A dream turned into a nightmare. The dream of over 800 slum dwellers who also happen to be owners of the land of having a permanent roof over their head has not turned 2 into reality for more than three decades. The slum dwellers are embroiled in various litigations. There are many powerful persons involved, be they builders, promoters and even those slum dwellers who have managed to become office bearers of the society of slum dwellers.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 18121 OF 2017
SUSME BUILDERS PVT. LTD. … Appellant(s)
Vs.
CHIEF EXECUTIVE OFFICER, SLUM
REHABILITATION AUTHORITY AND ORS. ….Respondent(s)
J U D G M E N T
Deepak Gupta, J.
1. A dream turned into a nightmare. The dream of over
800 slum dwellers who also happen to be owners of the land
of having a permanent roof over their head has not turned
2
into reality for more than three decades. The slum dwellers
are embroiled in various litigations. There are many powerful
persons involved, be they builders, promoters and even those
slum dwellers who have managed to become office bearers of
the society of slum dwellers. Learned senior counsel
appearing for the parties produced before us graphic
photographs showing the sordid conditions in which these
slum dwellers continue to reside despite having entered into
an agreement with the appellant more than 30 years back to
develop the slums and rehabilitate the slum dwellers in
proper accommodation.
THE FACTUAL BACKGROUND:
2. This case has a long and chequered history and has
some features which are unique to it. The land in question
measuring 23018.50 square meters is situated in the heart of
Mumbai i.e. Santacruz (East), Mumbai. This land earlier
belonged to the Ardeshir Cursetji Pestonji Wadia Trust,
hereinafter referred to as ‘the Trust’. A slum had developed
3
over the said land. The slum dwellers formed an Association
known as ‘the Shivaji Nagar Residents’ Association. It
appears that the Trust had initiated some litigation for
eviction of the slum dwellers. On 19.03.1980 a consent decree
appears to have been passed in this litigation whereby the
Trust agreed to transfer the entire land to the slum dwellers
in case the slum dwellers formed a society. The slum dwellers
thereafter constituted a society in the name and style of Om
Namo Sujlam Suflam Co-operative Housing Society,
Respondent No. 3 herein (hereinafter referred to as ‘the
Society’). About 800 slum dwellers formed the Society, which
was registered under the Maharashtra Co-operative Societies
Act, 1960. In furtherance to the decree, the Trust executed a
deed of transfer in favour of the Society (Respondent No. 3
herein), transferring the entire land to the Society on
20.02.1985. Thus, this is a unique case where the slum is
owned by the Society of which the slum dwellers themselves
are the members. The slum dwellers are, therefore, also the
owners of the land in question.
4
3. It would be pertinent to mention that the land in
question was declared to be a slum under Section 4 of the
Maharashtra Slum Areas (Improvement, Clearance and
Redevelopment) Act, 1971 (hereinafter referred to as ‘the Slum
Act’) firstly on 16.08.1977 and again on 07.12.1983.
4. On 15.09.1985, a General Body Meeting of the Society
was held and in this meeting it was decided to appoint M/s.
Susme Builders Private Limited, hereinafter referred to as
‘Susme’ (the appellant herein), to develop the property.
Thereafter, a development agreement was entered into
between the Society and Susme on 27.02.1986. It was agreed
that there were about 800 occupants on the land in question
and each one of the slum dwellers would be provided
accommodation measuring 240 sq. ft. built up area with
carpet area of 190 sq. ft. The agreement also contained a
condition that the slum dwellers could purchase additional
area of 60 or 110 sq. ft. by paying for the extra area at the
rate of Rs. 350 per sq. ft.. The project was to be completed
within a period of 5 years. Consequent to the agreement, the
5
Society executed a power of attorney in favour of the nominee
of Susme on 07.04.1986 virtually empowering it to act on
behalf of the Society.
5. Admittedly, no work was done as per the terms of the
agreement and nothing was constructed during this period.
The stand of Susme is that during the period some public
interest litigations were filed, hence the plot of land was
not developed.
6. Thereafter, the Development Control Regulations for
Greater Bombay, 1991 under the Maharashtra Regional &
Town Planning Act, 1966 (for short ‘DCR’) were enforced. As
per these DCRs, each one of the slum dwellers was entitled to
a tenement of 180 sq. ft. free of cost. Therefore, the general
body of the Society met on 30.10.1994 and passed a
resolution that the earlier agreement be modified and a
tenement of 225 sq. ft. carpet area be given to each slum
dweller. Thereafter, letter of intent in terms of the DCR was
6
issued in favour of the Society and Susme on 05.04.1995. As
per this letter of intent, each slum dweller was to be alloted
225 sq. ft. area. Susme was also to comply with the
guidelines laid down for redevelopment of notified slums. It
was made clear that first the existing slum dwellers were to be
rehabilitated and only thereafter, free sale could be done in
the open market. Susme was specifically directed to carry out
the activities as per the activity chart and in terms of
Regulation No. 33(10) of the DCR within five years from the
date of issue of the commencement certificate. Thereafter,
another agreement was entered between the Society and
Susme on 10.07.1995 and in terms of this agreement each
slum dweller was entitled for a tenement of 225 sq. ft.; 180
sq. ft. free of cost and 45 sq. ft. at the cost of Rs. 14,350/-.
7. In terms of the letter of intent dated 05.04.1995 and the
agreement, Susme was to construct 12 buildings of ground
plus seven floors for re-housing the slum dwellers and project
affected persons on about 11,000 sq. mtrs. of land and
remaining 12,497 sq. mtrs. was to be developed for the
7
purpose of free sale. During the pendency of this agreement,
Susme constructed two buildings in which 128 slum dwellers
were rehabilitated. This was the only progress which
took place.
8. The DCR was amended in 1997. Under the new DCR,
each slum dweller was entitled to a flat having carpet area of
225 sq. ft.. Naturally, the slum dwellers wanted, that as per
the amended DCR, which was more beneficial to them, they
should be granted a larger flat having carpet area of 225 sq.
ft.. Therefore, another meeting of general body was held on
10.08.1997. In this meeting it was resolved that fresh
negotiations be held with Susme and that Susme should
carry out further development under the amended Regulation
33(10) and that 70% residents should consent for the
redevelopment. Thereafter, another supplementary agreement
was entered into between the Society and Susme on
07.01.1998. In this agreement, it was stated that there are
867 occupants, out of which 825 are occupying residential
premises, 27 are occupying shops and 15 are occupying
8
industrial units. This agreement also provided that
tenements to be provided to each of the residential occupants
would have a carpet area of 225 sq. ft.. Relevant portion of
the agreement reads as follows:
“The parties are aware that under the Slum
Redevelopment Scheme and the Development Control
Regulations each slum dweller is entitled to, a tenement
admeasuring 225 sq. ft. carpet area. As regards 27 shops,
the shops members shall be entitled to get such area as
they are entitled under Sec. 23(10) of D.C. Regulations
1991 amended from time to time. As regards 15
Industrial Units it is agreed that the Developer shall
negotiate with them directly for developing the area
occupied by them and the society agrees to sign and
execute such papers and writings required by the
Developer for that purpose.”
Clause 26 of this agreement provided that the plans shall be
submitted by the developer to the Slum Redevelopment
Authority (for short ‘the SRA’) according to Regulation 33(10)
of DCR, 1991 as amended from time to time. This agreement
was treated to be a supplementary agreement to the
earlier agreement.
9. Susme, on behalf of the Society, also moved the SRA for
permission to convert the old SRD Scheme into a new slum
9
rehabilitation scheme. The SRA granted letter of intent on
27.01.1998 and approval was granted for conversion of the
scheme. Clause 19 of the letter of intent provided that Susme
would submit the agreements with photographs of wife and
husband in respect of all the eligible slum dwellers before
issue of commencement certificate for sale building, or three
months as agreed by the developer, whichever is earlier.
10. One writ petition was filed by the Shivaji Nagar
Residents’ Association being Writ Petition No. 1301 of 1999
challenging the sanction by the SRA in favour of Susme on
the ground that Susme had not obtained consent of 70% of
the slum dwellers. The said writ petition was dismissed on
13.12.1999. The relevant portion of the Judgment reads as
follows:-
“We have heard learned counsel appearing for the parties.
We do not find any substance in the contentions raised by
the petitioners. It is required to be noted that some 109
slum dwellers filed Writ Petition No. 497 of 1997 raising
identical challenge to the scheme and the said petition
came to be withdrawn unconditionally on 10th July, 1997.
Thereafter, as indicated earlier, two new buildings were
constructed and the eligible slum dwellers were put in
possession of their respective tenements. Under the 1997
scheme the builder is required to enter into agreement
with individual members and accordingly 582 agreements
have already been signed between the parties. There is
10
also no merit in the contention of the petitioners that
consent of 70% of the Slum dwellers was required under
the 1991 scheme. On perusal of the said scheme it is
clearly seen that consent of 70% of the slum dwellers was
not required and what was contemplated was that if 70%
of the Slum dwellers join the society, which is interested
in the rehabilitation of the slum dwellers, then such
society would be eligible to apply for sanction of the same
under DCR 33(10). It is not disputed before us that
practically all the slum dwellers have been enrolled as
members of the society and, therefore, it is not possible to
hold that the requirement of 1991 scheme was not
complied with. It is also pertinent to note that the
proceedings of the general body meeting dated 13th
October, 1994 were not challenged by the petitioners or
any other slum dwellers by adopting appropriate remedy.
Indeed, the general body meeting had unanimously,
resolved to modify the agreement in terms of the 1991
scheme and it is too late to challenge the resolution for the
first time by way of the present petition which was filed in
1999. As regards the, 1997 scheme there is a Specific
provision for conversion, of the old scheme into a new
scheme and accordingly the proposal for conversion was
accepted by the authorities and in pursuance of the
acceptance, two new buildings have been constructed at
an estimated cost of Rs. 5 crores. In our opinion, this
petition suffers from gross delay and laches. It is clearly
seen that the petitioners were aware of the sanction
granted to the society under the 1991 scheme as well as
the 1997 scheme. The construction on the property began
in 1996 and two buildings have already been constructed.
Under the circumstances, we do not find any reason to
interfere in writ jurisdiction under Article 226 of the
Constitution.”
11. After Susme had completed 80% construction of the two
rehabilitation buildings, it applied for grant of Transfer of
Development Rights (for short ‘TDR’) in terms of the amended
DCR and sold the same. Occupation certificate in respect of
these two buildings was issued on 03.11.1998. While granting
permission it was observed on the file as follows:-
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“Further, as per policy & DCR 33(10) it is necessary that
agreements with more than 70% slum dwellers as per new
scheme is required. This was pointed out to CEO (SRA)
during discussion, when CEO (SRA) instructed to submit
agreements with 70% slum dwellers before second phase
of T.D.R. Developers have informed that out of 869 slum
dwellers, they have submitted 450 agreements to the office
of S.R.A. (52%).”
12. On 07.07.1999, the architects of Susme, on instructions
of Susme, submitted 12 files containing 580 numbers of
individual agreements with members of the Society and
undertook to file the remaining individual agreements to
make up 70% in due course of time. On 18.01.2000, Susme
was again asked to furnish 70% individual agreements of
eligible slum dwellers. Susme replied that in terms of
judgment of the Bombay High Court dated 13.12.1999, it was
not required to file 70% individual agreements. Under the
1997 amended DCR, the developer was entitled to a higher
Floor Space Index (for short ‘the FSI’). Therefore, Susme
submitted fresh plans for construction of 14 storey buildings
plus ground floor as against the earlier plan submitted for
seven storey buildings plus ground floor buildings. These
plans were submitted sometime in the year 1998. However, it
12
appears that the plans were not sanctioned and Susme also
did not pursue the matter earnestly with the authorities.
13. Thereafter, on 13.02.2001, SRA informed Susme that
the request of Susme for approving amended plans for slum
rehabilitation scheme was not considered since the plot under
reference was affected by the Coastal Regulation Zone
Notification (for short ‘the CRZ Notification’). Then Susme
along with the Society filed Writ Petition No. 2269 of 2001 in
which the main prayer was for setting aside the CRZ objection
and it was also prayed that the petitioner be permitted to
complete the rehabilitation scheme. In this petition, an
interim order was passed on 07.08.2002.
14. The Government of Maharashtra during this period also
appointed a one man Commission headed by Shri
Chandrashekhar Prabhu to enquire into the complaints made
with regard to the Society and the manner in which the
rehabilitation scheme was implemented. Susme and the
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Society jointly filed Writ Petition No. 1854 of 2004 against this
Commission. It was alleged that the SRA had handed over all
the files to Shri Chandrashekhar Prabhu. However, an order
was passed on 01.03.2005 in the aforesaid writ petition in
which a statement was made on behalf of the SRA that all the
concerned files had been retrieved from Shri Prabhu and,
therefore, the decision on the plans would be taken within
four weeks. The Petition was accordingly disposed of.
15. In 2005 itself it was clarified by the authorities that the
property in question does not fall in CRZ, Part I and only a
portion of the property falls in the CRZ, Part II. The architects
of Susme applied for approval of construction of transit
accommodation and this approval was granted by the SRA on
18.08.2005. This was, however, subject to the condition that
agreements with individual slum dwellers would be executed
before demolition of existing structure on the site. Again
complaints were made by some people that transit camps
were not constructed as per the approved plans and the SRA
issued stop work notice on 14.03.2006.
14
16. Another supplementary agreement was entered into
between Susme and the Society on 05.09.2006. This
agreement had a clause that the developer i.e. Susme was to
deal only with the Managing Committee of the Society. This
agreement also provided that any of the Directors of Susme
would be treated to be the attorneys of the Society. This
agreement also provided that Susme had offered to pay a sum
of Rs.75,000/- to each member of the Society having a
structure not exceeding 17.00 sq. mtrs. and Rs.1,00,000/- to
each of those members whose structure is of more than 17.00
sq. mtrs.. It is, however, not clear whether this amount was
actually paid or not. An extraordinary general body meeting
of the Society was held on 22.02.2009. In this meeting it was
pointed out that the members of the Society were not taken
into confidence by the Managing Committee while issuing
power of attorney in favour of the developer and changes to
the detriment of the members have been made by the
Managing Committee in collusion with Susme. It was also
pointed out that agreements were entered into by the
15
Managing Committee with Susme behind the back of the
members of the Society. The majority of the members
demanded for cancellation of the agreement made with
Susme. It would not be out of place to mention that the old
Managing Committee had been voted out and a new Managing
Committee had taken over during this period. Thereafter,
another general body meeting was held on 29.03.2009 and
the minutes of the meeting dated 22.02.2009 were approved.
In this meeting it was also pointed out that now Susme had
offered to make new plans giving each slum dweller a
tenement of 269 sq. ft. carpet in terms of the new circular.
But, the benefit of such bigger tenements was not made
available to those who were already housed in the
rehabilitation buildings. In effect, in this meeting it was
decided to terminate the agreement with Susme.
17. Susme, thereafter, invoked the arbitration clause in the
agreement and filed a petition for grant of interim relief under
Section 9 of the Arbitration and Conciliation Act, 1996 on
29.10.2009. The said arbitration petition was withdrawn on
16
26.06.2012 with liberty to Susme to file a suit. However, the
Society was restrained from implementing the Resolution
terminating the agreement till 13.07.2012. Civil suit No.
1588 of 2012 was filed by Susme on 10.07.2012 in the High
Court of Bombay against the Society and M/s. J.G.
Developers Private Limited.
18. The Society made a complaint to the SRA on 05.04.2009
that Susme was not developing the project as per the
agreement and necessary action be taken by the SRA against
Susme. On 15.06.2009, a communication was sent to the
Society on behalf of SRA that since Susme had constructed
two buildings and is in the process of construction of transit
camp, the developer Susme should be allowed to continue
and the request for change of developer was virtually rejected.
There is some dispute as to whether this letter was signed by
the Chief Executive Officer or the Executive Engineer but that
is not very material for the decision of the case. On
24.07.2009, the Society terminated the agreement with
Susme by a written notice. The Society made another
17
complaint to the SRA and on 08.09.2009, the SRA issued
notice to Susme in terms of Section 13(2) of the Slum Act, but
it appears, that no action was taken pursuant to this notice.
19. Thereafter, on 14.09.2009, the Society entered into an
agreement with M/s J.G. Developers Private Limited,
respondent no.4 (hereinafter referred to as ‘J.G. Developers’).
In this agreement J.G. Developers agreed to provide
permanent alternative accommodation measuring 269 sq. ft.
carpet area to each of the eligible members having residential
premises. Sufficient alternative accommodation was also to
be provided to those occupying commercial/industrial
premises. In Clause (4) of the agreement, it was mentioned
that since the Society was the owner of the plot, the developer
would also grant it 72,000/- sq. ft. carpet area free of cost for
use by the members of the Society. This was crystallized in
the supplementary agreement entered on 22.09.2009 between
the Society and J.G. Developers. In terms of this
supplementary agreement, 155 members occupying double
residential premises would be entitled to additional area of
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150 sq. ft. and 614 members having single residential
premises would be entitled to 75 sq. ft. additional area. This
effectively meant that those having single residential area
would get a tenement of 344 sq. ft. and those having double
residential area would get a tenement of 419 sq. ft.. J.G.
Developers took the responsibility of getting permission for
giving this extra area. Thereafter, J.G. Developers entered
into individual agreements with some of the members of the
Society in terms of the agreement and supplementary
agreement as referred to above.
20. Complaint No. 30 was filed on 21.09.2006 before the
Anti-Corruption Bureau, which was referred to the High
Power Committee (for short ‘the HPC’), in which it was
complained that the names of the occupants at Serial No. 774
to Serial No. 852 of the list of occupants issued on
21.06.1993 by the Additional Collector, Encroachment, are
bogus and are based on fabricated documents. Notice was
issued on this complaint. On 04.06.2011, Susme again
19
wrote to the SRA to process the proposal submitted to SRA on
01.10.2008. Similar request was made on 16.07.2011 also.
21. Thereafter, on 11.08.2011, show cause notice under
Section 13(2) of the Slum Act was issued by the SRA to
Susme as to why the SRA should not determine the right
granted to Susme to develop the land and entrust the work of
rehabilitation of the slum of the Society to some other agency.
The reasons for issuing the notice are contained in AnnexureA,
which reads as follows:
“1) The LOI for conversion of SRA scheme was issued
u/No.SRA/ChE/110/HE/PL/LOI dt. 27/01/1998. It is
reported by the Secretary that the developer has failed and
neglected to complete the work of Rehab building within
the stipulated period as per LOI condition and committed
the breach of the terms and conditions of the sanctioned
S.R. Scheme.
2) As per complaint of Society, the Developer have not
taken effective steps for speedy implementation of Scheme
and shown wilful negligence.”
Susme replied to the notice. Even the Society submitted its
reply to the notice and stated that there was inordinate delay
in completing the scheme. Written submissions were filed by
all sides. Finally, by order dated 24.02.2012, the SRA set
20
aside the appointment of Susme as developer mainly on two
grounds:-
(i) that there was unexplained delay in carrying out the
work under the rehabilitation scheme and,
(ii) Susme had failed to show that it had filed
individual agreements with 70% slum dwellers.
The SRA, instead of handing over the work to another agency,
held that since the Society had already entered into an
agreement with J.G. Developers, it may get the scheme
implemented through it. Susme filed an appeal being No. 39
of 2012 before the HPC. This appeal was dismissed on
18.06.2012. This order of the HPC was challenged by filing
Writ Petition No. 1718 of 2012, on the ground that one of the
Members of the HPC was not entitled to hear the appeal. This
writ petition was allowed on 14.08.2012 and the matter was
remanded back to the HPC. Thereafter, the HPC again heard
the appeal and dismissed the same on 10.10.2012. Against
this order of the HPC, the appellant filed Writ Petition No. 5 of
2013, which was rejected by the Bombay High Court by the
21
impugned order dated 11.06.2014 and it is this order of the
High Court which is under challenge in this appeal. In the
meantime, on 03.08.2012 the Bombay High Court in the suit
filed by Susme, refused to grant any interim relief.
22. Letter of intent dated 29.10.2012 was issued by the
SRA in favour of the Society, J.G. Developers and also its
architects. In this letter of intent approval was given for FSI
of 3.78 for slum portion, 3.18 for slum portion in lieu of 128
tenements with carpet area of 20.90 sq. mtrs., already
constructed and 2.58 for slum portion in CRZ-II. Effectively,
the FSI for the developer had increased substantially. In this
letter of intent it was mentioned that the eligible slum
dwellers would be re-housed in residential tenements of
carpet area of 25 sq. mtrs. (269 sq.ft.) or 20.90 sq. mtrs. (225
sq.ft.). It is thus apparent that no permission was granted for
giving larger tenements to the eligible slum dwellers.
22
23. In another Special General Meeting of the Society held
on 13.07.2014, it was decided by majority vote to cancel the
agreement with J.G. Developers. It was also decided that in
view of the cancellation of appointment of J.G. Developers,
the Managing Committee should select a new and capable
developer and the offer made by such developer should be put
up before the next general body meeting. The Society
terminated the appointment of J.G. Developers on
25.08.2014. J.G. Developers challenged the termination of
their agreement by filing Civil Suit No. 756 of 2014 on
19.09.2014 and in this civil suit an interim order was passed
on 24.09.2014.
24. After the termination of the agreement with J.G.
Developers on 25.08.2014, on 26.08.2014 the Managing
Committee of the Respondent No. 3, the Society, entered into
consent terms with Susme again appointing Susme as the
developer.
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25. Susme filed the present petition for special leave to
appeal challenging the decision of the High Court of Bombay
in Writ Petition No. 5 of 2013, before this Court. The
respondents put in appearance even before the notice was
issued and on 27.03.2015 this Court has passed the following
order:
“Heard Mr. Fali S. Nariman, learned senior counsel for the
petitioner, Mr. P.C. Chidambaram, learned senior counsel
and Mr. Mihir Joshi, learned counsel for respondent no.4,
Mr. Kapil Sibal, learned senior counsel for respondent
no.3, Mr. C.U. Singh, learned senior counsel for
respondent no.1 and Mr. Raval, learned senior counsel for
the applicant in IA No.5/14 along with their assisting
counsel.
2. The present case frescoes a labyrinthine chequered
history that can flummox the prudence of the wise, for the
procrastination in putting an end to a litigation. But, a
pregnant one, it is a problem created by human beings by
use of adroit proclivity at their best and, therefore, as
advised at present, this Court is obliged to take recourse
to an innovative method, at least to attempt at a solution.
3. We need not reflect the nature of orders passed in
various cases fought between the parties. Suffice it to
mention that they have invoked the power of the
authorities under the Maharashtra Slum Areas
(Development, Clearance and Redevelopment) Act, 1971,
instituted civil suits on the original side of the Bombay
High Court and sometimes the society, namely, Om Namo
Sujlam Sujlam Co-operative Housing Society, respondent
no.3 herein, has changed its colour as chameleon with
afflux of time may be yielding to the “hydraulic pressures
of time” and thereby eventually, in all possibilities, making
the slum dwellers of the area, i.e., C.T.S. No.7627, 7627/1
to 852 admeasuring 23018.50 sq. mtrs. situated at village
Kolekalyan at Santacruz (East), Mumbai remain in that
pathetic condition as they were since 1986, as if the
parties have nurtured the notion that they can arrest
time. Be that as it may, a solution has to be thought of.
4. In course of hearing Mr. Chidambaram, appearing for
respondent no.4, assiduously asserted that he has got the
24
consent from 70% of the eligible slum dwellers and,
therefore, the society is absolutely justified in entering into
an agreement which is called a “development agreement”.
Mr. F.S. Nariman, learned senior counsel, determined not
to lag behind, would astutely asseverated that he has the
consentum of 70% of eligible slum dwellers and hence, his
case cannot be brushed aside. We have been apprised by
Mr. Kapil Sibal, learned senior counsel appearing for
respondent no.3, that at present there are slightly more
than 800 eligible slum dwellers. Mr. Raval, learned senior
counsel appearing for the assumed authorised authority of
the society, would present that it is the respondent no.3
who has been correctly granted the privilege of
development agreement inasmuch as there was a
verification with regard to the consent earlier.
5. In our considered opinion, regard being had to the
special features of the case which includes the longevity of
the case and indefatigable spirit in which the parties are
determined to fight, we think there should be appropriate
verification of the consent of the eligible slum dwellers in
praesenti. Regard being had to the same, we request Mr.
Justice B.N. Srikrishna, formerly a Judge of this Court, to
verify the factum of consentum of the eligible slum
dwellers. The Slum Rehabilitation Authority represented
by the Chief Executive Officer either by himself or by any
responsible high level officer nominated by him shall
assist Mr. Justice B.N. Srikrishna in this regard.
6. As secretarial staff would be required for this purpose,
the petitioner and the respondent no.4 shall deposit a sum
of Rs.5,00,000/- (Rupees five lacs only) each so that the
verification can be expedited. In addition, learned Judge
may fix his honorarium which shall be paid
proportionately, as agreed to by the petitioner and the
respondent no.4.
7. The parties are at liberty to file documents to facilitate
the process of verification with regard to consentum in
praesenti before the learned Judge. We repeat at the cost
of repetition that such a mode has been adopted, regard
being had to the special phenomena of the case. As we
have taken recourse to such a method any other the
litigation pending in any forum in this regard shall remain
stayed.
8. Needless to say, the interim order of status quo passed
in this special leave petition, except the directions which
have been issued hereinabove, shall remain in force.
9. Let this matter be listed on 09.07.2015 awaiting the
report from Mr. Justice B.N. Srikrishna.”
25
26. Thereafter, Justice B.N. Srikrishna, former Judge of this
Court carried out the mandate, which he was required to do
in terms of the aforesaid order. He decided that voting should
be held by secret ballot. He categorized the voters in four
categories.
Category “A” Persons who were original slum dwellers and continue to
be occupants as on the cut-off date i.e. 27th March 2015.
Category “B” Persons who claim to exercise their vote as a result of
legal heirship.
Category “C” Persons who claim to have become members of the
Society by reason of sale and transfer of the shares.
Category “D” 79 persons whose eligibility is under challenge before the
Competent Authority as per the directions of the High
Power Committee.
He found that there were 867 slum dwellers in the four
categories:
Category “A” 263
Category “B” 318
Category “C” 207
Category “D” 79
Total 867
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Four separate ballot boxes were kept i.e. one for each category
and the result of the voting is tabulated as follows:
Category Total
Eligible
Voters
Voter turn-out
at the Poll on
22/11/2015
Votes
polled by
Petitioner
Votes Polled by
Respondent No.4
Invalid
Votes
“A” 263 191 108 70 13
“B” 318 275 179 84 12
“C” 207 172 126 43 03
“D” 079 013 010 03 -
Total 867 651 423 200 28
Thereafter, Justice Srikrishna submitted his report setting
out the voting pattern but did not make any recommendation.
CONTENTIONS:
27. The main contention raised on behalf of the appellantSusme
by Shri F.S. Nariman, learned senior counsel is that
the order dated 27.03.2015 is an order passed by this Court
in exercise of its extraordinary jurisdiction either under
Article 136 or under Article 142 of the Constitution of India.
It is submitted that this order was passed with a view to settle
all disputes between the parties. It is urged that this Court
27
cannot go behind this order especially when there is no
application filed for recall of the said order. It is also urged
that I.A.No. 10 of 2015 filed by J.G. Developers for
modification of the order, was rejected. It is contended that
since Justice B.N. Srikrishna has found that the majority
supports Susme, the appeal should be allowed and Susme be
permitted to carry on with the project.
28. The other contentions raised on behalf of the appellantSusme
by Shri Darius Khambata, learned senior counsel are:
(a) that Section 13(2) of the Slum Act is wholly
inapplicable;
(b) that the notice under Section 13(2) was given only in
respect of delay and not in respect of 70% consent
and hence the SRA, the HPC and the High Court fell
in error in insisting on 70% consent;
(c) that when migration of the scheme took place from
redevelopment scheme to slum rehabilitation scheme,
70% consent was not necessary.
28
29. On behalf of J.G. Developers it is contended by Shri
Gopal Subramanium, learned senior counsel that the
intention of this Court was to find out whether any party had
support of 70% of the slum dwellers or not. It is also
contended that it was not the intention of this Court to
bypass the legal provisions and this Court is not bound by the
aforesaid order. In the alternative, it is submitted that the
exercise carried out by Justice B.N. Srikrishna only shows
that as on date there are more people with Susme. It is
contended that the Bombay High Court has consistently held
that there should be no competitive voting inter se developers
because that gives rise to many malpractices with the
developers trying to outbid each other by giving sops to the
voters. It is contended that the consistent view till now has
been that once the slum dwellers have given consent for one
developer or have entered into an agreement with a developer
then they cannot be permitted to withdraw the consent,
otherwise, it will lead to chaos and no slum rehabilitation
scheme would be implemented. It is also contended that the
matter should be decided on merits and not on the basis of
29
this order. It is also contended that Susme does not have the
support of 70% of the slum dwellers.
30. It is also contended on behalf of J.G. Developers that
Susme is guilty of unexplained delay and the slum dwellers
are suffering and, therefore, the Society had rightly decided to
enter into a fresh agreement with J.G. Developers. It is also
urged that Susme had never obtained the consent of 70% of
the slum dwellers, which was mandatory. It is also contended
that Susme had taken advantage of trading of the
development rights by assuring the SRA that it would get 70%
consent. It is further urged that Susme never contested the
issue of 70% consent earlier.
31. Here, it would be pertinent to mention that the Society
has two factions. One faction supports Susme and the other
faction supports J.G. Developers. The faction supporting
Susme states that it has terminated the agreement with J.G.
Developers and cannot be forced to get the development work
30
done through J.G. Developers. The other faction alleges that
there is no valid existing agreement with Susme.
32. The following issues arise for decision in this case:
(i) What is the scope, ambit and effect of the order of
this Court dated 27.03.2015;
(ii) What is the scope of powers under Section 13(2) of
the Slum Act;
(iii) Whether the SRA has any power to remove the
developer;
(iv) Whether in the notice issued under Section 13(2) of
the Slum Act the issue of 70% consent was raised;
(v) Whether support of 70% of the slum dwellers is
mandatory and whether slum dwellers are entitled to
withdraw their consent;
(vi) Whether Susme delayed the construction of the
Scheme, and is, therefore, not entitled to any relief;
31
(vii) Whether Susme is entitled to continue with the
Scheme;
(viii) In case Susme is not entitled to continue with the
scheme whether respondent no. 4 J.G. Developers is
entitled to continue with the rehabilitation scheme.
THE SCOPE, AMBIT AND EFFECT OF THE ORDER OF
THIS COURT DATED 27.03.2015:
33. Relevant portion of order dated 27.03.2015 has been
quoted hereinabove. The main contention of Mr. Nariman,
learned senior counsel appearing for the appellant is that this
order is an order passed under Article 142 or Article 136 of
the Constitution and is binding upon the parties. On the
other hand, it was urged by M/s Gopal Subramanium and
Neeraj Kishan Kaul, learned senior counsel appearing for the
respondents that the order in question is not a binding order.
In the alternative, it was submitted that even if the order is
binding, this Court can interpret the order and even as per
32
the said order, the appellant is not entitled to continue with
the Scheme.
34. At the outset, we may note that judicial propriety and
discipline requires that a Coordinate Bench must respect the
order of an earlier Bench. In fact, even a larger Bench should
not brush aside the order passed by an earlier Bench even if
it be a smaller Bench unless the order is in issue before the
larger Bench. Suffice to say that the order in question holds
the field. It has not been recalled and prayer for modification
in I.A. No. 10 was rejected on 13.05.2015. Therefore, the
order of this Court dated 27.03.2015 holds the field and we
are bound by the same. At the same time, it is our duty to
decipher what was the intention of the Bench while passing
the order and to find out what the Court intended to do by the
said order.
35. In Para 2 of the order, the Division Bench has noted the
long and chequered history of the case and has noted that the
33
Court had to take recourse to an innovative method to try and
find a solution. It is thus apparent that this is an order
falling within the ambit of Article 142 to do complete justice
between the parties. The Court was aware that the slum
dwellers were suffering due to the long protracted litigation.
Therefore, the Court felt the need to find an innovative
solution. In Para 3 of the order, the Court has noted the
factual aspects and again emphasized the need to find a
solution to resolve the various issues. The Court was
obviously moved by the pathetic condition in which most of
the slum dwellers continued to reside.
36. Para 4 of the order is very important because it notes the
contention of learned counsel appearing for J.G. Developers,
who had emphatically stated that his client had the consent
of 70% of the eligible slum dwellers and, as such, the Society
was justified in entering into a development agreement with
his client. On the other hand, learned senior counsel
appearing for the appellant equally strongly refuted this claim
and claimed that his client had the consent of 70% eligible
34
slum dwellers. It is in this context that the directions
contained in Para 5 of the order dated 27.03.2015 were
passed wherein this Court directed “…….there should be
appropriate verification of the consent of the eligible slum
dwellers in praesenti.” Justice B.N. Srikrishna was requested
to verify the factum of the consent of the eligible slum
dwellers.
37. The contention raised on behalf of Susme is that there is
no mention of “70%” in the direction given in Para 5 of the
order and, therefore, all that Justice B.N. Srikrishna was
required to do was to ascertain consent of the slum dwellers
in praesenti. It is contended that almost 70%, and at least
much more than the majority, have exercised their choice in
favour of Susme and, thus, there is no reason why the appeal
should not be allowed. Susme should be permitted to carry on
the development work in terms of the agreement entered into
with the respondent no. 3-Society. It is also urged that as far
as respondent no. 4 is concerned, it has got hardly 30% of the
votes and, therefore, there is no question of awarding the
contract to respondent no. 4.
35
38. We are not in agreement with this submission. It is
settled law that a judicial order or judgment has to be read as
a whole and a single line or phrase cannot be read out of
context. A judgment is not to be interpreted like a statute.
As far as the order dated 27.03.2015 is concerned, the
intention of the Court, will have to be deduced from the entire
order. We cannot read the phrase “…….there should be
appropriate verification of the consent of the eligible slum
dwellers in praesenti.” in isolation. This has to be read in the
context of the rival contention of the contesting parties that
each one of them had the consent of more than 70% of the
slum dwellers. According to us, this Court was not oblivious
of the requirements of the Slum Act though it may not have
explicitly referred to them. It is obvious from Para 4 of the
order dated 27.03.2015 that learned counsel for both the
parties claimed that their respective clients had the support of
70% of the slum dwellers. Obviously, both of them could not
be correct. This factual dispute could not be decided in these
proceedings. This was the dispute which was referred for
36
resolution to Justice B.N. Srikrishna. We may observe that
Justice B.N. Srikrishna in the first effective procedural order
dated 27.04.2015, rightly understood the order to mean as
follows:
“After carefully perusing the Order dated 27th March, 2015
made by the Hon’ble Supreme Court and the submissions
made in writing and through Counsel and representatives
on behalf of the Petitioners as well as the Respondents, I
am of the view that the best way of verifying the factum of
consentum of the eligible slum dwellers in praesenti would
be to hold a secret ballot under my aegis and after
counting the votes, make a report to the Court as to
whether more than 70% of the eligible slum dwellers are in
favour of the redevelopment agreement being signed with
the Petitioner or Respondent No.4.”
39. It is, thus, clear that Justice B.N. Srikrishna had
understood that he was to ascertain whether 70% of the
eligible slum dwellers are in favour of the redevelopment
scheme signed with the appellant-Susme or with respondent
no. 4. We are clearly of the view that a holistic reading of the
order admits of no other meaning. The only dispute raised
before this Court on 27.03.2015 was which of the builders
had the support of the 70% of the slum dwellers. Since this
factual dispute could not be decided in Court, Justice B.N.
Srikrishna was requested to do this job. It is not necessary
37
for us to go into the other arguments raised with regard to the
effect of the order because, according to us, this order admits
of no other interpretation. Admittedly, neither the appellant
nor respondent no. 4 has received 70% support.
40. Further, the words ‘in praesenti’ only mean that the
Court wanted the verification of the consent of the eligible
slum dwellers as on date of passing of the order. ‘In praesenti’
cannot be read to mean ‘present and voting’. It only means
eligible slum dwellers as on 27.03.2015. Justice B.N.
Srikrishna has divided the slum dwellers into four categories;
263 were the original slum dwellers, 318 were the legal heirs,
207 were those who had become members by means of sale
and transfer of shares and 79 voters were disputed. We may
note that during these entire proceedings not a single
complaint has been filed that an ineligible slum dweller was
permitted to vote or that an eligible slum dweller was not
permitted to vote. The procedure followed by Justice B.N.
Srikrishna is absolutely correct and no error can be found in
38
this regard. Therefore, we have no hesitation in accepting the
report submitted by Justice B.N. Srikrishna.
41. Out of 867 total eligible voters only 651 voted and the
appellant secured 423 votes, which would mean 64.98% or
roughly 65% of the votes polled. But, if we were to calculate
this percentage from the total number of slum dwellers i.e.
867 then the percentage is 48.78%, which is less than 50%.
In case we exclude 79 votes which are doubtful, then the total
eligible voters would be 788 and the appellant secured 413
i.e. 52.41% of the total eligible slum dwellers, well below the
magic figure of 70%. We are unable to accept the contention
of Mr. Nariman that to put an end to all litigation, the Court
only wanted to find out who had the majority. That,
according to us, is not the essence of the order dated
27.03.2015. It is true that 70% is not reflected in the
direction given in Para 5 of the order but as earlier noted by
us, the directions have to be understood in view of the
intention of the Court, which was to find out that which of the
builders had the support of 70% of the slum dwellers.
39
Unfortunately, both the developers do not enjoy 70% support,
though it is true that the appellant has the support of more
than twice the number of slum dwellers as compared to
respondent no. 4. Since neither Susme nor J.G. Developers
has the support of 70% slum dwellers, the order dated
27.03.2015 cannot be taken to its logical conclusion and we
have to decide the appeal on merits.
THE SCOPE OF POWERS UNDER SECTION 13(2) OF THE
SLUM ACT:
42. Relevant portion of Section 13 of the Slum Act which is
the bone of contention between the parties reads as follows;
“13. (1) Notwithstanding anything contained in subsection
(10) of section 12, the Slum Rehabilitation
Authority may, after any area is declared as the Slum
Rehabilitation Area, if the landholders or occupants of
such area do not come forward within a reasonable time,
with a scheme for re-development of such land, by order,
determine to redevelop such land by entrusting it to any
agency for the purpose.
(2) Where on declaration of any area as a Slum
Rehabilitation Area the Slum Rehabilitation Authority, is
satisfied that the land in the Slum Rehabilitation Area has
been or is being developed by the owner in contravention
of the plans duly approved, or any restrictions or
conditions imposed under sub-section (10) of section 12,
or has not been developed within the time, if any, specified
under such conditions, it may, by order, determine to
develop the land by entrusting it to any agency recognised
by it for the purpose:
40
Provided that, before passing such order, the owner shall
be given a reasonable opportunity of showing cause why
such order should not be passed."
43. Shri Darius Khambata, learned senior counsel appearing
for Susme urged that under Section 13(2) of the Slum Act, the
SRA is entitled to take action only against the owner. He also
submits that Section 13(2) will apply only when there is
violation of the conditions imposed under sub-section 10 of
Section 12 of the Slum Act and the condition with regard to
the time should also be a condition contained in sub-section
10 of Section 12. He submits that there is no power to take
action under this section against the developer. According to
him, action could have been taken by the SRA against the
Society but not against Susme.
44. We cannot accept such a wide submission. According to
us, under Section 13(2) of the Slum Act, the SRA has the
authority to take action and hand over the development of
land to some other recognized agency under three
circumstances:
41
i. When there is contravention of the plans duly
approved;
ii. When there is contravention of any restriction or
condition imposed under sub-section 10 of Section 12
of the Slum Act; and
iii. When the development has not taken place within
time, if any, specified.
45. The requirement to complete the development within
time may be there in the letter of intent issued by the SRA or
may be in the agreement entered into between the
owner/developer with the slum dwellers. Such condition, if
violated, would attract the provisions of Section 13(2) of the
Slum Act. Over and above that, when a clearance order is
passed, then in terms of sub-section 10 of Section 12, the
competent authority can include a condition with regard to
the time within which the development should be completed
and in that case also Section 13(2) would be attracted. We
are not, however, able to accept the very wide argument that
42
in case of delay, the condition that is violated must be laid
down under Section 12(10) of the Slum Act.
46. There may be cases where the slum dwellers do not
offer any resistance and willingly consent to move into transit
accommodation provided by the owner/developer. Therefore,
the conditions laid down under Section 12(10) will come into
play only when there is a clearance order, but in case there is
no clearance order, then under Section 13(2), the SRA would
be empowered to take action when there is violation of any
plan or when there is violation of any condition relating to
developing the project within time. The time limit can, some
time, be provided in the letter of intent, in the agreement or
even in the regulations.
47. Having held so, we are of the view that Shri Darius
Khambata, learned senior counsel, is right in his submission
that normally under Section 13(2) of the Slum Act, action by
the SRA has to be taken against the owner. Here, we may
43
repeat that this is a unique case where the slum dwellers are
the members of the owner-Society. The Society, in turn, has
given power of attorney to the builder. The builder virtually
has two roles – one as developer and the other as power of
attorney holder of the owner. Both are closely interlinked and
inextricably mixed with each other. Therefore, though
normally we would have accepted the contention that under
Section 13(2) action can only be taken against the owner, in
the present case, we are unable to accept this contention in
its totality. We may point out that even the SRA, in its order,
has itself noted that since the Society is the owner of the plot
of land, it is empowered and within its right to terminate the
agreement executed with the said developer for breaches
committed by the developer. It has, however, held that a
private dispute between the Society and the developer cannot
prevent the SRA from discharging its obligations. The SRA
agreed with the submission made by the Society that Susme
had not completed the project within time. It has taken
action under Section 13(2) of the Slum Act. The action taken
44
by the SRA is to remove Susme as developer which amounts
to cancelling the letter of intent issued in favour of Susme.
48. Otherwise, there would be an anomalous situation
where the Society would have terminated its contract with
Susme but the letter of intent issued by the SRA would
continue to hold the field and it would be entitled to develop
the land. The Society approached the SRA, in fact, asking it
to take action against Susme. Since the SRA is the authority
which issued the letter of intent, it will definitely have the
power to cancel the letter of intent.
49. We are of the considered view that in the peculiar facts
and circumstances of the case where the slum dwellers are
virtually the owners of the land as members of the owner
Society, the SRA had the power under Section 13(2) of the
Slum Act to issue the order dated 24.02.2012.
45
WHETHER THE SRA HAS ANY OTHER POWER TO
REMOVE THE DEVELOPER:
50. Even if we were to assume that the SRA did not enjoy
this power under Section 13(2) of the Slum Act, we are of the
considered view that since it was the SRA which issued this
letter of intent, it necessarily must have the power to cancel
the same. The SRA can also derive this power under clauses
(c) and (d) of sub-section (3) of Section 3A of the Slum Act,
which read as under:
“3A. (1) Notwithstanding anything contained in the
foregoing provision, the State Government may, by
notification in the Official Gazette, appoint an authority to
be called the Slum Rehabilitation Authority for such area
or areas as may be specified in the notification; and
different authorities may be appointed for different areas.
 xxx xxx xxx
(3) The powers, duties and functions of the Slum
Rehabilitation Authority shall be,-
 xxx xxx xxx
(c) to get the Slum Rehabilitation Scheme
implemented;
(d) to do all such other acts and things as may be
necessary for achieving the objects of rehabilitation
of slums.”
51. A bare reading of these provisions shows that in terms of
clause (c) and (d) of sub-section (3) of Section 3A of the Slum
46
Act, the SRA not only has the power, but it is duty bound to
get the slum rehabilitation scheme implemented and to do all
such other acts and things as will be necessary for achieving
the object of rehabilitation of slums. In this case, the SRA
was faced with a situation where the slum dwellers were
suffering for more than 25 years and, therefore the action
taken by SRA to remove Susme for the unjustified delay was
totally justified.
52. A perusal of the various provisions of the Slum Act
would show that normally in a case falling under the Slum
Act, it is the owner of the land, whether it be the Government,
a statutory authority or a private person, who will be
interested in the development work. Normally, the occupiers
will be encroachers of slum land. Therefore, there will be a
conflict of interest between the occupiers and the owner. The
owner, in turn, will always engage a developer/builder to
carry out the development work. In case the owner gives a
power of attorney to the developer, as in the present case, the
developer now has two identities – (i) the power of attorney
47
holder of the owner and (ii) the developer. As far as the
present case is concerned, the Society is made up of the
members who are occupiers and this Society has given power
of attorney to the developer-Susme. Therefore, the developer
Susme is actually having a dual role of owner and developer.
Both the letters of intent have been issued in favour of the
Society, Susme and the architects of Susme. Susme could
not have carried out the development work on the basis of its
agreement with the Society. It needed the permission of the
SRA. Therefore, SRA can obviously revoke such permission.
WHETHER IN THE NOTICE ISSUED UNDER SECTION 13(2)
THE ISSUE OF 70% CONSENT WAS RAISED:
53. Shri Darius Khambata, learned senior counsel, has
raised another contention that there is no allegation in the
notice under Section 13(2) of the Slum Act that Susme has
violated any provisions of the Act, Regulations or Scheme in
not getting consent of 70% of the slum dwellers. We have
gone through all the three notices and find that, in fact, in the
48
notices there is no specific allegation in this behalf. On the
other hand, Shri Gopal Subramanium, learned senior counsel
appearing for J.G. Developers, urges that in the last notice
reference has been made to violation of DCR and this will
obviously include violation of requirement of consent of 70%
slum dwellers.
54. We are unable to accept the contention of Shri Gopal
Subramanium, learned senior counsel. When a notice is
issued to a party it must be clearly told what are the
allegations which it must meet. The notice should be clear
and unambiguous.
55. There was no allegation in the notice(s) that the right to
develop granted in favour of Susme was liable to be revoked
because it had not obtained consent of 70% of the slum
dwellers. The reference to Regulation 33(10) also did not
specifically raise the issue of 70% consent. Susme was never
put to notice by the SRA that its right to develop the land may
49
be cancelled because of not having consent of 70% slum
dwellers. It was confined to the issue of delay. We answer
this issue accordingly.
56. However, we are of the view that while considering the
issue of delay, the SRA was justified in making reference to
the various communications made by Susme and its
architects seeking time to obtain consent of 70% slum
dwellers and, therefore, while dealing with the issue of delay,
we shall take into consideration all these matters.
WHETHER SUPPORT OF 70% OF THE SLUM DWELLERS
IS MANDATORY AND WHETHER SLUM DWELLERS ARE
ENTITLED TO WITHDRAW THEIR CONSENT:
57. It would be important to note that under DCR of 1991,
which were initially applicable to this project, a Scheme for
rehabilitation could be initiated where more than 70% of the
eligible hutment dwellers on the land agreed to the
redevelopment scheme by becoming members of a cooperative
society. Thereafter, the Scheme was to be considered by the
50
authorities for implementation. Relevant portion of the DCR
reads as follows:
“INITIATION OF THE SCHEME:- Where more than 70% of
the eligible hutment dwellers on the land agree to join the
redevelopment scheme and become members of the cooperative
society, the scheme should be considered for
implementation.”
58. Under Development Control Regulations 33(10) of 1991,
the essential requirement was that at least 70% of the slum
dwellers had to form a society with a view to redevelop the
slum area. In case 70% slum dwellers did not join, there
could be no rehabilitation scheme. As far as the present case
is concerned, it is not disputed that more than 70% slum
dwellers had formed the respondent no. 3-Society. It is the
admitted case of the parties that 800 out of 867 slum dwellers
formed respondent no. 3-Society, which is 92.27%.
59. DCRs of 1991 were amended in 1997. Clause 1.15 of
Appendix (IV) of the amended DCR provided that 70% or more
of eligible hutment dwellers in a slum must agree to join a
51
rehabilitation scheme before it can be considered for approval.
This clause reads as follows:
“Where 70 per cent of more of the eligible hutmentdwellers
in a slum or pavement in a viable stretch at one
place agree to join a rehabilitation scheme, it may be
considered for approval:
Provided that nothing contained herein shall apply to Slum
Rehabilitation Projects undertaken by the State
Government or Public authority or as the case may be a
Government Company as defined in section 617 of the
Companies Act, 1956 and being owned and controlled by
the State Government.”
Clause 1.16 of Appendix (IV) of this DCR reads as follows:
“In respect of those [eligible] hutment-dwellers on site who
do not join the Project willingly the following steps shall be
taken:-
(i) Provisions for all of them shall be made in the
rehabilitation component of the scheme.
(ii) The details of the actual tenement that would be
given to them by way of allotment by drawing lots for them
on the same basis as for those who have joined the Project
will be communicated to them in writing by the Managing
Committee of the Co-operative Housing Society. [If it is
registered or the developer and in case of dispute decision
of the CEO/SRA shall be final and binding on all the
parties concerned.
(iii) The transit tenement that would be allotted to
them would also be indicated alongwith those who have
joined the Project.
(iv) If they do not join the scheme within 15 days after
the approval has been given to the Slum Rehabilitation
Project on that site, then action under the relevant
provisions including sections 33 and 38 of the
Maharashtra Slum Areas (Improvement, Clearance and
Redevelopment) Act, 1971 as amended from time to time,
shall be taken and their hutments will be removed, and it
shall be ensured that no obstruction is caused to the
scheme of the majority of persons who have joined the
scheme willingly.”
52
60. It is thus obvious that under the amended DCR, not only
70% or more of the eligible hutment dwellers must first agree
to join a rehabilitation scheme before it is taken up for
consideration, but the owner/developer or cooperative society
must also enter into individual agreements with each of these
eligible hutment dwellers. We may also point out that the
amended DCR in clause 1.16 of Appendix IV provides that
even in respect of those eligible hutment dwellers who do not
join the project willingly, the developer/builder has to make
provision for accommodation of these hutment dwellers in the
scheme. They are entitled to the same benefits as the
hutment dwellers who actually join the scheme. They are also
entitled to similar transit accommodation as is allotted to
those who willingly join the scheme. Further, the regulations
also provided that if such hutment dwellers do not join the
scheme and do not accept the transit accommodation or the
completed premises, then they can be removed from their
hutments and it will be ensured that these hutment dwellers
do not cause any hindrance to the project.
53
61. Very lengthy arguments were addressed by learned
counsel on the issue whether 70% support of the slum
dwellers is mandatory. A large number of authorities have
also been cited but, in our view, it is not necessary to refer to
the various authorities because the bare provisions of law are
sufficient to decide this issue. A bare reading of DCR of 1991
makes it absolutely clear that under the said DCR at least
70% of the slum dwellers/occupiers have to get together and
form a Society for the purpose of slum re-development
scheme. Therefore, unless 70% slum dwellers agree to form a
Society, the provisions of the Slum Act could not be invoked
to frame an SRD scheme. Under the amended DCR of 1997,
there is a change and the change is that now the
developer/owner was required to enter into agreements with
70% of the slum dwellers and unless 70% of the slum
dwellers agree, the slum rehabilitation scheme cannot be
entertained. The magic figure remains at 70%. The idea
behind it is that more than 2/3 of the occupiers must agree
for the rehabilitation scheme.
54
62. As pointed out above, even if the remaining minority
slum dwellers do not agree to be part of the scheme, the
owner/developer is duty bound to make adequate
arrangements for their rehabilitation under the scheme and
they can join the scheme, and can take benefit of the scheme
even at any later stage. We are, therefore, of the considered
view that 70% consent of the occupiers is mandatory. As
clarified above, we are not dealing with this aspect in relation
to the order of the SRA because the notice under Section
13(2) did not raise this issue. However, we are clearly of the
view that under the 1997 DCR the owner is required to
produce individual agreements with 70% slum dwellers before
the scheme can be taken up for consideration.
63. The circulars issued by the SRA, specially Circular dated
21.08.1997, 19.09.1998 and Circular No. 27 permit
conversion of old approved SRD Scheme to new SRA Scheme
under the provisions of Clause No.10.1 of Appendix IV of
DCR. In the present case, the scheme was initiated under the
55
old DCR of 1991. There is no manner of doubt that the
Society was formed by more than 90% of the occupiers.

64. The migration was done to the Scheme of 1997. There is
no clear cut provision in the 1997 DCR as to how this
migration has to be done. Since there is no clear cut
provision, we may presume that while migrating, it was not
necessary for Susme to have individual agreements with 70%
of the slum dwellers. We may, however, point out that it was
Susme who applied for migration to the new Scheme,
obviously because the new Scheme gave greater benefits to
the developer. When migration was done, it was on the clear
cut understanding that after the migration, the provisions of
amended DCR would be applicable. When this application of
the Society and Susme for conversion was taken up, it was
noticed that one of the main objections was that there were
no individual agreements with the slum dwellers.
56
65. Later, Susme submitted agreements of 450 of the eligible
slum dwellers and stated in writing that the remaining to
make up 70% would be submitted before start of Phase II of
the construction. Fresh letter of intent dated 27.01.1998, in
terms of the new DCR, was issued in favour of Susme and
approved in accordance with Clause No.33(10) and Appendix
IV of amended DCR subject to certain conditions.
Clause 19 of the letter reads as follows:
“That you shall submit the Agreements with the
photographs of wife and husband on the agreements with
all the eligible slum dwellers before issue of CC for sale
bldg., or 3 months as agreed by developer whichever is
earlier. And the name of the wife of the eligible occupier of
hut shall be incorporated with joint holder of the
tenements to be allotted in rehabilitation building.”
66. A bare perusal of this condition makes it clear that
Susme was directed to submit agreements with all the eligible
slum dwellers before commencement certificate for sale
building was issued or within three months, as agreed by it.
It has been urged by Shri Darius Khambata, learned senior
counsel that, as per this condition, the agreements have to be
submitted only at the stage when the commencement
57
certificate is to be issued. It would also be important to note
that even before the rehabilitation building numbers 5 and 6
were completed, Susme was granted TDR to the extent of 40%
of the construction of building nos. 5 and 6, which they sold
in the open market. The relevant portion of the note dated
16.02.1998 is extracted hereinbelow:
“Further as per policy & DCR 33(10) it is necessary that
agreements with more than 70% slum dwellers as per new
scheme is required. This was pointed out to CEO (SRA)
during discussion, when CEO (SRA) instructed to submit
agreements with 70% slum dwellers before second phase
of T.D.R. Developers have informed that out of 869 slum
dwellers, they have submitted 450 agreements to the office
of S.R.A. (52%).”
When Susme applied for permission to sell the TDR, the SRA
ordered that 70% agreements should be submitted before
Phase II TDR and, further, Susme was informed by the SRA
that it has only submitted the agreements with 450 slum
dwellers which comes to barely 52%. The Bombay High
Court, therefore, rightly recorded that Susme accepted the
condition of 70% consent requirement when it accepted these
conditions and sold the TDR. Thereafter, on 03.11.1998,
occupation certificate was issued in favour of Susme with
58
regard to two rehabilitation buildings. Relevant portion of
communication dated 03.11.1998 reads as under:
“That the 70 percentage individual agreements with slum
dwellers shall be submitted before further approval/CC.”
67. On 24.12.1998, the SRA permitted Susme to take 90%
benefit of the TDR equivalent. Relevant portion of this note
reads as follows:
“As per policy it is necessary that agreements with
minimum 70% slum dwellers for new scheme is required.
It is also mentioned in the previous report sidelined ‘x’ at
page 35. Architect has to submit 70% agreements before
granting Phase-II TDR. At present 52 (sic 520) agreements
(60%) out of 869 are submitted in this office as mentioned
in the letter of Architect as at page…….However, these two
Rehab Bldgs are physically occupied and list of documents
rehoused is submitted at P-164 to 171 Phase II T.D.R. can
be recommended if agreed.
In view of above pending requirement if CEO (SRA) agreed
TDR equivalent to 0.90 x 3720.90 = 3348.81 (1295
SQ.MT. released in Phase I + 2051.81 sq.mt. to be
released & Phase II) sq. mt. Phase II TDR will be
recommended to M.C.G.M. ”
68. It was noted that Susme was required to submit
agreements with 70% of the slum dwellers. On 07.07.1999
Susme, through its architects, sent a letter to respondent no.
1 forwarding 580 individual agreements of the members of the
Society and also undertook to submit the remaining, to make
70% in due course. SRA pointed out in its letter dated
59
25.07.2001 addressed to Susme that out of the agreements
submitted, only 372 were correct.
69. Here, it will be pertinent to note some other relevant
facts. On 11.05.1999, some slum dwellers filed Writ Petition
No. 1301 of 1999, challenging the letter of intent dated
27.01.1998 in favour of Susme on various counts including
the ground that Susme had failed to obtain consent of 70% or
more of the eligible slum dwellers. This petition was
dismissed on 13.12.1999 and we have quoted the relevant
portion of the Bombay High Court in the earlier part of the
judgment. According to Susme, in view of this judgment, it
was not required to obtain 70% consent of the slum dwellers.
We do not think this is what was said by the High Court. We
may note that the main contention by the appellant before the
High Court was that the consent of 70% of the slum dwellers
was not required under the 1991 Scheme. The High Court
held, and rightly so, that under the 1991 DCR what was
required was that 70% of the slum dwellers joined the Society,
which was interested in the rehabilitation of slum dwellers
60
and there was no requirement that there should be consent
from 70% slum dwellers. The High Court did not discuss at
all, the issue whether 70% consent was required under the
1997 Scheme. This judgment will have no bearing on the
present case.
70. As we have already indicated above, in a migration from
1991 Scheme to 1997 Scheme, obviously 70% individual
agreements cannot be obtained prior to submission of the
Scheme. However, while granting migration, the SRA can lay
down conditions and such conditions can also be laid down
during the course of the Scheme. From the facts narrated
above it is more than amply clear that the SRA envisaged, and
Susme clearly understood, that it had to obtain consent of
70% of the slum dwellers. Even in the resolutions of the
Society authorizing Susme to take up the development work
entered after DCRs were amended it was clearly mentioned
that amended Regulation 33(10) would govern the
agreements. Susme cannot now say that it is not governed by
the amended regulations. Even the letters issued by the
61
architects of Susme clearly indicate that they would make up
the balance to achieve 70% agreements. The main dispute is
by when this should have been done. Initially, time was given
till commencement certificate of the sale building was issued.
This was a meaningless condition because if this condition
was to be applied after the rehabilitation buildings had been
built, then having the consent of the slum dwellers would be
an exercise in futility because by then they would have been
thrown out of their dwellings. We can, at best, understand
this to mean commencement of the rehabilitation buildings.
The slum dwellers are interested with the rehabilitation
buildings and not with the free sale buildings. Later on, when
applying for permission to trade their development rights,
Susme clearly understood and undertook that it would
furnish the consent forms of 70% of the slum dwellers. The
architects of Susme, in fact, deposited 580 individual
agreements but out of these, only 372 were found to be
correct. Thereafter, Susme took a U-turn and, relying upon
the judgment of the Bombay High Court in CWP No.1301 of
1999, took a stand that it was not required to submit
62
agreements with 70% slum dwellers. This stand was not
legally tenable. Susme cannot be permitted to back out of its
commitments. The agreements with 70% slum dwellers
should have been provided within a reasonable time and,
though almost 20 years have elapsed since the second letter
of intent was granted in favour of Susme, it has till date failed
to submit such agreements. We may again reiterate that we
are not dealing with this issue for the purpose of removing
Susme but only for the purpose of showing that Susme
delayed the project because it failed to get consent from 70%
of the occupiers.
WHETHER SUSME DELAYED THE CONSTRUCTION OF
THE SCHEME, AND IS, THEREFORE, NOT ENTITLED TO
ANY RELIEF:
71. With regard to the issue whether the appellant is
responsible for the delay in implementation of the Scheme, at
the outset, we may note, that both the SRA and the High
Court have dealt with this issue in detail and come to a
concurrent finding of fact that Susme was responsible for the
63
delay in implementation of the Scheme. Since this is a
finding of fact and dealt with in detail by the High Court, we
are not required to examine this contention in detail.
However, at the insistence of the learned senior counsel for
Susme we have gone through the voluminous record. From
the facts which are set out in this regard it is apparent that
Susme first entered into an agreement with the Society on
27.02.1986 committing to complete the project in 5 years.
Unfortunately, from 1986 to 1991, nothing was done and the
only excuse is that some public interest litigation was
pending. On 25.03.1991, the DCRs were brought into force.
On 09.10.1992, the appellant obtained permission for
development of the property on certain conditions. It would
be important to note that in the letter of 09.10.1992, while
granting permission, it was stated that the developer should
produce agreement of all the existing occupiers within six
months and the development work is to be completed within
two years, though the time could be extended for genuine
reasons. Admittedly, no work was done during this period
also. On 05.04.1995, letter of intent was issued in favour of
64
Susme. In this letter also, there was a stipulation that Susme
should produce the agreement with all the slum dwellers.
Thereafter, Susme entered into a fresh agreement with the
Society. During this period of 9 long years, not an inch of
construction was raised nor any portion of the property
developed. Thereafter, in a meeting of General Body of the
Society held on 12.11.1995, a resolution was passed that
each slum dweller be provided 225 sq. ft. carpet area. This
was accepted by Susme and crystallized in the agreement
dated 07.01.1998. Between 15.01.1996 to 01.02.1996 Susme
obtained ‘intimations of disapproval’ which, in fact, are
sanctions for construction for 15 rehabilitation buildings and
started construction of two rehabilitation buildings nos. 5
and 6. Susme’s proposal for conversion of SRD Scheme to
SRA Scheme was approved in January, 1998 and fresh letter
of intent was issued in favour of Susme on 27.01.1998.
During this period, two rehabilitation buildings were
constructed but nothing further was done. There is virtually
no explanation as to why the remaining rehabilitation
buildings were not constructed during this period except to
65
state that fresh plans were never approved. It is more than
obvious from the facts narrated above that Susme never
earnestly pursued the authorities for approval of the plans
and the reason is not far to seek – the reason being Susme
did not have consent/agreements of 70% slum dwellers. It is
more than obvious that Susme was buying time on one
excuse or the other. On 18.01.2000, the SRA called upon the
appellant to submit revised plans in respect of rehabilitation
buildings within 10 days of the receipt of the letter. In reply
thereto, the architects of Susme sent a letter on 27.01.2000
expressing their intention to start Phase II of the project but,
at the same time, sought waiver of the requirement of
obtaining 70% consent from the slum dwellers. This clearly
shows that Susme was using this excuse to delay the
construction. On 05.01.2001, Susme addressed a letter to
the SRA praying that the plan submitted in 1997 be
approved. Thereafter, the SRA did not consider Susme’s
proposal since, according to the SRA, the proposal was
affected by the Coastal Regulations Zone (CRZ) Notification.
66
72. On 07.07.2001, Susme and the Society filed Writ
Petition No. 2269 of 2001, in the Bombay High Court seeking
removal of the remarks which indicated that part of the
property of the Society was being affected by the CRZ
Notification. A perusal of the writ petition and the other
documents clearly shows that the entire property was not
affected by the CRZ Notification, but only a part thereof. On
07.08.2002, in the petition filed by Susme and the Society,
the Bombay High Court passed an order, relevant portion of
which reads as follows:
“Prima facie, having perused the affidavit of Dr. Munshil
Gautam filed before this Court on 24th June, 2002 and the
documents annexed thereto it does appear that the
property in question is affected by CRZ regulations.
Respondent No. 2 and 3 have already placed Coastal Zone
remark which is of course impugned in the present
petition but until the petitioners are granted relief as
prayed, the petitioners cannot raise any construction in
the area which is covered by CRZ regulation. We
accordingly observe that during the pendency of petition
the petitioners shall not raise any construction in the
property in question which is affected by CRZ regulation.”
73. It is apparent from the aforesaid order that stay was
granted not to raise construction in the area which is covered
by the CRZ Notification. No material has been brought on
67
record to show that the entire plot was covered by the CRZ
Notification and it is amply clear that only a portion of the
plot was covered by the CRZ Notification and nothing
prevented Susme from raising construction on that portion of
the land which was not affected by the CRZ Notification. On
09.05.2005, Susme’s architects sought approval of plans for
transit accommodation. This permission was granted on
18.08.2005, but a condition was laid down that 70%
agreements must be submitted before the existing structures
are demolished. On 14.03.2006, the SRA issued notice to
Susme to stop work on various grounds including nonsubmission
of demarcation from the competent authority
permitting the transit camp to be set up. Thereafter, on
05.09.2006, Susme and the Society entered into another
agreement and on 03.04.2008, respondent no. 1 revoked the
order dated 29.05.2006, after Susme obtained permission
from the State Government allowing the transit camps to
remain. It is apparent that sometime in the year 2005, it was
clarified by the concerned authorities that Susme’s
construction was not affected by the CRZ Notification. It is
68
obvious that only a portion of the land was affected by the
CRZ Notification and nothing prevented Susme from
constructing the buildings which were to be constructed on
land not falling within the CRZ Notification. However for
reasons known only to Susme, it withdrew the Writ Petition
No.2269 of 2001 only on 07.04.2008. It was only thereafter
that respondent no. 3-Society passed a resolution on
29.03.2009, terminating the development agreement with
Susme. Even after that, the SRA on 15.06.2009 issued a
letter that the Society’s request for change of developer need
not be considered. On 14.09.2009, the Society entered into
agreement with respondent no. 4 - J.G. Developers Pvt. Ltd..
Thereafter, civil litigation started. It has also been urged on
behalf of Susme that, in the meantime, a one man
Commission was constituted and due to the constitution of
this Commission, work was affected.
74. After going through all the material placed on record, we
are clearly of the view that the finding given by the SRA that
the appellant was responsible for the delay, is a finding based
69
on appreciation of material on record. It cannot be said to be
a perverse finding. It is a finding of fact and, therefore, the
Bombay High Court was justified in coming to the conclusion
that it could not set aside this finding of fact in writ
jurisdiction. We may, however, add that since lengthy
arguments were addressed, we have ourselves gone through
the various documents and though there may have been a few
stop orders and a few occasions when Susme may not have
been able to raise the construction but, by and large, Susme
was itself guilty of delaying the construction for no reason at
all. We, therefore, hold that Susme was rightly held
responsible for the delay in implementation of the
rehabilitation scheme and, as such, we find no error in the
impugned order.
WHETHER SUSME IS ENTITLED TO CONTINUE WITH THE
SCHEME:
75. With regard to the issue whether the appellant is entitled
to continue with the Scheme; in view of the findings given
above, we are clearly of the view that Susme is not entitled to
70
continue with the rehabilitation Scheme on account of the
fact that it has been responsible for the delay in completion of
the project for an inordinately long time. Susme has not been
able to explain the delay. We are dealing with slum dwellers
and Susme cannot take the benefit of technical points to
defeat the rights of the slum dwellers. The claim of Susme
that it had the support of 70% slum dwellers, was contested
before Justice Srikrishna and his findings clearly reveal that
Susme does not have the support of 70% of the slum
dwellers. We are of the view, that since the notice by the SRA
to Susme did not make any specific allegation with regard to
Susme not having 70% consent, that portion of the order of
the SRA, setting aside the right to develop the land on the
ground of lack of 70% consent, may have been beyond the
scope of the notice. However, this issue was argued before
the HPC and the High Court and on rival claims being made,
this Court vide order dated 27.03.2015, referred this dispute
to Justice Srikrishna, who has submitted his report.
71
76. In writ proceedings, the petitioner must show that both
in law and in equity it is entitled to relief. In this case, both
equity and law are against Susme. It has dealt with slum
dwellers in a highly inequitable manner. The law and the
conditions of the letter of intent as well as the conditions
imposed in the various letters issued by the SRA clearly
required Susme to produce agreements with at least 70% of
the slum dwellers. This, Susme has miserably failed to do.
We may also add that though Susme may have remained the
same entity in name, there have been, at least, three changes
in the promoters of Susme and these transfers of
shareholdings obviously must have been done for
consideration. It is more than obvious that Susme, as a legal
entity, was treating the slum dwellers only as a means of
making money and, therefore, we are clearly of the view that
Susme is not entitled to any relief.
72
IN CASE SUSME IS NOT ENTITLED TO CONTINUE WITH
THE SCHEME WHETHER RESPONDENT NO. 4 J.G.
DEVELOPERS IS ENTITLED TO CONTINUE WITH THE
REHABILITATION SCHEME:
77. The next issue is whether J.G. Developers is entitled to
any relief and can be permitted to continue with the
rehabilitation scheme. In this behalf, we may note that the
conduct of J.G. Developers is not above board. It is more
than obvious that when respondent no. 3-Society entered into
a development agreement with respondent no. 4, the
members were given a false hope and dream that the size of
their flats would go up.
78. Under the terms of this agreement, J.G. Developers
agreed to provide permanent alternative accommodation of
344 sq. ft./419 sq. ft. carpet area to the slum dwellers. J.G.
Developers also entered into individual agreements and under
these agreements, it agreed to provide 344 sq. ft./419 sq. ft.
carpet area to some residents. It is obvious that a false
promise was held out by J.G. Developers that the carpet area
73
of the flat would be increased from 269 sq. ft. to 344 sq.
ft./419 sq. ft.. Obviously, the slum dwellers, who had been
waiting for 23 long years for a flat admeasuring 269 sq. ft.
would happily accept the offer of a flat of 344/419 sq. ft..
79. From the communications addressed by the SRA, it is
obvious that J.G. Developers was legally not entitled to make
this offer. It is submitted by Shri Gopal Subramanium,
learned senior counsel that J.G. Developers was willing to
sacrifice its free sale area to give a larger flat. However, he
has failed to submit even one document to show that the SRA
had agreed to this proposal of the J.G. Developers. In fact,
the communication sent by SRA clearly shows that the
proposal was not accepted. It is, therefore, obvious that J.G.
Developers had hoodwinked the members of the Society in
entering into an agreement with it by holding out a false
promise that they would be given much larger flats. As such,
we are unable to accept the request of respondent no. 4- M/s.
J.G. Developers, to be permitted to continue with the project.
We may also note that the Society has terminated its
74
agreement with the J.G. Developers. We are not going into
the question whether this has been done rightly or wrongly,
but the fact is that the agreement stands terminated. We may
also note that in the voting conducted by Justice Srikrishna,
J.G. Developers failed to get the consent of 70% slum dwellers
and, in fact, it has got less than 1/2 of the votes, as compared
to Susme, and its support is even less than 30%.
80. It was urged before us that agreements once entered into
and the consent once given, cannot be withdrawn. We are
totally in agreement with the same. However, if the consent is
obtained by misrepresentation of facts, then that is no
consent. Now, when the position stands clarified that the
slum dwellers would get flats of 269 sq. ft. area only, J.G.
Developers has failed to get support of even 30% of the
slum dwellers.
81. In view of the above discussion, we are clearly of the
view that J.G. Developers is not entitled to continue with the
project and is not entitled to any relief.
75
LAW LAID DOWN BY THE BOMBAY HIGH COURT:
82. Our attention was drawn to various judgments of the
Bombay High Court that consent once given by the slum
dwellers should not be permitted to be withdrawn. It was also
brought to our notice that the Bombay High Court has
consistently held that voting inter se developers should not be
done. It has been the consistent view of the Bombay High
Court that in case voting is done, then this will lead to
developers trying to buy out the slum dwellers and then no
rehabilitation scheme would attain fruition. We totally agree
with the aforesaid views of the Bombay High Court. We must
remember that slum dwellers normally belong to the poorest
section of the society. They can be tempted to change their
mind. In the present case itself, the slum dwellers shifted
from Susme to J.G. Developers for two reasons – (i) Susme
had delayed the project and (ii) J.G. Developers made a
promise that it would give a flat of 344 sq. ft./419 sq. ft. area,
which promise was obviously a false promise. The view of the
Bombay High Court that consent once given should not be
76
permitted to be withdrawn, is absolutely the right view.
Otherwise, a person may give consent one day, withdraw it
the second day and review the consent the third day, leaving
the Scheme in a perpetual state of flux. For the aforesaid
reasons, we agree with the Bombay High Court that there
should be no inter se bidding between the builders. The
proper course is that the scheme of the developer who is the
first choice, should be placed before the slum dwellers and if
it gets 70% votes, then the Scheme can be considered, but if it
does not get 70% consent, then obviously, the second
developer can be considered. However, competitive bidding
should not be done because that can lead to a very unholy
practice of developers trying to buy out the slum dwellers,
which is also not in the interest of the rehabilitation scheme.
83. As far as the present case is concerned, this Court while
passing the order dated 27.03.2015, made a departure
because of the peculiar facts of this case. The present case
because of its own unique facts cannot be treated as a
77
precedent in other cases with regard to action taken in
this case.
CONCLUSION:
84. In view of the above discussion, we arrive at the
following conclusions:
1.That the order dated 27.03.2015 was passed in
exercise of jurisdiction vested in this Court under
Article 142 of the Constitution of India and is an order
binding on the parties;
2.That vide order dated 27.03.2015, this Court wanted
Justice B.N.Srikrishna to find out whether Susme or
J.G. Developers had the consent of 70% slum dwellers;
3.That, as a result of the Report submitted by Justice
B.N. Srikrishna, both Susme and J.G. Developers have
failed to show that they enjoyed support of the 70% of
the slum dwellers;
4.That, in the peculiar facts and circumstances of this
case, where the owners and occupiers are virtually
78
one, the SRA had the jurisdiction to invoke the
provisions of Section 13(2) of the Slum Act to revoke
and set aside the right to develop and cancel the letter
of intent granted in favour of Susme. Even if it be
assumed that Section 13(2) is not applicable, then the
SRA could have exercised this power under Section 3A
(3)(c) and (d) of Slum Act.
5.That the notice issued by the SRA to Susme was only
on the ground of delay and the issue of obtaining 70%
consent was not specifically raised in the notice.
Consequently, the order dated 24.02.2012 passed by
the SRA in so far as it rejects the case of Susme for
lack of 70% consent is beyond the terms of the notice.
Therefore, this part of the judgment of the Bombay
High Court, holding that Susme was aware about this
allegation, is not accepted and is set aside;
6.That, Susme was responsible for the delay in
implementation of the Scheme and construction of the
buildings and, therefore, the SRA was justified in
setting aside the appointment of Susme as developer
79
and impliedly cancelling the letter of intent issued in
its favour vide order dated 24.02.2012;
7.That, Susme has failed to show that it has the
consent/agreements of 70% of the slum dwellers even
today and, therefore, is not entitled to any relief from
this Court; and
8.That J.G. Developers obtained the consent of the
members of the Society by holding out a false promise
of a larger flat and, therefore, the agreements entered
into by J.G. Developers with the slum dwellers are
legally unconscionable and not enforceable and, as
such, J.G. Developers is also not entitled to continue
with the Scheme.
RELIEF:
85. This, as pointed out earlier, is a very unusual case. We
have held that both the contesting developers are not entitled
to any relief. It is our duty to ensure that these owners who
also happen to be slum dwellers do not live in sub-human
conditions for eternity.
80
86. We are not only disappointed with the conduct of
Susme, but also with the conduct of those persons who were
the office-bearers of the Society whichever faction they may
belong to. It is more than obvious that the two rival
developers and the office-bearers of the Society were playing
with the lives of large number of slum dwellers. We are not
going into this issue in detail but, if we were to carefully
examine the various agreements entered into by Susme with
the Society, we find that though the members may have been
entitled to larger flat in each subsequent agreement but, in
fact, it was the builder, who was the biggest gainer as the
advantage of higher FSI was cornered by the builder. Only a
small portion of this advantage was being transferred to the
slum dwellers and a large portion was being retained by the
builder. Another important aspect is that, in this case, it is
the occupiers who, through the Society, are also the owners of
the land. In our view, in addition to the flats which they
would be entitled to as slum dwellers or occupiers or
encroachers of land, they should have been given some
81
benefits as owners of the land. When a slum, owned by any
authority or person, is handed over to the developer, in
addition to rehabilitating the slum dwellers, the developer
also has to compensate the owner. We see no reason why, in
the present case, the slum dwellers, who are the owners,
should also not be given some adequate compensation for the
land which they own. It is these 800 plus slum dwellers, who
own this 23018.50 sq. mtrs. of land, which would be valuing
thousands of crores of rupees and, therefore, we see no
reason why the slum dwellers, who also happen to be the
owners of the land, should also not be compensated for the
price of the land.
87. This is a case where the earlier Bench of this Court had
invoked its power under Article 142 of the Constitution of
India and we also feel that it is a fit case for invocation of this
Court’s jurisdiction under Article 142 of the Constitution of
India. Hence, in exercise of this Court’s power under Article
142 of the Constitution of India, we issue the following
directions/orders for doing complete justice:
82
1. That the SRA shall within three weeks of the receipt of
this order, invite letters of interest from renowned
builders/developers, who have the capacity and
experience to take up such a large project by issuing
advertisements in not less than three newspapers
having wide circulation in Mumbai, one each in
English, Hindi and Marathi;
2. The advertisement may be brief but all necessary
details must be incorporated in the advertisement.
The details of the project including a copy of this
judgment should be made available on the website of
the SRA;
3. After the letters of interest are submitted, the SRA
shall consider which is the best offer and while
considering the best offer, it shall ensure that the
terms offered to the occupiers are in no manner
disadvantageous to them when compared to the last
offer made by Susme in regard to the area of flat
offered, the nature of construction and other facilities
available on the site. The SRA must, while evaluating
83
the proposals, take into consideration the past record
of the party/person expressing interest: it shall also
take into consideration the financial viability of such
party/person and, therefore, it may ask such
party/person to submit all the documents to support
their financial viability. In case of any doubt, the SRA
can move appropriate application before this Court;
4. The persons who express interest must be willing to
give an assurance that they will submit plans within
one month of the approval of their proposal and all the
concerned authorities must, within 15 days thereafter,
raise objections, if any, giving the successful bidder a
chance to remove the objections, if any, within one
month thereafter;
5. Thereafter, the concerned authorities should ensure
that the plans are approved and sanctions granted
latest within two months of the submission of the
original plans. The successful developer should
undertake to complete the rehabilitation of part of the
project to rehabilitate all eligible occupiers/slum
84
dwellers within a period of two years from the date of
sanction of the plan. The successful bidder must give
a bank guarantee of Rs. 200,00,00,000/- (Rupees Two
Hundred crores only) to ensure that it does not violate
the terms and conditions of the rehabilitation scheme.
In case of violation of the terms and conditions of the
rehabilitation scheme without reasonable cause, the
SRA will be entitled to invoke the bank guarantee,
after giving notice to the developer;
6. Keeping in view the fact that the slum dwellers are
also the owners, the developers may also indicate what
benefit they will give to the members of the Society
either in cash or in kind by means of giving additional
built up area out of their own free sale area to such
members of the Society;
7. The SRA shall monitor the progress of the Scheme to
ensure that it is completed within the time granted by
this Court;
85
8. No Court or authority shall pass any order which will
in any manner affect the implementation of the
directions/orders issued by us;
9. The Society, its members, the SRA and all concerned
will render complete assistance to the
builder/developer, who is awarded the project by the
SRA; and
10. That all pending litigation shall be disposed of in view
of the aforesaid orders passed by us and shall be
disposed of by the Court(s) accordingly.
88. We may also point out that vide order dated 12.10.2017
this Court directed that elections to respondent no. 3-Society
be conducted on or before 31.12.2017. These elections
were held on 17.12.2017 and a new Managing Committee was
constituted. This Managing Committee held its first meeting
on 31.12.2017 and has filed an affidavit on 03.01.2018
praying that the mandate recorded in the Report of Justice
B.N. Srikrishna be implemented. It has also referred to the
proposed amendment to the DCR whereby the requirement
86
for consent is being reduced from 70% to 50%. We have
taken this affidavit on record. It does not in any manner
affect the view which we have taken.
89. Pending application(s), if any, stand(s) disposed of.
90. The SRA to file status report by 31.03.2018. List on
09.04.2018.
..………………………J.
(Madan B. Lokur)
..………………………J.
(Deepak Gupta)
New Delhi
January 04, 2018

six months waiting period for consent Divorce is not mandatory = whether the minimum period of six months stipulated under Section 13B(2) of the Hindu Marriage Act, 1955 (the Act) for a motion for passing decree of divorce on the basis of mutual consent is mandatory or can be relaxed in any exceptional situations = where the Court dealing with a matter is 12 satisfied that a case is made out to waive the statutory period under Section 13B(2), it can do so after considering the following : i) the statutory period of six months specified in Section 13B(2), in addition to the statutory period of one year under Section 13B(1) of separation of parties is already over before the first motion itself; ii) all efforts for mediation/conciliation including efforts in terms of Order XXXIIA Rule 3 CPC/Section 23(2) of the Act/Section 9 of the Family Courts Act to reunite the parties have failed and there is no likelihood of success in that direction by any further efforts; iii) the parties have genuinely settled their differences including alimony, custody of child or any other pending issues between the parties; iv) the waiting period will only prolong their agony. 19. The waiver application can be filed one week after the first motion giving reasons for the prayer for waiver. 13 20. If the above conditions are satisfied, the waiver of the waiting period for the second motion will be in the discretion of the concerned Court.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 11158 OF 2017
(Arising out of Special Leave Petition (Civil)No. 20184 of 2017)
Amardeep Singh …Appellant
Versus
Harveen Kaur …Respondent
J U D G M E N T
ADARSH KUMAR GOEL, J.
1. The question which arises for consideration in this appeal is
whether the minimum period of six months stipulated under
Section 13B(2) of the Hindu Marriage Act, 1955 (the Act) for a
motion for passing decree of divorce on the basis of mutual
consent is mandatory or can be relaxed in any exceptional
situations.
1
2. Factual matrix giving rise to this appeal is that marriage
between the parties took place on 16th January, 1994 at Delhi.
Two children were born in 1995 and 2003 respectively. Since
2008 the parties are living separately. Disputes between the
parties gave rise to civil and criminal proceedings. Finally, on 28th
April, 2017 a settlement was arrived at to resolve all the disputes
and seeks divorce by mutual consent. The respondent wife is to
be given permanent alimony of Rs.2.75 crores. Accordingly, HMA
No. 1059 of 2017 was filed before the Family Court (West), Tis
Hazari Court, New Delhi and on 8th May, 2017 statements of the
parties were recorded. The appellant husband has also handed
over two cheques of Rs.50,00,000/-, which have been duly
honoured, towards part payment of permanent alimony. Custody
of the children is to be with the appellant. They have sought
waiver of the period of six months for the second motion on the
ground that they have been living separately for the last more
than eight years and there is no possibility of their re union. Any
delay will affect the chances of their resettlement. The parties
have moved this Court on the ground that only this Court can
relax the six months period as per decisions of this Court.
2
3. Reliance has been placed inter alia on decision of this Court
in Nikhil Kumar vs. Rupali Kumar1 wherein the statutory
period of six months was waived by this Court under Article 142
of the Constitution and the marriage was dissolved.
The text of Section 13B is as follows:
“13-B. Divorce by mutual consent.— (1) Subject to the
provisions of this Act a petition for dissolution of marriage by
a decree of divorce may be presented to the district court by
both the parties to a marriage together, whether such
marriage was solemnized before or after the
commencement of the Marriage Laws (Amendment) Act,
1976, on the ground that they have been living separately
for a period of one year or more, that they have not been
able to live together and that they have mutually agreed
that the marriage should be dissolved.
(2) On the motion of both the parties made not earlier than
six months after the date of the presentation of the petition
referred to in sub-section (1) and not later than eighteen
months after the said date, if the petition is not withdrawn in
the meantime, the court shall, on being satisfied, after
hearing the parties and after making such inquiry as it
thinks fit, that a marriage has been solemnized and that the
averments in the petition are true, pass a decree of divorce
declaring the marriage to be dissolved with effect from the
date of the decree.”
4. There is conflict of decisions of this Court on the question
whether exercise of power under Article 142 to waive the
statutory period under Section 13B of the Act was appropriate. In
1 (2016) 13 SCC 383
3
Manish Goel versus Rohini Goel2
, a Bench of two-Judges of
this Court held that jurisdiction of this Court under Article 142
could not be used to waive the statutory period of six months for
filing the second motion under Section 13B, as doing so will be
passing an order in contravention of a statutory provision. It was
observed :
“14. Generally, no court has competence to issue a
direction contrary to law nor can the court direct an
authority to act in contravention of the statutory provisions.
The courts are meant to enforce the rule of law and not to
pass the orders or directions which are contrary to what has
been injected by law. (Vide State of Punjab v. Renuka
Singla[(1994) 1 SCC 175], State of U.P. v. Harish Chandra
[(1996) 9 SCC 309], Union of India v. Kirloskar Pneumatic Co.
Ltd. [(1996) 4 SCC 453], University of Allahabad v. Dr. Anand
Prakash Mishra [(1997) 10 SCC 264] and Karnataka SRTC v.
Ashrafulla Khan [(2002) 2 SC 560]
15. A Constitution Bench of this Court in Prem Chand Garg
v. Excise Commr.[AIR 1963 SCC 996] held as under: (AIR p.
1002, para 12)
“12. … An order which this Court can make in order to do
complete justice between the parties, must not only be
consistent with the fundamental rights guaranteed by the
Constitution, but it cannot even be inconsistent with the
substantive provisions of the relevant statutory laws.”
(emphasis supplied)
The Constitution Benches of this Court in Supreme Court Bar
Assn. v. Union of India [(1998) 4 SCC 409] and E.S.P.
Rajaram v. Union of India [(2001) 2 SCC 186] held that under
Article 142 of the Constitution, this Court cannot altogether
ignore the substantive provisions of a statute and pass
orders concerning an issue which can be settled only
2 (2010) 4 SCC 393
4
through a mechanism prescribed in another statute. It is not
to be exercised in a case where there is no basis in law
which can form an edifice for building up a superstructure.”
5. This Court noted that power under Article 142 had been
exercised in cases where the Court found the marriage to be
totally unworkable, emotionally dead, beyond salvage and broken
down irretrievably. This power was also exercised to put quietus
to all litigations and to save the parties from further agony3
. This
view was reiterated in Poonam versus Sumit Tanwar4
.
6. In Neeti Malviya versus Rakesh Malviya5
, this Court
observed that there was conflict of decisions in Manish Goel
(supra) and Anjana Kishore versus Puneet Kishore6
. The
matter was referred to bench of three-Judges. However, since the
matter became infructuous on account of grant of divorce in the
meanwhile7
.
3 Para 11 ibid, noting earlier decisions in Romesh Chander v. Savitri (1995)
2 SCC 7; Kanchan Devi v. Promod Kumar Mittal (1996) 8 SCC 90; Anita Sabharwal
v. Anil Sabharwal (1997) 11 SCC 490; Ashok Hurra v. Rupa Bipin Zaveri (1997) 4
SCC 226; Kiran v. Sharad Dutt (2000)10 SCC 243; Swati Verma v. Rajan Verma
(2004) 1 SCC 123; Harpit Singh Anand v. State of W.B. (2004) 10 SCC 505; Jimmy
Sudarshan Purohit v. Sudarshan Sharad Purohit (2005) 13 SCC 410; Durga
Prasanna Tripathy v. Arundhati Tripathy (2005) 7 SCC 353; Naveen Kohli v. Neelu
Kohli (2006) 4 SCC 558; Sanghamitra Ghosh v. Kajal Kumar Ghosh (2007) 2 SCC 220;
Rishikesh Sharma v. Saroj Sharma (2007) 2 SCC 263; Samar Ghosh v. Jaya Ghosh
(2007) 4 SCC 511 and Satish Sitole v. Ganga (2008) 7 SCC 734
4 (2010) 4 SCC 460
5 (2010) 6 SCC 413
6 (2002) 10 SCC 194
7 Order dated 23rd August, 2011 in Transfer Petition (Civil)No. 899 of 2007
5
7. Without any reference to the judgment in Manish Goel
(supra), power under Article 142 of the Constitution has been
exercised by this Court in number of cases8
 even after the said
judgment.
8. We find that in Anjana Kishore (supra), this Court was
dealing with a transfer petition and the parties reached a
settlement. This Court waived the six months period under Article
142 in the facts and circumstances of the case. In Anil Kumar
Jain versus Maya Jain9
, one of the parties withdrew the consent.
This Court held that marriage had irretrievably broken down and
though the civil courts and the High Court could not exercise
power contrary to the statutory provisions, this Court under
Article 142 could exercise such power in the interests of justice.
Accordingly the decree for divorce was granted.
8 Priyanka Singh v. Jayant Singh(2010) 15 SCC 390; Sarita Singh v.
Rajeshwar Singh (2010) 15 SCC 374; Harpreet Singh Popli v. Manmeet Kaur Pople
(2010) 15 SCC 316; Hitesh Bhatnagar v. Deepa Bhatnagar (2011) 5 SCC 234; Veena v.
State (Govt of NCT of Delhi) (2011) 14 SCC 614; Priyanka Khanna v. Amit Khanna
(2011) 15 SCC 612; Devinder Singh Narula v. Meenakshi Nangia (2012) 8 SCC 580;
Vimi Vinod Chopra v. Vinod Gulshan Chpra (2013) 15 SCC 547; Priyanka Chawla v.
Amit Chawla (2016) 3 SCC 126; Nikhil Kumar v. Rupali Kumar (2016) 13 SCC 383
9 (2009) 10 SCC 415
6
9. After considering the above decisions, we are of the view
that since Manish Goel (supra) holds the field, in absence of
contrary decisions by a larger Bench, power under Article 142 of
the Constitution cannot be exercised contrary to the statutory
provisions, especially when no proceedings are pending before
this Court and this Court is approached only for the purpose of
waiver of the statute.
10. However, we find that the question whether Section 13B(2)
is to be read as mandatory or discretionary needs to be gone into.
In Manish Goel (supra), this question was not gone into as it
was not raised. This Court observed :
“23. The learned counsel for the petitioner is not able to
advance arguments on the issue as to whether, statutory
period prescribed under Section 13-B(1) of the Act is
mandatory or directory and if directory, whether could be
dispensed with even by the High Court in exercise of its
writ/appellate jurisdiction.”
11. Accordingly, vide order dated 18th August, 2017, we passed
the following order :
“List the matter on 23rd August, 2017 to consider the question
whether provision of Section 13B of the Hindu Marriage, Act,
1955 laying down cooling off period of six months is a
mandatory requirement or it is open to the Family Court to
7
waive the same having regard to the interest of justice in an
individual case.
Mr. K.V. Vishwanathan, senior counsel is appointed as Amicus
to assist the Court. Registry to furnish copy of necessary
papers to learned Amicus”.
12. Accordingly, learned amicus curiae has assisted the Court.
We record our gratitude for the valuable assistance rendered by
learned amicus who has been ably assisted by S/Shri Abhishek
Kaushik, Vrinda Bhandari and Mukunda Rao Angara, Advocates.
13. Learned amicus submitted that waiting period enshrined
under Section 13(B)2 of the Act is directory and can be waived by
the court where proceedings are pending, in exceptional
situations. This view is supported by judgments of the Andhra
Pradesh High Court in K. Omprakash vs. K. Nalini10
,
Karnataka High Court in Roopa Reddy vs. Prabhakar
Reddy11
, Delhi High Court in Dhanjit Vadra vs. Smt. Beena
Vadra12 and Madhya Pradesh High Court in Dinesh Kumar
Shukla vs. Smt. Neeta13
. Contrary view has been taken by
Kerala High Court in M. Krishna Preetha vs. Dr. Jayan
10 AIR 1986 AP 167 (DB)
11 AIR 1994 Kar 12 (DB)
12 AIR 1990 Del 146
13 AIR 2005 MP 106 (DB)
8
Moorkkanatt14
. It was submitted that Section 13B(1) relates to
jurisdiction of the Court and the petition is maintainable only if
the parties are living separately for a period of one year or more
and if they have not been able to live together and have agreed
that the marriage be dissolved. Section 13B(2) is procedural. He
submitted that the discretion to waive the period is a guided
discretion by consideration of interest of justice where there is no
chance of reconciliation and parties were already separated for a
longer period or contesting proceedings for a period longer than
the period mentioned in Section 13B(2). Thus, the Court should
consider the questions:
i) How long parties have been married?
ii) How long litigation is pending?
iii) How long they have been staying apart?
iv) Are there any other proceedings between the
parties?
v) Have the parties attended mediation/conciliation?
vi) Have the parties arrived at genuine settlement
which takes care of alimony, custody of child or
any other pending issues between the parties?
14 AIR 2010 Ker 157
9
14. The Court must be satisfied that the parties were living
separately for more than the statutory period and all efforts at
mediation and reconciliation have been tried and have failed and
there is no chance of reconciliation and further waiting period will
only prolong their agony.
15. We have given due consideration to the issue involved.
Under the traditional Hindu Law, as it stood prior to the statutory
law on the point, marriage is a sacrament and cannot be
dissolved by consent. The Act enabled the court to dissolve
marriage on statutory grounds. By way of amendment in the year
1976, the concept of divorce by mutual consent was introduced.
However, Section 13B(2) contains a bar to divorce being granted
before six months of time elapsing after filing of the divorce
petition by mutual consent. The said period was laid down to
enable the parties to have a rethink so that the court grants
divorce by mutual consent only if there is no chance for
reconciliation.
16. The object of the provision is to enable the parties to
dissolve a marriage by consent if the marriage has irretrievably
10
broken down and to enable them to rehabilitate them as per
available options. The amendment was inspired by the thought
that forcible perpetuation of status of matrimony between
unwilling partners did not serve any purpose. The object of the
cooling off the period was to safeguard against a hurried decision
if there was otherwise possibility of differences being reconciled.
The object was not to perpetuate a purposeless marriage or to
prolong the agony of the parties when there was no chance of
reconciliation. Though every effort has to be made to save a
marriage, if there are no chances of reunion and there are
chances of fresh rehabilitation, the Court should not be powerless
in enabling the parties to have a better option.
17. In determining the question whether provision is mandatory
or directory, language alone is not always decisive. The Court has
to have the regard to the context, the subject matter and the
object of the provision. This principle, as formulated in Justice G.P.
Singh’s “Principles of Statutory Interpretation” (9
th Edn., 2004),
has been cited with approval in Kailash versus Nanhku and
ors.15as follows:
15 (2005) 4 SCC 480
11
“The study of numerous cases on this topic does not
lead to formulation of any universal rule except this
that language alone most often is not decisive, and
regard must be had to the context, subject-matter and
object of the statutory provision in question, in
determining whether the same is mandatory or
directory. In an oft-quoted passage Lord Campbell
said: ‘No universal rule can be laid down as to whether
mandatory enactments shall be considered directory
only or obligatory with an implied nullification for
disobedience. It is the duty of courts of justice to try to
get at the real intention of the legislature by carefully
attending to the whole scope of the statute to be
considered.’
“ ‘For ascertaining the real intention of the
legislature’, points out Subbarao, J. ‘the court may
consider inter alia, the nature and design of the
statute, and the consequences which would follow
from construing it the one way or the other; the
impact of other provisions whereby the necessity of
complying with the provisions in question is avoided;
the circumstances, namely, that the statute provides
for a contingency of the non-compliance with the
provisions; the fact that the non-compliance with the
provisions is or is not visited by some penalty; the
serious or the trivial consequences, that flow
therefrom; and above all, whether the object of the
legislation will be defeated or furthered’. If object of
the enactment will be defeated by holding the same
directory, it will be construed as mandatory, whereas if
by holding it mandatory serious general
inconvenience will be created to innocent persons
without very much furthering the object of enactment,
the same will be construed as directory.”
18. Applying the above to the present situation, we are of
the view that where the Court dealing with a matter is
12
satisfied that a case is made out to waive the statutory
period under Section 13B(2), it can do so after considering
the following :
i) the statutory period of six months specified in
Section 13B(2), in addition to the statutory period of
one year under Section 13B(1) of separation of
parties is already over before the first motion itself;
ii) all efforts for mediation/conciliation including efforts
in terms of Order XXXIIA Rule 3 CPC/Section 23(2) of
the Act/Section 9 of the Family Courts Act to reunite
the parties have failed and there is no likelihood of
success in that direction by any further efforts;
iii) the parties have genuinely settled their differences
including alimony, custody of child or any other
pending issues between the parties;
iv) the waiting period will only prolong their agony.
19. The waiver application can be filed one week after the
first motion giving reasons for the prayer for waiver.
13
20. If the above conditions are satisfied, the waiver of the
waiting period for the second motion will be in the discretion
of the concerned Court.
21. Since we are of the view that the period mentioned in
Section 13B(2) is not mandatory but directory, it will be
open to the Court to exercise its discretion in the facts and
circumstances of each case where there is no possibility of
parties resuming cohabitation and there are chances of
alternative rehabilitation.
22. Needless to say that in conducting such proceedings
the Court can also use the medium of video conferencing
and also permit genuine representation of the parties
through close relations such as parents or siblings where the
parties are unable to appear in person for any just and valid
reason as may satisfy the Court, to advance the interest of
justice.
14
 23. The parties are now at liberty to move the concerned
court for fresh consideration in the light of this order.
The appeal is disposed of accordingly.
…………………………………..J.
(ADARSH KUMAR GOEL)
…………………………………..J.
(UDAY UMESH LALIT)
NEW DELHI;
SEPTEMBER 12, 2017.
15
ITEM NO.1502 COURT NO.11 SECTION XIV
(For judgment)
 S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 11158/2017
AMARDEEP SINGH Appellant(s)
 VERSUS
HARVEEN KAUR Respondent(s)
Date : 12-09-2017 This appeal was called on for pronouncement of
judgment today.
For Appellant(s) Mr. T. R. B. Sivakumar, AOR
For Respondent(s)
 Hon'ble Mr. Justice Adarsh Kumar Goel pronounced the judgment
of the Bench comprising His Lordship and Hon'ble Mr. Justice Uday
Umesh Lalit.
The appeal is disposed of in terms of the signed reportable
judgment.
 (SWETA DHYANI) (PARVEEN KUMARI PASRICHA)
SENIOR PERSONAL ASSISTANT BRANCH OFFICER
(Signed reportable judgment is placed on the file)
16

WELCOME TO 2018

Wish you all a happy and prosperous New Year. 
God bless you all with great health, wealth and prosperity .
                                                                                                                  with regards
                                                                                                                            yours
                                                                                                                         advocatemmmohan

the appellant was sitting on the mudguard of a tractor and this was not a risk insured by the insurer. Upon this finding, the High Court allowed the appeal of the insurer and rejected the appeal filed by the appellant for enhancement of compensation. = In our view, the monthly income of the appellant, having regard to the facts and circumstances of the case should be taken at Rs.4,000/-. After allowing for future prospects and making a deduction for present expenses, the compensation payable to the appellant shall stand enhanced by an amount of Rs.1,50,000/- from Rs.5,75,000/- to Rs.7,75,000/-. The amount for future medical expenses which has been fixed at Rs.30,000/- should be enhanced to Rs.1,20,000/- having regard to the serious nature of the disability. In other words, the compensation of Rs.8,66,000/- awarded by the Tribunal shall be enhanced by an additional amount of Rs.2,70,000/-. The appellant shall be entitled to interest @7% p.a. from the date of the claim petition until realization. The insurer shall deposit the compensation or, as the case may be, the balance payable in terms of this judgment within a period of 12 weeks from today before the Tribunal which shall be released to the appellant upon due verification.

1
REPORTABLE
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NOS 022911-022912 OF 2017
(Arising out of SLP (C ) Nos 6891-6892 of 2017)
HALAPPA ..... APPELLANT
Versus
MALIK SAB ..... RESPONDENT

J U D G M E N T
Dr D Y CHANDRACHUD, J
1 The High Court of Karnataka by a judgment dated 12 July 2011 reversed a
decision of the Motor Accident Claims Tribunal awarding compensation to the
appellant in the amount of Rs.8,66,000/- with interest @ 7% per annum. While
reversing the award of compensation, the High Court has come to the conclusion
that the appellant was sitting on the mudguard of a tractor and this was not a risk
2
insured by the insurer. Upon this finding, the High Court allowed the appeal of
the insurer and rejected the appeal filed by the appellant for enhancement of
compensation.
2 The accident took place on 24 September 2005. The appellant was 28
years old at the time of the accident. The case of the appellant is that on 24
September 2005 he was visiting Sirigere to attend an event. A demonstration of
tractors was being held at 11.30 A.M. by Sonalika tractors. The appellant, who is
an agriculturist, claimed that when he approached the tractor, the driver was
unable to bring it to a halt as a result of which it turned turtle and collided with the
appellant resulting in his sustaining grievous injuries. A first information report
was registered at the Bharamasagara Police Station under Case Crime 147 of
2005 and a charge-sheet was filed against the driver for offences punishable
under Sections 279 and 338 of the Penal Code.
3 The appellant claimed compensation in the amount of Rs.25,00,000/-. The
appellant was examined as PW 1 in support of his claim. PW 2 Dr Jayaprakash
was examined to prove the nature of the injuries sustained by the appellant. The
evidence indicated that immediately after the accident the appellant was taken
for treatment to the community health centre, Sirigere where he was
administered first aid. He was thereafter shifted to Bapuji Hospital, Davangere
from where he was referred to the M S Ramayya Hospital, Bangalore for further
3
treatment. The medical records showed that the appellant had suffered
paraplegia with a compression fracture. The appellant has been permanently
immobilized, is wheel-chair bound, and requires artificial support for bladder and
bowel evacuation. The lower portion of his body has been paralyzed. Dr
Jayaprakash, PW 2, deposed in evidence that the disability of the appellant is
one hundred per cent since both his lower limbs have been paralyzed resulting in
a loss of bladder and bowel control.
4 Before the Tribunal the defence of the insurer was that the appellant was
riding on the mudguard of the tractor, this having been stated in the FIR.
According to the insurer, the policy of insurance did not cover the risk of anyone
other than the driver of the tractor. The Tribunal rejected the defence of the
insurer and relied upon the testimony of the appellant which was found to have
been corroborated by the evidence of PW 3, an eye-witness to the incident. On
the aspect of compensation the Tribunal noted that the appellant belongs to a
family of agriculturists which has a land holding of 5 acres and 25 gunthas. The
appellant was married. The Tribunal did not accept the plea of the appellant that
his monthly income was Rs.10,000/-, in the absence of cogent proof. The
Tribunal assumed the income of the appellant to be Rs.3,000/- per month. The
age of the appellant at the time of the accident being 28 years, the Tribunal
applied a multiplier of 16 and computed the compensation on account of the loss
of future earning capacity at Rs.5,76,000/-. An additional amount of Rs.50,000/-
4
was awarded towards loss of amenities and Rs.30,000/- for future medical
expenses. An amount of Rs.2,10,000/- was awarded towards medical expenses,
pain and suffering. Consequently, a total compensation of Rs.8,66,000/- was
awarded together with interest at 7% per annum from the date of the claim
petition until realization. The driver, owner and insurer have been held to be
jointly and severally liable.
5 The appellant filed an appeal for enhancement of compensation. The
insurer had also filed an appeal questioning its liability. The High Court has
allowed the appeal of the insurer and dismissed the appeal filed by the appellant.
The High Court held that in the first information report which was registered on
the date of the accident on the basis of the statement of the appellant, it was
stated that the appellant was sitting on the mud-guard next to the driver of the
tractor. Subsequently on 30 September 2005 another statement was recorded
by the police in which the appellant stated that the accident had taken place as a
result of the rash and negligent act of the tractor driver, due to which the tractor
had turned turtle and fallen over the appellant. In the view of the High Court, the
police had attempted to protect the liability of the owner and had recorded a
further statement to support the plea that the appellant was a third party and that
the tractor had fallen upon him. The High Court has also doubted as to how the
police could have recorded the statement of the appellant on 30 September 2005
when he was shifted to M S Ramayya Hospital in Bangalore.
5
6 Learned counsel appearing on behalf of the appellant submits that the
High Court has manifestly erred in reversing the considered judgment of the
Tribunal. The appellant urged that the finding of fact recorded by the Tribunal on
the basis of substantive evidence could not have been reversed purely on the
basis of the FIR. Moreover, it was urged that the insurer had not produced any
ocular evidence to displace what was stated by the appellant in the course of his
deposition and which was supported by PW 3 who had witnesses the accident.
7 On the other hand, the learned counsel appearing on behalf of the insurer
has supported the judgment of the High Court and urged that the finding that the
appellant was injured while riding on the mud-guard of the tractor is correct.
Consequently it was urged that the insurance policy which was issued to the
owner did not cover the risk arising from a third party riding on the tractor and
there was hence a breach of the insurance policy.
8 The judgment of the Tribunal indicates that the defence of the insurer
based on the first information report, the complaint Exh.P1 and the
supplementary statement of the appellant at Exh.P2 was duly evaluated. The
Tribunal, however, observed thus:
“…the respondent no.3 and RW.1 submitted that the petitioner has
invited the alleged unfortunate accident but except the FIR and complaint
Ex.P.1 the respondent no.3 has not produced any documents to show
that at the time of accident the petitioner was travelling as a passenger
by sitting on the engine of the tractor in question. During the course of
cross-examination RW.1 has admitted that the respondent no.3 has
6
maintained a separate file in respect of accident in question and he has
also admitted that the respondent no.3 has not produced the
investigator’s report of this case. Admittedly the respondent no.3 has not
examined any independent eye witness to the accident to prove that on
the relevant date and time of the accident the petitioner was travelling as
a passenger by sitting on the engine of the tractor. If really the petitioner
has sustained grievous injuries by falling down from the engine of said
tractor the respondent no.3 insurer could have produced the separate file
maintained by it in respect of the accident in question and it could have
also produced investigator’s report in respect of the said accident but
admittedly the respondent no.3 has not produced the said separate file
and investigator’s report in respect of the accident in question for the
reasons best known to it. On the other hand as already stated above it is
clear from the statement of petitioner on oath and eye witness and from
the supplementary statement of petitioner at Ex.P.2 and police statement
of witnesses at Ex.P.3 and Charge Sheet at Ex.P.6 it is clear that due to
rash and negligent driving of said tractor by respondent no.1 the said
tractor turtle down and fell over the petitioner who was about to board the
tractor and as a result of which the petitioner has sustained grievous
injuries. Moreover as already stated above the Investigating Officer
concern after detail investigation has filed the Charge Sheet against the
respondent no.1 for the offences punishable u/s.279 and 338 IPC…”
The High Court has proceeded to reverse the finding of the Tribunal purely on the
basis that the FIR which was lodged on the complaint of the appellant contained
a version which was at variance with the evidence which emerged before the
Tribunal. The Tribunal had noted the admission of RW1 in the course of his
cross-examination that the insurer had maintained a separate file in respect of
the accident. The insurer did not produce either the file or the report of the
investigator in the case. Moreover, no independent witness was produced by the
insurer to displace the version of the incident as deposed to by the appellant and
by PW 3. The cogent analysis of the evidence by the Tribunal has been
displaced by the High Court without considering material aspects of the evidence
on the record. The High Court was not justified in holding that the Tribunal had
7
arrived at a finding of fact without applying its mind to the documents produced
by the claimant or that it had casually entered a finding of fact. On the contrary,
we find that the reversal of the finding by the High Court was without considering
the material aspects of the evidence which justifiably weighed with the Tribunal.
We are, therefore, of the view that the finding of the High Court is manifestly
erroneous and that the finding of fact by the Tribunal was correct.
9 That leaves the Court to determine the quantum of compensation. The
medical evidence on the record shows that the lower limbs of the appellant have
been paralyzed resulting in a loss of bladder and bowel control. The medical
evidence establishes that the disability of the appellant is one hundred per cent.
The medical records have been scrutinized by the Tribunal. The appellant
suffers from traumatic paraplegia and was hospitalized for 42 days. The
appellant was 28 years of age when the accident took place on 24 September
2005. In our view, the monthly income of the appellant, having regard to the
facts and circumstances of the case should be taken at Rs.4,000/-. After
allowing for future prospects and making a deduction for present expenses, the
compensation payable to the appellant shall stand enhanced by an amount of
Rs.1,50,000/- from Rs.5,75,000/- to Rs.7,75,000/-. The amount for future
medical expenses which has been fixed at Rs.30,000/- should be enhanced to
Rs.1,20,000/- having regard to the serious nature of the disability. In other
words, the compensation of Rs.8,66,000/- awarded by the Tribunal shall be
8
enhanced by an additional amount of Rs.2,70,000/-. The appellant shall be
entitled to interest @7% p.a. from the date of the claim petition until realization.
The insurer shall deposit the compensation or, as the case may be, the balance
payable in terms of this judgment within a period of 12 weeks from today before
the Tribunal which shall be released to the appellant upon due verification.
10 The appeals are allowed in the above terms with no order as to costs.
 ….....................................CJI
[DIPAK MISRA]

 …......................................J
[A.M. KHANWILKAR]
 …......................................J
 [Dr D Y CHANDRACHUD]

New Delhi
December 15, 2017