Bombay HC Upholds Bhendi Bazaar Cluster Acquisition Of Unreserved Land Where Developer Had Rights To 70% And Remaining Buildings Were Dangerous

The petitions challenged the acquisition of properties in Bhendi Bazaar, Mumbai, for a Cluster Development Scheme (CDS) implemented by the Saifee Burhani Upliftment Trust. The petitioners disputed Regulation 33(9)(3)(5) of the Development Control and Promotion Regulations 2034 (DCPR), the acquisition notification dated 27 September 2019, the award dated 30 December 2019, and the taking of possession.

The Trust’s scheme had been considered by the High Power Committee (HPC) over several years; the acquisition followed after the Trust obtained development rights over the required proportion of the cluster and the remaining owners did not consent.

The properties were acquired, possession was taken, and the Lucky Building was later demolished. The petitioners had also sought enhancement of compensation under Section 64 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act of 2013).

The second petition additionally alleged that the property was waqf property and that the Waqf Board had not been heard.

1. Whether Regulation 33(9)(3)(5) of the DCPR was ultra vires the MRTP Act, including because it permitted acquisition of land not separately reserved or designated for public purpose and allegedly involved excessive delegation.

2. Whether the Regulation and the acquisition violated the petitioners’ rights under Article 300A of the Constitution or were invalid for want of public purpose.

3. Whether the acquisition was vitiated by non-compliance with the Regulation or by procedural defects, including inadequate notice, denial of natural justice, unlawful sub-delegation, and failure to establish that the buildings were dangerous.

4. Whether the acquisition award was void under Section 91 of the Waqf Act, 1995, for want of notice to the Waqf Board.

The Court applied Sections 22(m), 125 and 126 of the MRTP Act, holding that Development Control Regulations form part of the development plan and that land required for a public purpose under those Regulations may be acquired under Section 126; the statutory concept of acquisition is not confined to land separately reserved or designated on the plan.

Section 159 of the MRTP Act empowers the making of regulations consistent with the Act, while the statutory procedures for preparing or modifying the plan and regulations provide for public participation.

The Court also applied Article 300A, under which deprivation of property must be by authority of law, and held that statutory regulations and acquisition under the MRTP Act and the Act of 2013 met that requirement.

It relied on the principles that public purpose is broad and may include schemes benefiting the community, and that delegated legislation is not excessive where it is guided by the parent statute and contains sufficient safeguards.

On procedural fairness, the Court applied the prejudice-based approach to natural justice stated in State of Uttar Pradesh v. Sudhir Kumar Singh (2021) 19 SCC 706.

It also considered the definition of “Collector” in Section 3(g) of the Act of 2013 and Rule 2(g) of the Maharashtra Rules, which include designated and specified officers, and Section 91(4) of the Waqf Act, which provides a procedure for seeking to have an order declared void where the Board was not given an opportunity.

The Court rejected the petitioners’ argument that acquisition required a separate reservation or designation, reasoning that the DCPR formed part of the development plan and that the land was required for the public purpose of urban renewal through cluster redevelopment.

It found that Regulation 33(9)(3)(5) contained safeguards—including minimum cluster-area requirements, the requirement that the promoter hold development rights over at least 70% of the land, the presence of dangerous buildings on the balance land, and HPC scrutiny—and therefore was neither ultra vires nor an instance of excessive delegation.

The Court found that the scheme had been considered over time, that the petitioners had notice of it, and that the buildings’ age, cessed status and warning notices supported the finding that the dangerous-building requirement was met.

It held that the petitioners showed no material prejudice from the alleged notice or hearing defects, and that the Deputy Collector was competent under the applicable statutory definition and rules.

Complaints about the compensation amount were left to the Section 64 reference proceeding.

As to the waqf claim, the Court noted that the Board had not applied under Section 91(4) within the prescribed period and had stated that it had no objection to the acquisition.

It rejected the Waqf Act challenge and dismissed both writ petitions, while leaving the petitioners free to pursue their pending claim for enhanced compensation under Section 64 of the Act of 2013.