{"id":255480,"date":"2021-10-12T12:00:10","date_gmt":"2021-10-12T06:30:10","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=255480"},"modified":"2021-10-15T10:36:28","modified_gmt":"2021-10-15T05:06:28","slug":"jawaharlal-nehru-urban-housing-and-slum-development-scam-supreme-court-refuses-to-stay-proceedings-upholds-high-courts-order","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/10\/12\/jawaharlal-nehru-urban-housing-and-slum-development-scam-supreme-court-refuses-to-stay-proceedings-upholds-high-courts-order\/","title":{"rendered":"Jawaharlal Nehru Urban Housing and Slum Development Scam; Supreme Court refuses to stay proceedings, upholds High Court\u2019s order \u00a0\u00a0"},"content":{"rendered":"

Supreme Court:<\/strong> The Division Bench of L. Nageswara Rao and S. Ravindra Bhat*, JJ., dismisses the appeal initiated by the accused contractors in Integrated Housing and Slum Development corruption case. The Bench observed,<\/p>\n

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\u201cThe constructions, according to the reports, were sub-standard \u2013 in respect of 100 such houses, so severe that the units were unusable. The main objective of providing housing to 1206 eligible and deserving families remains unfulfilled despite expenditure of substantial amounts.\u201d<\/em><\/strong><\/p>\n<\/blockquote>\n

Factual Fulcrum <\/strong><\/span><\/h4>\n

The criminal Public Interest Litigations were filed by the respondents seeking directions to the Union of India, the State of Maharashtra, the Maharashtra Housing and Urban Development Authority (MHADA) and state officials to initiate criminal proceedings against the responsible officers and office bearers of Municipal Council, Naldurg and the contractors concerned for misappropriation of government funds in implementation of the housing scheme in the municipality.<\/p>\n

An Integrated Housing and Slum Development Programme (IHSDP) was initiated by the Union Government through the State Government, under the “Jawaharlal Nehru National Urban Renewal Mission” for providing basic services to the urban poor including affordable prices, improved housing, water supply, sanitation, wherein the Maharashtra Government had appointed MHADA as the nodal agency.<\/p>\n

The petitioners-respondents alleged that the quality of work carried out by the appellants was very poor and the officials (i.e. MHADA, municipality, etc.) did not inspect or supervise the work, and did not submit the quarterly reports as required under the scheme. It was submitted that the municipality diverted funds meant for the said development project, for other works as the observation made by technical team showed that the municipal council made an excess payment of Rs. 2,43,79,017\/- to the contractors as compared to the work done. The allegations were also made with regard to failure to complete the project, and various other omissions were highlighted.<\/p>\n

Findings of the High Court<\/strong><\/span><\/h4>\n

Observing the dereliction of duties on the part of the authorities and certain other irregularities, the High Court had directed the Divisional Commissioner to take actions to its logical end as expeditiously as possible. Pursuant to the direction of the High Court and the report of the technical team the Collector directed the Municipal Council to recover the excess amount paid to the contractors, and blacklist them from Government work, to initiate criminal prosecution against the person(s) who had committed the irregularities, and lastly allot the repairable houses.<\/p>\n

Analysis and Conclusion<\/strong><\/span><\/h4>\n

Noticing that the appellants were all involved as persons or authorized individuals, acting on behalf of entities that were awarded the contract of construction and completion of the housing units, pursuant to the scheme, and that the spot inspection report alleged that they had not performed their task, the made the following observations:<\/p>\n

Effect of Delay in Giving Reasoning of the Judgment by the High Court<\/strong><\/span><\/em><\/p>\n

Rejecting the first grievance of the appellants that the reasoning for the impugned judgment was given and published long after its operative portion was pronounced, i.e. a year and over three months which had prejudiced their case, the Bench stated that though it is clear that the High Court\u2019s order, against which an aggrieved litigant has a right to approach in appeal, under special leave jurisdiction should contain reasons without which it would be well-nigh impossible to exercise that right of seeking special leave, to that extent, the appellants\u2019 grievance was held to be justified, however, the Bench denied to hold that the absence of reasons struck at the legitimacy of the impugned judgment. The Bench stated,<\/p>\n

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\u201c…prejudice stood off-set with the interim orders of this court, which recognized the piquancy of the situation, and directed stay of further action against the appellants.\u201d<\/em><\/strong><\/p>\n<\/blockquote>\n

However, the Bench deprecated the High Court\u2019s conduct in not furnishing reasons, either at the time of pronouncement of the operative part of the judgment, or before the commencement of the next working day (of the court).<\/p>\n

Motive of PIL <\/strong><\/span><\/em><\/p>\n

The appellant\u2019s next challenge to the impugned judgment emphasized the need to keep out \u201cbusybodies\u201d who \u201chave no interest in matters of public interest\u201d on the ground that the petitioners-respondents had personal motive as they were former Councillors of the municipality. Rejecting the contention of the appellants, the Bench expressed,<\/p>\n

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\u201cThe cause espoused by the said individuals was undoubtedly one of public interest, because it concerned housing for the economically disadvantaged sections of society, in such great numbers.\u201d<\/em><\/strong><\/p>\n<\/blockquote>\n

The scheme was meant to benefit thousands of persons, and over a thousand housing units were to be constructed and allotted to the beneficiaries. Therefore, in view of the inquiries and the reports, the Bench held that the initiation of public interest proceedings was justified even if the public interest litigants\u2019 motives were ambiguous, or not immediately bona fide<\/em><\/strong>, that could not have led to dismissal of the writ petition, before the High Court.<\/p>\n

Right to be Heard<\/strong><\/span><\/em><\/p>\n

Lastly, rejecting the main arguments of the appellants that criminal proceedings had been initiated against them even though they were not heard in the public interest proceedings, and that being adverse to them the judgment was vitiated on account of their non-participation, the Bench opined that the High Court disposed of the PILs directing the Divisional Commissioner to take appropriate steps to its logical end as expeditiously as possible, making it evident that the High Court did not by itself direct initiation of investigation nor did it direct registration of an FIR, hence, the appellants were not required to be on party array. The Bench emphasised,<\/p>\n

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\u201cWhilst the reasoning for the impugned judgment was undoubtedly published after a long and unexplained delay, the effect of its operative directions was not to per se prosecute.\u201d<\/em><\/strong><\/p>\n<\/blockquote>\n

Moreover, the constructions were sub-standard \u2013 in respect of 100 such houses, so severe that the units were unusable and dilapidated which rendered the main objective of providing housing to 1206 eligible and deserving families unfulfilled despite expenditure of substantial amounts.<\/p>\n

Hence, rejecting the argument of the appellants that they ought to have been heard even before action was initiated as unsound, since, according to the decision of the Constitutional Bench in Lalita Kumari v. Govt. of U.P.<\/em>, if there are allegations with respect to commission of cognizable offences, brought to the notice of the police authorities, ordinarily an FIR has to be lodged.<\/p>\n

Verdict<\/strong><\/span><\/h4>\n

Lastly, noticing that High Court did not comment on whether the allegations were true or whether the submissions on behalf of the petitioners justified their conduct or omission, and that the FIR was registered by the police following the imperative nature of the law declared in Lalita Kumari where it was held that a preliminary enquiry ordinarily is to be eschewed whenever cognizable offences are reported, the Bench dismissed the appeals.<\/p>\n

[Shaikh Ansar Ahmad Md. Husain v. State of Maharashtra, 2021 SCC OnLine SC 867<\/b><\/a>, decided on 05-10-2021]<\/p>\n

_________________________________________________________________________<\/p>\n

Kamini Sharma, Editorial Assistant has put this report together\u00a0<\/span><\/strong><\/p>\n

_________________________________________________________________________<\/p>\n

Appearance by: <\/strong><\/p>\n

For the Appellants: Shyam Divan, Senior Advocate<\/p>\n

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*Judgment by: Justice S. Ravindra Bhat\u00a0<\/strong><\/p>\n

Know Thy Judge| Justice S. Ravindra Bhat<\/a><\/p><\/blockquote>\n