NOTE ON 33(7) of DCPR of 2034

There are numerous old, dilapidated buildings in the island city of Mumbai. The occupants of
such buildings are under constant threat of loss of life and/or property. It is utmost important
to redevelop such buildings as early as possible to protect the human lives and assets. The
primary duty of the Government is to provide safe shelters to its citizens and the Government
of Maharashtra has made efforts through MHADA to address the matter of redevelopment.
Nevertheless, due to the lack of availability of quantum of funds required for this mammoth
task, the redevelopment matter has still remained unresolved for years. Hence, the
Government invited private participation in the redevelopment matters. Such redevelopment
schemes are usually taken as regulation 33(7) of DCR 1991 / DCPR 2034 where the
occupants are rehabilitated free of cost by private developers and to recover the cost of
rehabilitation, incentive FSI is provided to private developers. The scheme is operative since
past 20 to 25 years. Taking into consideration the requirements of executing the rehabilitation
scheme at ground level, the Government has modified the parameters of the regulation time
to time. There are many such redevelopment schemes taken up by private developers with
permissible FSI 2.5 as per the regulation 33(7). On receipt of representation from the
developer and after getting convinced about the facts of representation, the Government has
revised the permissible FSI for redevelopment scheme under regulation 33(7) from 2.5 to 3.0
since May 2011. However, it takes 3 to 4 years of time for the Government to issue the
required modification to regulation 33(7), after receipt of representation from the private
developers. In the meantime, while the Government was taking the decision in this respect,
many developers completed the redevelopment projects (i.e. - got the occupation certificate
from the BMC) in order to give timely possession of residential units to the rehab occupants
and the customers of the sale component in the said project(s), before they could apply and
get the revised 3.0 FSI under regulation 33(7). In such cases, MHADA has been denying the
permission to grant revised NOC for revised 3.0 FSI , stating the scheme / project has been
completed. Had the developer delayed the process of obtaining OC for rehab component or
some of the units in the sale component, the scheme could have been considered as not
completed and the revised NOC for 3.0 FSI would have been granted by MHADA. In order
to promote the redevelopment projects in the city and to ultimately regenerate the economy of
the city and the state, there is a need for the BMC and the State Government to clarify the
issue and instruct the MHADA to release NOC for 3.0 FSI as per regulation 33(7) for the
redevelopment schemes where the OC has been obtained.

MHADA POWERED TO PERMIT HIGHER FSI FOR REDEVELOPMENT OF

CESSED BUILDINGS UNDER DCR 33(7)
July, 2013: In a major boost for redevelopment of over 14,000 cessed buildings in South
Mumbai, the state government announced that a floor space index (FSI) of three will be
extended to B and C category buildings (constructed prior to September 30, 1969). The
buildings, pre-1969 tenanted properties in the island city, are classified into three categories:
A (pre-1940), B (1940-1950) and C (1950- 1969). A Floor Space Index (FSI)(total built
up area/ otal area of the plot) of three had been extended to B and C Category Buildings
(constructed prior to September 30, 1969). Buildings, pre-1969 tenanted properties in the
Mumbai city, were classified into three categories: A (pre-1940), B (1940-1950) and C (1950-
1969). The move was specifically to boost redevelopment of old and dilapidated buildings
under Section 33(7) of Development Control Regulations (DCR). There have been an
estimated 19,000 A, B and C Category cessed buildings in Mumbai City. Of these, 2,000
were being classified in B and C category. It was realized by the State Government that the
Developers never paid attention to B and C cessed buildings as only A Category Buildings
used to get the FSI of three. Many buildings which used to be neglected by Developers for
want of incentives could then go in for redevelopment. Developers redeveloping these
dilapidated cessed buildings in the Mumbai City were required to obtain prior permission
from State Government for availing this additional FSI. Presently, no prior nod from State
Government is needed for additional FSI in cessed buildings in Mumbai as the MHADA
which oversees the redevelopment of cessed buildings in Mumbai has been delegated the
powers to permit the Developers for availing additional FSI while undertaking the
redevelopment of dilapidated cessed buildings. MHADA’s vice president’s permission will
be enough to avail additional FSI. Nearly 5,000 dilapidated cessed buildings in shall get the
benefit from the new policy. In the year 2011, the DC Rules 33(7) was modified, increasing
FSI for such cessed redevelopment projects from 2.5 to 3. However, there was a condition
that in the case of such ongoing projects, the facility of an additional FSI could only be
availed if the construction of the rehabilitation building had not progressed beyond the plinth
stage. In the year 2013, the Bombay High Court declared this condition as invalid and
illogical while hearing a related case. The Court ruled that an additional FSI could be availed
in the ongoing incomplete redevelopment projects where Full Occupation Certificate has not
been granted on submission of structural stability certificate by a certified licensed engineer.
Following this, the State Government on October 7, 2013, applied the additional FSI to all
ongoing projects where Occupation Certificates had not been issued, while keeping the
conversion from FSI of 2.5 to 3 optional. The State Government had made it mandatory for
Developers to seek prior government approval before availing the facility of an additional
FSI, reasoning that the structural stability of incomplete buildings was crucial for the safety
of residents. However, the present State Government has now delegated these powers to
MHADA permitting the ongoing redevelopment projects of old cessed buildings in Mumbai
to avail additional FSI. The FSI is a tool that defines the extent of construction permissible on
a plot. It is the ratio of built-up area to the total area of the plot. As aforesaid, this move is
likely to benefit about 5,000 cessed redevelopment projects that were originally sanctioned an
FSI of 2.5. As per the fresh directive, all such projects can now avail an FSI of 3 regardless of
their stage of construction. The State Government also granted permission to modify norms
for hiking FSI for redevelopment of 5,000 odd old buildings in MHADA Colonies in Mumbai
from 2.5 to 3. However, the latest directive issued by the State Government does not impose
the condition for submission of a Structural Stability Certificate. Interestingly, the State
Housing Department had insisted that the structural stability be insisted upon. The State
Government held detailed discussions with Urban Development and Housing Department
Officials that the Rental Housing Model would be replaced by a Model for Construction of
Affordable Houses. While an FSI of 4 is allotted to Developers for Rental Housing Scheme,
the Government has plans to lower it to 3 and that it might give up on the idea of allowing
such schemes in areas outside Municipal Corporation Limits in the Mumbai Metropolitan
Region. The long pending proposal has also been taken up for approval to modify another
Affordable Housing Scheme where Owners or Developers having a plot larger than 2,000 sq.
meters can approach MHADA and get an FSI of 2.5. The modifications have been proposed
to make the scheme more viable for private players.
(https://www.redevelopmentofhousingsociety.com/index.php/202-mhada-powered-to-permit-
higher-fsi-for-redevelopment-of-cessed-buildings-under-dcr-33-7#:~:text=MHADA's
%20vice%20president's%20permission%20will,projects%20from%202.5%20to%203.)

DEVELOPERS TO HANDOVER FLATS TO MHADA ON REDEVELOPMENT

UNDER DCR 33(7)
Another blow under the belt to Developers of South Mumbai is that the Developers are
required to handover flats to MHADA On redevelopment of cessed buildings under DCR
33(7). The Bombay High Court has upheld the law requiring those Developers who are
undertaking redevelopment of old buildings in the island city required to hand over a few
flats to MHADA known as the Developers surplus housing stock. The surplus area means
additional premium FSI available to them to construct saleable flats. A Division Bench of
Chief Justice Mohit Shah and Justice Girish Kulkarni dismissed petitions of Developers
challenging the constitutional validity of certain provisions of the Development Control
Regulations i.e. DCR 33(7). The judges opined that having taken advantage of higher
FSI, the Developers cannot be permitted to approbate and reprobate by trying to escape
from their obligations voluntarily undertaken by them to surrender part of the surplus
area. The Developers on the other hand, contended that MHADA was paying them a pittance
of Rs 235/- per square foot for the flats under handover as against the construction cost of
over Rs. 2,500/- per square foot incurred for the saleable flats. The Court pointed that the
additional construction rights that the Developers had received under DCR 33(7) was
FSI of 3 as against the basic FSI of 1. The judges further said that they would have
appreciated if the Developers had volunteered to handover flats to MHADA as part of the
surplus built-up area in direct proportion to the FSI that they get under DCR 33(7).
Unfortunately, the Developers did not derive any delight of giving even after availing FSI of
3 from 2011 onwards as is apparent from filing of the petitions. The Developers strongly
expressed their resentment to the Court that there were 292 plots having old dilapidated
buildings in the city which cannot be redeveloped because of road widening or the
requirement to keep minimum building margins. There are over 19,000 cessed privately-
owned buildings in the city constructed before the 1940s. DCR 33 (7) is the rule that is
applied for the redevelopment of these buildings under which as against the FSI of 1, the
Developers can utilize an FSI of 3. In return, they have to hand over a few flats to MHADA
for a specified price. However, the policy of MHADA is not clear that how many flats are to
be handed over to them. The Developers questioned that why they should handover flats to
MHADA and that it amounted to acquisition of immovable property from the Developers.
The HC rejected the contentions of the Developers pointing to the benefits that they derived
from rule under DCR 33(7). Redevelopment of Old Buildings and Housing Societies Under
Section 33(7), 33(7)a and 33(7)b An interesting case is worth mention here that in the year
2013, State Housing Board seized 114 apartments in two plush high-rises in Byculla after the
Developer failed to hand over a portion of the surplus area to the State Housing Board on the
redevelopment of a cessed building despite their repeated notices. The apartments located in a
22-storey building with a total area of about 4,600 square metres, a residential housing colony
near Byculla police station, were then allotted as permanent accommodation to those who had
been living in the transit camps of MHADA for years after being displaced from dilapidated
cessed buildings. In terms of the total number of flats as well as their value, this was perhaps
the largest housing stock that MHADA could ever manage to recover from a single
Developer at least over the past 13 years. The estimated market value of these flats worked
out was approximately Rs 300 crores constructed around five years ago. The carpet area of
these flats range from 225 square feet to 560 square feet and the building is well-equipped
with elements such as granite flooring and a modular kitchen. It is learnt that the Developer
was to hand over these flats to MHADA originally in 2008. However, the Developer did not
comply or pay heed to the notices. The Developer’s plea was that the company never
intended not to hand over the required surplus housing stock to MHADA as per norms and
that as per the earlier policy, they could hand over the housing stock in some other developed
area within the same Ward. However, the MHADA later scrapped this policy making it
mandatory for the Developers to hand over flats in the same project. Later again the MHADA
reverted to the old policy and hence, there was some confusion which led to the delay.
MHADA’s Repair Board is responsible for the maintenance of cessed buildings under DCR
33(7) constructed before 1970 that have been paying repair cess to MHADA for their upkeep.
Developers are required to seek consent from the this Housing Board before taking
redevelopment of such buildings and are also supposed to surrender a pre-calculated amount
out of the total surplus housing stock generated on redevelopment. During the year 2013,
since the large number of Developers defaulted on handing over of this surplus housing stock
to MHADA who sent notices to 33 Developers which together owed the Housing Board a
total surplus area of about 10 lakhs square feet. Now that the Bombay High Court has upheld
a law requiring those Developers who are undertaking redevelopment of old buildings in the
island city shall mandatorily hand over the calculated number of flats to MHADA. The
Developers today are suffering from cash crunch, mounting of unsold stock, frequent changes
in Govt. policies, TDR rates sky rocketing, rising of labour and material cost etc. Kehte hai ki
“Kangali main aata gilla.”

REDEVELOPMENT OF OLD BUILDINGS AND HOUSING SOCIETIES UNDER

SECTION 33(7), 33(7)A AND 33(7)B Section 33(7)
Redevelopment of Cessed buildings in the Island City by Co-operative Housing Societies or
of old buildings.
1. In the case of redevelopment of cessed building existing prior to 30/9/1969
undertaken by landlords or Co-operative Societies of landlords and Co-operative
Housing Societies of landlords or occupiers, the total FSI shall be 3.00 of the Gross
Plot Area or the FSI required for rehabilitation of existing occupiers plus 50%
incentive FSI whichever is more.
2. In case of composite redevelopment undertaken by landlords or Cooperative
Societies of landlords and Co-operative Housing Societies of landlords or
occupiers jointly of 2 or more plots but not more than 5 plots with cessed
buildings existing prior to 30/9/1969, the FSI permissible will be 3.00 or FSI
 required for rehabilitation to exiting occupiers plus 60% incentive FSI,
whichever is more, the occupier shall be eligible for 8% additional rehab Carpet
Area.
3. Provided further that if the number of plots jointly undertaken for redevelopment are
six or more with cessed buildings existing prior to 30/9/1969, the incentive FSI
available will be 3.00 or FSI required of rehabilitation for occupiers plus 70%
incentive FSI whichever is more and the occupier shall be eligible for 15% addition
rehab Carpet Area.

Difference Between FSI under DCPR 33(7)2034 And DCR 33(7) For Greater Mumbai
Of 1961
(2022) 6 SCC 685: 2022 SCC OnLine SC 160
It was held by SC in the case of Kamgar Swa Sadan Cooperative Housing Society Limited V.
Vijaykumar Vitthalrao Sarvade And Others (Civil Appeal No. 1222 of 2022, dated February
8, 2022) in para 20 and 22:

“20. Now, we will deal with the offer made by the appellant Society
as well as by Respondent 27 and the response of Respondents 1 to 11
to the said offer. Mr Shripal Babulal Jain, the managing partner of
Respondent 27 has filed an affidavit/undertaking on 17-1-2021.
Paras 4 to 10 of the said affidavit reads thus:

"4. The correct facts in this regard as under:

(i) FSI as per Old Policy (DCR - 1991) under Section 33 (7) + 33
(24): FSI.

(ii) FSI as per New Policy (DCPR - 2034) under Section 33(7) with
80% incentive on rehab area: 4.31 FSI.

Here it may also be noted that:

Incentive FSI as per Old Policy (DCR-1991) was 50% under Section
33(7) plus under Section 33 (24) parking FSI by providing public
parking which would be roughly 25% of the rehab built-up area.
Thus, total incentive on rehab area would be around 75%.
Incentive FSI as per New Policy (DCPR -2034) under Section 33(7)
is 80%, however, parking FSI would not be available as it is
restricted up to 4 FSI.

A copy of the architect certificate is annexed hereto and marked as

Annexure A-1 (pp. 9 to -). A copy of the relevant portion of DCR 1991
is annexed hereto and marked as Annexure A-2 (pp. 10 to 13). A copy
of the relevant portion of DPCR 2034 is annexed hereto and marked
as Annexure A-3 (pp. 14 to 20). A copy of the relevant portion of
policy and Circular dated 8-7-2021 is annexed hereto and marked as
Annexure A-4 (pp. 21 to 31).

5. The size of new premises: (Residential)

Existing area occupied by members: 115 to 180 sq ft.

Eligible as per old policy (DCR 1991): 405 sq ft carpet area.

Offered earlier : 429.88 sq ft

Eligible as per new policy (DCPR 2034): 425.25 sq ft carpet area.

Revised offer by development: 450 sq ft.

22. In the undertaking of Respondent 27 given to this Court, the

details of the amenities and other benefits agreed to be extended to
the eligible members of the appellant Society have been specifically
set out:

"2. The main points of the proposals given by the deponent

Respondent 27 (Developer) are as under:

(i) The size of new premises:

A. Residential premises:

As per old policy of DCR 1991, developer was bound to provide 300
sq ft plus 35% fungible area i.e. 405 sq ft carpet area to each
residential eligible member.
 Under the development agreement executed with Society, Respondent
27 (Developer) has agreed to provide 429.88 sq ft carpet area plus
20.12 sq ft as service slab to each residential member of the Society.

In comparison to above two, as developer, we have now proposed to

provide 450 sq ft carpet area excluding service slab, to all existing
eligible members/occupants of residential premises, against their
existing carpet area of approx. 115 sq ft to 180 sq ft.

B. Non-residential premises:

So far as non-residential users are concerned, as per DCPR 2034

they are eligible for the same carpet area which is occupied by them.
However, we propose to provide them 300 sq ft carpet area against
their existing occupation of 242.08 sq ft of carpet area.”

CONCLUSION
The redevelopment of cessed buildings (buildings requiring structural repairs and
maintenance) in Mumbai's Island City, under regulations from the Maharashtra Housing and
Area Development (MHAD) Act, 1976, allows reconstruction by landlords, co-operative
societies, or tenants’ societies for buildings that existed before September 30, 1969. The
permissible Floor Space Index (FSI) for such reconstruction projects is set at 3.00 or the FSI
needed for tenant rehabilitation plus an incentive FSI, whichever is greater. For
redevelopment to proceed, at least 51% of the tenants in the old building must give written
consent. The eligible tenants, certified by the Mumbai Building Repair and Reconstruction
Board (MBRRB), are guaranteed a minimum of 300 sq. ft. carpet area, with the maximum set
at 1292 sq. ft. If the residential area exceeds 120 sq. m, tenants must cover the cost of
construction for the additional space. Non-residential occupiers are also entitled to an
equivalent space in the new building. A significant part of the FSI is designated for tenant
rehabilitation, while the remaining part can be used as "incentive FSI" for additional
development. In cases where multiple plots (up to five) are redeveloped jointly, incentive FSI
increases by 60% and can reach up to 70% for more than five plots, with tenants also
receiving a 15% increase in their carpet area. If the buildings are no longer cessed due to
acquisition by tenant societies, the FSI allowed is reduced to 2.5. Transit accommodations for
displaced tenants during construction are allowed, and temporary camps should be
demolished once tenants move into the new building. Furthermore, 20% of the incentive FSI
can be allocated for non-residential purposes. The rules ensure that unauthorized
constructions and new tenancies created after June 13, 1996, are not counted for FSI. There is
also a mandatory requirement for developers to pay additional development cess to improve
infrastructure in the surrounding area. The MHADA or MCGM (Municipal Corporation of
Greater Mumbai) oversees the process, ensuring compliance with tenant rights and
regulations. MHADA may receive surplus construction area or monetary compensation in
cases of redevelopment involving municipal plots. Special provisions allow redevelopment
on slum-occupied plots, where eligible slum dwellers are entitled to a minimum of 300 sq. ft.
tenements. The overall goal is to facilitate the redevelopment of dilapidated buildings while
safeguarding tenants' rights and ensuring that the process is equitable and beneficial to all
stakeholders.