The Bombay High Court on April 8 set aside demands exceeding ₹1,100 crore raised by the Mumbai Metropolitan Region Development Authority against Reliance Industries Ltd over alleged delays in completing a convention-cum-commercial complex in the Mumbai suburbs. The court also ordered a refund of ₹646.77 crore recovered from the company under protest.
Court Finds Additional Premium Illegal
A division bench comprising Chief Justice Shree Chandrashekhar and Justice Suman Shyam held that the additional premium claimed by the authority was illegal, arbitrary, and violative of Article 14 of the Constitution. The bench quashed a 2017 demand-cum-show cause notice and a 2019 communication through which the authority sought ₹1,116.83 crore from Reliance for extending the construction timeline in the Bandra-Kurla Complex.
The court directed that the amount already recovered be refunded within 90 days. It added that failure to do so would attract interest at the same rate charged by the authority for delayed premium payments under lease agreements.
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Project Treated as Single Composite Development
The court accepted Reliance’s position that the project was conceived and sanctioned as a single composite structure. It noted that the original and additional areas allotted over time could not be segregated for determining completion deadlines.
Reliance had originally been leased 1.15 lakh square metres in 2006 for a premium of ₹1,104 crore. Over time, the permissible Floor Space Index was increased, resulting in a total development potential of 3.12 lakh square metres on the same plot. The cumulative premium paid for this expanded capacity amounted to ₹4,005 crore.
Time Not Essential Condition, Policy Applied Retrospectively
Rejecting the authority’s argument that construction had to be completed within four years from the lease date, the court held that time was not an essential condition in such leases. It ruled that the construction period should be calculated from the issuance of the first commencement certificate in June 2008.
The bench also found that the authority’s 2015 policy extending the construction period to six years could not be restricted to leases executed after August 2015. It termed the cut-off arbitrary and discriminatory, extending the benefit to Reliance as a similarly placed lessee.
The court further held that payments made by the company under threat of lease termination and denial of occupation certificates amounted to coercion and were liable to be refunded.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
