Bombay High Court Quashes Acquisitions Under Maharashtra Slum Act Without Recognising Developler's Preferential Rights

The Bombay High Court has quashed the acquisition of private land under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, holding that the authorities acted without considering the developer's preferential right to redevelop the property. The Court observed that such actions violate the property rights guaranteed under Article 300A of the Constitution and cautioned the authorities against exercising acquisition powers in a manner that disregards the lawful rights of private landlords.

A Division Bench of Justice G.S. Kulkarni and Justice Aarti A. Sathe was hearing a writ petition filed by NESCO Limited challenging the acquisition of its land under Section 14(1) of the Slum Act. The acquisition had been initiated by the Slum Rehabilitation Authority (SRA). The petitioner contended that merely because the society formed by the slum dwellers would intend to make a proposal, the State Government could not have discarded the petitioner's right and proceeded to acquire the land under Section 14 of the Slum Act.

The Court noted that it is not in dispute that the land in question is a private land in respect of which the petitioner enjoys valuable rights under Article 300A of the Constitution. The Court observed that none of the essential requirements were complied with before the petitioner's land could be acquired.

“… none of the essential requirements as held by the Courts in the aforesaid decisions were complied with, before the petitioner's land could be acquired, inasmuch as no opportunity whatsoever at the relevant time was made available to the petitioner to undertake redevelopment of the land in recognition of the petitioner's preferential rights,” the Court observed.

The Court further remarked that the law casts certain responsibilities before the exercise of the powers under Section 14 of the Slum Act, and the exercise of such powers cannot be done in ignorance of the legal rights of private landlords. It observed:

“… we would be failing in our duty if we do not remind the Slum Authority, as also the appropriate officer of the State Government, as to the responsibility the law would cast on the Chief Executive Officer, as also the officials of the State Government, before the draconian powers under Section 14 of the Slum Act, are exercised. Such powers can never be undertaken at the behest of unscrupulous elements, and discarding the legal rights of private landlords when the land is inundated by slums is of private ownership.”

Accordingly, the Court quashed the impugned notification issued under Section 14(1) of the Slum Act and all consequential proceedings.

Case Title: NESCO Limited v. State of Maharashtra & Ors. [Writ Petition No. 1018 of 2017]

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