Bombay High Court: 'Tenants Can't Eclipse Owner's Redevelopment Rights'

Mumbai: In a significant verdict related to the often-contested issue of building redevelopment, the Bombay High Court ruled in the owner's favour, who mooted complete reconstruction of the structure while the tenants averred that repairs are more than enough. Going a step ahead, the court underscored that even if a building is in perfectly sound condition and the owner wishes to redevelop it, the owner cannot be precluded from such an endeavour just because a few tenants believe that it can be repaired. 

A division bench of Justices Gautam Patel and Kamal Khata made the impactful observations while hearing a plea by Anandrao G Pawar, owner of the Sheth Govindrao Smruti building in Worli. He took the legal recourse, seeking quashing of the no objection certificate (NOC) issued by the BMC to the tenants for repairing the building constructed in 1960. 

Structural assessment report

During an earlier round of litigation, the court had called for a structural assessment report which categorised the building as C-2A, meaning that it requires repairs without being evacuated. In February, the BMC granted the NOC to carry out repairs by the tenants, but Pawar argued that the structure is C-1 category, meaning the building is dilapidated and uninhabitable hence needs to be demolished. 

Advocate Mayur Khandeparkar informed the HC that his client, Pawar, is also willing to re-accommodate the tenants on an ownership basis after redevelopment. Senior Advocate Girish Godbole, appearing for the tenants, contended that the rights of the owner-developer must be subordinate to the repair and reconstruction rights of the tenants. 

At this point, the bench noted that ownership of an immovable property carries with it several rights, including the right to enjoy the fruits of development of that property to the fullest possible extent. Merely on the basis of a structural assessment, a tenant of a building cannot “wholly eclipse” the valuable redevelopment rights of the property owner, it underlined. 

Further, Godbole’s contention that the building was categorised C-2A was opposed by Khandeparkar saying that the declaration itself says that if repairs are not carried out within a stipulated time the building will automatically become a C-1 structure. Godbole pointed out that so long as a building is not categorised as C-1, the law doesn't permit the owner to redevelop it. 

“In other words, at the instance of the tenants, the property owner's right to enjoy the fruits of that property and the benefits of full-spectrum re-development in accordance with law must be curtailed. There is nothing in law to support such an extreme proposition,” the judges said, disagreeing with the tenants’ arguments. 

Accepting Pawar's plea and cancelling the repair NOC, the HC said, “If there is a redevelopment proposal and the broad terms of it are set out, whether or not these are acceptable to the tenants is immaterial. They are being re-accommodated and their tenancies are being converted free of cost to ownership.” 

POINTERS:

Court remarks…

Even if a building is in perfectly sound condition and the owner wishes to redevelop it, the owner cannot be precluded from such an endeavour just because a few tenants believe that it can be ‘repaired’. 

………

The ownership of an immovable property carries with it several rights, including the right to enjoy the fruits of development of that property to the fullest possible extent. Merely on the basis of a structural assessment, a tenant of a building cannot wholly eclipse the valuable redevelopment rights of the property owner.

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If there is a redevelopment proposal and the broad terms of it are set out, whether or not these are acceptable to the tenants is immaterial. They are being re-accommodated and their tenancies are being converted free of cost to ownership.