Author: Sanghita Ghoshal (BBA.LLB)
Introduction
Slum Areas have been a spoke in the wheel of India’s modernization since independence. The Slum Areas (Improvement and Clearance) Act, 1956 was the first legislation enacted by the Indian legislature to manage the issue of growing illegal habitation in urban areas. The metropolitan city of Mumbai has been the center of urban sprawl since before independence. The city of dreams is weighed down by the burden of massive and continuous rural migration from all over the country. With limited space and an already burdened infrastructure, the Mumbai legislature enacted the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act in 1971 (from now on referred to as the Act) to manage the ever-growing slums. This Act is the primary focus of the case of Yash Developers vs Harihar Krupa Housing. Disputes under the Act are not uncommon but what makes this particular case interesting is the ruling of the Supreme Court. The Apex Court took this opportunity to expand upon the powers of judicial review while highlighting the importance of accountability when it comes to statutory authorities. This article explores the case as the one that will bring about reform in the lethargic implementation of Slum Rehabilitation in Mumbai and hopefully, the future impact will be nationwide.
Facts of the case
For ease of understanding the facts of this case have been divided into 7 points:
1. The delay between 2003-2011
a) A Development Agreement was signed between Yash Developers and Harihar Housing on the 20th of August 2003
b) The Proposal of development by Yash Developers was accepted on 11th of December 2003.
c) On the 6th of May 2004, the municipal corporation of Greater Mumbai assigned redevelopment to a competing society and developer named Omkareshwar Co-Operative Housing Society and Siddhivinayak Developers
d) On 7th July 2011, a long litigation between the rivals ended with Yash Developers being permitted to implement the project.
Argument by Yash Developers counsel- The granting of LOI issued by SRA took 8 years by no fault of Yash Developers.
Argument by Harihar Housing counsel- The real reason for the 8-year delay for a 3-year project was a lack of expertise and financial capacity.
Judgment by High Court- The case with the rival developer did not prevent the commencement of the project since Yash Developers had the consent of 70% of the Slum Dwellers throughout the litigation.
2. Delay between 2011 and 2014
a) The SRA Certified the financial capability of Yash Developers and gave LOI on 29th July 2011.
b) On 15th Dec 2011, Yash Developers applied for Environmental Clearance (EC) for the commencement of construction. EC was granted on 28th April 2014.
AGRC found that the delay was the fault of Yash Developers.
The high court noted that some parts of the project did not require EC, and yet Yash Developers did not commence construction.
3. Delay between 2014 to 2019
a) 30 slum dwellers refused to cooperate with the project. They refused to vacate their premises. On 5th November 2020, an order passed by the deputy collector observed that eviction under sections 33 and 38 of the Act can be carried out only under directions from the High Court.
b) The issue of the evictions was decided in 2021.
Argument of Yash Developers counsel- The reason for the delay was the non-cooperation of 30 slum dwellers which was decided in 2021 and due to no fault of Yash Developers.
The argument of Harihar Housing counsel- The pendency of eviction applications does not justify the extraordinary delay of 5 years. It was argued that Yash Developers did not take appropriate steps to expedite the application process as he was financially incapable of commencing the project.
AGRC and the High Court held- that Yash Developers became passive after submitting the applications in 2014-2015. Litigation for eviction application would not justify a period of absolute inaction for 5 years.
4. Delay between 2015 to 2017
a) On 25th February 2015, the municipal corporation sanctioned the development of a road that passed through the property and published the draft development plan.
b) Objections to the said road plan were resolved in 2018
The argument of Yash Developers counsel- This delay period must be excluded as no construction is allowed in the area once the draft development plan is published.
The argument of Harihar Housing counsel- The road plan would only affect the proposed sale building and not the entire project. Nothing was stopping Yash Developers from commencing construction on the rehabilitation building.
High Court held that the Road Development Plan does not justify the delay in the commencement of construction on other parts of the project.
5. Issue of Financial capacity of Yash Developers
Yash Developers entered into contracts with 3rd parties in 2017, by way of mortgage of sale rights with one party and another mortgage with another party.
Argument of Harihar Housing Council- Yash Developers entered said into 3rd party contract to borrow large sums of money as they did not have the financial capacity to fund the project.
Argument by Yash Developers’ counsel- The SRA certified Yash Developer’s financial capacity in 2019.
The High Court found that Yash Developers were facing a severe financial crisis. The CEO of SRA should have noted this and concluded that Yash Developers were not financially capable of completing the scheme.
6. Yash Developers’ development agreement was terminated by AGRC in 2021 on grounds of delay. Yash Developers challenged the termination in the High Court of Bombay.
7. Overall findings of the AGRC and the High Court
The AGRC, after examining the whole case at the ground level, held that they did not agree with the findings of the CEO of the SRA that Yash Developers could continue with the project for reasons on record.
The High Court held that it was in agreement with the findings of the AGRC and that to condone the delay justified by Yash developers’ arguments would be to reward default.
8. On the issue of Maintainability of the AGRC proceedings
Counsel for Yash Developers argued that the AGRC complaints were inconsistent and hence inadmissible. The high court held that notwithstanding the validity of the complaints filed on technical grounds against the Harihar Housings, the SRA, and the AGRC have the power to take Suo Moto action under section 13(2) of the Act..
Legal issues in question
1. Can a delay of 18 years be condoned under the Act with justifications.
Yash Developers were replaced as the Authorised Developer under the Slum Rehabilitation Scheme. The Apex Court must decide whether the termination on grounds of a delay of 18 years is valid. The Court must also decide if the SRA be held accountable for the delay in the completion of the Slum development project under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971.
2. Maintainability of the AGRC proceedings
It was argued that the basis of the complaints against Yash Developers before the AGRC were inconsistent and hence inadmissible. The court must decide whether the admissibility of the complaints can deem the order of the AGRC invalid.
3. Scope of Judicial Review
The Court must decide the role of Judicial Review while interpreting a statute during the hearing of a case of dispute arising under that statute.
Judicial Interpretation
1. The Apex Court explained the importance of the principle of accountability and its correlation with the duty of authorities given power by a statute to fulfill a statuary objective.
Irrespective of the circumstances, the Act imposes a duty upon the SRA to take adequate action to ensure its objectives are fulfilled.
The Act was enacted for the benefit of slum dwellers under their rights protected by Article 21 of the Constitution.
According to the Principle of Accountability, the court held that the primary responsibility to implement land acquisition under section 13 lies with the CEO but the accountability for any disruptions and delays must be shared by the CEO and the SRA. Since the SRA has been given adequate power under the Act, it must also have the accountability to perform its duty effectively and expeditiously.
2. The Supreme Court held that irrespective of the admissibility of the complaints, the order of the AGRC cannot be held invalid as doing so would be allowing the defaulters an excuse on technical grounds. The Court reiterated that the AGRC has the power under the Act to take Suo Moto action if the objectives of the Act are being frustrated. The apex court found the decision of the high court to be correct on fact and law.
3. On the issue of financial incapacity of Yash Developers, the Apex Court held that:
The record shows the appellant running from one financier to another for borrowing capital. This is fatal to the object of the slum rehabilitation scheme as the withdrawal of 3rd party lenders would put the completion of the project at risk and cause further delay as the appellant goes around hunting for another lender.
4. The Apex Court observed that this case forced it to reflect upon the working of the Slum areas (Improvement and Clearance Act), 1956. The Court noted that the Act, since its enactment 5 decades ago, has generated a massive number of litigations many of which are still pending under various authorities. The Bombay High Court alone has admitted over 1600 litigations, more than 100 of which are over 10 years pending.
The Court has observed a problem with the statutory framework of the Act citing the following findings by the high court:
The provision for selection of developers by the slum dwellers is problematic as they do not possess adequate knowledge of the subject. The issue of disputes between slum dwellers is the ground for a multitude of pending litigations. This has disrupted the completion of the scheme for decades and caused dismay among all stakeholders.
The high court observed the following problems with the Act.
1)Identification and declaration of land as a slum.
2)Identification of slum dwellers
3)Selection of a developer
4)Apportionment of the slum land between the redevelopment area and the sale area
5)Obligation to provide transit accommodation for the slum dwellers pending redevelopment:
6)There are also issues of lack of independence and objectivity in the functioning of statutory authorities
5. The Court explained that the duty to review a statute to ascertain if it is fulfilling its objective lies with the executive government, in this particular case the Government of Maharashtra. The Supreme Court observed that the process of judicial review allows constitutional courts to perceive the faults in legislation from a practical perspective. The Court noted that one of the roles of the judiciary is to facilitate access to justice and to facilitate the effective functioning of constitutional bodies.
In this role, the court may provide impetus to systemic reform. In the present case, the beneficiaries of the legislature are the marginalized poor. It is not easy for them to raise complaints with the legislative and executive. By pushing for reform, the court is aiding the slum dwellers to access the legislative and executive constitutional bodies.
The Apex Court observed that it is the duty of the judiciary to direct the executive branch to review the working of statutes and audit the statutory impact.
The Court explained that when the court observes through the judicial process and judicial data, that the statute is unable to help its beneficiaries, or is stuck in bureaucratic and judicial loops, the court, under its facilitative role may require an audit of the statute and discussion and debate upon it. The court however may not mandate legislative reform.
The Supreme Court directed the High Court of Maharashtra to constitute a bench and take Suo Moto action to hold a comprehensive performance review of the legislation.
In the hearing, the High Court can hear all parties involved including but not limited to the state legislature, executive, beneficiaries, and senior members of the bar.
In the end, the Apex Court reiterated that it can require an audit and a review of the statute in question but it cannot write the law as that is the role of the legislature.
Case Laws
Shashikant Mishra vs Union Of India on 23 January, 2024
Galaxy Enterprises vs State Of Maharashtra And 7 Ors. on 3 June 2019 (AIRONLINE 2019 BOM 362)
Conclusion
The case of Yash Developers vs Harihar Krupa Housing Co. has been an eye-opener for the Indian Judiciary, bringing to light the dilapidated and neglected condition in which the Slum Rehabilitation Schemes have been laying. With complete inaction and disinterest from the state government and the state legislature, the marginalized part of our society has continued to suffer. The policy of slum rehabilitation is more than 60 years old. Since then, multiple state legislations have enacted laws to further the cause of the impoverished slum dwellers living in unhygienic conditions in cramped spaces around urban areas. More than a hundred cases of dispute have been filed in Indian Courts many among which remain pending.
The Supreme Court of India answered a call that had been long ignored and demanded that the loopholes and faults in the statutes be reviewed and assessed to ascertain the reason behind its ineffectiveness in providing remedy for a mammoth of a problem. Even though the Supreme Court asserted that it is not the task of the judiciary to rewrite legislation, it is its duty to communicate the faults it can see to the legislature to facilitate legislative reform. In the present case, the Supreme Court has expanded the boundaries of judicial review to include the role of facilitator to help constitutional bodies carry out their functions.
Abstract
In the case of Yash Developers vs Harihar Krupa Housing Co., the Supreme Court expands and elaborates upon the scope of judicial review in the role of a facilitator to compel constitutional bodies to perform audits on statutes that have become ineffective or have certain faults in the hope of bringing about legislative reform to help the beneficiaries of the statute. Some important aspects of the duties and responsibilities of statutory authorities have been reiterated. The Court has used the Principle of Accountability to demonstrate the constitutional duties of statutory authorities. The Supreme Court has taken it upon itself to help the slum dwellers gain access to legislative bodies and finally get the benefits under the Slum Area Schemes.
FAQs
1. What is the role of SRA and AGRC in the Slum Area Rehabilitation Act?
The SRA is the competent authority under the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act of 1971. The SRA has been given the power to direct, facilitate, and ensure that the Sum Rehabilitation Schemes are completed.
The Apex Grievance Redressal Committee has powers under the Act to hear and decide grievances against the SRA.
2. What was the objective of the Slum Rehabilitation Act?
The statute was enacted to improve upon and clear slum areas in Maharashtra, while providing safe and adequate rehabilitation to the slum dwellers.
3. Who is accountable for the delay and noncompletion of the Slum Area Rehabilitation Scheme?
The CEO of SRA is accountable along with the defaulting parties.
