Maharashtra Slum Areas Act | Land Can't Be Acquired Without Extinguishing Owner's Preferential Right To Propose Rehabilitation Scheme : Supreme Court

While dealing with acquisition of a parcel of land in Mumbai's Kurla for slum rehabilitation purposes, the Supreme Court recently held that Chapter I-A of the Slums Act gives preferential right to a landowner, vis-a-vis the State, Slum Rehabilitation Authority (SRA), occupiers, and other stakeholders, to redevelop land.The SRA shall mandatorily issue notice to the landowner inviting its proposal for an SR Scheme and the landowner must submit the Slum Rehabilitation (SR) Scheme "within a reasonable period" , the Court said.A bench of Justices Surya Kant and N Kotiswar Singh also held that acquisition by the State in terms of Section 14 of the Slums Act [that is, the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971] shall await extinguishment of the landowner's preferential right.In passing, the Court also remarked that the framework for Slum Rehabilitation under the Slums Act is "poorly structured". However, as the impugned actions took place prior to the 2018 amendment of the Act, it did not delve further into the issue."There appears to be no cogent reason as to why, instead of enacting a self-contained code within Section I-A, the drafters of this legislation chose to incorporate an entirely distinct slum rehabilitation mechanism by amending the existing legislation through Section 3D. This approach to drafting inevitably blurs the boundaries between the two frameworks, creating confusion in the mind of a reader."Factual BackgroundThe subject land, owned by Indian Cork Mills Private Limited (ICM) since 1970, was encroached upon by hutment dwellers and portion of it declared as a 'Slum Area' under Section 4 of the Slums Act. Over the years, the slum expanded and its dwellers formed the petitioner-Society (Tarabai Nagar Housing Society) in 2002. Vide notification dated 11.03.2011, SRA declared the entire subject land as an SR Area. Subsequently, the Tarabai society requested the authorities to acquire the land for redevelopment.In the absence of landowner-ICM's response, the concerned Additional Collector recommended that the subject land be acquired. In 2012, a report was forwarded to the Government of Maharashtra. Later, a notice was served to ICM, to which it responded, and expressed intention to redevelop the land itself through an SR scheme. In 2013, the CEO recommended acquisition of the land under Section 14 of the Act, noting that ICM had showed inclination to redevelop but not proposed any SR Scheme. The State Government issued a notification in 2016 to acquire the land.Aggrieved, ICM approached the High Court which, vide the impugned judgment, set aside the acquisition and directed SRA to consider ICM's proposal expeditiously. It was observed that the State and SRA conducted the acquisition without giving a proper opportunity to ICM to submit its SR Scheme. Assailing the High Court decision, petitioner-Society, State of Maharashtra and SRA approached the Supreme Court.Issues(i) Whether the owner of the land in an SR Area has any preferential right to redevelop it under Chapter I-A of the Slums Act?(ii) Whether such preferential right, if any, entails that the owner be specially notified and invited to redevelop the SR Area before the SRA takes a decision under Section 13 read with Section 3D(b)(iii) of the Slums Act?(iii) Whether the power of the State Government to acquire land under Section 14 read with Section 3D(c)(i) of the Slums Act28 is subject to the preferential right, if any, of the owner?Court Observations- Landholders/owners have a preferential right to redevelop SR AreaOn the first issue, the Court opined that the SRA has the responsibility to redevelop an SR Area only when the landholder or occupants do not come forward with a proposal for redevelopment. In this regard, the slum dwellers' rights are balanced by the caveat that owner must come up with its proposal within 'reasonable time'. "where landholders or occupants have submitted a proposal for redevelopment, it places a caveat against any claim by the SRA for its statutory right or preference to redevelop the SR Area on its own...Section 13 has its own measure to balance the rights of slum dwellers, by imposing the restriction of 'reasonable time' on the owner's right to redevelop."Based on a conjunctive reading of Sections 3B(4)(e) and 13(1), it concluded that the owner's right to develop an SR Area holds preference over that of the SRA within Chapter I-A of the Slums Act.Though it was argued that the right of occupiers of land (such as slum dwellers), if not SRA, cannot be subject to the landowners' right to redevelop land, the Court was not convinced. It was of the view that the occupiers cannot override the owner when the latter comes forward with a feasible redevelopment plan within reasonable time, as besides the Slums Act, the landowner also has constitutional and inherent rights attached to the property.The Court opined that if landowners and occupiers are given equal rights to redevelop, a...

Maharashtra Slum Areas Act | Land Can't Be Acquired Without Extinguishing Owner's Preferential Right To Propose Rehabilitation Scheme : Supreme Court

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Maharashtra Slum Areas Act | Land Can't Be Acquired Without Extinguishing Owner's Preferential Right To Propose Rehabilitation Scheme : Supreme Court

Debby Jain

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