In a significant ruling, the Bombay High Court has annulled the penalty demand notices issued by the Mumbai Metropolitan Region Development Authority (MMRDA) between 2014 and 2019, deeming them “arbitrary and illegal.” As a result, the court has mandated that over Rs 700 crore be refunded to various entities, including Reliance Industries Ltd.<\/p>\n
The High Court also rejected MMRDA’s attempt to suspend the enforcement of its decision, granting the authority a period of 90 days to process the refunds.<\/p>\n
The penalties in question were aimed at recovering lease premium dues for additional built-up area on properties located in the Bandra-Kurla Complex (BKC), which are owned by MMRDA.<\/p>\n
According to the court’s directive, Reliance Industries Ltd is to receive a refund of Rs 646.77 crore, while Sunteck Realty Limited (formerly known as Starlight Systems) is to be reimbursed Rs 52.8 crore. Additionally, hotel developer Shree Naman Hotels Pvt Ltd will get Rs 8.9 crore, and the Indian Newspaper Society is to receive Rs 22.6 crore.<\/p>\n
A division bench consisting of Chief Justice Shree Chandrashekhar and Justice Suman Shyam upheld the appeals from four entities, represented by senior advocate Vikram Nankani, along with advocates Ankit Lohia and Sujay Kantawala. They annulled the penalty demand notices issued by MMRDA concerning their respective leased properties.<\/p>\n
When MMRDA’s counsel requested a stay on the court’s ruling, the bench denied the motion, emphasizing that the authority’s actions had already been deemed “arbitrary” and could not continue to perpetuate illegality.<\/p>\n
In the case involving Reliance Industries Ltd, the MMRDA had leased a plot in the “G” block to the company in 2006 for an 80-year duration to establish a Convention and Exhibition Centre along with a Commercial Complex. The lease stipulated that construction should be completed within a four-year timeframe. However, in a notice dated September 12, 2017, MMRDA claimed that Reliance had delayed the project by over seven years and sought penalties for the entire duration.<\/p>\n
Reliance filed a petition with the Bombay High Court, which provided temporary relief from coercive measures in December 2017. In February 2019, the company deposited Rs 646.77 crore with MMRDA, supported by a bank guarantee of Rs 1,312 crore, to cover alleged delays from September 2010 to February 2019. Following this, MMRDA issued a partial Occupation Certificate for 44,621 square meters.<\/p>\n
In June 2019, MMRDA introduced a new demand for nearly Rs 1,116 crore as an additional premium for delays related to the completion of extra built-up area under a supplementary lease. The authority also halted the processing of Reliance’s application for a further Occupation Certificate for 1.24 lakh square meters until the dues were settled. However, in 2020, the High Court instructed MMRDA to proceed with the application without requiring payment.<\/p>\n
Upon granting the appeals, the bench remarked on April 8 that the demand for payment of penalties or additional premiums for alleged construction delays was not justifiable under the Lease Deed. Furthermore, the MMRDA’s collection of such amounts was conducted in a manner deemed arbitrary, heavy-handed, and unjust, subjecting the petitioners to undue pressure and the threat of lease termination, thereby jeopardizing their business interests.<\/p>\n
The bench noted that the petitioners were compelled to pay the penalty under coercive circumstances, lacking a proper Show-cause notice and violating principles of natural justice, which indicates that legal repercussions for such actions must follow.<\/p>\n","protected":false},"excerpt":{"rendered":"
In a significant ruling, the Bombay High Court has annulled the penalty demand notices issued by the Mumbai Metropolitan Region Development Authority (MMRDA) between 2014 and 2019, deeming them “arbitrary and illegal.” As a result, the court has mandated that over Rs 700 crore be refunded to various entities, including Reliance Industries Ltd. The High […]<\/p>\n","protected":false},"author":2,"featured_media":6063,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[40,155],"tags":[],"class_list":["post-6064","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-india","category-in-legal"],"yoast_head":"\n