Prohibition Under Maharashtra Slum Act Covers Informal Transfers & Power Of Attorney Deals: Bombay High Court

The Court dismissed a writ petition filed by an allottee challenging an eviction order passed by the Slum Rehabilitation Authority (SRA) and confirmed by the Appellate Authority. It held that the phrase "or otherwise" used in Section 3E(1) of the Act must receive a wide, purposive interpretation to prevent allottees from bypassing statutory lock-in periods and converting welfare housing into commercial properties.

A single-judge Bench of Justice Amit Borkar observed, “After considering the material placed on record, I find that absence of a registered sale deed or lease deed is not sufficient because Section 3E prohibits transfer ‘by way of sale, gift, exchange, lease or otherwise’. The judgments of the Supreme Court as well as this Court hold that the words "or otherwise" are required to receive a wider meaning so that indirect methods of transfer may come within the statutory prohibition. Therefore, where actual possession of the rehabilitation tenement has been parted with in favour of another person during the prohibited period, such arrangement may attract Section 3E even though no formal conveyance has been executed”.

Advocates Mahesh Tiwari appeared for the petitioner and S.D. Chipade, AGP appeared for the respondent.

The petitioner had been allotted a rehabilitation flat under an SRA scheme in Khar (West), Mumbai, in 2008. In 2009, she executed a Power of Attorney (PoA) in favor of a third party, handing over physical possession. During an SRA inspection in 2015, authorities found another individual residing in the tenement as a tenant on rent. Based on this, the SRA initiated eviction proceedings under Section 3E(2), holding that the original allottee was not residing in the premises and had illegally transferred the tenement. The allottee challenged the order, arguing that no registered sale, gift, exchange, or lease deed had been executed.

Rejecting the petitioner's argument, the High Court held that the absence of a registered deed is not sufficient to avoid statutory action.

“At the same time, merely because the expression ‘or otherwise’ has a wider meaning, it cannot be said that the authorities are free from proving the necessary facts. The authorities are still required to place material showing that there was in fact a prohibited transfer within the meaning of Section 3E. Mere assumption cannot take the place of proof. Though the expression ‘or otherwise’ extends the category of prohibited transactions, the basic facts showing that the allottee had parted with possession are required to be established from the record”, the Bench noted.

The Bench emphasized that rehabilitation tenements under SRA schemes are social welfare benefits meant specifically to accommodate displaced slum dwellers, rather than commercial assets for open-market trade.

The Court noted that executing a Power of Attorney to hand over physical possession, coupled with an unauthorized sub-tenancy found during inspection, provided ample evidence that the allottee had parted with possession in breach of Section 3E.

Finding no jurisdictional error or perversity in the findings of the SRA authorities, the Court upheld the eviction order passed under Section 3E(2) of the Maharashtra Slum Areas Act and dismissed the writ petition.

Cause Title: Chhaya Kashinath Shinde v. The State of Maharashtra & Ors. (Writ Petition No. 9247 of 2016)

Appearances:

Petitioner: Mahesh Tiwari, Hitesh Gupta, Advocates.

Respondents: S.D. Chipade, AGP, Tanaya Goswami, Habibur Rehman Ansari, Vinod P. Sangvikar, Shubham Sonawale, Saima S. Shaikh, and Sanika R. Said, Advocates.

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