Supreme Court of India
KAMLESH C. SHAH & ORS.versusSTATE OF MAHARASHTRA AND ORS.
- Citation
- 2013 INSC 421
- Decided
- 3 July 2013
- Disposal
- Dismissed
- Bench
- ALTAMAS KABIR
Holding
The interim relief sought cannot be granted as it contravenes the provisions and purpose of Chapter VIII‑A of the Maharashtra Housing and Area Development Act, 1976.
Summary
The petitioners sought an interim order declaring that the acquisition of a "cessed" building by MHADA under Chapter VIII‑A of the Maharashtra Housing and Area Development Act, 1976 was no longer necessary, as the landlord and tenants had entered into a development agreement while the substantive constitutional challenge to Chapter VIII‑A was pending before a nine‑judge bench. The Court examined the statutory scheme under Sections 103A, 103B and related provisions, which mandate that once land vests in MHADA it can be used only for the rehabilitation of tenants through a cooperative society. It held that the parties cannot contract out of the statute after vesting, and that granting the relief would defeat the very purpose of Chapter VIII‑A. Consequently, the interim application was dismissed, with the matter to be decided by the nine‑judge bench.
Issues considered
- The validity of seeking interim relief to set aside acquisition under Chapter VIII‑A while a constitutional challenge is pending.
- Whether parties may contract out of the statutory scheme of Sections 103A and 103B after vesting in MHADA.
- The interpretation of "vesting" under Section 103B and its consequences for releasing the land.
- Whether a bench of fewer than nine judges can entertain the interlocutory application.
- Whether granting the relief would contravene the purpose of Chapter VIII‑A.
Legislation cited
- Building Repairs and Reconstruction Board Act, 1969
- Maharashtra Co-operative Societies Act, 1960
- Maharashtra Housing and Area Development Act, 1976s. 103A, s. 103B, s. 103C(2), s. 92, s. 93, s. 94, s. 96
Subjects
Article 32cessed propertyacquisitionco-operative societyinterim reliefvestingtenant rehabilitationconstitutional challengeMaharashtra Housing and Area Development Act
Judgment
[2013] 13 S.C.R. 577
KAMLESH C. SHAH & ORS. A
~
v.
STATE OF MAHARASHTRA AND ORS.
I.A. NO. 3 OF 2012
IN
WRIT PETITION (C) NO. 342 OF 1999 B
JULY 03, 2013
[ALTAMAS KABIR CJI. VIKRAMAJIT SEN AND
A.K. SIKRI, JJ.)
c
Interlocutory Relief - Grant of - Writ petitions u/Art. 32
of the Constitution challenging introduction of Chapter Vfl/~A
in Maharashtra Housing and Area Development Act, 1976 -
Chapter VIII-A pertained to acquisition of the cess 3d
properties by the Authority under the Act for co-operative D
Societies of occupiers - Matter referred to a Bench of Nine-
--+- Judges and since pending - Interlocutory application in
respect of a building acquired as cessed property - Praying
for direction of the Court to declare the acquisition no longer
necessary in view of the fact that the owner and tenants of the E
property entered into an agreement to themselves develop
the property instead of waiting for the decision of Nine-Judge
Bench - Held: Application Jiable to be dismissed, as the relief
prayed for goes against the very grain of the provisions of
'f Chapter VIII-A of the Acf - Maharashtra Housing and Area
F
Developrnent Act, 1976 - Chapter VIII-A.
Chapter VIII-A w;-s introduced in Maharashtra
Housing and Are; _::=~ielopment Act, 1976, which
pertained to acquh;ition of cessed properties for co-
....,/ """11"' operative societies of occupiers. The validity thereof was G
challenged in several cases including the present writ
petition. The matters were initially referred to a Bench of
7 Judges, but later, the same were referred to Bench of
9 Judges and are still pending.
577 H
··~:
578 SUPREME COURT REPORTS [2013] 13 S.C.R.
A The writ petitioners have filed the present
interlocutory petition seeking interim reliefs in respect of
certain property which was acquired by the Maharashtra
Housing and Area Development Authority, treating the
same as cessed property, as per s. 103B of Chapter Vlll-
B A of the Act.
The petitioner took the plea that as the matter is
pending before a Bench of Nine Judges, which is not
likely to be taken up in near future, the tenants and the
C owner of the buildings entered into an agreement by
which they themselves agreed to develop the property,
instead of waiting for the decision of the nine-Judges
Bench. The petitioner prayed that this Court may declare
the acquisition of the property to be no longer necessary
a'nd relevant for the purposes of Chapter VIII-A and the
D relationship of the owner and the tenant would continue
as before.
Dismissing the petition, the Court
E HELD: 1. If the tenants have to wait till a decision is
rendered by the Nine-Judge Bench, the entire object with
which Chapter VlllA was introduced in the 1976 Act,
would be rendered completely nugatory. May be a
situation, such as the present one, was never
contemplated by those who wanted to frame a scheme
F
to rehabilitate tenants who were victims of a situation
where they had to reside in unhygienic and may be
dangerous conditions because of lack of repairs on
account of the low rents payable by the tenants which
had been frozen from 1st September, 1940, and made it
G virtually impossible for the landlords to maintain the
.....--·
properties when, at times, the municipal taxes were
higher than the rents collected; but the Courts have to
interpret the law as it is. [Para 18) [590-D-F]
H 2. Section 103A was introduced by way of Chapter
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 579
VIII-A in the 1976 Act, by Maharashtra Act 21 of 1986, when A
realisation dawned on the administration, that many
persons who had been occupying buildings either as
tenants or otherwise from before 1st September, 1940,
were faced with a peculiar dilemma in which on account
of the low rents paid by them, which had been frozen, the 8
landlords were unwilling to effect any repairs to the old
structures. Section 103A, whereby Chapter VIII-A was
made applicable to all "cessed buildings". [Para 19) [590-
G-H; 591-A]
3. "Cessed buildings" are buildings in which repairs C
had not been effected after 1st September, 1940, and
were in danger of collapse, but continued to be under the
occupation of tenants. In fact, 19,642 cessed. and
dilapidated buildings have been identified in the island
city of Bombay. It is Section 103B, which deals with the D
procedure for acquisition of cessed property for
cooperative societies of occupiers, pursuant to
proposals for acquisition submitted under Section 92 of
the 1976 Act. In fact, in order to facilitate the repair or
reconstruction of the building in question, Section 94 E
makes provision for temporary and alternative
accommodation to be provided to the affected occupiers
whose property is. acquired. [Para 20) [591-G-H; 592-A]
4. Sub-section (1) of Section 103B begins with a non-
F
obstante clause to the effect that notwithstanding
anything contained in any of the provisions of Chapter
VIII or any other law for the time being in force or in any
agreement, contract, judgment, decree or order of any
Court or Tribunal to the contrary, a co-operative society
formed or proposed to be formed under the provisions G
of the Maharashtra Co-operative Societies Act, 1960, by
not less than 70% of· the occupiers in a cessed building
may, by written application, request the Board to move
the State Government to acquire the land together with
H
580 SUPREME COURT REPORTS [2013) 13 S.C.R.
A the existing building thereon or where the owner of the +
building does not own the land, but holds it as a lessee
or licensee, then to acquire the right or interest of such ....
owner or person in or over such building or land or both
as lessee or licensee together with the existing building
B thereon. The 'latter part of Section 103B and more
particularly Sub-section (5A), is relevant and provides
that where acquisition proceedings have been initiated f-
as provided in Sub-section (5) and a notification under
Sub-section (5) of Section 93 is published, the Collector
c shall take and hand over the possession of the land to
the Board in accordance with the provisions of Sub-
section (6) of Section 93. It is at this stage that the land
vests absolutely in the Board on behalf of the Authority,
free from all encumbrances. At this stage, the Board shall
also require the Society to get itself registered, if it is not
0
registered till then, and to deposit the remainder of the
amount to be paid to the owner with the Land Acquisition
Officer. It is only, thereafter, under Sub-section (7), that
the Authority is to convey the land acquired under this
Section to the co-operative society of the occupiers
E thereon, with its right, title and interest therein and
execute, without undue delay, the necessary documents
in that behalf. [Para 21] [596-C-H; 597-A-B]
5. The tenants had already vacated the building in
F question in favour of the promoter. Whether they were
entitled to do so, once Section 103B of the 1976 Act had
already come into operation and symbolic possession of
the property had been taken by MHADA, through the
Board, under Sub-section (5A) thereof. Sub-section (7) of
G Section 103B provides for the conveyance of the land
acquired under Section 1038 to the co-operative society
of the occupiers together with its right, title and interest
therein, and for MHADA to execute, without undue delay,
the necessary documents in that behalf, which
H presupposes that MHADA had already acquired title to
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 581
-t- the property. Had the title not vested in MHADA, it could A
not have been vested with the right to convey the same
to the co-operative society. The scheme envisaged in
Chapter VIII-A, and in Section 92 of the 1976 Act comes
into play, upon an application being made by a registered
co-operative society or a proposed co-operative society B
to .undertake the restoration of the building. [Para 22]
(597-B-E]
A- 6. In the instant case, except for an application
having been made unde.r Section 92 and steps having
been taken thereafter under Section 103B, nothing c
further has happened. But by operation of law, the land
has come to be vested in MHADA. The parties to the
agreement, which ~includes the promoter, were fully
aware of this situation since in the agreement itself it is
indicated that the tenants would withdraw from the D
-+ acquisition and would apply to MHADA to release the
property from acquisition so that the agreement arrived
at could be given effect to instantly. Whether MHADA has
any obligation to provide similar accommodation to
others in respect of the 30% surplus land, is a E
controversy which need not be gone into and will surely
be decided, whenever the Nine-Judge Bench sits to take
up these matters. But for the purposes of this case, in
r spite of the inordinate delay in the working of the
provisions of Chapter VIII-A of the 1976 Act, which was F
intended for the benefit of a certain section of tenants
and occupants of cessed buildings, the relief prayed for
cannot be granted, as the same goes against the very
grain of the provisions of Chapter VIII-A of the 1976 Act.
~
Hence, the l.A.,is dismissed without going into further G
details, which will have to be settled by the Nine-Judge
Bench. [Para 23] [597-F-H; 598-A-C]
CIVIL ORIGINAL JURISDICTION : I.A. No. 3 of 2012.
H
582 SUPREME COURT REPORTS [2013] 13 S.C.R.
A IN -+-
Writ Petition (Civil) No. 342 of 1999.
Under Article 32 of the Constitution of India.
B K.K. Venugopal, Sudhir Gupta, Mukul Rohatgi, Ashok H.
Desai, Arnarjit Singh Bedi, Rohit Bhat, Mahesh Aggarwal,
Aarohi Bhalla, Subodh S. Patil, Sujata Kurdukar, Sanjay V.
Kharde, Asha Gopalan Nair, Amar Dave, Narendra Kumar
Goyal, Chirag M. Shroff for the appearing parties.
-*'
c The Judgment of the Court was delivered by
ALTAMAS KABIR, CJI. 1. Chapter VIII-A, which was
introduced into the the Maharashtra Housing and Area :
Development Act, 1976, hereinafter referred to as "the 1976
Act", in 1986, pertains to the acquisition of "cessed properties"
D
for co-operative societies of occupiers. Soon after its .+_
introduction, its validity was challenged in several cases,
including the present writ petition. The present writ petition was
tagged with W.P. No. 934 of 1992, another case pending in
this Court on the same issue. In view of the questions raised
E in the writ petitions, the matter was initially referred to a Bench
of 7-Judges, but, thereafter, by order dated 20.02.2002, the
matters have been referred to a Bench of Nine-Judges and are
still pending decision.
F 2. Since no final decision seems to be in the offing, the
writ petitioners have filed IA No. 3 of 2012, for interim reliefs.
3. The subject matter of the present petition is a property
known as "Chhotalal Niwas" situated at Laburnam Road,
Gamdevi, Mumbai - 400007, comprising a plot of land bearing
G Survey No. 7A/492, Malabar Cumbala Hill Division, Mumbai. ...,..
Treating the said property as a "cessed property", within the
meaning of Section 103A of the 1976 Act, the same was
acquired by the Maharashtra Housing and Area Development
Authority (MHADA), as per Section 103B of Chapter VIII-A of
H the 1976 Act.
•
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 583
[ALTAMAS KABIR, CJI.]
4. The apparent reas0n for the introduction of Chapter VIII- A
A into the 1976 Act appears to be the refusal of the owners of
the buildings to effect repairs thereto on account of the freezing
of rents from 1st September, 1940. The return which the landlord
could reasonably expect from time to time having been frozen,
a stage was reached when where rents were no longer B
sufficient to cover even the taxes payable for the said
properties. As a result, the landlords stopped effecting repairs
to the tenanted properties which resulted in rapid deterioration
of the buildings. Realizing the gravity of the matter, the
Legislature enacted "the Building Repairs and Reconstruction c
Board Act, 1969", which enabled levy on buildings in Greater
Bombay as the Legislature felt that from the recovery of the cess
in addition to the contribution of substantial amounts to be
made by the State Government and the Bombay Municipal
Corporation, it might be possible for the Board constituted
0
under the Act to carry out structural repairs to the old buildings
to make them safe for habitation. The Legislature also felt that
in case structural repairs did not improve the condition of the
building, then the Board could und!=!rtake reconstruction of the
building by pulling down the dilapidated structure and raising E
a new structure thereupon.
5. On 26th February, 1986, the Governor of Maharashtra
issued Ordinance No. 1 of 1986 to amend the 1976 Act with
effect from 26th February, 1986. The Statement of Objects for
enactment of the amendment indicates that tflere are 19,642 F
cessed old and dilapidated buildings in the island city of
Bombay and, out of these, 16,502 buildings were constructed
prior to 1st September, 1940, and the majority of the said
buildings are about 80 to 100 years old. To make things worse,
the freezing· of the rents from 1st September, 1940, made it G
quite impossible for the owners to look after or maintain the
buildings, which is one of the reasons for the introduction of
Chapter VIII-A in the 1976 Act.
6. Section 103A of the 1976 Act, which was introduced in
H
58~ SUPREME COURT REPORTS [2013) 13 S.C.R.
A 1986 as part of Chapter VIII-A, inter a/ia, provides that the said -+-
Chapter would come into force on and from the commencement
of the Maharashtra Housing and Area Development (Second
Amendment) Act, 1986 and would apply to all cessed buildings,
which had been erected before the 1st of September, 1940,
B and were classified as belonging to Category 'A' under Sub-
section (1) of Section 84.
7. Section 1038, which contains the raison d'etre, for the
introduction of Chapter VIII-A into the 1976 Act, inter a/ia, ~
C provides for acquisition of cessed property for co-operative
societies of occupiers. The scheme envisaged in the said
Section is that notwithstanding anything contained in any of1he
provisions of Chapter VIII or any other law for the time being in
force or in any agreement, contracts, judgment, decree or order
of any court or tribunal to the contrary, a co-operative society
D formed or proposed to be formed, under the provisions of the 4--
Maharashtra Co-operative Societies Act, 1960, by not less than
70% of the occupiers in a cessed building, may, by written
application, request the Board to move the State Government
to acquire the land together with the existing building thereupon
E and where the owner of the building did not own the land
underneath or appurtenant to such building, but held the same
as a lessee or licensee, then to acquire the right or interest of
such owner or person in or over such building or land or both ~
as lessee or licensee together with the existing building, in the
F interest of its better preservation· or reconstruction of a new ·
building in lieu of the old one. Sub-section (2) of Section 103B
provides that on receipt of the application made under Sub-
section (1), the Board shall, after due verification and scrutiny,
approve the proposal if it considers that it is in the interest of
G better preservation of the building or to be necessary for
reconstruction of a new building and shall direct the co-
operative society, whether registered or proposed, to deposit
with the Board, within the periods specified by it in that behalf,
30% of the approximate amount that would be required to be
H paid to the owner in that behalf. Sub-section (4) of Section
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 585
[ALTAMAS KABIR, CJI.]
103B provides tj1at if, on receipt of an acquisition proposal A
under Sub-section (3), the State Government is satisfied about
the reasonableness of the proposal, it may approve the same
and communicate its approval to the Board. On ret:eipt of the
government approval, the Board under Sub-section (5) was
required to forward the acquisition proposal to the Land B
Acquisition Officer for taking further proceedings in the matter.
8. An important element of Section 103B is Sub-section
(SA), which provides that when acquisition proceedings have
- been initiated under Sub-section (5) and a notification under
Sub-section (5) of Section 93 has been published, the Collector
would take and hand over the possession of the acquired
c
property to the Board in accordance with the provisions of Sub-
section (6) of Section 93. Sub-section (6) provides that after
the land is vested absolutely in the Board on behalf of the
0
Authority, free from all encumbrances, and the amount to be
paid to the owner is determined, the Board shall require the
society to get itself registered, if it is not registered, till then and
to deposit the remainder of the amount to be paid to the owner
with the Land Acquisition Officer. The Board is required E
simultaneously to pass on the amount deposited by the co-
operative society to the Land Acquisition Officer, who shall
thereupon make payment of the amount for acquisition or
deposit the same in the Court, as provided in Section 46. Sub-
section (7) provides that, subject to the provisions of Sub-
section (6), the Authority shall convey the land acquired under F
this Section to the co-operative society of the occupiers thereof
with its right, title and interest therein and execute, without undue
delay, the necessary documents in that behalf.
9. As is clear from the above, the scheme introduced by G
Chapter VIII-A of the 1976 Act was intended to protect tenants
who were compelled. to reside in buildings which had been
constructed prior to 1940, and had become dilapidated as no
repairs were effected thereto. The landlords were not keen to
repair the buildings as the rents were very low and often the H
taxes payable for the property were higher than the rents
586 SUPREME COURT REPORTS [2013] 13 S.C.R.
A collected from the tenants. The scheme provided for ·the +
formation of cooperative societies by tenants of such buildings,
who were required .to deposit 30% of the compensation
payable to the owner, whereupon the lands would stand
acquired and would vest in the Mumbai Building Repair and
B Reconstruction Board for the limited purpose of ensuring that
after acquisition, the balance 70% would be deposited by the
tenants, consequent whereupon, MHADA under Section
1038(7) was bound to convey the land to the cooperative
society for construction of the building.
c
10. Appearing for the writ petitioners, Mr. K.K. Venugopal,
learned Senior Advocate, submitted that the very fact that
MHADA was required to convey the land to the cooperative
society for constructing the building, establishes beyond doubt
0 that the vesting in the Board amounted to holding the property
in trust for and on behalf of the tenants forming the cooperative
society, who were the beneficiaries of the said scheme.
11. Mr. Venugopal urged that since the issue was pending
before a Nine-Judge Bench and it was unlikely that the matter
E would be heard in the near future, the tenants and the owner of
the building entered into an Agreement by which they
themselves agreed to develop the property, instead of waiting
for the decision of the Nine-Judge Bench. The essence of the
understandings arrived at between the landlord and the tenants
F was that the tenants would withdraw themselves from the
acquisition and instead enter into a Development Agreement
with landlord to reconstruct the building. Mr. Venugopal urged
that should such a course of action be accepted, then there
would be no further need for the proceeding under Section
G 103B to be continued and upon the property being returned to -~
the owner, the tenants could have the benefit of the offer made
by the new builder. This would enable the tenants to purchase
their own flats and the landlord to also get sufficient
consideration so that the purpose of the scheme would stand
H fully satisfied. Furthermore, the Trust would cease to exist as
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 587
[ALTAMAS KABIR, CJI.]
~ the purpose of acquisition would also cease to exist. Mr. A
Venugopal urged that the Court may declare the acquisition of
the property to be no longer necessary and relevant for the
purposes of Chapter VlllA and the relationship of the owner and
the tenant would continue as before. Mr. Venugopal also
submitted that since possession has continued with the owner B
and the tenants and, at no point of time, had such possession
been handed over to M.HADA, could it be said that the premises
in question had vested with MHADA. Mr. Venugopal contended
k that if the object of the rehabilitation scheme was to be kept in
- mind, the objective taken on behalf of MHADA that the property
had vested in it by virtue of the Notification published at the
request of the tenants, was highly technical and was required
c
to be discarded, as the lands were, in fact, being held in trust
for the tenants as the beneficiaries thereof.
12. The prayer made on behalf of the Petitioners in I.A. was D
opposed, on behalf of the State of Maharashtra and its
authorities, as being mischievous and was nothing but an
attempt to circumvent the challenge thrown to Chapter VIII-A,
which was pending before this Court not only in other matters,
but in the instant writ petition also. It was urged by Mr. Sanjay E
V. Kharde, learned Advocate appearing for the Respondent
Nos. 1 and 5, that the question to be considered in the context
}- of this interlocutory application is whether the parties can
contract out of the statute when they have no locus standi or
title in respect of the suit property. It was urged that stay prayed F
for earlier had been refused by this Court and Chapter VIII-A,
inserted by the Maharashtra Act (21of1986), in the 1976 Act,
continues to. be valid and operative. It was submitted that the
provisions make it very clear that once the suit property stood
)'- vested in MHADA, the same could be utilized only for the G
purpose of the tenants/ co-operative societies and nobody else.
It was urged that the relief sought for by the Petitioners in the
present application could not be granted since there is a
complete bar on such kind of proceedings after vesting, in view
of Section 103C(2) of the 1976 Act. Mr. Kharde urged that H
588 SUPREME COURT REPORTS [2013] 13 S.C.R.
A symbolic possession of the property had already been taken i--·
and the introduction of a third party into the proceedings was
with the knowledge that the assignee wo1:1ld approach MHADA
for releasing the property for the purpose of development.
13. Mr. Kharde reiterated that once vesting had taken
8
effect under Section 93(5), read with Section 103B(5A), (6)
and (7) of the 1976 Act, and the same having been upheld up
to this Court, the same could not be released to the owners of
the land and would have to be utilized for a purpose similar for
C which it had been acquired. Mr. Kharde urged that the I.A. filed
on behalf of the Petitioners is liable to be dismissed.
14. Mr. Ashok H. Desai, learned Senior Advocate, who
-
appeared for MHADA and the Mumbai Housing Repairs and
Reconstruction Board, submitted that the relief prayed for in the
D instant I.A. was wholly misconceived since the challenge to the
notification dated 20.04.1995 issued by the Respondent No.
4 under Section 93(5) of the 1976 Act, thereby vesting the land
and building absolutely in MHADA free from all encumbrances,
had been repelled up to this Court. It was urged that the vesting
E of the property in MHADA having been upheld up to this Court,
this application seeking release of the property from acquisition
has to be dismissed and the Petitioners have to await the
decision to the challenge of the constitutional validity of Chapter
VIII-A. Mr. Desai submitted that when the matter involving a
F constitutional challenge to Chapter VIII-A of the 1976 Act was
pending consideration before a Bench of Nine-Judges, the
present application could not be decided by any Bench of this
Court of a strength of less than Nine-Judges.
15. Mr. Desai submitted that the scope of these pending
G matters relate to the interpretation of the expression "vesting"
of the property with MHADA under the scheme of the Act. Mr.
Desai also urged that the property having been acquired for
the purposes of Section 103B of the 1976 Act, MHADA was
also saddled with an obligation to utilize 30% of the acquired
H land for similar objects. Mr. Desai submitted that the land could
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 589
[ALTAMAS KABIR, CJI.]
-+ only be used for the benefit of the tenants, if they had formed a A
co-operative society and registered the same, but not for the
purpose of development by a third party, which was completely
alien to the provisions of the 1976 Act. Mr. Desai submitted
that I.A. No. 3 was wholly misconceived and was liable to be
rejected. B
16. Mr. Mukul Rohatgi, learned Senior Advocate, ·
appearing for the Chief Promoter of the UNAT Co-op. Housing
Society, Hashmukh B. Gandhi, contended that since the object
of the 1976 Act was to rehabilitate those tenants who were
living in dilapidated structures, and the end object of the c
scheme of arrangement arrived at by the landlord with the
promoter was for the same purpose, the same should be
accepted and implemented for t~e benefit of the tenants.
17. Countering the submissions made by Mr. Ashok Desai D
that once the lands had vested in MHADA under Section 1038
of the 1976 Act, the same could only be utilised for the
purposes of construction/ reconstruction as intended under the
Act, Mr. Rohatgi submitted that the acquisition in the instant
case was specifically for the purpose of rehabilitation of the E
members of the proposed Punit Cooperative Housing Society,
on whose application the acquisition proceedings had been
started. Mr. Rohatgi submitted that the land so acquired for the
>-
aforesaid Cooperative Society could not be utilised for any
other society/tenants and in the event the tenants chose not to F
continue with the scheme of rehabilitation by resorting to the
provisions of the 1976 Act, MHADA could not obstruct the
release of the land, as otherwise the tenants would be rendered
homeless and they would be deprived of their residences, which
-.,.. they enjoyed in the premises before the acquisition
' G
proceedings were mooted. Mr. Rohatgi urged that the entire
logic of the 1976 Act was to rehabilitate the tenants of the
building which had become dilapidated on account of non-
repair thereof by the landlords and the scheme envisaged
under Chapter VlllA was tenant-specific and any decision to
H
590 SUPREME COURT REPORTS (2013] 13 S.C.R.
A deprive the tenants, either by taking recourse to the scheme
or remaining outside the scheme, would be contrary to the spirit
and object of the Act.
18. Since the writ petition is to be heard by a Bench of
B nine Judges, along W,ith other similar matters, and there is little
likelihood of the matter being taken up for final decision in the
near future, we have given our serious thoughts to the problem
which has been spelt out in the present Interlocutory Application.
On the one hand, it is at the request made by a proposed
Cooperative Society of the tenants of the building that
C acquisition proceedings were commenced by the Board under
Section 103B of the 1976 Act on 30th October, 1986, on the
other, the purpose of the acquisition has not fructified even after
26 years. If, as suggested by Mr. Desai and Mr. Kharde, the
tenants have to wait till a decision is rendered by the Nine-
D Judge Berich, the entire object with which Chapter VlllA was
introduced in the 1976 Act, would be rendered completely
nugatory. Maybe a situation, such as this, was never
contemplated by those who wanted to frame a scheme to
rehabilitate tenants who were victims of a situation where they
E had to reside in unhygenic and maybe dangerous conditions
because of lack of repairs on account of the low rents payable
by the tenants which had been frozen from 1st September,
1940, and made it virtually impossible for the landlords to
maintain the properties when, at times, the municipal taxes were
F higher than the rents collected; but the Courts have to interpret
the law as it is.
19. As indicated hereinbefore, Section 103A was
introduced by way of Chapter VI 11-A in the 1976 Act, by
G Maharashtra Act 21 of 1986, when realisation dawned on the
administration that many persons who had been occupying
buildings either as tenants or otherwise from before 1st
September, 1940, were faced with a peculiar dilemma in which
on account of the low rents paid by them, Which had been
frozen, the landlords were unwilling to effect any repairs to the
H
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 591
[ALTAMAS KABIR, CJI.]
- -1- old structures. Section 103A, whereby Chapter VII I-A was made A
applicable to all "cessed buildings", reads as follows:
"103A. Application of Chapter VIII-A to certain
buildings.
This Chapter shall come into force on and from the B
commencement of the Maharashtra Housing and Area
Development (Second Amendment) Act, 1986, and shall
~- apply to all the cessed buildings which are erected before
the 1st day of September 1940 and are classified as
belonging to Category A under subsection (1) of section c
84:
Provided that, nothing in this Chapter shall apply to any
cessed building belonging to Category A if, on the date
- ----+
of commencement of the Maharashtra Housing and Area
Development (Second Amendment)Act, 1986, out of the
total number of occupiers of such building, fifty per cent,
D
or more occupiers are using the tenements or premises
in their possession for commercial or non-residential
purpose.
E
Explanation - For the purposes of this section, any such
building where a floor or any part of a building is
,__ constructed subsequently and such floor or part is not
separable, shall be deemed to be a building belonging to
Category A." F
20. "Cessed buildings" are buildings in which repairs had
not been effected after 1st September, 1940, and were in
danger of collapse, but continued to be under the occupation
- of tenants. In fact, 19,642 cessed and dilapidated buildings
have been identified in the island city of Bombay. It is Section
G
103B, which deals with the procedure for acquisition of cessed
..-- property for cooperative societies of occupiers, pursuant to
proposals for acquisition submitted under Section 92 of the
1976 Act. In fact, in order to facilitate the repair or ·
H
592 SUPREME COURT REPORTS (2013] 13 S.C.R.
A reconstruction of the building in question, Section 94 makes i-
provision for temporary and alternative accommodation to be
provided to the affected occupiers whose property is acquired.
Since much of the case of the parties depend on Section 1038
of the 1976 Act, the same, in its entirety, is extracted
B hereinbelow:
"1038. Acquisition of cessed property for co-
operative societies of occupiers.
(1) Notwithstanding anything contained in any of the
c provisions of Chapter VIII or any other law for the time being
in force or in any agreement, contracts judgement, decree
or order of any Court or Tribunal to the contrary, a co-
operative society formed or proposed to be formed under
the provisions of the Maharashtra Co-operative Societies
D Act, 1960, by not less than seventy per cent of the ..
occupiers in a cessed building may by written application ·+--
request the Board to move the State Government to
acquire the land together with the existing building thereon
or where the owner of the building does not own the land
E underneath or appurtenant to such building but holds it as
a lessee or licensee, or where any person holds the
building or the land underneath or appurtenant to such
building or both under a lease or licence, then to acquire
the right or interest of such owner or person in or over such -.f
building or land or both as lessee or licensee together with
F
the existing building thereon (hereinafter in this Chapter
referred to as "the land") in the interest of its better
preservation or for reconstruction of a new building in lieu
of the old one and intimate their willingness to pay the
amount of such acquisition as may be determined under --~·--
G the provisions of this Chapter and to carry out the
necessary structural and other repairs or, wherever
necessary, to reconstruct a new building, as the case may
be, at their own cost.
H Explanation I - In this section the expression "seventy
KAMLESH C. SHAH v.. STATE OF MAHARASHTRA 593
[ALTAMAS KABIR, CJI.]
per cent, of the occupiers' means the seventy per cent of A
the occupiers on the date of commencement of the
Maharashtra Housing and Area Development (Secortd
Amendment) Act, 1986, and include their successors-in
interest or new tenants inducted in place of such occupiers,
but does not include the owner or the occupiers inducted B
by virtue of creation of any additional tenancies or licences
by the owner after the date of commencement of the
aforesaid Act.
x Explanation II - For the purposes of this sub-section,
any suit or proceeding for recovery or possession of c
tenement or premises or part thereof, initiated against the
occupier in any court or before any authority whether,
before or after making an application under this sub-
section, shall not affect the right of such occupier to join
or to continue as a member of the co-operative society of D
-t the occupiers of the building, but his membership of such
cooperative society shall be subject to the final decision
in such suit or proceeding:
Provided that, if, in the meantime before the final decision E
in such suit or proceeding, the acquisition proceedings
under this Chapter are completed and the land is conveyed
to the Co-operative society of the occupiers under sub-
} section (7), the claim for possession made in such suit or
proceeding, at any stage where it is pending on the date
of execution of such conveyance, shall abate.
r=
(2) On receipt of the application made under sub-section
(1 ), the Board shall after due verification and scrutiny,
approve the proposal if it considers that it is in the interest
of better preservation of the building or to be necessary G
for reconstruction of a new building and shall direct the co-
operative society, whether registered or proposed, to
deposit with the Board within the period specified by it in
that behalf thirty per cent of the approximate amount that
would be redirected to be paid to the owner if the land is H
594 SUPREME COURT REPORTS [2013) 13 S.C.R.
A acquired and give intimation in that behalf to the owner.
(2A) Where after the date of application made under sub-
section(1),-
(a) any owner has undertaken the work of any repairs to
B the Building; or
(b) the percentage of the occupiers who had initially agreed
to become members of the co-operative society formed ,l.,
under subsection (1) is reduced to less than seventy per
c cent of the occupiers as a result of some members opting
out, or due to the number of additional tenancies or
licences created in the building thereafter or due to any
other reason whatsoever,
then the power of Board to approve the proposal shall not
D be affected, and notwithstanding anything contained in -t-
sub-section (1 ), the Board shall approve the proposal and
direct the co-operative society to deposit the approximate
amount as required under sub-section (2).
E (3) On receipt ofthe amount of deposit as provided in sub-
section (2), the Board shall submit to the State
Government a proposal to acquire the land for the
aforesaid purpose.
-'t
(4) If on receipt of an acquisition proposal under sub-
F
section (3), the State Government is satisfied about the
reasonableness of the proposal, it may approve the
proposal and communicate its approval to the Board.
(5) On receipt of the Government approval, the Board shall ~~
G forward acquisition proposal to Land Acquisition Officer
for initiating and acquisition proceedings in accordance
with the provisions- of sub-sections (3), (4) and (5) of
section 93 and section 96 of this Act :
Provided. that, where any proceedings for acquisition of
H
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 595
[ALTAMAS KABIR, CJI.]
land are so initiated the notice to be published under sub- A
section (3) of section 93 in respect thereof need not
contain any statement regarding provision of any
alternative accommodation to occupiers in such land :
Provided further that, where the proposal involves
B
acquisition of the right or interest of the lessee or licensee
in or over the building or land as referred to in subsection
(1) , then such building or land on its transfer by the
Authority to the co-operative society under sub-section (7)
shall be held by the co-operative society on lease or
licence, as the case may be.subject, however, to the C
following conditions, namely:-
(i) where there is a subsisting lease or licence, on the
same terms ahd conditions on which the lessee or licensee
held it, and D
(ii) where the lease or licence has been determined or.
where the lessee or licensee has committed breach of the
terms and conditions of the lease or licence, as the case
may be, on the fresh terms and conditions, particularly in E
regard to the period of lease or licence and rent as may
be stipulated by the owner of the land.
(SA) Where acquisition proceedings have been initiated
as provided in sub-section (5) and a notification under sub-
section (5) of section 93 is published, the Collector shall F
take and hand over possession of the land to the Board
in accordance with the provisions of sub-section (6) of
section 93.
(6) After the land is vested absolutely in the Board on behalf G
of the Authority free from all encumbrances and the amount
to be paid to the owner is determined, the Board shall
require the society to get itself registered if it is not
registered till then and to deposit the remainder of the
amount to be paid to the owner with the Land Acquisition H
596 SUPREME COURT REPORTS [2013) 13 S.C.R.
A Officer. The Board shall simultaneously pass on the amount -;-- .
deposited by the co-operative society with it to the Land
Acquisition officer. The Land Acquisition Officer shall
thereupon make the payment of the amount for acquisition
or deposit the same in the court as provided in section 46.
B
(7) Subject to the provisions of sub-section (6), the Authority
shall convey the land acquired under this section to the co-
operative society of the occupiers thereof with its right, title
and interest therein and execute without undue delay the ~.
necessary documents in ,that behalf."
c
21. Sub-section (1) of Section 103B begins with a non-
obstante clause to the effect that notwithstanding anything
contained in any of the provisions of Chapter VIII or any other
law for the time being in force or in any agreement, contract,
D judgment, decree or order of any Court or Tribunal to the
contrary, a co-operative society formed or proposed to be +-
formed under the provisions of the Maharashtra Co-operative
Societies Act, 1960, by not less than 70% of the occupiers in
a cessed building may, by written application, request the Board
E to move the State Government to acquire the land together with
the existing building thereon or where the owner of the building
does not own the land, but holds it as a lessee or licensee, then
to acquire the right or interest of such owner or person in or over
...(
such building or land or both as lessee or licensee together with
the existing building thereon. The latter part of Section 103B
F
and more particularly Sub-section (5A), is relevant for our
purpose and provides that where acquisition proceedings have
been initiated as provided in Sub-section (5) and a notification
under Sub-section (5) of Section 93 is published, the Collector
shall take and hand over the possession of the land to the Board
G
in accordance with the provisions of Sub-section (6) of Section "!"
93. It is at this stage that the land vests absolutely in the Board
on behalf of the Authority, free from all encumbrances. At this
stage, the Board shall also require the Society to get itself
registered, if it is not registered till then, and to deposit the
H
KAMLESH C. SHAH v. STATE OF MAHARASHTRA 597
[ALTAMAS KABIR, CJI.]
remainder of the amount to be paid to the owner with the Land A
Acquisition Officer. It is only, thereafter, under Sub-section (7),
that the Authority is to convey the land acquired under this
Section to the co-operative society of the occupiers thereon,
with its right, title and interest therein and execute, without undue
delay, the necessary documentsjn that behalf. B
22. As submitted by Mr. Desai and Mr. Kharde, the tenants
had already vacated the building in question in favour of the
promoter. The million dollar question is whether they were
entitled to do so, once Section 103B of the 1976 Act had
already come into operation and symbolic possession of the C
property had been taken by MHADA, through the Board, under
Sub-section (5A) thereof. Sub-section (7) of Section 103B
provides for the conveyance of the land acquired under Section
103B to the co-operative society of the occupiers together with
its right, title and interest therein, and for MHADA to execute, D
without undue delay, the necessary documents in that behalf,
which presupposes that MHADA had already acquired title to
the property. Had the title not vested in MHADA, it could not
have been vested with the right to convey the same to the co-
operative society. The scheme envisaged in Chapter VIII-A, and E
in Section 9·2 of the 1976 Act comes into play, upon an
application being made by a registered co-operative society
or a proposed co-operative society to undertake the restoration
of the building.
F
23. In the instant case, except for an application having
been made under Section 92 and steps having been taken
thereafter under Section 103B, nothing further has happened.
But by operation of law, the land has come to be vested in
MHADA. The parties to the agreement, which includes the
promoter, were fully aware of this situation since in the G
agreement itself it is indicated that the tenants would withdraw
from the acquisition and would apply to MHADA to release the
property from acquisition so that the agreement arrived at could
be given effect to instantly. Whether MHADA has any obligation
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598 SUPREME COURT REPORTS [20.13] 13 S.C.R.
A to provide similar accommodation to others in respect of the
30% surplus land, is a controversy which we need not go into
and will surely be decided, whenever the Nine-Judge Bench sits
to take up these matters. But for the purposes of this case, we
regret that in spite of the inordinate delay in the working of the
B provisions of Chapter VIII-A of the 1976 Act, which was intended
for the benefit of a certain section of tenants and occupants of
cessed buildir:igs, we are unable to grant the relief prayed for,
as the same goes against the very grain of the provisions of
Chapter VIII-A of the 1976 Act. Accordingly, we have no other
C option, but to dismiss the I.A., without going into further details,
which will have to be settled by the Nine-Judge Bench.
24. Having regard to the nature of the facts of the case,
the parties shall bear their own costs.
Kalpana K. Tripathy Petition dismissed.
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