MHADA permitted to pursue cluster redevelopment; developer lacks locus to challenge e-tender

A bench of Justices Sudhanshu Dhulia and K. Vinod Chandran heard an appeal arising from a Special Leave Petition challenging a Division Bench judgment of the Bombay High Court that dismissed a writ petition by a private developer against an e-tender issued by the Maharashtra Housing and Area Development Authority (MHADA). The core issue related to whether MHADA's e-tender and government resolution directing redevelopment interfered with the contractual rights claimed by the appellants.

The Court dismissed the appeal and upheld the High Court's conclusion that the writ petition was not maintainable. It found that MHADA was empowered under Regulation 33(9) of the Development Control and Promotion Regulations, 2034 (DCPR) to participate in Cluster Development Schemes (CDS) on freehold lands jointly with landowners or cooperative housing societies, and that the appellants had not demonstrated any vested, enforceable right to carry out redevelopment that could be protected by a writ. The Court emphasised procedural and evidentiary gaps in the appellants' claims and noted that remedies lay in civil proceedings. The Court, in its reasoning, observed: "The appellants have no locus standi to challenge the e-tender in a writ proceeding, when the redevelopment of the said land is carried out as a Cluster Development Scheme under the DCPR, which enables MHADA, jointly with the land owners/Cooperative Societies to carry out such development. The appellants have failed to show us any vested right to carry out the development, especially when there is not even a registered agreement with any individual or the Societies. The very claim of the appellants based on the resolutions purportedly of the Societies clearly indicate that the promises made by the appellant were not complied with and the redevelopment also was not carried out within the time stipulated, leading to breach of any such agreement; if at all such agreements were valid and enforceable."

Background: The dispute concerned approximately 11.20 acres known as Guru Teg Bahadur Nagar, where 25 buildings housing around 1,200 families had stood; those structures were decades old, classified as Category C-1 by the Brihanmumbai Municipal Corporation and were demolished in 2019 after statutory proceedings. The appellants, a private developer, contended that they had secured redevelopment agreements from individual occupants and societies, and had incurred about Rs.17.31 crores in pursuit of redevelopment, including corpus payments. They argued that the government and MHADA could not lawfully intervene by issuing an e-tender because the land was freehold and private and contracted to them.

The State and MHADA countered that many occupants and societies supported governmental intervention and that MHADA was authorised to prepare and execute redevelopment proposals, including on freehold lands when undertaken jointly with landowners or societies under Regulation 33(9). The High Court found that the agreements relied on by the appellants were largely unregistered, that the corpus funds were not shown to have been paid to the majority of occupants, and that the appellants had not pursued available civil remedies. The High Court concluded that "the writ petition is not maintainable" and that relief against alleged contractual breaches must be sought in a civil forum. The Supreme Court agreed, noting that the erroneous description of the land in a government resolution as government-owned was "inconsequential" to MHADA's jurisdiction under the DCPR and that the Societies, "in one voice", supported MHADA's initiative. The Court dismissed the appeal and disposed of pending applications.

Case Details: Case No.: 2025 INSC 489 (Civil Appeal @ SLP (C) No.29118 of 2024) Case Title: Lakhani Housing Corporation Pvt. Ltd. & Anr. v. The State of Maharashtra & Ors. Appearances: For the Petitioner(s): Mr. C. A. Sundaram, Senior Counsel For the Respondent(s): Mr. Tushar Mehta, Solicitor General (for MHADA); Mr. Shyam Divan, Senior Counsel (for several societies)