Summary of the Judgement
Case Name:Â Yash Developers vs. Harihar Krupa Co-operative Housing Society Limited & Ors.
Date:Â 30th July 2024
Court:Â Supreme Court of India
Judges:Â Honorable Justice Pamidighantam Sri Narasimha and Honorable Justice Aravind Kumar
Advocates:Â Mr. Kapil Sibal, Mr. C A Sundaram, Mr. Huzefa Ahmadi
Acts and Sections:Â Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, Sections 13, 33, 38
Cited Judgements:Â Susme Builders Pvt. Ltd. v. CEO, Slum Rehabilitation Authority & Ors., Galaxy Enterprises v. State of Maharashtra, Tulsiwadi Navnirman Co-op Housing Society Ltd. & Anr. v. State of Maharashtra & Ors., New Janta SRA CHS Ltd. v. State of Maharashtra
Introduction
The case of Yash Developers vs. Harihar Krupa Co-operative Housing Society Limited & Ors. brings to light the prolonged and often contentious nature of real estate development under the guise of slum rehabilitation projects in Maharashtra. The legal battle centered around the termination of a development agreement due to significant delays in the project’s execution.
Background and Issues
In 2003, Yash Developers was appointed by Harihar Krupa Co-operative Housing Society to redevelop a slum area in Borivali, Mumbai. Over the next two decades, the project faced numerous delays. Consequently, in August 2021, the Apex Grievance Redressal Committee (AGRC) terminated the agreement. This decision was challenged by Yash Developers in the Bombay High Court, which dismissed the petition. The appeal then moved to the Supreme Court.
Key Legal Questions
The Supreme Court was tasked with addressing the following key questions:
Whether the developer’s delay of 18 years in commencing construction is fatal to the objectives of the Slum Rehabilitation Scheme.
Whether the right to shelter, as part of the right to livelihood under Article 21 of the Constitution, can be nullified due to the developer's unconscionable delay.
Scope of Judicial Review
Honorable Justice Pamidighantam Sri Narasimha emphasized the limited scope of judicial review under Article 226 of the Constitution. The focus was on the legality and validity of the AGRC's power under Section 13 of the Act to terminate the development agreement. Section 13(2) explicitly grants the authority the power to redevelop the land if the original developer fails to adhere to the approved plans or conditions within the specified time.
Phases of Delay
1. 2003-2011: The initial phase involved a legal tussle between Yash Developers and a rival developer, Omkareshwar Co-operative Housing Society, which consumed significant time. The CEO of SRA settled this dispute in 2011, favoring Yash Developers.
2. 2011-2014: During this period, delays were attributed to obtaining necessary permissions, approvals, and environmental clearances. Despite receiving the LOI in June 2011, environmental clearance was granted only in April 2014.
3. 2014-2019: The project stalled due to non-cooperation from certain slum dwellers, leading to legal proceedings for their eviction. However, these proceedings stretched until 2021.
4. 2015-2017: Further delays were justified on the grounds of a draft development plan proposing a road through the property. The objections to this plan were resolved only in November 2018.
5. Financial Capacity: The developer’s financial instability was highlighted, evidenced by multiple financial arrangements with third parties, which raised doubts about their capacity to complete the project.
Accountability and Judicial Precedents
The judgment extensively referenced previous cases, emphasizing the duty of the Slum Rehabilitation Authority (SRA) to ensure timely completion of projects. The Supreme Court reiterated that accountability and duty go hand in hand, citing Susme Builders Pvt. Ltd. and Galaxy Enterprises cases to underscore the statutory duty of the SRA to take over delayed projects.
Importance of Accountability
The Supreme Court highlighted the importance of accountability for statutory authorities, emphasizing that the exercise of power must be coupled with a corresponding duty. The Court stated:
"Accountability in itself is an essential principle of administrative law. Judicial review of administrative action will be effective and meaningful by ensuring accountability of the officer or authority in charge. Accountability of institutions is also one of the development goals adopted by the United Nations in 2015."
This principle was underscored by referencing Vijay Rajmohan v. CBI, where it was held that accountability has three essential dimensions: responsibility, answerability, and enforceability. The Court observed that:
"Responsibility requires the identification of duties and performance obligations of individuals in authority and with authorities. Answerability requires reasoned decision-making so that those affected by their decisions, including the public, are aware of the same. Enforceability requires appropriate corrective and remedial action against lack of responsibility and accountability to be taken."
Impact of Delays on Slum Rehabilitation
The Court critically examined the impact of delays on slum rehabilitation projects, noting that prolonged inaction undermines the fundamental rights of slum dwellers. The judgment pointed out:
"Execution of the project under the Slum Rehabilitation Scheme cannot be viewed as a real estate development project. There is a public purpose involved, and that is inextricably connected to the right to life of some of our brother and sister citizens who are living in pathetic conditions."
The Court's findings stressed the importance of timely project execution, the duty of the SRA to ensure adherence to timelines, and the adverse effects of delays on vulnerable populations.
Findings and Conclusion
The Supreme Court upheld the AGRC and Bombay High Court’s decisions, finding that the prolonged delay by Yash Developers was unjustifiable. The Court noted that the delays fragmented over various phases could not excuse the overall 16-year delay. The developer's financial instability further compounded their inability to meet project timelines.
Performance Audit of the Statute
The judgment concluded with a directive for a comprehensive review of the Maharashtra Slum Areas Act. The Court recognized the recurring litigation and delays in slum rehabilitation projects as indicative of deeper statutory and implementation issues. It urged the Chief Justice of the Bombay High Court to initiate suo motu proceedings for a performance audit, emphasizing the need for legislative and executive reforms to ensure the statute effectively serves its intended purpose.
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