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Transfer of Tenacy does not create new tenacy: Bombay High Court

The Bombay High Court has ruled that transfer of tenacy would not result in creation of a new one under the MHADA Act and Development Control Regulations, 1991, through the learned bench consisting of  Justices G.S.Patel & Madhav J Jamdar, JJ in the case of Alice Realties Pvt. Ltd. Vs State of Maharashtra (Writ Petition (L) No. 19891 of 2021)

FACTS OF THE CASE

The Petitioner is a private limited firm that rents space in the Saraswati Vinayak Pandurang building (hereinafter referred to as “said Building”). Numerous tenants and occupants occupied the aforementioned building. The Development Control Regulations, 1991 (the “DCR”), read with Appendix III to the DCR, attempted to redevelop the aforementioned Building, which was a cessed construction. The freehold site on which the aforementioned Building stood (“said Building”) belonged to a public charitable trust known as The Pathare Prabhu Charities Trust (“said Trust”). The aforementioned Trust designated Rohan Developers Pvt. Ltd., the Writ Petition’s Respondent No. 8 to handle the renovation work of the aforementioned Building (“said Developer”).

One of the original tenants, Ms. Lalita Umakant Dharadhar, surrendered her tenancy rights in favour of the petitioner at some point in 2010 with regard to Room No. 5 in the aforementioned Building. After conducting an inspection, the Executive Engineer and Deputy Engineer of the Repair Board prepared an office note on November 2, 2010, stating that the tenancies in the aforementioned Building were deemed eligible as they complied with the requirements outlined in the Government Resolution dated August 16, 2010. The Repair Board’s Deputy Chief Engineer for Zone II asked whether a renter might transfer their tenancy to a private limited company on November 25, 2010.

The Chief Officer of the Mumbai Building Repairs and Reconstruction Board, who is Respondent No. 7 to the Writ Petition, was then tasked with handling the situation. The Respondent No. 5 to the Writ Petition created and certified a list of eligible tenants/occupants that included the entities/people in the aforementioned Building who were qualified for permanent alternate housing.

However, following the certification of the names, Respondent No. 7 believed that the said Developer had acquired 22 tenancies/occupancies from the building’s previous tenants and added 22 new businesses as tenants (the “said Tenancies”). According to Respondent No. 7, the aforementioned Tenancies could not be accepted. According to Respondent No. 7, DCR Regulation 33(7) contemplated the rehabilitation of elderly tenants/occupants. The Respondent No. 7 submitted that the aforementioned Tenancies should be classified as a single occupant, be clubbed and be treated as residential and owner occupied. On February 28, 2011, Respondent No. 7 gave its first NOC, subject to the aforementioned clause 25 observation.

OBSERVATION OF THE COURT:

According to the court, The Housing Board and the MHADA Act were both concerned with the state of the housing system, the Bombay High Court noted. The MHADA Act prohibited the creation, surrender, or transfer of tenancies. Only the Maharashtra Rent Control Act, 1999 (the “Rent Act”) permitted tenancy transfers. The Bombay High Court noted that a person who had obtained title from a tenant was included in the term of “tenant” under the Rent Act.

According to the Bombay High Court, the question in this case was not whether the firms were affiliated with one another but rather if a “new tenancy” attempt had been made or if something illegal had been done in violation of the DCR or the Rent Act. The Bombay High Court stated that the ban included in Regulation 33(7) of the DCR and Appendix III of the DCR would not apply if there was merely a transfer of a tenancy and no new tenancy was created.

The Bombay High Court granted the Writ Petition and ruled that Clauses 25 and 28 of the NOCs dated February 28, 2011, and June 4, 2015, respectively, could not be upheld. The two provisions were eliminated and disregarded. It was further decided that the need of treating all of the aforementioned tenancies as a single residential unit and owner-occupied as a result could not be upheld. 

The Bombay High Court instructed Respondent No. 4 to update its NOC as needed while taking into account its directives.

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Judgement reviewed by – Sudarshana Jha  Click here to view the judgementì

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