Holding

Sigtia Construction Company Ltd. is a necessary and proper party to the writ petition and the Special Leave Petition, and the order directing the SRA to issue a Letter of Intent to Keya Developers is recalled.

Summary

The case concerned a slum‑rehabilitation scheme in Vile Parle where Mis Sigtia Construction Co. Ltd. (S) had been appointed developer by the co‑operative housing society. While S was awaiting a Letter of Intent (LOI) from the Slum Rehabilitation Authority (SRA), slum dwellers filed writ petitions challenging S’s appointment and the society attempted to replace S with Mis Keya Developers (K). The High Court dismissed the challenges but directed the SRA to impose additional conditions. Subsequent Special Leave Petitions (SLPs) were filed, but S was not impleaded despite being directly affected by any order appointing K. The Supreme Court held that S was a necessary and proper party to both the writ petition and the SLP, and therefore the order directing the LOI to K was recalled. The SRA was directed to call both developers, consider their applications under the Maharashtra Slum Areas (Improvement, Clearance and Re‑development) Act, 1971, and award the LOI to the developer who satisfies the statutory qualifications.

Issues considered

The appointment of a new developer (Keya) without impleading the existing developer (Sigtia) – whether Sigtia is a necessary and proper party to the proceedings.
Whether the order directing the SRA to issue a Letter of Intent to Keya Developers should stand.
Whether the SRA must consider both developers and award the LOI in accordance with the Maharashtra Slum Areas (Improvement, Clearance and Re‑development) Act, 1971.

Legislation cited

Constitution of Indias. Article 136

Subjects

Slum Rehabilitation SchemeNecessary partyImpleadmentLetter of IntentDeveloper appointmentMaharashtra Slum Areas ActSpecial Leave PetitionProcedural law

Judgment

A RAMCHANDRA MAHADEV JAG PAT AND ORS.
v.
CHIEF EXECUTIVE OFFICER AND ORS.

NOVEMBER 7, 2006

B [DR. AR. LAKSHMANAN AND TARUN CHATTERJEE, JJ.]

Constitution of India, 1950: Article I36.

Special Leave Petition-Necessary party-Application for i1'ipleadment
C and recall of order-Slum Rehabilitation Scheme-Development agreement-
Revocation of-Applicant 'S' was appointed as a developer by the Co-
operative Housing Society as a developer in respect of a Slum Rehabilitation
Scheme of the property in question-When the applicant was about to get
the Letter of Intent, a writ petition was filed by some slum dwellers challenging
D the appointment of 'S' as a developer-High Court dismissed the writ petition
and directed the Slum Rehabilitation Authority (SRA) to put additional
conditions-Special Leave Petition filed against the said order-During its
pendency the Society gave 11otices purporting to revoke the development
agreement executed in favour of 'S'-The Management. of the Society. also
decided to appoint 'K' to execute the project-The said Special Leave Petition
E was dismissed-The very same slum dwellers filed another writ petition
alleging that 'S' did not commence re-development of the properties in terms
ofthe agreement-'S' was not made a party to this writ petition-The Principal
Secretary, Housing Department directed SRA to issue Letter of Intent in
favour of 'S'-In the second Special Leave Petition filed against the order
F passed in the second writ petition 'S' was again not made a party-This
Court passed an order in the second Special Leave Petition directing SRA
to iswe a Letter of Intent in favour of 'K'-'S' filed an application for
impieadment and recall of the order passed against 'K'-Held: 'S' was a
necessary party to the second writ petition and to the second Special Leave
Petition as it was directly affected by any order appointing 'K' as a
G developer-Therefor~, 'S' should have been made ..i party respondent in the
second •vrit petition as well as in the second Special Leave Petition-Hence,
the order passed in the second Special Leave Petition is recalled-The SRA
is directed to call the two developers, namely, 'K' and 'S' and to award the
Letter of Intent to the developer who satisfies the required qualifications and

H 658
- RAMCHANDRA MAHADEV JAGPATv. CHIEF EXEClJilVE OFFICER

conditions and regulations and the provision of the Slum Areas Improvement
Act-Maharashtra Slum Areas Improvement, Clearance and Re-development
659

A

Act, 1971.

The applicant 'S' was appointed as a developer by the Co-operative
Housing Society Limited-respondent No. 2 in respect of a Slum Rehabilita_tion
Scheme of the property in question. When the applicant was about to get the B
Letter of Intent, a writ petition was filed l>y some slum dwellers challenging
the appointment of 'S' as a developer. The High Court dismissed the writ
petition and directed the Slum Rehabilitation Authority (SRA) to put additional
conditions. During the pendency of the Special Leave Petition challenging
the order passed in the aforesaid writ petition the Society gave notices C
purporting to revoke the development agreement executed in favour of 'S'.
The Management of the Society also decided to appoint 'K' to execute the
project However, the said Special Leave Petition was dismissed as withdrawn.
The very same slum dwellers filed another writ petition alleging that 'S' did
not commence re-development of the properties in terms of the agreement.
'S' was not made a party to this writ petition. 'S' wrote a letter to SRA D
enclosing a cheque for a sum of Rs. 2.5 crores towards the interest-free
deposit with SRA. However, the cheque was not accepted by SRA stating that
there was no specific order of the High Court to accept the amount from 'S'.
The Principal Secretary, Housing Department directed SRA to issue Letter
of Intent in favour of 'S'.
E
In the second writ petition the High Court passed an order directing
the SRA to call the parties and pass an order in terms of the High Court
judgment. In the Special Leave Petition filed against this order 'S' was again
not made a party.

This Court passed an order in the above Special Leave Petition directing
F
SRA to issue a Letter of Intent in favour of 'K'. Hence, 'S' filed an application
before this Court for impleadment and to recall the order passed by this Court

Disposing of the application, the Court
HELD: 1. The applicant 'S' has explained to this Court as to how the G
amount of Rs. 2.5 crores was not deposited with the Slum Rehabilitation
Authority (SRA). It also denied that the agreement entered into between 'S'
and the society came to an end by efflux of time. From the agreement it would
be clear that the developer was to start the actual construction after the
issuance of the commencement certificate by the authority. Therefore, the H
660 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A period of 3 years must be construed to begin 'from the date when the
commencement certificate is issued and not from the date of ex·ecution of the
agreement. The letters revoking the development agreement issued in favour
of 'S' were issued by 2 or 3 members of the society who were acting with
ulterior motive and in collusion with the rival developer. Even.the SRA to whom
B the letters were addressed, in its counter affidavit filed before this Court in
the present proceedings, has stated that it did not take notice of the said letter
of termination as the letter was not suppo'rted by the relevant resolution of
the society. 'S' app'roached the SRA on several occasions requesting for the
issuance ofthe Letter of Iii tent but no response was coming from the Housing
Department. After the dismissal of the Special Leave Petitio~ the order of
C the High Court passed in 'the first writ petition attained finality and there
was·no proposal of 'K' before the SRA and, therefore, ·there was no question
of SRA considering the proposal made by the ri_ew developer. 'S' was a
necessary party to the second writ petition and to'the second Special Leave
Petition as it was directly affected by any order appointing 'K' as a developer.
[681-E, F, G;H; 682-A, Bl
D
2. It was rightly contended by the applicant'that in any subsequent
proceedings where the termination of the agreement of the applicant 'S' with
the society and replacement cif'S' by a·new developer is a·subject-matter, 'S'
is a proper and necessary party to it. There is much force and substance in
the said argument. The applicant 'S' has also the right to have a hearing
E before the SRA along with 'K', the new appointee. It must also be seen that
the relief sought in"the second Special Leave Petition'though is only against
the SRA but in effect is against the applicant 'S' and, therefore~ 'S' is the
necessary party to any proceedings wherein the replac'ement of 'S' with a
new developer and the termination of the agreement with 'S' is in issue and,
F therefore, 'S' should have been made a party r.espondent in the second writ
petition as well as in the' second Special Leave Petition. It is 'also not in dispute
that 'S' was impleaded as party respondent N6. 7 in the first Special Leave
Petition which came to be withdiawn by the petitimfer therein on which date
•s•·appeared through its advocate in'this Court. After the withdrawal of the
Special Leave Petition by the petitioner both 'S' and 'K' kept on submitting
G applications with the SRA. However, due to pendency of the sec'ond'Special
Leave Petition in this Court, SRA was /not able to take any decision on the
representations of the developers as well as the society. [683-A, B, C,D, EJ
2.1. Therefore, for the foregoin'g reasons, it is held that 'S' is a
necessary and proper party to the second Special Leave Petition. The order
H was passed in this SLP on the basis of the representation made by all the
.... RAMCHANDRA MAHADEV JAGPAT v. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.] 661

respective senior counsel appearing at that time. The order was not obtained A
by playing fraud on the Court as alleged by the applicant. Now 'S' has made
out a clear case as to why it was a necessary party to the second Special Leave
Petition and in the light of the directions given by the High Court in the writ
t petitions the order passed in this SLP is recalled. (683-G, H; 684-A, BJ

3. The SRA is directed to call the two developers, namely, 'K' and 'S' B'
and dispose of their applications for issuing the Letter of Intent and to pass
appropriate orders in accordance with the Maharashtra Slum Areas
Improvement, Clearance and Re-development Act, 1971 and also strictly follow
the procedure for submission, processing and approval of Slum Rehabilitation
Scheme and to award the Letter of Intent to the developer who satisfies the
required qualifications and conditions and regulations and the provision of C
the 1971 Act. [684-E, F)
CIVIL APPELLATE JURISDICTION
I.A. Nos. 2-S & 8
IN D
Special Leave Petition (C) No. 10281/2006.
WITH
I.A. No. l in S.L.P. (C) No .... 5527 of2006.
From the final Judgment and Order dated 4.5.2006 of the High Court of E
Judicature at Bombay in W.P. No. 1277 of2006.
G.E. Vahanvati, S.G., Arun Jaitely, Ravindra Srivastava, Dushyant Dave,
Harish N. Salve, L.N. Rao, U.U. Lalit, Dr. A.M. Singhvi, Jaideep Gupta, P.H.
Parekh, Sum it Goel, Shashikant G. Surana, Shekhar Naphade, Lal it Jain, Ashok
K. Mahajan, Malvika Trivedi, Shekhar Kumar, Prateek Jalan, Meenakshi Grover, F
Goodwill Indeevar, Sanjay V. Kharde, Sunil Kumar Verma, B. Sunita Rao,
Arvind Varma, Nemika Jha, Amit Bhandri and Indra Sawhney for the appearing ·
parties.
The Judgment of the Court was delivered by

DR. AR. LAKSHMANAN, J. I.A. No. I for impleadment is ordered on G
10.07.2006. Mis. Sigtia Construction Company Private Limited was impleaded
as respondent No.5 in Special Leave Petition No. 10281 of 2006.

I.A. No.3 of 2006 was filed by the applicant-Mis. Sigtia ConstructioQ
Company Private Limited to recall the order dated 27.06.2006 passed by this
H
662 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Court in Special Leave Petition No. l 0281 of 2006. The order passed by this·
Court in Special Leave Petition No. l 0281/2006 dated 27.06.2006 reads thus:

"ORDER •;

Heard Mr.L.N.Rao, senior advocate for the petitioners. Mr. Sanjay
B V. Khande, Mr. B.S. Rao and Ms. Indra Sawhney, advocates accepts
notice on behalf of respondent Nos. l to 3. We also heard their
submissions.

By a prayer for interim relief, the petitioners seek direction directing
the Slum Rehabilitation Authority to issue a letter of intent in favour
c of Mis. Keya Develope~s and Construction' Company (P) Lti:I. For
undertaking re-development work in the slum s~tuated at Irla Tank, S. V.
Road, Vile Parle (West) Mumbai.

The grievance of the petitioners is that despite no legal impediment,
the Slum Rehabilitation Authority was not issuing the letter of intent
D in favour of Mis. Keya Developers and Construction Company (P)
Ltd. despite a request made by the Society. According to them, it was
merely a case of replacement of· previous developers Mis. Sigtia
Construction Company Pvt. Ltd. who had not even started the project
even after almost eight years and whose agreement with the Society
had come to an end by efflux of time.
E
Mr. Sunil K.Vanna, advocate, appears for the Chief Executive
Officer, Slum Rehabilitation Authority, Bandra (E), Mumbai (respondent
No.I). The learned counsel submits. that the Slum Rehabilitation
Authority will issue proper orders within two·weeks from today. In
F view of the submission made by the learned counsel for respondent
No. I, we direct the Slum Rehabilitation Authority to issue the letter
of intent in favour of Mis. Keya Developers and Construction
Company (P) Ltd. which is also represented by Mr. Jaideep Gupta,
learned senior counsel and the Society is represented by Mr. P.K.
Ghosh; learned senior counsel.
G
The Special Leave Petition is disposed 6f accordingly."

The reasons for recalling the order as stated in I.A.No.3 of 2006 are as
under:-

H
RAMCHANDRA MAHADEV JAGPAT v. CHIEF EXECUTIVE OFFICER [LAKSHMANAN,J.] 663

The applicant Sigtia Construction Company Private Limited (in short A
"Sigtia") was appointed as developer by the Vile Parle Prem Nagar Co-operative
Housing Society Limited (hereinafter called "Society" the respondent No.2).
The applicant who is directly affected by an order appointing M/s. Keya
Developers and Construction Private Limited (in short "Keya") as Developer
was not made a party respondent in Writ Petition No. 1277 of2006 and also
in the Special Leave Petition No. I 0281 of 2006 although the applicant was B
a party in the previous proceedings, namely, Writ Petition No. 988 of 2004
which was filed before the High Court and the Special Leave Petition No.
11318 of2005 and 19848 of2005. According to the applicant, the respondents
in the Special Leave Petition No. I 0281 are not contesting respondents and
particularly respondent No. I-the Slum Rehabilitation Authority (in short "SRA") C
had taken a stand before this Court in earlier round in Special Leave Petition
No. 19848 of 2005 by way of an affidavit that they will abide by any orders
which may be passed by this Court. Nobody appeared for Bombay Municipal
Corporation on 27.06.2006. Therefore, there was nobody present who could
have opposed the passing of the order. The applicant, against whom
allegations were made, was not made a party to the special leave petition. It D
was the duty of the petitioner in the special leave petition, to make the
applicant Sigtia, who is directly affected, a party to the special leave petition.
However, instead of doing that this Court was given the impression that all
the affected parties wt:re before this Court.

Mr. Arun Jaitley, learned senior counsel appearing for the applicant E
Sigtia made the following submissions as to why the order dated 27.06.2006
in Special Leave Petition No. 10281 of2006 should be recalled.

(a) M/s Sigtia was appointed as developers in respect of Slum
Rehabilitation Scheme of the property in the Suburban district of F
Mumbai at Irla Tank by the general body of the proposed Prem
Nagar Housing Society;

(b) Sigtia submitted the proposal for re-development of the slum
known as Prem Nagar situated at Vile Parle (W), CTS No. 439-442;
446-448; 451-1-15, 452, 453, 454A under Slum Rehabilitation Scheme G'
on 11.09.2002 with the consent of 1054 hutment dwellers;

(c) In all I 054 individual agreements and consent affidavits were
filed by slum dwellers in favour of Sigtia before the SRA and
approved by the Additional Collector (Encroachment) by its order
dated 23.01.2003;
~

664 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

(d) When the applicant was about to get the Letter of Intent, the
A
Writ Petition No. 988 of2004 was filed on 31.03.2004 before the
High Court of Bombay by Mr. Nazir Khan Yakub Khan and 8
others slum dwellers challenging the appointment of Sigtia as
developer to undertake the re-development of the slum area on
the ground that Sigtia was having neither technical expe1tise nor
B financial capability to complete the project.
(e) In the above writ petition, the Chief Promoter of the Society filed
two affidavits before the High Court dated 07.06.2004 and
29.06.2004 expressing confidence and faith in the technical and
financial capability of Sigtia to execute the project. The Chief
c Executive Officer, SRA also filed additional affidavit on 11.02.2005
supporting the scheme in totality.
(f) The High Court, while dismissing the Writ Petition No. 988 of
2004 on 11.03.2005 directed the SRA to put additional conditions
as follows:- '
D a. Obtaining security deposit ofRs.2.5 crores from the developer
to safeguard the interests of the Slum Dwellers.
b. Supervision by the Senior Engineer of Bombay Municipal
Corporation at the cost of the developer.

E c. No construction of sale component till all the slum dwellers are
rehabilitated in the new buildings, and
d. Undertaking/ indemnity from the developer for fulfilling the
above three conditions.

Out of 9 petitioners in Writ Petition No. 988 'of 2004, one Nazir Khan
F Yakub Khan alone filed a Special Leave Petition No. 11318 of2005 challenging
the order of the High Court passed in Writ Petition No. 988 of 2004. Sigtia
was impleaded in the special leave petition as Respondent No.7. The Special
Leave Petition was withdrawn by the petitioner on 26.09.2005. 4 other
petitioners out of original 9 filed Special Leave Petition No. 19848 of 2005
G challenging the order in Writ Petition No. 988 of 2004 and obtained interim
stay on 19.09.2005 from this Court. Due to the above said stay order, Sigtia
could not take any further steps towards the implementation of the project.
The stay order continued till 13.04.2006 on which date this Court dismissed
the Special Leave Petition No. 19848 of 2005 as withdrawn.
H During the pendency of the Special Leave Petition No. 19848 of 2005,
RAMCHANDRA MAHADEV JAGPAT "·CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.) 665

counsel of Prem Nagar Co-operative Housing Society gave notices dated A
26.04.2005 and 06.06.2005 purporting to revoke the development agreement
and the Power of Attorney executed in favour of Sigtia. By letter dated
15.06.2005, Sigtia gave reply questioning the authority of the persons
purporting to terminate and revoke the said development agreement and
Power of Attorney.
B
A public notice dated 05.09.2005 was issued by the Vile Parle Society
referring to the termination of the development agreement and power of
attorney by the Society. The Management of the society also decided to
appoint one - M/s. Keya Developers (in short "Keya") to execute the project
and intimation to this effect was sent to SRA by way of an application. 'C
In the above special leave petition, certain interlocutory applications
were filed by some hutment dwellers praying for directions to SRA to examine
and consider the proposed scheme for rehabilitation submitted by Mis. Keya.
These IAs were dismissed along with the special leave petition.
,D
The very same slum dwellers filed Writ Petition No. 1277 of2006 seeking
the same prayer alleging that Sigtia did not commenced re-development of the
properties in terms of the agreement entered into with SRA and was never
interested in re-development of the said property for the benefit of slum
dwellers. Sigtia was not made a party to this writ petition.
E
Sigtia wrote a letter to the CEO, SRA on 25.04.2006 stating that Sigtia .
was keenly interested in developing the Vile Parle Slum and would take
immediate steps to deposit Rs. 2.5 crores by SRA in the matter and also would
furnish indemnity as required by SRA. On 04.05.2006, the High Court passed
an order in Writ Petition No. 1277 of2006 directing the SRA to call the parties ,
in terms of the judgment of the Court. F
On 02.06.2006, Sigtia wrote a letter to the SRA stating that Keya had '
obtained the order dated 04.05.2006 from the High Court in writ petition No.
1277 of2006 and that the applicant was not inade a party to the writ petition'
and, therefore, they were not heard at all and requested the SRA to postpone G
the hearing fixed on 03.06.2006 to enable Sigtia to move the High Court.'
However, there was no response from the SRA.

On 02.06.2006, Sigtia wrote a letter to SRA enclosing a cheque for a sum
of ~.2.5 crores towards the interest free deposit with SRA as the performance1
related guarantee as directed by the High Court in its judgment dated H
666 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A 11.03.2005. The Law Officer of SRA conveyed to Sigtia that the cheque for
Rs.2.5 crores could not be accepted by SRA as there was no specific order
of the High Court to accept Rs.2.5 crores from Sigtia. The Principal Secretary,
Housing Department in compliance with the order dated I I.03.2005 issued
clear directions to SRA to issue Letter of Intent in favour of Sigtia. On
B 21.06.2006, the petitioners in the Writ Petition No. 1277 of2006 filed special
leave petition before this Court against the order dated 04.05.2005 and by way
of interim relief prayed that SRA be directed to issue Letter of Intent in favour
of Keya. Sigtia was again not made a party in the special leave petition.

This Court, on 27 .06.2006, passed an order directing SRA to issue Letter
C of Intent in favour of Keya within two weeks.
Mr. Arun Jaitley, learned senior counsel strenuously contended that
before issuance of the Letter of Intent certain conditions ought to be fulfilled
by a developer as per the rules and regulations of 'SRA and as per the
guidelines and regulations of SRA, a developer needs to obtain Annexure-
D II and Annexure-III from SRA. Annexure II is issued when the developer
shows that he has consent from atleast 70% eligible hutment dwellers and
Annexure III is issued when SRA is satisfied about the financial and technical
capability of the developer. It is not disputed that the applicant has obtained
both the Annexures and therefore there is no reason for not issuing LOI to
the applicant. It is submitted that the Keya Developer does not have consent
E of atleast 70% hutment dwellers and therefore is not entitled to get LOI issued
in its favour for the said project. Moreover SRA having been set up by the
State in exercise of its powers under the Slum Act, it is ultimately for it to
decide as to who should be permitted to undertake the redevelopment of slum
and the SRA has shown confidence in the applicant by filing affidavits before
p the Bombay High Court in Writ Petition No.988 of 2004.

According to Mr. Arun Jaitley, the purported termination of the
development agreement with Sigtia by the society is illegal, without authority
of law as the society has no authority to do so. It is fmther submitted that
I 054 slum dwellers filed consent affidavits in favour of the applicant in the
G year 2002 itself and therefore the Chief Promoter and few Committee members
of the Society cannot terminate the appointment of the developer. In fact the
original Writ Petitioner who filed Writ Petition No. 988/2004, namely, Nazir
Khan Yakub Khan and others made serious allegations against the Chief
Promoter-Shri Vichare and few Managing Committee members that they
H have manipulated the records and got the extra units to their family members.
RAMCHANDRA MAHADEV JAGPAT v. Cl-llEF EXECUTIVE OFFICER [LAKSHMANAN, J.] 667

He would further submit that as per Section 3(k) of the Maharashtra A
Slum Area (Improvement, Clearance and Re-development) Act, 1971, the SRA
is bound to follow the directions given by the Government of Maharashtra
for the implementation of provisions under the Act and that the Government
issued directions to SRA to issue letter of intent to Sigtia way back on
20.06.2005 but those directions have not been complied with. Mr. Jaitley
further submitted that the main grievance of the slum dwellers in the I.As filed B
in this Court and in the Writ Petition No.1277 of 2006 is that no steps have
been taken by Sigtia Constructions towards the completion of the project. It
is submitted that after obtaining Annexure II and Annexure III from SRA,
when the applicant was about to get LOI the writ petition No. 988 of 2005 was ,
filed on 31.3.2004 challenging the technical and financial capability of the C
applicant. After the said Writ Petition was dismisse<l, the applicant approached
SRA many times to get LOI but it received no response and this fact has been
recorded by the Principal Secretary, Housing in its order dated 20.06.2005.
Thereafter, stay order was passed by this Court in SLP(C) No.19848 of 2005
staying the order of the High Court dated 11.03.2005 passed in Writ Petition
No. 988 of2004. After the said SLP was dismissed by this Court on 13.04.2006 D
the applicant has written several letters to SRA to issue LOI and also sent
a cheque of Rs. 2.51 crores but the same was not accepted by SRA. That there
has been no delay on the part of the applicant in the implementation of the
development work but it is due to frivolous litigations filed by some slum
dwellers who were put up by rival developers that the project was stalled. E

Mr. Arun Jaitley further submitted that the applicant was a necessary
party in the Writ Petition No 1277 of2006 and also to the above special leave
petition as it was appointed as developer by the society and is at having
consent of more than 70% of the slum dwellers in the area and therefore, any
order passed issuing Letter of Intent to some other developer gravely injures F
the applicant and therefore no such order can be passed without giving an
opportunity to the applicant to be heard.

Concluding his arguments, Mr. Jaitley submitted that the order has been
obtained behind the back of the applicant Sigtia and that the order is contrary
to the order of the High Court dated 11.03 .2005 passed in Writ Petition No~ G
988 of 2004 which has become final with the dismissal of Special Leave
Petition No. 11318 of 2005 and 19848 of 2005.

In this context, Mr. Arun Jaitley invited our attention to the order dated
11.03.2005 passed in Writ Petition No. 988 of2004.
H
668 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.l<..

A At the time of hearing, Mr. Jaitley also invited our attention to the order
passed by the High Court in Writ Petition No. 1277 of2006 dated 04.05.2006.
It is useful to reproduce the said short order which reads thus:

"CORAM: Fl. REBELLO & ANOOP V. MOHTA, JJ.

B DATE: 4th May,2006.

P.C.:

In the ordinary course, we would not have entertained this petition
when there is a society who is responsible for the development.
c However, on behalf of respondent No.2, their learned counsel makes
a statement that they had already communicated to Respondent No. I
to appoint respondent No.3 as a developer anci that the application
is pending before the Respondent No. I pursuant to the termination
of the first developer by Respondent No.2. The respondent No. I to
call the parties in terms of the judgment of this court and after hearing
D the parties, dispose of the application of RespondentNo.2 according
to law within the period of six weeks from today.

(F.I. REBELLO, J.)(ANOOP V. MOHTA, J.)"

He also drew our attention to para 12 of the order in Writ Petition No.
E 988 of 2004 passed by the High Court which reads thus:

"The SRA having been set up by the State in exercise of its power
under the Slum Act, it is ultimately, for it to decide as to who should
be permitted to ~ndertake the re-development of slum. In this behalf,
perusal of the relevant statutory provisions including Section 13 would
F make it abundantly clear that the SRA is empowered to permit land
holders of occupants of an area which is declared as slum rehabilitation
area to undertake scheme of development of such land and if they do
not come forward with a scheme for redevelopment within a reasonable
time, the SRA may decide to redevelop such land by entrusting iMo
G any other Agency. In the instant case, respondent No.7 has be~n
selected by respondent No. 6. The SRA is satisfied that the requisite
70% numbers/ occupiers of slum area have come forward and reposed
confidence in respondent no. 7. Since petitioners raised objections to
the capacity and capability of respondent No.7, this Court issued
directions that these aspects be scrutinized and verified once again.
H
RAMCHANDRA MAHADEV JAGPAT v. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.] 669 '

Even that exercise is now complete and a report is submitted by the A
CEO of SRA. In such circumstances, we are of the view that all
aspects have been considered by the SRA and its decision cannot be
faulted. More so, when the proposal is at a primary stage."

Our attention has also been drawn to the order of this Court in Special
Leave Petition No. 19848 of2005 dated 13.04.2006 dismissing the writ petition , B
as withdrawn filed by Mr. Nilesh Wakadey and Ors. preferred against the
judgment and order dated 11.03.2005 in Writ Petition No. 988of2004. Likewise,
Special Leave Petition No. 11318 of 2005 filed against the very same order in
Writ Petition No. 988 of 2004 was also dismissed as withdrawn.

We may also usefully refer to the letter dated 02.06.2006 of Sigtia C
addressed to SRA, the relevant portion of which reads thus:

"In this connection, we wish to submit that M/s. Sigtia Construction
Pvt. Limited is bound by the directive and conditions in the High
Court Judgment dt. 11.3.2005 and also by the guidelines of the SRA U
for the development of the Vile-Parle (W) Slum project. As such, the
company will be complying with all the conditions recommended by
the SRA and accepted by the Hon'ble High Court.

In pursuance of the said High Court order dt.11.3.2005, Mis. Sigtia
Construction Pvt. Ltd. is hereby depositing a sum of Rs.2,50,00,000/ E
- (Rupees Two Crores Fifty Lakhs only) drawn on Standard Chartered
Bank, Santacruz (W) Branch, Mumbai vide Cheque No.991396 dt.
2.6.2006 towards the interest free deposit with SRA as the performance
related guarantee as directed by the Hon'ble High Court in its landmark
judgment dt.l l.3.2005. The SRA may put it in its fixed deposit account,
as it may deem fit. F
Besides interest free deposit of Rs. 2.5 crores, M/s. Sigtia
Construction Pvt. Ltd. will comply with and abide other conditions
such as

(a) First we will construct Rehab portion in all respect and then ask G
permission of sale portion.

(b) We accept the Supervision ofB.M.C. Engineer who will monitor
the project.

(c) We will give required undertaking/indemnity bond etc. as directed
by Hon'ble High Court and as desired by SRA." H
670 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A We may also refer to the proceedings of the Principal Secretary, Housing
Department, Government of Maharashtra on the representation received from
Sigtia and the orders passed thereunder. The relevant portion reads thus:-

"In view of the above, I, N. Rama Rao, Principal Secretary, Housing
Department, Government of Maharashtra, in the capacity of the
B Administrative Head of the Department, direct that

(I) LOI be issued in favour of Sigtia Constructions Pvt.Ltd. who
have a joint venture agreement with Spark Developers as stated
above and who had completed all the fonnalities to ensure the
implementation of the project without pennitting any further delay
c (2) The CEO, SRA is further directed to comply with the other
directions and suggestions given by the Hon'ble High Court in
its order dated l l .03 2005.
(3) The Developer also, hereby directed to comply with the conditions
imposed by the Hon'ble High Court in the said order."
D
It is to be noted that this order was not challenged before any forum.

Our attention was also drawn to the notice dated 26.04.2005 issued by
Mr. Suresh P. Chaugule t0 Sigtia an'd the further notice dated 06.06.2005 by
the very same advocate to the Chief Officer, Slum Rehabilitation Authority on
E tennination of appointment of developer. A copy of the same was also marked
to Sigtia Constructions. Our attention was also drawn to the IA No. Nil of
2006 filed by Nilesh Wakade and Ors. in Special Leave Petition (C) No. 19848
of2005 in which Babita Baliram Tambe & Ors. as applicants made the following
prayer in the above IA :
F
"PRAYER

Thus, in the facts and circumstances, it is most respectfully prayed
that this Hon'ble Court may be pleased to:-

(a) Direct that the rehabilitation of the slum area in question is
G carried out at the earliest;

(b) Direct M/s. Keya Developers & Construction Pvt. Ltd. Tardeo
Air-conditioned Market, Tardeo, Mumbai-34 to produce its
proposed Scheme for Rehabilitation;

(c) Direct the Respondent Authorities to forthwith examine and
H
.. RAMCHANDRA MAHADEV JAGPAT v. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, .I.] 671

consider the said proposed Scheme for Rehabilitation submitted A
by M/s Keya Developers & Construction Pvt. Ltd. Developers
(P) Ltd; and

(d) If the above scheme is approved by the Respondent No.2, then
the Respondent Authorities and the developer be directed to forthwith
implement the Scheme in a time bound manner subject to such terms B
and conditions as this Hon 'ble Court may deem fit and proper."

It was also brought to our notice about the undertaking given on the
stamp paper by the Chief Promoter and Members of the Managing Committee
of Vile Parle Prem Nagar Cooperative Housing Society who declared as under:-
c
"(I) That the General Body of the Vile Parle Prem Nagar Co-operative
Housing Society (Proposed) in their meeting held on 8.9.2001 has
confirmed the appointment of M/s. Sigtia Construction Pvt. Ltd.
as our Developer and Shri Bipin Khatri as Architect of the S.R.A.
project to be undertaken by our society.
D
(2) That in pursuance to the above appointments of the Developer
and the Architect, both agencies have carried out voluminous
work in connection with the formulation of S.R.A proposal and
to submit the same to the office of S.R.A. For doing this they had
to obtain, the necessary undertakings from over I 000 hutment
dwellers on Rs.20/- stamps paper, surveying the area by appointing E
Surveyor, preparation of plans and other relevant documents for
obtaining Annexure-11. The developer has obtained Annexure-II
and submitted the required information in Annexure I & III to the
office of S.R.A. for issuance of Letter of Intent to our S.R.A.
proposal in shortest possible time with active support from the
F
society and we are satisfied with their performance in this regard.
(3) That we have not engaged any other Developers or the Architect.
This question did not arise since the present Developer and the
Architect have done their duties to the expectation of the Society.
While carrying out the job by the Developer and the Architect
they have carried out the job with due consultation with the
G
Society and have kept us informed of the progress of the work
from time to time.

(4) That the Society hereby confirm and undertake to continue the
, Developer Mis. Sigtia Construction Pvt. Ltd. and the Architect
H
672 .SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Mr. Bipin Khatri as our Developer and Architect respectively till
the completion of the S.R.A. project under D.C. Regulation 33(10)
undertaken by our Vile Parle Prem Nagar Co-operative Housing
Society (Proposed)
For Vile-Parle Premnagar Co-operative Housing Society. (Proposed)
B Sci/-

Shamrao A. Vichare

Chief Promoter

C Date:26.2.2004"

Mr. Goolam E. Vahanvati, learned Solicitor General appeared for the
Slum Rehabilitation Authority. He placed before us the Maharashtra Slum
Areas (Improvement, Clearance and Re-development) Act, 1971. He also invited
D our attention to the procedure for submission, processing and approval of
Slum Rehabilitation Schemes which reads thus:-

"1. All slums and pavements whose inhabitants' names and structures
appear in the electoral roll prepared with reference to 1st January, 1995
or a date prior thereto and who are actual occupants of the hutments
E are eligible for the slum rehabilitation scheme.

2. 70% or more of the eligible hutment-dwellers in a slum or pavement
in a viable stretch at one place have to show their willingness to join
slum rehabil,itation scheme and come together to form a co-operative
housing society of all eligible hutment-dwellers through a resolution
p to that effect. The following resolution should be adopted:

(a) Resolution electing a chief Promoter.
(b) Resolution giving the chief promoter authority to apply for
reservation of name for co-operative housing society.
(c) To collect share capital (Rs. 50/- pe; member for slum societies)
G
and Re. II- as entrance fee and to open account in Mumbai
District Central Co-operative/Maharashtra State Co-operative Bank
Lt-d (any branch)

3. The chief promoter, office bearers and the members of the proposed
society should collect the documents such as 7/12 extract and the PR
H
\
I
..... RAMCHANDRA MAHADEV JAGPATi·. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.) 673

card of the plot on which the slum is situate. They should then get A
the plot surveyed/measured and prepare map of the plot showing
slum structures therein with the help of surveyors attached to the
office of Additional Collector (Encroachment) or the Deputy Collector
(Encroachment) or the Deputy Collector (Encroachment of the zone.

4. While undertaking the survey, they should collect the information B
of the proposed members/slum-dwellers and fill up land occupied by
the slum-dwellers, number and type of structures such as residential,
industrial, commercial, amenity structures etc. and the list of eligible
and ineligible occupants and consent of the slum-dwellers to join the
scheme. Earlier the promoter/co-operative housing society had to first C
approach the different Competent Authorities namely Additional
Collector for the slums on government and private lands and the land
owning authorities for the slums on differe11t public authority lands,
for obtaining certified Annexure-11, before they could put in application
I
for slum rehabilitation scheme SRA. As a simplification measure, this '
procedure is now discontinued and Annexure-II format is now required D
to be filled by the promoter/co-operative housing sociery itself for
submitting building proposal to SRA, so that the scrutiny of the
proposal and certification of Annexure-11 can start simultaneously.
Annexure-11 needs to be submitted in duplicate. As a measure of
further simplification, Additional Collector (Encroachment) is being E
designated as the sole Competent Authority for deciding eligibility
and for taking eviction action against non-participants in slum
rehabilitation schemes."

5. The chief promoter and the office bearers of the proposed society
should then apply for name reservation of the proposed co-operative F
housing society along with the self-prepared Annexure-11 and the
required resolutions to the Assistant Registrar of Co-operative
Societies. To facilitate this, office of the Assistant Registrar has been
started in SRA itself. It is no longer necessary to approach different
offices of the Co-operation Department for this purpose. The assistant
Registrar/SRA will issue a letter reserving the name for the proposed G
co-operative housing society and permission to open a bank account
in the proposed society's name.

6. While the above steps are being taken, the decision to search a
competent developer to act as a promoter has to be taken up by the
H
674 SUPREME COURT REPORTS (2006] SUPP. 8 S.C.R.

A proposed co-operative housing society of slum-dwellers. The society
itself or an NGO/developer/owner can take up slum rehabilitation
scheme as a promoter.

7. The promoter so chosen has to enter into agreement with every
eligible slum-dweller while putting up slum rehabilitation proposal to
B SRA for approval. SRA is in the process of trying to evolve standard
formats for the following four types of agreements required in the
scheme, with the approval of the State Government.

(a) Consent-cum-agreement between the promoter and the slum-
dwellers.
c
(b) Development rights/Agreement to lease between the promoter and
the land owning authority.

(c) Lease agreement between the land owning authority and the co-
operative society of slum-dwellers.
D {d) Lease agreement between the land owning authority and the co-
operative society of free-sale tenement buyers.

8. The promoter has also to appoint an architect in consultation with
the proposed co-operative housing society of slum-dwellers to prepare
the plans of development of the slum area as per th_J-DCR-33(10). It
E is expected that the architect ensures communify participation in
preparation of the building plans. All required documents such as
building plan, layout plan, PR Card etc. along with Annexure-1,
Annexure-11 and Annexure-III are to be submitted to SRA by the
architect along with an application for the slum rehabilitation scheme.
F A checklist of all such documents required for submission is available
in SRA office.

l 0. Annexure-III is prescribed to asses the financial capability of the
promoter. The items contained in Annexure-III are self explanatory.
Keeping in view the sensitivity of this information, it is kept strictly
G confidential by SRA.

11. After a pre-security by a designated engineer of SRA, to ensure
completeness of the proposal submitted, so far as documents are
concerned, proposals are accepted. Then a computerized file number
is allotted to the scheme on payment of scrutiny fees which are
H
RAMCHANDRAMAHADEVJAGPATl·.CHIEFEXECUTIVEOFFICER[LAKSHMANAN,J.]675

charged at half file number is allotted to the scheme on payment of A
scrutiny fees which are charged bat half the rate of the Municipal
Corporation's general building permission fees. Upon acceptance, the
scrutiny of Annexures, I, II and III start simultaneously in the building
permission Wing, Eligibility Certification Wing and Accounts & Finance
Wing respectively."
B
He also invited our attention to para 18 of the order in Writ Petition No.
988 of2004 dated 11.03.2005 :

"In the affidavit filed on I Ith February, 2005 the SRA has further
pointed out that the Slum Rehabilitation Sc,heme proposal is at primary
scrutiny stage and not yet approved. They have pointed out that C
eligibility of the members of Managing Committee ofrespondent no.6
shall be thoroughly scrutinized by the Slum Rehabilitation Authority
before issuing LOI and in any case within eight weeks from the date
of this affidavit. Mr. Singh appearing for 7th respondent makes a
statement that the developer will file necessary undertaking as per D
para No. 7 of the affidavit dated I Ith February 2005 of SRA, within
such time as is stipulated by it. He has also agreed to file an
undertaking in terms of para 7 of this affidavit in this Court in case
the Letter of intent is issued in favour of respondent no. 7. He has also
agreed to furnish indemnity as insisted by SRA."
E
He also specifically drew our attention to the order dated 11.03.2005 in
Writ Petition No. 988 of2004 and the order dated 04.05.2006 in Writ Petition
No. 1277 of2006 and also the application for· direction filed by Babita Baliram
Tambey on the prayer made by him in the IA in special leave petition No.
19848 of 2005. The said Babita Baliram was also petitioner No. IO in Writ
Petition No. 1277 of2006 which was verified in April, 2006 whereas the final p
order in the said writ petition was made on 04.05.2006. Concluding his
arguments, the learned Solicitor General submitted that as per the guidelines
there are several conditions to be fulfilled by the slum dwellers/proposed
society as well as by the proposed developer and .remarks required to be
obtained on the proposal from concerned authorities before issuing Letter of G
Intent. The SRA also to verify the resolution passed by the general body of
1

the slum dwellers, proposed society by majority for appointing or replacing
the developer for the development of the scheme. It is also necessary to
verify by the SRA to see whether the plot under the development is not
affected by any reservation such as playground or recreation ground in view
H
676 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.
.....
A of the interim stay order in writ Petition No. 1152 of2002 of the High Court.
The SRA has to verify whether the proposed appointed developer has the
financial capacity to undertake and complete the same. Therefore, in the
context of the submissions made above by the learned Solicitor General
further directions with regard to this Court's order dated 27.06.2006 should be
B given to SRA. As already noticed, the writ petition No. 1277 of2006 was filed
by the very same petitioner in SLP No. l 0281 of 2006 Sigtia was not made a
party to the writ petition No. 1277 of 2006. However, the High Court, by order
dated 04.05.2006 in writ petition No. 1277 of2006 has directed the SRA to call
the parties in terms of the judgment of the High Court dated 11.03 .2005 in writ
petition No. 988 of2004 and after hearing the parties disposed ofthe application
C of the society respondent No.2 according to law within 6 weeks from 04.03.2006.
It is also useful to refer to the direction given in the order dated 11.03.2005
in para 20 in writ petition No. 988 of2004. The High Court, by the said order,
has observed that it is not necessary to quash or set aside the Scheme or
issue further directions as sought and that final approval have not been
granted by SRA and if SRA decides not to issue the Letter of Intent in favour
D of respondent No.7 (Sigtia), it will always be open for the parties to submit
a fresh development scheme. In view of the order dated 11.03.2005 and
04.05.2006 of the High Court, the learned Solicitor General submitted that the
SRA has to call both Sigtia and Keya in order to dispose of. the application
of the society according to law.
E Mr. Harish Salve appearing for the petitioner in special leave petition
Shri Ramchandra Mahadev Jagpat submitted that SRA cannot decide any
contractual dispute and that the order dated 11.03.2005 put certain obligations
on Sigtia and that the Society in its general body meeting dated 29.05.2005
terminated the agreement with Sigtia and decided to invite other builders. In
F this context, he drew our attention to the unanimous resolution passed by the
Society in regard to the appellant of Keya for the development of slum
property at Premnagar dated 10.06.2005. This letter dated 10.06.2005 was
addressed to Keya Developer and Construction Company, Mumbai. The letter
reads as follows:

G "We are informing hereof that the Managing Committee had decided
in the meeting held on 6th June, 2005 Monday at 8.00 p.m. vide
Resolution No.6 to develop the property bearing C.S. Nos. 439,439-1
& 2,440-1 to 6,441, 441-1 to 3,442,442-1 to 3,443,443-1 to 15,444,444-1
to 6,446,447,447-1to3,448,448-1to5,451-1to3,452-1to24,453,453-1
H to 5,454(A), Irla, Vile-parle (West) in the District of Mumbai, the area
RAMCHANDRA MAHADEV JAGPAT i·. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.J 677

is 28200 sq. mtrs. And the owner is the Mumbai Municipal Corporation. A
This land be declared Slum as per Slum Act 1971 Sub-section 4 (I).
You are appointed to re-develop the said p·roperty as per Maharashtra
Government Rules and Regulations. In the subject-matter we are
enclosing herewith the true certified copy to you. You are requested
to intimate your consent in this regards and co-operation.
B
True Extract of Resolution No. 6of General Body meeting held on 8th
June 2005 at 8.00p.m. Committee Office RESOLUTION N0.6.

Resolved that Mis Keya Developer and Construction Pvt.Ltd. Having
its office at 302, Tardeo Air-Condition Market, Tardeo Road, Mumbai-
400024 is and be appointed as Developer to develop the slum property C
by providing permanent alternate accommodation of225 sq.ft. Carpet
Area to all eligible Slum dwellers and to sell balance from sale
component in open market as per O.C.R.33 (10) of 1991. Also power
care given to said developer to enable him to exercise the powers for
the development of the said property. This appointment will be Ii>
remaining in force and valid till entire Project is successfully completed
in all respect as tenant are handed over to all slum dwellers. No an
y Manaaging Committee, existing or forth coming, shall have any right
to change the developer under any circumstances whatsoever may be
the nature.
E
Proposed By: Mrs.Sandhaya Ketemkar

Seconded By: Mr. Sanjay Kadam

RESOLUTION UNANIMOUSLY PASSED

Sd/- F
(Mr. Shamrao Vicharee)
Chief Promoter"
\ He also drew our attention to the subsequent events in the appointment
of Keya Developers and the letter dated l 0.06.2005 issued to Keya Developers
made in the I.A. in 19848 of2005 filed by Babita Baliram. He also invited our G
attention to the second round of litigation on the non-deposit of the amount
by Sigtia. He also submitted that Sigtia have acted on termination and have
not challenged the termination of the agreement.

Mr. Salve also submitted that there is no question of fraud having
H
678 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A played upon by this Court as alleged or told and that the applic~nt Sigita has
conveniently not mentioned that his agreement with the society had come to
an end by efflux of time and stood cancelled on 24.04.2005 and that the
society had also unanimously terminated the appointment of Sigtia as !!1e
developer and that the prayer in writ petition No. 1277 of2006 was directed
against the SRA and that there was no prayer or relief sought against the
B Sigtia and, therefore, Sigtia was not arrayed as a party in the said writ petition
and that there was also no reason to make Sigtia as a party as they had been
replaced by a new developer as far back as June, 2005 of which the Sigtia had
notice. Mr. Salve further submitted that it is incorrect to say that the parties
before this Court in special leave petition (C) No. 10281 of2006 were not the
C affected parties. In fact all the parties are affected parties excepting the Sigtia
who has undertaken no development work from 1997 and even after agreement
dated 2002 was entered into with the society and therefore, Sigtia has no
subsisting legal or other rights whatsoever and the present I.A. to recall the
order deserves to be dismissed.

D I.A.No. 9 of 2006

Mr. Dushyant Dave, learned senior counsel filed an application for
impleadment in I.A. No. 9 of2006 on behalf ofNazeer Khan Yakub Khan who
is also slum dweller. Learned senior counsel submitted even that in 1997_ Sigtia
was appointed by the Society as a developer for the slum and the appointment
E was approved by SRA. However, no efforts were taken by Sigtia for
development. As per the agreement Sigtia the agreement has to complete the
entire development work within 3 years and if the development work was not
so completed the agreement was to be treated as cancelled automatically. It
is further argued that Sigtia had taken no efforts for development of the slum
F and in fact had no financial or technical capability to carry out the development.
Sigtia had also not deposited the 2.5 crores as interest free deposit and,
therefore, the applicant in I.A. No. 9 of 2006 filed special leave petition No.
11318 of2005 before this Court challenging the order dated 11.03.2005 and in
the meantime, the agreement of Sigtia with the society to develop the slum
itself came to an end on the expiry of 3 years from the date of agreement and,
G thereafter, the Society at a general body meeting dated 29.05.2005 resolved to
terminate the appointment of Sigtia as the developer and the SRA was also
informed of such decision since the appointment of Sigtia stood terminated
and a new developer had been appointed the applicant Nazeer Khan Yakub
Khan had no further ·grievance as it was apparent that the development work
H of the slum would finally commence and in these circumstances the applicant
RAMCHANDRA MAHADEV JAGPAT i•. CHIEFEXECUTIVE OFFICER [LAKSHMANAN, J.J 679

withdraw special leave petition {C) No. 11318 of2005 on 26.09.2005. A
Mr. Dave further submitted that the applicant in IA No. 9 of 2006 had
always opposed the appointment of Sigtia as developers as they had no
technical capability to carry out the development work and in fact undertook
no work whatsoever for over 8 years to the department of the slum dwellers ,
and other similar situate slum dwellers. It is further submitted the order in B
special leave petition No. 10281 of 2006 is fair and just and in the interest of
the slum dwellers who will finally be able to s~e the development work of their
slum being undertaken and that the Sigtia have no legal right for undertaking
the development of the slum in view of the termination and automatic
cancellation of their agreement with the Society. C
I.A. No. 8 of 2006

The applicant is a Zuveriya Developer. Their application for intervention
is allowed and Mr. Shekhar Naphade, advocate was heard on his behalf. I.A.
No. 8 of 2006 was filed to recall the order dated 27 .06.2006 in special leave D
petition No. 10281 of 2006 and allow the applicant to file a reply to the above
special leave petition. We have perused the intervention application. The
applicant was not a party to the earlier writ petition. The applicant put up a
proposal to the Municipal Corporation of Greater Bombay being the competent
authority under the Act expressing its willingness to re-accommodate the
hutment dwellers and offered to give certain portion of plot of land to E
Municipal Corporation free from encumbrances as per the Slum Rehabilitation
Scheme. The Managing Committee of the original society have executed an
agreement dated 16.07 .1997 that the applicant and gave development rights
in favour of the applicant for the development of the property. They have also
issued general Power of Attorney in favour of the applicant. The Addi. F
Collector (Encroachment) has fixed the hearing for the purpose of issuance
of Annexure-2 when one M/s Sigtia Construction Pvt. Ltd. intervened in the
matter by representing that another society by name Ville Parle Premnagar
Cooperative Society {proposed) had appointed the said Sigtia as developer.
The applicant was not a party to the writ petition No. 988 of 2004 filed by
some of the hutment-dwellers not to issue Annexure-3 and Letter of Intent G
in favour of Sigtia. The applicant or the original society was not a party to
the said writ petition upon knowledge the applicant has taken out chamber :
• summons in the petition to intervene in the matter. The High Court dismissed
· the writ petition and also the chamber summons as it was too late for the
applicant to apply to joint as party to the said writ petition. The applicant H
680 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A again made a representation to the SRA. The applicants are agreeable to
obtain similar agreement from slum dwellers in support of the said proposal
with a view to develop the property.

Writ petition No. 1277 of 2006 was also filed by the petitioners without
impleading the applicant before the High Court. It is submitted without making
'B the applicant a party the petitioner has obtained an order dated 27 .06.2006
whereby this Court has directed the SRA to issue a Letter of Intent in/avour
of Keya Developers. Hence the applicant is making the present intervention
application for recalling the said order dated 27 .06.2006. In our opinion, the
above I.A. has no merits and is belated. No relief can, therefore, be granted
C to the applicant. I.A. No. 8 of 2006 stai'cs dismissed.

Dr. Abhishek Singhvi, learned senior counsel appearing for Keya
Developers submitted that Sigtia did not take any recourse to any legal
proceedings to challenge the termination and by letter dated I 0.06.2005 Keya
was informed of the resolution appointing it as developer to develop the
D property on the terms and conditions mentioned therein. In view of the
termination of Sigtia as developer two groups of slum dwellers who had filed
special leave petition before this Court against the order of the High Court
dated 11.03.2005 withdrew the special leave petition on 26.09.2005 and
13.04.2005 respectively. Sigtia was represented in the proceedings and did not·
represent the factum of expiry/termination of the agreement between Sigtia
E and the society. Keyas since the intimation of the resolution of the society
has been taking all· steps within its power to prepare for the development of
the property including the appointment of Mis Anil Chawla and Associates
as architects and made arrangements for a transit camp for residence of the
members of the society during the period of re-development. The Keya's has
p also made arrangements with HDFC Bank Ltd. for provision of loan of over
Rs. 12 crores towards the implementation of the project and is also ready and
willing to deposit such amount as this Court may determine by way of
security deposit. Keyas has also approached the SRA for grant of Letter of
Intent in its favour for the purpose of transi~ accommodation and has also
already incurred an expenditure of Rs.45,56,720/- Keyas has also not been
G served with any notice or order of any Court with respect to any challenge
to the termination of the Sigtia or appointment of the Keyas as developer of
the property. In these circumstances, Dr. Singhvi submitted that the SRA was
bound to con.sider the application for issue of Letter of Intent to Keyas and
Keyas has also been approached from time to time by the society and its
H members for taking further steps to commence the actual work of re-
RAM CHANDRA MAHADEV JAGPAT v. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.] 681

development of the property. However, Keyas was unable to commence the A
actual work of re-development for want of Letter of Intent from the authority
in the present special leave petition No. 10281 of2006. This Court passed the
order in the presence of the counsel for all the parties and deny that any fraud
has been played upon this Court as alleged. It is further submitted Sigtia has
been terminated as developer of the property long before the writ petition was
filed in the High Court. According to learned senior counsel Sigtia is not a B
necessary party to the special leave petition and that it had the consent of
more than 70% of the slum dwellers and that the same is in any event
irrelevant after the termination of the contract with the society. Concluding
his submission, learned senior counsel submitted that the applicant has failed
to make out any good ground for the recall of the order dated 27.06.2006 and, C
therefore, the said application is liable to be dismissed.

Mr. T.L. Nageswara Rao, learned senior counsel appearing for Vile Parle
Premnagar Society submitted that in view of the termination of the agreement
given to Sigtia, Sigtia is not a necessary party to the special leave petition
10281 and that the SRA should be directed to consider only the application D
made by Keyas.

We have given our anxious and careful consideration to the lengthy
submissions made by all the learned senior counsel appearing for the respective
parties with reference to the pleadings, annexures etc. The applicant Sigtia
have explained to this Court as to how the deposit of Rs.2.5 crores was not f-
be deposited with SRA. It also denied that the agreement entered into between
Sigtia and the society came to an end on 25.04.2005 by efflux of time. In this
context, Clause 22 of the agreement must be read as a whole and when so
read, it would be clear that the developer was to start the actual construction
after the issuance of the commencement certificate by the authority. Therefore, p
the period of 3 years must be construed to begin from the date when
commencement certificate is issued and not from the date of execution of the
agreement. It was also submitted that the letters dated 25.04.2005 and 06.06.2005
were issued by 2 or 3 members of the society who were acting with ulterior
motive and in collusion with the rival developer. Even the SRA to whom the
letter dated 06.06.2005 was addressed in its counter affidavit filed before this G
Court in the present proceedings has stated that they did not take notice of
the said letter of termination as the letter was not supported by the relevant
resolution of the society. After 11.03.2005, Sigtia approached the SRA on
several occasions requesting for the issuance of the Letter of Intent but since
no response was coming from the Housing Department of Government of H
682 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A Maharashtra on 10.06.1995. In our view after the dismissal of the special leave
petition No. 19848 of 2005, the order of the High Court dated 11.03.2005
attained finality and there was no proposal of Mis. Keya Developers before
the SRA on 13.04.2006 and, therefore, there was no question of SRA considering
the proposal made by the new developer. In our view, Sigtia was a necessary
B partr to the writ petition and to the special leave petition No. I 0281 of 2006
as it directly affected by any order appointing Keya as developer. The society
has also entered into an agreement and also executed an irrevocable general
Power of Attorney dated 19.03.2004 wherein expressed its satisfaction with
the progress in the work made by the Sigtia and also by the undertaking dated
26.02.2004 where the society undertook to continue with Sigtia as developer
C till the completion of the SRA project. Though it is contended by Sigtia that
the termination by the society on 29.04.2005 was illegal and without authority,
the Sigtia has not so far challenged the order of termination by the society.
This important factor has also to be taken note off by the SRA at the time
of considering the case of Sigtia along with Keya Developers. It is also stated
that the consent affidavits of more than 70% of the slum dwellers had already
D been obtained by Sigtia. It is also submitted in the rejoinder affidavit that
Sigtia did have the technical expertise and financial capability to complete the
work and that all these issues were decided in favour of Sigita by the High
Court in writ petition No. 988 of2004 by order dated 11.03.2005 which order
has attained finality in view of the dismissal of special leave petition Nos.
E 11318 of2005 and 19848 of2005. Sigtia, after receiving the copy of the letters
dated 24.05.2006 and 06.06.2005 sent a reply dated 15.06.2005 wherein the
Sigtia submitted that the purported termination is illegal and without any
authority and no further reply was sent by the society to the said letter.
Moreover, in the hearing held before the Principal Secretary dated 20.06.2005,
the representative of the society made no arguments with regard to the
F purported termination of the agreement. Therefore, it is contended that the
society has not acted on the letter of termination and that the matter has come
to an end and, therefore, Sigtia did not file any petition to challenge the
purported termination. It is also argued that the prayer in the writ petition No.
1277 of2006 adversely affects the interests of the Sigtia. It is stated that with
G the dismissal of special leave petition No. 19848 of 2005 all the applications
filed in the said petition also stood dismissed and, therefore, the petitioners
in the special leave petition had no right to approach this Court by way of
writ petition making the same prayer which was made in the application for
directions filed in special leave petition No. 19848 of2005 and that the effect
of the order dated 13.04.2006 is that the order of the High Court dated
H
RAMCHANDRA MAHADEV JAGPATi·. CHIEF EXECUTIVE OFFICER [LAKSHMANAN,J.] 683

I 1.03.2005 which was not challenged in the special leave petition attained A
finality and that in the application for directions filed in the special leave
petition No. 19848 of 2005 the society had raised the issue of termination of
agreement of Sigtia and appointment of Keya developers and the same stood
dismissed with the dismissal of the said special leave petition. Therefore, as
rightly pointed out by Mr. Arun Jaitley in any subsequent proceedings where B,
the termination of the agreement of applicant Sigtia with the society and
replacement of Sigtia a new developer is a subject-matter, Sigtia is a proper
and necessary party to it. We see much force and substance in the said
argument. In our view, the applicant Sigtia has also the right to have a hearing
before the SRA along with Keya Developers, the new appointee. It must also
be seen that the relief sought in the special leave petition No. 10281 of 2006 C
though only against SRA but in effect against the applicant Sigtia and,
therefore, Sigtia is the necessary party to any proceedings wherein the
replacement of the Sigtia with a new developer and the termination of the
agreement with the Sigtia is in issue and, therefore, Sigtia should have been
made a party respondent in the writ petition No. 1277 of 2004 as well as
special leave petition No. 10281 of 2006. It is also not in dispute that Sigtia D
was impleaded as party respondent No. 7 in the special leave petition which
came to be withdrawn by the petitioner therein on 26.09.2005 on which date
Sigtia appeared through their advocate in this Court. As rightly submitted by
the learned Solicitor General after the withdrawal of special leave petition No.
I 1318 of2005 by the petitioner Nazeer Khan Yakub Khan both the developers E
i.e. Mis Sigtia and Keya Developers kept on submitting applications with the
SRA. However, due to pendency of the special leave petition in this Court,
SRA was not able to take any decision on the representations of the developers
as well as the society. At the time of hearing, our attention was also drawn
to the guidelines and the several conditions to be fulfilled by the slum
dwellers/the society/ as well as the developers and the remarks required to F
be obtained on the proposal from the concerned authorities before issuing
Letter of Intent. The SRA has also to verify the resolution as passed by the
general body of the slum dwellers proposed society by majority for appointing
or replacing the developers for the development of the scheme. It is also
necessary for SRA to verify and to see whether the plot under the development G
is not affected by any reservation such as playground or recreation grou_nd
in view of the stay granted by the High Court in writ petition No. 1152 of2002
and also to verify whether the proposed appointed developer has the financial
capacity to undertake and complete the scheme. Therefore, for the foregoing
reasons, we hold that Sigtia is a necessary and proper party to the special
leave petition No. 10281 of2006 filed by Ramchandra Mahadev Jagpat & Ors. H
684 SUPREME COURT REPORTS [2006) SUPP .. 8 S.C.R.

A We say that the order dated 27.06.2006 was passed in S.L.P. No. 10281/2006
on the basis of representation made by all the respective senior counsel
appearing at that time. The order was not obtained as playing fraud on Court
as alleged by the applicant herein. Now, it is brought to our notice and made
out a clear case as to why Sigtia was a necessary party to the special leave
B petition No. l 0281 of 2006 and in the light of the directions given by the High
Court dated 11.03.2005 in writ petition No. 988 of2004 and of the order d3ted
04.05.2006 in writ petition No. 77 of2006. We have, therefore, no hesitation
to recall our order dated 27.06.2006 in special leave petition No. 10281 of2006.
Since the entire matter was argued at length now by all the respective senior
counsel, there is no necessity to rehear special leave petition No. 10281 of
C 2006. This apart in the concluding portion of our order dated 27.06.2006 in
special leave petition No. 10281 of2006, this Court directed the SRA to issue
proper orders within two weeks from 27.06.2006. The said direction is also not
correct. This Court ought to have directed the SRA, if at all, to consider
issuing of the Letter of Intent in favour of Keya Developers in view of the
replacement of previous Developers Mis Sigtia.
D
We, therefore, allow the application I.A. No. 3 of 2006 filed by the
applicant Sigtia and recall our order dated 27.06.2006 passed in special leave
petition No. 10281 of 2006 and pass the following order:-

As Jirected by the order in writ petition No. 988 of2004 dated 11.03.2005
E and order dated 04.05.2006 in writ petition No. 1277 of 2006 the SRA is
directed to call the two developers, namely, M/s Keya and Mis Sigtia and
dispose of their application for issuing the Letter of Intent and to pass
appropriate orders and in accordance with the Maharashtra Slum Areas
Improvement, Clearance and Re-development Act, 197 l and also strictly
F following the procedure for submission processing and approval of Slum
Rehabilitation Scheme and to Award the Letter of Intent to the developer who
satisfies the required qualifications and conditions and regulations and the
provision of the Act, 1971.

The SRA is also directed to consider as to whether the guidelines and
G other conditions are fulfilled by the slum dwellers/the society/as well by the
developers and issue notice to the society also and heal' them and pass
appropriate speaking order within 3 months from today. The above direction
is issued in the larger interest of the slum dwellers and in order to rehabilitate
the poor slum dwellers and needy slum dw~llers at the earliest. We place on
H record the very valuable assistance and guidance of all the learned senior
RAMCHANDRA MAHADEV JAGPAT1•. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.] 685

counsel rendered to this Court and, in particular, the learned Solicitor General A
inviting our attention to the proper procedure, guidelines and conditions to
be followed by SRA while granting the Letter of Intent to the Developer.

A.II the IAs are disposed of as above. No costs.

v.s.s. IAS disposed off. B