The court ruled that the lack of adherence to procedural fairness in demanding additional lease premium necessitated reconsideration, balancing the interests of both parties.

JUDGMENT

A.S. Bopanna,J.

Leave granted.

2. The appellant- City and Industrial Development Corporation of Maharashtra Ltd., (‘CIDCO’ for short) is before this Court in this appeal assailing the order dated 29.08.2018 passed by the High Court of Judicature at Bombay in W.P.No.12674 of 2017. The said order was passed in the writ petition instituted by the respondents No.1 and 2 herein claiming to be aggrieved by the letter dated 20.04.2016, (signed on 01.07.2016) issued by the appellant herein to the respondent No.3 herein requiring them to pay the sum of Rs.14,05,60,587/- (Rupees Fourteen Crores, Five Lakhs, Sixty Thousand, Five Hundred and Eighty Seven) towards additional lease premium up to 30.03.2007 so as to process the request of respondent No.3 for grant of ‘No dues Certificate’ in their favour which in turn was required to secure Occupation Certificate in respect of the building, from respondent No.4. The High Court having considered the matter has quashed the demand made through the impugned letter dated 20.04.2016/01.07.2016 and has directed the appellant herein to issue ‘No dues Certificate’. The High Court has further directed the respondent No.4 herein to process the application for Occupation Certificate. The appellant is therefore, aggrieved by the order impugned herein.

3. The brief facts leading to the present situation is that the appellant herein allotted plot bearing No.7, Sector 15, CIDCO, Belapur, Navi Mumbai, measuring 3176.25 sq.mtrs to M/s Mehak Developers Pvt. Ltd., the respondent No.3 herein in terms of the New Bombay Disposal of Land Regulations, 1975 . The said allotment was governed by the terms and conditions contained in the Agreement of Lease dated 04.08.1995. The construction was required to be completed by the respondent No.3 as per the time frame agreed including the extended time period. Not putting up the construction within the time frame agreed was to attract payment of additional lease premium retrospectively from 06.08.2001 as per the agreed terms. The fact that the respondent No.3 completed construction of ‘A’ Wing of the building known as Arneja Chambers II within the initially extended period i.e. 31.12.2005 is not in dispute.

4. The issue that has given rise to the instant dispute between the parties is relating to the construction put up as ‘B’ Wing of Arneja Chambers II, in the residual area. In that regard, the fact remains that as per time extended for completion of the construction, the same was to be completed on or before 31.12.2008. Though the respondents No.1 and 2 herein who were the writ petitioners before the High Court and respondent No.3 herein have sought to contend that the construction was complete in all respects prior to 31.12.2008 and, therefore, they are entitled to seek for issue of ‘No dues Certificate’ so as to secure the occupancy certificate without levy of the additional lease premium, the case of the appellant herein is that the construction as required had not been completed except for creation of certain documents in the nature of completion certificate dated 24.12.2008. The appellant contends that the respondent No.3 was, therefore, liable to pay the additional lease premium retrospectively from 06.08.2001 and as such the communication dated 20.04.2016/01.07.2016 was issued to respondent No.3 which is in accordance with the terms of allotment. It is the further contention on behalf of the appellant that there is no privity of contract between the respondents No.1 and 2 herein on the one hand and the appellant on the other. As such, in respect of the said communication issued to respondent No.3 the respondents No. 1 and 2 cannot raise any grievance. It is contended that the writ petition therefore ought not to have been entertained.

5. In the above background, we have heard Mr. Ajit S. Bhasme, learned senior advocate for the appellant, Mr. Shyam Divan, learned senior advocate for respondents No.1 and