Insights
Property redevelopment approvals: Lessons from Bombay HC
November 19, 2023In a recent judicial ruling, the Bombay High Court played a decisive role in resolving a property redevelopment dispute involving an owner-developer, their partner and uncooperative tenants. The ruling highlights the rights of property owners, the value of cooperation and the significance of tenant participation in the redevelopment process.
At the heart of this case is a writ petition filed by the owner-developer and their partner (Shree Ram Builders vs Municipal Corporation of Greater Mumbai). Their plea sought legal intervention from the Court, compelling the authorities to expedite the granting of essential permissions, approvals and NOCs for the redevelopment of the property. The petitioners’ request included a plea for an exemption from the obligation to provide registered permanent alternate accommodation agreements (PAAAs) as mandated in one of the conditions outlined in the intimation of disapproval (IOD). This condition stipulated submission of executed and registered PAAAs with all tenants.
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The counsel for the petitioners presented a comprehensive overview of the property’s redevelopment to the Court. They provided detailed information about tenants who cooperated with the redevelopment process. The cooperative tenants not only signed PAAAs but also had the opportunity to secure additional space and had an option to purchase additional areas on an ownership basis.
They further shared information about the three non-cooperative tenants within the property as well. Two of these tenants were offered units with higher area on a tenancy basis to ensure their participation.
Upon examination, the Court determined that it could not mandate changes to the terms of the offer related to the new premises, which were initially presented on an ownership basis. However, the counsel informed the Court that through subsequent discussions, the two non-cooperative tenants eventually agreed to accept their new units on a tenancy basis and consented to execute the PAAAs.
For the third non-cooperative tenant, who had filed a separate writ petition, the Court decided to address the case as a separate matter.
The Court ordered the Municipal Corporation of Greater Mumbai (MCGM) not to insist on the execution of a PAAA with the uncooperative tenant, granting them the relief they sought.
The Bombay HC’s judgment in this property redevelopment case sets a precedent for future redevelopment projects by directing the MCGM not to require copies of PAAAs from all tenants as a prerequisite for granting the necessary permissions and NOCs for redevelopment initiatives. This ruling offers insights into the delicate balance between property owners’ rights, tenant cooperation and participation, ensuring a smoother and equitable redevelopment process. Moreover, it highlights the decisive role played by the Court in achieving fair resolutions that benefit all parties involved.
This article was originally published in The Hindu Business Line on 19 November 2023 Written by: Ashoo Gupta, Partner. Click here for original article
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This is intended for general information purposes only. The views and opinions expressed in this article are those of the author/authors and does not necessarily reflect the views of the firm.
