Bombay HC slams BMC, MHADA for pressuring tenants over developer’s OC default
The court directed MHADA’s CEO and the BMC to investigate the actions of their officers, who have allegedly caused public financial losses.
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“The BMC is equally responsible. As a public-serving entity, the BMC cannot and should not allow any building to operate without an OC,” the bench stated.
The Bombay High Court slammed the Brihanmumbai Municipal Corporation (BMC) and the Maharashtra Housing and Area Development Authority (MHADA) for failing to take responsibility in issuing the Occupation Certificate (OC) for tenants of shops on a redeveloped plot in Mahim (West) over the past 25 years.
The court directed MHADA’s CEO and the BMC to investigate the actions of their officers, who have allegedly caused public financial losses.
The bench reprimanded both BMC and MHADA for pressuring the tenants instead of holding the developer accountable for failing to meet the redevelopment conditions.
The court has mandated that MHADA issue a No Objection Certificate (NOC) to the petitioners by August 30, and BMC must grant the OC by September 20.
“The BMC is equally responsible. As a public-serving entity, the BMC cannot and should not allow any building to operate without an OC,” the bench stated.
On August 13, a division bench of Justices Mahesh S. Sonak and Kamal R Khata ruled on two petitions seeking directives for BMC and MHADA to issue the OC for properties leased by tenants of Mumtaj Begum Shah and others.
The plot in question, located in Mahim, includes three chawls, nine shops, and nine residential tenements built in 1946.
The tenants, represented by advocates Pradeep Thorat and Aniesh Jadhav, also sought a waiver of additional municipal taxes imposed on them.
In 1986, Raj Realtors Construction Company Pvt Ltd acquired the property from the owners. The tenants cooperated with the redevelopment and vacated their premises, with the agreement that their shops would be part of the new construction’s front wing, and the rear wing would include residential accommodations and salable flats.
Although the tenants received their redeveloped shops, the developer failed to secure the OC for these properties, resulting in BMC withholding water and sewerage services while charging 150 per cent of the regular property tax. The BMC informed the tenants that the OC was delayed because MHADA had not issued the final NOC.
Since February 1999, communication between the petitioners, BMC, and MHADA has been ongoing. The issue arose because the developer was granted a Floor Space Index (FSI) of two but failed to surrender 1,986 square feet to MHADA, leading to the additional tax penalty.
The front wing of the property was auctioned in January 2000, prompting the tenants to approach the high court over the authorities’ actions.
The high court has directed MHADA to secure either the surrender area or its market value from the developer. The court criticised the relationship between MHADA, BMC, and the developer, noting, “We find that the BMC and MHADA have been unjustly pressuring the tenants for costs related to water and sewerage services that were not provided. The nexus between MHADA, BMC, and the Developer is apparent. The MHADA was not a private entity that can waive conditions for the developer at its whims and fancies or foist such conditions on the tenants to pressure them.”
The court instructed BMC to reconcile payments made by the petitioners and refund any surplus amounts related to the additional municipal taxes.
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