Church Trust’s Preferential Right Upheld: Supreme Court Strikes Down Slum Land Acquisition in Saldanha Real Estate Case

Presided by: Justice Surya Kant, Justice Ujjal Bhuyan, Supreme Court of India
Appellants: Saldanha Real Estate Pvt. Ltd., Shri Kadeshwari CHS Ltd. (Proposed), Slum Rehabilitation Authority (SRA)

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Respondents: Bishop John Rodrigues & Basilica of Our Lady of the Mount (Church Trust)

The point of the dispute was land at CTS No. B-960, Bandra, Mumbai belonging to the Basilica of Our Lady of the Mount (Church Trust). A portion of this area that was long-enroached by shacks was declared as slums in 1978 and it has since been extended. The dwellers of the slums developed Shri Kadeshwari CHS Ltd. and hired developers to rehabilitate the development. Initially associated with M/s Accord Estates, they had later entered a tie up with the Saldanha Real Estate Pvt. Ltd.

The Church Trust, however, proposed to redevelop its broader estate in order to create a composite project, including the subject land. After Saldanha lodged his proposal with the SRA, when it submitted its own redevelopment plan in 2021, the SRA rejected this on technical grounds, and continued with Saldanha. This was followed by commencement of acquisition proceedings at the behest of Saldanha. The Bombay High Court overturned the acquisition and acknowledged a preferential right of the Trust. Then the appellants filed a motion before the Supreme Court

Court Proceedings

The Appellants claim that:

The Trusts redevelopment proposal was not in proper format, defective and late.

The Amendment of the Slum Areas Act 2018 reversal of the burden of action so that a declaration alerts landowners of the next 120 days to act, requiring no action.

In decades of conduct, the Trust was seen to be inactive and thereby justified to be acquired.

The respondents (Church Trust) responded by stating that:

The right of a landowner to redevelop is not taken away and the Trust provided its proposal in time. SRA colluded with the developer at the expense of the rights of the Trust.

The acquisition was purchased with malafide, to have Saldanha have an avenue to exploit the land with under aggressively valuated rates.

Court’s Reasoning

Tarabai Nagar Co-Op. Housing Society, issue of right to strike/license and how far the strike can be called off has also been addressed with the Supreme Court firmly holding that no strike can be called off nor the strike suspended however the strike can be postponed. State of Maharashtra and Indian Cork Mills. The Court of Appeal, State of Maharashtra, observed that the owner of the land would have a right of first refusal to redevelop slum rehabilitation sites and such right could not be waived without a special notice/invitation in terms of Section 13 of the Slums Act. The Court was of the opinion that the preferential right was not weakened in the 2018 Amendment, instead, it was strengthened in the amendment since the owners had been incorporated within the statutory framework. No valid notice was issued to the Church Trust meaning its preferential right existed. Besides, actions of Saldanha Real Estate, Kadeshwari Society, and the SRA indicated collusion and ill intent of conquering the land of the Trust, as the rejection of the proposal of the Trust on technical grounds by the SRA whilst accepting the same proposal as that of Saldanha reveals the biasness of the latter. As such the pleas by the Court were rejected and what stood was the decision by the Bombay High Court that a considerable part of the acquisition was illegal and tainted with mala fide. It ordered that the Church Trust get 120 days to present a proper redevelopment scheme, and that the SRA and the State was mandated to accommodate and process the scheme within 60 days of the filing. The Court also stipulated that the rights of the slum dwellers would have to be carried out by following the undertakings that remained with the Trust already. With this decision, the Court reaffirmed the priority rights of landowners against opportunism and hence redevelopment acquisitions in Mumbai sought to protect them against collusive tendencies common in this redevelopment industry.