Can’t continue as developer without completing obligations to eligible slum-dwellers: HC

Observing this, the HC directed a developer to deposit Rs 5.55 crore which was due from 2015 to 2019 to be paid to the slum dwellers from Andheri (West) as transit rent arrears as immediate measure to prove his “sincerity.”

Transit rent is paid by the developer or the developing authority to the eligible people vacating their premises for redevelopment/rehabilitation purposes, till they avail permanent alternative accommodation.

The bench also said that it was “inconceivable” for the persons who have to fend for themselves for nearly a decade in a city like Mumbai. The HC was hearing a plea by slum dwellers’ society which challenged an order setting aside removal of the developer from the project.

A division bench of Justice Gautam S Patel and Justice Neela K Gokhale on August 3 passed an order in plea by Late Yallapa Narayan Sonavane CHS, Andheri (West). The co-operative housing society of slum dwellers had challenged the May 17, 2023 order of the Apex Grievance Redressal Committee (AGRC) which had reversed the order of the CEO of Slum Rehabilitation Authority (SRA).

The slum authority had removed Deepak Vitthal Rao, the sole proprietor of Accanoor Associates as a developer, on grounds of an inordinate and unexplained delay and non-payment of rent, in addition to no work having been done on the site since the project under SRA first begun in 2007. Rao had then approached the AGRC, which reversed the SRA order, prompting the society to approach HC.

The SRA submitted that there are arrears of transit rent due from 2015 till June 2019 for 69 slum dwellers and from June 2019 until 2023 for 20 slum dwellers, which in total is to the tune of Rs 5.55 crore.

The bench noted that while it was prepared to consider developer’s submissions about estimation of dues, the same can be demonstrated only after he proves ‘bona fides,’ as he claimed that confidence of AGRC in his continuance as a developer is justified.

The developer had submitted that he required several weeks or months to bring the amount found due by SRA. However, the bench refused to grant extension. Justice Patel noted, “We have held in several cases that the developer has no rights to a free sale component without performing obligations to eligible slum dwellers, and that a failure to abide by the terms of the Letter of Intent (LoI) issued by SRA in making timely payments of transit rent and in completion of rehab buildings on schedule is sufficient to warrant an ejectment.”

It went on to add, “We are in 2023 and it is inconceivable that persons out on transit rent in Mumbai when leave and license and rentals always proceed only in one direction, i.e., upwards, should be expected by this developer to somehow manage and fend for themselves for nearly an entire decade while the developer claims to be capable, eligible, financially sound and in a position to complete the project,” the bench observed, adding that the developer needed to be “put to the test” to prove sincerity. He cannot simply chant it.”

Ordering the developer to deposit Rs 5.55 crore in the court by August 11, the bench said that the admission of arrears itself may be considered sufficient to justify developer’s ejectment and quashing of the AGRC order.