Bombay High Court Upholds AGRC Recommendations In Stalled Mumbai Slum Redevelopment, Rejects JC Flowers Challenge And Prioritises Transit Rent For Thousands Of Displaced Residents
Bombay High Court Declines To Block Proposed Amnesty Withdrawal In Jogeshwari Slum Project, Holds AGRC Can Recommend Developer Replacement When Lenders Repeatedly Fail Rehabilitation Obligations
Facts
The dispute concerns a composite Jogeshwari slum rehabilitation scheme involving about 35 societies and 7,200 eligible slum dwellers, alongside more than 1,400 homebuyers. The original developer, Omkar Ventures (later Manomay Ventures), left rehabilitation buildings incomplete and transit rent unpaid. Following assignment of Yes Bank’s lending exposure to JC Flowers Asset Reconstruction, the lender availed a Maharashtra Government amnesty framework to engage Aspect Buildcon LLP as developer. Aspect announced its withdrawal in October 2025. With transit-rent arrears exceeding ₹90 crore and no replacement appointed despite further time, the Apex Grievance Redressal Committee (AGRC) recommended on 20 April 2026 that the State withdraw amnesty benefits, permit fresh tendering, and utilise available deposits and bank guarantees for eligible residents.
Issues
Whether Section 34A(2)(ii) of the Maharashtra Slum Areas Act authorised the AGRC to address a State-referred rehabilitation dispute and recommend withdrawal of amnesty benefits; whether the parties received adequate hearing and reasons; whether pending Section 13(2) appeals or insolvency proceedings barred action; and whether the affected housing societies could intervene.
Petitioner’s Arguments
JC Flowers and the former developer argued that the AGRC functioned only as an appellate body and lacked power to monitor a rehabilitation scheme, recommend withdrawal of government concessions, or initiate developer substitution. They alleged inadequate hearing, deficient reasons, and prejudice to statutory appeals against the SRA’s termination of the original developer. The proposed change, they submitted, would also obstruct the ongoing corporate insolvency resolution process and diminish asset value. They relied on decisions governing statutory jurisdiction, natural justice and reasoned administrative decisions.
Respondent’s Arguments
The SRA, AGRC and intervening societies emphasised that large numbers of slum dwellers were displaced, rehabilitation construction remained stalled, and over ₹90 crore in transit rent had not been paid. The State had expressly referred these defaults to the AGRC; stakeholders were heard, warned of possible withdrawal of concessions and given three months to nominate a competent developer. Instead, extensions were sought for completion of insolvency proceedings. The impugned decision was only a recommendation to the State Government, not a concluded cancellation of amnesty benefits. The societies sought participation and immediate transit relief.
Analysis of the Law
Section 34A(2) of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 gives the AGRC two distinct functions: disposing of specified appeals under clause (i), and dealing with any issues or matters referred by the State Government under clause (ii). The second is not a general, inherent supervisory jurisdiction; its exercise remains tied to the Act’s rehabilitation objectives. The 25 May 2022 amnesty scheme permitted financial institutions to participate in completion of stalled projects but imposed corresponding responsibilities for construction and transit rent. An insolvency resolution effort does not itself suspend those commitments or confer an unconditional right to continue as developer.
Precedent Analysis
The Court relied on Tulsiwadi Navnirman Co-op. Hsg. Soc. Ltd. v. State of Maharashtra, 2007 SCC OnLine Bom 1000 (Full Bench), on the SRA’s duties towards displaced residents; Galaxy Enterprises v. State of Maharashtra, 2019 SCC OnLine Bom 897, linking rehabilitation to Article 21; Susme Builders Pvt. Ltd. v. CEO, SRA, AIR 2018 SC 237, endorsing action against prolonged developer default; and Yash Developers v. Harihar Krupa Co-op. Hsg. Soc. Ltd., (2024) 9 SCC 606, recognising slum rehabilitation’s public purpose. The petitioners invoked Harshad Chiman Lal Modi, Krishnadatt Awasthy and Kranti Associates, but the Court found the statutory reference and hearing record sufficient.
Court’s Reasoning
Justice N.J. Jamadar held that the State’s 30 September 2025 reference validly activated AGRC jurisdiction under Section 34A(2)(ii). Its proceedings in October and November 2025 warned the financial institutions that non-appointment of a new developer would trigger a recommendation to withdraw concessions. No replacement was appointed in time; the lender instead sought postponement pending NCLT resolution. The Court rejected allegations of denial of hearing and held that the State could consider AGRC’s recommendations in light of the rehabilitation crisis. Crucially, the AGRC had not finally withdrawn amnesty benefits: its order was recommendatory, with the ultimate decision reserved for the Government. Separate statutory appeals remained open to determination on their own merits.
Conclusion
The Court dismissed both writ petitions and allowed the societies’ interim application only to permit intervention. It rejected the request to continue the earlier ad-interim stay and awarded no costs. The ruling does not itself terminate the amnesty concession or select another developer; it allows the competent State authority to decide on the AGRC’s recommendations. Commercial interests and pending insolvency proceedings cannot indefinitely displace the central statutory goal of timely rehabilitation and payment of transit rent.
Case: JC Flowers Asset Reconstruction Pvt. Ltd. v. State of Maharashtra & Ors.; connected Manomay Ventures petition
Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Case Number: WP Nos. 8052 and 10393 of 2026; IA No. 7818 of 2026; 2026:BHC-AS:44658
Judge: Justice N.J. Jamadar
Date: 2 November 2026 (reserved 19 October 2026)
Result: Both writ petitions dismissed; intervention allowed; continuation of interim stay refused; no costs.
