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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SHREE CHANDRASHEKHAR, CJ., SUMAN SHYAM
Shree Naman Hotels Pvt. Ltd. – Appellant
Versus
Mumbai Metropolitan Region Development Authority – Respondent
Judgment :
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 “P”) issued by Respondent No.1–Mumbai Metropolitan Region Development Authority (hereinafter referred to as “MMRDA”), whereby, the said Respondent had demanded payment of additional premium, together with interest, on account of alleged delay in completion of the construction, the Petitioner has approached this Court by filing the present Writ Petition inter alia contending that such demand pertaining to the construction of the basic built-up area of 18,600 sq. mtrs. in the building known as “Sofitel Hotel” on Plot Nos. C-57 and C-58 (combined) at Bandra-Kurla Complex (“BKC”) is contrary to the terms and conditions of the Lease Deed dated 9th June 2006 and, therefore, is arbitrary, illegal, discriminatory and also is in violation of the fundamental rights guaranteed to the Petitioner under Article 14 of the Constitution of India. The facts and circumstances, giving rise to the filing of the present Writ Petition, shorn of unnecessary details, are as hereunder.
4. The Petitioner is
Additional premium demand for construction delay under lease held arbitrary where caused by statutory approvals, late commencement certificates, and extra built-up area without timeline; applicable s....
Penalty for construction delay under lease quashed due to delays from court stay, statutory approvals, additional area; writ maintainable for arbitrary state action; 6-year extension non-discriminato....
Supplementary lease deeming additional built-up area integral with no time limit overrides original four-year completion clause for composite construction; penalty demands arbitrary, illegal; payment....
Lease penalty for construction delay invalid where lessor nondiscloses material site defects, supplementary deed removes time limit for additional built-up area, delays due to approvals/statutory fac....
Imposing penal charges for contract breaches is valid when stipulated policies and terms align with contractual obligations, and acceptance of penalties post-acceptance negates protest claims.
The court ruled that the lack of adherence to procedural fairness in demanding additional lease premium necessitated reconsideration, balancing the interests of both parties.
The court emphasized that administrative discretion must be exercised fairly, considering both parties' interests, especially when external factors impede contractual obligations.
The authority has the power to terminate a lease in case of breach, and a notice must be served before termination.
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