Court’s Decision
The Bombay High Court allowed the writ petition filed by tenants against the sale of their tenanted premises by the Housing Society to a third-party developer without their consent. The Court directed the Municipal Corporation not to grant any permission or entertain any redevelopment application unless the petitioners were first restored to possession or arrangements made for their alternate accommodation in compliance with legal requirements. The Court emphasised that the eviction of tenants without following due process and handing over possession to a third party was a “gross illegality.” The Court quashed the mutation entry in favour of the developer and declared that possession must be restored to the tenants as they were never lawfully evicted.
Facts
The petitioners were long-standing tenants in a building situated at Walkeshwar Road, Mumbai, which was managed by a Co-operative Housing Society. The Society sold the entire building to a third-party developer in 2003 through a registered conveyance deed without terminating the tenancy rights of the petitioners or even informing them. After the sale, the developer filed a suit under Section 41 of the Presidency Small Causes Courts Act seeking possession and mesne profits, claiming that the petitioners were trespassers. Simultaneously, the developer also obtained a mutation entry in the property card, substituting its name as the owner.
During the pendency of the litigation, the developer allegedly took forceful possession of the tenanted premises without following due process. The petitioners challenged the same and sought to quash the mutation entry, declaration of their tenancy rights, and protection from eviction without due process. They also prayed for restoration of possession or alternate premises in the redevelopment plan.
Issues
- Whether the petitioners continued to be lawful tenants despite the sale of the tenanted premises to the developer?
- Whether the transfer of property by the Society to the developer, without terminating tenancies, was valid?
- Whether the developer could claim possession without following the due process of law?
- Whether the petitioners were entitled to restoration of possession or alternate accommodation under the redevelopment scheme?
- Whether the Municipal Corporation was right in permitting redevelopment despite the tenancy dispute?
Petitioner’s Arguments
The petitioners argued that they were lawful tenants of the building and their tenancy rights had never been lawfully terminated. They contended that the Co-operative Housing Society had sold the tenanted premises to the developer in breach of their tenancy rights, without any notice, consent, or lawful process. The developer’s entry into possession was forceful and without due process. They also highlighted that the developer’s suit under Section 41 of the Presidency Small Causes Courts Act was still pending, and hence the unilateral mutation and redevelopment application were premature. The petitioners asserted their right to be restored to possession and sought quashing of the mutation entry and protection from further dispossession.
Respondent’s Arguments
The developer contended that by virtue of the sale deed executed in 2003 by the Co-operative Housing Society, it had acquired lawful ownership of the premises. It argued that the tenants had no valid right to continue occupying the premises and that the premises were already vacated. The developer claimed that the possession was either lawfully obtained or the tenants had voluntarily vacated. The Municipal Corporation defended its actions by stating that it had no role in adjudicating tenancy rights and had permitted redevelopment based on the ownership documents and approvals submitted by the developer. The Corporation also argued that its role was limited to regulating building permissions under the Development Control Regulations.
Analysis of the Law
The Court examined the provisions of the Maharashtra Rent Control Act, 1999, and reiterated that tenants cannot be evicted except in accordance with law. The sale of property by a landlord, including a Co-operative Housing Society, does not automatically extinguish the rights of existing tenants. Moreover, even the new owner (developer) cannot evict a tenant without a decree of eviction from a competent court. The Court noted that the developer had filed a suit under Section 41 of the Presidency Small Causes Courts Act but did not pursue lawful execution and instead proceeded to take possession extralegally.
It further held that mutation entries do not confer title and are only for revenue purposes. Possession taken in contravention of law is illegal and liable to be set aside. The rights of tenants under rent laws are protected even in redevelopment, and the Municipal Corporation is obligated to ensure that alternate accommodation or consent terms are in place before granting redevelopment permissions.
Precedent Analysis
- Krishna Ram Mahale v. Shobha Venkat Rao – Cited for the proposition that forcible dispossession without due process is illegal even against a trespasser.
- K.K. Verma v. Union of India – Held that even an unauthorized occupant cannot be removed without following due process of law.
- Lallu Yeshwant Singh v. Rao Jagdish Singh – Declared that possession cannot be disturbed by force and must be addressed through legal recourse.
- Krishna Bai Kashi Bai v. Prakash Developers – Emphasised the rights of tenants in redevelopment projects and the illegality of their dispossession without alternative accommodation.
- Hindustan Petroleum Corporation Ltd. v. Dilbahar Singh – Clarified that mutation entries do not affect ownership or title and are for administrative convenience.
Court’s Reasoning
The Court concluded that the developer’s possession was not obtained through legal means. It categorically held:
“The possession of the petitioners was never terminated in accordance with law. The alleged taking over of possession was illegal and the petitioners continue to have legal rights.”
The Court noted that the developer’s conduct in taking over possession and simultaneously claiming mutation and redevelopment benefits was “not only improper but also a fraud on the law.” Further, the Municipal Corporation was faulted for failing to verify the legal status of occupants before granting redevelopment permissions.
Conclusion
The Bombay High Court allowed the writ petition and directed:
- The Municipal Corporation shall not entertain or process any redevelopment application concerning the premises without first ensuring either restoration of possession or alternate accommodation for the petitioners.
- The mutation entry in favour of the developer is set aside.
- The petitioners’ rights as tenants are declared to subsist.
- The developer is restrained from dispossessing the petitioners without following due process.
Implications
This judgment reinforces the protective framework of tenancy rights under the Maharashtra Rent Control Act and sends a strong message to developers and housing societies that redevelopment cannot override lawful possession. It safeguards tenants against coercive eviction and illegal redevelopment manoeuvres, and places a duty on municipal authorities to examine legal possession status before processing redevelopment applications.
Referred Judgments Summary
- Krishna Ram Mahale – Forceful dispossession even of trespassers is illegal.
- Lallu Yeshwant Singh – Possession cannot be disturbed without legal procedure.
- Hindustan Petroleum v. Dilbahar Singh – Mutation entries do not establish title.
- Krishna Bai v. Prakash Developers – Emphasised tenant protection during redevelopment.
- K.K. Verma – Due process must be followed even against unlawful occupants.
FAQs
1. Can tenants be evicted during redevelopment without consent?
No. Tenants cannot be evicted without following due legal process and must be provided with alternate accommodation if redevelopment is to proceed.
2. Does a sale by a housing society extinguish tenancy rights?
No. Tenancy rights survive the sale of property unless lawfully terminated by a court.
3. What is the value of a mutation entry in ownership disputes?
Mutation entries are administrative and do not confer title or possession rights.
