Cluster Development Schemes for Urban Renewal Qualify as Public Purpose: Bombay HC

The Bombay High Court has upheld the validity of the Cluster Development Scheme (CDS) for Mumbai’s Bhendi Bazaar, ruling that the State possesses the power to acquire land for private-led urban renewal projects as they serve a significant public interest. The Court clarified that such redevelopment schemes, aimed at upgrading congested areas and providing better living conditions, constitute a 'public purpose' under land acquisition laws, even when implemented by a private trust.

A Division Bench comprising Justice Manish Pitale and Justice Shreeram V. Shirsat heard the challenge against the acquisition of properties in the Bhendi Bazaar area. The petitioners had contested the validity of Regulation 33(9)(3)(5) of the Development Control and Promotion Regulations 2034, alleging that it was ultra vires the Maharashtra Regional and Town Planning Act, 1966 and violated the right to property under Article 300A of the Constitution of India, 1950.

Legal Validity of Cluster Development Regulations

The Court rejected the petitioners' argument that land can only be acquired if it is specifically 'reserved' or 'designated' for a public purpose in a development plan. The Bench emphasized that the word 'required' in Section 126 of the Maharashtra Regional and Town Planning Act, 1966 is of equal significance. The Court observed: "Once it is held that the Development Control Regulations or DCPR are part of the development plan, the moment a land is required for public purpose as per such regulations, the same can be acquired."

The Bench further noted that the Development Control and Promotion Regulations 2034 is an organic document that must evolve with the needs of the city. Relying on DB Realty Limited vs. State of Maharashtra and others and Nariman Point Association and another vs. State of Maharashtra and others ( "2003(3) Mh.L.J. 68": 2003 CaseBase(BOM) 930), the Court held that these regulations are conceptually and in law a part of the sanctioned final development plan. The Court, in its reasoning, observed: "The concept of ‘public purpose’... clearly demonstrates that the subject CDS qualifies as ‘public purpose’. The public character of such a Urban Renewal Scheme is not diluted because of the fact that it is implemented with the assistance of a promoter/ developer."

Observations on Article 300A and Human Rights

While acknowledging that the right to property is a human right, the Court held that the acquisition in this case was backed by the 'authority of law'. The Bench cited Hindustan Times & Ors. vs. State of U.P. & Anr. and Bishambhar Dayal Chandra Mohan & Ors. vs. State of Uttar Pradesh & Ors. to reiterate that statutory regulations like the Development Control and Promotion Regulations 2034 qualify as 'law' under Article 300A of the Constitution of India, 1950. Since the petitioners were offered market-value compensation determined under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, their constitutional rights were sufficiently protected.

Waqf Property and Procedural Compliance

Regarding the additional challenge in the second petition involving Waqf property, the Court found no violation of Section 91 of the Wakf Act, 1995. The Bench noted that the Waqf Board had not filed any application to declare the award void within the statutory timeframe and had, in fact, expressed 'no objection' to the acquisition. The Court also dismissed claims of procedural haste, noting that the Bhendi Bazaar proposal had been under scrutiny by a High Power Committee (HPC) since 2009.

The Court has following directions:

"In view of the above and considering the facts and circumstances of the case, we are of the opinion that the petitioners have failed to support their case for granting reliefs as claimed in the writ petitions. Accordingly, the writ petitions are dismissed. Pending applications, if any, also stand disposed of."

Background

The dispute arose from the Bhendi Bazaar Cluster Development Scheme executed by the Saifee Burhani Upliftment Trust. The petitioners, owners of the 'Lucky Building', challenged the acquisition of their property after refusing to join the scheme, which had already secured the consent of nearly 90% of local landowners. They argued that the State could not acquire land for a private trust and that the Development Control and Promotion Regulations 2034 exceeded the powers granted by the Maharashtra Regional and Town Planning Act, 1966.

The State and the Trust argued that the Bhendi Bazaar area was highly congested with dilapidated, century-old cessed buildings that posed a risk to life. They maintained that the project would provide modern housing, roads, and sanitation facilities to thousands of residents. The Court found that the buildings were statutorily 'dangerous' under the Maharashtra Housing and Area Development Act, 1976 as they were constructed prior to 1940. Following the vacation of interim relief by the High Court and subsequent refusal of the Supreme Court to interfere in 2023, the subject building was demolished. The High Court ultimately dismissed the petitions, permitting the petitioners to seek enhanced compensation through a reference under Section 64 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Case Details:
Case No.: WRIT PETITION NO. 2997 OF 2021 WITH WRIT PETITION NO. 4762 OF 2024
Case Title: Moiz Dawoodbhai Palitanawala & Ors. Versus The Municipal Corporation of Greater Mumbai & Ors.
Appearances:
For the Petitioner(s): Mr. Sagheer A. Khan a/w Sauda Nachan, Insha Shaikh, Mr. Aqil Khan, Mr. Dawood Khan, Ms. Afsha Khan, Ms. Tasmiya Siddique, Aleze Kodare and Mr. Gufran i/by Judicature Law Associates.
For the Respondent(s): Dr. Milind Sathe, A.G. a/w Ms. Usha Rahi, AGP; Dr. Birendra Saraf, Senior Advocate a/w Mr. Pralhad Paranjpe; Ms. Pooja Khandeparkar a/w Ms. K. H. Mastakar.

Source: 2026 CaseBase(BOM) 7124