Slum Redevelopment - The Legal Chamber

Moratorium Doesn’t Protect Inaction: Supreme Court Upholds Termination of Defaulting Developer’s Agreement

14Feb

By The Legal ChamberNo Comments

Supreme Court

Moratorium Doesn’t Protect Inaction: Supreme Court Upholds Termination of Defaulting Developer’s Agreement

This Supreme Court judgment clarifies that validly terminated contracts do not constitute "assets" of a corporate debtor under the IBC, and its moratorium does not revive extinguished rights. It reaffirms that NCLT cannot interfere with terminations based on pre-existing, non-insolvency-related defaults. Furthermore, High Courts retain constitutional jurisdiction to direct statutory authorities, even during moratorium. Facts Of The Case: The dispute originated from a 2005 Development Agreement between Kher Nagar Sukhsadan Co-operative Housing Society and developer AA Estates for redevelopment of a dilapidated Mumbai building declared dangerous under municipal laws. The agreement required completion within 24 months, but the developer failed to meet this timeline. A Supple...

Supreme Court Backs Landowners: Slum Authority Can’t Acquire Land Without Notice

The Supreme Court affirmed the landowner's preferential right to redevelop a Slum Rehabilitation Area under the Maharashtra Slum Areas Act, 1971. It held that the Slum Rehabilitation Authority must issue a specific notice inviting the owner to submit a redevelopment scheme before any acquisition under Section 14 can be initiated. The 2018 Amendment to the Act did not dilute this mandatory requirement, and acquisition proceedings commenced without such notice were declared illegal. Facts Of The Case: The case concerns a plot of land in Bandra, Mumbai, owned by the Basilica of Our Lady of the Mount (Church Trust). A portion of this land had been encroached by hutments since the 1930s and was declared a slum area in 1978. The slum dwellers formed the Shri Kadeshwari Cooperative Housing Soci...

Supreme Court Clarifies Slum Laws: Landlords Get First Right to Redevelop Their Property

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 Reh...