Landowner Retains Preferential Right to Implement Slum Rehabilitation Scheme Despite Technical Invalidity of Initial Proposal

The Petitioner, a Public Charitable Trust and owner of the subject property in Bandra, challenged two orders by the AGRC (R1).

In July 2021, the Slum Rehabilitation Authority (SRA) gave "in-principle" acceptance to the Petitioner's proposal for a Slum Rehabilitation (SR) Scheme under Circular No. 144A.

Respondent Nos. 5 and 6 (a proposed slum society) challenged this before the AGRC.

On February 7, 2025, the AGRC allowed an intervention by the legal heirs of a former trustee (R7-R9).

On May 27, 2025, the AGRC set aside the SRA’s acceptance, citing: (a) lack of 70% consent/resolution from the society as per Circular No. 144; and (b) alleged false statements regarding pending litigation in the Petitioner’s affidavit.

1. Whether the AGRC erred in applying the requirement of 70% consent under Circular No. 144 to a proposal filed by a landowner under Circular No. 144A.

2. Whether the Petitioner had suppressed material facts regarding "litigation" when the pending suits did not involve the subject property.

3. Whether the SRA could legally accept an SR Scheme proposal before the land was formally declared a "Slum Rehabilitation Area" under Section 3C(1) following the 2017 Amendment.

The Court primarily applied Section 3C(1) and Section 13(1) of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, as amended in 2017.

It relied on the "preferential right of the owner" doctrine established in Tarabai Nagar Co-op. Housing Society v. State of Maharashtra and Saldanha Real Estate Pvt. Ltd. v. Bishop John Rodrigues, which holds that a landowner has the first right to develop an SR Scheme and that Circular No. 144A dispenses with the 70% consent requirement when the owner exercises this right.

The AGRC failed to distinguish between Circular 144 (general) and 144A (landowner-specific); under the latter, 70% consent is not a prerequisite for the owner to propose a scheme.

The "pending litigation" cited by the AGRC (Suit Nos. 3148/2009 and 389/2010) did not list the subject property as suit property, rendering the allegation of "false affidavit" baseless.

The Court identified a separate jurisdictional defect: following the 2017 Amendment, a declaration under Section 3C(1) is a mandatory precursor to any SR Scheme implementation.

The SRA had accepted the Petitioner’s proposal in 2021 before the Section 3C(1) declaration was issued in 2024; an owner's 120-day preferential window under Section 13(1) only triggers after the formal 3C(1) declaration.

The Court granted liberty to the Petitioner to file a fresh proposal based on the 2024 declaration within four weeks; the SRA was directed to process this new proposal with priority and was barred from rejecting it on the erroneous grounds previously cited by the AGRC.