
The reasons for introducing Chapter 1A pursuant to the Afzalpurkar Committee Report is that the slum projects must be expeditiously cleared since the procedure in Chapter II does not serve this purpose;
(iii) that the Legislature has consciously refrained from providing a hearing before declaration under Section 3C(1) of the Slum Act is made. The General Slum Rehabilitation Scheme under Section 3B was prepared and a public notice inviting objections and suggestions was given and a scheme was finalized. That the provisions must be read in the context of entire statutory scheme which clearly provides no prior hearing ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 31 Wp2488-11 before the declaration under section 3C(1) is required;
(iv) that the statutory scheme provides for a substantial Appeal where the aggrieved person is given a full hearing on merits and the Petitioners have availed the same and failed to establish that the property is not a slum;
(v) that the Tribunal has relied upon the Reports dated 11th April, 2011 and 19th April, 2011 to record a finding of fact. There is no serious challenge to these Reports either in the Appeal or in the present petition;
(vi) that the Slum Act is a social welfare legislation, in that, the people i.e. the slum dwellers living in inhuman conditions are rehabilitated and the exercise of power ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 32 Wp2488-11 under Article 226 is not warranted;
(vii) that the object and purpose of principles of natural justice is to prevent any prejudice being caused to the party concerned. The Petitioners have not shown any prejudice whatsoever by the declaration of Slum and the alleged breach of principles of natural justice will not invalidate the action;
(viii) that the hearing before the Tribunal by way of Appeal under section 3C(2) is a sufficient compliance of principles of natural justice;
(ix) that the Petitioners who claim to be Lessees have no title to the suit property and the Petitioners are 'slumlords' under section 2(h-a) and the Petitioners are ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 33 Wp2488-11 not the owners within the meaning of Section 2(f) of the Slum Act;
(x) that it is not in dispute that the Respondent No. 3 are the owners of the property in question.
The following decisions were cited by Mr. Naphade in support of the above submissions:
(i) Tulsipur Sugar Co. Ltd. Vs. Notified Area Committee, (1980) 2 SCC 295;
(ii) Union of India Vs. Cynamide India Ltd., (1987) 2 SCC 720;
(iii) Aligarh Muslim University Vs. Mansoor Ali Khan, (2007) 7 SC 529;
(iv) Shri Sachidanand Pandey Vs. The State of West Bengal, AIR 1987 SC 1109;::: Downloaded on - 09/06/2013 18:36:50 :::
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(v) Calvin Vs. Carr, (1980) Privy Council 574;
(vi) The Municipal Corporation of Gr. Bombay Vs. P.S. Malvenkar, AIR 1978 SC 1380.
22. On behalf of Respondent Nos. 1 and 2, learned Advocate General made the following submissions:
(i) that in pursuance of the recommendations of the Afzalpurkar Committee, Chapter 1A, 1B and 1C came to be introduced in the Slum Act, whereby the statutory scheme for slum rehabilitation was radically altered and Chapters II and III were made inapplicable to schemes under Chapter IA. The various provisions contained in Chapter IV were also amended in their applications and schemes under Chapter I-A. The purport and object of all these legislative changes was to ensure that the clearance ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 35 Wp2488-11 and redevelopment and rehabilitation of slums should be expeditious and involved the least possible procedural delay. Section 3C(1) is required to be understood and interpreted in this light;
(ii) that section 3B provides that before a general slum rehabilitation scheme is declared, a detailed public consultative process involving, inviting of suggestions and objections, hearing to affected parties etc. is required to be undergone. It is only after a Slum Rehabilitation Scheme is declared that a declaration under Section 3C can be made. The legislature deliberately and consciously avoided making a provision for a hearing at the stage anterior to the declaration under section 3C(1);
(iii) that the next succeeding provision Section 3C(2) ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 36 Wp2488-11 provides for an Appeal by "any aggrieved person". The said Appeal under section 3C(2) amounts to full review/appeal on merits. This post decisional hearing amounting to a full review/ appeal on merits is expressly contemplated by the statute itself and is sufficient to meet the requirements of natural justice. A contrary interpretation reading a requirement to give a hearing prior to a declaration under Section 3C(1) will defeat the very purpose of the amendment to the Slum Act. The similarity in language between Section 3C and Section 4 is irrelevant, since both the provisions are in a different context;
(iv) that during the hearing before the Tribunal at no place the Petitioners in the pleading or in the arguments have made out any case on merits and solitary contention on behalf ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 37 Wp2488-11 of the Petitioners was that they ought to have been heard before the declaration under Section 3(C)(1) was made.
No material was placed on record before the Tribunal or even before this Court to arrive at a contrary findings as regards the property being a Slum and the petition is lacking in bonafides;
(v) that it is a well settled law that a gazetted declaration need not disclose reasons. The Reports and file notings are part of the decision making process and constitute the reasons which have weighed with the CEO while accepting the same. The signature of the CEO on the file at the foot of the reasoned notings tantamount to his accepting the reasons contained in the file. This is more than adequate;
::: Downloaded on - 09/06/2013 18:36:50 :::Dmt 38 Wp2488-11 The learned Advocate General relied upon the following rulings:
(i) Rasilal S. Mehta Vs. Custodian, Nariman Bhavan, Mumbai, (2011) 6 SCC 220;
(ii) Swadeshi Cotton Mills Vs. Union of India, (1981) 1 SCC 664;
(iii) The Co-operative Housing Society, Civilian Employees, Defense Service Vs. Commissioner and Special Officer, Municipal Corporation of Hyderabad, AIR 1985 Andhra Pradesh 277.
23. I have considered the rival contentions canvassed by the learned Counsel. At the outset, it is noticed that some of the issues raised by the Petitioners in the Appeal have not been addressed by the Tribunal in the impugned order. In the first blush, therefore, I was inclined simplicitor to remit the matter back to the Tribunal to ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 39 Wp2488-11 decide all the issues afresh. However, I have also noticed that there is no authoritative pronouncement on the issue whether the principles of natural justice need to be followed before making the declaration under section 3C(1) of the Slum Act and that no consistent procedure is being followed and in several Appeals before the Tribunal, the Notifications declaring slum area/slum rehabilitation area are being set aside on that count, thereby delaying slum projects. The Petitioners have also highlighted this aspect as mentioned in para 20(v) hereinabove and urged that the subject Notification be set aside, claiming parity. Considering the above, though I have eventually remitted the matter back to the Tribunal, I have, whilst doing so, decided the principal issue raised in the Petition as stated in paragraph 3 herein-above.
Statutory Provisions
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Dmt 40 Wp2488-11
24. It would, at the outset, be appropriate to examine the relevant provisions to appreciate the scheme of the Slum Act.
25. The preamble of the Slum Act interalia states that the Act is enacted to make better provision for the improvement and clearance of slum areas in the State and their redevelopment.
26. Under section 2(e), "occupier" includes - (i) any person who for the time being is paying or is liable to pay to the owner the rent or any portion of the rent of the land or building in respect of which such rent is paid or is payable; (ii) an owner in occupation of, or otherwise using, his land or building; (iii) a rent-
free tenant or any land or building; (iv) a licensee in occupation of any land or building; and (v) any person who is liable to pay to the owner damages for the use and occupation of any land or building.
27. Section 2(f) provides that "owner", when used with ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 41 Wp2488-11 reference to any building or land, means the person who receives or is entitled to receive the rent of the building or land, if the building or land were let, and includes.- (i) an agent or trustee who receives such rent on account of the owner; (ii) an agent or trustee who receives the rent of or is entrusted with or concerned for any building or land devoted to religious or charitable purpose; (iii) a receiver, sequestrator or manager appointed by a Court of competent jurisdiction to have the charge of or to exercise the rights of owner of the said building or land, and (iv) a mortgagee-in-possession; but does not include a slumlord.
28. Section 2(ga) defines "slum area" to mean any area declared as such by the Competent Authority under sub-section (1) of Section 4.
29. Section 2(h-a) defines "slumlord" to mean a person ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 42 Wp2488-11 who illegally takes possession of any lands whether belonging to Government, local authority or any other person or enters into or creates illegal tenancies or leave and licence agreements or any other agreements in respect of such lands, or who constructs unauthorized structures thereon for sale or hire, or gives such lands to any persons on rental or leave and licence basis for construction or use and occupation, of unauthorized structures, or who knowingly gives financial aid to any persons for taking illegal possession of such lands, or for construction of unauthorized structures thereon, or who collects or attempts to collect from any occupiers of such lands rent, compensation or other charges for criminal intimidation, or who evicts or attempts to evict any such occupiers by force without resorting to the lawful procedure or who abets in any manner the doing of any of the above mentioned things.
30. Sections 2(h-b), 2(h-c) and 2(h-d) were inserted by the Maharashtra Act IV of 1996. Under Section 2(h-b) "Slum ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 43 Wp2488-11 Rehabilitation Area" is defined to mean a slum rehabilitation area, declared as such under sub-section (1) of section 3C by the Competent Authority in pursuance of the Slum Rehabilitation Scheme notified under section 3B.
31. "Slum Rehabilitation Authority" under Section 2(h-c) is defined to mean the Slum Rehabilitation Authority or Authorities appointed by the State Government under Section 3A.
32. Section 2(h-d) defines "Slum Rehabilitation Scheme" to mean the Slum Rehabilitation Scheme notified under section 3B;
33. Apart from the aforementioned definitions, the Slum Act was substantially amended by the said Maharashtra Act IV of 1996 pursuant to a Bill introduced in the Assembly. The Statement of Objects and Reasons of the Bill interalia set out that although the schemes in the Slum Act have helped in improving the hygiene and ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 44 Wp2488-11 environment in the slum areas, the problem of slum development has, to a large extent, remained unresolved. With a view to find out a permanent solution to the problem and to provide for the rehabilitation of the slum and hutment dwellers through reconstruction, the Government of Maharashtra had appointed a Study Group under the Chairmanship of Shri Dinesh Afzalpurkar, who submitted a Report to the State Government making certain suggestions, including that of appointment of Slum Rehabilitation Authority. Pursuant thereto, the Slum Act came to be amended.
Chapter I-A which was also inserted by the Maharashtra Act IV of 1996 consists of sections 3A to 3W.
34. Section 3A(1) provides that the State Government may by Notification in the Official Gazette, appoint an authority to be called the Slum Rehabilitation Authority for such area or areas as may be specified in the Notification.
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35. Section 3A(3) lays down that the powers, duties and functions of the Slum Rehabilitation Authority shall be as follows:
"(a) To survey and review existing position regrading slum areas;
(b) to formulate schemes for rehabilitation of slum areas;
(c) to get the Slum Rehabilitation Scheme implemented;
(d) to do all such other acts and things as may be necessary for achieving the objections of rehabilitation of slums."
36. Section 3B(1) & (2) provides for preparation of general Slum Rehabilitation Scheme which is required to be published in the Official Gazette as the provisional Slum Rehabilitation Scheme for the areas specified under section 3A(1) for the Rehabilitation of Slums and hutment colonies in such area for the information of general public inviting objections and suggestions. Section 3B(3) states that after considering the objections and suggestions by the ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 46 Wp2488-11 CEO and after carrying out such modifications as deemed fit or necessary, the Scheme is to be finally published in the Official Gazette as the Slum Rehabilitation Scheme.
37. Section 3B(4) provides that the Slum Rehabilitation Scheme so notified under sub-section (3) shall generally lay down the parameters for declaration of any area as the slum rehabilitation area and indicate the manner in which rehabilitation of the area declared as the slum rehabilitation area shall be carried out. In particular, it is required to provide for all or any of the following matters, that is to say.-
(a) the parameters or guidelines for declaration of an area as the slum rehabilitation area;
(b) basic and essential parameters of development of slum rehabilitation area under the Slum Rehabilitation Scheme;
(c) provision for obligatory participation of the landholders and occupants of the area declared as the slum ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 47 Wp2488-11 rehabilitation area under the Slum Rehabilitation Scheme in the implementation of the Scheme;
(d) provision relating to transit accommodation pending development of the slum rehabilitation area and allotment of tenements on development to the occupants of such area, free of cost;
(e) scheme for development of the slum rehabilitation areas under the Slum Rehabilitation Scheme by the landholders and occupants by themselves or through a developer and the terms and conditions of such development; and the option available to the Slum Rehabilitation Authority for taking up such development in the event of non- participation of the land holders or occupants;
(f) provision regarding sanction of Floor Space Index and transfer of development rights, if any, to be made available to the developer for development of the slum rehabilitation area under the Slum Rehabilitation Scheme;
(g) provision regarding non-transferable nature of tenements for certain period, etc."
38. Section 3C is most relevant for the purposes of the present case. It provides for declaration of a 'Slum Rehabilitation Area'. It reads as under:
::: Downloaded on - 09/06/2013 18:36:50 :::Dmt 48 Wp2488-11 "3C(1) As soon as may be after the publication of the Slum Rehabilitation Scheme, the Chief Executive Officer on being satisfied that circumstances in respect of any area justifying its declaration as slum rehabilitation area under the said scheme, may by an order published in the Official Gazette, declare such area to be a "slum rehabilitation area". The order declaring slum rehabilitation area (hereinafter referred to as "the slum rehabilitation order") shall also be given wide publicity in such manner as may be specified by the Slum Rehabilitation Authority.
3C(2) any person aggrieved by the slum rehabilitation order may, within four weeks of the publication of such order prefer an appeal to the Special Tribunal; and the decision of the Special Tribunal shall be final."
39. Section 3D lays down that on publication of the Slum Rehabilitation Scheme under sub-section (1) of Section 3B, the provisions of other Chapters of the Slum Act shall apply to any area declared as the slum rehabilitation area, subject to certain modifications as set out in the said Section. It interalia provides that Chapter II and III shall be omitted in respect of slum ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 49 Wp2488-11 rehabilitation area. Thus, by the Amendment of Maharashtra Act IV of 1996, upon the publication of the slum rehabilitation scheme under section 3C, some Chapters of Slum Act are required to be omitted and some are substituted or modified in respect of areas declared as slum rehabilitation areas.
Chapter II of the Slum Act deals with the 'Slum Areas' (as distinguished from 'Slum Rehabilitation Areas' introduced by Maharashtra Act IV of 1996). As indicated above, upon a declaration being made under section 3C(1), Chapter II would stand omitted. However, to bring out the scheme of the Slum Act, as regards declaration of 'slum area', the provisions of Section 4 of Chapter II may be looked at.
40. Section 4, which was left undisturbed by the above amendment to the Slum Act, reads as under:
::: Downloaded on - 09/06/2013 18:36:50 :::Dmt 50 Wp2488-11 "4(1) Where the Competent Authority is satisfied that-
(a) any area is or may be a source of danger to the health, safety or convenience of the public of that area or of its neighborhood, by reason of the area having inadequate or no basic amenities, or being insanitary, squalid, overcrowded or otherwise, or
(b) the buildings in any area, used or intended to be used for human habitation are -
(i) in any respect, unfit for human habitation; or
(ii) by reasons of dilapidation, overcrowding, faulty arrangement and design of such buildings, narrowness or faulty arrangement of streets, lack of ventilation, light or sanitation facilities or any combination of these factors, detrimental to the health, safety or convenience of the public of that area, the Competent Authority may, by notification in the Offi-
cial Gazette, declare such area to be slum area. Such dec- laration shall also be published in such other manner (as will give due publicity to the declaration in the area) as may be prescribed.
(2) In determining whether buildings are unfit for human habitation for the purposes of this Act, regard shall be had to the condition thereof in respect of the following matters, that is to say, -
(a) repairs;
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(b) stability;
(c) freedom for damp;
(d) natural light and air;
(e) provision for water supply;
(f) provision for drainage and sanitary conveniences;
(g) facilities for the disposal of waste water;
and the building shall be deemed to be unfit as aforesaid, if, and only if, it is so far defective in one or more of the said matters that it is not reasonably suitable for occupa- tion in that condition."
41. Under Sub-section (3) of Section 4, any person aggrieved by a declaration made under sub-section (1) may, within thirty days after the date of such declaration in the Official Gazette, appeal to the Tribunal within thirty days.
42. Sub-section (4) reads as follows:
"(4) When an appeal is presented under sub-section (3) the Tribunal shall, by a public notice published in a newspaper in the Marathi language circulating in the ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 52 Wp2488-11 local area in which the slum area is situated and also displayed at some conspicuous place in the slum area, call upon the residents of the slum area to file their objections, if any, to the appeal within a period of fifteen days from the date of publication of such public notice in the newspaper as aforesaid, either by themselves or through any association of residents in the slum area of which they are members."
43. Sub-section (5) and the Explanation read as follows:
"(5) on expiry of the period of fifteen days as aforesaid the Tribunal shall fix a day for hearing the appeal and inform the appellant about the same by letter under certificate of posting and the residents of the slum area by displaying the notice of hearing at some conspicuous place in the slum area and upon hearing the appellant and the residents or representative of their association in the slum area, if present, or on considering the written objections, if any, made by such residents of association, if absent, the Tribunal may, subject to the provisions of sub-section (6) make an order either confirming, modifying or rescinding the declaration; and the decision of the Tribunal shall be final."
Explanation.- For the purposes of sub-section (4) and this sub-section, the expression "any association of residents in the slum area"means a society, if any, or such residents registered under the Societies Registration Act, 1860 or under the Maharashtra Co-operative Societies Act, 1960.
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44. Section 22 falls in Chapter VI of the Slum Act. It interalia provides the consequences which would flow from the declaration in a slum area. It states that notwithstanding anything contained in any other law for the time being in force, no person shall except with the previous permission in writing of the Competent Authority institute any suit or proceeding for obtaining any decree or order for eviction of any occupier from any building or land in a slum area or for recovery of any arrears of rent or compensation from any such occupier. Section 22 also provides for restrictions in the execution of any decree or any order in such area or for recovery of any arrears of rent or compensation from such occupier or for both execute such decree or order or apply for a distress warrant for arrears of rent or rent against any occupier of a house or premises in a slum area.
This provision which relates to slum area would also mutatis ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 54 Wp2488-11 mutandis apply to Slum Rehabilitation Area. (See Section 3D).
45. Section 36 deals with service of notice etc. Sub-
sections (1) and (3) of Section 36 reads as follows:
"(1) Every notice, order or direction issued under this Act shall, save as otherwise expressly provided in this Act, be served, -
(a) by giving or tendering the notice, order or direction [or] by sending it by registered post to the person for whom it is intended; or
(b) if such person cannot be found, by affixing the notice, order or direction on some conspicuous part of his last known place of abode or business, or by giving or tendering the notice, order or direction to some adult member or adult servant of his family or by causing it to be affixed on some conspicuous part of the building or land, if any, to which it relates."
"(3) Every notice, order or direction, which by or under this Act is to be served as a public notice, order or direction or as a notice, order or direction which is not required to be served on any individual therein specified shall, save as otherwise expressly provided, to be deemed to be sufficiently served if a copy thereof is affixed in such conspicuous part of the office of the ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 55 Wp2488-11 Competent Authority or in such other public place during such period, or is published in such local newspaper or in such other manner, as the Competent Authority may direct."
46. Section 45 of the Act deals with the powers of the Tribunal. Section 45 (1) reads as follows:
"In exercising the jurisdiction conferred upon it by or under this Act the Tribunal shall have the powers of a civil court for the purpose of taking evidence on oath, affirmation or affidavit, or summoning and enforcing the attendance of witnesses, of compelling discovery and the production of documents and material objects requisitioning any pubic record or any copy thereof from any court or office, issuing commissions for the examination of witnesses or documents, and for such other purposes as may be prescribed including the power to grant stay and any other powers of a Civil Court which may be vested in Tribunal; and the Tribunal shall be deemed to be a Civil Court for all the purposes of section 195, 480 and 482 of the code of Criminal Procedure 1898 and its proceedings shall be judicial proceedings within the meaning of section 193, 219 and 228 of the Indian Penal Code."
47. Rule 3 of the Maharashtra Slum Area (Improvement, ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 56 Wp2488-11 Clearance and Redevelopment) (Other manner of publication of Declaration) Rules 1971 may also be referred to. It reads as under:
"3. Other Manner of Publication of Declaration under section 4(1):-
(a) The declaration referred to in sub-section (1) of section 4 shall also be published in not more than one local newspapers as the Competent Authority may, for ensuring due publicity to the declaration in the area in respect of which the declaration is made, decide:
(b) A copy of such declaration shall be pasted on the Notice Board in the office of the Competent Authority and shall also be displayed in a conspicuous place in such area. A substance of the declaration shall also be proclaimed by beat of drum in the area.
(c) The Competent Authority shall as far as practicable serve a notice on every owner or occupier of both the property in such area stating the effect of the declaration and specifying the time within which any aggrieved person may appeal to the Tribunal under sub-
section (3) of section 4 of the Act."
48. Reference may also be made to Regulation 14 of the Maharashtra Slum Area (Improvement, Clearance and Redevelopment) Tribunal Regulations 1974. It provides that a Tribunal may on the application of the presenting party, order stay of ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 57 Wp2488-11 the operation of any declaration, order, decision, notice or direction.
49. From the aforesaid provisions amongst other things, the following aspects are required to be noted:
(i) that the Slum Act was substantially amended by the Maharashtra Act IV of 1996 pursuant to the Report of the Committee headed by Mr. Afzalpurkar. Apart from inserting definitions of 'Slum Rehabilitation Area', 'Slum Rehabilitation Authority' and 'Slum Rehabilitation Scheme", Chapter IA consisting sections 3A to 3W constituting an independent statutory scheme of Slum Rehabilitation was also inserted interalia to hasten the process of implementation of the slum schemes.
(ii) that under Section 3A the State Government is required to appoint Slum Redevelopment Authority for such areas ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 58 Wp2488-11 as may be specified in the Notification interalia to get slum rehabilitation schemes implemented and do all such other acts and things necessary for achieving the objects of rehabilitation of slums.
(iii) That under section 3B a general Slum Rehabilitation Scheme for the areas specified in section 3A(1) is prepared and finally published in the Official Gazette after following due procedure of inviting objections and suggestions. The Slum Rehabilitation Scheme under section 3B, the Court is informed, has already been published for Greater Mumbai area after following due procedure prescribed under the said section, on 9th April 1998.
(iv) that under section 3C(1), after publication of the Slum Rehabilitation Scheme under section 3B, the Chief Executive Officer on being satisfied that circumstances ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 59 Wp2488-11 exist in respect of any area justifying its declaration as 'slum rehabilitation area' may declare such area to be slum rehabilitation area, which declaration, is required to be given wide publicity in the manner as may be specified by the SRA.
(v) that under section 3B(2), "any person" aggrieved by slum rehabilitation order can prefer an appeal within four weeks to the Special Tribunal.
(vi) that the powers of the Tribunal are wide as laid down in section 45 and includes that of taking evidence. Under Regulation 14 of the Tribunal Regulations of 1974, the Tribunal also has the power to grant stay to the operation of the declaration.::: Downloaded on - 09/06/2013 18:36:50 :::
Dmt 60 Wp2488-11 Legislative/Non Legislative Function.
50. It is necessary at this juncture to deal with the contention of Mr. Naphade, learned Senior Counsel on behalf of the Respondent No. 3 that in making an order of declaration of slum rehabilitation area under section 3C(1), the CEO, SRA is performing a legislative function.
51. Mr. Naphade, pointed out the Maharashtra Legislative Assembly Bill No.XXXIX of 1995 in respect of proposed amendments to Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971. He invited my attention to the last page of the said Bill titled "Memorandum Regarding Delegated Legislation". It is stated therein that the Bill involves proposal for delegation of Legislative powers interalia under section 3C(1) empowering the Competent Authority to declare by an order ::: Downloaded on - 09/06/2013 18:36:50 ::: Dmt 61 Wp2488-11 published in the Official Gazette, any area to be the slum rehabilitation area. Mr. Naphade, with his usual panache, argued that the order making the declaration under Section 3C (1) of an area to be a rehabilitation area was thus a legislative function and principles of natural justice are not required to be followed. Indeed, there can be no two opinions that if the making of such declaration were a purely legislative function, there would be no question of reading principles of natural justice in the provisions and for providing an opportunity of hearing before making the declaration.
52. In Tulsipur Sugar Co. Ltd. Vs. Notified Area Committee, Tulsipur, (supra), the case before the Hon'ble Supreme Court was in connection with a Notification issued under the U.P. Town Areas Act, 1914, extending the limits of a Town Area to bring within its confines certain village where the factory of the Plaintiff was situate. The Hon'ble Supreme Court observed:::: Downloaded on - 09/06/2013 18:36:51 :::
Dmt 62 Wp2488-11 "The power of the State Government to make a declara-
tion under Section 3 of the Act is legislative in character because the application of the rest of the provisions of the Act to the geographical area which is declared as a town area is dependent upon such declaration. Section 3 of the Act is in the nature of a conditional legislation. Dealing with the nature of functions of a non-judicial authority, Prof. S.A. De Smith in Judicial Review of Administrative Action (3rd Edn.) observes at p. 163:
"However, the analytical classification of a function may be a conclusive factor in excluding the operation of the audi alteram partem rule. It is generally assumed that in English law the making of a subordinate legislative in- strument need not be preceded by notice or hearing un- less the parent Act so provides."
The Hon'ble Supreme Court held that the maxim 'audi alteram partem' does not become applicable to the case by necessary impli-
cation.
53. In Union of India Vs. Cynamide India Ltd., (supra), which decision Mr. Naphade heavily relied upon, the Hon'ble Supreme Court was concerned with the issue of exercise of powers ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 63 Wp2488-11 under the Essential Commodities Act and the Drugs (Prices Control) Order, 1979 for fixation of maximum selling prices of indigenously manufactured bulk drugs and retail prices of formulations by the Central Government for which the Central Government issued Notifications. The Delhi High Court had quashed the impugned Notifications on the ground of failure to observe principles of natural justice before issuance of the Notifications. While setting aside the order of the High Court, the Hon'ble Supreme Court held:
"....legislative action, plenary or subordinate, is not sub-
ject to rules of natural justice. In the case of Parliamen- tary legislation, the proposition is self-evident. In the case of subordinate legislation, it may happen that Parlia- ment may itself provide for a notice and for a hearing -- there are several instances of the legislature requiring the subordinate legislating authority to give public notice and a public hearing before say, for example, levying a municipal rate -- in which case the substantial non-ob- servance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. The right here given to rate pay- ers or others is in the nature of a concession which is not to detract from the character of the activity as legislative ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 64 Wp2488-11 and not quasi-judicial. But, where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it will not be permissible to read natu- ral justice into such legislative activity."
The Hon'ble Supreme Court further observed in the very judgment as under:
... "It is true that, with the proliferation of delegated leg-
islation, there is a tendency for the line between legisla- tion and administration to vanish into an illusion. Admin- istrative quasi-judicial decisions tend to merge in legisla-
tive activity and, conversely, legislative activity tends to fade into and present an appearance of an administrative or quasi-judicial activity.
.... A price fixation measure does not concern itself with the interests of an individual manufacturer or producer. It is generally in relation to a particular commodity or class of commodities or transactions. It is a direction of a gen-
eral character, not directed against a particular situation.
"Price fixation may occasionally assume an administra- tive or quasi-judicial character when it relates to acquisi- tion or requisition of goods or property from individuals and it becomes necessary to fix the price separately in re- lation to such individuals. Such situations may arise when the owner of property or goods is compelled to sell his property or goods to the government or its nominee ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 65 Wp2488-11 and the price to be paid is directed by the legislature to be determined according to the statutory guidelines laid down by it. In such situations the determination of price may acquire a quasi-judicial character".
"The Order made under Section 3(2)(c), which is not in respect of a single transaction, nor directed to a particular individual is clearly a legislative act, while an Order made under Section 3(3-C) which is in respect of a par- ticular transaction of compulsory sale from a specific in- dividual is a non-legislative act."
ig (emphasis supplied)
54. In Shri Sitaram Sugar Company Limited Vs. Union of India, (1990) 3 SCC 223, also, a Constitution Bench of the Hon'ble Supreme Court was dealing with the exercise of power of price fixation under the Essential Commodities Act, 1955. Their Lordships held as under:
"Judicial decisions are made according to law while ad-
ministrative decisions emanate from administrative poli- cy. Quasi-judicial decision are also administrative deci- sions, but they are subject to some measure of judicial procedure, such as rules of natural justice. To distinguish ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 66 Wp2488-11 clearly legislative and administrative functions is "diffi- cult in theory and impossible in practice. Referring to these two functions, Wade says:
'They are easy enough to distinguish at the extremities of the spectrum: an Act of Parliament is legislative and a deportation order is administrative. But in between is a wide area where either label could be used according to taste, for example where ministers make orders or regu- lations affecting large numbers of people....' Wade points out that legislative power is the power to prescribe the law for people in general, while administra-
tive power is the power to prescribe the law for them, or apply the law to them, in particular situations. A scheme for centralising the electricity supply undertakings may be called administrative, but it might be just as well leg-
islative. Same is the case with ministerial orders estab- lishing new towns or airports etc. He asks: "And what of 'directions of a general character' given by a minister to a nationalised industry? Are these various orders legisla-
tive or administrative?" Wade says that the correct an-
swer would be that they are both. He says: "...there is an infinite series of gradations, with a large area of overlap, between what is plainly legislation and what is plainly administration". Courts, nevertheless, for practical rea-
sons, have distinguished legislative orders from the rest of the orders by reference to the principle that the former is of general application. They are made formally by publication and for general guidance with reference to which individual decisions are taken in particular situa- tions.::: Downloaded on - 09/06/2013 18:36:51 :::
Dmt 67 Wp2488-11 ...The element of general application is often cited as a distinct feature of legislative activity. In the words of Chief Justice Burger, 'rule making is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class...' (emphasis supplied)
55. In State of Rajasthan Vs. Basant Nahata, (supra) the Supreme Court observed as under:
"The necessity of the legislatures delegating its powers in favour of the executive is a part of legislative function. It is a constituent element of the legislative power as a whole under Article 245 of the Constitution. Such delegation of power, however, cannot be wide, uncanalised or unguided. The legislature while delegating such power is required to lay down the criteria or standard so as to enable the delegatee to act within the framework of the statute. The Principle on which the power of the legislature is to be exercised is required to be disclosed. It is also trite that essential legislative functions cannot be delegated.
....The procedural powers are, therefore, normally left to be exercised by the executive by reason of a delegated legislation.::: Downloaded on - 09/06/2013 18:36:51 :::
Dmt 68 Wp2488-11 ....We have noticed hereinbefore the effect of a power of attorney under the Contract Act or the Powers-of-
Attorney Act. A subordinate legislation which is not backed up by any statutory guideline under the substantive law and opposed to the enforcement of a legal right, in our opinion, thus, would not be valid."
56. Reverting to the present case, it is required to be noted that the General Rehabilitation Scheme under section 3B of the Slum Act in respect of the entire limits of the area of Greater Mum-
bai has already been published in the Official Gazette by issuance of a Notification sometime in April 1998 after following due procedure of inviting objections and suggestions by publication. By issuing the subject Notification now for declaration of Slum Rehabilitation Area under section 3C(1), what has been done is, certain specified proper-
ty/properties as mentioned in the Notification are declared Slum Re-
habilitation Area. Thus, as opposed to the general application of the Slum Rehabilitation Scheme to all properties situate in Greater ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 69 Wp2488-11 Mumbai, the declaration of Slum Rehabilitation Area would apply only to certain specified property/properties. Considering the scheme of the Slum Act and applying the principles laid down in the case of Cynamide India Ltd. (supra) and Shri Sitaram Sugar Compa-
ny Ltd. (supra), I am inclined to hold that the power exercised by the CEO, SRA, in making an order for declaration of Slum, even if it were a legislative function, would partake the character of a non-
legislative function inasmuch as the declaration of Slum Rehabilita-
tion Area applies only to certain specified property/properties as op-
posed to all properties in general in Greater Mumbai.
57. Apart from the above, there are other reasons too why I am inclined to take this view. Perusal of section 3C(1) would show that the words used in the section - "...the Chief Executive Officer on being satisfied that circumstances in respect of any area justify-
ing its declaration as slum rehabilitation area under the said scheme ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 70 Wp2488-11 may...."; would indicate that the entire discretion whether to de-
clare an area as slum rehabilitation area is upon the subjective satis-
faction of the CEO, SRA. His decision in turn is entirely based on the enquiry by the City Survey Officer, SRA and Dy. Collector, SRA as regards the factual conditions prevailing as mentioned in the two Reports submitted by them to the Secretary, SRA who in turn places the two Reports with his submission before the CEO, SRA. The fac-
tual conditions prevailing in the area for declaration of slum are whether the area is or may be a source of danger to the health safety or convenience of the public of that area or of its neighbours by rea-
son of that area having inadequate or no basic amenities, or being insanitary, squalid etc. It is common knowledge that there are huge stakes and profits involved in Slum Redevelopment Schemes given the incentives in terms of FSI offered by the State Government to Developers with the object of eradicating slums in Mumbai. Dis-
putes in respect of the slum schemes have unfortunately now be-
::: Downloaded on - 09/06/2013 18:36:51 :::Dmt 71 Wp2488-11 come the order of the day in Mumbai and there are not many such disputes which have not added to the docket of this Court. Consid-
ering the above, the possibility of the vice of arbitrariness or extra-
neous considerations in the Reports to bring out the correct factual position, cannot be ruled out.
58. Further, it is required to be noted that under section 3C(2), any person aggrieved by the slum rehabilitation order can prefer an Appeal to the Special Tribunal. In my view, ordinarily, if the order making the declaration were a legislative function, there would be no question of sitting in judgment over the same. Infact by the Tribunal Regulations of 1974, the Tribunal has also been giv-
en power to grant stay to the effect of the slum rehabilitation order.
59. Reference may also be made to the Circular No. 118 dated 16th October 2010 of SRA. By this Circular, the procedure has been prescribed for declaration of Slum Rehabilitation Area by the ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 72 Wp2488-11 SRA. The said Circular clearly sets out that before the declaration of Slum Rehabilitation Area, the "Land Owner" is required to be heard.
Had it strictly been a legislative function there would have been no question of any hearing even to the 'Land Owner" as contemplated in the Circular.
60. Significantly, though it is being argued that the func-
tion exercised by the CEO, SRA is a legislative function, the Re-
spondent No. 3 themselves in para 11A(x) of their Affidavit in Reply have stated that the decision taken by the CEO, SRA, is an adminis-
trative decision.
61. Furthermore, it may be mentioned that the learned Ad-
vocate General on behalf of SRA, has very fairly and candidly stated before the Court that he does not support the contention of Mr. Naphade that the CEO, SRA is exercising a legislative function.
::: Downloaded on - 09/06/2013 18:36:51 :::Dmt 73 Wp2488-11 Now, if the SRA itself says that the CEO, SRA is not exercising leg-
islative function, the Court would be rather slow to take a view con-
trary thereto at the instance of a 3rd private party.
62. For the aforesaid reasons, I am unable to accept the contention of Mr. Naphade that the CEO, SRA in making a slum re-
habilitation order is exercising a purely legislative function and that therefore there is no question of principles of natural justice coming into play.
Whether Principles of Natural Justice need to be read in the provisions.
63. Section 3C(1) does not provide for an opportunity of hearing before making a slum rehabilitation order. Nor does the section exclude a hearing in terms. The question therefore is whether ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 74 Wp2488-11 the Court ought to read the principles of natural justice in section 3C(1) and apply the doctrine of audi alteram partem (hear the other side).
64. In The Government of Mysore Vs. J.V. Bhat, (supra) which decision is relied upon by Mr. Samdani on behalf of the Petitioners, a 3-Judge Bench of the Hon'ble Supreme Court was considering the issue whether before declaring an area to be a slum area under the provisions of Karnataka Slum Areas (Improvement and Clarence) Act, 1958, a hearing was required to be given. The High Court of Karnataka had struck down Sections 3 and 9 of the said Act as violating Article 19(1)(f) of the Constitution (which is now no more in the Constitution) and Section 12 (1) (b) as violating Articles 14 and 15 of the Constitution. The High Court had held that the three subject Notifications were not unconstitutional because in exercising their functions under Sections 3, 9 and 12 the ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 75 Wp2488-11 authorities concerned were not exercising a quasi judicial power.
The Hon'ble Supreme Court in its judgment observed as follows:
"...It is only where there is nothing in the statute to actu- ally prohibit the giving of an opportunity to be heard, but, on the other hand, the nature of the statutory duty im- posed itself necessarily implied an obligation to hear be- fore deciding that the "audi alteram partem" rule could be imported. The nature of the hearing would, of course, vary according to the nature of the function and what its just and fair exercise required in the context of rights af-
fected."
The Hon'ble Supreme Court referred to the case of Binapani Dei [AIR 1967 SC 1269] wherein it was held:
"the rule that a party to whose prejudice an order is intended to be passed is entitled to a hearing applies alike to Judicial Tribunals and bodies of person invested with authority to adjudicate upon matters involving civil consequences. It is one of the fundamental rules of our Constitution set up that every citizen is protected against exercise of arbitrary authority by the State or its officers. Duty to act judicially would therefore arise from the very nature of the function intended to be performed, it need ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 76 Wp2488-11 not be super-added. If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of justice be ignored and an order to the prejudice of a person is passed, the order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case."
The Apex Court also referred to Kraipak's case wherein it was observed:
..."The concept of natural justice has undergone a great deal of change in recent years. What particular rule of natural justice should apply in a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or the body of persons appointed for that purpose. Whenever a complaint is made before a Court that some principle of natural justice had been contravened, the Court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. The rule that enquiries must be held in good faith and without bias, and not arbitrarily or unreasonably, is now included among the principles of natural justice."
In para 18 of the judgment it was observed as under:::: Downloaded on - 09/06/2013 18:36:51 :::
Dmt 77 Wp2488-11 "The proviso to sub-section (1) provides for such a contingency but if there is no provision for hearing the affected person he cannot bring to the notice of the concerned authority that his building is not unfit for human habitation or dangerous or injurious to health, and such person would go unheard. There can be no two opinions about the need to hear the affected persons before declaring an area to be a slum area under Section 3 or an area as a clearance area under Section 9 or before taking action under Section 10. All these difficulties will be removed if the affected persons are given an opportunity to be heard in respect of the action proposed."
Pertinently, however in paras 2 and 17, their Lordships noted as follows:
"2. There are two possible approaches to this question. One is to hold that the provisions of the statute are themselves unconstitutional because they do not provide a reasonable opportunity for the affected parties to be heard, the other is to hold that as there is nothing in the statutory provisions which debar the application of the principles of natural justification while the authorities exercise the statutory powers under the Act, and as the principles of natural justice would apply unless the statutory provisions found to be contrary, the statutory ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 78 Wp2488-11 provisions which are themselves are not unconstitutional though the Notifications issued under them may be struck down if the authorities concerned do not observe the principles of natural justice while exercising their statutory powers. As there is a presumption of constitutionality of statues unless contrary is established it is the latter course that appears to us to be the proper approach".
"17. As pointed out by the High Court, no appeal is provided against the declaration made under Sections 3 and 9. Those declaration have far reaching consequences.
While acting under Sections 3 and 9 the possibility of arbitrary decisions cannot be ruled out...."
It is thus of significance that in the aforesaid case, the Hon'ble Supreme Court noted that the Karnataka Slum Act did not provide for an Appeal against the declaration made under section 3 and 9 of the said Act. The Hon'ble Supreme Court therefore, considered two alternative approaches in the matter viz. whether to hold that the provisions of the statute are themselves unconstitutional because they do not provide a reasonable opportunity for the affected parties ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 79 Wp2488-11 to be heard or to hold that as there is nothing in the statutory provisions which debar the application of the principles of natural justice. The Hon'ble Supreme Court, so far as sections 3 and 9 of the Karnataka Slum Act were concerned, instead of holding the said sections unconstitutional, read the principles of natural justice in the said provisions. In the present case, however, there is a post-
decisional Appeal provided under Section 3C(2) before the Special Tribunal to any aggrieved party against the declaration. To that extent the aforesaid reported case cannot be said to be applicable on all fours to the present case.
65. In Scheduled Case and Weaker Section Welfare Association (Regd.) Vs. State of Karnataka, (supra) the Hon'ble Supreme Court was dealing with the case whether a Notification was issued rescinding the earlier Notification under Section 3(1) declaring certain area as slum area and a further Notification under ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 80 Wp2488-11 Section 11 declaring whole area as slum clearance area and it is in this context that the Hon'ble Court held that when any alteration is sought to be made in the original scheme it becomes incumbent upon the authorities to give an opportunity to the persons who had been affected by the earlier order and required to adopt a certain course of action. It, therefore, held in the facts of that case that when a notification is made rescinding an earlier notification without hearing the affected persons, it is violation of the principle of natural justice.
In the present case, there is no question of any rescindment of any earlier Notification and therefore this case may not be relevant for our purposes.
66. In C.B. Gautam v. Union of India, (1993) 1 SCC 78, a Constitution Bench of the Apex Court held as under:
"28. It must, however, be borne in mind that courts have generally read into the provisions of the relevant sections ::: Downloaded on - 09/06/2013 18:36:51 ::: Dmt 81 Wp2488-11 a requirement of giving a reasonable opportunity of be- ing heard before an order is made which would have ad-
verse civil consequences for the parties affected. This would be particularly so in a case where the validity of the section would be open to a serious challenge for want of such an opportunity.
29. It is true that the time frame within which the or- der for compulsory purchase has to be made is a fairly tight one but in our view the urgency is not such as would preclude a reasonable opportunity of being heard or to show cause being given to the parties likely to be adversely affected by an order of purchase under Section 269-UD(1). The enquiry pursuant to the explanation giv- en by the intending purchaser or the intending seller might be a somewhat limited one or a summary one but we decline to accept the submission that the time-limit provided is so short as to preclude an enquiry or show cause altogether.
30. In the light of what we have observed above, we are clearly of the view that the requirement of a reasonable opportunity being given to the concerned parties, partic- ularly, the intending purchaser and the intending seller must be read into the provisions of Chapter XX-C. In our opinion, before an order for compulsory purchase is made under Section 269-UD, the intending purchaser and the intending seller must be given a reasonable op-
portunity of showing cause against an order for compul- sory purchase being made by the appropriate authority concerned.... "::: Downloaded on - 09/06/2013 18:36:51 :::
Dmt 82 Wp2488-11 In the aforesaid case, despite the constraints of the time-limit pro-
vided in the provisions, the Constitution Bench read the require-
ment of a reasonable opportunity of being heard before making an order for compulsory purchase under section 269-UD of the In-
come Tax Act, 1961.
67. In Devendra Ganpatlal Chamdedia Vs. Chief Officer and Competent Authority, (supra), support of which is strongly drawn by Mr. Samdani, it is noticed that the learned Single Judge of this Court had merely remanded back the matter to the Tribunal for a de novo consideration interalia on the ground that the contentions of the owners of the property that the property was declared as slum area under Section 4 (1) without following the principles of natural justice and the judgment of the Apex Court in Govt. of Mysore vs. I.V. Bhatt (supra) though relied upon, was not considered by the Tribunal. The said judgment of the learned Single Judge is therefore ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 83 Wp2488-11 not an authority for the proposition that principles of natural justice are required to be followed before making a declaration under the Slum Act. Reliance placed upon this decision by the Petitioners is therefore misplaced. It is also noticed that that was a case of declaration of slum area under section 4(1) and the challenge in that case was by the owners of the property.
68. The decision in Aligarh Muslim University Vs. Mansoor Ali Khan, (supra) is relied upon by Mr. Naphade on behalf of Respondent No. 3 in support of his contention that since the Petitioners have not seriously disputed the factual conditions prevailing in the area for it to be declared a slum rehabilitation area, no hearing is necessary and it would only be an empty formality.
The Hon'ble Supreme Court had held in that case that non compliance with principles of natural justice unless causing the prejudice, would not automatically entitle one to relief under Article ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 84 Wp2488-11 226 of the Constitution. The Hon'ble Supreme Court referred to the case of Ridge Vs. Baldwin [(1964) AC 40], wherein it was held that breach of principles of natural justice was in itself treated as prejudice and that no other "de facto" prejudice needed to be proved. The Apex Court, however, noted that since then the rigour of the rule has been relaxed not only in England but also in India. It was observed that the useless formality theory is an exception and apart from the class of cases of admitted or indisputable facts leading only to one conclusion there has been considerable debate on the application of that theory in other cases. The Hon'ble Supreme Court further held that when no other conclusion was possible on admitted or indisputable facts, it was not necessary to quash the order which was passed in violation of natural justice. It was however cautioned that, this being an exception, great care must be taken in applying this exception. It was held in the ultimate analysis that the applicability of the theory would depend on the ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 85 Wp2488-11 facts of a particular case.
In the present case, it cannot be said that the Petitioners have not disputed the facts. The ground (q) of the Appeal Memo of the Petitioners before the Tribunal would bear that out. This ruling would therefore have no application.
69. In Calvin Vs. Carr (supra), it was held that notwithstanding that decision of an administrative or domestic tribunal which had been reached in breach of the rules of natural justice might for certain purposes be void it was nevertheless susceptible of appeal and that therefore, assuming (without deciding) that there had been a failure of natural justice in the stewards' inquiry, the Jockey Club Committee had had jurisdiction to entertain the plaintiffs' appeal from the stewards' decision to disqualify him.
::: Downloaded on - 09/06/2013 18:36:52 :::Dmt 86 Wp2488-11 The aforesaid decision was in the facts of that case and would have no universal application.
70. The case of Rasila S. Mehta v. Custodian, Nariman Bhavan, Mumbai (supra) has been relied upon by the Learned Ad-
vocate General to contend that a post-decisional hearing was suffi-
cient compliance of principles of natural justice. The Hon'ble Supreme Court observed in para 49 as follows:
"49. The provisions of the Act do not provide for a pre- decisional hearing before notification but contain an im-
peccable milieu for a fair and just post-decisional hear- ing. The fact that it does not provide for a pre-decisional hearing is not contrary to the rules of natural justice be- cause the decision of the Custodian to notify does not ipso facto take away any right of the person thus notified or imposes any duty on him...."
Pertinently, the Apex Court has further observed as under:
"...Also a pre-decisional hearing would frustrate the en- tire purpose of the Act. If there is time given to show cause why a person should not be notified, that time ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 87 Wp2488-11 could practically be utilised to further divert the funds, if any, so that it becomes even more difficult to trace them."
The aforesaid case was a case under Special Court (Trial of Of-
fences Relating to Transactions in Securities) Act, 1992, where the issuance of a pre-decisional hearing would have the effect of frus-
trating the entire purpose of the Act as observed by the Hon'ble Supreme Court. The said case would therefore not be relevant in the facts of the instant case.
71. In Swadeshi Cotton Mills Vs. Union of India, (supra) relied upon by the learned Advocate General, a 3-Judge Bench of the Hon'ble Supreme Court in para 44 observed:
"...the general principle - as distinguished from an abso- lute rule or uniform application - seems to be that where a statue does not, in terms, exclude the rule of prior hear-
ing but contemplates a post-decisional hearing amount- ing to a full review of the original order on merits, then such a statue would be construed as excluding audi alter- am partem rule at the pre-decisional stage"::: Downloaded on - 09/06/2013 18:36:52 :::
Dmt 88 Wp2488-11 Pertinently, in the very paragraph the Apex Court observed:
"... this rule of fair play 'must not be jettisoned save in very exceptional circumstances where compulsive neces-
sity so demands'. The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications."
Moreover, in paragraph 78, the Apex Court held as follows:
"78. The audi alteram partem rule, as already pointed out, is a very flexible, malleable and adaptable concept of nat- ural justice. To adjust and harmonise the need for speed and obligation to act fairly, it can be modified and the measure of its application cut short in reasonable propor-
tion to the exigencies of the situation. Thus, in the ulti- mate analysis, the question (as to what extent and in what measure), this rule of fair hearing will apply at the pre- decisional stage will depend upon the degree of urgency, if any, evident from the facts and circumstances of the particular case."
72. In The Co-operative Housing Society, Civilian Em-
ployees, Defence Service vs. Commissioner and Special Officer, ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 89 Wp2488-11 Municipal Corporation of Hyderabad, AIR 1985 Andhra Pradesh 277, while considering the provisions of the A.P. Slum Im-
provement (Acquisition of Land) Act, a learned Single Judge of Andhra Pradesh High Court took the view that there was no infirmi-
ty in the notification in question for want of opportunity before issu-
ing the notification and it cannot be challenged on the said ground.
It is however to be noted that the Single Judge also observed, after examining the provisions of the A.P. Slum Act, that no civil conse-
quences resulted from the said notification.
In the present case however, in view of section 22 of the Slum Act, it cannot be said that there would be no civil consequences flowing in making the declaration.
73. In Ponkunnam Traders Vs. Additional Income Tax Officer, Kottayam, (supra) a learned Single Judge of the Kerala High Court held that the defect of natural justice before the trial ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 90 Wp2488-11 body cannot be cured by the presence of natural justice in the appel-
late body which results in the deprivation of the right of appeal from the trial body.
Pertinently, in the aforesaid case it appears that the relevant Section itself provided for a hearing before the lower authority.
74. Considering the exposition of law enunciated in the aforesaid judgments, the following broad principles can be culled out :
(i) that the concept of natural justice has undergone substan-
tial changes and what particular rule of natural justice should apply in a given case must depend on the facts and circumstances of that case and the frame work of law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that pur-
pose;
::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 91 Wp2488-11
(ii) that the Courts have generally read into the provisions of
the relevant sections, the requirement of giving a reason-
able opportunity of being heard before an order is made which would have adverse civil consequences;
(iii) that the rules of natural justice are not required to be fol-
lowed when the statutory provisions specifically exclude the right to be noticed and heard;
(iv) that in cases where facts are admitted and only one view is possible, applying the doctrine of useless formality the rigours of the rules of natural justice can be relaxed when no prejudice can be said to have been caused;
(v) that the general principle also seems to be that where a statute does not in terms exclude the rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits, then, such a statute would be construed as excluding the audi alterem ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 92 Wp2488-11 partem rule at the pre-decision stage, particularly in emergent situations;
(vi) that if the statute conferring the power is silent with re-
gard to giving a pre-decisional hearing to the persons af-
fected and the decision taken by the authority involves civil consequences of a grave nature and no full review or appeal on merits against that decision is provided, the Court should be extremely reluctant to construe such a statute as excluding the duty of affording a minimal hear-
ing.
The aforesaid principles which emerge may only be but by way of broad illustration. However in the ultimate analysis it would entire-
ly depend on the facts and circumstances of each case and the scheme of the relevant Act so as to arrive at a just decision.
75. Coming to the case in hand, as indicated above, Section 3C(1) does not in terms either grant or exclude an opportunity of ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 93 Wp2488-11 hearing. It is however required to be noted that though under Section 3B, before the General Rehabilitation Scheme is finally published, objections of citizens are invited by publication, no such publication inviting objections and suggestions is provided for under section 3C(1) before making an order of declaration of slum rehabilitation area. The said section however states that after the order declaring slum rehabilitation area is made, wide publicity shall be given in such manner as specified by SRA. This is done by publication in newspapers as stated in the Circular No. 118 dated 16 October 2010 of SRA. However, the immediate succeeding section after Section 3C(1), viz. Section 3C(2) provides that "any person aggrieved" by the slum rehabilitation order is entitled to prefer an Appeal before the Special Tribunal. Perusal of Section 45 of the Slum Act also re-
veals that in exercising jurisdiction the Tribunal has been conferred with the powers of the Civil Court including that of taking evidence.
The Tribunal is also invested with powers under the Tribunal Regu-
::: Downloaded on - 09/06/2013 18:36:52 :::Dmt 94 Wp2488-11 lations of 1974 to grant stay to the operation of the Notification in respect of the declaration. Thus, the statute does provide for a post-
decisional opportunity to cure any illegality and the remedy of Ap-
peal in that sense would be a sufficient remedy for redressal of grievances. That said, it also cannot be denied that once the declara-
tion is made under Section 3C(1), adverse consequences would fol-
low. In that, as provided in Section 22 of the Slum Act, unless previ-
ous permission in writing is taken from the Competent Authority, there is a bar for the institution of any suit or proceedings for obtain-
ing any decree or order for the eviction of an occupier from any building or slum in a Slum Rehabilitation area or for any recovery of any arrears of rent or compensation unless such permission is taken.
There is also a bar for executing any decree or order in Slum Reha-
bilitation area or for applying for a distress warrant for arrears of rent against such occupier.
::: Downloaded on - 09/06/2013 18:36:52 :::Dmt 95 Wp2488-11
76. Indisputably, even the Circular No. 118 dated 16 Octo-
ber 2010 of the Slum Rehabilitation Authority, which prescribes the procedure for declaration of a slum rehabilitation area in Section 3C(1) of the Slum Act, provides for a hearing by following princi-
ples of natural justice to the "land owner" before making the decla-
ration of Slum Rehabilitation area. The said Circular of SRA would be binding on the CEO, SRA. It would, therefore, have to be con-
strued that the Authorities themselves have read the principles of natural justice in the provisions of Section 3C(1). That being the po-
sition, the Respondent Nos. 1 and 2 cannot be heard to say that the Authorities need not follow the principles of natural justice at least in so far as the "land owner" is concerned.
77. The learned Advocate General submitted that the provi-
sions of section 3C(1) are required to be interpreted differently. He submitted that there were deficiencies in implementing the scheme ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 96 Wp2488-11 under the Slum Act as it stood earlier. The State of Maharashtra, therefore, had appointed a Committee headed by Shri D.K. Afzulpurkar, which submitted its Report on the working of the Slum Act, 1971, recommending a faster and more expeditious process for slum redevelopment. In pursuance of the recommendations, Chapter I-A, I-B and I-C came to be introduced in the Act and the statutory scheme for slum rehabilitation was radically altered. The provisions of Chapter II and III were made inapplicable to schemes under Chapter I-A. The various provisions contained in Chapter IV were also amended in their applications and schemes under Chapter I-A. The purport and object of all these legislative changes, pursuant to the Report of the Committee headed by Mr. Afzalpurkar, was to en-
sure that the clearance and redevelopment and rehabilitation of slums should be expeditious and involving the least possible proce-
dural delay. It was therefore submitted that section 3C(1) is required to be read and interpreted in that light and the observance of rules of ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 97 Wp2488-11 natural justice ought not to be read in the provisions as that would defeat the object of the amendments. There can be no two opinions of the fact that the schemes under the Slum Act need to be imple-
mented with utmost promptitude. The fact however remains that even after the amendment to the Slum Act by insertion of Chapter IA which contains section 3C(1) which deals with the making an or-
der of declaration of slum rehabilitation area, the Legislature has in its wisdom not thought it fit to exclude a hearing in the said section 3C(1). Thus, insofar as observance of principles of natural justice is concerned, I do not see any change insofar as section 4 and the new section 3C(1). Moreover, when SRA itself has as a matter of policy, as reflected in its own Circular No. 118 dated 16 October 2010, thought it appropriate to afford an opportunity of hearing to the landowner, it is not possible for me to hold that an opportunity of hearing is to be denied merely on the ground that the extant scheme ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 98 Wp2488-11 of the Slum Act does not contemplate a hearing before making an order of declaration of slum rehabilitation area under Section 3C(1).
78. Taking an overall view of the matter, in my opinion, a minimal or limited hearing is required to be read into section 3C(1) of the Slum Act.
Persons entitled to be noticed As noted above, the Circular No. 118 dated 16 October 2010 of SRA itself provides that the rules of natural justice need to be fol-
lowed and an opportunity of hearing is required to be given to the "land owner". In my view, however, this opportunity of hearing pro-
vided by the said Circular cannot be restricted to the "land owner"
alone. In a given case, a registered Lessee of say 99 or 999 years, whose name appears on the Property Card would for all practical purposes be the owner of the property. In the circumstances, in my view, a hearing which is limited only to the "land owner" would not ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 99 Wp2488-11 suffice. It would, in my opinion be appropriate that an opportunity of hearing be provided to the interested persons whose names appear in the Property Card. It is, therefore, directed that in addition to the land owner, the SRA shall also grant an opportunity of hearing to the interested persons whose names appear on Property Card.
80. In an area which is proposed to be declared as a Slum Reha-
bilitation Area, it is neither reasonably practical nor feasible that all persons who are affected be noticed and be afforded a personal hear-
ing. Besides the persons whose name figure in the Property Card, there may be hundreds of structures owned by different persons and there may be still others who occupy those structures. In most of such areas which are proposed to be declared as slum area/slum re-
habilitation area, the structures are unauthorised and there may be a number of persons who claim to be 'owners'. The Slum Act has therefore defined the term 'slumlord' under section 2 (h-a) and un- ::: Downloaded on - 09/06/2013 18:36:52 :::
Dmt 100 Wp2488-11 der Section 2(f) the definition of 'owner' excludes a 'slumlord'. One has to bear in mind that under the Slum Rehabilitation Scheme a limited protection is available to the occupants, in that, the occu-
pants of slums whose names and structures appear in the electoral roll prepared with reference to 1-01-1995 or a date prior thereto are eligible for rehabilitation. In my view, therefore, except for the in-
terested persons whose names appear on the Property Card, no other person is required to be noticed. Insofar as the affected persons whose names are not reflected in the property card, in my view, the post-decisional remedy available to them in the form of an Appeal under Section 3C(2) would amount to a full review on merits and would be a substantive remedy to redress their grievance. In other words, except for the interested persons whose names are reflected in the Property Card, there would be no obligation on the Authorities to notice and hear other affected parties. Having said that, however, in a given case the Authorities would not be precluded from grant-::: Downloaded on - 09/06/2013 18:36:52 :::
Dmt 101 Wp2488-11 ing an opportunity of pre-decisional hearing to any other person if they find it expedient and necessary to do so in the interest of jus-
tice. It is also clarified that this order would not be any impediment to the Authorities exercising powers as provided in section 36 of the Slum Act.
Whether the Petitioners are entitled to be noticed.
81. The Petitioners admit that Respondent No. 3 is the own-
er of the property. It is also an admitted position that one Shri Hari Fakira Kharavi was the lessee of the said property at one time. The Petitioners claim to have entered into a Lease Deed with the said Shri Hari Fakira Kharavi who at the relevant time apparently had a right to give the said property on further lease. The said Lease Deed is registered. On the other hand, the Respondent No. 3 claims that the said Hari Fakira Kharavi has wrongly described himself as the ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 102 Wp2488-11 owner of the said property by adverse possession in the Lease Deed and that the pencil entry in the property card reflecting the name of Shri Hari Fakira Kharavi was deleted sometime in the September 1974. It is an admitted position that so far as the Petitioners are con-
cerned, their names are not reflected in the property card. Infact, the Petitioners have in order to establish their legal right, filed suit in this Court interalia for a direction that they be declared the Lessees.
The fact that the Petitioners' deceased father Hanmantrao Sonawane had successfully challenged the declaration of the property as slum area at the relevant time, by filing an Appeal being Appeal No. 84 of 1978 will not, in my view, entitle the Petitioners to a pre-decisional hearing before the declaration being made under Section 3C(1). In the circumstances, I hold that the Petitioners would not be entitled to be noticed and it would not be incumbent on the Authorities to hear the Petitioners before making a declaration of Slum Rehabilitation Area.::: Downloaded on - 09/06/2013 18:36:52 :::
Dmt 103 Wp2488-11
REMAND.
82. The burden of song of the Petitioners before the Tri-
bunal in their Appeal was that they have not been afforded a hearing thereby violating the principles of natural justice. Though, the Peti-
tioners have in their Memo of Appeal before the Tribunal, stated that the area does not pose a danger to the health, safety and convenience to the public in that area and there are sufficient and adequate amenities and there was no compelling reasons to declare the prop-
erty as slum area, I find that the Petitioners have not presented their case in a manner which they ought to have, possibly under a belief that their contention of non-observance of principles of natural jus-
tice would see them through. It appears that they did not file any objections to the two Reports of the City Survey Officer, SRA and the Dy. Collector, SRA. Even according to the Respondent No. 3, as stated in their Written Submissions, the Petitioners have not "seri-
ously" disputed the factual position. It is to be borne in mind that the ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 104 Wp2488-11 core issue really is whether the property would meet the factual cri-
teria of being declared as slum. In my view, the Petitioners are re-
quired to be given an opportunity to represent their case afresh and place such material before the Tribunal to satisfy the Tribunal that the factual criteria of the property of being declared slum does not exist and the conditions prevailing therein do not require that the property be declared as a slum rehabilitation area. I am, therefore, inclined to remit the matter back to the Tribunal. The Petitioners would be entitled to file objections to the two Reports and place oth-
er material, if they so desire, before the Tribunal. Whilst remanding the matter back, however, I wish to make it clear that it would also not be open for the Respondents to contend that the Petitioners would have no locus to file the Appeal in the teeth of the stand taken by them that the Appeal is a substantive remedy for the Petitioners on full merits. Moreover, section 3C(2) also makes it clear that "any person aggrieved" can prefer an Appeal against the slum rehabilita-::: Downloaded on - 09/06/2013 18:36:52 :::
Dmt 105 Wp2488-11 tion order which expression has been interpreted by the Hon'ble Supreme Court in the case of United Bank of India vs. Satyawati Tandon (supra).
Conclusion :
83. Considering the overall facts and circumstances of the case, the following order is passed :
(I) The matter is remitted back to the Tribunal for granting an opportunity to the Petitioners to demonstrate before the Slum Tribunal that the property in question does not meet the criteria for declaring it a slum rehabilitation area.
(II) The Petitioners will be entitled to file objections to the two Reports of the City Survey Officer, SRA and Dy.
Collector, SRA and to produce further material before the Tribunal, if they so desire.
::: Downloaded on - 09/06/2013 18:36:52 :::Dmt 106 Wp2488-11 (III) The Authority shall pass appropriate orders on merits and in accordance with law after hearing the parties not later than 10 weeks from the placing of a copy of this judgment/order before it.
(IV) To facilitate the hearing, the impugned order is set aside.
(V) The slum dwellers societies would be at liberty to apply to be added as party Respondents to the Appeal. If such an Application is made within a reasonable period, the same shall be allowed and the said societies shall also be heard.
(VI) The contention of the Petitioners of non-observance of principles of natural justice and a right of hearing before making an order of declaration of slum rehabilitation area, is rejected. Furthermore, It will not be open for the Respondents to contend before the Tribunal that the ::: Downloaded on - 09/06/2013 18:36:52 ::: Dmt 107 Wp2488-11 Petitioners have no locus to file the Appeal. All other contentions are kept open.
84. It is clarified that the observations in this judgment will not influence the decisions in the pending suits.
85. Rule is made absolute in the aforesaid terms. In the facts and circumstances there shall be no order as to costs.
( A.A. SAYED, J. )
86. On the request of the learned Counsel for the Petitioners, the operation and effect of this order is stayed for a period of 8 weeks.
(A.A. SAYED, J.) ::: Downloaded on - 09/06/2013 18:36:52 :::