POWAI PLANT CO-OPERATIVE HOUSING SOCIETY (PROPOSED) v. POOJA ESTATE CONSULTANT AND CONSTRUCTION AND ORS

Citation: [2007] 6 S.C.R. 550

Court: Supreme Court of India

Bench: C.K. THAKKER, TARUN CHATTERJEE

Case summary

POWAI PLANT CO-OPERATIVE HOUSING SOCIETY (PROPOSED) v. POOJA ESTATE CONSULTANT AND CONSTRUCTION AND ORS.pdf

Judgment text

POWAI PLANT CO-OPERATIVE HOUSING SOCIETY (PROPOSED) ~·v. POOJA ESTATE CONSULTANT AND CONSTRUCTION AND ORS. MAY 14, 2007 [C. K. THAKKERAND TARUN CHATIERJEE. JJ. ) Maharashtra Housing and Area Development Act, 1976-Mass Housing ~ Project-Offer for allotment of flats-No response from public-Authority decided to allot flats to Cooperative Societies-Offer made by appellantsociety--First respondent-estate agent also made an offer-Letter of intent issued to Cooperative Society--High Court set aside the order of allotment for non consideration ofoffer ofFirst respondent-Held, not correct-Matter remitted to High Court for reconsideration-Maharashtra Housing and Area Development (Estate, Management, Sale, Transfer and Exchange ofTenements) Regulation, 1981. MHADA, a statutory authority constituted under the Maharashtra T llousing and Area Development Act, 1976, took up a Mass Housing Project and constructed several flats in Mumbai in 1995.

MHADA in accordance with the provisions of law released public advertisements for sale of 165 Non-Deluxe Flats. Between 1995 and 2002, eight such advertisements were released in several leading newspapers for allotment of flats, but there was practically no response from public. In 2003, as also in 2004, two more advertisements were issued but again there was n~gligible response from public. MHADA also considered appointment of E~tate/Property Agents to boost up sa! e and disposal offlats since huge amount . ,.. okrores of rupees had been blocked up. First respondent was appointed as an authorised property agent of MHADA. But it also could sell only 12 flats. The agency of first respondent came to an end on October 7, 2003 which was not renewed thereafter. A policy decision was then taken to make allotment of flats through Co-operative Housing Societies under the "Bulk Purchase Scheme'.

As per the said decision, an offer was made by appellant and since it was the only society, which had applied, a decision was taken to sell flats to the appellant subject to the terms and conditions mentioned in the Resolution "' pas~ed by MHADA. The terms and conditions were accepted by the appellant- POWAi PLANT CO-OP. HOUSING SOCTY. (PROPOSED) v. POOJA ESTATE CONSULTANT AND CONST. 551 society and a Letter of Intent was issued on October 25, 2004. When first respondent came to know about the resolution passed by MHADA to sell flats to the appellant-society, it approached the High Court complaining against the said action on the ground that since they applied on September 9, 2004 and the decision was taken by MHADA and Letter oflntent was issued thereafter on October 25, 2005, it was clear that when the decisio? was taken application of the appellant-society as also of the first respondent were before MHADA.

The High Court allowed the petition observing that it was left "with no option but to quash the Letter of Intent dated 25th October, 2004" issued in favour of the appellant-society. The Court directed MHADA to re-advertise sale of flats and after receiving all the offers, consider all offers in accordance with law and take an appropriate decision. AReview Petition filed against the aforesaid decision was summarily rejected. Hence the present appeal. Disposing of the appeal and remitting the matter to High Court, the Court . ,. HELD: 1. MHADA is a statutory authority. It is required to exercise its ... powers, perform its functions and discharge its duties in consonance with law. Under the Act, it is required to provide housing accommodation throughout the State and to dispose of its property in accordance with law. MHADA had also framed regulations for the purpose of management, sale, transfer and exchange of tenements.

The regulations also provide for allotment of residential tenements by laying down procedure for such allotment. Though normally tenements are to be disposed of by issuing notices, inviting offers and drawing lots by determining eligibility, they also deal with situation where there is no adequate response from public at large. -y [Para 16] (557-D, E, F] 2. Several attempts were made by MHADA to dispose of flats by issuing public advertisements. 10 advertisements had been issued in various newspapers in different languages like English, Marathi, Hindi, Gujarati, etc. But there was no proper response from public. Records show that initially no public members came forward and even after several advertisements, few flats could be disposed of. Thus, on the one hand, construction of flats was complete . ,.. ,.

and the residential accommodation was available but not opted by general public and on the other hand, there was block up of huge amount of MHADA, · depriving it from undertaking other functions which were required to be undertaken by it under the Act It, therefore, considered the question and in an Office Note dated October 12, 2004, opined that disposal offlats could be made under the 'Bulk Purchase Scheme'. In the said Note, it was mentioned that there were 214 flats. Deducting the flats for which response was received (10 flats), flats allotted to Amey CHS (53 flats) and applications received from . public (37 flats), 114 flats were still 11acant which could be allowed to a proposed co-operative society in exercise of power by MHADA. Terms and conditions were also laid down and the proposal was submitted for orders.

Accepting the said proposal, Letter of Intent was issued by MHADA on October 25, 2004 to f the first-respondent-society whi1:h was the only eligible society onder the 'Bulk Purchase Scheme'. Provisional Offer Letter was, therefore, sent to the appellant by MHADA on November 17, 2004. [Para 18) [558-C, D, E, F, G) 3. It was not a case of inviting tenders/offers from general public and the High Court was in error in proceeding on the basis as ifoffers were invited ' from public at large. [Para 18) [558-G, H] 4. Primafacie, MHADA acted within four corners oflaw and in exercise of power under the regulations, particularly, Regulation 16B, it considered the offer ofthe first respondent The basis on which the High Court proceeded was not well-conceived or well-founded and on that ground alone, the decision deserves to be set aside. (Para 18) (559-A, BJ 5.

The High Court has not considered other questions and on a short ground (non-consideration ofom~r of first respondent, allowed the petition. [Para 20) (559-E) 6. The matter was, therefore, remanded to the High Court to be decided . on merits. [Para 21) [559-F) CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2506 of2007. From the Final Judgment and Order dated 25. 02. 2005 ofthe High Court of Judicature at Bombay in Writ Petition No. I0243 of 2004. G' WITH C. A. No. 2507 of2007. Mukul Rohtagi, R. P. Bhat, S. B. Sanyal, Sushil K. Tekriwal, Rajiv Pandey, Venkateswara Rao, Anumolu, Mukesh Kumar, Mahima C. Shroff, Chirag M. Shroff, Varun Thakur, A. S. Bhasme and John Mathew for the appearing POWAi PLANTCO-OP. HOOSING. SOCTY, (P1t01'0$!!. D) v. POOJ'AESTATE CONSUL't'ANT ANDCONST. ICK.. n11,l{Kf. R. J. J 553 i _.. ). ~ parties. . The Judgment of the Court was delivered by C. K. THAKKER, J. I. Leave granted. 2.

Present appeals have been filed against the judgment and order dated February 25, 2005 passed by a Division Bench ofthe High Court of Judicature at Bombay in Writ Petition No. 10243 of2004 and an order dated April 25, 2005 in Review Petition No. 56 of2005. • -( 3. To appreciate the controversy raised in the present appeals, few relevant facts may be noted. 4. The Maharashtra Housing and Area Development Authority ('MHADA' for short) is a statutory authority constituted under the Maharashtra Housing and Area Development Act, 1976 (hereinafter referred to as "the Act"). One ofthe functions of MHADA is to construct residential tenements/ flats for Low Income Groups, Middle Income Groups and Other Poorer Sections ofthe society and to provide them residential accommodation at lower costs. . ,. As per the said mandate, MHADA took up Mass Housing Project and ... constructed several flats in Building Nos. 23A and 23B at Veer Savarkar Nagar, Powai, Mumbai in 1995.

The Act enables the State Government to frame rules (Section 184) for the purpose ofcarrying into effect the provisions of the Act. Likewise, it authorises MHADA to make regulations with the previous sanction ofthe State Government for all or any ofthe matters which have to be or may be prjlscribed or provided by the regulations under the Act (Section 185). In exerciile ofthe power under Section 184 ofthe Act, the State Government has framed rules knows as the Maharashtra Housing and Area Development (Disposal ofLand) Rules, 1985. Similarly, in exercise ofpower '"y under Section 185 of the Act, MHADA framed regulations knows as the Maharashtra Housing and Area Development (Estate, Management, Sale, Transfer and Exchange of Tenements) Regulations, 1981. Rules framed by the State Government as also Regulations made by MHADA provide for allotment ofresidential tenements by inviting applications from members ofpublic who are eligible for such allotment. 5.

MHADA, in accordance with the provisions of law released public advertisements for sale of 165 Non-Deluxe Flats. Between 1995 and 2002, eight r such advertisements were released in several leading newspapers for allotment of flats, but there was practically no response from public. In 2003, as also in 2004, two more advertisements were issued but again there was negligible - ~ sale, transfer and exchange of tenements. The regulations also provide for allohnent of residential tenements by laying down procedure for such allohnent. Though normally tenements are to be disposed of by issuing notices, inviting offers and drawing lots by determining eligibility, they also deal with situation where there is no adequate response from public at large. Regulation l4A provides for such situation and is material which reads as under; 14A. Special provision for disposal of tenements in certain circumstances.

Ifeven after renotification of vacancies as provided in Regulation 14 there is no adequate response and demand for tenements in any particular scheme such of the tenements as can not be so disposed of must be disposed of on the 'first served' basis or in any other manner determined by the Authority from time to time. (emphasis supplied) 18. Our attention has been invited by the learned counsel for the appellants-society and MHADA that several attempts were made by MHADA to dispose of flats at Powai by issuing public advertisements. 10 advertisements (8+2) had been issued in various newspapers in different languages like English, Marathi, Hindi, Gujarati, etc. But there was no proper response from public. Records show that initially no public members came forword and even after several advertisements, fe:w flats could be disposed of.

Thus, on the one hand, construction of flats was complete and the residential accommodation was available but not opted by general public and on the other hand, there was block up of huge amount of MHADA, depriving it from undertaking other functions which were required to be undertaken by it under the Act. It, therefore, considered the question and in an Office Note dated October 12, 2004, opined that disposal of flats could be made under the 'Bulk Purchase Scheme'. In the said Note, it was mentioned that there were 214 flats. Deducting the flats for which response was received (10 flats), flats allotted to Amey CHS (53 flats) and applications received from public (37 flats), 114 flats were still vacant which could be allowed to a proposed co-operative society in exercise ofpower by MHADA. Terms and conditions were also laid down and the proposal was submitted for orders.

Accepting the said proposal, Letter oflntent was issued by MHADA on October 25, 2004 to the first-respondentsociety which was the only eligible society under the 'Bulk Purchase Scheme'. Provisional Offer Letter was, therefore, sent to the appellant herein by MHADA on November 17, 2004. The learned counsel for the appellants, in our opinion, are right in submitting that it was not a case of inviting tenders/offers from general public and the High Court was in error in proceeding on the basis as if offers were invited from public at large. If it is so, it goes without saying POWAi PLANT CO. OP. HOUSING SOCTY. (PROPOSED)"· POOJA ESTATE CONSULTANT ANO CONST. IC. IC THAKhER. J. ] 559 ,. ;. ·)' that the High Court was in error in setting aside the decision of MHADA on the ground that though Letter of Intent was issued in October, 2004 and Provisional Offer was made in November, 2004, since the offer of the first respondent-petitioner, dated September 9, 2004 was not considered.

the action of MHADA was illegal. Jn our opinion, Prima facie, MHADA acted within four comers of law and in exercise of power under the regulations, particularly, Regulation I68, it considered the offer of the first respondent. The basis on which the High Court proceeded was not well-conceived or well-founded and on that ground alone, the decision deserves to be set aside. • -. ( ' 19. We have also gone through the affidavits filed by the contesting respondents before the High Court (appellants herein) in which the above aspect has been highlighted. Even after the decision by the High Court in the Writ Petition, in Review Petition also, the said contention was raised, but the Review Petition had been rejected summarily. It is also the case of the appellants that first respondent-original petitioner (Pooja) was no longer authorised agent ofMHADA after 2003 and had no right to claim any benefit as an agent of MHADA.

We express no opinion on that aspect inasmuch as the High Court had not decided the matter on that ground. ........ ... 20. It is no doubt contended by the first respondent (original petitioner) that even otherwise the action impugned by the first respondent in the High Court was illegal, unreasonable and otherwise objectionable. To repeat, the High Court has not considered other questions and on a short ground (nonconsideration ofoffer ofPooja) allowed the petition. It is, therefore, appropriate if we set aside the order of the High Court and remit the matter for fresh disposal in accordance with law. 21. For the foregoing reasons, the appeals deserve to be allowed and are accordingly allowed. The order passed by the High Court in Writ Petition ....... as also in Review Petition is set aside and the matter is remanded to the Court for fresh decision in accordance with law. 22.

Before parting with the matter, we may clarify that we have not entered into correctness or otherwise of the decision taken by MHADA and we may not be understood to have expressed any opinion thereon. We are also not deciding one way or the other the contention of the appellants as to locus standi of Pooja that since its agency came to an end in 2003, it could ,. ).. not have filed a writ petition to challenge the decision of MHADA. The A parties are at liberty to take up all pleas before the High Court and the Court will decide them in accordance with law without being influenced by observations made by us in this judgment. The High Court is requested to decide the matter expeditiously preferably within three months from the receipt of the order from this Court. B The appeals are disposed of accordingly with no order as to costs. D. G. Appeals disposed of. . ,.. •