Case Note & Summary
The Petitioner No.1, a company incorporated under the Companies Act, 1956, successfully bid for a plot in Bandra-Kurla Complex leased by the Mumbai Metropolitan Region Development Authority (MMRDA) for construction of a Convention and Exhibition Centre and Commercial Complex. A Lease Deed dated 1 September 2006 was executed, requiring construction completion within four years, with provision for extension on payment of additional premium. After allotment of additional built-up area, a Supplementary Lease Deed was executed on 13 July 2007. A third party filed Writ Petition No. 1165 of 2007 challenging the grant of additional FSI, and an interim order dated 15 October 2007 restrained the Petitioner from utilizing the additional FSI for the commercial complex. The Petitioner sought extension of time and exclusion of the period of the stay from the construction timeline. MMRDA by letter dated 1 February 2012 agreed to exclude the period during which the stay was operative. The stay was vacated on 12 March 2012 upon withdrawal of the writ petition. Further additional built-up area was allotted to the Petitioner, increasing total built-up area to 3,12,500 sq. mtrs. for an aggregate premium of Rs.4,005 crores. MMRDA issued a demand-cum-show cause notice dated 12 September 2017 demanding additional premium for alleged delay of 7 years and 12 days, and a further demand dated 13 June 2019 for Rs.1116,83,10,102/- as additional premium with interest towards extension of time for construction using additional built-up area. The Petitioner filed a writ petition under Article 226 of the Constitution of India challenging these demands, contending that the delay was caused by the court stay and that MMRDA had agreed to exclude the period. The Court heard the matter finally by consent of parties. The judgment remained reserved and was pronounced on 8 April 2026. The instant extract covers the factual background and does not include the Court’s analysis or final order.
Issue of Consideration
Whether the Respondent No.1 could demand additional premium for delay in completing construction when the delay was attributable to a court stay order; Whether the period during which an interim court order was in operation should be excluded from the computation of the four-year construction period under Article 2(d) of the Lease Deed; Whether the demand notices were arbitrary and violative of Article 14 of the Constitution of India
Case Details
2026 LawText (BOM) (04) 42
Writ Petition No. 242 of 2018 with Interim Application No. 2172 of 2020
Shree Chandrashekhar, CJ, Suman Shyam, J.
Mr. Vikram Nankani, Senior Advocate, with Mr. Vikramaditya Deshmukh, Mr. Ashwin Dave, Mr. Ameya Nabar & Ms. Swati Jain for the Petitioners; Dr. Birendra Saraf, Senior Advocate, with Mr. Nishant Chotani, Mr. Nivit Srivastava, Ms. Sneha Patil, Ms. Aditi Sinha, Mr. Hrishikesh Joshi & Ms. Isha Vyas for the Respondents
Reliance Industries Limited and Mr. Rajumal Nahar
Mumbai Metropolitan Region Development Authority (MMRDA) and The Metropolitan Commissioner, MMRDA
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Nature of Litigation
Constitutional writ petition under Article 226 of the Constitution of India challenging demand notices for additional premium/penalty issued by a statutory authority.
Remedy Sought
The Petitioners sought quashing of the demand-cum-show cause notice dated 12 September 2017 and the subsequent demand dated 13 June 2019 for additional premium and interest for alleged delay in completing construction.
Filing Reason
The Respondent No.1 demanded additional premium for a delay of 7 years and 12 days in completing construction, which the Petitioners contended was attributable to a court stay order and which the Respondent had earlier agreed to exclude.
Previous Decisions
An interim order dated 15 October 2007 was passed in Writ Petition No. 1165 of 2007 restraining the Petitioner from utilizing additional FSI for the commercial complex. The writ petition was withdrawn on 12 March 2012 and the stay vacated.
Issues
Whether the demand for additional premium was valid given that the delay was caused by an interim court order staying construction activity.
Whether the period of the court stay should be excluded from the four-year construction timeline under Article 2(d) of the Lease Deed.
Whether the subsequent demand dated 13 June 2019 for additional premium for using additional built-up area was arbitrary and contrary to the earlier agreement.
Judgment Excerpts
Assailing the demand-cum-show cause notice dated 12th September 2017 (Exhibit “R”), whereby, the Respondent No.1– Mumbai Metropolitan Region Development Authority (“MMRDA”) had demanded additional premium/penalty as per statements ‘A’ and ‘B’ annexed thereto, for the alleged delay of 7 years and 12 days in completion of construction of a Convention & Exhibition Centre and Commercial Complex on Plot No. C-64, ‘G’ Block, Bandra-Kurla Complex, Mumbai, the Petitioners have approached this Court by filing this Writ Petition invoking the jurisdiction of this Court under Article 226 of the Constitution of India.
Article 2(d) of the Lease Deed dated 1st September, 2006 stipulates that the lessee shall, within three months from receipt of approval of plans, commence and within a period of four years from the date of the lease, build and completely finish the construction...
Article 2(e) lays down that in case of failure to adhere to the said time limit, extension of time may be granted upon payment of additional premium at the prescribed rates.
There is no controversy in this case about the fact that the proposed development was composite in nature with common basement and foundation.
By the letter dated 1st February 2012, the Respondent No.1 had informed the Petitioner that... the period during which the stay order of the court was under operation, will not be considered for computing the four years time period.
Procedural History
Writ Petition No. 242 of 2018 was filed challenging the demand-cum-show cause notice dated 12 September 2017. During the pendency, the Petitioner filed Interim Application No. 2172 of 2020. By consent of parties, the matter was taken up for final hearing. The judgment was reserved on 22 January 2026 and pronounced on 8 April 2026.
Acts & Sections
- Mumbai Metropolitan Region Development Authority Act, 1974: Section 3
- Constitution of India: Article 226
- Companies Act, 1956:
