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CASE NO.: Appeal (civil)  2506 of 2007

PETITIONER: POWAI PLANT CO-OPERATIVE HOUSING SOCIETY (PROPOSED)

RESPONDENT: POOJA ESTATE CONSULTANT & CONSTRUCTION & Ors.

DATE OF JUDGMENT: 14/05/2007

BENCH: C.K. THAKKER & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T

CIVIL APPEAL No.2506 OF 2007 Arising out of Special Leave Petition (Civil) Nos. 15495-96 OF 2005 WITH CIVIL APPEAL No.2507 OF 2007 Arising out of Special Leave Petition (Civil) Nos. 19846-47 OF 2005

MAHARASHTRA HOUSING & AREA DEVELOPMENT AUTHORITY & ANR             \005.   Appellant

                       VERSUS

POOJA ESTATE CONSULTANT & CONSTRUCTION & Ors.                   \005    Respondents

C.K. THAKKER, J.         Leave granted.         Present appeals have been filed against the  judgment and order dated February 25, 2005 passed by  a Division Bench of the High Court of Judicature at  Bombay in Writ Petition No. 10243 of 2004 and an order  dated April 25, 2005 in Review Petition No. 56 of 2005.         To appreciate the controversy raised in the present  appeals, few relevant facts may be noted.         The Maharashtra Housing and Area Development  Authority (’MHADA’ for short) is a statutory authority  constituted under the Maharashtra Housing and Area  Development Act, 1976 (hereinafter referred to as "the  Act").  One of the functions of MHADA is to construct  residential tenements/flats for Low Income Groups,  Middle Income Groups and Other Poorer Sections of the  society and to provide them residential accommodation at  lower costs.  As per the said mandate, MHADA took up  Mass Housing Project and constructed several flats in  Building Nos. 23A and 23B at Veer Savarkar Nagar,  Powai, Mumbai in 1995. The Act enables the State  Government to frame rules (Section 184) for the purpose  of carrying into effect the provisions of the Act.  Likewise,  it authorises MHADA to make regulations with the  previous sanction of the State Government for all or any  of the matters which have to be or may be prescribed or  provided by the regulations under the Act (Section 185).   In exercise of the power under Section 184 of the Act, the  State Government has framed rules knows as the  Maharashtra Housing and Area Development (Disposal of

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Land) Rules, 1985.  Similarly, in exercise of power under  Section 185 of the Act, MHADA framed regulations knows  as the Maharashtra Housing and Area Development  (Estate, Management, Sale, Transfer and Exchange of  Tenements) Regulations, 1981.  Rules framed by the  State Government as also Regulations made by MHADA  provide for allotment of residential tenements by inviting  applications from members of public who are eligible for  such allotment.          MHADA, in accordance with the provisions of law  released public advertisements for sale of 165 Non- Deluxe Flats.  Between 1995 and 2002, eight such  advertisements were released in several leading  newspapers for allotment of flats, but there was  practically no response from public. In 2003, as also in  2004, two more advertisements were issued but again  there was negligible response from public.  MHADA also  considered appointment of Estate/Property Agents to  boost up sale and disposal of flats since huge amount of  crores of rupees had been blocked up.  Pooja Estate  Consultant & Construction (original petitioner-first  respondent-herein) was appointed as an authorised  property agent of MHADA.  But it also could sell only 12  flats.  The agency of Pooja came to an end on October 7,  2003 which was not renewed thereafter.  A policy  decision was then taken to make allotment of flats  through Co-operative Housing Societies (Proposed) under  the "Bulk Purchase Scheme’.  As per the said decision,  an offer was made by the Powai Planet Co-operative  Housing Society (Proposed) (appellant) and since it was  the only society, which had applied, a decision was taken  to sell flats to the appellant subject to the terms and  conditions mentioned in the Resolution passed by  MHADA.  The terms and conditions were accepted by the  appellant-society and a Letter of Intent was issued to the  Chief Promoter of appellant-society on October 25, 2004  stating therein that its request was accepted by MHADA.   It was also communicated by MHADA to the appellant  vide its letter dated November 17, 2004 that the offer  made by the appellant-society was accepted and that the  society had paid an amount of Rs.27,50,000/- (Rupees  twenty seven lakhs, fifty thousand only) towards EMD.         When Pooja came to know about the resolution  passed by MHADA to sell flats to the appellant-society, it  approached the High Court complaining against the said  action.  It was inter alia contended by the petitioner that  it had come to know pursuant to an advertisement  issued by MHADA on May 27, 2004, that certain vacant  tenements of MHADA were to be sold to members of  public on "first come first served" basis.  Since buyers did  not come forward to purchase the flats, MHADA  entertained applications under the ’Bulk Purchase  Scheme’.  On August 23, 2004, appellant-society made  such application for purchase of flats.  According to the  first respondent, it was well-known consultation and  construction concern and was having vast experience as  an estate agency of MHADA.   It was also interested in  purchase of flats and, accordingly, applied on September  9, 2004 for purchase of 100 flats.  According to the first  respondent, Letter of Intent was issued to the appellant  on October 25, 2004.  Since the first respondent applied  on September 9, 2004 and the decision was taken by  MHADA and Letter of Intent was issued thereafter on  October 25, 2005, it was clear that when the decision  was taken by MHADA, application of the appellant-

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society as also of the first respondent (Pooja) were before  MHADA.  It was, therefore, incumbent on MHADA to  consider both the applications and to take appropriate  decision on merits.  The grievance of the first respondent,  however, was that its application was never considered  by MHADA and a decision was taken to sell all flats to  appellant-society.  The action was, therefore, illegal,  unlawful and was liable to be set aside.         The Division Bench of the High Court heard the  parties and noted that even though both the parties, i.e.  the appellant herein as also first respondent Pooja were  before MHADA when the decision was taken on October  25, 2004, the application of the first respondent was not  considered which was illegal and improper.  The Court,  therefore, allowed the petition observing that it was left  "with no option but to quash the Letter of Intent dated  25th October, 2004" issued in favour of the appellant- society.  The Court directed MHADA to re-advertise sale  of flats in one national (English) newspaper and one  vernacular (Marathi) newspaper and after receiving all  the offers, consider all offers in accordance with law and  take an appropriate decision.  A Review Petition filed  against the aforesaid decision was summarily rejected  observing that no case had been made out for review.         The aforesaid decisions have been challenged by  both, the society as also by MHADA in this Court.         On September 12, 2005, notice was issued, parties  were allowed to file affidavits and further affidavits and  the matter was ordered to be placed for final hearing.         We have heard the learned counsel for the parties.         The learned counsel for the appellant-society  contended that the High Court has committed an error of  law and of jurisdiction in setting aside action and  decision of MHADA even though it was legal, valid and in  accordance with law.  It was submitted that a resolution  was passed by MHADA to dispose of flats under the ’Bulk  Purchase Scheme’ to a Co-operative Society (Proposed)  and the said decision was in consonance with law.  It was  not a case of a ’tender’, ’offer’ or ’public advertisement’ by  MHADA.  There was, therefore, no question to consider  other offers and the petition filed by the first respondent  was misconceived and ill-founded.  The High Court was  in error in allowing the petition on the ground that since  the first respondent herein-petitioner before the High  Court, applied on September 9, 2004 and the decision  was taken on October 25, 2004, it was obligatory on  MHADA to consider the offer of first respondent also.  It  was a policy decision and the petition ought to have been  dismissed by the High Court.  It was stated that in the  affidavit-in-reply filed before the High Court, MHADA  expressly stated that it was not a case of public  advertisement of disposal of flats by inviting offers and  MHADA was not required to consider the offer said to  have been made by the first respondent on September 9,  2004.  It was also urged that in Review Petition, once  again the attention of the Court was invited to the fact  that it was on the basis of policy decision of disposal of  flats under the ’Bulk Purchase Scheme’ that flats were  sold to the appellant herein but the review was also  dismissed summarily.         Even on merits, the order passed by the High Court  is not sustainable.  It was stated that so far as the  appointment of first respondent as Estate/Property Agent  of MHADA is concerned, it was a matter of past.  The said  agency came to an end on October 7, 2003 and after the

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expiry of the said term, the agency was not renewed by  MHADA.  It was, therefore, not open to the first  respondent to apply nor it was the duty of MHADA to  consider the offer made by the first respondent.  Pooja  had no locus standi to challenge the decision of MHADA  or to invoke Writ Jurisdiction of the High Court under  Article 226 of the Constitution. Taking in view all the  matters, submitted the learned counsel, the order of the  High Court is illegal and the appeal deserves to be  allowed.         MHADA has also filed an appeal being aggrieved by  the order passed by the High Court and raised almost  similar grounds as have been raised by the appellant- society. It was stated that MHADA has right to dispose of  tenements/flats under ’Bulk Purchasing Scheme and a  decision was taken to dispose of flats by resorting to such  method which was in the nature of a policy decision and  could not have been interfered with by the High Court.  It  was also submitted that it was not the case of the  petitioner before the High Court that such decision was  contrary to law and could not have been taken by  MHADA.  The precise ground of Pooja- petitioner was that  since decision was taken by MHADA in October 2004,  non-consideration of offer of Pooja vitiated the decision  making process by MHADA.  Since the High Court  proceeded on a wrong basis, it allowed the petition by  quashing the order of MHADA which is liable to be set  aside.         The learned counsel for the first respondent- petitioner before the High Court, supported the order  impugned herein.  It was submitted that MHADA is a  public authority performing statutory functions under  the Act.  It was, therefore, expected of MHADA to act  legally, fairly and strictly in accordance with law.  The  High Court was satisfied that at the time of taking  decision, two offers were before MHADA and it was  supposed to consider both the offers objectively.  By  holding so, no error of law or of jurisdiction can be said  to have been committed by the Court and no grievance  can be made against it.  It was also submitted that the  Court had taken into account interest of all the parties. It  did not direct to sell flats to the petitioner, but passed an  order to re-advertise sale of flats and allowed MHADA to  take appropriate decision on all offers.         It was, therefore, submitted that the decision of the  High Court needs no interference in exercise of  discretionary jurisdiction under Article 136 of the  Constitution and the appeals deserve to be dismissed.         Having given anxious consideration to the facts and  circumstances of the case and having gone through the  relevant provisions of law and the decision taken by  MHADA, in our opinion, grievance voiced by the  appellants before this Court is well-founded and the  submissions deserve to be accepted by setting aside the  order passed by the High Court.  MHADA is a statutory  authority.  It is required to exercise its powers, perform  its functions and discharge its duties in consonance with  law.  Under the Act, it is required to provide housing  accommodation throughout the State and to dispose of  its property in accordance with law.  In exercise of power  under the Act, the State Government has framed rules.  Rules 11 to 17 deal with disposal of tenements.  They  also lay down manner of disposal of residential  tenements in buildings constructed by MHADA. Rule 12  declares that all disposal should be by ’public notice’.  

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Rule 16B, however, makes special provision for disposal  of tenements in certain cases.  It reads thus; 16B. Special provisions for disposal of  tenements in certain circumstances.          If after following the procedure prescribed  in the foregoing rules or the Regulations made  thereunder, it is found that there is no  adequate response and demand for tenements  in any particular scheme, such of the  tenements as cannot be so disposed of may be  disposed of in any other manner deemed fit by  the Authority.

       MHADA had also framed regulations for the purpose  of management, sale, transfer and exchange of  tenements.  The regulations also provide for allotment of  residential tenements by laying down procedure for such  allotment.  Though normally tenements are to be  disposed of by issuing notices, inviting offers and  drawing lots by determining eligibility, they also deal with  situation where there is no adequate response from  public at large.  Regulation 14A provides for such  situation and is material which reads as under; 14A. Special provision for disposal of  tenements in certain circumstances.          If even after renotification of vacancies as  provided in Regulation 14 there is no adequate  response and demand for tenements in any  particular scheme such of the tenements as  can not be so disposed of must be disposed of  on the ’first served’ basis or in any other  manner determined by the Authority from  time to time.   (emphasis supplied)  

       Our attention has been invited by the learned  counsel for the appellants-society and MHADA that  several attempts were made by MHADA to dispose of flats  at Powai by issuing public advertisements.  10  advertisements (8+2) had been issued in various  newspapers in different languages like English, Marathi,  Hindi, Gujarati, etc.  But there was no proper response  from public.  Records show that initially no public  members came forword and even after several  advertisements, few flats could be disposed of.  Thus, on  the one hand, construction of flats was complete and the  residential accommodation was available but not opted  by general public and on the other hand, there was block  up of huge amount of MHADA, depriving it from  undertaking other functions which were required to be  undertaken by it under the Act.  It, therefore, considered  the question and in an Office Note dated October 12,  2004, opined that disposal of flats could be made under  the ’Bulk Purchase Scheme’.  In the said Note, it was  mentioned that there were 214 flats.  Deducting the flats  for which response was received (10 flats), flats allotted to  Amey CHS (53 flats) and applications received from  public (37 flats), 114 flats were still vacant which could  be allowed to a proposed co-operative society in exercise  of power by MHADA.  Terms and conditions were also  laid down and the proposal was submitted for orders.   Accepting the said proposal, Letter of Intent was issued  by MHADA on October 25, 2004 to the first-respondent- society which was the only eligible society under the  ’Bulk Purchase Scheme’.  Provisional Offer Letter was,  therefore, sent to the appellant herein by MHADA on

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November 17, 2004.  The learned counsel for the  appellants, in our opinion, are right in submitting that it  was not a case of inviting tenders/offers from general  public and the High Court was in error in proceeding on  the basis as if offers were invited from public at large.  If  it is so, it goes without saying that the High Court was in  error in setting aside the decision of MHADA on the  ground that though Letter of Intent was issued in  October, 2004 and Provisional Offer was made in  November, 2004, since the offer of the first respondent- petitioner, dated September 9, 2004 was not considered,  the action of MHADA was illegal.  In our opinion, prima  facie, MHADA acted within four corners of law and in  exercise of power under the regulations, particularly,  Regulation 16B, it considered the offer of the first  respondent.  The basis on which the High Court  proceeded was not well-conceived or well-founded and on  that ground alone, the decision deserves to be set aside.           We have also gone through the affidavits filed by the  contesting respondents before the High Court (appellants  herein) in which the above aspect has been highlighted.   Even after the decision by the High Court in the Writ  Petition, in Review Petition also, the said contention was  raised, but the Review Petition had been rejected  summarily.  It is also the case of the appellants that first  respondent-original petitioner (Pooja) was no longer  authorised agent of MHADA after 2003 and had no right  to claim any benefit as an agent of MHADA.  We express  no opinion on that aspect inasmuch as the High Court  had not decided the matter on that ground.         It is no doubt contended by the first respondent  (original petitioner) that even otherwise the action  impugned by the first respondent in the High Court was  illegal, unreasonable and otherwise objectionable.  To  repeat, the High Court has not considered other  questions and on a short ground (non-consideration of  offer of Pooja) allowed the petition.  It is, therefore,  appropriate if we set aside the order of the High Court  and remit the matter for fresh disposal in accordance  with law.         For the foregoing reasons, the appeals deserve to be  allowed and are accordingly allowed.  The order passed  by the High Court in Writ Petition as also in Review  Petition is set aside and the matter is remanded to the  Court for fresh decision in accordance with law.          Before parting with the matter, we may clarify that  we have not entered into correctness or otherwise of the  decision taken by MHADA and we may not be understood  to have expressed any opinion thereon.  We are also not  deciding one way or the other the contention of the  appellants as to locus standi of Pooja that since its  agency came to an end in 2003, it could not have filed a  writ petition to challenge the decision of MHADA.  The  parties are at liberty to take up all pleas before the High  Court and the Court will decide them in accordance with  law without being influenced by observations made by us  in this judgment.  The High Court is requested to decide  the matter expeditiously preferably within three months  from the receipt of the order from this Court.         The appeals are disposed of accordingly with no  order as to costs.