Bombay High Court
Reliance Industries Ltd. And Anr. vs The Mumbai Metropolitan Region … on 8 April, 2026
2026:BHC-OS:8906-DB
Reliance-oswp-242-2018-J-R.doc
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 242 OF 2018
WITH
INTERIM APPLICATION NO. 2172 OF 2020
IN
WRIT PETITION NO. 242 OF 2018
1. Reliance Industries Limited,
A company incorporated under the
Companies Act, 1956 having its
Registered Office at Maker Chamber IV,
3rd Floor, Nariman Point,
Mumbai 400 021
2. Mr. Rajumal Nahar,
SHEPHALI having his office at having his office at
SANJAY
MORMARE 6th Floor, "B" Wing, Fortune 2000, "G"
Digitally signed Block, Bandra Kurla Complex,
by SHEPHALI
SANJAY
MORMARE
Bandra (East), Mumbai 400 051. ...Petitioners
Date: 2026.04.09
15:15:50 +0530
~ versus ~
1. Mumbai Metropolitan Region
Development Authority (MMRDA),
an authority established under the
Mumbai Metropolitan Region
Development Authority Act, 1974 and
having its head Office at Plot C-14 &
C-15, 'E' Block, Bandra Kurla Complex,
Bandra (East), Mumbai 400 051.
2. The Metropolitan Commissioner,
Mumbai Metropolitan Region
Development Authority, having office
at Plot C-14 & C-15, 'E' Block, Bandra
Kurla Complex, Bandra (East),
Mumbai 400 051.
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3. The Deputy Metropolitan
Commissioner,
Mumbai Metropolitan Region
Development Authority, having office
at Plot C-14 & C-15, 'E' Block, Bandra
Kurla Complex, Bandra (East),
Mumbai 400 051. ...Respondents
A PPEARANCES
For the Petitioners Mr. Vikram Nankani, Senior
Advocate, with Mr. Vikramaditya
Deshmukh, Mr. Ashwin Dave,
Mr. Ameya Nabar & Ms. Swati Jain,
i/b A. S. Dayal & Associates.
For Respondents-MMRDA Dr. Birendra Saraf, Senior Advocate,
with Mr. Nishant Chotani, Mr. Nivit
Srivastava, Ms. Sneha Patil,
Ms. Aditi Sinha, Mr. Hrishikesh
Joshi & Ms. Isha Vyas, i/b Maniar
Srivastava Associates.
CORAM : SHREE CHANDRASHEKHAR, CJ &
SUMAN SHYAM, J.
RESERVED ON : 22nd JANUARY 2026.
PRONOUNCED ON : 8th APRIL 2026.
JUDGMENT (Per Suman Shyam, J):
–
1. Rule. Rule is made returnable forthwith.
2. By consent of the parties, the matter is taken up for final
hearing.
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3. Assailing the demand-cum-show cause notice dated 12 th
September 2017 (Exhibit “R”), whereby, the Respondent No.1-
Mumbai Metropolitan Region Development Authority (“MMRDA”)
had demanded additional premium/penalty as per statements ‘A’
and ‘B’ annexed thereto, for the alleged delay of 7 years and 12
days in completion of construction of a Convention & Exhibition
Centre and Commercial Complex on Plot No. C-64, ‘G’ Block,
Bandra-Kurla Complex, Mumbai, the Petitioners have approached
this Court by filing this Writ Petition invoking the jurisdiction of
this Court under Article 226 of the Constitution of India. During
the pendency of the Writ Petition, by the communication dated
13th June 2019 (Exhibit “X”) a further amount of
Rs.1116,83,10,102/- was demanded from the Petitioner No. 1 as
additional premium, along with interest, towards extension of
time for completing the construction of the building by using the
additional built up area of 72,500 sq mtrs. allotted under the
Supplementary Lease Deed dated 13 th July 2007. The said Notice
is also under challenge in this Writ Petition. The facts and
circumstances giving rise to the filing of the present Writ Petition,
shorn of unnecessary details, are as hereunder.
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4. The Petitioner No.1 is a company incorporated under the
provisions of the Companies Act, 1956. As per statements made in
the Writ Petition it is engaged inter alia in the business of
exploration of petroleum products and allied activities. Petitioner
No.2 is a shareholder of the Petitioner No.1 company. The
expression “Petitioner” shall here-in-after refer to the Petitioner
No.1 company. The Respondent No.1, MMRDA, is a statutory
authority constituted under Section 3 of the Mumbai Metropolitan
Region Development Authority Act, 1974. Respondent Nos.2 and 3
are its officers.
5. In the month of December 2005, Respondent No.1, being
the owner of the land, had invited bids for leasing out Plot No. C-
64 admeasuring approximately 75,000 sq. mtrs. situated in ‘G’
Block of Bandra-Kurla Complex (BKC) for the purpose of
construction of “Convention and Exhibition Centre and
Commercial Complex”. The Petitioner had submitted its bid for the
said plot and was declared successful bidder. As such, by the letter
dated 15th February 2006, the Respondent No.1 had approved the
proposal for leasing out the aforesaid plot of land to the Petitioner
for a maximum permissible built-up area of 65,000 sq. mtrs. for
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the Convention and Exhibition Centre and 50,000 sq. mtrs. for the
Commercial Complex, aggregating to 1,15,000 sq. mtrs., for a
total premium of Rs.1104 crores. Pursuant thereto, a registered
Lease Deed dated 1st September 2006 came to be executed by and
in between the Petitioner and Respondent No.1 for leasing out the
demised plot for a term of 80 years. Possession of the said plot of
land was handed over to the Petitioner on the same day i.e. on 1 st
September 2006.
6. Article 2(d) of the Lease Deed dated 1st September, 2006
stipulates that the lessee shall, within three months from receipt of
approval of plans, commence and within a period of four years
from the date of the lease, build and completely finish the
construction of the Convention and Exhibition Center and
Commercial Complex, fit for occupation. Article 2(e) lays down
that in case of failure to adhere to the said time limit, extension of
time may be granted upon payment of additional premium at the
prescribed rates.
7. On 14th October 2006 the Petitioner had applied for
permission to start excavation and removal of earth on site by
attaching a report of the Structural Consultants. By the said letter,
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the Petitioner had also informed the Respondents that it will not
carry out any construction activity on the site without prior
intimation to the MMRDA and also without obtaining the required
statutory permissions.
8. After the execution of the Leased Deed dated 1 st September
2006, the FSI for the plots in block ‘G’ of BKC was increased from
2.00 to 4.00. As such, in the month of February 2007, the
Petitioners had applied for allotment of additional built-up area of
72,500 sq. mtrs.. By the letter dated 7 th May 2007, the Respondent
No.1 had approved the allotment of additional built up area of
41,000 sq. mtrs. for the Convention Centre and 31,500 sq. mtrs.
for the Commercial Complex, aggregating to 72,500 sq mtrs.,
against payment of premium of a total amount of Rs.696 crores.
Upon allotment of the additional built up area, as aforesaid, a
Supplementary Lease Deed dated 13th July 2007 was executed by
and between the parties in respect of the additional built-up area.
9. It would be pertinent to note herein that after the allotment
of the additional built up area, Reliance Communication &
Infrastructure Ltd., along with another, had instituted Writ Petition
No.1165 of 2007 before this Court challenging the grant of the
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additional FSI of 71,500 sq mtrs to the Petitioner for the
Convention and Exhibition Centre (41,000 sq mtrs) and
Commercial Complex (31,500 sq mtrs). The Petitioner was
impleaded as Respondent No. 3 in that writ petition. By the
interim order dated 15th October 2007 passed in the said Writ
Petition, a Division Bench of this Court had restrained the
Petitioner from utilizing the additional FSI of 31,500 sq. mtrs.
allocated for the Commercial Complex.
10. On 17/04/2008, the Petitioner submitted revised plans
seeking necessary approvals. Based on the same, on 12 th
June,2008, Commencement Certificate (CC), upto the plinth level,
only in respect of the Convention & Exhibition Centre plot “A’ of
plot C-64 in Block “G” of BKC Complex, with total permissible
built up area of 1,06,000sq mtrs. was issued in favour of the
Petitioner. However, no CC was issued in respect of the
commercial complex.
11. There is no controversy in this case about the fact that the
proposed development was composite in nature with common
basement and foundation. As such, by the letter dated 28 th
January 2009, the Petitioner had submitted progress report and
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informed the Respondent No.1 that commencement of
construction at site was affected due to the interim order passed
by the court since the basement and foundation of the Convention
& Exhibition Centre (CEC) as well as the Commercial Complex
(CC) was common. However, by letter dated 18 th February 2009,
the Respondent No.1 had replied that since there was no restraint
order in respect of the Convention & Exhibition Centre, hence,
the Petitioner to continue with the construction of the CEC as per
CC (1,06,000 sq mtrs) and also expedite the final hearing of the
proceeding pending in the court. The Petitioner was also asked to
furnish Bank Guarantee of Rs 20 crores towards liquidated
damage and Completion Guarantee for a sum of Rs 20 crores.
12. In response to the above, by the letter dated 16 th March
2009, the Petitioner had highlighted the design uncertainty in
proceeding with the construction and had sought the guidance of
the MMRDA in the matter. Due to the uncertain circumstances
arising in view of the pending Court proceedings, the Petitioner
had also sought extension of time to complete the project.
However, in the meantime, the Commencement Certificate issued
earlier on 12th June 2008 had lapsed in June 2009.
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13. While the matter was poised as above, in the 129 th Meeting
of the MMRDA held on 8th September 2011, the Respondent No.1
had resolved to extend the time for allotment of additional FSI in
‘G’ Block till December 2012. Accordingly, by the letter dated 8 th
November 2011, the Respondent No.1 had offered additional
built-up area to the Petitioner by recording that there would be no
time limit for construction of such additional built-up area.
14. However, in view of the pendency of Writ Petition No 1165
of 2007 and the interim order operating therein, on 14 th October
2010, the Petitioner had offered to surrender the additional built
up area of 72,500 sq.mtrs and sought refund of the amount of Rs
1064 crores being the premium, along with interest, paid for the
aforesaid built up area. The said request was followed by the
subsequent letters dated 3rd August 2020 and 10th January 2012
rehearing the request. In response to the above request of the
Petitioner, by the letter dated 1st February 2012, the Respondent
No.1 had informed the Petitioner that its request for refund of
lease premium by surrendering the additional built up area cannot
be considered as there is no provision in the Leased Deed as well
the Supplementary Lease Deed permitting the same. It was,
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however, clarified that in so far as the request for extension of
time for completion of construction on the plot under reference as
per Article 2(d) of the Lease Deed dated 1 st September 2006, is
concerned, the period during which the stay order of the court
was under operation, will not be considered for computing the
four years time period, meaning thereby, that the period, during
which the interim order passed in Writ Petition No.1165 of 2007
was operative, shall be excluded while computing the four-year
period stipulated under Article 2(d) of the Lease Deed dated 1 st
September, 2006. Be it stated here in that the Writ Petition No
1165 of 2007 was withdrawn on 12 th March 2012 as a result of
which, the stay order also got vacated on the same day.
15. In the wake of the aforesaid development, the Respondent
No.1, by letters dated 20th March 2012 and 3rd April 2012
approved allotment of further additional built-up area of 1,00,000
sq. mtrs. and 25,000 sq. mtrs. against payment of premiums of
Rs.1470 crores and Rs.367.50 crores respectively. With the
allotment of the additional built up area of 1,25,000 sq mtrs, the
total built-up area allotted by the Respondent No.1 to the
Petitioner for construction to be carried out on the same plot, was
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increased to 3,12,500 sq. mtrs. It is a matter of record that the
Petitioner had paid an aggregate premium of Rs.4,005 crores to
the Respondent No.1 for the allotment of the entire built up area
of 3,12,500 sq. meters.
16. In view of the allotment of additional built-up area, as
aforesaid, the Petitioner was required to revise the development
plans for a composite structure and also obtain various statutory
approvals afresh including the environmental clearance under the
EIA Notification dated 14th September 2006, height clearance from
Civil Aviation Authorities, approval from the High Rise Committee,
permission from the Municipal Corporation of Greater Mumbai
and other statutory authorities. Accordingly, various approvals
were obtained during the year 2013 and early part of the year
2014.
17. On 26th June 2013, Environment Clearance for the proposed
” Convention & Exhibition Centre and Commercial Complex” over
plot No. C-64 in Block-G of BKC was granted to the Petitioner for
the entire FSI of 3,12,500 Sq. Mtrs. In the said communication
also, the CEC & CC was shown as a composite construction.
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18. After compliance of the above requisites and submission of
the revised plans, the Respondent No.1 had issued
Commencement Certificate dated 16th April 2014 for construction
upto the 7th floor level of the composite building comprising
Convention & Exhibition Centre and Commercial Complex.
Thereafter, further Commencement Certificates were issued on
23rd December 2016, 17th April 2017 and 19th May 2017.
19. In the meantime, in its 131st Meeting held on 22nd October
2012, the Respondent No.1 had considered granting extension of
time for completion of construction by taking note of the delay
caused in obtaining multiple statutory permissions/ clearance
form different agencies. After considering the matter, the
Respondent No.1, vide Resolution No.1283 adopted in the said
meeting, had recommended extension of time from four years to
six years for completing the construction. The said resolution was,
however, kept in abeyance for some. Finally, in its 138 th Meeting
held on 26th August 2015, the Respondent No.1 had resolved to
amend Article 2(d) to provide six years time period for completion
of construction in respect of plots leased after the date of the
resolution and further resolved to constitute a One Man
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Committee to examine the issue of recovery of additional
premium in the cases where delay was attributable to time
required for obtaining statutory permissions.
20. Notwithstanding the above developments,the Respondent
no.1 had insisted on an undertaking from the Petitioner to pay
the additional premium for grant of extension of time for
completing the construction of the building. As such, on 18 th
November 2016, the Petitioner had submitted an undertaking to
the above effect thus, agreeing to pay the additional premium for
extension of time for completing the construction of the building
over Plot No- C-64 in Block “G” of the BKC before receipt of
Occupation Certificate or decision of the Authority, which ever was
earlier, with a further undertaking not to create any third party
liability on the project till receipt of the Occupation Certificate.
21. Based on such undertaking, the Respondent No 1 had issue
further Commencement Certificate dated 19th May 2017 for the
Fire Check floor and the 15th (part) floor.
22. While the above process was under way, the Respondent No.
1 had issued the impugned Notice dated 12 th September 2017,
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alleging that as per Article 2(d) of the Lease Deed dated 01 st
September 2006, the Petitioner had the obligation to erect and
completely finish the construction, fit for occupation, within four
years from the date of execution of the Lease Deed. However,
although, there was delay of 7 years and 12 days the Petitioner
had failed to pay the penalty for the entire period of delay till
completion of the construction, fit for occupation. It was further
mentioned that the amount on account of delay in construction,
along with interest, has been shown in Annexures “A” and “B”. It
was alleged that the Petitioner had committed breach of the terms
and conditions of the Deed of Lease. As such, the MMRDA had the
power to recover the said amount as arrears of land revenue and
also resume the land as per Articles 5 & 6 of the Lease Deed. The
Petitioner was, therefore, called upon to remedy the situation
within 30 days, failing which, the Authority will have the right to
determine the lease and enter upon the leased premise and also
proceed to recover the amount due as arrears of land revenue.
23. It would be pertinent to mention here-in that the Notice
dated 12th September, 2017 does not mention the amount claimed
by the Respondent No. 1. The figures projected in the Statements
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“A” & “B” annexed to the Writ Petition are also not legible.
However, it appears that upon receipt of the Notice dated 12 th
September 2017, the Petitioner had sent reply dated 11 th October
2017 denying its liability to pay the amount claimed with a further
request to withdraw the show cause notice dated 12 th September,
2017. However, no action was taken by the Respondents on such
request made by the Petitioner.
24. Aggrieved by the dated 12th September 2017 the Petitioner
had instituted Writ Petition on 30 th November, 2017 which was
originally registered as Writ Petition (L) No 3395 of 2017. On 8 th
December 2017, this Court, while issuing notice, had recorded the
statement made on behalf of Respondent No.1 that till next date
of hearing no coercive steps would be taken pursuant to the
impugned notice. Records reveal that the said ad-interim order
was extended by the court from time to time. Subsequently, the
said writ petition was registered as Writ Petition No.242 of 2018
i.e. the present Writ Petition.
25. On 06th February 2019, the Architect engaged by the
Petitioner had applied for part Occupation Certificate for the built
up area of 44,621 sq.mtrs. That apart, by the letter dated 18 th
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February 2019, the Petitioner had deposited a sum of
Rs.646,77,68,594 (Rupees Six Hundred and Forty Six Crores
Seventy Seven Lakhs Sixty Eight Thousand Five Hundred and
Ninety Four) after deducting TDS amount of Rs.21,32,20,676/-
and furnished a Bank Guarantee of an amount of
Rs.13,12,54,85,287/- (Rupees Thirteen Hundred Twelve Crores
Fifty Four Lakhs Eighty Five Thousand Two Hundred and Eighty
Seven) based on an alternate computation treating the delay to be
for the period from 01st September 2010 to 17th February 2019. It
was also mentioned in that letter that the amount was being
deposited under protest and without prejudice to the rights and
contention of the Petitioner in the pending Writ Petition.
26. Upon receipt of the above amount, on 20 th February 2019,
the Respondent No.1 had issued part Occupation Certificate for
44,621 sq. mtrs. However, soon thereafter i.e. on 13 th June 2019,
the Petitioner was served with another communication demanding
payment of a further amount of Rs.1116,83,10,102/- as additional
premium for the delay in completing the construction of the
additional built up area as allotted under the Supplementary
Lease Deed dated 13th July 2007.
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27. Despite the notice dated 13th June 2019, the Petitioner,
through its Architect, had applied for further part Occupation
Certificate for the built up area of 1,24,000 sq. mtrs. However, the
Respondent No. 1 refused to process the same until the amount of
Rs.1116,83,10,102/- was paid. Under such circumstances, the
Petitioner had filed Interim Application No.2171 of 2020 arising
out of this Writ Petition, seeking a direction upon the Respondent
No.1 for issuance of Occupation Certificate without insisting upon
payment of the additional premium. By the judgment and order
dated 12th July 2021 passed in the Interim Application No. 2171 of
2020, this Court had allowed the prayer made in the Interim
Application and directed the Respondent No.1 to process the
applications seeking Occupation Certificates including the
application dated 3rd February 2020, without insisting on payment
of the amount mentioned in the subsequent demand notice dated
13th June 2019. In the said order it was also observed that when
the court was in seisin of the matter and considering the earlier
interim order dated 8th December 2017, the Respondents ought
not to have issued the notice dated 13th June 2019. By carrying
out amendments in the writ petition, the Petitioner has
challenged the letter dated 13th June 2019.
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28. The Respondent Nos. 1 and 2 have opposed the Writ
Petition by filing joint Reply. The plea taken by the Respondents in
their Reply, reduced to their essence, is to effect that that the Writ
Petition involves disputed questions of fact, which cannot be
adjudicated in a Writ Petition; that the Writ Petitioners have an
alternate, efficacious remedy by way of Civil Suit; that the dispute
is purely contractual in nature involving interpretation of the
terms and conditions of the contract, which cannot be entertained
in a Writ Petition; that this is not a case of infringement of any
constitutional, statutory or fundamental right of the Petitioner;
that the Demand Notice has issued on account of breach of
conditions of the Lease Deed and, therefore, the same does not
involved violation of any constitutional right; that Articles 2(a)
and 2(d) of the Lease Deed, which require completion of the
construction within a period of four years from the date of Lease
Deed are binding and mandatory clauses in the Lease Deed.
Therefore, those are enforceable under the law; even if the delay
in construction has occurred due to interim order of Court or on
account of force majeure, even than, in view of Article 2(d), any
extension of time could only been granted upon payment of
additional premium. Since the MMRDA would not have any power
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to waive such amount, therefore, payment of additional
premium/penalty was inevitable in case of delay; that the restraint
order of the Court was limited only to the additional area of
31,500 sq.mtrs. of commercial FSI. Therefore, the same did not
prevent commencement and completion of construction of the
Convention Centre; that allotment of additional built-up area was
optional. Since the Petitioners have opted for the additional built-
up area, therefore, the allotment of additional built up area
cannot be a justifiable ground for the delay in completion of
construction; that the Petitioners have issued an unconditional
undertaking on 14th December 2016 agreeing to pay the additional
premium/penalty for grant of extension of time. Therefore, they
would be bound by such undertaking; that the Writ Petitioner has
approached this Court by suppressing material facts and
particulars pertaining to the undertaking dated 14 th December
2016, therefore, the Writ Petition is liable to be dismissed on such
count alone; that the decision of the MMRDA to extend the time
period from four years to six years was applicable prospectively,
i.e., with effect from August, 2015 and therefore, the same would
not cover the case of lessees such as the Petitioner in respect of
whom, the Lease Deed was executed prior to August, 2015.
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29. By filing Rejoinder, the Writ Petitioner, while denying the
assertions made by the Respondents, has reiterated that it is a case
of violation of fundamental right of the Petitioner guaranteed
under Article 14 of the Constitution of India. It has further been
asserted that even in contractual matters, unfair treatment
extended by the State or its instrumentality would be amenable to
writ jurisdiction of this Court; that due to the allotment of the
additional built-up area and the integrated design of the project, it
would be impossible to complete the original portion of the
building within four years since it included common structures
such as common basement and services, etc. The Petitioners have
also denied the contention that the restraint order of the Court did
not affect the integrated planning and common infrastructure of
the project so as to permit bifurcation of the construction; it has
also been alleged that the Petitioner being similarly situated
Lessee, extension of time from four years to six years would be
equally applicable to them as denial of such benefit would amount
to unfair discrimination; the Petitioners have further contended
that similarly situated entities such as Bharat Diamond Bourse &
Indian Oil Corporation have been granted extension of time
without levy of additional premium; it has also been contended
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that the undertaking dated 14th December 2016 was obtained
under coercion viz. On the threat of withholding Occupation
Certificate and, therefore, the same cannot preclude the Petitioner
from agitating its grievance as per law; the Petitioner has also
denied suppression of material facts.
30. In their additional Reply, the Respondents have controverted
the statements made in the Rejoinder Affidavit while maintaining
their original stand justifying the demand for the additional
premium.
31. This Writ Petition was analogously heard along with three
other Writ Petitions being Writ Petition No.864 of 2018, Writ
Petition No.2377 of 2018 and Writ Petition No.3209 of 2017,
involving similar issues wherein, identical reliefs were sought by
the Writ Petitioner(s).
32. We have heard the learned Senior Counsel appearing for the
parties and have also perused the pleadings and documents placed
on record.
33. Mr. Vikram Nankani, learned Senior Counsel appearing for
the Petitioners, has argued that the impugned demand notice
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dated 12th September 2017 and the subsequent communication
dated 13th June 2019 issued by Respondent No.1 seeking recovery
of additional premium on account of alleged delay in completion
of construction are arbitrary, illegal and unsustainable in law.
According to the learned Senior Counsel, the demand proceeds on
an erroneous interpretation of Clauses 2(a), 2(c) and 2(d) of the
Lease Deed dated 1st September 2006, in as much as under Clause
2(c), no construction work could commence until the plans and
specifications were approved by the planning authority. It is
therefore submitted that the timeline for completion of
construction cannot be computed independent of such approvals.
34. The learned Senior Counsel further submits that the project
contemplated construction of a Convention and Exhibition Centre
and Commercial Complex as a composite development.
Subsequent to the execution of the Lease Deed, Respondent No.1
had allotted additional built-up area of 72,500 sq. mtrs. under the
Supplementary Lease Deed dated 13 th July, 2007, and thereafter,
further additional built-up area of 1,25,000 sq. mtrs. in the year
2012. The allotment of such additional built-up area required
revision of the development plans and fresh statutory approvals
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and therefore, the timelines originally contemplated under the
Lease Deed dated 1st September 2006 cannot be strictly applied to
such construction.
35. The learned Senior Counsel further has submitted that the
allotment of additional built-up area was unconditional and
Respondent No.1 had itself clarified that there would be no time
limit for construction of such additional built-up area. Therefore,
by granting such additional development rights during the
subsistence of the Lease Deed, Respondent No.1 must be deemed
to have waived the condition relating to completion of
construction within four years.
36. It is also submitted that the development of the project was
affected by the order of injunction passed by this Court in Writ
Petition No.1165 of 2007, which restrained utilization of a portion
of the additional built-up area until 12th March 2012. The
Petitioners had requested Respondent No.1 to exclude the said
period while computing the four-year period stipulated under the
Lease Deed which was confirmed by the Respondent No. 1 vide
communication dated 1st February 2012. As such, such time line
cannot be enforced.
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37. The Senior Counsel has further submitted that the project
required several statutory approvals from various authorities
including environmental clearance, aviation height clearance,
approval of the High-Rise Committee and permissions from the
Municipal Corporation of Greater Mumbai. According to the
Petitioner, these approvals were obtained over a period of time
and the commencement certificate for the integrated project was
eventually issued only in the year 2014. The learned Senior
Counsel therefore submits that the period of four years
contemplated under Clause 2(d) of the Lease Deed must be
construed in a commercially reasonable manner and the same
must be computed only after approval of the development plans
and issuance of the necessary commencement certificates.
38. The learned Senior Counsel has further argued that the
Respondent No.1 had itself recognized the practical difficulties
faced by developers in completing construction within four years
and at its 138th Meeting held on 26th August 2015, resolved to
amend the standard form of lease by extending the period for
completion of construction from four years to six years. According
to the Petitioner’s Counsel, restricting the benefit of the said
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decision only to leases executed after 26 th August 2015 would be
arbitrary and discriminatory, since all developers in Bandra-Kurla
Complex are required to obtain similar statutory approvals. It is,
therefore, contended that the impugned action of the Respondent
No.1 violates Article 14 of the Constitution of India.
39. To sum up his arguments, the learned Senior Counsel has
submitted that the present case is squarely covered by the decision
of this Court rendered in the case of Raghuleela Builders Pvt. Ltd.
& Anr vs. MMRDA & Ors. , whereby in identical fact situation and
similar circumstances, this Court, by interpreting similar clauses in
the lease deed, has held that the demand of additional premium
on account of delay in completing the construction was arbitrary
and illegal and, accordingly struck down such demand.
40. Dr. Birendra Saraf, learned Senior Counsel appearing for the
Respondent Nos.1 and 2,on the other hand, has opposed the
prayer made in the Writ Petition and has also questioned the
maintainability of the Writ Petition by contending that the dispute
between the parties arise out of contractual obligations contained
in the Lease Deed and the Supplementary Lease Deed and the
same involves several disputed questions of fact which cannot be
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adjudicated in a writ petition in exercise of jurisdiction under
Article 226 of the Constitution of India. He has further argued that
the Writ Petition is hit by delay and laches and the relief prayed
for is also barred by limitation. According to Dr. Saraf, , since the
Petitioner had earlier sought extension of time for completion of
construction and had not challenged the communications issued
by Respondent No.1 at the relevant time, hence, the challenge
made to such demand notices is not maintainable at this point of
time.
41. The learned Senior Counsel for the Respondents has further
argued that the recovery sought by Respondent No.1 is strictly in
accordance with the provisions of the MMRDA Act, the MMRDA
(Disposal of Land) Regulations, 1977 as well as the terms and
conditions of the Lease Deed executed by and between the parties.
According to learned counsel, the clauses contained in the Lease
Deed are statutory in nature. Therefore, under Article 2(e),
extension of time for completion of construction can be granted
only upon payment of additional premium at the prescribed rates
which cannot be waived even by the MMRDA.
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42. Dr. Saraf has further argued that the Petitioner had
furnished undertakings promising to pay the amount of additional
premium for the delay in completing the construction. Therefore,
the Petitioner cannot now resile from such promise.
43. The learned Senior Counsel for the Respondents has also
argued that the reliance placed by the Petitioner on the judgment
in Raghuleela Builders Pvt. Ltd. & Anr. (Supra) is misplaced in as
mush as the said decision was rendered in the peculiar facts of
that case.
44. To sum up his arguments, Dr. Saraf has submitted that the
Petitioners have approached this Court without disclosing material
facts and producing the relevant documents. Since they have
approached this court with unclean hands, hence, the Petitioners
are not entitled to any relief from the court of equity. As such, the
Writ Petition be dismissed.
45. In support of his above arguments, Dr. Saraf, has relied
upon the following decisions:-
(a) State of Punjab and Ors. vs. Dhanjit Singh Sandhu1
1 (2014) 15 SCC 144.
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(b) Atur Park-4 Co operative Housing Society Ltd. vs
State of Maharashtra2
(c) State of Goa vs. Dr. Alvaro Alberto Mousinho3
Plea regarding Maintainability of the Writ Petition :-
46. Insofar as the plea regarding maintainability of the Writ
Petition is concerned, at the very outset, it deserves to be
mentioned herein that although the maintainability of the Writ
Petition has been questioned inter-alia on the ground that several
disputed questions of facts are involved there-in, yet, after
examining the record, we find that the material assertions made in
the Writ Petition are all based on documents annexed thereto,
which are admitted documents. Moreover, in view of the plea
raised by the Petitioner that the action of the Respondent No. 1 in
levying additional premium/penalty for the delay in completion of
construction is not only contrary to the terms and conditions of
the Lease Deed, but also, arbitrary and illegal and hence, in
violation of the fundamental rights guaranteed to the Petitioner
under Article 14 of the Constitution, we are of the view that the
2 2023 SCC Online Bom 874.
3 (2019) 10 SCC 465.
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issues raised in the Writ Petition have an element of public law
character.
47. In the case of Joshi Technologies International IBC vs. U.O.I.
& Ors. , the Hon’ble Supreme Court has observed that there is no
absolute bar to the maintainability of a Writ Petition, even in
contractual matters or where there are disputed questions of fact
or even when monitory claim is raised, provided, the Court is
called upon to examine the issue which has a public law character
attached to it. Having regard to the core controversy involved in
this proceeding and considering the fact that the issues involved in
this Writ Petition would call for determination by this Court based
on interpretation of the relevant Articles of the Lease Agreement
as well as the documents exchanged by and between the parties so
as to ascertain fairness in the action of the Respondent No 1, we
are unable to agree with the stand of the Respondents that the
Writ Petition ought to be dismissed on the ground that it raises
disputed questions of facts.
48. Likewise, from a reading of Section 44 of the MMRDA, Act
1974, we find that the provision for Appeal provided thereunder,
is available for disputes regarding recovery of money due to the
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authority as arrears of land revenue. Since the challenge made to
the impugned demand notice is on the ground that the same is
contrary to the terms of the Supplementary Lease Deed and hence,
illegal and arbitrary as such, we are of the opinion that the said
controversy cannot be effectively adjudicated in an Appeal filed
under Section 44. Therefore, we reject the contention of the
Respondents that the Petitioner has an effective and efficacious
alternative remedy.
49. We also find that all material facts necessary for
appreciating the controversy have been disclosed in the Writ
Petition. Therefore, we are of the view that the Writ Petition
cannot also be dismissed on account of suppression of material
facts as well.
50. In so far as the grounds of delay and laches as well as the
plea of the claim being barred by the Law of Limitations is
concerned, save and except making a bald assertion on such count
the Respondents have failed to mention as to on which date the
cause of action for the petitioner to institute the proceeding had
ceased and on what count. There is also no oral argument
advanced to that effect.
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51. In Banda Development Authority, Banda vs. Motilal Agarwal
& Ors.4 the Hon’ble Supreme Court has observed that no limitation
has been prescribed for filing a Writ Petition under Article 226 of
the Constitution of India. However, the High Court will treat the
delay in filing the Writ Petition as unreasonable, if the same is
filed beyond the period of limitation prescribed for filing a Civil
Suit for a similar cause. From the above, it would be apparent that
although un-explained delay in instituting a Writ Petition could be
a valid ground to decline relief to the Petitioner, yet, the law of
Limitation would not have strict application in a Writ Petition.
52. There is no dispute in this case about the fact that the
Respondent No. 1 is an instrumentality of the State and, therefore,
would be an “other authority” within the meaning of Article 12 of
the Constitution of India.
53. Law is well settled that arbitrariness in the decision making
process of the State or its instrumentality is a facet of Article 14 of
the Constitution of India. In E.P..Royappa v State of Tamil Nadu,5 it
was pointed out that Article 14 would strike at arbitrariness in
State action and ensure fairness and equality of treatment.
4 (2011) 5 SCC 394.
5 (1974) 4 SCC 3.
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54. The present is not a proceeding simpliciter for enforcing a
money claim but raises significant questions pertaining to the
validity and fairness in the impugned action of the Respondent No
1, which are required to be adjudicated on the touch stone of
Article 14. As such, we are of the considered opinion that such
plea cannot be brushed aside merely on the ground of delay and
laches, more so, since such delay has evidently not given rise to
any parallel right of a third party.
55. In view of the foregoing discussions, we are of the view that
the Writ Petition is maintainable in law as well as in the facts and
circumstances of the case.
56. It would be further pertinent to note herein that in an
earlier decision rendered by a co-ordinate Bench of this Court
dated 20th November 2019 in Raghuleela Builders Pvt. Limited
and Anr. vs. The Mumbai Metropolitan Regional Development
Authority & Ors. (Supra) wherein, identical issues were involved,
this Court had entertained the Writ Petition. In that case also the
Petitioners had challenged a similar Demand Notice dated 12 th
September 2017 issued by the Respondent No.1, by invoking
similar provisions of the Lease Deed as well as the Supplementary
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Lease Deed, demanding payment of a sum of Rs. 432 Crores as
penalty for the delay in completion of construction of the building.
That was also a case wherein, although the initial built up area
was 30550 sq. meters, which was to be consumed by constructing
9 (nine) floors in the building, yet, subsequently, due to the
increase in the FSI, the Respondent No.1 had allotted additional
built up area of 67000 sq. meters to the Petitioner resulting in
construction of 11 additional floors in the same building. Due to
the addition in the built up area, the construction of the building
could not be completed within four years, as stipulated in Article
2(d) of the original Lease Deed, as a result of which, Demand
Notice dated 12th September 2017 was served for recovery of
penalty/additional premium along with interest calculated
thereon.
57. By the Judgment and Order dated 20 th November 2019, in
Raghuleela Builders Pvt. Ltd. & Anr. (Supra), the Division Bench
had set aside the impugned Demand Notice dated 12 th September
2017 by holding that such a demand was not maintainable in the
eyes of law. That apart, it was also observed that in view of the
change in policy of the MMRDA increasing the time limit for
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completion of the building “Fit for occupation”, from four years to
six years, the demand for penalty/additional premium for delay in
completion of construction within four years was ex-facie
unreasonable, unjustified and discriminatory.
58. The Special Leave Petition (C) No. 6411 of 2020 preferred
by the Respondent No.1 assailing the Judgment and Order dated
20th November 2019 was dismissed by the Hon’ble Supreme Court
by the order dated 27 th July 2020 after taking note of the findings
recorded in paragraphs No. 38 and 40 of the Judgment and Order
dated 20th November 2019. However, it was clarified that since the
judgment of the Division Bench of the Bombay High Court was
rendered in the facts of that case, hence, it cannot influence any
other matter in this behalf. With the above observation the Special
Leave Petition was dismissed.
59. In the order dated 27th July 2020 the Hon’ble Supreme
Court, while dismissing the Special Leave to Appeal (C) No(s)
6411/2020, had observed as follows:-
“We are not inclined to exercise our jurisdiction under Article
136 of the Constitution of India in the given facts of the case and
more so as reflected from paragraphs 38 and 40 of the
impugned judgment.
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Mr. K. K. Venugopal, learned Attorney General for India
expresses some apprehension on account of there being other
matters pending.
We clarify that the present matter is in the given facts of
the case as stated aforesaid and thus, cannot be said to influence
any other matter in this behalf.
The special leave petition is dismissed in terms aforesaid.
Pending applications shall also stand disposed of.”
60. It appears that the Respondent No. 1 had filed a Review
Petition seeking review of the order dated 27 th July 2020, which
was also dismissed by the Hon’ble Supreme Court vide order
dated 29th September 2020 passed in Review Petition (Civil) No.
1764 of 2020 arising out of SLP (C) No. 6411 of 2020.
61. From a plain reading of the decision rendered in Raghuleela
Builders Pvt. Ltd. & Anr. (Supra) we are of the opinion that, even
if the said decision is treated to have been rendered in the fact
situation of that case, even then, we can take note of the legal
principles emanating therefrom. In that view of the matter we are
unable to agree with the submission of the learned Counsel for the
Respondents that the decision in the case of Raghuleela Builders
Pvt. Ltd. & Anr. (Supra) cannot be looked into by this Court even
for the purpose of deciding the question of maintainability of the
Writ Petition.
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62. It is to be noted herein that the question of
maintainability of a Writ Petition is a mixed question of law
and facts. Therefore, such question would obviously have to
be considered having due regard to the peculiar facts and
circumstances of each case. Having regard to the facts and
circumstances of this case and considering the fact that a
similar Writ Petition, raising similar issues in Raghuleela
Builders Pvt. Ltd. & Anr. (Supra) had earlier been entertained
by this Court, for the sake of maintaining uniformity in
judicial decisions, we are not inclined to non-suit the Writ
Petitioner merely on the plea of maintainability as raised by
the Respondents.
On Merits:-
63. During the Course of arguments, the learned Counsel for
the Respondents has made it clear that the demand for additional
penalty on account of delay in completing the construction had
been raised by the Respondent No.1 in deference to Article 2(d) &
(e) of the Lease Deed dated 1 st September 2006 which is as per
Form ‘D’ of Regulation No 10 of the Mumbai Metropolitan Region
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Development Authority (Disposal of Land) Regulations, 1977.
Therefore, the question as to whether such a claim /demand of
the Respondent No. 1 for payment of additional premium/ penalty
on account of delay in completing the construction was
maintainable in the eyes of law as well as in the facts and
circumstances of the case would undoubtedly have to be answered
by this court in the light of materials brought on record and by
constructing the relevant clauses of the Lease Agreement. For the
above purpose Articles 2 (d) and (e) of the Lease Deed dated 1 st
September 2006 would be relevant and therefore, the same are
being reproduced herein-below for ready reference:-
“(d) Time limits for commencement and completion of
construction work: That the Lessee shall within three months
from the receipt of approval of its plans and specifications of
building or buildings intended to be erected on the said plot of
land, commence and within a period of four years from the
date of this lease at his own expense and in a substantial and
workman like manner and with the sound materials and in
compliance with the said Development Control Regulations
and Building Regulations and all Municipal Rules, bye-laws
and Regulations applicable hereto and in strict accordance
with the approved plans, elevations, sections, specifications
and details as specified in the Section 5, 6 & 8 of the said RFP
and the said allotment letter, to the satisfaction of the
Metropolitan Commissioner and conforming to the Bandra-
Kurla Complex Notified Area, Development Control
Regulations, 1979 & all other relevant Rules, Regulations &
Acts and further as provided in Section 5 of the said RFP and
the said allotment letter, build and completely finish fit for
occupation a (i) “Convention & Exhibition Centre” and (ii)
“Commercial Complex”to be used as (i) “Convention &
Exhibition Centre” and (ii) “Commercial Complex” with all
requisite drains and other proper conveniences thereto.
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PROVIDED THAT the construction of Convention and
Exhibition Centre will be commenced before the
commencement of construction of Commercial Complex and
Occupation Certificate of Convention and Exhibition Centre
(65000 sq. mtr. shall be obtained prior to the request for
Occupation Certificate of Commercial Complex (50000 sq.
mtr) as set out in the said RFP and the said allotment letter
the Lessee shall scrupulously observe the approved Work
Execution Plan (copy Whereof is set out in the SIXTH
SCHEDULE hereunder written).
PROVIDED FURTHER THAT as set out in the said
allotment letter, the Lessee shall submit the periodic progress
report of the Convention and Exhibition Center say in the first
week of every third month to the Metropolitan Commissioner,
Mumbai Metropolitan Region Development Authority. The
Evaluation Committee appointed by the Metropolitan
Commissioner as referred in the Proviso to clause (a)
hereinabove, will review the progress of the development of
Convention Center report by the Lessee and submit its report
to the Metropolitan Commissioner. The Evaluation Committee
as indicated above will satisfy itself regarding the development
of the Convention and Exhibition Center which has to be of
international standards and if necessary the Evaluation
Committee will make suggestions in that respect to the
Metropolitan Commissioner and the Lessee shall incorporate
changes so directed by the Metropolitan Commissioner.’
(e) Extension of time stipulated for construction of
building or development of land:
(i) If the Lessee shall not perform and observe the
limitations of the time mentioned in clause 2 (d) above
for construction of the intended (i) “Convention &
Exhibition Centre” on plot of land admeasuring 55000
sq. mtr. and (ii) “Commercial Complex” on plot of land
admeasuring 20000 sq. mtr. or otherwise development
of said plot of land leased to him for reasons beyond
his control, the Metropolitan Commissioner may
permit extension of such time on payment of additional
premium at the following rates:
Up to 1 year _____ 25 percent of the
respective premium paid
for "Convention &
Exhibition Centre" and
"Commercial Complex"
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Between 1 and 2 years___ 35 percent of the
respective premium paid
for "Convention &
Exhibition Centre" and
"Commercial Complex"
Between 2 and 3 years ___ 40 percent of the
respective premium paid
for "Convention Exhibition
Centre" and "Commercial
Complex"
(ii) If the Metropolitan Commissioner shall refuse to
permit such extension of time or shall find the Lessee
of having committed breach of any condition or
covenant during limitation of time mentioned in clause
2(d) hereto before Metropolitan Commissioner may
forfeit and determine the Lease: provided that in the
event of such determination of lease 25 percent of the
premium paid by the Lessee to the Lessor shall stand
forfeited and the the remaining 75 percent of such
premium shall be refunded to him; provided further
that the power to so determine the Lease shall not be
exercised unless and until the Metropolitan
Commissioner shall be given to the Lessee or left on
some part of the demised premises a nonce in writing
of his intention to do so and of specific breach of the
covenant or condition in respect of which forfeiture is
intended and default shall have been made by the
Lessee in remedying such breach within three months
from the service of notice on him or the notice being
left on the demised premises.”
64. Article 2 of the Supplementary Lease Deed dated 13 th July
2007 mentions that the incremental premises agreed to be
constructed shall be deemed to be integral part of the demised
premise defined in Lease Deed dated 1 st September 2006. Article 2
reads as follows :-
“2. It is here by agreed and declared by and
between the parties hereto that all the conditions
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to be incorporated herein and shall regulate the
lease hereby granted. It is further agreed and
declared by the parties hereto that the incremental
premises hereby agreed to be constructed and to be
leased by the lessor to the lessee shall be deemed to
be the integral part of demised premises as defined
in the said Deed of Lease dated 1 st September 2006
and annexed hereto as ANNEXURE.”
65. At the very out set it must be noted here-in that as per
Article 2(d) the lessee is required to complete the construction
within four years from the date of execution of the lease deed.
However, Article 2 (c) of the Lease Deed makes it clear that no
work shall commence or be carried out contrary to the
Development Control Regulations and the Building Regulations
applicable to the plot of land and until the plans, elevations,
sections, specifications and details shall have been approved.
Therefore, in view of Article 2(c), the construction no construction
can commence until all statutory approvals including the approval
of building plan etc. are received. Article 2(a) of the Lease Deed
mentions that the lessee shall, within three months, submit plans
etc. for approval. However, there is no condition in the Lease Deed
laying down any time line for granting of such approval by the
Respondent No. 1.
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66. In a construction of this nature, permission of multiple
statutory authorities including the Municipal Corporation, Fire
department, Environment clearance, height clearance etc. will be
necessary, without which even the Commencement Certificate
cannot be issued. Unless the Commencement Certificate is issued,
the construction work cannot commence. These statutory
authorities are not bound by the terms and conditions of the Lease
Agreement. Notwithstanding the same, the Lease Agreement is
completely silent as to who will be responsible in case of delay in
granting approval by these Statutory Authorities, coming in the
way of early commencement and completion of the construction.
67. Not only that, the Lease Deed is also silent as to what would
be the effect on the time line of four years for completion of the
construction, as laid down in Article 2(d) in case, there is delay in
granting of statutory approvals. As such, if there is delay in
granting permissions/ approval by the statutory authorities for any
reason whatsoever, leading to delay in commencement of
construction, then in that event, the Lessee will be left with no
scope to complete the construction within the stipulated time, that
too, for no fault on its part. Notwithstanding the same, as per
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Article 2(d), as interpreted by the Respondent No 1, the lessee
would still be liable to pay penalty for the delay in completing the
construction beyond the period of four years from the date of
execution of the Lease Deed. Viewed from that perspective, Article
2(d) of the Lease Deed appears to be ex-facie unfair, unreasonable
and hence, unconscionable. However, since the Articles of the
Lease Deed are not under challenge, hence, the said aspect of the
matter need not detain this Court.
68. As has been noted hereinabove, the initial built-up area,
which is the subject matter of Lease Deed dated 1 st September
2006, was only 65,000 sq. mtrs. for the Convention & Exhibition
Centre and 50,000 sq.mtrs for the Commercial Complex, totaling
to 1,15,000 sq.mtrs. Article 2(d) of the Lease Deed providing four
years’ time limit for completing the construction would, therefore,
apply to the 1,15,000 sq. mtrs of built up area.
69. Subsequent to the execution of the Lease Deed dated 1st
September 2006, there was increase in the FSI leading to
allotment of additional built-up area of 72,500 sq. mtrs to the
Petitioner. This 72,500 sq. mtrs was not within the ambit of the
original Lease Deed dated 1st September 2006. As such, the
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Supplementary Lease Deed 13th July 2007 had to be executed.
However, as had been noted above, soon thereafter, i.e. on 15 th
October 2007, an interim order was passed by this High Court in
Writ Petition No. 1165 of 2007 which had affected the
construction work, at least in sofar as 31,500 sq. mtrs pertaining
to the Commercial Complex is concerned. The aforesaid stay order
remained in force until 12th March 2012. Therefore, although a
plinth Commencement Certificate (CC) was issued on 12 th June
2008 permitting construction upto the plinth level, yet, in view of
the composite design of the Convention & Exhibition Centre as
well as the Commercial Complex, having common foundation and
basement, the Petitioner could not commence construction due to
the operation of the stay order. The said fact was also informed to
the Respondent No. 1 vide communication dated 28th January
2009.
70. From the statements made in the Writ Petition and from the
examination of various documents on record, including EIA
Certificate dated 26th June 2013 as well as Article 2 of the
Supplementary Lease Deed dated 13 th July 2007, it is evident that
although the area of 72,500 sq. mtrs was allotted subsequently,
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yet, it was treated as an integral part of the construction to be
carried out with the original built up area.
71. The Writ Petition No. 1165 of 2007 was withdrawn on 12 th
March 2012. As such, on 20th Mach 2012, i.e., after the
withdrawal of the Writ Petition No. 1165 of 2007, the Respondent
No. 1 had approved the allotment of additional 1,00,000 sq. mtrs
to the Petitioner and, thereafter, on 3 rd April 2012, another 25,000
sq. mtrs was allotted thus, increasing the total allotment of built-
up area upto 3,12,500 sq. mtrs. The Commencement Certificate
upto the seventh floor level pertaining to the 3,12,500 sq. mtrs
was issued only on 16th April 2014.
72. In a composite construction of this nature involving complex
layouts, warranting multiple Commencement Certificates to be
issued by the Respondent No. 1, it is inconceivable that the Lessee
would adhered to two different timelines for construction of the
original allotment and the additional built-up area, the
construction whereof is to be carried out over the same plot and in
respect of the same construction. Since the construction in this
case was evidently and admittedly not severeable in nature,
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therefore, we cannot but hold that there could only be one date of
completion of the entire building “fit for occupation”.
73. In view of the above discussion, we are also of the opinion
that although a plinth Commencement Certificate was issued on
12th June 2008 granting permission to complete the construction
only upto the plinth level, yet, in view of the pending Court
proceeding, and operation of the interim order dated 15 th October
2007 such certificate was not capable of being acted upon and,
accordingly, was also not acted upon by the Petitioner. Thereafter,
the Commencement Certificate for the entire building came to be
issued on 16th April 2014. Therefore, commencement of
construction only took place pursuant to the issuance of the
Commencement Certificate dated 16th April 2014.
74. We also find from the materials on record that in view of
the long continuation of the interim order dated 15 th October
2007, the Petitioner wanted to surrender the additional built-up
area of 72,500 sq. mtrs under the Supplementary Lease Deed
dated 13th July 2007 but the said proposal was declined by the
Respondent No. 1. On the contrary, on 8 th November 2011, the
Respondent No. 1 had issued a communication categorically
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representing that there would be “no time-limit” for construction
of the additional built-up area.
75. Further, by the communication dated 1 st February 2012, the
Respondent No. 1 had also confirmed that the period, during
which, the stay order passed by the Court was in force, shall not
be counted for computing the time-limit of four years.
76. The reflections made in the communication dated 8 th
November 2011 as well as 1st February 2012, in our opinion,
clearly holds out a promise to the Petitioner by the Respondent No
1, based on which, the Petitioner had altered its position. Under
such circumstance, the Respondent No. 1 cannot subsequently
resile from such promise. Therefore, any action on the part of the
Respondents to act contrary to the reflection made in the letters
dated 8th November 2011 and 1st February 2012 prejudicially
affecting the interest of the Petitioner would be hit by the doctrine
of promissory estoppel and hence, would be liable to be interfered
with by this court. (See Motilal Padampat Sugar Mills Co. Ltd. vs.
State of Uttar Pradesh & Ors).6
6 (1979) 2 SCC 409.
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77. It would be significant to note here-in that it is not a case
where the construction was delayed due to negligence on the part
of the Lessee. On the contrary, it appears from the materials on
record that the construction was delayed due to delay in issuance
of statutory approvals including environment clearance. Since
even as per the terms and conditions of the Lease Deed, the
construction cannot commence without the approval of the plan
and issuance of the Commencement Certificate, hence, by a
reasonable and harmonious construction of the Articles of the
Lease Deed, we hold that, in such a case, the time line of four
years for completing the construction under Article 2(d) ought to
be computed from the date of issuance of the Commencement
Certificate and not from any prior date.
78. Having regard to the facts and circumstances of this case,
we find that even the condition precedent for invoking the Article
2(d) of the Lease Deed dated 1 st September 2006 was not met in
this case in as much as the construction of the original built-up
area was evidently completed by the Petitioner within the period
of four years from the date of issuance of the Commencement
Certificate i.e. 14th April 2014 by the Respondent No. 1 after
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excluding the period during which the interim order passed by the
High Court was in force. As such, viewed from that angle also, in
our opinion, there was no legal justification for the Respondent
No.1 to insist on additional premium/penalty from the Petitioner
under Article 2(d) on account of alleged delay in completing of
the construction beyond the period of four years.
79. In the above context, it would be relevant to note here-in
that, even if the provision of Article 2(d) of the Lease Deed dated
1st September 2006 is given full weightage, even then, the four
years period for completing the construction reckoned from the
date of executions of the Lease Deed would expire on 30 th August
2010. The interim order passed by the Court on 15 th October 2007
was vacated on 12th March 2012. Therefore, the said order had
remained in force for a period of 4 (four) years 4(four) months
and 26 (twenty six) days, i.e. 1610 days’ in total. If the said period
is added to the completion period, then in that event, even under
Article 2(d), the Petitioner would be entitled for 8 years, 4
months, 226 days’, with effect from 1st September 2006, to
complete the construction without seeking extension of time. In
view of the determination made here-in above, such period of 8
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years 4 months 26 days will have to be counted from 14 th
April,2014 i.e the date on which the first effective Commencement
Certificate facilitating the commencement of construction of the
building was issued. If that be so, by such interpretation of the
Clauses of the Contract, we are of the view that the time available
to the Petitioner to complete the construction of the initial built up
area, without seeking extension of time, would be till August
2022. In so far as the additional built up area is concerned, in
view of the communication dated 8th November 2011, there would
be no time restriction applicable for completing the construction
of the additional built up area. As such, the question of seeking
time extension for completing the construction of the additional
built up area would not at all arise in the eyes of law.
80. After a careful examination of the documents brought on
record, we find that there is no clarity as to on which date the
construction of the entire built-up area of 3,12,500 sq. mtrs was
actually completed by the Petitioner. The impugned Notice dated
12th September 2017 which had imposed additional premium/
penalty upon the Petitioner for delay of 7 years 12 days in
completing the construction also does not furnish any relevant
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particulars in support of the above allegation. The said notice also
appears to be totally vague as regards basis for arriving at the
conclusion that there was 7 years 12 days delay. It is also not
clear, if the penalty was applied for the alleged delay in
completing the construction of the total built-up area including
the Additional Built-up Area or any part thereof.
81. Be that as it may, if the projection made by the Respondent
No. 1 in the impugned notice dated 12 th September 2017 is taken
into account on their face value, even then, if such delay has been
computed with effect from 30th August 2010 i.e. on expiry of 4
years from the date of execution of the Lease Deed dated 1 st
September 2006, the question of delay of seven years twelve days
by excluding the period during which the interim order of the
court was operating, would not arise in this case. We say so
because there was substantial delay in granting statutory
approvals and Commencement Certificate which period, in our
view, would also have to be added to the time available to the
Petitioner to complete the construction.
82. It is pertinent to note herein that the Respondent No. 1 had
made recovery of substantial amount from the Petitioner as
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additional premium/penalty for delay in completion of
construction. However, a transparent procedure valid in the eyes
of law has not been followed in the matter. This we say so because
the Respondent No. 1 had never served any default notice to the
Petitioner intimating that it would be liable to pay penalty due to
delay and completion of construction. There was also no notice
ever served upon the Petitioner indicating as to on which date, the
four years period mentioned in Article 2(d) of the Lease Deed
dated 1st September 2006, would come to an end. Such prior
notice, in our opinion, was sine- qua- non in view of the
intervening developments in the matter , particularly the
operation of the interim order passed by this Court. Before
demanding and/or recovering the amount of penalty, no Show
Cause Notice was also required to be served upon the Petitioner
giving it an opportunity to show cause as to why such penalty
should not be recovered by the Respondents. However, no such
notice was served. Therefore, the entire process of recovery, in our
view, was not only conducted in a completely arbitrary, whimsical
and capricious manner but the same was also in violation of the
principles of natural justice.
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83. It must be borne in mind then that in a matter of this nature
where penalty is sought to be levied alleging default committed by
a party, unless allegation is admitted, the recovery of penalty
cannot be based on mere ipse dixit of the authority more so, if the
controversy arises out of implementation of terms and conditions
of a contract wherein the authority itself is a party. In such
matters, the recovery would be permissible only after that
controversy is resolved in accordance with the law.
84. In the above context, it would be pertinent to mention
herein that even as per Rule 11(A) of the MMRDA (Disposal of
Lands) Regulations 1977, no action to determine the lease could
be initiated by the Metropolitan Commissioner without serving
prior notice as regards specific breach of the covenants and
conditions in respect of which, default has been alleged.
85. In so far as the undertaking given by the Petitioner to pay
the additional premium/penalty and the consequent deposit of the
amount of Rs 646,77,68,594 /- is concerned, it must be noted
herein that the Writ Petitioner had not only objected to the
demand for payment of additional premium/penalty for the
alleged delay in completing the construction but had also
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deposited the amount under protest, thereby, categorically
conveying that the deposit was not made voluntarily or in
discharge of its contractual obligation. Such protest was not only
raised contemporaneously but the same was also in writing and
unambiguous in nature, thus, putting the Respondent No. 1 on
clear notice that the Petitioner has not accepted the decision in
principle.
86. It also appears from the materials on record that apparently
due to the pressure mounted by the Respondent No. 1 demanding
payment of additional premium/penalty, the Petitioner was
compelled to deposit the penalty as otherwise the Petitioner would
not only be prevented from obtaining the Occupation Certificate
thus, causing serious economical prejudice to its interest but the
same would also expose the Petitioner to the risk of termination of
the Lease. Since the Petitioner had evidently made the deposit of
penalty under duress and under compelling circumstances, hence,
the principles of waiver, estoppel and acquiescence would not
operate against the Petitioner in this case. From the protest raised
by the Petitioner, it was apparent that the Petitioner had reserved
its right to agitate the matter at an appropriate time, thus, keeping
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the cause alive. Therefore, we hold that the claim for refund of the
amount made by the Petitioner would not be barred under the law
merely on account of the undertaking given by it.
87. Section 72 of the Indian Contract Act provides that a person
who receives payment made by the payee under coercion must
repay or return the same.
88. In Fatima Khatoon Chowdrain vs. Mahmoed Jan Chowdhury
(1868) 12 Moo Ind App 65, the Privy Council has held that
payment made not voluntarily but under species of compulsion
would be liable to be returned.
89. In Valpy vs Manley (1845) 1 CP 594, the Court of England
& Wales has held that money paid under the constraint of threats
to interfere with the legal right is sufficient to make it recoverable.
90. In Ram Kishen Singh vs. Dooli Chand (1881) 8 IA 93 before
the Privy Council, it was held that if a person pays money to save
his property which has been wrongly attached in execution, he is
entitled to recover it.
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91. Relying upon the case of Ram Kishen Singh (Supra), the
Privy Council in the case of Kanhaya Lal vs The National Bank of
India Limited7 has held that if a payment is made under protest
and involuntarily, under coercion, the party making such payment
would be entitled to claim refund of the same.
92. Materials on record unequivocally go to show that the
deposit of penalty was dehors any proper demand raised in
writing but was forced under the circumstances created by the
Respondent No. 1, as noted above. Hence, by any stretch of
reasonable reckoning, the deposit of the penalty as well as the
undertaking, cannot be treated as voluntarily so as to prevent the
Petitioner to seek refund of the amount in accordance with law.
93. In view of the foregoing discussion, we are of the un-
hesitant opinion that the demand for payment of the
penalty/additional premium for alleged delay in completing the
construction was not maintainable under Article 2(d) & (e) of the
Lease Deed. Moreover, such amount was realized by the
Respondent No. 1 in a most arbitrary, high handed, unfair, and
unreasonable manner by subjecting the Petitioner to undue
7 1913 SCC Online PC 4.
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pressure and threat of termination of the Lease, thus putting its
business interest in peril. The Petitioner was made to deposit the
amount of penalty under coercion. The imposition of the penalty
was also not preceded by proper Show Cause notice thus, acting in
clear contravention of the principle of natural justice. Therefore,
consequences under the law on such counts must follow.
94. In the case of State of Punjab and Ors. vs. Dhanjit Singh
Sandhu (Supra) relied upon by Dr. Saraf, the allottees of the land
had accepted the terms and conditions of the allotment letter and
also took possession but they did not raise any construction within
the specified time, as a result of which, due to violation of specific
condition, the authority wanted to go for resumption of the plot.
In that case, the allottees, after availing the benefit of extension,
had later on demanded refund. It was in such context that the
Apex Court has held that as per the doctrine of “approbate and
reprobate” a party cannot be permitted to “blow hot and cold” at
the same time. In Atur Park-4 Co operative Housing Society Ltd. vs
State of Maharashtra (Supra), the core question, as projected in
paragraph 30, was as to whether, the Petitioner there-in could be
the permitted to seek compensation and seek acquisition under
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Fair Compensation Act for the land belonging to it which was
affected by an adjoining road.In Dr Alvaro Alberto Mousinho De
Noronha Ferreira (Supra), the controversy was as regards
conversion of land from agricultural to non-agricultural land and
the applicability of rates there-in. Therefore, the above decisions
relied upon by Dr. Saraf in our view, are distinguishable on facts
and as such, the same would not be of any assistance to the
Respondents in the facts and circumstances of this case.
95. Having held as above, we deem it appropriate to record
here-in that although the learned Counsel for the Petitioner has
argued that this case is squarely covered by the decision rendered
in Raghuleela Builders Pvt. Ltd. & Anr . (Supra),yet, the said
assertion has been strongly contested by the Respondent’s Counsel
by submitting that in view of the observations made by the
Hon’ble Supreme Court in the order dated 27 th July 2020, no
reliance can be placed on the said judgment on any count for the
purpose of deciding the present Writ Petition. On a careful
examination of the decision in Raghuleela Builders Pvt. Ltd. &
Anr. (Supra) we also find that the said decision was rendered in
the facts of that case. However, it is important to note here-in that
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one of the question raised in the said proceedings was pertaining
to the question as to whether, the decision of the MMRDA to apply
the extension of time from 4 years to 6 years for completing the
construction only to the post August 2015 was valid in the eyes of
law, is also a question raised in the present proceeding. While
answering the said question, it was held in Raghuleela Builders
Pvt. Ltd. & Anr. (Supra), as follows:-
“38. The MMRDA constituted a single member committee of
retired Judge of the Supreme Court to decide whether the
MMRDA should give concession in recovery of premium
considering the time required for plot owner to obtain
permissions from various authorities for construction of building
thereon. It is contended that one member committee has
concluded that the charging of premium for extension of time
for completing construction in Bandra-Kurla Complex area,
specifically in case where additional built up area has been
allotted by the MMRDA, was illegal. In its 138th meeting held
on 26th August 2015, the MMRDA had acknowledged the
difficulties faced by the lessees and that the condition of
completion of construction within 4 years of the execution of the
lease was adversely affecting the tendering process. The
MMRDA had appointed an expert one man committee of retired
Supreme Court Judge in that regard. The single member
committee has advised that the period of 6 to 7 years be granted
for completion of construction.
39. The lease deed entered into by the MMRDA with the
lessees are as per form D, prescribed under the MMRDA
(Disposal of Lands) Regulations 1977. Clause 2(a) of the lease
deed provides that for building plans to be submitted to country
and town planing division for approval within 3 months from
the date of lease. Clause 2(c) of the lease deed provides that no
work is to be carried out until all plans, elevations, specifications
are approved by the concerned authorities. Clause 2(d) provides
that within 3 months of the approval of plans, the lessee is to
commence construction which is to be completed within four
years of the lease. Clause 2(e) provided for extension of time.
Clause 2(e) contemplates a situation when the time for
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may arise which may require more time for completion of the
construction. In view of this, time is not essence of the contract
between the parties and rightly so since construction of any
building in Bandra Kurla Complex, several permissions are
required from the various authorities and not only from the
MMRDA who is planning authority for the Bandra Kurla area,
namely,
(1) The environmental clearance under the
Environmental Impact Notification from the Ministry of
Environment and Forest.
(2) Building height clearance from the Ministry of
Civil Aviation because of the close proximity to Airport.
(3) Clearance from the high rise committee.
(4) Permission from the the MCGM.
(5) Permission from the traffic police.
Each of these authorities is required to be approached
separately since there is no single window clearance / nodal
agency which would co-ordinate with the aforesaid authorities
for granting of all necessary permissions. In view of the delay in
obtaining permissions which are beyond the control of lessee, no
work could be carried out as per clause 2(d) of the lease deed.
40. The MMRDA had issued a letter of allotment dated 20th
March 2012 allotting additional 67,000 sq. meters at
consideration of 984 crore. Part payment of Rs.196 crore was
received on 20th March 2012. The supplementary lease deed
was executed for additional built up area of 67,000 sq. meters.
The letter of allotment dated 20th March 2012, the acceptance
of part payment of consideration for additional built up area
allotted, diluted the time period of four years and there was no
question of application of condition of occupation certificate for
built up area within 4 years when additional built up area was
allotted for raising additional 11 floors on the same building.
41. The resolution passed by MMRDA for extending the time
period for completing construction from 4 years to 6 years only
for leases executed after 26th August 2015 also appears to be
arbitrary, discriminatory, without basis and justification. The said
set of circumstances are prevailing for the construction being
carried out under the leases executed prior to 26th August 2015.
Therefore, not extending this benefit of this extension of time
from 4 years to 6 years to the prior leases in respect of other
plots in the BKC, is completely arbitrary, discriminatory,
capricious and violative of Article 14 of the Constitution of
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India. There is no reasonable basis or justification for this
decision. The classification sought to be made between the
leases prior and subsequent to 26th August 2015 is not founded
on intelligible differentia and neither does this differentia has
any logic, rational, nexus to the object sought to be achieved.
The MMRDA has sought to treat equals as unequal. The lessees
of plots are being discriminated on the basis of their date of
execution of their leases. The lessees who are placed in similar
circumstances prevailing for construction in Bandra Kurla area
are entitled to equal treatment guaranteed under Article 14 of
the Constitution of India.”.
96. It is not in dispute that the Lease Deed involved in
Raghuleela Builders Pvt. Ltd. & Anr. (Supra) was also in Form ‘D’
of the Regulations of 1977 wherein the same Articles 2 (d) and (e)
were involved. The Writ Petitioner there-in was also a similarly
situated lessee, from whom, penalty for delay in completing the
construction beyond the period of 4 years was raised by the
Respondent No 1. The Petitioner in that case had also raised
identical plea as regards the applicability of the time extension
Clause. The Lease Deed in that case was also executed prior to 26 th
August 2015. If that be so there can be no doubt about the fact
that the legal principles discussed and the findings & observations
recorded in paragraphs 38 and 41 of Raghuleela Builders, in so
far as uniform applicability of the 6 years time extension clause is
concerned, would be applicable to the facts of the present case as
well. Therefore, we hold that by applying the principles parity, the
Respondent No. 1 would be duty-bound to extend the same
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benefit of extension of time for completion of construction to six
years to the present Petitioner as well.
97. In the facts and circumstances of this case, we are also of
the opinion that there is no legal justification for the Respondent
No. 1 to confine the benefit of the time extension clause only to
those Lease Agreements which were executed after 26 th August
2015 as such an approach would be highly arbitrary and
discriminatory in nature. Therefore, having regard to the peculiar
facts and circumstances of this case, we do not find any justifiable
ground to take a different view on the aforesaid issue.
98. Law is well settled that for maintaining judicial discipline
and propriety, a decision rendered by a Coordinate Bench on the
same issue must be respected and followed by a Coordinate
Bench. In the case of Mary Pushpam vs. Televi Curusumary & Ors.8
the Hon’ble Supreme Court has observed that when a decision of a
Coordinate Bench of the same High Court is brought to the notice
of the Bench, it is to be respected and would be binding, subject to
the right of the Bench of such co-equal forum to take a different
view and refer the question to a larger Bench. In other words, any
8 (2024) 1 SCR 11.
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decision of a Coordinate Bench would be binding on a Bench of
equal strength subject to the condition that if a different view is
sought to be taken in the matter, then the issue would have to be
referred to a larger Bench.
99. The above legal principle has taken a firm footing in the
Indian Jurisprudence by a long line of judicial pronouncements.
We do not deem it necessary to burden this judgment by referring
to all those decisions. However, suffice it to mention here-in that
unless there are justifiable grounds to take a different view in the
matter warranting reference to a larger Bench, the previous
decision of a coordinate Bench would be binding on a Bench of
equal strength.
100. Consequently, it is held that notwithstanding Article 2(d) of
the Lease Deed dated 1 st September 2006, in view of the decision
taken by the Respondent No 1 to extend the period of construction
from four years to six years, the Petitioner, being a similarly
situated Lessee, would also be entitled to six years’ time for
completion of the construction. Since, the Commencement
Certificate for the entire built up area of 3,12,500 sq. mtrs. was
issued by the Respondent No.1 only on 16 th April 2014, as such,
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we are of the opinion that the Petitioner would be entitled to six
years’ time period, with effect from 16th April 2014, for completing
the construction for the simple reason that in view of the built-up
area subsequently allotted to the Petitioner, there was no scope to
commence construction of the composite construction prior to 14 th
April 2014. Therefore, adding the period of 4 years 4 month and
26 days, during which period, the interim order dated 15 th
October 2007 was in force, the Petitioner, in our opinion, would
be entitled to total time period of 10 years 4 months 26 days with
effect from 14th April 2014. Alternately, even if the period of 10
years 4 months 26 days is counted from 1 st September 2006, i.e.,
the date of the Lease Deed, even then, the Petitioner would be
entitled to such period of time for completing the construction of
the initial built-up area without seeking extension of time. In so
far as the additional built up area is concerned, in view of the
communication dated 08/11/2011, as noted above, no time limit
would at all be applicable for the construction of such built up
area.
101. Therefore, we are constrained to hold that the condition
precedent so as to invoke Articles 2(d) & (e) of the Lease Deed
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Dated 1st September, 2006 was not met in this case. As such, we
are also of the view that no additional premium/ penalty was
either payable or recoverable from the Petitioner on account of
delay in completing the construction.
102. For the reasons stated above, this Writ Petition succeeds
and the same is hereby allowed in terms of payer clauses(a),(a)
(i),(a)(ii)(a)&(b). The impugned Demand Notices dated
12/09/2017 and 13th June 2019 are accordingly, set aside.
103. Consequently, we hold that the Petitioner would be entitled
for refund of the amount of Rs.646,77,68,594 (Rupees Six
Hundred and Forty Six Crores Seventy Seven Lakhs Sixty Eight
Thousand Five Hundred and Ninety Four) deposited as additional
premium/ penalty for the alleged delay in completion of the
construction. The Respondent No 1 is, therefore, directed to
refund the aforesaid amount to the Petitioner within a period of
90 (ninety) days from the date of receipt of the Certified Copy of
this order, failing which, the amount would carry interest at the
same rate at which, interest was payable by the Petitioner under
the Lease Agreement due to delay in paying premium, to be
calculated from the date of this order till the date of the refund.
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104. In so far as the Bank Guarantee(s) furnished by the
Petitioner including that for an amount of Rs.13,12,54,85,287/-
(Rupees Thirteen Hundred Twelve Crores Fifty Four Lakhs Eighty
Five Thousand Two Hundred and Eighty Seven ) the same shall be
kept valid for a period of 90 (Ninety) days from the date of this
order.
105. With the above observations, the Rule is made absolute.
106. The Writ Petition stands disposed of.
107. Parties to bear their own cost.
108. In view of disposal of the Writ Petition, nothing survives in
the Interim Application and the same is disposed of accordingly.
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