Eviction Under MHADA Act Not Automatic; Authority Must Examine Legality Of Dues Claimed By Housing Board: Bombay High Court

The Bombay High Court has held that the Competent Authority under the Maharashtra Housing and Area Development Act is empowered to examine whether the amount claimed by the Housing Board is "lawfully due" and is not confined merely to ordering eviction. The Court observed that an allottee who receives a tenement under a government quota is not exempt from payment of the price and other lawfully recoverable components, including capitalised interest.

Justice M.M. Sathaye was hearing a writ petition filed by the Pune Housing and Area Development Board challenging an order of the Appellate Officer, which had dismissed the Board's appeal and partially allowed the allottee's appeal by setting aside an eviction order. The dispute concerned a tenant whose possession was directed to be handed over immediately after completion of formalities and payment of an initial deposit. The price of the flat was not fixed at the time of allotment. In 1995, the price was fixed at ₹5.51 lakh. Upon the respondent's failure to pay the amount, eviction proceedings were initiated under Section 66 of the Act.

The Competent Authority reduced the demand and determined the amount payable at ₹2,56,405.57. After the respondent paid the amount so determined, the Appellate Authority set aside the eviction order. The Board contended that the Competent Authority lacked jurisdiction to reassess or revise the amount.

The Court observed that Section 66 permits eviction where an allottee has failed to pay an amount "lawfully due" and that the expression itself requires scrutiny of whether the amount claimed is legally recoverable. The Court held that if the Competent Authority could order eviction on the basis of unpaid dues, it necessarily had jurisdiction to examine whether those dues were lawfully payable. The Court observed that any contrary interpretation would leave allottees without a forum to challenge unlawful demands, particularly since the Act bars the jurisdiction of civil courts in such matters.

“… if the power of the Competent / Appellate Authority is interpreted in a restricted / limited manner, as suggested by learned Counsel for the Petitioner, the allottee will be left in a situation where no authority under the said Act will have power to scrutinize whether the amount claimed by the officers of the Board is lawfully due or not. Such interpretation will result in unchecked powers with the officers to demand unlawful dues. Such interpretation can not be countenanced,” the Court observed.

The Court further observed that allotment under a government quota does not exempt an allottee from complying with statutory regulations governing price fixation and payment obligations. Referring to Regulations 15 and 22, the Court held that where considerable time has elapsed between construction and allotment, the Board is entitled to revise the price and recover additional amounts, including through the method of interest capitalization. The Court found that the increase in the price of the flat from 1987 to 1993 through capitalization of interest at 12.5% per annum could not be termed arbitrary or illegal.

The Court observed that although the Board was entitled to recover capitalized interest up to the date of allotment, it had failed to explain why no demand was raised between July 1993 and May 1995. Accordingly, the Court held that the Board could not claim interest for that period. However, interest at 9% per annum from May 1995 onwards was found to be justified.

Holding that the respondent remained liable to pay the balance amount lawfully due, the Court partly allowed the petition and directed the respondent to pay ₹3,42,047 within two weeks.

Case Title: Pune Housing And Area Development Board v. Vithal Shripati Ladkat [Writ Petition No. 798 of 2007]

Citation: 2026 LiveLaw (Bom) 294

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