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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SHREE CHANDRASHEKHAR, CJ., SUMAN SHYAM, J.
Shree Naman Hotels Pvt. Ltd. – Appellant
Versus
Mumbai Metropolitan Region Development Authority – Respondent
Writ Petition No. 3209 of 2017
Decided On : 08-04-2026
| Table of Content |
|---|
| 1. petition admitted for immediate final hearing. (Para 1 , 2 , 28) |
| 2. delays from approvals, additional fsi, demand raised. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25) |
| 3. parties contest demand's legality and estoppel. (Para 26 , 27) |
| 4. delays uncontrollable; additional area resets timeline. (Para 29 , 30 , 31 , 32) |
| 5. demand contractual; writ barred by limitation. (Para 33 , 34 , 35 , 36) |
| 6. writ maintainable; public law violation alleged. (Para 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52) |
| 7. lease silent on approval delays; unconscionable. (Para 53 , 54 , 55 , 56) |
| 8. approvals delayed start; additional fsi extended. (Para 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70) |
| 9. time computed from commencement certificate issued. (Para 71 , 72 , 73) |
| 10. coerced payments under protest refundable. (Para 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82) |
| 11. precedent binding; six-year period retrospective. (Para 83 , 84 , 85 , 86 , 87 , 88 , 89) |
| 12. demand illegal; full refund directed. (Para 90 , 91 , 92 , 94 , 95) |
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 a company incorporated under the provisions of the Companies Act, 1956 having its registered office at Opera House, Mumbai. It is a subsidiary of “Shree Naman Developers Ltd”.
5. The Respondent No.1, MMRDA is a statutory authority constituted under the Mumbai Metropolitan Region Development Authority Act, 1974 (hereinafter referred to as “the MMRDA Act”) and the Respondent No. 2 is the Metropolitan Commissioner of MMRDA.
6. The Respondent No.1, being the owner of the land, had floated a Tender on 8th February 2005, for grant of 80-years lease in respect of Plot Nos. C-57 and C-58 (combined) admeasuring approximately 8,092.40 sq. mtrs., situated in ‘G’ Block of Bandra- Kurla Complex, for construction of a Star Category Hotel with the maximum permissible built-up area of 18,600 sq. mtrs. The said tender was issued in terms of the provisions of the Mumbai Metropolitan Region Development Authority (Disposal of Land) Regulations, 1977. Although the bid process was initiated by Respondent No. 1 on 8th February 2005, yet, the same was kept in abeyance. Thereafter, fresh bids were invited by the Respondent No.1 on 18th November 2005 with revised terms including revised the reserve price.
7. In response to the above tender, the Petitioner’s parent company, viz., Shree Naman Developers Ltd. (“SNDL”), had submitted its bid on 30th December 2005, offering premium of Rs.1,10,000/- per sq. mtrs., aggregating to Rs.204,60,00,000/- for the entire plot. The bid submitted by the SNDL came to be accepted by Respondent No.1 in its 115th Meeting held on 3rd February, 2006, under Resolution No.1072. Accordingly, Letter of Allotment dated 14th Februar
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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