In a packed courtroom on Tuesday morning, the Supreme Court delivered a firm message to Mumbai’s redevelopment lobby: preferential rights of a landowner cannot be elbowed aside simply because a developer has already spent years working on a larger slum scheme. The bench led by Justice J.B. Pardiwala dismissed Jyoti Builders’ appeal and refused to direct the State to forcibly acquire a 2,005 sq. m. plot at Malad, reserved as Recreational Ground (RG).
The court noted that the dispute had been simmering for decades, with multiple rounds of litigation, disputed MoUs, shifting stands of the Slum Rehabilitation Authority (SRA), and competing claims over the rehabilitation of 34 slum dwellers on the site.
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Background
The land-part of CTS No. 620, Malad-was originally owned by Phuldai Yadav and later sold in 2022 to Alchemi Developers. Although Jyoti Builders had developed the larger 12,606 sq. m. property and rehabilitated nearly 498 slum dwellers, this particular plot had a complicated history.
An unregistered MoU in 1992 between Phuldai and the earlier developer (Harishree Enterprises) collapsed years ago. Their suit for specific performance was dismissed back in 2000. Meanwhile, the SRA’s 2015 order had stated that the land be acquired and handed to BMC as RG-but acquisition never happened due to a long-standing High Court injunction on using RG lands for SRA schemes.
The injunction was lifted only on 1 March 2022. Within weeks, Phuldai sold the land to Alchemi Developers, who promptly submitted a fresh redevelopment proposal.
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Court’s Observations
The bench did not mince words about the seven-year delay by Jyoti Builders in seeking acquisition after the SRA’s 2015 order. “What Jyoti did between 2015 and 2022?” the court remarked, adding that approaching the court now “appears to be a backdoor attempt” to take over the property even after failing to buy it.
The judges emphasized several key findings:
1. Owner’s Preferential Right Comes First
Citing recent rulings like Tarabai Nagar and Saldanha Real Estate, the court stressed that an owner must first be given the chance to propose a redevelopment scheme. Only when the owner refuses or fails does acquisition become legally necessary.
“As long as the owner is willing to undertake development… acquisition cannot proceed,” the bench noted.
Since Alchemi Developers (the purchaser) submitted a valid proposal in April 2022, the owner’s right remained intact.
2. No Automatic Rights Just Because Builder Rehabilitated Slum Dwellers
The bench acknowledged that Jyoti Builders had already re-housed the 34 slum dwellers earlier living on the disputed plot. But that alone, it said, cannot create ownership-like rights over someone else’s land.
“If someone clears slums on another’s property, they cannot later claim beneficial rights over that land,” the court observed.
3. SRA Could Not Acquire the Land Earlier Due to Court Injunction
For nearly 20 years, the Bombay High Court had barred new slum schemes on lands reserved as gardens, parks, and recreation grounds. That restriction was lifted only recently.
So, the Supreme Court said, it was unreasonable for Jyoti Builders to insist that the 2015 order should have been implemented earlier.
4. FSI Benefits for 34 Slum Dwellers Already Utilized
The court found that Jyoti Builders had already availed FSI benefits after shifting those 34 slum dwellers as PAPs, even though the FSI of this specific plot had been kept in abeyance under multiple LOIs.
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Decision
The Supreme Court upheld the Bombay High Court order and dismissed the appeal. It refused to order acquisition of the property and clarified that since the owner’s preferential right survives-and has in fact been exercised-the State cannot be compelled to acquire the land at this stage.
The matter ends with the court letting Alchemi Developers’ proposal proceed as per law, while Jyoti Builders must settle with the benefits already received.
Case Title: Jyoti Builders vs. Chief Executive Officer & Others
Case No.: Civil Appeal No. 14512 of 2025 (arising out of SLP (C) No. 3405 of 2025)
Case Type: Civil Appeal (Supreme Court – Civil Appellate Jurisdiction)
Decision Date: 18 December 2024 (High Court Order Challenged) / Supreme Court Judgment Published in 2025 INSC 1372