2019 (9) TMI 1605 - HC - Indian Laws

High Court Orders FIR Against MHADA Officials for Financial Loss to State

Kamlakar R. Shenoy Versus State of Maharashtra; Principal Secretary, Housing Department, Mantralaya, State of Maharashtra; Director General of Police Anti-Corruption Bureau, Mumbai; Commissioner of Police, Mumbai City; Chief Executive Officer, Maharashtra Housing Area and Development Authority, Mumbai

The High Court directed the registration of an FIR against MHADA officials for their alleged complicity with developers, resulting in significant ... Omission and commission on the part of the officials of the MHADA - wrongful loss to the State and wrongful gain to the developers - compulsory acquisition of part of property constructed by the petitioners on their own lands - exhaustion of statutory remedies - HELD THAT:- The material placed on record by the respondents themselves, clearly shows, that for years together and atleast since 1991 neither officials of MHADA nor of the Board, have taken any steps to recover the penalty as levied (as referred to here-in-above) or to recover constructed area from such developers to whom permissions were granted for re-developing cess buildings. The two high rank officers of the State were of the opinion that complaint of the petitioner prima-facie discloses cognizable offence committed by the officials of the MHADA/ Board. However, in spite of this fact, officers of the EOW and officers of the ACB declined to entertain the complaint either by disputing facts and figures disclosed in the petition and/or by saying that initiating proceedings against the officials of the MHADA may amount to double jeopardy. It is nothing but shirking the responsibility and acting in defiance of provision of Penal Laws. Material on record equally indicates that the component of constructed area, which is to be surrendered to the MHADA, has been sold by the developers in the open market. Though this fact was within knowledge of the officers of the MHADA/Board, they turned nelsons eye, obviously for the reasons known to all. Thus, we are of the considered opinion that the complaint and material on record constitutes credible information, which prima-facie discloses commission of cognizable offences punishable under the Indian Penal Code and other penal laws - The P.C. Act is amended by Amendment Act 16 of 2018 so as to fill in the gaps in description and coverage of the offence of bribery so as to bring it in line with the current international practice and also to meet more effectively India's obligation under the U.N. Convention. The provision for previous approval is aimed at providing a safeguard to a public servant from vexatious prosecution for any bonafide omission or commission in the discharge of official duties. It is not a shield to protect officials who do not act bonafide but with ulterior motives. This is not the case of rejection only on the ground of alternate remedy since rule of exclusion of alternate remedy is satisfied here. In the case in hand two high rank officers after examining material on record held opinion that such material disclosed cognizable offence, however, they sought permission of the State to hold enquiry may be in the light of provisions of Section 17A of the Prevention of Corruption Act (Amendment) Act, 2018. The fact remains that the concerned authority has not granted permission within the required period but that itself will not absolve respondents from registering the FIR - taking into consideration material on record, for the reasons stated constitutes credible information and/or material shows prima-facie positive or tacit acquiescence of officials with defaulting developers and discloses commission of cognizable offence by the officers of the MHADA/Board punishable under the Indian Penal Code and other penal laws and, therefore, Economic Offences Wing are directed to register the FIR within five days from today. Petition allowed in part. Issues Involved:1. Alleged nexus between defaulting developers and MHADA officials.2. Failure to surrender surplus built-up area by developers.3. Alleged inaction by MHADA officials.4. Petitioner's request for registration of FIR.5. Legal obligations under DCR 33(7) and MHADA Act.6. Role of Anti-Corruption Bureau (ACB) and Economic Offences Wing (EOW).7. Application of Section 17A of the Prevention of Corruption Act.8. Judicial directives and observations.Issue-wise Detailed Analysis:1. Alleged Nexus Between Defaulting Developers and MHADA Officials:The petitioner alleges an unholy nexus between defaulting developers and officials of the Maharashtra Housing and Area Development Authority (MHADA), resulting in unlawful losses to the State's exchequer amounting to Rs. 40,000 crores. The developers failed to surrender surplus built-up area, which is the exclusive property of the State under the Development Control Regulation 33(7) (DCR).2. Failure to Surrender Surplus Built-up Area by Developers:Under DCR-33(7), developers are required to surrender surplus built-up area to MHADA. The petitioner obtained information under the Right to Information Act, revealing that out of 241 developers granted NOCs, 121 had not surrendered the surplus area. Despite repeated reminders, MHADA officials did not take steps to recover the property.3. Alleged Inaction by MHADA Officials:The petitioner contends that MHADA officials' willful acts of omission and commission caused wrongful loss to the State and gain to developers. The officials failed to recover the surplus area or take legal action against defaulting developers, despite being aware of the issue.4. Petitioner's Request for Registration of FIR:The petitioner seeks a Writ of Mandamus directing the respondents to register an FIR based on a complaint dated 1/6/2016. The petitioner alleges that MHADA officials' inaction amounts to negligence and intentional misconduct, causing significant financial loss to the State.5. Legal Obligations Under DCR 33(7) and MHADA Act:The Development Control Regulations (DCR) 33(7) and the MHADA Act, 1976, outline the obligations of developers to surrender surplus built-up area. The validity of Clause (4) of Appendix-III of DCR, 1991, which mandates this surrender, was upheld by the High Court and the Apex Court.6. Role of Anti-Corruption Bureau (ACB) and Economic Offences Wing (EOW):The EOW forwarded the petitioner's complaint to the Director General of Police, Anti-Corruption Bureau (ACB), which sought permission to conduct an open inquiry against MHADA officials. Despite reminders, no action was taken, prompting the petitioner to seek judicial intervention.7. Application of Section 17A of the Prevention of Corruption Act:Section 17A of the Prevention of Corruption (Amendment) Act, 2018, requires previous approval for inquiries against public servants. The ACB sought permission from the State, which was not granted within the required period, indicating a deliberate avoidance of registering an FIR.8. Judicial Directives and Observations:The court observed that the material on record prima facie disclosed cognizable offenses by MHADA officials. The court directed the Economic Offences Wing to register an FIR within five days and proceed with the investigation. The court emphasized that its observations were tentative and should not influence the investigation or trial.Conclusion:The High Court directed the registration of an FIR against MHADA officials for their alleged complicity with developers, resulting in significant financial loss to the State. The court's decision underscores the importance of accountability and adherence to legal obligations by public officials.