Why Bombay HC has initiated a review of Maharashtra Slum Areas Act, 1971

Over the years, courts have raised questions about the efficacy of the 1971 Act due to cases of “unconscionable delays” by developers involved in slum redevelopment projects. Such delays are violative of slum-dwellers’ fundamental rights, including the rights to shelter and livelihood, courts have held.

What is the 1971 law on slum redevelopment in Maharashtra?

In Mumbai, where real estate prices are among the highest in the country, slum redevelopment is often as much about profit as it is about housing the urban poor or improving the conditions of the city. Developers benefit from incentives under the redevelopment laws and schemes.

For instance, the 1971 law empowers the Maharashtra government to declare an area as a “slum area” and, if needed, acquire it. A statutory body, the Slum Rehabilitation Authority (SRA), is created to oversee the rehabilitation, which can entrust any agency or developer to redevelop the designated area. The law also prescribes the relocation and rehabilitation of slum dwellers.

In 1995, the government introduced the Maharashtra Slum Rehabilitation Scheme. Under it, private developers (in agreement with the slum dwellers) fund redevelopment and provide finished tenements free of cost. In exchange, they receive some additional area for construction and selling in the open market.

They can also be entitled to a higher Floor Space Index (FSI), allowing them to build more saleable flats than the number usually allowed on a piece of land. Prime lands in the city also become available at lower costs than open market rates under such schemes.

What are the issues with it?

The case that triggered the review of the 1971 law involves a 2003 slum redevelopment project in Borivali, allotted to Yash Developers. Delays of nearly two decades caused the Apex Grievance Redressal Committee (AGRC), which has oversight of the SRA, to terminate the contract in 2021. The appointment of a new builder prompted Yash Developers to petition before the Bombay High Court.

In 2022, Justice Girish S Kulkarni of the Bombay HC upheld the AGRC’s decision and also noted that 199 slum dwellers had been kept waiting for years without being paid transit rent. The Court said this “was completely opposed to the spirit and ethos of a slum scheme.”

The developer then moved the Supreme Court. While also upholding the AGRC decision, the court underlined the inefficiency of judicial review. “Case after case, the Bombay High Court has been ruling that, a) the developer is duty-bound to complete the project within the stipulated time and that b) the Slum Rehabilitation Authority (SRA) has not merely the power but a broader duty to ensure that the developer completes the project within time,” it said. Despite judicial intervention, it noted that there was hardly any course correction because the law does not require that from the developer or the SRA.

Citing data from the National Judicial Data Grid, the SC said 1,612 cases involving disputes under the 1971 Act are currently pending before the Bombay High Court. Of these, 135 cases are more than 10 years old.

“In any event, execution of the project under the Slum Rehabilitation Scheme cannot be viewed as a real estate development project. There is a public purpose involved, and that is inextricably connected to the right to life of some of our brother and sister citizens who are living in pathetic conditions,” the SC said, setting the stage for a review of the law.

The court thus expanded its power to “that of facilitator of access to justice and effective functioning of constitutional bodies.” The ruling also sets a precedent for the court to review legislation without a cause of action, that is, when there is no affected party before the court. The only other instance where this happens is under Article 143 – where the President can request the SC’s opinion on any matter of public interest importance or question of law.

Since the review is of a state legislation, the SC directed the Chief Justice of the Bombay High Court to “constitute a bench to initiate suo motu proceedings for reviewing the working of the statute to identify the cause of the problems” discussed in the ruling. It also asked the HC to consider directing the government to constitute a committee for a performance audit of the Act.

What exactly needs to be reviewed?

The SC identified key areas requiring review:

1. 01

   Identification and declaration of land as slum

   This problem involves an examination of authorities’ role in giving recognition for the land. The SC said “insidious” intervention of builders in the process casts doubts on the independence and integrity in the decision-making process.

2. 02

   Identification of slum dwellers

   The SC said it is a complicated process to ascertain the status proof of the dwellers and gives rise to competing claims among the slum population, leading to litigation.

3. 03

   Selection of a developer

   The court said the law leaves the decision to the slum dwellers’ cooperative societies, who are often manipulated by competing and rival developers.

4. 04

   Apportionment of land for redevelopment and sale

   Developers seek to increase the proportion of saleable area, leading to contestation by the slum dwellers s lacking under the law.

5. 05

   Obligation to provide transit accommodation for slum dwellers pending redevelopment

   The court said that sometimes, developers do not provide transit accommodation within time or inadequate alternatives. There are also instances where some slum dwellers refuse to vacate the area in question as the transit accommodation is either inconvenient or the transit rent amount offered to them is insufficient.

6. 06

   Lack of independence, objectivity in the functioning of statutory authorities

   The SC said it was a “matter of serious concern” as courts have witnessed that the authorities have no independence and have short tenures. “The functioning of these statutory authorities gives an indication that there could be a regulatory capture,” the bench noted. It further raised concerns over the effectiveness of the statutory remedies and said that the accountability of authorities was lacking under the law.

How has Bombay HC proceeded so far?

On February 14, after beginning detailed hearings, a special bench led by Justice Girish S Kulkarni of HC remarked that Maharashtra was the only state where people get free housing after encroaching on government or other lands and raised concerns over the “vexed problem” of mass housing.

The bench had earlier suggested a policy for rental accommodation for migrants, provision of large open spaces for future generations amidst “concrete jungles” and had raised concerns over “vertical slums” in the form of Slum Rehabilitation (SR) buildings. It had sought suggestions from various stakeholders. It will continue hearing the matter on March 18.