Bombay High Court Upholds Landowners' Preferential Rights in Slum Rehabilitation Case

Acquisition of private land for slum rehabilitation deemed unconstitutional without recognizing landowners' redevelopment rights, says court.

In a landmark judgment, the Bombay High Court has ruled in favor of NESCO Limited, emphasizing the preferential rights of private landowners in undertaking redevelopment of slum rehabilitation areas. The division bench, comprising Justices G.S. Kulkarni and Aarti A. Sathe, declared the acquisition of NESCO's land in Goregaon, Mumbai, under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, as arbitrary and unconstitutional, thereby quashing the state's acquisition notification.

The case, brought forth by NESCO Limited, challenged the acquisition of their privately-owned land that was declared a slum rehabilitation area, arguing that the State Government and Slum Rehabilitation Authority (SRA) failed to recognize and exhaust the landowners' preferential rights before proceeding with acquisition. The court observed that such actions were inconsistent with the legislative scheme and the constitutional guarantee of the right to property under Article 300A of the Constitution of India.

The judgment highlighted that landowners possess a preferential right to redevelop slum areas on their property, and any acquisition must adhere to statutory provisions ensuring fairness, reasonableness, and non-arbitrariness. The court referred to precedents, including the Supreme Court's decisions in Tarabai Nagar Co-op.Hsg.Society and Saldanha Real Estate Pvt. Ltd., which reinforced landowners' preferential rights in similar contexts.

The court criticized the conduct of public authorities, noting that actions influenced by private developers at the expense of landowners and slum dwellers were highly depreciable. The judgment emphasized the need for transparency and equity in the acquisition process, urging the SRA and State Government to uphold the rule of law.

The ruling mandates that before any acquisition under the Slum Act, the landowner must be given an opportunity to submit a redevelopment scheme. The decision is seen as a significant assertion of landowners' rights, ensuring they are not bypassed in favor of private developers.

The judgment sets a precedent reinforcing the constitutional and statutory protections available to landowners, ensuring that their rights are safeguarded in the face of redevelopment and slum rehabilitation initiatives.

Bottom Line:

Slum Rehabilitation - Acquisition of private land under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 - Preferential rights of the private landowner to undertake redevelopment recognized - Acquisition of land for slum rehabilitation cannot proceed without recognizing and exhausting the owner's preferential rights.

Statutory provision(s): Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, Article 300A of the Constitution of India

NESCO Limited v. State of Maharashtra, (Bombay)(DB) : Law Finder Doc Id # 2794469