Mumbai: HC asks developers to pay transit rent arrears

Mumbai: HC asks developers to pay transit rent arrears

Says city is not for developers, SRA intended to serve public welfare, says court

Urvi MahajaniUpdated: Wednesday, March 01, 2023, 12:13 AM IST
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Mumbai: HC asks developers to pay transit rent arrears | representative pic

Mumbai: The city is not for developers and the Slum Rehabilitation Act (SRA) is intended to serve the purpose of public welfare and not developers, the Bombay High Court observed while directing two developers to pay transit arrears of Rs 11 crore for a suburban SRA project by March 3.

A division bench of Justices Gautam Patel and Neela Gokhale on Monday directed Afcons Developers Ltd and Ameya Housing Private Ltd to clear the transit arrears by March 3.

Slum Rehabilitation Act 1995 (SRA) is not for developers: Court

“This city is not for developers. The Slum Rehabilitation Act 1995 (SRA) is not for developers. The Act is intended to serve a public welfare purpose. Developers are a means to that end,” the court observed, while hearing a petition filed by Shree Sai Pawan SRA CHS Ltd that claimed that the two developers appointed for redevelopment of their society had not paid them transit rent since 2019.

Afcons Developers Ltd and Ameya Housing Private Ltd were appointed as co-developers of the slum rehabilitation project at Jogeshwari in suburban Mumbai, according to the petition, which claimed that more than 300 people, who were found eligible to get flats in the project have not been getting transit rent since 2019. Of these, 17 were not paid transit rent as they were put up in transitaccommodations, but these houses were in a dilapidated condition, it alleged.

The two co-developers are locked in a never-ending arbitration and no work is being done at the site, the court noted in its order. If the developers are serious about the project, they will pay the entire amount of transit rent due to those entitled to transit rent from 2019, it said.

“They (the developers) are entitled to a free sale component provided by the incentive floor space index (FSI) but this is a consideration for their fulfilling their obligations under the contract... Those obligations include not only the rebuilding or building of rehabilitation structures and tenements both commercial and residential, but also the payment of transit rent in the meantime or the providing of habitable transit accommodation,” the court said.

A developer who does not pay transit rent, does not provide habitable transit accommodation or otherwise is in default of his obligations, all of which have to be performed on a schedule and within a time frame, is not entitled to any of the benefits of the slum rehabilitation project, including the free sale component, it said.

“A party in default cannot be allowed to take advantage of its own wrong and failure. That would be profiteering and that too at public expense because many of these slum projects are on public lands — such as this one — and the developer is not being made to pay the cost of land,” the bench said.

The bench warned the developers that it will “compel a change of developer”. “The developer can always be changed. The beneficiaries of a SRA project cannot,” it said.

“If these developers want their rights to continue and to be preserved, they must demonstrate their bona fides. They must prove their sincerity. To seek equity, they must do equity,” the court said directing the developers to deposit the amount by March 3.

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