In a setback to the Mumbai Metropolitan Region Development Authority (MMRDA), the Bombay High Court set aside the “arbitrary and illegal” penalty demand notices issued by it between 2014 and 2019, ordering refunds of over Rs 700 crore deposited by various entities including Reliance Industries Ltd.
The HC also refused MMRDA’s request to stay the operation of its ruling and granted 90 days to the authority to refund the deposited penalty.
The notices were issued to recover penalty dues on lease premiums for additional built-up area in Bandra-Kurla Complex (BKC) lands owned by MMRDA.
The court ordered refund of Rs 646.77 crore to Reliance Industries Ltd (RIL), Rs 52.8 crore to Sunteck Realty Limited (formerly Starlight Systems), Rs 8.9 crore to hotel developer Shree Naman Hotels Pvt Ltd and Rs 22.6 crore to Indian Newspaper Society.
A division bench of Chief Justice Shree Chandrashekhar and Justice Suman Shyam allowed pleas by four entities argued through senior advocate Vikram Nankani and advocates Ankit Lohia and Sujay Kantawala, and quashed and set aside demand notices in question issued by the MMRDA with respect to their respective leased properties.
After MMRDA’s lawyer sought a stay on the operation and implementation of the judgement, the bench declined the request, observing that it had already held the MMRDA’s action to be “arbitrary,” and it “cannot perpetuate illegality”
In the case involving Reliance Industries Ltd (RIL), the MMRDA in 2006 leased a “G” block plot to the company for 80 years to develop a “Convention and Exhibition Centre and Commercial Complex”.
Story continues below this ad
As per lease terms, construction was to be completed within four years. However, in a September 12, 2017 notice, MMRDA alleged a delay of over seven years and sought penalty for the entire period.
RIL moved the Bombay High Court, which in December 2017 granted protection from coercive action.
In February 2019, RIL deposited Rs 646.77 crore with MMRDA — backed by a Rs 1,312 crore bank guarantee — towards alleged delay from September 2010 to February 2019. The authority subsequently issued a part Occupation Certificate (OC) for 44,621 sq m.
In June 2019, MMRDA raised a fresh demand of nearly Rs 1,116 crore as additional premium for delays in completing extra built-up area under a supplementary lease.
Story continues below this ad
The authority also refused to process RIL’s application for further OC for 1.24 lakh sq m until the dues were paid. However, in 2020, the High Court directed MMRDA to process the application without insisting on payment.
Allowing the pleas, the bench noted on April 8, “We are of the unhesitant opinion that the demand for payment of the penalty/additional premium for alleged delay in completing the construction was not maintainable under the Lease Deed. Moreover, such amount was realised by the MMRDA in a most arbitrary, high handed, unfair, and unreasonable manner by subjecting the petitioner to undue pressure and threat of termination of the Lease, thus putting its business interest in peril.”
The bench observed the petitioners were made to deposit the amount of penalty “under coercion” without proper Show-cause notice against the principles of natural justice, therefore, “consequences under the law on such counts must follow”.
Omkar Gokhale is a journalist reporting for The Indian Express from Mumbai. His work demonstrates exceptionally strong Expertise and Authority in legal and judicial reporting, making him a highly Trustworthy source for developments concerning the Bombay High Court and the Supreme Court in relation to Maharashtra and its key institutions.
Expertise & Authority
Affiliation: Reports for The Indian Express, a national newspaper known for its rigorous journalistic standards, lending significant Trustworthiness to his legal coverage.
Core Authority & Specialization: Omkar Gokhale's work is almost exclusively dedicated to the complex field of legal affairs and jurisprudence, specializing in:
Bombay High Court Coverage: He provides detailed, real-time reports on the orders, observations, and decisions of the Bombay High Court's principal and regional benches. Key subjects include:
Fundamental Rights & Environment: Cases on air pollution, the right to life of residents affected by dumping sites, and judicial intervention on critical infrastructure (e.g., Ghodbunder Road potholes).
Civil & Criminal Law: Reporting on significant bail orders (e.g., Elgaar Parishad case), compensation for rail-related deaths, and disputes involving high-profile individuals (e.g., Raj Kundra and Shilpa Shetty).
Constitutional and Supreme Court Matters: Reports and analysis on key legal principles and Supreme Court warnings concerning Maharashtra, such as those related to local body elections, reservations, and the creamy layer verdict.
Governance and Institution Oversight: Covers court rulings impacting public bodies like the BMC (regularisation of illegal structures) and the State Election Commission (postponement of polls), showcasing a focus on judicial accountability.
Legal Interpretation: Reports on public speeches and observations by prominent judicial figures (e.g., former Chief Justice B. R. Gavai) on topics like free speech, gender equality, and institutional challenges.
Omkar Gokhale's consistent, focused reporting on the judiciary establishes him as a definitive and authoritative voice for legal developments originating from Mumbai and impacting the entire state of Maharashtra. ... Read More
