Supreme Court Upholds Landowners' Preferential Right in Slum Redevelopment

On 22 August 2025, the Supreme Court in Saldanha Real Estate Pvt. Ltd. v. Bishop John Rodrigues quashed the Mumbai Slum Rehabilitation Authority’s (SRA) compulsory acquisition of a 1,596 sq. m. parcel of land in Bandra belonging to a Church trust. The Court held that the landowner’s preferential right to redevelop slum-affected land is protected under the Constitution and statutory framework, and cannot be overridden by arbitrary State action.

A Bench led by Justice Sanjiv Khanna underscored: “The Slum Rehabilitation Authority, as a statutory authority, must act fairly, transparently and in adherence to timelines prescribed under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971. The landowner cannot be sidelined without compelling justification.”

This ruling marks a significant moment in property and municipal law, clarifying the balance between the State’s redevelopment powers and private ownership rights. It has implications not only for slum rehabilitation in Maharashtra but also for broader questions of due process in urban planning.

Why the SRA’s Acquisition Was Struck Down

The case arose when the Church trust proposed to redevelop the slum-affected plot through a private developer. The proposal was pending before the SRA but was neither processed nor decided within the statutory time frame. Instead, the Authority invoked its power of compulsory acquisition and allotted the land to Saldanha Real Estate for redevelopment.

The Supreme Court found this approach untenable. Two points were decisive:

1. Violation of Statutory Timelines: Under Section 14 of the Maharashtra Slum Act, redevelopment proposals by landowners must be considered within a fixed timeline. The SRA’s inaction amounted to an abdication of duty, rendering subsequent acquisition arbitrary.

2. Preferential Right of Landowners: The Court held that where slum rehabilitation is possible through the initiative of the landowner, the State should defer to that choice. Compulsory acquisition is an extraordinary measure and cannot be invoked mechanically.

The Bench described the SRA’s action as “procedurally unfair and constitutionally infirm.”

The Constitutional and Statutory Framework

At the heart of the ruling lies the reconciliation of two competing objectives:

• Urban Welfare and Slum Rehabilitation: The Maharashtra Slum Act empowers the State to intervene in order to improve living conditions of slum dwellers, a legitimate public interest.

• Property Rights and Due Process: While the 44th Amendment removed the right to property from Part III, Article 300A protects against deprivation of property save by authority of law. Moreover, Article 14’s equality principle requires that State action in redevelopment be non-arbitrary.

The Court emphasised that compulsory acquisition, while lawful, must satisfy the test of fairness. As Justice Khanna noted, “The State’s pursuit of welfare objectives does not sanction the suppression of a landowner’s preferential right to redevelop. Equality before law demands that such rights be recognised and given primacy unless compelling circumstances dictate otherwise.”

Departure from Prior Jurisprudence?

This ruling strengthens a line of decisions in which courts have cautioned against arbitrary State intervention in redevelopment projects:

• In Tulsiwadi Navnirman Co-op. Hsg. Society v. State of Maharashtra (2007), the Bombay High Court held that landowners have the first right to propose redevelopment.

• In Zoroastrian Co-op. Housing Society v. District Registrar (2005), the Supreme Court reinforced the autonomy of housing societies in redevelopment decisions.

However, the August 2025 decision goes further by elevating the landowner’s “preferential right” to near-constitutional status. It signals that slum rehabilitation, though a public purpose, must not disregard ownership rights absent clear necessity.

Implications for Slum Rehabilitation in Maharashtra

The judgment recalibrates how redevelopment projects under the Slum Act will be processed:

• Strengthening Landowner Participation: Private owners can no longer be ignored when they bring redevelopment proposals; SRA must process them in time.

• Higher Threshold for Acquisition: Authorities must show compelling public interest and strict compliance with procedure before invoking compulsory acquisition.

• Impact on Developers: Private developers partnering with landowners may now face fewer risks of displacement by rival SRA-appointed developers.

• Checks on Administrative Discretion: The ruling reiterates that statutory authorities are bound by fairness and accountability in exercising discretionary powers.

For practitioners, this creates a stronger litigation and advisory framework for landowners resisting acquisition, while also giving developers more confidence in landowner-led projects.

Comparative Perspectives: Balancing State and Property Rights

The decision resonates with global trends in property law:

• In the United States, the controversial Kelo v. City of New London (2005) upheld broad State power of eminent domain, but subsequent state-level reforms restricted such powers to protect landowners.

• In the UK, compulsory purchase is tightly regulated, with significant safeguards for landowners to challenge acquisitions.

India’s judgment aligns more with the latter model, embedding constitutional fairness into statutory schemes. It reflects a jurisprudential evolution where urban welfare goals must coexist with procedural justice and property rights.

A Needed Correction or Judicial Overreach?

While the decision strengthens due process, it also raises questions:

• Potential Delays: By reinforcing landowners’ primacy, could slum rehabilitation projects be slowed down when landowners are unwilling or under-resourced?

• Judicial Expansion: The Court’s elevation of “preferential rights” to quasi-constitutional status arguably stretches Article 14 jurisprudence beyond traditional bounds.

• Implementation Challenges: Municipal authorities may now face increased litigation from landowners citing the ruling to resist acquisition, adding administrative burden.

Nonetheless, the Court’s reasoning appears calibrated to curb arbitrary acquisition rather than halt redevelopment. By insisting on timelines and transparency, it seeks to discipline rather than disable the SRA’s functioning.

Conclusion: A Landmark in Urban Redevelopment Jurisprudence

The Supreme Court’s August 2025 ruling in Saldanha Real Estate v. Bishop John Rodrigues is a landmark for property and municipal law. It restores primacy to landowners in slum redevelopment, subjecting State acquisition powers to rigorous scrutiny under Article 14 and the Maharashtra Slum Act.