Developers’ pleas for exemption of Rs 800 cr dismissed

Section 124F of the MRTP Act prescribed that no development charge shall be levied on the institution of use or change of use, or development of, any land or building vested in or under the control or possession of the Central or State Government or of any local authority.

A division bench of Justice R D Dhanuka and Justice Kamal R Khata passed judgement after hearing the pleas, which claimed that the petitioners are developing lands belonging to the state government, MHADA, BMC and therefore, the development undertaken by them is exempted and petitioners are not liable to pay development charges.

It was submitted that amounts already paid by the petitioners under protest towards development charges should be refunded to the petitioners.

The petitioners, through senior advocate Milind Sathe along with advocates Girish Godble and Saket Mone submitted that it is enough for a person seeking exemption of development charge that the property belongs to a local authority, and it vests in the local authority. The question of whether the local authority owns or exercises control in respect of such property is not required to be separately met.

The petitioners said that merely because the state government has not undertaken infrastructure projects, the tax without the authority of law does not become payable.

However, Senior advocates Aspi Chinoy and Joaquim F Reis for BMC submitted that since 1992, the developers, who undertake projects privately on land belonging to authorities have been paying charges and have all understood that exemption is not applicable in the same.

The authorities said that if a developer is aggrieved, they can file an appeal under the MRTP Act. However, in most cases appeal has not been filed by the petitioners to avoid pre-deposit of the amount.

Advocate General Ashutosh Kumbhakoni along with advocate Akshay Shinde opposed the pleas and said that if the land was to be developed by the government authorities itself, only then the exemption could be granted on the development charges.

After hearing submissions, the bench held, “When the Union government or the state government or the planning authority, who propose to carry out development on the land owned by them for their purpose, there is an exemption from payment of development charges, such exemption under Section 124F of the MRTP Act cannot be claimed by a third party, who proposes to carry out redevelopment on the land in possession of or under control of or vested authorities.

“If the land owned by these authorities is sought to be developed by such authorities itself, for their benefits and their purposes, such exemption permissible under Section 124F can be claimed by itself and not by others proposing to carry out redevelopment on such lands for their benefits,” it said.

The bench found “no merit” in the petitions and dismissed the same.