HC clears way for slum rehab project in Wadala

Mumbai: In a reprieve for Surana Developers LLP, the Bombay high court has directed the Slum Rehabilitation Authority (SRA) to decide the developer’s plea for a revised letter of intent (LoI) for a slum rehabilitation project in Wadala

Mumbai: In a reprieve for Surana Developers LLP, the Bombay high court has directed the Slum Rehabilitation Authority (SRA) to decide the developer’s plea for a revised letter of intent (LoI) for a slum rehabilitation project in Wadala. The project was stalled after the Enforcement Directorate (ED) had instructed the SRA to maintain the status quo.

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“Deciding the application for the revised LoI would not in any manner hinder the power of the ED under the Prevention of Money Laundering Act (PMLA), 2002. Even if the revised LoI is granted by the SRA, the ED still can proceed under the provisions of the PMLA,” the division bench of justice SV Gangapurwala and justice RN Laddha said in the order issued on November 14.

The bench clarified that the power of the SRA as a planning authority under the Maharashtra Regional and Town Planning (MRTP) Act, 1966 and the powers of the ED under the provisions of PMLA are distinct and the agency would not be precluded from taking independent action.

Surana Developers had moved the HC after the SRA had on August 24, 2021 received instructions from the ED not to process the developer’s plea for a revised LoI for Anand Nagar Slum Rehabilitation project after the changed planning regulations on the Development Control Promotion Regulations 2034 came into force in May 2018.

The developer contended that the ED had no power to instruct a statutory authority like the SRA not to process the request for a revised LoI and a pending investigation against a certain person can never be a ground for not processing an application for development permission.

The developer also pointed out to the court that they had already paid a sum of ₹5.87 crore to the SRA towards development charges and already constructed nine rehabilitation buildings at Anand Nagar. Besides, the developer claimed to have spent an amount of ₹155 crore in paying transit rent to slum dwellers and delay in completion of the project would negatively affect all the stake-holders, including the developer.

The ED, on the other hand, maintained that the issuance of the instructions to the SRA not to process the request for the revised LoI was well within the agency’s statutory powers. The agency informed the court that it initiated a money laundering probe after finding that Surana Constructions took a loan of ₹410 crore from Yes Bank for construction of rehab and sale components of the project, but the entire loan amount was diverted and utilised for some other purposes.

The agency also claimed that the developer had illegally increased the number of rehabilitation tenements. It said the number of eligible slum dwellers (to be rehabilitated under the scheme) was 138 at the commencement of the scheme, but subsequently increased to 402 after clubbing three slum rehabilitation schemes together. The ED further claimed that several ineligible slum dwellers were accepted as eligible and, on that strength, the developer had got a floor space index of 4 sanctioned for the project.

The HC, however, did not find any force in the contention and directed the SRA to decide the developer’s plea in accordance with prevailing rules and regulations, with liberty to the authority to take the ED’s allegation of illegal increase in rehab tenements into consideration.