In a powerful and precedent-shaping order, the Bombay High Court has warned that developers who default on paying transit rent to slum dwellers can now face recovery proceedings that extend all the way to their personal assets. The ruling reinforces the newly inserted Section 33B of the Maharashtra Slum Act (effective 29 August 2025), which empowers authorities to recover dues as arrears of land revenue — even from directors and partners personally if the developer entity lacks sufficient assets.
The order came in a writ petition filed by Vijay Namdev Gujar and others, slum dwellers rehabilitated under DCPR 2034 Regulation 33(10), who have not received transit rent for nearly four years.
HC Pulls Up Developers; Says “Legitimate Transit Rent Must Be Paid Immediately”
The petitioners said that while transit rent was paid until 2021, the developer stopped payments thereafter. The developer appeared in court and agreed to pay all legitimate dues. The High Court, however, pressed for strict accountability.
The bench of Justice G.S. Kulkarni and Justice Aarti Sathe directed:
- The Slum Rehabilitation Authority (SRA) must hold a personal hearing within two weeks and determine the exact arrears and the applicable interest.
- Once decided, the developer must immediately disburse the transit rent, either directly or by depositing it with SRA within one week.
Section 33B: Transit Rent Dues Recoverable as Arrears of Land Revenue
The Court highlighted the new Section 33B, which makes it mandatory for SRA to enforce recovery of unpaid transit rent. Crucially, the section includes a first-of-its-kind personal liability clause:
- If the developer company/LLP does not have enough assets,
the unpaid transit rent can be recovered from the personal property of its directors or partners.
This is the strongest legal mechanism introduced so far to protect slum dwellers from delays and non-payment.
Court Directs SRA: Transit Rent Complaints Must Be Resolved in 15 Days
Expressing sharp displeasure at the growing number of complaints reaching the Court instead of being resolved by SRA, the bench noted:
- Delay in transit rent payments violates the Right to Shelter under Article 21.
- SRA officers cannot allow complaints to remain pending.
- Any transit rent complaint must be decided within 15 days, failing which it will be treated as a breach of fundamental rights.
- SRA CEO must issue a circular directing all competent officers to follow these timelines.
The Court cautioned that if SRA officers continue to show laxity, the Court will take strict action.
Developers Cannot Divert Transit Rent Funds, Says Court
The Court strongly criticised the practice where some developers take up projects but divert funds meant for transit rent towards other uses.
The judges noted:
Developers cannot undertake the scheme, not pay transit rent, and utilise the money elsewhere, depriving slum dwellers of their legitimate dues.
Why This Order Matters for Slum Dwellers Across Mumbai
This judgment is significant for tens of thousands of slum dwellers living in transit accommodation. Key takeaways:
- Transit rent must be paid on time, without exception.
- Developers cannot escape liability by hiding behind corporate structures.
- Personal assets of directors/partners are now at risk if dues remain unpaid.
- SRA is obligated to act swiftly and cannot delay complaints.
- Protects the constitutional right to shelter, ensuring slum households are not financially abandoned.
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