Case Note & Summary
The petitioner, M/s. Paramhari Engineers, a proprietary concern, was allotted a plot of land by the Maharashtra Industrial Development Corporation (MIDC) on 23.01.2008. Possession was handed over on 28.02.2008. The agreement to lease was executed on 26.03.2009 and registered on 30.03.2009. The petitioner sought extension of time to complete construction and obtain a Building Completion Certificate. MIDC demanded Rs.32,42,500/- as non-refundable additional premium, computing the five-year period from the date of possession (28.02.2008). The petitioner challenged this demand, arguing that the period should run from the date of registration of the agreement to lease (30.03.2009). The court held that the agreement to lease is a license, and the period for completion runs from its registration. The demand based on possession date was arbitrary. The court allowed the petition, quashed the demand, and directed MIDC to extend time without additional premium, subject to the petitioner depositing Rs.32,42,500/- with the court registry.
Headnote
A) Industrial Law - Allotment of Land - Period of Completion - The period of five years for completing construction and obtaining Building Completion Certificate under MIDC allotment is to be computed from the date of registration of the agreement to lease, not from the date of possession - The agreement to lease is a license and the period runs from its registration - Held that the demand for additional premium based on computation from possession date was arbitrary and unsustainable (Paras 3-5).
Issue of Consideration
Whether the period of five years for completing construction of factory building and obtaining Building Completion Certificate should be computed from the date of possession or from the date of registration of the agreement to lease.
Final Decision
Writ petition allowed. Communication dated 20.11.2013 demanding Rs.32,42,500/- quashed. Respondents directed to extend time limit up to 27.02.2014 without demanding additional premium. Amount deposited by petitioner to be refunded.
Law Points
- Period of five years for completing construction under MIDC allotment runs from date of registration of agreement to lease
- not from date of possession
- Agreement to lease is a license
- not a lease
- Demand for additional premium without contractual basis is arbitrary
