Supreme Court Affirms Preferential Right of Landowners in Slum Redevelopment | Acquisition by Slum Rehabilitation Authority Held Invalid Under Maharashtra Slum Areas Act
Kiran Raj
The Supreme Court of India Division Bench of Justice Surya Kant and Justice Ujjal Bhuyan dismissed the civil appeals and upheld the High Court’s judgment declaring the acquisition of land void. The Court held that the landowner retained a preferential right to redevelop the subject slum and directed the Slum Rehabilitation Authority to support the landowner in preparing and submitting a redevelopment scheme. The Court quashed the acquisition proceedings and affirmed that the landowner shall submit a redevelopment plan within a stipulated time frame while ensuring the benefits earlier offered to the slum dwellers are maintained. The Court further directed the authority to process the proposal expeditiously in accordance with statutory requirements.
The dispute arose concerning the validity of the acquisition of land situated at CTS No. B-960 in Village Bandra, Taluka Andheri, Mumbai, measuring 1,596.40 square meters. The land, owned by a public trust operating the Mount Mary Church, was encroached upon by hutment dwellers since the 1930s. The area was declared a slum in 1978 and later expanded in 2002. The slum dwellers subsequently formed a cooperative housing society comprising thirty-five identified tenements existing prior to 01.01.2000.
Since 2012, discussions commenced between the housing society and the public trust regarding redevelopment. Initially, the society appointed M/s Accord Estates as developer and entered into development agreements. However, citing inaction, the society terminated agreements with Accord Estates and instead appointed M/s Saldanha Real Estates Pvt. Ltd. as its developer in December 2017. The society executed a development agreement and individual agreements with Saldanha, and a power of attorney was also granted in its favour. The developer later offered to purchase the subject land from the trust for INR 2.5 crores, later revised to INR 3 crores, but the deal did not materialize.
The public trust intended to redevelop the subject land along with adjoining plots, forming a composite project named ‘Nirmala Colony.’ When this proposal was presented, the housing society opposed it and requested independent redevelopment through Saldanha. On 24.09.2019, the housing society submitted a proposal to the Slum Rehabilitation Authority for declaration of the area as a Slum Rehabilitation Area. Meanwhile, the trust submitted a feasibility report prepared by its architect to the authority. The Slum Rehabilitation Authority, however, proceeded with the society’s proposal and issued notices under Section 3C(1) of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971.
The trust filed objections, contending that it wished to redevelop the property on its own and that the subject land should not be classified as a slum. Nonetheless, the Chief Executive Officer of the authority, by order dated 29.12.2020, rejected the objections and declared the land as a Slum Rehabilitation Area. The declaration was published in the Official Gazette on 31.12.2020. The trust challenged this declaration through a statutory appeal before the Apex Grievance Redressal Committee, which remained pending.
Subsequently, both Saldanha and the trust filed redevelopment proposals. Saldanha filed on 23.04.2021 with support of the housing society, while the trust submitted its proposal on 04.05.2021 for a composite redevelopment of Nirmala Colony. The Slum Rehabilitation Authority proceeded with Saldanha’s proposal and disregarded the trust’s submission. On 09.09.2021, the housing society applied for acquisition of the subject land. A public notice was issued on 29.10.2021 inviting objections. The trust objected but, on 22.12.2021, the authority rejected its proposal citing format and procedural deficiencies. On 29.03.2022, the CEO approved acquisition on the ground that the trust had not filed a scheme within 120 days of the Section 3C(1) declaration. The acquisition proposal was forwarded to the State Government for approval.
The trust challenged the acquisition before the High Court, which by judgment dated 11.06.2024 set aside the notice and acquisition order. The High Court held that the trust possessed a preferential right to redevelop the land and that the acquisition was void. The aggrieved housing society, the developer, and the Slum Rehabilitation Authority appealed to the Supreme Court.
The Supreme Court recorded that “the private owner of an SR Area has a preferential right to develop it” and that “the SRA must invite the landowner to come forward with a redevelopment proposal and give them reasonable time to do so before the said preferential right extinguishes.” The Court further stated that “the State or the SRA cannot move to acquire the land before the preferential right of the owner is extinguished.”
On the preliminary objection, the Court observed: “the High Court, in exercise of its plenary jurisdiction under Article 226 of the Constitution, can prevent or annul any executive overreach, arbitrary decision-making process, action tainted with mala fides, or colourable exercise of power.” It held that the notice and order under challenge were traceable to statutory provisions and amenable to judicial review.
Addressing the impact of the 2018 Amendment, the Court stated: “no attempt has been made to remove or dilute the preferential right of the landowner to redevelop an SR Area.” It recorded that the amendment added the term ‘owner’ to the statutory scheme, thereby entrenching the owner’s rights. The Court noted: “the issuance of a notice under Section 3C is meant to accord hearing to a landowner and invite objections, if any, against declaration as an SR Area. By contrast, the purpose of a specific notice under Section 13 is to invite and enable the owner to initiate redevelopment.”
The Court held: “the stipulated time-limit would come into effect after the owner is notified and invited to redevelop the SR Area, whereupon they must come forward within the time-ceiling.” Rejecting the appellants’ contention, the Court declared: “the claim that the owner is expected to present an SR Scheme within 120 days of the Section 3C(1) Declaration without any notice-cum-invitation is wholly misconceived.”
On the validity of acquisition, the Court observed: “there is no notice or invitation under Section 13 on the record that was issued to the Church Trust.” It recorded: “the inevitable consequence of the SRA’s omission to issue a separate notice under Section 13 is that the Church Trust’s preferential right to redevelop the Subject Land remains intact. In the absence of a valid notice or opportunity, there existed no legal basis to extinguish this right.”
Regarding waiver of rights, the Court held: “if there is no clear and overt communication by the owner that it does not wish to exercise its preferential right to develop the SR Area, there cannot be an automatic waiver of the right.” The Court noted that the trust consistently expressed intent to redevelop and had submitted a proposal, therefore no waiver could be inferred.
The Court scrutinized the conduct of the parties, stating: “Saldanha’s actions suggest a calculated attempt to wrest the Subject Land from the Church Trust… by exploiting the markedly low acquisition rates for commercial gain.” Referring to correspondence, the Court cited threats of adverse possession and coercive offers, concluding that the developer orchestrated the society’s actions. Regarding the authority, the Court recorded: “the facts reveal a prejudiced attempt by the SRA to undermine legislative and judicial efforts and hand over the Subject Land and the benefits of its rehabilitation to Saldanha.” It held that such actions of a public authority, “marred by collusion and connivance and motivated by extraneous profit interests of private builders, are highly depreciable.”
The Supreme Court dismissed the appeals and upheld the High Court’s judgment. It directed that “Liberty is granted to the Church Trust to submit, within a period of 120 days, an SR Scheme for the redevelopment of the Subject Slum, strictly in accordance with laws and regulations in force.” The Court further ordered that “the Church Trust shall be bound by the offer of the size of the apartments as well as other benefits and entitlements already made by it to the slum dwellers.” The judgment directed: “The SRA shall offer full support to the Church Trust for surveys, demarcation, etc., as per the applicable Regulations, to enable it to submit an SR Scheme.” Finally, the Court stated: “The SRA and the State shall process the Church Trust’s proposal as expeditiously as possible within the prescribed procedure, within a period of 60 days from the date of the Trust’s submission.”
Case Title: Saldanha Real Estate Private Limited v. Bishop John Rodrigues and others
Neutral Citation: 2025 INSC 1016
Case Number: Civil Appeal arising out of Special Leave Petition (C) Nos. 15454, 15711, 16209 of 2024
Bench: Justice Surya Kant, Justice Ujjal Bhuyan
