Mumbai: The Bombay High Court has rapped the MHADA and BMC for going soft on Raj Realtors Construction Company Pvt Ltd for failing to comply with its obligations and also 2001 court directions with regard to handing over 1,324 sqft area to MHADA in a redevelopment project at Mahim.
Instead the BMC went after the shop owners, who were given tenements in the redeveloped building, and not only did it not provide water and sewerage facilities, but also charged them 150% of the normal property tax.
The HC was hearing petitions filed by the shop owners seeking direction to the MHADA and BMC to issue Occupation Certificate (OC) for their property. They also sought a waiver of additional municipal taxes and consideration of their application dated 27th May 1999.
The developer purchased Raj Mahal comprising three chawls with nine shops and nine residential tenements built in 1946. He was to construct a front wing to accommodate the shops and a rear wing for the residential tenants and free sale flats. After completing the front wing, possessions were handed over to the shop owners with an assurance to get the Occupation Certificate (OC) once the rear wing was completed.
The developer failed to acquire OC for the shops and consequently, the BMC did not provide water and sewerage facilities to the shops but nevertheless charged them 150% of the normal property tax. On inquiry, the BMC said that OC was not issued as the MHADA had not granted the final No Objection Certificate (NOC).
Raj Developers was granted a Floor Space Index (FSI) of 2 for the project, for which he was obliged to give MHADA an area of 1,986 sqft, which he defaulted on. Hence, MHADA did not grant NOC.
Petitioners’ advocate Madhav Thorat submitted that the BMC demanded over Rs10.52 lakh of which they have paid Rs6.88 lakh. As there was a deadlock, the shopowners approached the HC in 2000.
The HC, on April 27, 2001, directed the developer to submit a proposal to MHADA along with the requisite bank guarantee. The developer was also allowed to pay MHADA the market price of 1324 sqft within three months of his failure to obtain sanction. The petitioners were granted six months time to clear the arrears.
Despite the leniency shown to the Developer, he failed to comply, Throat submitted.
The court noted that instead of “going against the developer and builder”, the MHADA and BMC have been unnecessarily “pressuring the petitioners” to cough up amounts towards water supply and sewerage facilities that are not even supplied to them. In any event, the authorities should have recovered the same from the developer by withholding the OC for the rear wing.
Instead the MHADA and BMC refused NOC and OC, respectively, for the front premises. “All this is unreasonable and done to favour the developer at the petitioners’ cost,” a bench of Justices MS Sonak and Kamal Khata noted on August 13. By not ensuring compliance, MHADA facilitated the developer “to make commercial profits without paying the MHADA, which is a public authority, its dues”, HC said.
The BMC also quickly obliged by issuing an NOC for the rear portion, which it should not have done unless the tenants/occupants were rehabilitated in the front premises with a final NOC, the court said.
“The nexus between MHADA, BMC, and the Developer is apparent,” the judges underlined. It noted that the developer did not even bother to appear before the court in response to the petition “because it has nothing to lose and has already gained everything, thanks to the dereliction and unreasonable approach of the MHADA and BMC in this matter”.
The court said that this apparent lapse must be enquired into and responsibility must also be fixed. “In our view, these authorities have chosen to evade their responsibilities by passing the buck, which is unacceptable… Were the BMC and MHADA unaware that the Developer was obligated to allocate certain square footage in the residential wing to MHADA?” the bench asked.
The HC has asked the MHADA to “immediately and unconditionally” issue NOC to petitioners by August 30 and BMC has been asked to issue OC by September 30.
“We direct the CEO of MHADA to inquire into the entire episode and the conduct of the officers responsible, which resulted in a loss to the MHADA/public exchequer. Appropriate legal action should be taken against all those involved from the inception of the issue,” the HC has said. The entire exercise has to be completed within six months. MHADA has also been directed to secure a surrender area of money in lieu of the same.
“The MHADA, due to the inaction of its officials, cannot waive or refuse to enforce such obligations of any developer or builder. Otherwise, the officials responsible must be made to pay for the losses caused to MHADA’s/ public exchequer,” the court added. MHADA CEO has been directed to submit an affidavit of compliance by March 15, 2025.
The BMC is directed to conduct a thorough investigation into the actions of the officers responsible for taking necessary measures as per the 2001 order. The HC has kept the matter for checking compliance on March 17, 2025.
