JUDGMENT :

Ranjit More, J.

In the instant petition, the Petitioners being aggrieved with the actions of Mumbai Metropolitan Regional Development Authority (MMRDA)-Respondent No.1, have impugned the following-

(i) letter/orders dated 11th February 2014 and 23rd December 2014 issued by the MMRDA demanding payment of penalty premium @ 10% per year on account of alleged delay in completion of construction of 30,550 sq.mtrs built up area (BUA) of the building known as "ONE BKC" at Plot No.C-55, Bandra Kurla Complex, Bandra (E), Mumbai, and

(ii) demand notice dated 12th September 2017 issued by the MMRDA, demanding recovery of penalty in the form of additional premium and interest thereon aggregating Rs.432 crore i.e. Rs.273 crore as penalty upto August 2015, and interest thereon of Rs.159 crore in respect of the same building "One BKC".

2. By way of interim orders, Respondent No.1 was restrained from taking any coercive steps against the Petitioners. Respondent No.1 is the owner of land admeasuring 10183 sq.mtrs bearing plot No.C-66, situated at G-Block, Bandra Kurla Complex, Village Kole Kalyan, Taluka Andheri, and is the planning authority in respect of Bandra Kurla Complex notified area region. Any construction thereon must conform to Bandra Kurla Complex notified area Development Control Regulations 1979. The Bombay Metropolitan Region Development Authority (Disposal land) Regulations 1977 were framed under Section 50 of the MMRD Act.

3. The brief factual matrix of the case is as under :

[A] On 1st November 2007, MMRDA-Respondent No.1 issued a tender inviting bids for the lease of land admeasuring 10,183.18 square meters being Plot No.C-66 situate at 'G' Block, Bandra Kurla Complex, for the construction of a commercial complex of 30,550 sq.mtrs and a public car parking of 20,366 sq.mtrs. This tender was issued pursuant to the MMRDA (Disposal of Land) Regulations, 1977. These Regulations were in fact included as Volume-II of the Bid Booklet. The lease to be executed was to be in accordance with the statutory Form D annexed to the Regulations.

[B] At the pre-bid meetings, in response to queries as to the responsibility for demarcating boundaries and handing over the demarcated land, Respondent No.1 had confirmed that "the MMRDA will hand over the demarcated land to the successful bidder."

[C] On 26.11.2007, Petitioner No.2 had submitted its bid of Rs.918.03 crore for the plot. Respondent No.1 had accepted the offer and had issued a letter of allotment dated 28th December, 2007 to Petitioner No.2. Petitioner No.2 had paid the entire premium amount of Rs.918.03 crores.

[D] On 15th July 2008, lease-deed was executed for public car parking of 20,266 sq.ft. and commercial complex of 30,655 sq. ft. BUA. A lease-deed (in accordance with the statutory Form D) was executed between Respondent No.1 and Petitioner No.2. The lease-deed recorded that the said land admeasuring 10183.18 sq.mtrs and delineated on the plan annexed thereto by a red colored boundary line, had been demised to Petitioner No.2 for a term of 80 years for construction of public car parking admeasuring 20,366 built up area and a commercial complex of 30,655 built-up area. Clause 2(a) required plans for the building/ construction to be submitted to the Town and Country Planning Division of the MMRDA, within 3 months of the date of the lease. Clause 2(d) of the said lease-deed provided that - "The lessee shall, within 3 months from the receipt of approval of its plans and specifications of the said Buildings intended to be erected on the said land, commence and within a period of four years from the date of this lease....build and completely finish, fit for occupation a multi storeyed car parking and commercial complex...Clause 2(e)(i) of the said lease-deed provided that if the lessee did not perform and observe the time limit mentioned in Clause 2(d), the Metropolitan Commissioner may permit extension of time upon payment of additional premium as stated therein.

[E] On 1st August 20