Slum Rehabilitation Scheme Should Not Be Viewed As A Real Estate Development Project; It Is Connected To The Right To Life: Supreme Court

Case Title:

Yash Developers Versus Harihar Krupa Co-Operative Housing Society Limited & Ors. 

Date of Order:

July 30, 2024

Bench: 

Pamidighantam Sri Narasimha, J.

SUBJECT: 

The Supreme court of India held that the Slum Rehabilitation Scheme Should Not Be Viewed as a Real Estate Development Project; It Is Connected to the Right to Life under the Article 21 of the Indian Constitution. 

IMPORTANT PROVISIONS: 

• Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971
• Article 226 of the Constitution of India: 

OVERVIEW:

• In 2003, Yash Developers was contracted as a developer by Harihar Krupa Co-operative Housing Society to redevelop a slum area in Mumbai.
• The Apex Grievance Redressal Committee terminated the development deal in 2021, following a 16-year delay.
• Yash Developers filed a writ suit in the High Court of Bombay opposing the termination, but the court dismissed it.
• Yash Developers filed an appeal to the Supreme Court of India, disputing the Bombay High Court's decision. 

THE ISSUES IN THE CASE: 

• Whether the development agreement was rightly terminated on account of delay in executing the project.
• Whether there is, another scope of judicial review under Article 226 against orders under Section 13 of the Slum Act. 

ARGUMENTS BY APPELLANT:

• The appellant tried to justify the delays by due to litigation with competing developers were from 2003 to 2011, environmental clearance delays from 2011 to 2014, slum dwellers non-cooperation and eviction proceedings from 2014 to 2019, and draft Development Plan Road sanction-related delays connected with it from 2015 to 2017.
• The appellant argued superior financial and technical capacity. Their agreements with Rajesh Habitat, Vistra ITCL, and Sanghvi Associates were solely for financial aid, not owing to a lack of resources. This was confirmed by the SRA's certification of the aforementioned financial capacity in 2019.
• The appellant argued that the termination processes be quashed because complaints were withdrawn, and the termination order by Society was set aside. They observed also that Mr. Rai who appealed to AGRC did not have proper authorization by the society, rendering the appeal invalid.
• The appellant argued that the Respondent No.6, Veena Developers, had no locus to oppose them in view of the joint development agreement between them which specifically barred Veena Developers from opposing their efforts at development independently.

ARGUMENTS BY RESPONDENTS:

• The parties contended that the justification of the 16-year delay in starting the project work is without any standing. While pronouncing the judgment and order, the Appellate Tribunal opined that the litigation with the competing developer did not prevent the appellant from commencing the project; there was no requirement of environmental clearance for constructing the rehabilitation building. Also, the non-cooperation by some slum dwellers would not justify five years of inaction on the appellant's part.
• The party explained that the many finance agreements with third parties proved that capacity in terms of finances was low, something that will jeopardize the project implementation.
• The party pointed out that the SRA was empowered under Section 13(2) to take suo moto action against delay in cases of projects, irrespective of any complaint or withdrawal thereof. The timely completion of projects is incumbent upon the SRA as per section 13(2), it was pointed out.
• The party emphatically reiterated the implicit public purpose of the project and the rightful claim of slum dwellers to timely rehabilitation, and hence, asserted that the project was of enormous importance to be completed without any further delay.

COURT ANALYSIS:

• The court has, in this case, explained that Article 226, as far as judicial review for orders under Section 13 of the Slum Act is concerned, is limited. What needs to be tested, argues the court, is the legality and validity of the powers exercised by the AGRC in terminating the agreement. This is a very narrow scope, designed to ensure that the judiciary does not overstep its bounds in administrative matters.
• The court minutely examined every point of delay—both individually and cumulatively. It held that the grounds for the delay, taken individually and collectively, advanced by the appellant were inadequate and unreasonable. The court further observed that Slum Rehabilitation Projects could not be equated with purely private estate projects in view of the substantive public interest involved. The inordinate delay could not be justified considering the project to be an important one meant for the public good.
• The court upheld the concurrent findings of the AGRC and the High Court that affirmed the appellant's lack of financial capacity. Part of the reasons being advanced for this finding was that some of the agreements indicated instability and posed a likely threat to the completion of a project. These undermined confidence in the capability of the appellant to successfully manage and finance the project.
• It interpreted Section 13(2) of the Slum Act as casting an obligation upon the SRA to ensure that the projects are completed within a stipulated timeframe. It further held the CEO and the SRA liable for such an obligation. This kind of interpretation strengthened the mandate upon the SRA to actively monitor and supervise the implementation of slum rehabilitation projects for avoiding such avoidable delays.
• The court did not entertain arguments against the maintainability of the AGRC proceedings. That power under Section 13(2) of the SRA is not dependent upon a complaint and may be exercised suo moto was clarified. An important clarification in that respect was that it asserts the authority of the AGRC to act suo moto in the public interest, rather than being bound by formal complaints to initiate proceedings.
• The court pointed that there were systemic defects in the way that the Slum Act was working. It held that what was needed was a periodical performance audit to properly scrutinise the implementation of the Act. That clearly was an acceptance of the fact that these systemic defects required continuous monitoring and reform in the administration of slum rehabilitation projects to keep them efficient and in public interest.It further explained the judiciary's part in facilitating access to justice and ensuring the proper functioning of constitutional bodies.
• It, therefore, substantiated judicial intervention to direct the review or audit of statutes, especially those with far-reaching public benefits, such as the Slum Act. Such a function on the part of the judiciary assumes great importance in ensuring accountability, so that whatever is engrafted within the legislative framework to serve the public welfare fructifies into successful implementation.

CONCLUSION

The Supreme Court dismissed the appeal, affirming the termination of the development agreement, and directed the Bombay High Court to commence suo moto proceedings to assess the operation of the Slum Act. Suggested a performance audit of the Act to identify and fix systematic implementation difficulties. The Court stressed the necessity to modify laws via frequent review and assessment to ensure they fulfill their intended purposes, particularly beneficial legislation directed at underrepresented sections.