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The Bombay High Court recently delivered a verdict that limits the rights of tenants and asserts that they cannot dictate the nature of redevelopment to the owner. The court directed the Brihanmumbai Municipal Corporation (BMC) to issue a commencement certificate for redevelopment in the case of a Khar (West) building where a single tenant was holding up the process. The owner of the property, G M Heights, a limited liability partnership firm, had petitioned the HC.
According to the bench of Justices Girish Kulkarni and R N Laddha, "Tenancy rights cannot be stretched to such an extent that the course of redevelopment can be taken over by the tenants, so as to take away the basic corporeal rights of the owner of the property, to undertake redevelopment of the owner's choice." The verdict is expected to pave the way for future redevelopment projects.
The building, originally known as Rami Raja Chawl, had 21 tenants and was demolished in August 2021 after being declared dilapidated. The owner proposed a commercial structure, which a lone tenant, represented by counsel D K Jain, said was legally impermissible.
Senior counsel GS Godbole, for the owner, stated that the BMC had accepted the proposal, and barring one, the other 20 tenants had no objection to a commercial building in the redevelopment plan. However, the tenant refused to give an NOC and did not sign the Permanent Alternate Accommodation Agreement. In 2021, the BMC stated that the nod for actual construction or commencement certificate was to be issued only after all tenants gave consent. The owner challenged the BMC's conditions in its petition, arguing that they were arbitrary and unconstitutional.
The HC ruled that tenants could not impose on the owner to redevelop the building in the same manner it originally stood, and that the owner had the right to undertake redevelopment of the manner and type they intended. The only rights of the tenants were to be provided with an alternative accommodation of an equivalent area occupied by them before the building was demolished.
The tenant's counsel was unable to show "any embargo on the owner of the land, to undertake redevelopment, different from the nature of the existing building which has stood demolished," said the HC. Recently, the HC clarified that the BMC cannot demand 100% consent in cases of a dangerous building, and consent of 50-70% tenants would suffice.
The owner in the case offered the tenants accommodation on tenancy in the commercial building, which the "obstinate tenant" did not accept. As a last resort, monetary compensation was also offered. "The approach of the (tenant) is most unreasonable and adamant, to say the least," observed the HC. The court also noted that there was an existing eviction dispute pending before the small causes court, and the outcome of the dispute would impact the offer of alternative accommodation to the tenant.
This landmark judgment is expected to have far-reaching implications for future redevelopment projects in Mumbai. It is a significant boost for property owners, who will have greater freedom to pursue their redevelopment plans without being held hostage by tenants' demands. The verdict also highlights the importance of tenants' rights to alternative accommodation and equivalent area in cases of redevelopment, ensuring that they are not left out in the cold.
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