Letter of Intent must be kept alive in order to waive the premium which is to be paid as per the Government Resolution

Lahari Gurrala | Symbiosis Law School, Hyderabad | 4th February 2020

Uttar Bhartiya Rajak Samaj Panchayat Banganga Rajak Samaj Co-operative Housing Society (Proposed) & Anr. Vs State of Maharashtra Through Secretary & Ors. CIVIL APPEAL NOS. 887-888 OF 2020

Facts of the Case:

• The appellants have challenged an order of the High Power Committee (HPC) dated 19th December 2009 by which, the demand made by the 2nd respondent Slum Rehabilitation Authority (SRA) demanding premium of an amount of Rs.8,47,69,029.69, is confirmed in respect of Letter of Intent (LOI) dated 05th January 2005, issued in their favour for Slum Rehabilitation Scheme. The appellants also sought directions to direct the SRA to issue Commencement Certificate as per the existing guidelines. 
• The appellant no.1 is the registered society of slum dwellers, who are stated to be residing in Mumbai. The appellant no.2 is a rehabilitator who was approached by the 1st appellant-society to develop the said plot and rehabilitate its members under Slum Rehabilitation Scheme, under Maharashtra Slum Rehabilitation Act, 1976. 
• On the proposal for the aforesaid scheme, a LOI dated 05.01.2005 has been issued by the 2nd respondent-authority in favour of the 2nd appellant to carry out the said rehabilitation. Since the said plot was within the area of Coastal Regulation Zone (CRZ), the said LOI was issued subject to clearance by CRZ authorities as provided under Clause 46, by the 1st respondent and Maharashtra Coastal Zone Management Authority.
• During the pendency of the proceedings before the Coastal Zone Management Authority, 1st respondent-Government issued notification dated 16.04.2008. The Government of Maharashtra has issued directives under Section 37(1) and Section 154 of the Maharashtra Regional & Town Planning Act. As per the above said directives issued by the Government, developer/co-operative society is required to pay premium @ 25% in terms of the Ready Reckoner in respect of Slum Rehabilitation Scheme proposed to be undertaken on the lands owned by the Government, Semi-Government Undertakings and local bodies. 
• In view of the said notification issued by the Government, the appellants were demanded an amount of Rs.8,47,69,029.69.Questioning the letter of demand issued by the 2nd respondent for the aforesaid sum, the appellants have approached the High Power Committee(HPC), Even the HPC has considered the issue and rejected the claim of the appellants that they are not required to pay the premium amount as much as they were already issued LOI dated 05.01.2005. 
• Questioning the demand of Rs.8,47,69,029.69 and further order issued by the HPC, the appellants have approached the High Court of Maharashtra by filing writ petition. The above writ petition was dismissed by the impugned order dated 03.05.2012 by the High Court of Judicature at Bombay and the review petition filed by the appellants has also ended in dismissal by order dated 01.07.2015. 
• The Letter of Intent dated 05.01.2005 was issued in favour of the appellants in respect of the scheme, under Development Control Regulation 33(10). Clauses 40 and 46 of the LOI read as under : “40. That this LOI is valid for the period of 3 (three) months from the date hereof. However, if IOA/CC is obtained for any one bldg.. of the project then this LOI will remain valid till completion of estimated project period. 46. That the confirmation from Govt. regarding the imaginary line from CRZ point of view shall be obtained before asking approval of plans & if required the scheme shall be revised accordingly.” 
• As the area covered by the scheme was within the CRZ, the appellants have approached the Coastal Zone Management Authority for clearance. During the pendency of the application, the Government of Maharashtra has issued directives in exercise of power under Sections 37(1) and 154 of the Maharashtra Regional & Town Planning 

Held:

In this case it is to be noted that the Letter of Intent was valid for a period of three months only. If, for any reason, delay is occurred in obtaining clearance from the Coastal Zone Management Authority, nothing prevented the appellants to make appropriate representation so as to keep the Letter of Intent alive. When the validity of Letter of Intent itself is for three months and if the same is not kept alive, we are of the view that the premium is to be paid as per the Government Resolution dated 16.04.2008. By virtue of the aforesaid notification, developer/co- operative society is required to pay premium @ 25% in terms of the Ready Reckoner, in respect of Slum Rehabilitation Schemes proposed to be undertaken on the lands owned by the Government, Semi- Government Undertakings and local bodies. 

In that view of the matter the demand made by the respondents is in conformity with the law and we do not find any illegality in the impugned orders passed by the High Court in either dismissing the writ petition or the review petition 

For the aforesaid reasons, the civil appeals are devoid of merit and are accordingly dismissed, with no order as to costs.