Maharashtra Slum Areas Act | State's Power To Acquire Land Subject To Owner's Preferential Right : Supreme Court

The Supreme Court on Tuesday (December 2) dismissed a plea seeking compulsory acquisition of a 2,005-square-metre plot reserved as a Recreational Ground (RG) in Malad, Mumbai. The Court emphasized that the state's power of compulsory acquisition cannot be invoked to override a landowner's preferential statutory right to redevelop slum-affected property as per the Maharashtra Slum Areas(Improvement, Clearance and Redevelopment) Act, 1971 (Slum Act).

A bench of Justices J.B. Pardiwala and K.V. Viswanathan heard the matter in which the appellant, Jyoti Builders, had approached the Bombay High Court to direct the State Government to acquire land for a redevelopment project on the strength of the Slum Rehabilitation Authority (SRA) order which had ordered acquisition of the land in 2015 for the scheme proposed by the appellant.  

The case involved Jyoti Builders (the appellant), which sought a mandamus to compel the State to acquire the subject property under Section 14 of the Maharashtra Slum Areas Act, 1971. The builder relied on a 2015 SRA order that concluded the land should be acquired for Jyoti's larger slum rehabilitation scheme, under which 498 dwellers had already been rehabilitated.

However, the original owner (Respondent No.4), Phuldai Yadav, sold the plot in March 2022 to Alchemi Developers (Respondent No. 4), which promptly submitted its own slum rehabilitation proposal to the SRA. Jyoti Builders argued the 2015 order was final and binding, and the subsequent sale and new scheme were illegal.

Aggrieved by the dismissal of their plea by the High Court, the Appellant moved to the Supreme Court.

Before the Supreme Court, the issue was whether, despite the landowners' preferential right over the slum property and the subsequent submission of a rehabilitation proposal by the developer who purchased the land, the Appellant could still seek a direction compelling the State government under Section 14 of the Slum Act to acquire the land for the Appellant's redevelopment scheme

Refusing to interfere with the High Court's decision, the judgment authored by Justice Pardiwala held that a landowner enjoys a statutory preferential right to redevelop slum land. This right must be respected before the State can exercise its acquisition powers under Section 14 of the Maharashtra Slum Act, 1971, the court said.

“It is well settled that the power of the State Government to acquire land under Section 14 read with Section 3D(c)(i) of the Slum Act is subject to preferential right, if any, of the owner.”, the court held.

Since, the landowner had exercised the preferential right over the land, the Appellant would not be entitled to seek a direction to the state government to exercise its compulsory power to acquire the land, the Court said, referencing Tarabai Nagar Co-Op. Hog. Society (Proposed) v. State of Maharashtra & Ors., 2025 LiveLaw (SC) 832, where it was held that “as long as the owner is willing to undertake development in exercise of its preferential right, the acquisition cannot proceed.”

“any process to acquire the land shall have to be kept in abeyance till such time as the owner's preferential right to develop it stands extinguished. Since it is open to the owner to file its own SR Scheme within a reasonable time and the proposal of the owner, if valid and complete, would take primacy, it cannot be said that there is any legal necessity to acquire the land. If acquisition is allowed to take place at this stage, it will jeopardise the preferential right of the landowner. It is only when the owner declines to undertake development or to support any third-party development, thereby foregoing its preferential right, that such a necessity would actually arise. There can thus be no doubt that, as long as the owner is willing to undertake development in exercise of its preferential right, the acquisition cannot proceed.”, the court held in Tarabai Nagar's case.

No Construction on Recreational Ground

Further, the court issued a blanket prohibition against any construction on the disputed plot.

“We make it abundantly clear that no construction shall be made on the subject property of any nature and the same shall be utilized only as a Recreational Ground (RG).”, the court said, and specifically directed Alchemi Developers, its successors and assigns, not to put up any type of construction on the land.

In terms of the aforesaid, the appeal was disposed of.

Cause Title: Jyoti Builders vs. Chief Executive Officer & Ors.

Citation : 2025 LiveLaw (SC) 1158

Click here to download judgment

Appearance:

For Petitioner(s) :Mr. Shyam Divan, Sr. Adv. Mr. Kavin Gulati, Sr. Adv. Mr. Anish Agarwal, AOR Mr. Yogesh Adhia, Adv. Mr. Pratik Chakma, Adv. Ms. Natasha Bagga, Adv. Mr. Abhinav Maurya, Adv. Ms. Pooja Kane, Adv. Mr. Jitendra Jain, Adv. Mr. Yashvardhan Singh, Adv.

For Respondent(s) : Ms. Pallavi Sharma, AOR Mr. Vikas Singh, Sr. Adv. Mr. Vinay Navare, Sr. Adv. Mr. Shubhranshu Padhi, Adv. Mr. Bharat Jain, Adv. Mr. Purvesh Buttan, Adv. Mr. Karan Batura, AOR Mr. Prateek Narwar, Adv. Mr. Nikhil Vijay Adkine, Adv. Ms. Tuhina Kakkar, Adv. Mr. Himanshu Buttan, Adv. Ms. Prachi Bhutani, Adv. Mr. Abhikalp Pratap Singh, AOR Mr. Amol Nirmalkumar Suryawanshi, AOR Mr. B. Dhananjay, Adv. Ms. Srishty Pandey, Adv. Mr. K. Parameshwar, Sr. Adv. Mr. Palash Singhai, AOR Mr. Harshal Sareen, Adv. Mr. Pragya Prakash Upadhyaya, Adv.