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2015 SCC OnLine Bom 6681 : (2016) 2 AIR Bom R 310

In the High Court of Bombay

(BEFORE S.C. DHARMADHIKARI AND B.P. COLABAWALLA, JJ.)

1. M/s. Darshan Jayant Builders, A partnership firm

having its registered office at 109/B,
Shankeshwar Darshan, Seth Motishah Lane,
Mazgaon, Mumbai-400 010.
2. Pritesh M. Jain, Partner of Petitioner No. 1, R/o as
above .…. Petitioners
Versus
1. The State of Maharashtra.
2. The Secretary, Housing Department, Government
of Maharashtra, Mumbai.
3. Maharashtra Housing and Area Development
Authority, Bandra (E), Mumbai.
4. The Chief Officer, Mumbai Building Repairs and
Reconstruction Board, Bandra (E), Mumbai.
5. Municipal Corporation of Greater Mumbai,
Mumbai .…. Respondents
Mr. Virag Tulzapurkar, Senior Advocate, with Mr. Mayur
Khandeparkar, Mr. Sanjeev Kadam, Ms. Apeksha Sharma i/by Kadam &
Co. for Petitioners.
Mr. S.S. Joshi, AGP for Respondent Nos. 1 and 2 State.
Ms. P.D. Anklesaria, Senior Advocate, with Mr. V.P. Sawant for
Respondent Nos. 3 and 4.
Ms. Surekha Sonawane for Respondent No. 5 MCGM.
Writ Petition No. 1776 of 2014
Decided on November 26, 2015
JUDGMENT
S.C. DHARMADHIKARI, J.:— Rule. Learned counsel for the
Respondents waive service. By consent, the Rule is made returnable
forthwith. The writ petition is taken up for hearing and final disposal.
2. By this writ petition under Article 226 of the Constitution of India,
the Petitioners seek a writ of certiorari or any other appropriate writ,
order or direction under Article 226 of the Constitution of India calling
for the records of the impugned order dated 4 March 2014 (Exhibit-I to
the petition) and quash and set aside the same.
3. The facts necessary to appreciate the rival contentions are that
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the Petitioner no. 1 is a partnership firm registered under the Indian

Partnership Act, 1932 and Petitioner no. 2 is a partner of Petitioner no.
1. The Respondent nos. 1 and 2 are the State Government and the
Secretary in the Department of Housing and Special Assistance. The
Respondent no. 3 is a statutory authority constituted under the
Maharashtra Housing and Area Development Act, 1976 and Respondent
no. 4 is the Chief Officer of the Mumbai Building Repairs and
Reconstruction Board, a unit of Respondent no. 3. The Respondent no.
5 is the Municipal Corporation of Greater Mumbai (‘MCGM’) constituted
under the Mumbai Municipal Corporation Act, 1888.
4. The subject matter of this petition is a land which is part of City
Survey Nos. 251, 252 and 253 of Tardeo Division and the buildings
standing thereon situate at Dr. Dadasaheb Bhadkamkar Marg, Mumbai.
5. On these city survey numbers, there are three buildings known as
Calcuttawala Estate, Jariwala Chawl and Dwarkadas Building. The total
number of occupants of these buildings and divided into
residential/commercial/non-residential, are set out in paragraphs 2.2 to
2.4 of the petition.
6. Annexures-A and B are the plan and letter of Respondent no. 3
declaring the structures/buildings on the said property as dangerous.
7. It is the case of the Petitioners that 164 families are, therefore, to
be taken care of and who are the occupants of these buildings. A
reference is made to Regulation 33(7) of the Development Control
Regulations for Greater Mumbai, 1991, as modified (‘DCR’), and it is
submitted that the occupants approached the Petitioners and requested
them to undertake the redevelopment/reconstruction of the buildings in
question. That is how, the Petitioner no. 1 submitted a proposal for
joint redevelopment of the said property. It is stated that there is an
agreement appointing the Petitioner no. 1 as a developer. A reference is
made to DCR 33(7) and the benefits that would flow from the same and
it is then submitted that convinced by the proposal so submitted, the
Respondent no. 3 issued a Letter of Intent (‘LOI’) dated 29 October
2010, which is at Annexure-D to the paper book. Since heavy reliance
is placed by both sides on this LOI, copy whereof is at pages 38 to 40
of the paper book, we deem it appropriate to reproduce it verbatim:
“MUMBAI BUILDING AND REPAIRS AND RECONSTRUCTION
BOARD
(A MHADA UNIT)
No. R/J.V.-LOI-33(7)/4374/MBRRB-10
Date : 29 October 2010
To,
M/s. Darshan Jayant Builders, 109, Sankeshwar Darshan,
Sheth Motisha Lane,
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Mazgaon, Mumbai-400 010.

Subject : Joint Redevelopment of property bearing C.S. No. 251
(pt), 252(pt) and 253(pt) of Girgaon Divn, Building
No. 71-71A Culcuttawala Chawl, 79-81 Jariwala Chawl and 91
Dwarkadas Chawl, situated at Dr. Bhadkamkarr Marg, Mumbai-400
008 under DCR 33(7).
Reference : 1) Government of Maharashtra/Urban Development
Department Notice No. TPB 4309/968/CR-127/09/UD-11, dated
19.05.2009.
2) Your application dated 09.12.2009.
3) Executive Engineer “D2” Divn/MBRRB's letter No. EE/D-
2/1032/2010, dated 26.03.2010.
4) Dy. Chief Engineer (Zone-II)/MBRRB's office note No. 1011
dated 30.03.2010.
5) Your application dated 17.08.2010.
The Government of Maharashtra, Urban Development Department
vide above referred Notice has published the proposed modification
to Regulation No. 33(7) for Reconstruction or Redevelopment of
cessed buildings in the Island City of Mumbai acquired under MHAD
Act 1976 undertaken by MHADA with Joint Venture with private
developer.
In pursuance to this notice, you are hereby informed that this
office has No Objection to get the proposed building plans
approved for the Joint Venture Redevelopment Scheme of the
captioned property from MCGM with FSI for rehab + 60% incentive
FSI as per provision of DCR 33(7) subject to the conditions
mentioned in the above notice and following terms and conditions.
1. The plans of proposed buildings shall be prepared by the Architect
and Structural Engineer appointed by you and submit the same to
the Building Proposal Department of MCGM, in concurrence of the
Dy. Chief Engineer (Zone-II)/MBRRB, a unit of MHADA.
2. You will have to plan to rehabilitate all the existing
tenants/occupants of all the old buildings. Each occupant shall be
given the carpet area occupied by him for residential purpose in
the old buildings subject to the minimum carpet area of 27.88
sq.mtrs (300 sq.ft.) and equivalent Carpet area if it is more than
300.00 sq.ft. subject to maximum Carpet area 70.00 sq.mtrs.
(753.00 sq.ft.) as provided in the MHAD Act, 1976. In case of non
-residential occupiers, the area to be given in the reconstructed
building will be equivalent to the area occupied in the old
building.
3. 60% incentive FSI on rehab area shall be granted to the developer
who will have to hand over 20% of the incentive FSI to MBRRB in
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the form of tenements of 300 sq.ft. and remaining 80% will be

available for free sale to the Developer. The actual number of
tenements to be handed over to the MBRRB will be communicated
after final approval of the policy of Joint Venture by the
Government.
4. It shall be binding upon you to display the plans of proposed Joint
Venture Scheme of Redevelopment and the list of amenities to be
provided to the existing tenants at suitable places for the
information of all tenants at the captioned property. The said
display should clearly indicate the proposed building for the
rehabilitation of existing tenants, for MBRRB and for free sale.
5. As far as possible you will plan separate building(s) for
rehabilitation of existing tenants, for MBRRB and for the purpose
of free sale, taking in to account the plot area of the captioned
property.
6. The proposal should be processed in accordance with
Development Control Regulation 33(7), D.P. Reservations etc. and
you should obtain MCGM's approval for the same.
7. The plans of the proposed building will be processed and sent to
MCGM for the approval by Dy. Chief Engineer (Zone-II)/MBRRB
and the Developer Jointly. The plans prepared shall clearly show
the rehab tenements and area to be surrendered to MBRRB.
8. All the above terms and conditions shall exclusively be applicable
for the captioned property only.
9. Since the development of the captioned property is to be carried
out jointly, an agreement for Joint Venture Scheme will have to be
executed between you and MBRRB, such agreement will have to
be executed after final approval of the Joint Venture policy by
Government.
10. The modifications in Regulation DCR 33(7) as may be finalised
by Government, shall be conclusive and binding on you.
11. The MCGM shall not grant Commencement Certificate till final
NOC and agreement to that effect is executed by developer with
MBRRB.
12. The terms and conditions for Joint Venture Policy as may be
finalized by Government and MBRRB shall be conclusive and
binding on the developer and shall become part of the NOC and
agreement. No third party rights shall be created without express
permission of MBRRB.
13. If it is noticed that some more additional tenants/occupants of
the old acquired buildings apart from the 12 tenants already
mentioned by you are found to have been given alternate
accommodation in newly reconstructed building under PMGP
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Scheme or any other reconstructed building of MBRRB, then in

that case, you will have to hand over the equivalent number of
tenements in the new buildings to be constructed.
This Letter of Intent should not be construed as NOC but only a
letter to apply to MCGM for getting the proposed building plans
approved from the MCGM.
Sd/-
Chief Officer,
M.B.R. & R. Board, Mumbai.”
8. On 29 October 2010, this LOI was issued and on receipt thereof,
the Petitioners claim to have taken steps mentioned at paragraph 3.6 of
the petition.
9. The Petitioners, therefore, claim that they acted in terms of the
LOI. The whole scheme was to the knowledge of the statutory
authorities. It is in these circumstances, they rely upon the letter of
Respondent no. 4 dated 1st November 2011 asking the Deputy
Engineer, Building Proposals of Respondent no. 4 to approve the
building plans submitted jointly by the Petitioners and Respondent no.
4.
10. At the stage when the Petitioners were awaiting the clearances
and approvals in terms of this LOI and the communication dated 1st
November 2011, they were surprised to receive a communication/letter
dated 29 November 2012. It is claimed that this was not just any letter
or communication but there is a direction therein cancelling the LOI
issued in favour of the Petitioners.
11. Aggrieved by this order/action, the Petitioners approached this
Court and filed a Writ Petition bearing No. 838 of 2013. On that writ
petition, a detailed order was passed after hearing both sides on 19
June 2013. This Court quashed the letter/direction dated 29 November
2012 by taking a view that before the statutory authorities reach such a
conclusion, they must issue a show cause notice to the parties like the
Petitioners and thereafter comply with the principles of natural justice.
Meaning thereby, they must be given an opportunity of a hearing or a
personal hearing or forwarding their representations and on which the
statutory authority/ies must pass a detailed order assigning reasons.
12. The Petitioners, therefore, submit that they were expecting a
fresh action to be taken only on issuing a show cause notice. However,
that was not issued. The Petitioners were informed in writing that there
would be a hearing on 17 January 2014. The Petitioners appeared on 17
January 2014 and prayed for time. Thereafter they furnished their
written submissions raising all the contentions and objections. It is on
such material that the impugned order dated 4 March 2014 cancelling
the LOI came to be passed. It is this order, a copy of which is at Exhibit
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-I of the paper book, which is challenged in this writ petition.

13. Mr. Virag Tulzapurkar, learned Senior Advocate, appearing for
the Petitioners would submit that the impugned order is contrary to
law. The impugned order and decision is arbitrary, unreasonable, unfair
and unjust. It violates the mandate of Article 14 of the Constitution of
India. It is also contrary to the specific order and direction of this Court
in Writ Petition No. 838 of 2013. Mr. Tulzapurkar would submit that no
show cause notice containing specific grounds and allegations was ever
issued to the Petitioners. The Petitioners, therefore, were handicapped
as they had no knowledge of the grounds on which the LOI is being
cancelled. Once the order and direction of this court is violated, then,
on that ground alone, the impugned order be quashed and set aside.
14. Mr. Tulzapurkar then submitted that the reasons assigned in the
impugned order are not supportable by the record. In that regard, Mr.
Tulzapurkar would rely upon the averments in the writ petition and
specifically the grounds. He would submit that Resolution No. 6636,
dated 24 October 2013 of Respondent no. 3 states that it has decided
to redevelop the properties in question acquired by it. The subject
properties were acquired by Maharashtra Housing And Area
Development Authority (‘MHADA’) more than three decades back.
Though the buildings standing thereon were declared as dangerous,
MHADA was unable to take-up the redevelopment. Therefore, the joint
venture by MHADA with private developer like the Petitioner no. 1 came
into effect. If the principal reason for cancelling the LOI is the notice
dated 19 May 2009, then, that cannot be relied upon. What has been
informed by the Housing Department vide letter dated 23 August 2012
is that the proposed modification dated 19 May 2009 to DCR 33(7) is
cancelled. The letter at Annexure-F to the writ petition does not speak
of any such cancellation. It is not possible for the Housing Department
of the Government to cancel the notice which is issued by the Urban
Development Department of State Government. Mr. Tulzapurkar would
submit that the authorities could not have proceeded on the basis that
there is any government direction. The Government has not said that
modification is cancelled. It only says that MHADA ought to take a
policy decision. Mr. Tulzapurkar then submitted that participation of a
private developer is not ruled out by DCR 33(7). There is no directive of
the Government to exclude private developers. In these circumstances,
the decision is also contrary to the Development Control Regulations in
the field.
15. It is on such a foundation that Mr. Tulzapurkar would submit
that the Petitioners have a legitimate expectation. That legitimate
expectation is that the LOI was issued and the Petitioners were allowed
to take further steps including presentation of plans for approval of
MCGM. If MCGM were to approve the plans and that is how even the
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Respondent no. 4 acted, then, all that remained was a No Objection

Certificate (‘NOC’) from MHADA. Mr. Tulzapurkar invited our attention
to several clauses of LOI, a copy of which is at Annexure-D, to submit
that once the Petitioners were assured in terms of the LOI, which is a
written communication by a statutory authority, that it can undertake
and complete the work of redevelopment of the properties belonging to
that statutory authority, then, legitimate expectation is that the
statutory authority will allow the Petitioners to take all steps in
furtherence thereof, including a belief that the statutory authority will
not abruptly cancel such a LOI or approval which may be conditional.
The LOI is not cancelled on the ground that any conditions were
breached or violated by the Petitioners. It is not cancelled on the
ground that the Petitioners were unfit to take-up the redevelopment
work or that any deliberate or intentional act of the Petitioners is
responsible for the delay allegedly in implementation of the scheme. In
these circumstances, the doctrine of legitimate expectation applies with
full force.
16. Alternatively and without prejudice, it is submitted that the
decision impugned in this writ petition must be given a prospective
effect. If that decision contains a policy which has been brought into
effect now, then, all the more it can have no retrospective effect. For
these reasons, Mr. Tulzapurkar would submit that the petition be
allowed.
17. He places reliance on a decision of Hon'ble Supreme Court of
India in the case of Gorkha Security Services v. Government (NCT of
Delhi)1 .
18. The contesting Respondents to this writ petition are Respondent
nos. 3 and 4 MHADA. They have filed an affidavit of their Resident
Executive Engineer. That deponent of this affidavit is working with
Respondent no. 4 Board. He states that there is no dispute that the
buildings in question were acquired. There is no dispute that the
Petitioners applied on 9 December 2009 for redevelopment of the
complex under DCR 33(7). However, the Government proposed to alter
DCR 33(7) in regard to permitting a joint venture. That would be
undertaken by MHADA wholly with private developer. Accordingly, a
notice at page 36 of the paper book was issued by the Government on
19 May 2009 for considering the change in DCR 33(7). The Government
invited objections and suggestions from the public in relation to the
proposed change in DCR 33(7). It is submitted that the Development
Control Regulations are framed in accordance with the proposals of the
development plan. In that regard, they are traceable to Section 22(m)
of Maharashtra Regional and Town Planning Act, 1966 (‘MRTP Act’). Any
change or modification in the DCRs would tantamount to a modification
or change in the development plan itself. Therefore, the procedure
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prescribed by Section 37(1)(AA) of the MRTP Act will have to be

undertaken and completed. Since MHADA had issued a LOI to the
Petitioners proposing a joint venture for redevelopment, it has taken
care to impose such conditions as are permissible in law. There was
never any firm assurance or promise and it was for a limited purpose to
enable the Petitioners to approach MCGM for approval of building plans,
that the LOI was issued by MHADA. It was clarified that proposed joint
venture would be in accordance with the suggested modification to DCR
33(7) and not DCR 33(9), as erroneously alleged. It is only on the
finalization of the joint venture policy by the Government, that an
agreement will be executed between MHADA and the private developer.
This would be in consonance with the conditions stipulated in the joint
venture policy as determined by the Government. Therefore, any
modification or change in DCR 33(7) by the Government, will bind the
authorities. It was, therefore, clarified at the end of the letter that after
compliance with the said conditions, the LOI may be issued. In such
circumstances, when a policy decision has now been taken not to allow
any private participation, but to complete the redevelopment by
MHADA itself and which MHADA is competent to undertake, then, all
the more, the order under challenge cannot be quashed and set aside
on the ground that it violates the principles of natural justice or that
the Government's action or letter does not prohibit undertaking of
development by participation of a private developer. Consistent with
this stand on affidavit, Ms. Anklesaria, learned Senior Advocate
appearing for the contesting Respondents, would submit that the LOI
does not create or vest any right in the Petitioners. The Petitioners are
private builders and developers. The builders and developers may have
been approached by the occupiers and residents of the buildings in
question, but the property as such belongs to MHADA. Once the land
and buildings vest in MHADA and it is MHADA which alone can take a
decision in terms of its policies of redevelopment and reconstruction of
buildings at site, then, any private arrangement between the occupants
and the developer and the builder, will not enable it to approach a
competent Court and seek any reliefs. The foundation of the relief itself
is untenable in law. There is no right, title and interest created in favour
of the Petitioners in respect of the three buildings or the land beneth
the same.
19. Ms. Anklesaria, therefore, would submit that the argument of Mr.
Tulzapurkar by relying on the doctrine of legitimate expectation
deserves to be rejected. She relies upon clauses 9 to 12 of the LOI. she
would submit that other argument of Mr. Tulzapurkar that the
impugned order contravenes the direction of this Court in earlier
proceedings, is equally unsound and untenable. The earlier letter dated
29 November 2012 was received by the Petitioners. That letter was
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challenged by them in Writ Petition No. 838 of 2013. The Petitioners

knew as to why MHADA proposed to cancel the LOI. Once this court
quashes that letter but permits MHADA to go ahead with its action,
then, this letter dated 29 November 2012, at page 41 of the paper
book, can very well be treated as a show cause notice. There are two
reasons given by MHADA and through out. First is that it desires to
have expeditious implementation of the project. In that regard, Ms.
Anklesaria would submit that the Petitioners could not gather support
of requisite number of occupants or percentage of the residents. She
would submit that a policy decision was taken by MHADA and it was
subject matter of the earlier order. Therefore, the Petitioners are not
taken by surprise at all. They have participated in the hearing. They
have tendered written submissions, which have been duly considered.
If the overriding public interest demands cancellation of LOI and in
terms of DCR 33(7), the benefits can be obtained by MHADA for itself
and for the public, then, it is entitled to change its policies and bring
them in tune with the requirement of public interest. Today, MHADA
would gain in terms of FSI, which is unrestricted and uncapped. There
are several buildings and properties acquired by MHADA which are
awaiting redevelopment. Therefore, a larger policy decision led to the
impugned order being passed. Such an order deserves to be upheld. It
should not be quashed and set aside on the spacious ground of a
private developer's hope and expectation that he/she would obtain
commercial benefits, if permitted to redevelop the property, either
solely or partially with MHADA. With these submissions, Ms. Anklesaria
requests to dismiss the petition.
20. Ms. Anklesaria brings to our notice the decision of Hon'ble
Supreme Court of India in case of Jayant Achyut Sathe v. Joseph Bain
D'Souza2 .
21. We have, with the assistance of both learned Senior Advocates,
perused the petition, the affidavit-in-reply filed by contesting
Respondents and annexures thereto. We have carefully considered the
rival contentions. We have also perused the relevant provisions of law.
22. It is common ground that Maharashtra Housing and Area
Development Authority collects the cess on buildings located in the
Island City of Mumbai. The cess is collected to subserve a larger public
interest and public good. That is to ensure the occupants and residents
of such buildings that in the event repairs, up keep and maintenance of
these buildings is neglected by the owners, then the Housing Board will
come to their aid and assistance. It would undertake structural repairs,
if required, to the buildings. It would equally acquire them and
redevelop the properties in terms of the powers conferred in it by
Maharashtra Housing and Area Development Act, 1976 (‘MHAD Act’). It
is, therefore, entitled to take such policy measures and decisions so as
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to carry forward the object and purpose of the MHAD Act and collection
of cess. Eventually, the State Government has enacted MHAD Act and
amended it from time to time so as to unify, consolidate and amend the
laws relating to housing, improving and reconstructing dangerous
buildings and carry out improvement works in slum areas. The MHAD
Act subserves the larger constitutional mandate enshrined under
Articles 21 and 39(b) and (c) of the Constitution of India.
23. In the instant case, three buildings and the land beneath them
were acquired by MHADA. True it is, the buildings are occupied by the
occupants who are using the tenements for residential and non-
residential purposes. True it is that DCR 33(7) has been enacted and it
is applicable to the reconstruction or redevelopment of cessed buildings
in the Island City of Mumbai by co-operative housing societies or old
buildings either belonging to the MCGM or as specified in DCRs of the
category stated therein. The Government in its Urban Development
Department's Notification dated 25 January 1999 further modified this
DCR. The Government has decided to modify DCR 33(9) regarding
reconstruction or redevelopment of cessed buildings/urban renewal
schemes. The Housing Department has brought to the notice of the
Government that it has filed an affidavit in one of the Court proceedings
that guidelines for joint venture shall be issued regarding development
of cessed buildings which are acquired under MHAD Act, 1976. Since
the modification is in the public interest, Government finds it necessary
to modify the DCRs. That is how a notice at pages 36 and 37 of the
paper book notifying the proposed modification came to be issued. The
proposed modification sought in the notice at pages 36 and 37 reads as
under:
“… … … … …
… … … … …
.. … … … …
And whereas, Government has decided to modify the Regulation
No. 33(9), regarding reconstruction or redevelopment of cessed
buildings/Urban Renewal Schemes (hereinafter referred to as “the
said proposed modification”);
And whereas, Housing Department has brought to the notice that
Housing Department has filed an affidavit in one of the Court case
matter that the guidelines for joint venture shall be issued regarding
the development of cessed buildings which are acquired under
MHADA Act, 1976;
And whereas, the modification is in public interest, govt. finds it
necessary to modify the said regulation.
Now, therefore, in exercise of the powers conferred under sub-
section (1AA) of Section 37, Government is pleased to issue the
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notice for inviting suggestions/objections from public.

The Government is further pleased to inform that any
objections/suggestions upon the said proposed modification be
forwarded within 30 days from the date of publication of this notice
in the official gazette to the Deputy Director of Town Planning,
Greater Mumbai having his office at ENSA Hutments, E-Block, Azad
Maidan, Mahapalika Marg, Mumbai-400 001 who is being appointed
as an officer under section 162 of the said Act. The said officer shall
submit his report to Government after scrutinising the suggestions
and objections over the proposed modification and say of the said
Corporation and after granting hearing to the concerned persons
including the said Corporation.
PROPOSED MODIFICATION
Following provisions shall be added in the Regulation 33(7).
Reconstruction or redevelopment of cessed buildings in the Island
City acquired under MHAD Act, 1976, undertaken by MHADA with
joint venture with private developer shall be permissible subject to
following conditions-
1. Rehabilitation of all cessed buildings with tenement size 300
sq.ft. carpet area.
2. 50% incentive FSI shall be granted to the developer who will
hand over 10% of incentive FSI to MHADA in the form of built
up tenements of 300 sq.ft. carpet area and remaining 40% be
sold as free sale by the developer.
3. FSI remaining out of 2.5 after deducting the rehabilitation area
and incentive FSI will be shared in ratio 2 : 1 between MHADA
(2) and the developer (1).
4. The scheme shall be completed on time bound basis within 2
years or period prescribed by MHADA.
5. The monitoring shall be done by MHADA.
By order and in the name of Governor of Maharashtra.
Sd/-
(Abhiraj Girkar)
Under Secretary to Government.”
24. Thus, reconstruction or redevelopment of the cessed buildings in
the Island City of Mumbai acquired by MHADA can be undertaken by
MHADA with joint venture of the private developer, subject to the
conditions proposed.
25. It is then common ground that on 29 October 2010, MHADA
through its Mumbai Building Repairs and Reconstruction Board (‘Unit’)
considered the application of the Petitioners made on 9 December
2009. It considered the letter dated 26 March 2010 of the Executive
Engineer of Mumbai Board. It also considered the note No. 1011, dated
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30 March 2010 of the Deputy Chief Engineer of Mumbai Board and

further application of the Petitioners dated 17 August 2010. It,
therefore, addressed a letter/communication to the Petitioner no. 1, a
copy of which is at Exhibit-D, which we have reproduced. This letter
specifically refers to the Government's decision proposing modification
or change in DCR 33(7) whereunder reconstruction or redevelopment of
the cessed buildings in the Island of City of Mumbai acquired by
MHADA can be undertaken by MHADA, jointly with private developer.
Therefore, this letter clearly states that Petitioners can approach for
sanctioning building plans for this joint venture and that would be
subject to the conditions mentioned in the notice dated 19 May 2009
issued by the Government, a copy of which is at pages 36 and 37 of the
paper book and on the terms and conditions of LOI itself. It is thus a
limited no objection to get the proposed buildings plans approved. It is
only conditional upon the Government's sanctioning and approving the
proposed changes or modifications in DCR 33(7). We are in complete
agreement with Ms. Anklesaria that such a LOI does not create any
right, title or interest in favour of the Petitioners in respect of subject
property and buildings. The buildings continued to be owned and vest
in MHADA. The policy was mooted by MHADA on the suggestion of the
Government and that is to reconstruct the buildings and redevelop the
property with participation of a private developer. The said LOI,
therefore, by itself could not have been a foundation of the Petitioners'
grievance made to this Court either earlier or now. Pertinently, the
Petitioners raised more or less identical contentions in the earlier round
of litigation. They were satisfied with the limited directions of this Court
that the LOI will be cancelled, if at all, only after they were issued a
notice and granted an opportunity of a personal hearing by the
statutory authorities. It is that limited request which was considered
and granted by this Court bearing in mind that the letter at Exhibit-D
came to be issued on 29 October 2010. We have perused each and
every condition of the letter at Annexure-A. We find that the reliance
placed on the clauses thereof by Ms. Anklesaria is well founded.
Condition no. 6 clearly refers to the proposals and its processing in
accordance with DCR 33(7). It also refers to the policy of the
Government (Condition no. 9). Therefore, it mandates execution of an
agreement after the change or modification in DCR 33(7) is sanctioned
and approved by the Government. Pertinently, no such agreement for
joint venture ever came to be signed and executed between the
Mumbai Building Repairs and Reconstruction Board and the Petitioners.
Condition no. 10 clearly refers to the modifications in DCR 33(7), which
were to be finalized by the Government. The LOI also stipulates in
condition no. 11 that MCGM shall not grant commencement certificate
till final NOC and agreement to that effect is executed by the developer
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with Mumbai Board. Condition no. 12 is also to identical effect. The LOI
ends by informing the Petitioners that it should not be considered as a
no objection certificate. It reiterates that it is only a letter to apply to
MCGM for getting the proposed building plans approved from MCGM.
26. Now that the Government has clarified that it does not propose
to effect any change or modification in DCR 33(7) and left it open for
MHADA to take proper action, then, in terms of the powers conferred in
MHADA by the substantive provisions of MHAD Act of 1976, it could
have taken a decision and hence passed a resolution to cancel the LOI
granted to the Petitioners. It is a policy decision. If the Government
and MHADA are of the view that greater benefit could be obtained for
the public if the Housing Board/authority itself undertakes
redevelopment of the land and reconstruction of the old and dilapidated
buildings, then, such a decision of experts in the field of housing, is not
liable to be interfered with by the Court in exercise of its powers under
Article 226 of the Constitution of India. It is too well settled and does
not require any reiteration that policy decisions cannot be questioned
as if this Court possesses appellate power to scrutinize and verify the
same. The wisdom of a policy decision cannot be questioned by this
Court. Unless the policy is arbitrary, capricious, discriminatory or mala
fide, it is beyond the powers of judicial review. This Court may think of
a better option but that by itself and without anything more will not
empower this Court to question the action of the statutory authority.
27. In the circumstances, we do not find that the impugned order
which is based on a policy decision of MHADA requires any interference
in our writ jurisdiction. The doctrine of legitimate expectation has also
some limits and restrictions. The expectation must be legitimate. The
expectation loses all its legitimacy and no action can be founded
thereon, if the overriding public interest so demands. In a decision of
the Hon'ble Supreme Court of India in case of Union of India v.
Hindustan Development Corporation3 , this principle has been explained
elaborately. The relevant portion of the said decision is reproduced as
under:
“33-34. On examination of some of these important decisions it is
generally agreed that legitimate expectation gives the applicant
sufficient locus standi for judicial review and that the doctrine of
legitimate expectation is to be confined mostly to right of a fair
hearing before a decision which results in negativing a promise or
withdrawing an undertaking is taken. The doctrine does not give
scope to claim relief straightway from the administrative authorities
as no crystallised right as such is involved. The protection of such
legitimate expectation does not require the fulfillment of the
expectation where an overriding public interest requires otherwise.
In other words where a person's legitimate expectation is not
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fulfilled by taking a particular decision then decision-maker should

justify the denial of such expectation by showing some overriding
public interest. Therefore even if substantive protection of such
expectation is contemplated that does not grant an absolute right to
a particular person. It simply ensures the circumstances in which
that expectation may be denied or restricted. A case of legitimate
expectation would arise when a body by representation or by past
practice aroused expectation which it would be within its powers to
fulfill. The protection is limited to that extent and a judicial review
can be within those limits. But as discussed above a person who
bases his claim on the doctrine of legitimate expectation, in the first
instance, must satisfy that there is a foundation and thus has locus
standi to make such a claim. In considering the same several factors
which give rise to such legitimate expectation must be present. The
decision taken by the authority must be found to be arbitrary,
unreasonable and not taken in public interest. If it is a question of
policy, even by way of change of old policy, the courts cannot
interfere with a decision. In a given case where there are such facts
and circumstances giving rise to a legitimate expectation, it would
primarily be a question of fact. If these tests are satisfied and if the
court is satisfied that a case of legitimate expectation is made out
then the next question would be whether failure to give an
opportunity of hearing before the decision affecting such legitimate
expectation is taken, has resulted in failure of justice and whether on
that ground the decision should be quashed. If that be so then what
should be the relief is again a matter which depends on several
factors.
35. We find in Attorney General for New South Sales' case (1994
(64) Aus LJR 327), that the entire case on the doctrine of legitimate
expectation has been considered. We also find that on an elaborate
and erudite discussion it is held that the courts' jurisdiction to
interfere is very much limited and much less in granting any relief in
a claim based purely on the ground of ‘legitimate expectation’. In
Public Law and Politics edited by Carol Harlow, we find an article by
Gabriele Ganz in which the learned author after examining the views
expressed in the cases decided by eminent Judges to whom we have
referred to above, concluded thus:
“The confusion and uncertainty at the heart of the concept stems
from its origin. It has grown from two separate roots, natural justice
or fairness and estoppel, but the stems have become entwined to
such an extent that it is impossible to disentangle them. This makes
it very difficult to predict how the hybrid will develop in future. This
could be regarded as giving the concept a healthy flexibility, for the
intention behind it is benign; it has been fashioned to protect the
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individual against administrative action which is against his interest.

On the other hand, the uncertainty of the concept has led to
conflicting decisions and conflicting interpretations in the same
decision.”
36. Legitimate expectations may come in various forms and owe
their existence to different kind of circumstances and it is not
possible to give an exhaustive list in the context of vast and fast
expansion of the governmental activities. They shift and change so
far that the start of our list would be obsolete before we reached the
middle. By and large they arise in cases of promotions which are in
normal course expected, though not guaranteed by way of a
statutory right, in cases of contracts, distribution of largesse by the
Government and in somewhat similar situations. For instance in
cases of discretionary grant of licences, permits or the like, carries
with it a reasonable expectation, though not a legal right to renewal
or non-revocation, but to summarily disappoint that expectation may
be seen as unfair without the expectant person being heard. But
there again the Court has to see whether it was done as a policy or
in the public interest either by way of G.O; rule or by way of a
legislation. If that be so, a decision denying a legitimate expectation
based on such grounds does not qualify for interference unless in a
given case, the decision or action taken amounts to an abuse of
power. Therefore the limitation is extremely confined and if the
according of natural justice does not condition the exercise of power,
the concept of legitimate expectation can have no role to play and
the court must not usurp the discretion of the public authority which
is empowered to take the decisions under law and the court is
expected to apply an objective standard which leaves to the deciding
authority the full range of choice which the legislature is presumed
to have intended. Even in a case where the decision is left entirely to
the discretion of the deciding authority without any such legal
bounds and if the decision is taken fairly and objectively, the court
will not interfere on the ground of procedural fairness to a person
whose interest based on legitimate expectation might be affected.
For instance, if an authorityy who has full discretion to grant a
licence and if he prefers an existing licence holder to a new
applicant, the decision cannot be interfered with on the ground of
legitimate expectation entertained by the new applicant applying the
principles of natural justice. It can therefore be seen that legitimate
expectation can at the most be one of the grounds which may give
rise to judicial review but the granting of relief is very much limited.
It would thus appear that there are stronger reasons as to why the
legitimate expectation should not be substantively protected than
the reasons as to why it should be protected. In other words, such a
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legal obligation exists whenever the case supporting the same in

terms of legal principles of different sorts, is stronger than the case
against it. As observed in Attorney General for New South Wales'
case (1990 (64) Aus LJR 327). “To strike down the exercise of
administrative power solely on the ground of avoiding the
disappointment of the legitimate expectations of an individual would
be to set the courts adrift on a featureless sea of pragmatism.
Moreover, the notion of a legitimate expectation (failing short of a
legal right) is too nebulous to form a basis for invalidating the
exercise of a power when its exercise otherwise accords with law.” If
a denial of legitimate expectation in a given case amounts to denial
of right guaranteed or is arbitrary, discriminatory, unfair or biased,
gross abuse of power or violation of principles of natural justice, the
same can be questioned on the well-known grounds attracting Art.14
but a claim based on mere legitimate expectation without anything
more cannot ipso facto give a right to invoke these principles. It can
be one of the grounds to consider but the court must lift the veil and
see whether the decision is violative of these principles warranting
interference. It depends very much on the facts and the recognised
general principles of administrative law applicable to such facts and
the concept of legitimate expectation which is the latest recruit to a
long list of concepts fashioned by the courts for the review of
administrative action, must be restricted to the general legal
limitations applicable and binding the manner of the future exercise
of administrative power in a particular case. It follows that the
concept of legitimate expectation is “not the key which unlocks the
treasury of natural justice and it ought not to unlock the gates which
shuts the court out of review on the merits”, particularly when the
element of speculation and uncertainty is inherent in that very
concept. As cautioned in Attorney General for New South Wales' case
the courts should restrain themselves and restrict such claims duly
to the legal limitations. It is a well meant caution. Otherwise a
resourceful litigant having vested interests in contracts, licences etc.
can successfully indulge in getting welfare activities mandated by a
directive principles thwarted to further his own interests. The
caution, particularly in the changing scenario, becomes all the more
important.”
28. If one tests the argument of Mr. Tulzapurkar in the backdrop of
these principles, one finds that the Petitioners cannot claim any right
higher than the one conferred by the communication at Exhibit-D. That
itself being conditional and wholly dependent on the Government's
decision and the policy is enunciated by the letter of Urban
Development Department, Government of Maharashtra to be
implemented by the statutory authority like MHADA, then, this
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argument that Petitioners' had a legitimate expectation cannot be

accepted. The Petitioners cannot claim, on a limited authority under the
LOI, a right by which they could have undertaken the redevelopment or
reconstruction work on their own. If that was to be jointly undertaken
with MHADA and MHADA being bound by the Government's policy
decision taken in larger public interest, then all the more, the argument
of Mr. Tulzapurkar cannot be accepted.
29. The other argument of Mr. Tulzapurkar is equally devoid of any
substance. True it is that if somebody is sought to be deprived of a
right vested or created by law, then, the principles of natural justice
have to be adhered to. The application of the principles of natural
justice would apply dependent upon number of relevant factors
including the nature of right and the lis, power vested in the statutory
authorities. Ordinarily, a show cause notice is issued so that the person
proceeded against gets to know the reasons or grounds based on which
the proposed action is taken against it. In the instant case, we find that
the Petitioners are not prejudiced at all. They had complete knowledge
of the fact that Government's policy would be guiding the MHADA and
equally them in the redevelopment or reconstruction proposed at the
site. Therefore, once the Government does not pursue a particular
policy, then the Petitioners cannot claim to be joint developer with
MHADA. If this is the ground on which essentially the matter
proceeded, then prior communication dated 29 November 2012
furnished adequate reasons for the Petitioners to meet them in the
subsequent proceedings. That is how they have placed on record the
detailed written submissions. In the circumstances and when they
question the merits of the impugned order, then all the more, we do
not see as to how Mr. Tulzapurkar can place reliance on the decision in
Gorkha Security Services (supra). In Gorkha Security Services (supra),
the party approaching the Supreme Court was unaware that in the garb
of cancelling a particular contract, the authority proposes to blacklist it.
The consequences of such an action would be extreme and the party
then would be unable to obtain any public contract. It is such a drastic
act which should have preceded a proper show cause notice and
proposing such blacklisting. That being not placed on record, the
Hon'ble Supreme Court reiterated the principles on which a blacklisting
action can be founded. Accordingly, the Supreme Court quashed the
order challenged before it. The Supreme Court itself has clarified that
the principles of natural justice cannot be put in a straight jacket
formula. The applicability of the same would be dependent on facts of
each case. In the circumstances, this decision is wholly distinguishable
on facts.
30. As a result of the above discussion, we do not find any merit in
the writ petition. We do not find any substance in the argument of Mr.
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Tulzapurkar that the reasons in the impugned order are not supportable
by record. The impugned order amply clarifies as to why MHADA has
cancelled the LOI. It assigns reasons and which refer to the
Government's policy and the earlier steps. It also refers to the Court
order and duly considers the written submissions in the light of the
terms and conditions of LOI. We are, therefore, of the view that merits
of the impugned order cannot be challenged by the Petitioners. The
impugned order is essentially based on a policy decision. In the
circumstances and when the Petitioners do not have any right which it
can enforce in writ jurisdiction, then there is no question of giving any
prospective effect to the impugned order either.
31. The writ petition, therefore, fails and is dismissed, but without
any order as to costs.
32. At this stage Mr. Kadam prays that this Court on 14 November
2014 passed ad-interim order in terms of prayer clause (b). Inviting
our attention to prayer clause (b), it was submitted that this Court
restrained the statutory authorities from acting in furtherance of the
impugned order. The ad-interim order is continued till date and must
be continued for a reasonable period so as to enable the Petitioners to
challenge this order in a higher Court. This request is opposed by Mr.
Sawant. He would submit that MHADA cannot be restrained from
redeveloping its own properties and reconstruction of buildings
standing thereon so as to rehouse the occupants and eligible persons.
He would submit that larger public interest would not be subserved by
continuation of the ad-interim order.
33. Having heard the learned counsel, we are of the view that there
is much substance in the objection of Mr. Sawant. Now restraining
MHADA or Mumbai Board from giving effect to its order or to continue
the ad-interim order granted on 14 November 2014 and after
concluding that Petitioners' challenge to it has no merit, will be
improper and contrary to public interest. The request of Mr. Kadam is,
therefore, refused. The request of Mr. Kadam is also refused because
the buildings are dilapidated and the occupants are evicted therefrom.
———
1 (2014) 9 SCC 105

2 Civil Appeal No. 2970 of 2006 and connected Appeals decided on 4 September 2008

3 AIR-1994-SC-988

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