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MOFA Vs Slum Act Vs MHADA land and Slum Scheme

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Suit by 48 apartment owners of existing twin towers seeking enforcement of Sections 7 & 7A of MOFA and for restraining the developer from further construction on the remaining land of the land

 

Defendant No.1 Developer was appointed by SRA for SRA in respect of the land at Malbar and Cumbala Hill Division by combining three slum societies as per the LOI dated 14.1.1999.

 

Under the slum scheme, the defendant no.1 was construct 10 buildings for slum dwellers and a free sale building of three towers A, B and C.   Plaintiffs purchased  the flats in Tower A and B buildings.  Full occupancy certificate was issued by SRA on 16.10.2014.

 

Imperial project was initially a triple towers in the lay out.  While simultaneously rehabilitating the slum dwellers, the developer took up construction of only two out of the three planned towers, construction of which was partly completed in 2009 and fully in 2014.

 

The Developer has kept the slum scheme incomplete for over 25 years and has constructed a furth unplanned tower “Imperial Edge” while keeping under wraps, the specifications for construction of third planned tower.

 

Judgment dated 11.11.2025 of the High Court of Bombay in Interim Application No.25478 of 2025 in Suit (L)  No.25468 of 2025 of Rajkumar Gulati and others    Vs.  S.D. Corporation Private Ltd & others

 

Section 190 of MHADA Act and Section 18 of MOFA – MOFA is applicable even to the MHADA land.  The contention of the Developers that MOFA is not applicable to its MHADA land is liable to be rejected since this was raised after making specific representation to the flat purchasers in their agreements that the MOFA is applicable.

 

Whether Sections 3, 4, 7 and 7A of MOFA apply to “free sale” component buildings in a Slum Scheme?

 

The relation between the developer of SRA to execute slum scheme and flat purchaser with whom he executes agreement of sale (free sale component flat) would be governed by the MOFA.

 

Slum Act  Vs.  MOFA & Primacy

 

 

There is no conflict between Section 11 of M)FA and Section 1A of the Slum Act in respect of the slum land scheme

 

In a slum scheme, a developer is in the nature of licensee appointed by the SRA for rehabilitation of slum dwellers.  The developer has no right, title or interest in the land of slum scheme.  Therefore, there is no question of any right in the land being transferred or conveyed by developers implementing slum scheme in society of flat purchasers. 

Section 15A of the SRA Act thus provides for automatic vesting of land in SRA with statutory duty on SRA to execute leases in favour of the two societies.

 

Whether Disclosure Obligation of MOFA can be relaxed in relation to slum scheme.   There is liability of the developer to disclose development potential of sale component building or plans and specifications thereof under Sections 3, 4, 7 and 7A of MOFA.

 

Mere availability of higher sale component area on accunt of non-completion of slum scheme for several years, cannot be a ground to encroach upon the rights of the flat purchasers flow through sections 3, 4, 7 and 7A of MOFA.

 

Considering the position that the flat purchasers of sale component buildings under slum schemes cannot be classified as a different class than other home buyers in non-slum scheme buildings, it is necessary to apply MOFA (exception section 11) to sale component buildings of slum scheme with a view to protect the rights of flat purchasers therein.

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