Owner’s Preferential Right, Limits on Section 14 Acquisition, and Protection of Recreational Grounds in Slum Rehabilitation: Commentary on Jyoti Builders v. CEO, SRA (2025 INSC 1372)

Owner’s Preferential Right, Limits on Section 14 Acquisition, and Protection of Recreational Grounds in Slum Rehabilitation: Commentary on Jyoti Builders v. Chief Executive Officer, SRA (2025 INSC 1372)

I. Introduction

The Supreme Court’s decision in Jyoti Builders v. Chief Executive Officer & Ors., 2025 INSC 1372 (decided on 2 December 2025), sits at the intersection of slum rehabilitation law, town planning, property rights, and environmental/open space protection.

The case concerned a long-running dispute over a 2,005 sq. m. plot in Malad, Mumbai (the “Subject Property”), originally owned by one Phuldai R. Yadav (Respondent No. 5) and subsequently sold to Alchemi Developers (Respondent No. 4). The land:

  • was declared a slum area under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 (“Slum Act”);
  • was reserved as a Recreational Ground (RG) in the Development Plan under the Maharashtra Regional and Town Planning Act, 1966 (“MRTP Act”); and
  • formed part of a larger slum redevelopment project initiated in the 1990s by the predecessors of the appellant, Jyoti Builders.

Having already rehabilitated the 34 slum dwellers from the Subject Property, Jyoti Builders sought to rely on a 2015 order of the Chief Executive Officer of the Slum Rehabilitation Authority (“CEO-SRA”) directing initiation of acquisition under Section 14 of the Slum Act. The appellant asked for:

  1. a writ of mandamus compelling the State to acquire the Subject Property under Section 14; and
  2. a direction to issue a full Occupation Certificate (OC) for its final sale building.

The Supreme Court ultimately:

  • refused to compel acquisition of the Subject Property;
  • confirmed the landowner’s preferential right to redevelop, as elaborated in Tarabai Nagar Co-op. Housing Society and Saldanha Real Estate;
  • granted Jyoti Builders the right to obtain an OC, subject to handing over another RG plot (2700 sq. m. “dark green” land) to the municipal corporation; and
  • crucially, directed that no construction can be put up on the Subject Property by anyone, and that it must be used only as Recreational Ground.

The judgment therefore reinforces two key principles:

  1. The State’s power of acquisition under Section 14 of the Slum Act is subordinate to the preferential redevelopment right of the landowner in a notified Slum Rehabilitation Area; and
  2. RG-reserved land, even if slum-affected, cannot be converted into a buildable component of a slum scheme, and must remain open, preserving much-needed urban green space.

II. Summary of the Judgment

1. Issues before the Supreme Court

The Court clearly framed three central questions (para 54):
  1. Whether a writ of mandamus should be issued directing the State Government to acquire the Subject Property under Section 14(1) of the Slum Act, relying on the CEO-SRA’s 2015 order.
  2. Whether Jyoti Builders is entitled to a full Occupation Certificate for the final sale building on its slum scheme upon handing over the 2700 sq. m. “dark green” plot as Recreational Ground.
  3. Whether Jyoti Builders has been fully compensated through Floor Space Index (FSI) for rehabilitating the 34 slum dwellers earlier residing on the Subject Property.

2. Core Holdings

The Supreme Court held:

  1. No mandamus to acquire under Section 14:
    • The State’s power under Section 14 read with Section 3D(c)(i) of the Slum Act is subject to the preferential right of the owner to redevelop the land (Tarabai applied).
    • By 2022, the Subject Property had been lawfully sold to Alchemi Developers, and Alchemi, as owner, had exercised its preferential right by submitting a redevelopment proposal.
    • Given this, and the earlier Citispace injunction restricting slum schemes on RG land until March 2022, it was “too late in the day” to direct acquisition (paras 70–72, 77(1)).
  2. Occupation Certificate to Jyoti Builders:
    • Jyoti Builders is entitled to the OC for the final sale building once it hands over the 2700 sq. m. “dark green” RG plot (CTS No. 620/A/1A/1A/3) to the MCGM (paras 73–74, 77(2)).
    • The Subject Property (light green, 2005 sq. m.) is not a part of Jyoti’s scheme for OC purposes.
  3. Developer already fully compensated:
    • The CEO-SRA’s 2015 order had directed that the 34 slum dwellers from the Subject Property be treated as Project Affected Persons (PAPs).
    • In return, Jyoti Builders received equivalent FSI for the sale component, which it has already fully utilised to construct the final sale building (para 75).
    • Accordingly, Jyoti has been “fully compensated” and cannot claim any further property-related benefit from the Subject Property (paras 75–77(3)).
  4. Subject Property to remain permanently as RG:
    • The Court accepted the State’s statement that no construction would be permitted on the Subject Property and converted it into a binding direction.
    • Alchemi Developers, its successors and assigns, are restrained from putting up any construction on the Subject Property, which must be used only as a Recreational Ground (para 76, 77(4)).

3. Outcome

  • The appeal was disposed of with partial relief:
    • No acquisition under Section 14;
    • Yes to OC for Jyoti Builders, conditional on handing over the 2700 sq. m. RG parcel;
    • Subject Property preserved as open RG with an absolute no-construction mandate.

III. Background and Factual Matrix

1. The Lands and Their Planning Status

  • The dispute concerns part of a “Larger Property” of 19,456.7 sq. m. in Malad (Village Malad, Taluka Borivali, Mumbai Suburban District):
Plot CTS No. Colour (Plan) Area (sq. m.) Ownership / Treatment in Scheme
“Dark Green” RG plot 620/A/1A/1A/3 Dark Green 2700 Owned by Jyoti; included in scheme; satisfies RG requirement; to be handed to MCGM.
“Light Green” – Subject Property 620/A/1A/1B/1 & 620/A/1A/1B/2 Light Green 2005 Originally owned by Phuldai; later sold to Alchemi; excluded from appellant’s scheme per LOIs since 2000.
  • The entire Subject Property was:
    • Declared a slum under Section 4 of the Slum Act in 1987; and
    • Reserved as Recreational Ground (RG) in the 1991 Development Plan for Mumbai (and continues to be so reserved).

2. Early Transactions and the 1990s Slum Scheme

  • Original owner: F.E. Dinshaw Trust.
  • Purchase by Respondent No. 5: Phuldai R. Yadav bought the Subject Property in September 1991.
  • Within six months, Phuldai executed a Memorandum of Understanding (MoU) dated 09.02.1992 with Harishree Enterprises (predecessor to Jyoti) to sell the Subject Property and consent to its redevelopment.
  • Harishree proposed a slum rehabilitation scheme on the larger property (19,456.7 sq. m.), which included the Subject Property.
  • In 1997:
    • Annexure II (the certified list of eligible slum dwellers and plan) was issued for the Larger Property, including the Subject Property and 34 slum dwellers found on it.
    • A Letter of Intent (LOI) dated 3 September 1997 was issued in favour of Harishree to implement the scheme.

3. Breakdown of MoU and Progressive Exclusion of the Subject Property

  • The 1992 MoU between Phuldai and Harishree was terminated by Phuldai in 1995.
  • Harishree sued for specific performance (Suit No. 1514/1995); the suit was dismissed for default on 06.04.2000 and never revived, so the termination stood.
  • LOIs were revised:
    • LOI 02.08.1999: revised earlier LOI in favour of Harishree.
    • LOI 04.06.2004 (superseding 02.08.1999): crucially included a condition (clause 35) that:
      “You shall not claim FSI of plot admeasuring 2005 sq. m. kept in abeyance till the dispute between Harishree & Smt. Phuldai Yadav is decided by Court.”
    • LOI 09.08.2005 (in favour of Vikas/Jyoti as developer of 12,606.7 sq. m. “Project Property”): repeated the condition (clause 33) that FSI of the 2005 sq. m. plot was kept in abeyance pending resolution of disputes with Phuldai.
    • LOI 28.09.2017 (in favour of Jyoti Builders): significantly made no mention of the Subject Property, confirming its effective exclusion from Jyoti’s scheme.
  • In 2008, SRA explicitly asked Jyoti to submit a revised scheme excluding the Subject Property, and Jyoti itself wrote (15.01.2008) that it was not utilising or taking benefit of the Subject Property and therefore no revision was needed.

4. Implementation of Jyoti’s Scheme and the 2015 CEO-SRA Order

  • Through 2005–2011, Jyoti (through predecessors) constructed four rehabilitation buildings, and later obtained OC for a fifth rehab building (2022).
  • Overall, Jyoti’s scheme rehabilitated 498 slum dwellers, including the 34 from the Subject Property, who were housed elsewhere as part of the rehab component.
  • On 26.02.2015, the CEO-SRA passed a detailed order (“2015 Order”) which:
    • recorded that Jyoti’s slum scheme had been substantially implemented over the 12,606.7 sq. m. project area;
    • held that the Subject Property was liable to be acquired under Section 14 of the Slum Act to complete the scheme and RG handover;
    • stated that Phuldai would be entitled to monetary compensation after acquisition; and
    • directed steps towards acquisition (demarcation occurred on 6 June 2015).
  • The 2015 Order was never challenged by Phuldai and technically attained finality; however, it was never implemented in terms of issuance of a Section 14 notification.

5. The Citispace Injunction and Freeze on RG-based Slum Schemes

In Citispace & Ors. v. State of Maharashtra (W.P. No. 1152 of 2002), the Bombay High Court, by an interim order dated 31.07.2002, directed that:

“...no new rehabilitation scheme be sanctioned without the permission of this Court in respect of open spaces which are reserved for gardens, parks, playgrounds, recreational spaces, maidans, no-development zones, pavements, roads and carriageways.”

The Supreme Court (para 66) noted that this injunction continued to operate until 1 March 2022. Thus, any slum rehabilitation activity involving RG-reserved land (like the Subject Property) was constrained:

  • The CEO-SRA’s direction in 2015 to acquire the Subject Property as part of the slum scheme could not practically translate into a Section 14 acquisition while the Citispace injunction was in force.

6. Sale to Alchemi Developers and the Competing Scheme

  • On 26.03.2022, within weeks of the Citispace constraints lifting (1.3.2022), Phuldai sold the Subject Property to Alchemi Developers by a registered conveyance.
  • Alchemi, now lawful owner, submitted a slum rehabilitation proposal for the Subject Property on 05.04.2022 under the newer regime (DCPR 2034), claiming to rehabilitate a list of 34 persons allegedly still on the land.
  • Jyoti contended that:
    • those 34 slum dwellers had already been rehabilitated in its scheme as part of Annexure II,
    • Alchemi’s list was fraudulent or at least recycled, and
    • the SRA had “changed its stance” after Alchemi entered the picture, now asserting that the Subject Property had always been excluded from Jyoti’s scheme.

7. High Court Proceedings and Findings

The Bombay High Court dismissed Jyoti’s writ petition challenging:

  • the CEO-SRA’s order dated 03.10.2022 (refusing to proceed with acquisition); and
  • an order dated 07.10.2024 (from the AGRC/SRA side of the dispute).

Key High Court conclusions (summarised at para 26 of the SC judgment) included:

  1. The Subject Property was not part of Jyoti’s slum scheme, especially in view of:
    • successive LOIs keeping FSI of 2005 sq. m. in abeyance; and
    • the 2017 LOI which did not include the Subject Property at all.
  2. Jyoti had already:
    • rehabilitated the 34 slum dwellers from the Subject Property as PAPs; and
    • utilised the FSI benefit granted to it for such PAP rehabilitation.
    Hence, Jyoti had been compensated and could not assert property rights over the land itself.
  3. Jyoti’s attempt to compel acquisition after a delay of seven years (2015–2022) was seen as an attempt at “backdoor entry” to usurp Phuldai’s land.
  4. The CEO-SRA, in his 2022 order, had not reviewed the 2015 order, but merely complied with directions to consider rival contentions; therefore, the line of authorities on review (e.g., Kapra Mazdoor Ekta Union, Deoki Nandan Parashar, Chiranjilal Shrilal Goenka) did not assist Jyoti.
  5. The AGRC was correct in holding that slum dwellers from Phuldai’s plot had already been allocated apartments, and SRA should now “look into” the matter further.

Against this backdrop, Jyoti Builders approached the Supreme Court.

IV. Detailed Legal Analysis

A. Statutory and Regulatory Framework

1. Slum Act: Sections 3B, 4, 14 and the SRA

  • Section 4: Enables declaration of an area as a “slum area” if the conditions of buildings or basic amenities endanger health/safety.
  • Section 3B: Empowers the Slum Rehabilitation Authority (“SRA”) to prepare a “general Slum Rehabilitation Scheme” for notified areas. Critically:
    • Sub-section (4) provides that such a scheme is deemed to be Development Control Regulations (DCR) for the area, and its provisions prevail over pre-existing DCRs under the MRTP Act.
    • Sub-section (5) lists the contents of such schemes, including:
      • parameters for declaring Slum Rehabilitation Areas (SRAs),
      • obligatory participation of owners and occupants,
      • provisions for rehab tenements, PAPs, FSI and TDR, etc.
  • Section 14: Gives the State Government the power to acquire land for executing improvement or redevelopment works:
    • Acquisition is triggered by a representation from the Competent Authority/SRA.
    • The State must:
      • issue a show-cause notice to the owner/interested persons,
      • consider objections and the SRA’s report, and
      • then decide whether to acquire.
    • On publication of a notification in the Official Gazette, land vests absolutely in the State, free from all encumbrances.
    • Section 14(1A) deems such acquisition to be for a public purpose.

2. MRTP Act and SRA as Planning Authority

  • Section 2(19) of the MRTP Act includes the SRA, for slum areas declared under the Slum Act, within the definition of a “Planning Authority”.
  • The second proviso to Section 152 enables delegation of specific powers (e.g., sanction of development permissions, enforcement) to the CEO-SRA.
  • Thus, the SRA functions both as a slum rehabilitation authority under the Slum Act and as a planning authority under the MRTP Act, especially for slum areas.

3. DCR 1991, DCPR 2034 and Slum Schemes (Regulation 33(10))

  • DCR 1991, Regulation 33(10): Provided the framework for slum redevelopment in Mumbai until 2018; Appendix IV governed:
    • implementation through slum dwellers’ societies, owners or developers,
    • requirement of 70% consent from eligible slum dwellers,
    • incentive FSI for developers in proportion to rehab obligations.
  • DCPR 2034: Successor planning regulations that also contain a provision akin to 33(10), but with modified norms and, importantly, more detailed rules on how RG-reserved plots may be dealt with in certain contexts.
  • The High Court noted that only after 1 March 2022 (post-Citispace and regulatory changes) could an owner propose a scheme on land reserved for garden/RG in the manner claimed.

B. Precedents Cited and Their Influence

1. Tarabai Nagar Co-op. Housing Society (Proposed) v. State of Maharashtra, 2025 SCC OnLine SC 1795

In Tarabai, the Supreme Court conducted a comprehensive analysis of Chapter I-A of the Slum Act (dealing with Slum Rehabilitation Areas and Schemes) and held:

  • The private owner of land in a Slum Rehabilitation Area has a preferential right to redevelop it.
  • The SRA is bound to issue a notice-cum-invitation under Section 13, inviting the owner to propose and implement a Slum Rehabilitation Scheme.
  • Acquisition under Section 14 cannot proceed so long as:
    • the owner has not been properly invited; and
    • the owner’s preferential right has not been extinguished by failure to act within a reasonable (or prescribed) time.
  • Section 14 in the Chapter I-A context is not an independent, free-standing power that can ignore the structure of preferential rights; it must be harmonised with the owner’s primacy in redevelopment.

In Jyoti Builders, the Supreme Court applies Tarabai directly:

  • It reiterates (paras 72, 77(1)) that the State’s Section 14 power is subject to the owner’s preferential redevelopment right.
  • Since Alchemi, as current owner, had come forward with a proposal (even if ultimately rendered nugatory by the RG prohibition), the Court holds there is no legal necessity or power to compel acquisition at Jyoti’s behest.

2. Saldanha Real Estate Pvt. Ltd. v. Bishop John Rodrigues & Ors., 2025 SCC OnLine SC 1794

Saldanha followed and reinforced Tarabai:

  • Reaffirmed that:
    • the landowner has a preferential right to develop an SR Area;
    • the SRA must invite the owner to submit a scheme; and
    • acquisition cannot be undertaken unless and until the owner’s right is extinguished.
  • Held that failure to issue a proper Section 13 notice to the owner vitiates acquisition proceedings.

The Supreme Court in Jyoti Builders expressly quotes Saldanha (para 64) and applies its reasoning mutatis mutandis:

  • Since no valid acquisition process compliant with the owner’s preferential right had been initiated, and Alchemi had stepped forward as owner, Section 14 could not be used now to override that status.

3. Murlidhar Teckchand Gandhi and the Independence of Sections 13 and 14

In Murlidhar Teckchand Gandhi, the Supreme Court earlier held, in the context of the pre-Chapter I-A framework, that Sections 13 and 14 of the Slum Act were independent powers. However:

  • Tarabai carefully distinguished that case, holding that in the Chapter I-A context (Slum Rehabilitation Areas), the dynamics are different because:
    • there is a statutory preferential right in favour of the owner;
    • acquisition is now more narrowly tailored to the implementation of a Slum Rehabilitation Scheme; and
    • Section 14 cannot be invoked to circumvent the owner’s priority.

In Jyoti Builders, the Court expressly relies on Tarabai’s reading of Murlidhar (para 72), thus confirming that:

  • When dealing with an SR Area under Chapter I-A, Section 14 cannot be used as a stand-alone acquisition power, divorced from the owner’s rights and the Section 13 notice process.

4. Citispace & Ors. v. State of Maharashtra, Bombay High Court (2002)

The Citispace interim order had profound practical implications:

  • It prohibited sanction of new rehabilitation schemes (including slum schemes) on lands reserved for gardens, parks, playgrounds, recreational spaces, maidans, no-development zones, pavements, roads and carriageways, without leave of the Court.
  • This injunction remained in force until 1 March 2022.

In Jyoti Builders:

  • The Supreme Court recognises that SRA could not, in practice, proceed to acquire RG land under Section 14 while the Citispace injunction operated (para 66).
  • Thus, Jyoti’s argument that the CEO-SRA’s 2015 order created a “power coupled with duty” to acquire is undercut by:
    • the supervening judicial restraint in Citispace; and
    • the subsequent intervening rights of a new owner in 2022.

Ultimately, the Supreme Court goes further than Citispace by making a final, case-specific direction that no construction of any kind shall be permitted on the Subject Property, thereby permanently securing it as RG.

5. “Power Coupled with Duty” Cases: Jogendra Singh and Governor of Tamil Nadu

Jyoti relied on decisions like:

for the proposition that where a statute confers a power to achieve a public objective, the authority is under a “duty” to exercise that power once the conditions are met.

However, the Supreme Court, following Tarabai, effectively rejects the extension of this doctrine to override the landowner’s preferential right or the intervening Citispace injunction. The judgment acknowledges the concept but makes clear that:

  • Even a “power coupled with duty” cannot be exercised in a manner that undermines other statutory and constitutional rights (here, property rights and the structured scheme of Chapter I-A).
  • In any event, subsequent circumstances—Citispace, sale to Alchemi, and Tarabai/Saldanha jurisprudence—make it inequitable and legally untenable to compel acquisition in 2025 based on a 2015 internal direction.

C. Legal Reasoning on the Three Core Issues

1. Mandamus to Acquire under Section 14

(a) Nature of the 2015 CEO-SRA Order

The 2015 Order directed steps towards acquisition of the Subject Property under Section 14 and recorded that Phuldai would receive compensation. Jyoti argued:

  • that this was a quasi-judicial adjudication between it and Phuldai,
  • that it had attained finality, and
  • that the CEO-SRA (and the State) were now under a legal duty to implement it by issuing acquisition notifications.

The High Court and Supreme Court both effectively treated the 2015 Order as:

  • a directional/administrative order premised on then-existing assumptions and constraints; and
  • one that could not, by itself, create an unqualified obligation to acquire, especially when subsequent legal developments and rights intervened.
(b) Impact of Citispace and Lapse of Time

The Supreme Court finds (para 66) that:

  • Between 2015 and 1 March 2022, due to Citispace, the State and SRA could not lawfully process new slum schemes on RG land or move meaningfully towards acquisition for such purpose.
  • Therefore, the delay in acting on the 2015 Order was not mere indifference; there was a judicial bar.

By the time Citispace constraints were lifted:

  • On 26.03.2022, Phuldai sold the Subject Property to Alchemi, a bona fide purchaser for value (as recorded by the Court); and
  • On 05.04.2022, Alchemi had already submitted its scheme as owner.

When Jyoti finally filed its writ petition on 25.07.2022, seeking mandamus to acquire:

  • the Subject Property had been under new ownership for several months; and
  • the owner’s preferential right was actively being exercised.
(c) Interplay with Preferential Right and Section 14

Applying Tarabai and Saldanha, the Court holds (paras 72, 77(1)):

  • The State’s Section 14 power “is subject to preferential right, if any, of the owner”.
  • Therefore, where the owner (here Alchemi) is willing to and does propose a slum scheme, there is no “necessity” for acquisition, and the State cannot be compelled to acquire the land.

The Court also implicitly accepts the High Court’s characterization of Jyoti’s pursuit of acquisition as an attempt at a “backdoor entry” to gain indirect control over land it had failed to purchase from the original owner.

(d) Conclusion on Mandamus

The Supreme Court’s conclusion is categorical (para 70–72, 77(1)):

  • It is “too late in the day” to direct acquisition on the strength of the 2015 Order.
  • Given the preferential right of the owner and the changed circumstances, no writ of mandamus lies to compel the State to issue a Section 14 notification.

2. Occupation Certificate and the 2700 sq. m. RG Plot

Jyoti argued that the OC for its final sale building was being withheld on the ground that:

  • the Subject Property (2005 sq. m.) had not been acquired and handed over as RG; and
  • the Recreational Ground requirement of the slum scheme was incomplete.

The State/SRA, however, clarified (paras 39–40, 73–74):

  • That Jyoti was never required to hand over the Subject Property (light green, 2005 sq. m.) for OC purposes;
  • The only RG requirement from Jyoti’s scheme pertained to the “dark green” plot of 2700 sq. m. (CTS No. 620/A/1A/1A/3), which:
    • Jyoti owns;
    • is part of its slum scheme; and
    • must be surrendered to MCGM as RG.

The Supreme Court therefore directed (para 74, 77(2)):

  • The respondents (State/SRA) must issue the OC for the final sale building within four weeks from the judgment; and
  • This is subject only to Jyoti handing over the 2700 sq. m. dark green RG plot to MCGM.

This resolves the immediate practical concern of Jyoti’s project, while aligning with the town planning requirement that the statutorily mandated RG be handed over.

3. Full Compensation by FSI: PAPs and No Double Benefit

The third issue concerned whether Jyoti had already been fully compensated for undertaking the rehabilitation of the 34 slum dwellers from the Subject Property.

The Court notes (para 75):

  • The 2015 CEO-SRA order directed that these 34 persons be treated as Project Affected Persons (PAPs) under the policy.
  • In lieu of handing over PAPs to the SRA, Jyoti was granted equivalent FSI for the sale component.
  • This additional FSI was equivalent to the rehab obligation and has been fully utilised by Jyoti to construct its final sale building.
  • Moreover, the 2017 LOI makes it clear that the Subject Property is not part of the scheme. The FSI benefit Jyoti received is thus not from the Subject Property as “land-FSI”, but as PAP-linked compensatory FSI.

Thus, the Court holds:

  • Jyoti has been “fully compensated by granting adequate area/FSI for sale” (para 77(3));
  • It cannot now claim a further proprietary advantage over the Subject Property merely because it rehabilitated the slum dwellers who once occupied it.

From a policy perspective, this closes the door to “double-dipping”: a developer cannot:

  • first receive FSI compensation for clearing and rehousing slum dwellers, and then
  • seek to appropriate the underlying land (particularly RG land) through acquisition or claim of beneficial ownership.

4. Subject Property to Remain Recreational Ground — No Construction by Any Party

Perhaps the most forward-looking aspect of the judgment is the direction in paras 76–77(4):

  • “No construction shall be made on the Subject Property of any nature and the same shall be utilized only as a Recreational Ground (RG).”
  • Respondent No. 4 (Alchemi Developers), its successors and assigns are specifically restrained from putting up any type of construction on the Subject Property.

This direction:

  • Responds directly to the concern raised by the slum societies (Respondents 6 and 8) that Alchemi’s scheme under DCPR 2034 would:
    • build over 65% of the Subject Property, and
    • thereby drastically reduce usable RG for 498 rehabilitated slum dwellers and the general public.
  • Aligns with the original Development Plan reservation and with the spirit (and long-term impact) of the Citispace litigation, which sought to preserve urban open spaces from encroachment.
  • Effectively neutralises Alchemi’s proposed slum scheme on this RG parcel — even though the Court has refused to compel State acquisition, it has also blocked any development on that land.

The practical legal outcome for the Subject Property is:

  • Ownership: remains with Alchemi Developers (as private property), subject to planning restrictions;
  • Use: restricted exclusively to Recreational Ground – no building, no slum scheme construction;
  • FSI: no buildable FSI from this land can be utilised for sale or rehab components on this or other plots, beyond what the authorities may lawfully allow by way of separate TDR mechanisms consistent with the DP and DCPR (not addressed in detail by the Court).

This is an important illustration of how the Court can:

  • uphold landowner’s preferential rights against forced acquisition, yet
  • simultaneously enforce town planning and environmental constraints that limit what the landowner can do with the property.

V. Complex Concepts Simplified

1. Floor Space Index (FSI)

FSI is the ratio between:

  • the total floor area that can be built on a plot; and
  • the area of that plot.

Example:

  • If FSI = 2.0 and plot area = 1000 sq. m., a developer can construct 2000 sq. m. of built-up area (e.g., two floors of 1000 sq. m. each, or four floors of 500 sq. m. each, etc.).

In slum schemes:

  • Developers get extra FSI as an incentive for rehabilitating slum dwellers.
  • This FSI can be used to construct “sale component” buildings, which cross-subsidise the free rehab tenements.

2. Recreational Ground (RG)

An RG is a land-use reservation in the Development Plan for:

  • gardens, parks, playgrounds, maidans or open spaces,
  • meant to remain open and green for public or community use.

RG land is typically subject to strict restrictions on construction. In Jyoti Builders, the Court reaffirms that RG land:

  • cannot be legitimately converted into a dense built-up slum project, even if slum dwellers once occupied it, and
  • must remain open as declared by the planning authority.

3. Slum Rehabilitation Authority (SRA) and CEO-SRA

The SRA is a statutory body under the Slum Act that:

  • declares Slum Rehabilitation Areas,
  • approves slum rehabilitation schemes,
  • coordinates between slum dwellers, developers and government agencies, and
  • acts as a Planning Authority for slum areas under the MRTP Act.

The CEO-SRA is the chief executive officer who exercises powers delegated under Section 152 of the MRTP Act, including:

  • granting sanctions and LOIs for schemes;
  • issuing directions on implementation; and
  • making recommendations for acquisition under Section 14.

4. Annexure II

In slum rehabilitation practice, Annexure II is the certified list of:

  • eligible slum dwellers; and
  • their structures and locations,

for a given scheme. It is a foundational document that determines:

  • who is entitled to free rehab tenements; and
  • how much rehab and sale FSI the developer is entitled to.

5. Project Affected Persons (PAPs)

PAPs are persons displaced by public projects (roads, infrastructure, slum schemes, etc.). In slum rehabilitation:

  • slum dwellers removed from a site may be designated PAPs;
  • developers who house PAPs are granted additional FSI incentives; and
  • PAP tenements may be located within or outside the original slum site.

In this case, the 34 slum dwellers from the Subject Property were treated as PAPs for the purposes of FSI computation and rehab obligations.

6. Preferential Right of Owner in Slum Rehabilitation Areas

Under Chapter I-A of the Slum Act (as interpreted in Tarabai and Saldanha):

  • A private owner of land in a Slum Rehabilitation Area has a first preference to:
    • submit a rehabilitation proposal; and
    • implement the scheme.
  • The SRA must issue a notice-cum-invitation to the owner.
  • Only if the owner fails to act within the stipulated time can the SRA:
    • entertain third-party developers; or
    • recommend acquisition under Section 14.

7. Writ of Mandamus

A writ of mandamus is a constitutional remedy through which a court:

  • compels a public authority to perform a public or statutory duty where:
    • such duty exists (by law), and
    • the authority has failed or refused to perform it.

In Jyoti Builders, the Court holds that:

  • there is no enforceable statutory duty on the State to acquire the Subject Property under Section 14 in the face of:
    • the owner’s preferential right, and
    • intervening legal developments.
  • Therefore, mandamus cannot be issued.

VI. Broader Impact and Future Implications

1. For Landowners in Slum Rehabilitation Areas

  • The decision strengthens and operationalises the preferential right articulated in Tarabai and Saldanha:
    • Owners can be more confident that their land will not be compulsorily acquired under Section 14 as long as they:
      • are willing to redevelop, and
      • respond within reasonable time to SRA’s notice-cum-invitation.
  • At the same time, owners must recognise that:
    • their use of land is still constrained by town planning reservations (e.g., RG) and environmental considerations;
    • purchase of RG land is subject to those restrictions—ownership does not imply buildability.

2. For Developers Undertaking Slum Schemes

  • Developers cannot assume that:
    • rehabilitating slum dwellers on someone else’s land,
    • or receiving PAP-linked FSI incentives,
    will entitle them to a proprietary claim over the underlying land.
  • This judgment sends a clear signal:
    • FSI compensates developers for their rehab obligations;
    • it does not confer land ownership or beneficial title over plots where they have “cleared” slums.
  • Developers must be vigilant about:
    • whether the land they wish to build on is RG/reserved or otherwise restricted;
    • whether their LOIs and approvals expressly include or exclude particular parcels (as was decisive here).

3. For Slum Dwellers and Cooperative Societies

  • The decision protects:
    • the integrity of RG/open spaces that often serve as the only breathing spaces for high-density rehabilitated communities; and
    • the finality of their rehabilitation: once slum dwellers have been allotted tenements and counted for FSI as PAPs, they cannot be endlessly recycled into new schemes.
  • Slum societies now have stronger legal footing to:
    • oppose subsequent schemes that seek to build over planned open spaces adjacent to their rehab buildings;
    • insist on the preservation of RGs as per original sanctioned plans.

4. For Planning Authorities and the SRA

  • The SRA must:
    • carefully align its decisions with Development Plan reservations, particularly for RG, gardens and no-development zones;
    • ensure consistency in its stance over time, lest its changes be viewed as arbitrary or collusive.
  • However, the Court’s handling implicitly recognises that:
    • earlier orders (like the 2015 CEO-SRA order) must yield to:
      • later binding precedents (Tarabai, Saldanha), and
      • supervening court injunctions (Citispace) and factual developments.

5. Environmental and Urban Planning Dimension

  • The case significantly advances the jurisprudence on protection of open spaces in Mumbai:
    • It reinforces the Citispace ethos that RGs, gardens and playgrounds are not reservoirs of buildable FSI to be tapped through slum schemes.
    • It emphasises that even when slums exist on RG land, the ultimate planning objective is to restore and preserve the RG, not permanently densify it.
  • The Supreme Court’s explicit no-construction mandate on the Subject Property serves as a strong precedent and a cautionary tale against:
    • overusing slum rehabilitation as a justification to erode public open space; and
    • attempts to exploit regulatory changes (such as DCPR 2034) to convert RG land into saleable real estate.

6. Litigation Strategy and Lessons

  • For parties seeking mandamus based on earlier administrative orders:
    • This case shows that mere inaction on an internal order (like the 2015 CEO-SRA direction) will not automatically yield a mandamus years later, especially when circumstances and law have changed.
  • For courts:
    • The judgment exemplifies a balancing approach:
      • respecting property rights and preferential redevelopment rights of owners,
      • protecting rehabilitated slum dwellers’ interests and open spaces, and
      • resisting attempts at leveraging slum schemes to appropriate high-value land indirectly.

VII. Conclusion

Jyoti Builders v. CEO, SRA is a significant addition to India’s slum rehabilitation and urban planning jurisprudence. It consolidates three major strands of law:

  1. Preferential Right of Owners vs. Section 14 Acquisition
    Echoing and applying Tarabai and Saldanha, the Court holds that:
    • The State’s power to acquire land under Section 14 of the Slum Act is not absolute in Slum Rehabilitation Areas.
    • It is conditioned by the preferential redevelopment right of private landowners, which must be respected unless clearly extinguished.
  2. FSI as Compensation, Not a Route to Land Ownership
    The Court emphasises that:
    • Developers are fully compensated for their obligations through FSI benefits and PAP-linked incentives.
    • They cannot claim proprietary rights over plots where slum dwellers once lived merely because they have rehabilitated those dwellers.
  3. Non-Buildability of Recreational Ground in Slum Schemes
    By directing that no construction can be put up on the Subject Property and that it must remain RG, the Court:
    • solidifies the principle that RG reservations are to be honoured, even in slum contexts;
    • ensures long-term environmental and social benefits for dense urban communities; and
    • prevents the use of slum rehabilitation as a pretext to consume open spaces.

In doing so, the Court carefully balances the interests of:

  • the developer (granting the OC and recognising FSI-based compensation),
  • the landowner (protecting against forced acquisition),
  • the slum dwellers (preserving their open space and finality of rehabilitation), and
  • the city at large (securing a scarce Recreational Ground from irreversible construction).

The judgment thus stands as an important precedent on the limits of acquisition powers, the contours of slum rehabilitation entitlements, and the constitutional importance of preserving urban open spaces amid intense development pressures.

Case Details

Year: 2025
Court: Supreme Court Of India

Judge(s)

HON'BLE MR. JUSTICE J.B. PARDIWALA HON'BLE MR. JUSTICE K.V. VISWANATHAN

Advocates

ANISH AGARWAL

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