Consent of all tenants not needed for redevelopment of dilapidated building: Bombay High Court

The Bombay High Court recently held that a developer can be allowed to redevelop a dilapidated building even if 51 to 70 percent tenants are in agreement with such redevelopment [Raj Ahuja vs Municipal Corporation of Greater Mumbai]..A division bench of Justices Girish Kulkarni and RN Laddha said that as per the Development Control and Promotions Regulation - 2034 (DCPR-2034), there is no need to obtain consent of all the tenants in the building for such redevelopment. "The requirement of 100% consent of tenants entering into a PAAA with the landlord/owner would not be applicable in respect of such any proposal when the DCPR 2034 itself mandates consent of 51% to 70% respectively of the occupants/ tenants," the Court saidThe Court, therefore, quashed the decision of the Municipal Corporation of Greater Mumbai (MCGM) which had asked the petitioner-developer to obtain consent of all the tenants for the redevelopment of a building in Goregaon. The civic body, the bench noted, had directed the developer to get the consent of 100 percent tenants if it wanted approval for the redevelopment, known as the commencement certificate (CC). "It is a settled position in law that the interest of the minority occupants or the tenants cannot be opposed to the interest of the majority occupants, as also such persons cannot foist on the owners a delay in commencement of the redevelopment work, resulting in the project cost being increased, which would be seriously prejudicial to the owners or the developers and above all, the majority of the occupants," the bench observed in its order pronounced on March 20. .The developer contended that by imposing such a condition, the civic body would only prejudice the rights and interests of the developers. It argued that getting consent of 100 percent tenants is not always possible and, therefore, such a pre-condition was arbitrary. On the other hand, MCGM said that the pre-condition was imposed only to secure the interests of all the tenants. .The bench referred to the guidelines issued by the MCGM for declaring private and municipal buildings as ‘C-1’ category (dangerous, unsafe) and also the DCPR-2034.It noted that the same provides that if 51 per cent to 70 percent of the tenants consent and agree to accept permanent alternate accommodation (PAA) offered by the owner or landlord, the same would suffice and would entitle the developer to secure a CC."Thus, in our clear opinion, it was arbitrary for the MCGM to insist from the petitioners, consent of 100 per cent of the tenants and in its absence withhold the CC to be issued to the petitioners on few tenants not consenting to accept residential tenements," the bench held. .The bench opined that it cannot be countenanced that once the majority of the occupants agree to vacate the building and/or accept the PAA being offered by the owner, by protecting their occupancy rights as they stood at the time the building was demolished, it cannot be heard from minority of such tenants, for whatever reasons, that they are not agreeable to a settlement in this regard. "They cannot now resist a PAA as offered by the owner to the majority of the tenants, for a reason that the PAA does not suit their requirements, or for some other reasons they are not agreeable to enter into a PAA, as in the present case. This would amount to few tenants bringing the entire redevelopment to a standstill, by not consenting to a permanent alternate accommodation or by raising disputes," the bench ruled. .Senior Advocate Ashish Kamat along with advocates Mayur Khandeparkar, Pooja Kane-Kshirsagar, Jitendra Jain, Laxman Jain, Rohit Bamne and Yogesh Adhia, Rajesh Sharma, Tehashree Paraz instructed by Rajesh Sharma & Associates appeared for the Petitioners. Senior Advocate Anil Sakhare along with advocates Vandana Mahadik and Dharmesh Vyas represented the MCGM. Additional Government Pleader Sukanta Karmakar represented the State. Advocate Amarendra Mishra appeared for the non-consenting Tenants. .[Read Judgment]