Bombay High Court
Indian Newspapaer Society vs Mumbai Metropolitan Region … on 8 April, 2026
2026:BHC-OS:8910-DB
Indian-Newspaper-oswp-864-2018-J-R.doc
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 864 OF 2018
Indian Newspaper Society,
A company registered under Section 25 of
the companies Act, 1956, having its
registered office at INS Building,
Rafi Marg, New Delhi 110 001. ...Petitioner
~ versus ~
1. Mumbai Metropolitan Region
Development Authority,
a Body Corporate having its Head
Office at MMRDA Office Building,
SHEPHALI Plot Nos. C-14 & C-15, 'E' Block,
SANJAY
MORMARE Bandra Kurla Complex, Bandra (East),
Digitally signed Mumbai 400 051.
by SHEPHALI
SANJAY
MORMARE
Date: 2026.04.09
2. The Metropolitan Commissioner,
15:15:50 +0530
being the Chief Executive Officer of
the Mumbai Metropolitan Region
Development Authority, having his
office at MMRDA Office Building,
Plot Nos. C-14 & C-15, 'E' Block,
Bandra Kurla Complex, Bandra (East),
Mumbai 400 051. ...Respondents
A PPEARANCES
For the Petitioner Mr. Ankit Lohia, with Mr. Firoz
Patel, Mr. Prashant Ghelani,
Ms. Namrata Vashist & Mr. Darshil
Desai, i/b Markand Gandhi & Co.
For Respondents-MMRDA Dr. Birendra Saraf, Senior Advocate,
with Mr. Nishant Chotani, Mr. Nivit
Srivastava, Ms. Sneha Patil, Ms.
Aditi Sinha, Mr. Hrishikesh Joshi &
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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.
3. Assailing the demand notice dated 12th September 2017
(Exhibit-N) the Writ Petitioner has approached this Court inter alia
contending that the demand for penalty/additional premium on
account of late completion of the construction, raised by the
Respondent No. 1, i.e., Mumbai Metropolitan Region Development
Authority (“MMRDA”), is contrary to the terms and conditions of
the Lease Agreement and, therefore, arbitrary and illegal. The
facts and circumstances, giving rise to the filing of the Writ
Petition, shorn of unnecessary details, are as hereunder.
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4. The Writ Petitioner is a registered company having its office
at INS Building, Rafi Marg, New Delhi 110 001. The Petitioner is a
non-profit organization and plays a central role in protecting and
promoting the interest of the Press in India. The Respondent No. 1
(MMRDA), is an authority set up under a statute viz. the Mumbai
Metropolitan Regional Development Authority Act, 1974
(hereinafter referred to as “MMRDA Act”) and the Respondent No.
2 is its Chief Executive Officer.
5. Based on an application made by the Petitioner-Company,
the Respondent No. 1 had allotted the Plot No. C-63 in ‘G’ Block at
Bandra-Kurla Complex (BKC) vide authority of approval granted
in its 120th meeting held on 24th December 2007.
6. On 17th November 2005, the Respondent No. 1 had allotted
the aforesaid plot admeasuring 10,450 sq. mtrs. to the Writ
Petitioner, on a long term lease of 80 years, for construction of
office complex, on payment of lease premium of
Rs.88,52,75,000/- (Rupees Eighty Eight crores Fifty Two lakhs and
Seventy Five thousand), calculated at the rate of Rs.42,500/- per
sq. mtr.
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7. On 1st December 2005, the Respondent No. 1 permitted the
Petitioner to transfer 40% of the built up area to third party
subject to the condition that the same shall be used only for office
purpose. Consequently, on 14th February 2008, the Petitioner had
entered into a Development Agreement with M/s. Orbit Enterprise
(“Developer”) for development of the said plot.
8. On 18th February 2008, the Petitioner paid the entire lease
premium of Rs.88,52,75,000/- (Rupees Eighty Eight Crores Fifty
Two Lakhs and Seventy Five Thousand) to the Respondent No. 1,
pursuant whereto, Lease Deed dated 9th April 2008, leasing out
the area of 10415 sq. mtrs of land, for a period of 80 years, was
executed by and between the Petitioner and the Respondent No. 1.
As per the Lease Agreement, the permissible built-up area was
20,830 sq. mtrs.
9. Article 2(c) of the Lease Deed dated 9th April 2008 stipulates
that no work shall commence till the plan is approved by the
authority; Article 2(d) lays down that the construction will be
completed within a period of four years from the date of execution
of the Lease Deed; Article 2(e) stipulates that failure to comply
with Article 2(d) would require extension of time that may be
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permitted by the Metropolitan Commissioner on payment of
additional premium, which would be 25% of the premium up to
one year; 35% of the premium between one and two years; and
40% of the premium between two and three years.
10. Pursuant to the execution of the Lease Deed dated 9 th April
2008, possession of the plot of land was handed over to the Writ
Petitioner on 10th April 2008. It would be pertinent to note herein
that when the Lease Deed dated 9th April 2008 was executed, 2.00
Floor Space Index (FSI) was available at Bandra-Kurla Complex
and, therefore, the permissible built-up area on the said plot of
land was 20,830 sq. mtrs only. Accordingly, proposal for
construction of commercial office building with two wings, viz., ‘A’
and ‘B’ wings with two level basement, constituting Ground+3
floors at ‘A’ wing (8,006 sq. mtrs.) and Ground+11 floors in ‘B’
wing (13,650 sq.mtrs) was drawn up by the Petitioner.
11. On 20th April 2008, the construction plan, along with
application for shore-piling and excavation, was submitted by the
Petitioner before the Respondent No. 1. On 30 th May 2008, the
Respondent No. 1 granted permission for excavation and shore-
piling.
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12. On 3rd November 2008, the drawings of the construction
was submitted by the Petitioner before the Respondent No. 1 for
approval. On 8th December 2008, the Respondent No. 1 had issued
deficiency letter asking the Petitioner to obtain ‘NOC’ for the
Environment Impact Assessment (EIA), which was obtained and
submitted by the Petitioner on 8th October 2009. Thereafter, the
plan upto the plinth level was approved.
13. The FSI in the Bandra-Kurla Complex area was
subsequently, enhanced to 4.00. As such, the Respondent No. 1
had offered additional built-up area upto 4.00 FSI to the existing
Lessees. In view of the enhancement in the FSI, the Petitioner, vide
letter dated 22nd September 2009, requested the Respondent No. 1
to allot additional built-up area of 20,830 sq. mtrs. on the same
plot. Acting on such request made by the Petitioner, on 10 th
September 2009, the Respondent No. 1 had allotted additional
built-up area of 20,830 sq. mtrs to the Petitioner against payment
of Rs.204,02,98,500/- (Rupees Two Hundred Four Crores Two
Lakhs Ninety Eight Thousand Five Hundred only), which was
payable in five installments. Liberty was also granted to the
Petitioner to transfer the entire additional built-up area, subject to
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the provision of the Lease Deed. In view of the allotment of the
additional built-up area, the total built-up area allotted to the
Petitioner stood increased to 41,660 sq. mtrs.
14. On 22nd April 2013, a Supplementary Lease Deed was
executed by and between the Petitioner and the Respondent No. 1.
Article 2(c) of the Supplementary Lease Deed clearly stipulated
that there shall be no time-limit, as stipulated in Article 2(d) of
the Lease Deed dated 9th April 2008, for completion of the
construction of the building by using the additional built-up area.
It was further provided that the incremental premises would be
deemed to be the integral part of the demised premise as defined
in the Lease Deed dated 9th April 2008.
15. In the wake of the allotment of additional built-up area
(BUA), as aforesaid, the Petitioner was required to submit revised
building plan so as to consume the new built-up area within the
same plot and the same building. According to the revised plan,
both the wings, namely, ‘A’ and ‘B’ wings would now have G+14
floors. Accordingly, on 29th March 2010, the Petitioner had
submitted amended plan which was approved by Respondent No.
1 on 26th August 2011. Thereafter, on 2nd January 2012, the
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Respondent No. 1 had issued Commencement Certificate (“CC”)
for the 4th to 6th floor in Wing ‘A’ for the built-up area of 5,730.64
sq. mtrs.
16. As per the projection made in the Writ Petition, the
Petitioner had completed construction of the two basements as
well as Ground+9 floors in wing ‘B’ and Ground+6 floors in ‘A’
Wing in the month of April, 2012, thus, substantially consuming
the original built-up area of 20,830 sq. mtrs.
17. In view of the allotment of the additional built-up area, the
height of the building had to also be raised. Therefore, the
Petitioner had applied for height clearance which was granted by
the Airports Authority of India by NoC dated 2nd August 2012.
18. On 18th January 2013, the Respondent No. 1 had issued
Commencement Certificate (“CC”) for ‘A’ Wing (7 th to 12th floors)
and ‘B’ Wing (10th to 12th floors) and, thereafter, on 14th November
2013, the Respondent No. 1 had issued Commencement
Certificate for the plinth level basements as well as G+14 floors of
‘A’ and ‘B’ wings. Thus, the CC for completing the construction of
the entire building, including the basement as well as G+14 floors
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in both the wings, was eventually granted by the Respondent No.
1 only on 14th November 2013.
19. Although there was no written demand for any additional
premium/penalty for extension of time, yet, in view of Article 2(c)
of the Lease Deed dated 9 th April 2008 stipulating outer limit of
four years for completion of the construction, which period had
already expired, on 6th June, 2012, the Petitioner wrote a letter
to the Chief Town Planner of Respondent No. 1 seeking extension
of time for two years as the height clearance was yet to be
received from the Civil Aviation Authorities, New Delhi. The letter
dated 6th June 2012 was followed by another letter dated 10 th
December 2012 renewing the request for extension of time by two
years by citing the reasons for the delay. Thereafter, on 10 th
January 2013, the Petitioner had addressed another letter to the
Deputy Metropolitan Commissioner, Land & Estate Department of
the Respondent No. 1 stating that the completion of the building
would take almost six years due to various reasons and problems.
20. In view of the above request for extension of time made by
the Petitioner, the Respondent No.1 i.e. the MMRDA had proposed
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to levy penalty upon the Petitioner due to the delay in completion
of the construction beyond the time-limit of four years.
21. Although, the Petitioner did not agree with the said decision
and had clarified that the decision would be appealed against, yet,
in the interest of the project, some more time as well as facility of
payment of additional premium under protest, in four quarterly
installments, was made by the Petitioner. By the letter dated 10 th
January 2013, the Petitioner had also assured the Respondent
No.1 that the first installment would be paid on or before 31 st
March 2013 as the project did not have any provision for this
additional burden.
22. On 30th September 2013, the Deputy Metropolitan
Commissioner of the Respondent No. 1 Authority had issued a
letter to the President of the Petitioner-company, granting the
request for extension of time for completing the construction of
the building on Plot No. C-63 in ‘G’ Block of Bandra-Kurla
Complex (BKC) under Lease Deed dated 9th April 2008 for a
period of one year from 9th April 2012 to 8th April 2013, by
charging additional premium at the rate of 10% of the lease
premium payable in advance. In the said letter, it was also
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mentioned that the additional premium payable by the Petitioner,
as on that date, works out to Rs.8,85,27,500/- along with interest
payable for delayed payment, calculated at the rate of 14% per
annum. It was also conveyed that as requested by the Petitioner ,
the Respondent No. 1 was agreeable to the proposal for payment
of the additional premium in four equal quarterly installments
along with interest due thereon, at the rate of 14%, of which, the
first installment would be due on 31 st March 2013. The Petitioner
was, therefore, asked to pay the outstanding dues immediately
along with interest applicable thereon.
23. Thereafter, on 31st October 2013, the Deputy Town Planner
TN & CP Division of Respondent No. 1, had addressed a letter to
the representative of the Petitioner calling upon him to deposit the
amount of Rs.10,05,449/- as scrutiny fee in respect of the
development on Plot No. C-63 in ‘G’ Block at Bandra-Kurla
Complex for “Indian Newspaper Society”.
24. Thereafter, on 22nd August 2014, the Respondents issued a
notice to the Petitioner to pay up the outstanding dues, failing
which, the CC will be revoked and the ‘Lease’ would also be
determined. In the said notice, although reference has been made
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to breach of the terms and conditions of the Lease Deed dated 9 th
April, 2008 as well as the Supplementary Deed of Lease deed
dated 22nd April 2013, in so far as completion of the construction
as “fit for occupation” was concerned, yet, there is no mention of
any specific amount falling due and payable by the Petitioner on
account of the alleged breach of the terms of the Lease
Agreements nor was any particulars furnished as regards the
nature and extent of the breach, so alleged.
25. On 19th September 2014, the Petitioner submitted its reply
to the notice dated 22nd August 2014 as well as the letter dated
31st October 2013, forwarding a Pay Order for an amount of
Rs.73,78,07,466/- as payment of installment for the additional
built-up area. That apart, a separate pay order for an amount of
Rs.13,78,59,150/- was also forwarded towards payment of
penalty/additional premium for granting extension of time for
completion of the construction.
26. The above communication was followed by the letter 22 nd
September 2014 issued by the Petitioner to the Respondent No. 1
inter- alia stating that the payment of premium for the additional
built-up area due to delay in completing the construction has been
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made under protest. It has further been mentioned therein that at
the time of executing the Supplementary Lease Deed allotting the
additional built-up area, it was assured that due to the increase in
additional built-up area the period of completion of construction
would be increased by the MMRDA from four years to six years.
Therefore, the additional premium/penalty was paid without
prejudice to the right of the Petitioner to claim refund of the entire
amount, in case, the period of construction is increased from four
years to six years. Accordingly, a request was made to re-validate
the NoC etc.
27. On 23rd December 2014, the Respondent No. 1 extended the
date of completion of construction of the building to 8 th April 2015
and demanded additional penalty of Rs. 8.85 Crores for the year
2014-2015. On such basis, the Respondent No. 1 claimed that an
amount of Rs.15,44,36,039/- along with interest for delayed
payment, as on 31st October 2014, was due and payable.
28. Eventually, on 12th September 2017, the Respondent No. 1
had issued the impugned Demand Notice calling upon the
Petitioner to pay the outstanding dues, failing which, action under
Articles 5 and 6 of the Deed of Lease would be initiated for breach
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of the Agreement. The said Demand Notice is under challenge in
the present proceeding.
29. In the Reply filed on behalf of the Respondents, the
maintainability of the Writ Petition has been assailed inter-alia on
the ground that the same raises several disputed questions of facts
which cannot be adjudicated in a Writ Petition. By referring to
Section 44 of the MMRDA Act, 1974 read with Rule 5 of the
MMRDA Rules,1976, it has been alleged that alternative remedy,
in the form of an Appeal under Section 44 was available to the
Petitioner. Therefore, the Writ Petition ought to be dismissed on
such ground alone.
30. The Respondents have also alleged that the Writ Petitioner
has approached this Court by suppressing material facts and
particulars; that in the Writ Petition, challenge has been made to
the policy decision of the State without challenging the relevant
provisions of the statute which permits such action; that the Writ
Petition is hit by delay and laches and the same is also barred by
the law of limitation.
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31. The Respondents have further alleged that by failing to
produce the full ‘CC’ dated 14th November 2013, the Petitioner has
suppressed material facts. Since the Petitioner has approached this
Court with unclean hands and, hence, the Writ Petition is liable to
be dismissed on such count alone.
32. While denying and disputing the assertions made by the
Petitioner that the construction of the built-up area as per the
initial allotment of 20,830 sq. mtrs. was completed in the month
of April 2012, i.e., within the stipulated period of four years, it
was contended that such disputed questions of facts cannot be
gone into in a Writ Petition.
33. This Writ Petition was analogously heard along with three
other Writ Petitions being Writ Petition No. 2377 of 2018, Writ
Petition No. 242 of 2018 and Writ Petition No. 3209 of 2017,
involving similar issues whereby, identical reliefs were sought by
the Writ Petitioner(s).
34. Mr. Ankit Lohia Learned Counsel for the Petitioner has
adopted the arguments advanced by Mr Nakani Learned Senior
Counsel for the Writ Petitioners in the connected Writ Petitions.
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Like wise Dr. Saraf, learned Senior Counsel for the Respondents
has also advanced common arguments in this Writ Petition as well
in Writ Petition No 242 of 2018, supporting the statements made
in the Reply Affidavit.
35. We have considered the pleadings brought on record and
have also gone through the documents annexed therein.
36. At the very outset, it deserves to be mentioned herein that
although the maintainability of the Writ Petition has been assailed
on the ground that several disputed questions of facts are involved
there-in, yet, after examining the record, we find that save and
except the claim of the Petitioner as regards the date of
completion of the first phase of initial built-up area of 20,830 sq.
mtrs., all other assertions made in the Writ Petition are based on
documents annexed thereto, which are admitted documents.
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 based on interpretation of
the relevant clauses of the Lease Agreement(s) as well as the
documents exchanged by and between the parties, we are of the
considered opinion that the date of completion of the first phase
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of the initial built up area would not have much of a material
bearing in the out come of the Writ Petition.
37. In the case of Joshi Technologies International IBC vs. U.O.I.
& Ors.,1 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 monetory 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.
38. Likewise, in Banda Development Authority, Banda vs.
Motilal Agarwal & Ors.2 the Hon’ble Supreme Court has observed
1 (2015) 7 SCC 728.
2 (2011) 5 SCC 394.
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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.
39. 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.
40. 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,3 it
was pointed out that Article 14 would strike at arbitrariness in
State action and ensure fairness and equality of treatment.
3 (1974) 4 SCC 3.
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41. 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.
42. In so far as the plea of availability of alternative remedy is
concerned, from a reading of Section 44 of the MMRDA, Act 1974,
we find that the provision for Appeal provided thereunder, is
pertaining to disputes regarding recovery of money due to the
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, 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.
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43. We also find that all material facts have been stated in the
Writ Petition. Therefore, the Writ Petition cannot also be dismissed
on account of suppression of facts.
44. In view of the above discussions, we hold that the Writ
Petition is maintainable in law as well as in the facts and
circumstances of the case.
45. Having held as above, it would be pertinent to mention
herein that our attention has been invited to an earlier decision
rendered by a co-ordinate Bench of this Court (Coram: Ranjeet
More & Bharati Dangre, JJ) dated 20 th November 2019 passed in
Raghuleela Builders Pvt. Limited and Anr. vs. The Mumbai
Metropolitan Regional Development Authority & Ors. 4 wherein
issues of similar nature were involved. In that case also the Writ
Petitioners had challenged a similar Demand Notice dated 12 th
September 2017 issued by the Respondent No.1 by invoking
identical Articles in the Lease Deed as well as the Supplementary
Lease Deed, thus demanding payment of a sum of Rs. 432 Crores
as penalty for the delay in completion of construction of the
building. In that case also, the initial built up area was 30550 sq.
4 (2020) (1) ABR 397: 2019 SCC OnLine Bom 4529.
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meters, which was to be consumed by constructing 9 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 into construction of 11
additional floors in the same building. Due to addition in the built
up area, the construction of the building could not be completed
within four years, as a result of which, Demand Notice dated 12 th
September, 2017 was served on the Lessees for recovery of
penalty/additional premium along with interest calculated
thereon.
46. By the Judgment and Order dated 20th November 2019,
rendered in Raghuleela Builders Pvt. Ltd. & Anr . (Supra), a
Division Bench of this Court had set aside the impugned Demand
Notice dated 12th 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 for completion of the building “Fit for
occupation”, from four years to six years, the demand for
penalty/additional premium for delay in completion of
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construction within four years was ex-facie unreasonable,
unjustified and discriminatory.
47. 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 27th July 2020 by taking note of the findings
recorded in paragraphs No. 39 and 41 of the Judgment and Order
dated 20th November 2019. However, it was clarified that since the
judgment of the Division Bench of Bombay High Court in
Raghuleela Builders Pvt. Ltd. & Anr. (Supra) 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 by the following order:-
“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.
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.”
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48. 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.
49. From the plain reading of order dated 27th July 2020, what
transpires is that the Hon’ble Supreme Court had observed that
the decision in Raghuleela Builders Pvt. Ltd. & Anr . (Supra) was
passed in the facts of that case. However, in our considered
opinion, we can take note of the legal principles, if any, emanating
from the said decision. In that view of the matter we are unable to
agree with the submission of learned Counsel for the Respondent
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.
50. The question of maintainability of a Writ Petition is mixed
question of law and facts. Therefore, such question has to be
answered by taking note of the facts and circumstances of each
case. Having regard to the peculiar facts and circumstances of this
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case and also 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, we are not
inclined to non-suit the Petitioner merely on the plea of
maintainability raised by the Respondents.
On Merit :-
51. By referring to the materials available on record the
learned Counsel for the Petitioner has argued that after the
allotment of the additional built-up area of 20,830 sq. meters,
which was required to be used on the same plot and the same
building, it was impossible to segregate the construction and
complete the construction of initial built-up area of 20,830 sq.
meters “fit for occupation”, inasmuch as, various services, such as,
cooling tower, air cool chillers, exhaust fans for toilet exhaust, DG
exhaust, pipes, fresh air fans for AHU, pressurization fans for
staircase, etc. were common facilities for the entire building and
therefore, were required to be located on top of 14 th floor of the
building, which would not be possible until the entire construction
is completed. As a result of the same, the Building cannot be
completed “fit for occupation” without such facilities. Likewise,
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submits the learned counsel, it would not be possible to obtain fire
NOC, storm-water drainage completion certificate, service lift /
fire lift approval, etc. from the Statutory Authorities until the
construction of the entire building was completed. It is also the
submission of learned Counsel for the Petitioner that the demand
for penalty for delay in construction was unsustainable in law, as
the ‘No Time Limit’ clause would be applicable to the entire
building after the additional built-up area was allotted.
52. By referring to the subsequent decision of the MMRDA to
grant six years time for completion of construction of the buildings
but keeping it confined only to those leases which were granted
after 25th August 2015, the learned counsel has argued that such
differentia is wholly arbitrary, illegal, discriminatory and devoid of
any rational basis. The learned counsel for the Petitioner further
submits that the Respondent No.1 has not disclosed any
reasonable basis for making a distinction between pre-August
2015 and post-August 2015 lease agreement for granting
additional period of time for completion of construction without
levying any penalty, notwithstanding the fact that the lessees of
both the categories were similarly situated and were facing similar
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nature of challenges in completing the construction, which facts
were well within the knowledge and understanding of the
Respondent No.1. Therefore, he submits that the impugned
Demand Notice is illegal and hence, liable to be set aside by this
court.
53. Dr. Birendra Saraf, learned Senior Counsel appearing for the
Respondents, on the other hand, has submitted that the
Petitioners, having executed a Lease Deed which contains a
specific stipulation in the form of Article 2(c) permitting levy of
penalty due to delay in completion of construction beyond four
years, cannot now turn back and question such decision of the
authority. It is also his submission that the Petitioner cannot be
permitted to question the policy decision of the Respondent No.1,
which has the backing of a statute. On such count, the learned
senior counsel has submitted that the Writ Petition deserves to be
dismissed with cost.
54. 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
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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 cannot
commence until all statutory approvals including the approval of
building plan etc is received by the Lessee. 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 authority.
55. 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 also the Commencement Certificate
cannot be issued. Unless the Commencement Certificate is issued
by the Authority, 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
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case of delay in granting approval by these statutory authorities
coming in the way of early commencement and completion of the
construction.
56. 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. Therefore, if there is delay in
granting permissions/ approval by the statutory authorities for any
reason whatsoever, leading to delay in commencement of
construction, then even in that event, the Lessee will be left with
no option but to complete the construction within the stipulated
time for no fault on its part. Yet, as per 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.
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57. From a plain reading of the documents brought on record,
more particularly, the Deed of Lease dated 9 th April 2008, it is
apparent that in view of the applicability of 2.00 FSI, the
Respondent No.1 had initially granted built-up area 20,830 sq.
mtrs only to the Petitioner by realizing the agreed premium.
However, subsequently, after the FSI was increased for the Bandra-
Kurla Complex area to 4.00, additional built-up area of 20,830 sq.
meters was allotted to the Petitioner. Consequently, a
supplementary Lease Deed dated 22 nd April 2013, was executed.
In Article 2(c) of the Supplementary Agreement, the time
restriction for completion of the building within four years was,
however, dispensed with and in its place, the time period for
completing the construction was made unlimited. Since the entire
controversy in this proceeding revolves around the pertinent
clauses of the two Lease Deeds, hence , we deem it appropriate to
reproduce the relevant clauses of the lease deeds as hereunder :-
58. Article 2 of the Lease Deed Dated 9 th April 2008 reads as
follows:-
“2. The Lessee hereby agrees to observe and perform the
following conditions that is to say:
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(c) No work to begin until plans are approved: No work
shall be commenced or carried on which infringes any of the
Development Control Regulations and Building Regulations set
out in the THIRD SCHEDULE hereto as also Municipal or any
other Regulations so far as the same are applicable to the said
land or to the use to which the said land and/or building there
upon is going to be put to, being the subject of these presents,
or until the said plans, elevations, sections, specifications and
details shall have been to approved as aforesaid and thereafter
shall not make any alterations or additions there to unless
such alternations and additions shall have been previously, in
like manner, approved.
(d) Time limits for commencement and completion of
construction work: That the Lessee shall within three months
from the receipt of approval of his plans and specifications of
building or buildings intended to be erected on the 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, to the satisfactions of the Metropolitan
Commissioner and confirming to the building lines marked on
the plan hereto annexed, and the Development Control
Regulations and Building Regulations, build and completely
finish, fit for occupation a building to be used as building with
all requisite drains and other proper convenience thereto.
(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 building or otherwise
development 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 premium
Between 1 and 2 years ______ 35 percent of the premium
Between 2 and 3 years ______ 40 percent of the premium
(ii) If the Metropolitan Commissioner shall refuse to permit
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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 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 have
given to the Lessee or left on some part of the demised
premises a notice 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 a notice on him on the notice being left on
the demised premises.”
59. Thereafter, a Supplementary Lease Agreement was entered
by and between the parties on 22 nd April 2013 covering the
additional built up area. Articles 2(c), 2(d) and 2(e) of the
Supplementary Lease Deed are reproduced as hereunder:-
“2. It is hereby agreed and declared by and between the
parties hereto that–
(b) The Lessee shall use the said additional build up area
on the plot allotted to them and shall be at liberty to assign
the said constructed build up area subject to the terms &
conditions and covenants as setout in the said Lease Deed.
(c) All the conditions and covenants including the terms
of the lease and except the condition in Article 2(d) as
contained in the said Deed of Lease shall be deemed 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 permitted to be
constructed and to be leased by the Lesor to the Lessee shall
be deemed to be the integral part of demised premises as
defined in the said Deed of Lease dated 9 th April 2008,
annexed hereto as ANNEXURE-I. There shall be no time limit
as contained in the Article 2(d) of the said Deed of Lease for
completion of construction of the building by using the said
additional built up area.
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(d) The Lessee shall not apply and Lessor shall not grant
Occupation Certificate in respect of the premises
constructed by using the said additional built up area as
required under the Development Control Regulations and
Building Regulations as also Municipal or any other
regulations so far as the same are applicable to the said plot
of land or to the use for which the said plot of land and/or
building there upon is going to be put to, unless Lessee pays
to the Lessor the balance lease premium of the said additional
built up area with interest due thereon or any other amount
due to the Lessor.”
60. The use of expressions such as “the incremental premises”
which shall be deemed to be “integral part of the demised
premises as defined in Deed of Lease dated 9th April 2008,” used in
Article 2(c) of the Supplementary Lease Deed makes it abundantly
clear that it was a case of composite construction meant to be
carried out over the same plot of land and in the same building.
Article 2(c) of the Supplementary Lease Deed dated 22 nd April
2013, also makes it amply clear that there shall be “no time limit”
for completion of construction of the building by using the
additional built-up area. It is, therefore, evident that after the
signing of the Supplementary Lease Deed dated 22 nd April 2013, in
view of Article 2(c), time was no longer the essence of the
contract for development of the land.
61. The unambiguous expressions used in Article 2(c) of the
Supplementary Lease Deed had clearly displaced the time
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restriction imposed under Article 2(d) of the Lease Deed dated 9 th
April, 2008 for completing the construction as long as the
construction is carried out by using the additional BUA. Had it
been the intention of the parties to still continue with time
restriction clause, as envisaged in Article 2 (d) of Lease Deed
even after allotment of the additional Built up Area and signing of
the Supplementary Lease Deed, then in that event, the said aspect
of the matter would have been clarified in the subsequent
agreement. However, the same was not done. If that be so, the
irresistible conclusion that would follow is that in view of Article
2(c) of the Supplementary Lease Deed dated 22 nd April 2013,
Article 2(d) of the original Lease Deed dated 9 th April 2008
imposing the time restriction for completing the construction was
no longer enforceable. We are, therefore, of the unhesitant
opinion that, in view of Article 2(c) of the Supplementary Lease
Deed, the Respondent No.1 did not have any right under the Lease
Agreement to insist on the time restriction clause of four years for
completing the construction by using the additional built up area.
62. It would be further pertinent to note herein that even
assuming that Article 2(d) of the Lease Deed dated 9 th April 2008,
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had any relevance after the allotment of the additional built-up
area, even then, it is apparent after the expiry of the four years
time from the Date of execution of the Lease Deed, although the
construction of the building was still incomplete, no default notice
was served upon the Petitioner. As a matter of fact, until 22 nd
August 2014, the Respondent No.1 had never raised any demand
seeking penalty nor did it threaten to determine the lease for any
reason whatsoever. The demand for payment of additional
payment/ penalty was also raised, under the circumstances noted
above, without calling for any explanation from the Petitioner as
to why such demand should not be raised, thus acting in clear
violation of the principles of the natural justice and administrative
fair play.
63. Although, there is no written communication from the
Respondent No. 1 available on record intimating the Petitioner
regarding expiry of the time limit for completing the construction,
yet, it appears that the Petitioner had, on its own volition, issued
communications dated 6th June 2012 (Exh.F) seeking extension of
time, which was followed up by the subsequent communications
dated 10th December 2012 (Exh.G) and 10th January 2013
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(Exh.H), whereby, it had deposited the amount of penalty for
delay but under protest. In all probability, such demand was made
by the Petitioner on the projection made by the Respondent No.1
threatening to determine the lease, thus, jeopardizing the entire
construction. However, since the payment was made under protest
and by reserving the right of the Petitioner to seek refund and
considering the fact that such demand was in conflict with Article
2(c) of the Supplementary Lease Deed dated 22 nd April 2013,
hence, we are of the view that the mere fact that the amount had
been deposited by the Petitioner would not be prejudicial to its
interest in any manner.
64. We also note herein that in the Demand Notice dated 22 nd
August 2014, although a threat was held out to determine the
lease until the outstanding dues were cleared by the Petitioner, the
Respondent No.1 did not specify any amount nor referred to the
specific articles of the Lease Deed which had allegedly been
violated by the Petitioner. Even in the subsequent Notice dated
12th September 2017, there is no mention as to in what manner,
the Petitioner had acted in violation of any specific Article of the
Lease Deed or for that matter, the exact amount which was found
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to be due and recoverable from the Petitioner. Considering the
nature of controversy involved in this Writ Petition, we deem it
appropriate to reproduce the Demand Notice dated 12 th
September 2017, as hereinunder:-
EXHIBIT = ‘N’
MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY
eqacbZ egkuxj izns’k fodkl izkf/kdj.k
_________________________________________________________
No.LEC/BKC (G)/INS(C-63)/1792/2017 Date: 12th September 2017
NOTICE
WHEREAS the Mumbai Metropolitan Region Development
Authority issued a Show Cause Notice dated 22/08/2014 for
non-payment of requisite dues and non-performance of the Lease
Deed conditions as stated therein.
WHEREAS you have submitted your say along with
explanation vide your letter dated 19/09/2014 & 22/09/2014.
WHEREAS your representation/explanation is examined
thoroughly and no merit was found in the submission/
explanation given by you.
AND WHEREAS the explanation submitted vide your
letter 19/09/2014 & 22/09/2014 dated with reference to the
Show Cause Notice is unsatisfactory and hence was summarily
rejected vide our letter dated 23/12/2014.
WHEREAS you were instructed to pay the outstanding
dues as stated in the Notice under reference within a period of 30
days. However, till date you did not pay the requisite dues to
MMRDA and thus failed to comply with your obligations.
AND WHEREAS the amount due to the Authority along
with the interest due thereon is as shown in the statement
annexed hereto as Annexure- A & B. An amount due to Authority
is un-paid till date & thus you have therefore committed breach
of the terms and conditions of the said Deed of Lease and
therefore, the Authority has power to recover the said due
amount as stated hereinbefore as arrears of land revenue and
also resume the said land as per the Article 5 and 6 of the said
Deed of Lease.
NOW THEREFORE, in exercise of the powers conferred by
Articles 5 and 6 of the said Deed of Lease, I, the Dy. Metropolitan
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Indian-Newspaper-oswp-864-2018-J-R.docCommissioner of the Authority hereby call upon you to remedy or
cause to be remedied within 30 days from the date of this notice.
Please take further notice that in the event of the default to
comply with this requisition, the Authority will have the right to
determine the Lease and enter upon the premises and proceed
further to recover the due amount stated hereinbefore as arrears
of land revenue.”
Sd/-
(A.R. Wankhade)
Dy. Metropolitan Commissioner,
M.M.R.D.A.
To,
The President,
Indian Newspaper Society,
INS Building,
Rafi Marg, New Delhi -110 001.
65. From a plain reading of the impugned Demand Notice, it is
clear that the same is devoid of any specific particulars as to the
head on which the amount was sought to be recovered. Rather, it
appears to be a completely vague and unsubstantiated notice
which did not refer to violation of any specific article of the Lease
Deed. Moreover, although the demand was admittedly a penal
action, no prior Show Cause was served upon the Petitioner
calling for any explanation. As such, impugned demand notice, in
the opinion of this Court, is liable to be declared illegal on the
ground of violation of the principles of natural justice alone.
66. There is no controversy in this case about the fact that the
Lease Deed(s) are contract agreements within the meaning of
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Section 10 of the India Contract Act,1872. Law is well settled that
while constructing the terms of a contract, the documents must be
read as a whole so as to ascertain the true intent of the parties.
67. In the case of Bank of India & Anr. Vs K. Mohandas, 5 the
Hon’ble Supreme Court has held that it is well recognized
principle of construction of contract that it must be read as a
whole in order to ascertain the true meaning of its several clauses
and the words of each clause should be interpreted so as to bring
them into harmony with the other provisions if that interpretation
does no violence to the meaning of which they are entirely
susceptible to. The observations made in paragraph 28 would be
relevant in the present case and, therefore, are being reproduced
herein-below for ready reference:-
“28. The true construction of a contract must depend upon the
import of the words used and not upon what the parties choose
to say afterwards. Nor does subsequent conduct of the parties in
the performance of the contract affect the true effect of the clear
and unambiguous words used in the contract. The intention of
the parties must be ascertained from the language they have
used, considered in the light of the surrounding circumstances
and the object of the contract. The nature and purpose of the
contract is an important guide in ascertaining the intention of the
parties.”
68. In the present case, if the intent of the parties was to
continue with the original time restriction clause as per Article
5 (2009) 5 SCC 313.
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2(d) of the Lease Deed dated 9th April 2008 notwithstanding the
allotment of the additional built up area, then in that event, there
was nothing preventing the Respondent No 1 to clarify the same in
the Supplementary Leased Deed. The same was, however, not
done. On the contrary, as has been noted above, a specific
stipulation in the form of Article 2(c), completely dispensing with
the time restriction, was inserted in the Supplementary Lease
Deed, thus signifying a clear policy shift as regards the time
restriction for completing the construction.
68. Law is well settled that the onus to remove ambiguity in a
contract would always be on the party drafting the contract.
Therefore, if there is any ambiguity in the contract, the benefit of
the same must be resolved in favour of the party which is not
responsible for creating the ambiguity.
69. The legal maxim “Contra Proferentum” means, ambiguity to
be resolved against the party which had drafted the contract.
While dealing with the maxim “Contra Proferentum”, the Hon’ble
Supreme Court, in case of Industrial Promotion and Investments
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Corporation of Orissa Ltd., vs New India Assurance Co. Ltd. &
Anr.,6 has made the following observations:-
“We proceed to deal with the submission made by the counsel
for the appellant regarding the rule of contra proferentem. The
Common Law rule of construction “verba chartarum fortius
accipiuntur contra proferentem” means that ambiguity in the
wording of the policy is to be resolved against the party who
prepared it. MacGillivray on Insurance Law deals with the rule
of contra proferentem as follows:
“The contra proferentem rule of construction
arises only where there is a wording employed by those
drafting the clause which leaves the court unable to
decide by ordinary principles of interpretation which of
two meanings is the right one. ‘One must not use the
rule to create the ambiguity — one must find the
ambiguity first.’ The words should receive their
ordinary and natural meaning unless that is displaced
by a real ambiguity either appearing on the face of the
policy or, possibly, by extrinsic evidence of surrounding
circumstances.”
70. From a careful analysis of Articles 2(d) of the Lease Deed
dated 9th April,2008 and Article 2(c) of the Supplementary Lease
Deed dated 22nd April,2013, we are of the opinion that both the
Articles cannot be simultaneously enforced in the respect of the
same construction since the construction is composite in nature.
We, therefore, find force in the submission of the learned counsel
for the Petitioner that it would be impossible to implement Articles
2(d) of the Lease Deed and 2(c) of the Supplementary Lease Deed
referred to above, on the same construction and at the same time.
6 (2016) 15 SCC 315
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71. We have taken note of the stand of the Respondents that
Clause 2(d) of the Lease Deed dated 9 th April 2008 puts in place a
policy decision of the authority and, therefore, the same is not
amenable to challenge by one of the contracting parties by
invoking the writ jurisdiction of the Writ Court under Article 226
of the Constitution of India. However, we are of the view that such
arguments of the Respondents cannot be countenance in view of
the law laid down in the case of Industrial Promotion and
Investments Corporation of Orissa Ltd., vs New India Assurance
Co. Ltd. & Anr. (Supra), which categorically lays down that the
principle of “Contra Proferentum” would apply even in a case
where there is ambiguity in the wording of the policy.
72. It would be apparent from the observations made above
that the Petitioner did not deposit the amount of Penalty
voluntarily but the same was done under pressure and on the face
of the threat issued by the Respondent No. 1 to terminate the
Lease and also cancel the CC. Therefore, it is apparent that the
amount of penalty deposited by the Petitioner was obtained under
duress and / or coercion.
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73. 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.
74. In Fatima Khatoon Chowdrain vs. Mahmoed Jan
Chowdhury,7 the Privy Council has held that payment made not
voluntarily but under species of compulsion would be liable to be
returned.
75. In Valpy vs Manley,8 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.
76. In Ram Kishen Singh vs. Dooli Chand9 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.
77. Relying upon the case of Ram Kishen Singh (Supra), the
Privy Council in the case of Kanhaya Lal vs The National Bank of
India Limited10 has held that if a payment is made under protest
7 (1868) 12 Moo Ind App 65.
8 (1845) 1 CP 594.
9 (1881) 8 IA 93.
10 1913 SCC Online PC 4.
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and involuntarily, under coercion, the party making such payment
would be entitled to claim refund of the same.
78. In view of the discussions in the foregoing paragraphs, we
are of the considered opinion that the demand for additional
premium/penalty raised by the Respondent No. 1 on account of
delay in completing the construction was dehors the terms of the
Lease Deed and hence, was not authorized under the law. The
Respondents have acted in a highly arbitrary and high handed
manner by realizing such amount from the Petitioner under duress
and coercion.
79. It is to be noted here that in a matter of this nature, where
the Authority is seeking to recover penalty for default on grounds
which are not admitted, the recovery cannot be based on mere
ipse dixit, but upon proper resolution of the controversy in
accordance with law, more so, when such claim arises out of a
contract wherein the Authority itself is a party.
80. 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
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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
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 heldPage 44 of 50
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Indian-Newspaper-oswp-864-2018-J-R.docon 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
completion of construction can be extended, parties to the
contract contemplated that certain uncertainties or situations
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.
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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
same 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
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.”.
81. 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
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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
benefit of extension of time for completion of construction to six
years to the present Petitioner as well.
82. 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.
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83. 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.11 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 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.
84. 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
11 (2024) 1 SCR 11.
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decision of a coordinate Bench would be binding on a Bench of
equal strength.
85. For the reasons stated above we hold that the Demand
Notices dated 22nd August 2014 as well as 12 th September 2017
are illegal, dehors the terms and conditions of the Lease Deeds as
well as the authority of law. Therefore, the same are hereby set
aside.
86. The Writ Petition stands allowed in terms of prayer clauses
(A) and (B).
87. From the statements made in the Writ Petition it appears
that the Petitioner had deposited an amount of Rs 13,78,59,150/-
as penalty by the letter dated 19/09/2014 and thereafter, a
further amount of Rs. 8.85 crores on 23/12/2014, totaling to Rs
22,63,59,150/-. In view of the determination made above, the
Respondent No. 1 is directed to verify and refund the entire
amount paid by the Petitioner on additional premium/penalty,
within a period of 90 (ninety) days from the date of receipt of a
Certified Copy of this order, failing which, the amount would carry
interest at the rate of 14% per annum i.e. the same rate at which,
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interest was payable by the Petitioner under the Lease Agreement
due to delay in payment of outstanding dues, to be calculated
from the date of this order till the amount is refunded.
88. With the above observations, Rule is made absolute.
89. The Writ Petition is disposed of accordingly.
90. Parties to bear their own costs.
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