This Supreme Court judgement affirms that landowners possess a preferential right to redevelop their property declared as a Slum Rehabilitation Area under the Maharashtra Slum Areas Act, 1971. The Court held that the Slum Rehabilitation Authority must formally invite the landowner to submit a rehabilitation scheme. The power of the State to acquire the land under Section 14 of the Act is subject to this preferential right and cannot be exercised before this right is legally extinguished.
Facts Of The Case:
The case concerned a land dispute in Mumbai, where Indian Cork Mills Private Limited (ICM) was the owner of a plot that had been encroached upon by slum dwellers. A portion of the land was declared a slum area in 1979, and later, in 2011, the entire plot was declared a Slum Rehabilitation Area (SRA). The slum dwellers, formed into the Tarabai Nagar Co-operative Housing Society, persistently lobbied the authorities for the land’s acquisition so that a private developer they had appointed could undertake its redevelopment. In response, the Slum Rehabilitation Authority (SRA) and the State of Maharashtra initiated acquisition proceedings against ICM’s land under the state’s slum laws. ICM consistently opposed the acquisition, asserting its willingness and right to redevelop the land itself. Despite ICM’s repeated written communications to the SRA and the State expressing this intent and seeking necessary cooperation for surveys, the authorities proceeded with the acquisition. This led ICM to challenge the acquisition in the Bombay High Court, which ruled in its favour. The SRA, the State, and the slum society then appealed to the Supreme Court against the High Court’s decision to quash the acquisition.
Procedural History:
The procedural history of this case began when Indian Cork Mills Private Limited (ICM) filed Writ Petition No. 658 of 2017 before the High Court of Judicature at Bombay. This petition challenged the acquisition notification dated December 22, 2016, issued by the State Government under Section 14 of the Maharashtra Slum Areas Act, and a subsequent notice dated January 7, 2017. The High Court, vide an interim order on January 27, 2017, directed the parties to maintain the status quo regarding the acquisition. Ultimately, in its final judgement dated June 13, 2018 (later clarified on July 9, 2018), the High Court allowed ICM’s petition, setting aside the land acquisition. It held that the acquisition was void as the authorities had failed to afford ICM a proper opportunity to exercise its preferential right to redevelop the land. Aggrieved by this decision, the Tarabai Nagar Co-operative Housing Society, the State of Maharashtra, and the Slum Rehabilitation Authority filed independent Special Leave Petitions before the Supreme Court, which granted leave and led to the consolidation and final disposal of these civil appeals.
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Court Observation:
In its observations, the Court firmly established that the legislative scheme of the Maharashtra Slum Areas Act confers a preferential right upon the landowner to redevelop a declared Slum Rehabilitation Area. It held that this right is paramount and that the Slum Rehabilitation Authority is duty-bound to issue a specific notice, inviting the landowner to submit a rehabilitation scheme before any other action is taken. The Court further ruled that the power of the State to acquire land under Section 14 of the Act is not independent but is subject to the extinguishment of this preferential right; acquisition cannot pre-empt the owner’s statutory opportunity to develop the land. Critically, the Court expressed strong disapproval of the SRA’s conduct, noting its arbitrary and shifting stance, and highlighted the apparent collusion between the slum society and a private developer, which raised serious doubts about the bona fides of the acquisition process.
Final Decision & Judgement:
The Supreme Court dismissed the appeals and upheld the judgement of the High Court. The final decision quashed the land acquisition initiated by the State Government, declaring it invalid. The Court vacated the status quo order and granted liberty to the landowner, Indian Cork Mills Pvt. Ltd., to submit a fresh Slum Rehabilitation Scheme within 120 days. It directed the Slum Rehabilitation Authority and the State Government to process the landowner’s proposal expeditiously, within a period not exceeding 60 days from its submission. The ruling reinforced the landowner’s statutory preferential right to redevelop the property, affirming that acquisition cannot proceed until this right is legally extinguished.
Case Details:
Case Title:Tarabai Nagar Co-Op. Hog. Society (Proposed) vs. The State of Maharashtra and others CITATION:2025 INSC 1015 Civil Appeal No:(Arising out of Special Leave Petition (C) No. 19774 of 2018) Date of Judgement:August 22, 2025 Judges/Justice Name:Justice Surya Kant and Justice Nongmeikapam Kotiswar Singh
Download The Judgement Here