Mumbai, Feb 23: Holding a slum rehabilitation project hostage for over a decade cannot deprive a developer of contractual rights, an arbitral tribunal has directed Sai Nagar SRA Co-operative Housing Society in Bhandup (East) and 40 dissenting occupants to hand over vacant possession of redevelopment land to Chourangi Developers Pvt Ltd, while awarding Rs 50.79 crore towards escalation losses caused by prolonged delays.
The order was passed by an arbitral tribunal headed by former judge Justice AB Chaudhari in an arbitration reference initiated by Chourangi Developers Private Limited (formerly Reatox Guru Developers Pvt Ltd) in relation to redevelopment of Sai Nagar — a notified slum admeasuring 16,242.60 sq metres (around 1.74 lakh sq ft) at village Kanjur.
Background of redevelopment project
The settlement comprises nearly 660 hutments and was declared a slum in 1977-78, with confirmation granted by the competent authority in November 2006. Following an Urban Land Ceiling Authority NOC in February 2008, the housing society executed a development agreement with the developer on April 13, 2008, and issued a common consent letter later that year.
Litigation by dissenting residents
Trouble began soon after when a group of dissenting residents formed an unregistered association — Sai Nagar Bachao Samiti — and initiated multiple litigations opposing the project. The tribunal noted that despite years of disputes, no court had granted any injunction or stay against redevelopment.
The developer, through advocates Uday Dable and Harshit Tiwari, submitted that under a mutual arrangement it deposited three years’ transit rent, ordinarily sufficient to complete an SRA project, but possession of the entire plot was never handed over. Records showed rent was paid to nearly 300 slum dwellers, while only 56 occupants vacated their tenements.
Tribunal rejects society’s contention
The society, through advocate Suraj Singh, contended that delays were caused solely by minority dissenters. However, the arbitrator rejected the contention and ruled that the obligation to deliver vacant possession rested on the society and all its members.
“To say that no time limit was fixed for delivering vacant possession is something strange… possession could not be delayed indefinitely after execution of the development agreement in 2008,” the tribunal observed.
Calling it an admitted fact that Phase-II land meant for the sale building remained unavailable, the tribunal held that construction could not commence without complete possession and that the developer had been “left high and dry” despite spending crores on the project.
Compensation and directions
The society and dissenting members have now been directed to hand over peaceful possession within six weeks, with liberty granted to the developer to seek police protection for eviction if required.
The tribunal also restrained residents from claiming further transit rent and awarded Rs 50.79 crore towards project escalation at 4%, with 10% annual interest from August 31, 2025.
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Holding the society and 40 obstructionist members jointly liable, the tribunal permitted recovery of damages through forfeiture and sale of rehabilitation units allotted to dissenting members. Arbitration costs were quantified at Rs 15 lakh.
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