REAL ESTATE UPDATE
14th January, 2024
Issue No. 23/24-25
SRA PROJECTS IS A PUBLIC PRIORITY – DEVELOPERS FAILURE CAN RESULT IN TERMINATION OF DEVELOPMENT AGREEMENT – SC RULING
BACKGROUND
The Supreme Court of India, in Yash Developers v. Harihar Krupa Co-operative Housing Society Limited & Ors. (Civil Appeal No. 8127 of 2024), addressed the termination of a development agreement under the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971. Yash Developers entered into a development agreement in 2003 to rehabilitate slum dwellers in Borivali, Mumbai. The project, however, encountered multiple delays due to litigation involving competing developers, environmental clearance procedures, and non-cooperation from certain slum dwellers. Despite these challenges, the Apex Grievance Redressal Committee (AGRC) terminated the agreement in 2021, citing the developer’s failure to meet project timelines. The Bombay High Court upheld the AGRC’s decision, emphasizing the public interest and the statutory and constitutional obligations of developers in slum rehabilitation projects. Dissatisfied, Yash Developers approached the Supreme Court.
COURT’S RULING
The Supreme Court dismissed the appeal and upheld the AGRC’s decision to terminate the agreement. The Court emphasized the following key points:
- Statutory Provisions: Section 13(2) of the Maharashtra Slum Areas Act empowers statutory authorities to terminate agreements if developers fail to adhere to prescribed timelines. This statutory provision ensures accountability and timely execution of redevelopment projects.
- Accountability: The Court held that delays in slum rehabilitation projects are not solely attributable to developers but also require oversight and accountability from statutory authorities. Both parties share the responsibility to ensure timely completion.
- Public Interest: The judgment underscored the constitutional imperative of slum rehabilitation, linking it to the fundamental right to housing under Article 21 of the Constitution. The Court emphasized that slum redevelopment projects serve a public purpose and must prioritize the welfare of slum dwellers over private real estate interests.
- Judicial Review: While exercising its powers under Article 226, the Bombay High Court rightly focused on ensuring that statutory authorities fulfilled their obligations toward public welfare. The Court ruled that the AGRC’s decision was neither arbitrary nor beyond its jurisdiction.
CONCLUSION
The Supreme Court reaffirmed the constitutional and statutory duties of developers and authorities in slum rehabilitation projects. It stressed the importance of timely redevelopment, balancing private interests with the public need for adequate housing under Article 21. The judgment imposes a duty of accountability on all stakeholders involved and reinforces the broader objective of protecting the housing rights of marginalized communities. By dismissing the appeal with costs imposed on Yash Developers, the Court sent a clear message about the consequences of failing to meet statutory obligations in public-interest projects.
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