The Bombay High Court strongly criticised the City and Industrial Development Corporation (CIDCO), noting that it had created an unfair situation, by forcing a ‘competition’ between a Mercedes owner and a bicycle owner. The court also stayed the allotment of around 25,000 flats constructed by CIDCO in Navi Mumbai under the Prime Minister Awas Yojana (urban) (PMAYU-2.0) scheme. These flats were meant for the Lower Income Group (LIG) in 2024.

‘Mockery of the Poor’:

A division bench of Justice Ravindra Ghuge and Justice Abhay Mantri observed that by allowing people earning above the Rs “6 lakh” limit to apply under the LIG category, CIDCO has made a “mockery of the poor” and has “aimed” to make these homes—meant for the “poorest of the poor”—available to the rich.

The bench was surprised to note that CIDCO had allowed people to apply for LIG flats through a lottery system, on the condition that they do not own a ‘pucca’ house in Navi Mumbai. It also noted that people earning more than Rs 6 lakh annually were allowed to apply for these LIG flats.

Mercedes vs Bicycle Remark:

Justice Ghuge said:

"How can someone earning more than Rs 6 lakhs annually be considered to be falling in a LIG? By this logic, even a person having a lavish house in Mumbai, but does not own a pucca house in Navi Mumbai, can come and apply for a flat in this scheme. You are making a person earning Rs 6 lakh annually to compete with a person earning Rs 6 lakh per hour. Someone coming in a Mercedes would say he does not own a pucca house in Navi Mumbai and thus, would apply under the LIG and end up getting a flat under the lottery system. And possibly someone coming on a bicycle, a genuine needy, may not get a flat because of the lottery? You are compelling these two categories to compete? Is this not a mockery of the poor?."

The judges also questioned what would count as the Middle Income Group (MIG) and High Income Group (HIG) if there is no salary limit for people in the LIG category.

No Salary Cap Criticised

Justice Ravindra Ghuge said:

"If this is LIG then what is MIG? We are confident that wisdom is not used in this matter... You cannot have a limitless category (for salary) for such schemes... Do you think that a person coming with a Rolls-Royce will stay there, he will purchase it as an investment. Your entire scheme is defeated by your own wisdom... We don't know who gave you this idea to open the cap (on salary) but yes, we are very confident that all this hasn't happened innocently... The objective of the PMAYU-2.0 was to sell the flats to the poorest of the poor and not to deprive the poor and sell it to the rich..."

Eligibility Rules Slammed:

The bench further criticised the ‘eligibility’ criteria framed by CIDCO, especially because there was no income limit for LIG applicants.

"It doesn't require any debate that CIDCO was floating a housing scheme strictly under the PMAYU-2.0... Such scheme has been introduced by the Government with a sole object of ensuring that each family has a house. Our judicial conscience is shocked by the fact that a person earning Rs 6 lakh per hour and a person earning Rs 6 lakh per year are competing under per the scheme...Does it appeal to reason and logic and does it stand the test of judicial scrutiny that such small homes, which were intended for LIG, would be open for persons earning in billions. Are you not taking India back to 60 years, to which J Krishna Iyer referred as 'Daridri Narayan'? Are you not mocking the poor of this country?" Justice Ghuge noted in the order.

The bench observed that even a simple look at the scheme would shock any sensible person. It noted that under PMAYU-2.0, people earning up to Rs 6 lakh per year fall under LIG, those earning up to Rs 12 lakh fall under MIG-I, and those earning up to Rs 18 lakh fall under MIG-II.

"We are concerned today that the very purpose of the PMAYU 2.0 has been defeated by the advertisement published by CIDCO in October 2024, which only is in complete opposition to the welfare scheme... Prima facie, considering the SC ruling in Olga Telis case, at this interim stage we are of the view that this petition deserves to be entertained.... What we find most serious and which has shocked our judicial conscious is as to whether CIDCO could have modified the scheme of affordable homes to this extent by virtually destroying the objective of the PMAYU 2.0," the judges said in the order.

Allotment Stopped:

The bench further held that by altering the eligibility criteria and issuing the October 2024 advertisement, CIDCO had undermined the objective of providing ‘affordable’ housing to homeless people.

It also noted that thousands of flats had already been allotted through the lottery system, and therefore it stayed the entire process.

Strict Court Order:

"CIDCO not to create any equities in the favour of people, to whom flats allotted and given possession, despite them having salary beyond Rs 6 lakhs and having or not having a pucca house anywhere in India. Those, who are yet to receive possession, CIDCO is restrained from handing over the possession till further orders. CIDCO not to allot any flat to anyone having salary beyond Rs 6 lakhs and having pucca house anywhere in India,"

Accordingly, the bench granted interim relief to the petitioners.

Case Details: Abheeshek Shashikant Israji vs State of Maharashtra (WP (C ) 2650/2026)