[Cites 20, Cited by 0]
Bombay High Court
Shree Naman Hotels Pvt. Ltd. vs Mumbai Metropolitan Region ... on 8 April, 2026
2026:BHC-OS:8909-DB
Shree Naman Hotels-oswp-3209-2017-J-R.doc
Shephali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 3209 OF 2017
Shree Naman Hotels Pvt. Ltd.,
A company registered under the provisions
of the Companies Act, 1956, having its
registered office at 315, Parekh Market,
39, J.S.S. Road, Opera House,
Mumbai 400 004. ...Petitioner
~ versus ~
1. Mumbai Metropolitan Region
Development Authority,
a Body Corporate having its Head
SHEPHALI
Office at MMRDA Office Building,
SANJAY Plot Nos. C-14 & C-15, 'E' Block,
MORMARE
Bandra Kurla Complex, Bandra (East),
Digitally signed
by SHEPHALI Mumbai 400 051.
SANJAY
MORMARE
Date: 2026.04.09
15:15:50 +0530
2. The Metropolitan Commissioner,
being the Chief Executive Officer of
the Mumbai Metropolitan Region
Development Authority, having his
office at MMRDA Office Building,
Plot Nos. C-14 & C-15, 'E' Block,
Bandra Kurla Complex, Bandra (East),
Mumbai 400 051. ...Respondents
A PPEARANCES
For the Petitioner Mr. Vikram Nankani, Senior
Advocate, with Mr. Vaibhav Krishna
& Mr. Tahir Pande, i/b Juris
Consillis.
For Respondents-MMRDA Mr. Pravin Samdani, Senior
Advocate, with Mr. Nishant Chotani,
Mr. Nivit Srivastava, Ms. Sneha
Page 1 of 55
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Patil, Ms. Aditi Sinha, Mr.
Hrishikesh Joshi & Ms. Isha Vyas,
i/b Maniar Srivastava Associates.
CORAM : SHREE CHANDRASHEKHAR, CJ &
SUMAN SHYAM, J.
RESERVED ON : 22nd JANUARY 2026.
PRONOUNCED ON : 8th APRIL 2026.
JUDGMENT (Per 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-
Shree Naman Hotels-oswp-3209-2017-J-R.doc
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
Shree Naman Hotels-oswp-3209-2017-J-R.doc
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 115 th Meeting held on 3rd February, 2006,
under Resolution No.1072. Accordingly, Letter of Allotment dated
14th February 2006 was issued in favour of SNDL.
8. SNDL, thereafter, paid the entire lease premium of
Rs.204,60,00,000/- (Rupees Two hundred and four crores sixty
Shree Naman Hotels-oswp-3209-2017-J-R.doc
lakhs) to Respondent No.1 pursuant whereto, a Lease Deed dated
9th June 2006 came to be executed by and in between the
Respondent No.1 and SNDL, for granting leasehold rights in respect
of the said plot of land for a period of 80 years for construction of a
Star Category Hotel.
9. Article 2(a) of the Lease Deed dated 9 th June 2006 stipulates
that building plans are to be submitted to the planning authority for
approval. Article 2(d) provides that the lessee shall, within three
months from receipt of approval of the plans, commence
construction and within a period of four years from the date of the
lease, complete and finish the building so as to render it "fit for
occupation". Article 2(e) lays down that in the event of failure to
complete the construction within the stipulated period, the
Metropolitan Commissioner may grant extension of time upon
payment of additional premium at the prescribed rates.
10. Possession of the said plot was handed over to SNDL on 13 th
June 2006. Thereafter, with the permission of Respondent No.1,
granted on 14th July 2006, SNDL had assigned its right, title and
interest under the Lease Deed, in favour of the present Petitioner,
by executing Deed of Assignment dated 1st August 2006.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
11. On 14th September 2006, a notification was issued by the
Ministry of Environment and Forests ("MoEF") requiring
Environmental Impact Assessment ("EIA") clearance for the project.
On 13th December 2006, the Petitioner had applied for permission
from the Respondent No. 1 to commence excavation work pending
EIA clearance from the MoEF. By communication dated 13 th
November 2006, the Respondent No.1 had, however, declined such
permission and informed the Petitioner that excavation permission
could be considered only after the Petitioner obtains the EIA
clearance.
12. The Petitioner accordingly, applied for the EIA clearance on
23rd November 2006 and the same came to be granted on 2 nd March
2007. Pursuant thereto, the Respondent No.1 had granted
excavation permission to the Petitioner on 8th March 2007.
13. In the meantime, the Petitioner had submitted building plans
to Respondent No.1 and applied for Commencement Certificate.
The first Commencement Certificate upto the plinth level was
issued only on 29th October 2007 i.e. after a delay of about 1 year 4
months from the date of execution of the Lease Deed.
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14. According to the Petitioner, considerable time was consumed
in securing statutory approvals including EIA clearance from the
Ministry of Environment and Forest (MoEF), height clearance from
the Ministry of Civil Aviation. The Civil Aviation Ministry had
granted permission for construction only up to a restricted height
vide communication dated 25th March 2008. Thereafter, Intimation
of disapproval and further approvals were processed and ultimately,
Commencement Certificate dated 18th March 2009 was issued by
the Respondent No.1 permitting construction of two basement
levels, ground floor and 12 upper floors.
15. In the meantime, on 31st December, 2008, the Respondent
No.1 had permitted the Petitioner to utilize the area of staircase, lift
and lobbies free of FSI against payment of premium of Rs.6.03
crores, as a result of which, additional built up area of 11849.46 sq.
mtrs. had become available to the Petitioner which resulted in
construction of the 12th and 13th floors. On 16th June, 2010, the
Respondent No. 1 permitted further staircase area of 245 sq. mtrs.
to be treated as free of FSI on payment of Premium. In the above
process, there was substantial and unforeseen delay in
commencement of the construction. The Petitioner could ultimately
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commence construction of the two upper floors only after the
month of July 2010.
16. In view of the above developments, the Respondent No.1
had issued two further Commencement Certificates dated 15 th
October 2009 and 7th July 2010. It is the case of the Petitioner that
while permitting utilization of the additional built-up area, the
Respondent No. 1 had not stipulated any time limit for completing
the construction.
17. It is also the case of the Petitioner that construction of the
entire building, comprising of two basements, ground floor and
thirteen floors was completed on 14th June 2011. Completion of the
construction was, thereafter, certified by the Chief Town and
Country Planning Division of Respondent No. 1 on 17th June 2011.
18. On 18th February, 2011, the Petitioner, through its architect,
had applied for Occupation Certificate. By the communication
dated 3rd October 2011, the Respondent No.1 had informed the
Petitioner that Occupation Certificate would be issued subject to the
condition that "The applicant shall provide 2 suits for 50 nights
each per year and 1 meeting/conference room for atleast 20
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persons to be accommodated on 20 occasions with all necessary
technical equipment for presentations, per year free of any charge,
fee or rent in the Hotel to MMRDA. Food, beverages and other
services will be provided at a discount of 20% excluding taxes and
service charges, if any." Accordingly, the Petitioner was asked to
convey its acceptance of the above condition within 7 days.
19. On 29th September,2011 the Petitioner had once again
requested for issuance of Occupation Certificate for the hotel but
the same was declined. Instead, the Petitioner was asked to give an
undertaking that it will not commence operation of the Hotel until
payment of the additional premium. As such, the Petitioner was
compelled to submit a Notarized undertaking dated 3 rd
October,2011 to such effect.
20. On 11th October 2011, the Respondent No.1 had issued a
conditional Occupation Certificate in respect of the said building.
The Occupation Certificate so issued had also included the
stipulation that the Petitioner shall provide two suits for 50 nights
each per year and one meeting/conference room for atleast 20
persons to be accommodated on 20 occasions, with all necessary
technical support, to the MMRDA, free of charge, fee or rent. It was
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also mentioned that the Petitioner shall not commence operation of
the Hotel until the payment of the additional premium towards
extension of time for completion of construction as per the Lease
Deed and the undertaking dated 03/10/2011 is made.
21. Thereafter, by letter dated 12th October 2011, the Respondent
No.1 had demanded payment of additional premium amounting to
Rs.25,42,74,636/- (Rupees Twenty Five crores Forty Two lakhs
Seventy Four thousand Six hundred and Thirty Six), together with
interest, for the alleged delay in completion of the construction
beyond four years from the date of execution of the Lease Deed i.e.
beyond 9th June, 2010.
22. The Petitioner had submitted representations requesting for
waiver of the demand for payment of additional premium/penalty
but the said request came to be rejected by communication dated
3rd January 2012 issued by the Respondent No.1. As such, in terms
of the undertaking furnished to Respondent No.1, the Petitioner
had paid two installments of Rs.4,39,37,781/-(Rupees Four Crores
Thirty-Nine Lakhs Thirty-Seven Thousand Seven Hundred Eighty-
One only) and Rs.4,54,54,537/- (Rupees Four Crores Fifty Four
Lakhs Fifty Four Thousand Five Hundred and Thirty Seven only)
Shree Naman Hotels-oswp-3209-2017-J-R.doc
respectively, towards the demanded amount of additional
premium/penalty The said amount was, however, paid under
protest.
23. Thereafter, further communications dated 1st September 2014
and 23rd April 2015 came to be issued by Respondent No.1 calling
upon the Petitioner to pay the balance outstanding amount, which
had culminated in the impugned Demand Notice dated 12 th
September 2017, by means of which, the Respondent No.1 had
called upon the Petitioner to pay the entire outstanding dues failing
which, the Respondents would recover the amount as arrears of
Land Revenue and also determine the Lease.
24. It is the further case of the Petitioner that in its 131st Meeting
held on 22nd October 2012, the Respondent No.1 had considered
granting extension of time for completion of construction from four
years to six years in view of the extra time consumed in securing
various statutory approvals from different authorities. In its 138 th
Meeting held on 26th August 2015, the Respondent No.1 had
resolved to amend Clause 2(d) of the standard form of the Lease
Deed so as to provide six years time period for completion of the
construction but made the said amendment applicable only to Lease
Shree Naman Hotels-oswp-3209-2017-J-R.doc
Deeds executed after 26th August 2015. According to the Petitioner,
restricting the benefit of the said amendment only to Lease Deeds
executed after 26th August 2015 was highly arbitrary and
discriminatory.
25. In the aforesaid circumstances, the Petitioner has instituted
the present Writ Petition challenging the Demand Notice dated 12 th
September 2017, as well as the earlier communications dated 12 th
October 2011, 3rd January 2012, 1st September 2014, 23rd April
2015 and 25th June 2015, whereby the Respondent No.1 had
demanded payment of additional premium, together with interest,
on account of alleged delay in completion of the construction.
26. In the reply affidavit filed by the Respondents Nos.1 and 2, it
has been inter- alia contended that the Writ Petition is not
maintainable due to delay and laches on the part of the Petitioner
in approaching this Court that the relief prayed for by the Petitioner
relates to implementation of the terms and conditions of the Lease
Deed dated 9th June 2006 and, therefore, the same cannot be
granted in a Writ Petition; that the Writ Petition having been
instituted beyond the period of three years form the date of the
demand, the same is bared by law of limitation; that the Petitioner
Shree Naman Hotels-oswp-3209-2017-J-R.doc
has an alternative, efficacious remedy in the form of a Civil Suit
and, therefore, the Writ Petition is not maintainable on such count
as well; that the Petitioner, having furnished a Notarized
undertaking to pay the amount of additional premium/penalty and
also agreeing not to commence the operation of the hotel till the
amount is paid, is estopped from challenging the demand, more so,
since part of the amount of additional premium/ penalty has
already been deposited by the Petitioner; that a conjoint reading of
Article 2(a) and 2(d) of the Lease Deed makes it clear that the
construction of the building must be completed within four years
from the date of the Lease Deed. Therefore, the demand made for
additional premium/penalty due to delay in completion of
construction is interim of Article 2(d) of the Lease Deed, which is
on agreed conditions of the Lease Deed. As such, the same cannot
be termed as arbitrary and illegal; that the resolution extending the
period for completion of construction from four years to six years
would apply prospectively and, therefore, the Petitioner would not
be entitled to such benefit. It has, further, been contended that
since most of the other parties have already complied with the
demand of additional premium, hence, there can no justifiable
ground for the Petitioner to dispute the claim; that the appointment
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of one man committee is a matter of "internal management" of the
MMRDA and the report submitted by the committee is only of
persuasive value.
27. In the Rejoinder Affidavit, the Petitioner has reiterated its
stand that the demand for penalty is arbitrary and has denied that
there was any concluded contract to make payment of the penalty.
It has also been contended that in the facts and circumstances of
the case, it was not possible to complete the construction within
four years from the date of execution of the Lease Deed in view of
the additional built-up area allotted to the Petitioner permitting
construction of the 12th and 13th floor and that there was no time
limit for completion of the said construction. As such, the time line
for completion of integrated composite structure of the building by
using the additional built up area would not come within the ambit
of Article 2(d) of the Lease Deed.
28. This Writ Petition was analogously heard along with three
other similar Writ Petitions being Writ Petition No. 864 of 2018,
Writ Petition No. 242 of 2018 and Writ Petition No. 2377 of 2018,
wherein, identical reliefs were prayed for by the Writ Petitioner(s).
Shree Naman Hotels-oswp-3209-2017-J-R.doc
29. Mr. Vikram Nankani, learned Senior Counsel appearing for
the Petitioner has referred to the documents available on record to
submit that the demand for additional premium raised by
Respondent No.1 on account of alleged delay in completion of
construction of the building known as "Sofitel Hotel" on Plot Nos.
C-57 and C-58 at Bandra-Kurla Complex is wholly arbitrary, illegal
and unsustainable in the eyes of law. According to the learned
Senior Counsel, such demand is also contrary to the terms and
conditions of the Lease Deed dated 9th June 2006 and, therefore,
the Respondent No.1 had no authority to levy additional premium
for the alleged delay in completion of the construction.
30. It is further submitted by Mr. Nankani that the delay, if any, in
completion of construction occurred due to circumstances beyond
the control of the Petitioner which included the extra time
consumed in obtaining statutory approvals such as Environmental
Clearance from the Ministry of Environment and Forests , height
clearance from the Civil Aviation authorities as well as other
permissions required for development of the project. According to
the learned senior counsel, the Petitioner could not have
commenced or continued with the construction without obtaining
Shree Naman Hotels-oswp-3209-2017-J-R.doc
such statutory approvals and therefore, the time consumed in
securing such approvals ought to be excluded while computing the
period stipulated under Article2(d) of the Lease Deed for
completing the construction.
31. The learned Senior Counsel has also submitted that the
Respondent No.1 had itself permitted the Petitioner to utilize the
additional built-up area in the same building by excluding certain
areas from the FSI, upon payment of additional premium and by
issuing revised commencement certificates. According to him, once
such additional development was permitted and incorporated in the
building, the project had to be executed as a composite
development plan and therefore, the original time limit
contemplated under Article 2(d) of the Lease Deed could not have
been applied in such a rigid manner for the purpose of levying
additional premium.
32. The learned Senior Counsel has further submitted that the
issues raised in the present Writ Petition are squarely covered by
the decision of this Court in Raghuleela Builders Pvt. Limited and
Anr. vs. Mumbai Metropolitan Region Development Authority &
Shree Naman Hotels-oswp-3209-2017-J-R.doc
Ors.1 wherein, under similar facts and circumstances, this Court has
held that the demand of additional premium/ penalty for alleged
delay in completion of construction was arbitrary and unsustainable
in law. He further submits that the aforesaid judgment has attained
finality in the eyes of law inasmuch as the Special Leave Petition
preferred by the Respondent No.1 against the said judgement also
came to be dismissed by the Hon'ble Supreme Court by order dated
27th July 2020 passed in Special Leave to Appeal (C) No.6411 of
2020. According to the learned Senior Counsel, the principle laid
down in the said decision would apply to the facts of the present
case and therefore, the same would lay down a binding precedent
for this court to follow. As such,submits Mr. Nankani, the
impugned demand of penalty raised by Respondent No.1 deserves
to be set aside and a direction is required to be issued by this Court
to refund the amount of penalty already deposited by the Petitioner
under protest.
33. Responding to the above submissions, Mr. Pravin Samdani,
learned Senior Counsel appearing for Respondents has questioned
the maintainability of the Writ Petition on the grounds that the
1 (2020) (1) ABR 397: 2019 SCC OnLine Bom 4529.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
same involves disputed issues of facts and that, it is hit by delay and
laches in as much as, the relief claimed there-in is also barred by
the law of Limitation. Contending that the demand raised by
Respondent No.1 is in terms of the provisions of the Mumbai
Metropolitan Region Development Authority Act, 1974 and the
Mumbai Metropolitan Region Development Authority (Disposal of
Land) Regulations, 1977 (hereinafter referred to as "Land Disposal
Regulations") Mr. Samdani has argued that the additional premium
has been levied in accordance with the terms of the Lease Deed
executed between the parties, which is in the statutory form
prescribed under the said Regulations. As such, the same cannot be
waived.
34. The learned Senior Counsel for Respondents further submits
that, by filing the present Writ Petition, the Petitioner is in effect
seeking to challenge the contractual stipulations contained in the
Lease Deed without challenging the statutory provisions governing
the same, which is impermissible in law. It is submitted that once
the Petitioner has entered into the Lease Deed with full knowledge
and understanding of the terms and conditions contained therein, it
would be bound by the conditions contained in the Lease Deed.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
Therefore, the Petitioner cannot now resile from its contractual
obligations.
35. The learned Senior Counsel further submits that, under the
terms of the Lease Deed, extension of time for completion of
construction can be granted, only upon payment of additional
premium at the prescribed rates and therefore the demand raised
by Respondent No.1 cannot be said to be arbitrary or illegal. To sum
up his arguments, the learned senior counsel has submitted that it
is not a case of violation of the fundamental rights of the Petitioner
and therefore, it is not entitled to any relief in exercise of
discretionary jurisdiction of this Court under Article 226 of the
Constitution of India. As such, the Writ Petition deserves to be
dismissed.
36. In support of his above arguments, Mr Samdani has relied
upon he following decisions:-
(a) Bank of Baroda, Mumbai & Anr vs. Mumbai
Metropolitan Regional Development Authority & Ors.2
(b) Assistant Excise Commissioner & Ors. vs. Issac Peter &
Ors.3
2 2010 (3) Mh. L.J.
3 (1994) 4 SCC 104.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
(c) State of UP & Ors. vs. Chaudhari Ran Beer Singh,4
(d) Goetze (India) Ltd. vs. Employees State Insurance
Corporation5
(e) Transmission Corporation of Andhra Pradesh Ltd. &
Anr. Vs. Sai Renewable Power Pvt. Ltd. & Ors.6
(f) Banda Development Authority, Banda vs. Motilal
Agarwal & Ors.7
(g) Punjab Financial Corporation vs. Surya Auto
Industires8
(h) Joshi Technologies International IBC vs. U.O.I. & Ors.9
(i) The Godhra Electricity Co. Ltd. & Anr. vs. The State of
Gujrat & Anr10
(j) Dhanraj vs. Vikram Singh & Ors.11
(k) Dalip Singh vs. State of U.P & Ors.12
Plea regarding Maintainability of the Writ Petition :-
37. Insofar as the plea of the maintainability of the Writ Petition
is concerned, at the very outset, it deserves to be mentioned herein
that although the maintainability of the Writ Petition has been
questioned inter-alia on the ground that several disputed questions
4 (2008) 5 SCC 550.
5 (2008) 8 SCC 705.
6 (2011) 11 SCC 34.
7 (2011) 5 SCC 394.
8 (2010) 1 SCC 297.
9 (2015) 7 SCC 728.
10 (1975) 1 SCC 199.
11 2023 SCC OnLine SC 724.
12 (2010) 2 SCC 114.
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of facts are involved there-in, yet, after examining the record, we
find that the material assertions made in the Writ Petition are all
based on documents annexed thereto, which are admitted
documents. Moreover, in view of the plea raised by the Petitioner
that the action of the Respondent No. 1 in levying additional
premium/penalty for the delay in completion of construction is
arbitrary and illegal and hence, violative of the fundamental rights
of the Petitioner guaranteed under Article 14 of the Constitution of
India, we are of the view that the issues raised in the Writ Petition
have an element of public law character.
38. In case of Joshi Technologies International IBC vs. U.O.I. &
Ors. (Supra), relied upon by Mr Samdani, the Hon'ble Supreme
Court has observed that there is no absolute bar to the
maintainability of a Writ Petition, even in contractual matters or
where there are disputed questions of fact or even when monitory
claim is raised, provided, the Court is called upon to examine the
issue which has a public law character attached to it. Having regard
to the core controversy involved in this proceeding and considering
the fact that the issues involved in this Writ Petition would call for
determination by this Court based on interpretation of the relevant
Shree Naman Hotels-oswp-3209-2017-J-R.doc
Articles of the Lease Agreement as well as the documents
exchanged by and between the parties so as to ascertain fairness in
the action of the Respondent No 1, we are unable to agree with the
stand of the Respondents that the Writ Petition ought to be
dismissed on the ground that it raises disputed questions of facts.
39. Likewise, from a reading of Section 44 of the MMRDA, Act
1974, we find that the provision for Appeal provided thereunder, is
available for resolving disputes pertaining to recovery of money due
to the authority as arrears of land revenue. Since the challenge
made to the impugned demand notice is on the ground that the
same is contrary to the terms of the Lease Deed, hence, we are of
the opinion that the said controversy cannot be effectively
adjudicated in an Appeal filed under Section 44. Therefore, we
reject the contention of the Respondents that the Petitioner has an
effective and efficacious alternative remedy.
40. We also find that all material facts necessary for dealing with
the controversy have been stated in the Writ Petition. Therefore, the
Writ Petition cannot also be dismissed on account of suppression of
material facts.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
41. In so far as the grounds of delay and laches as well as the
plea of the claim being barred by the Law of Limitations is
concerned, save and except making a bald assertion on such count
the Respondents have failed to mention as to on which date the
cause of action for the petitioner to institute the proceeding had
ceased and on what count.
42. In Banda Development Authority, Banda vs. Motilal Agarwal
& Ors. (Supra), relied upon by Mr Samdani, the Hon'ble Supreme
Court has observed that no limitation has been prescribed for filing
a Writ Petition under Article 226 of the Constitution of India.
However, the High Court will treat the delay in filing the Writ
Petition as unreasonable, if the Writ Petition is filed beyond the
period of limitation prescribed for filing a Civil Suit for similar
cause. From the above, it would be apparent that although
unexplained delay in instituting a Writ Petition could be a valid
ground to decline relief, yet, the law of Limitation would not have
strict application in a Writ Petition.
43. There is no dispute in this case about the fact that the
Respondent No. 1 is an instrumentality of the State and, therefore,
would be an "other authority" within the meaning of Article 12 of
Shree Naman Hotels-oswp-3209-2017-J-R.doc
the Constitution of India. Law is well settled that arbitrariness in
the decision making process of the State or its instrumentality is a
facet of Article 14 of the Constitution of India. In E.P..Royappa v
State of Tamil Nadu,13 it was pointed out that Article 14 would
strike at arbitrariness in State action and ensure fairness and
equality of treatment.
44. The present is not a proceeding simpliciter for enforcing a
money claim but raises significant questions pertaining to the
validity and fairness in the impugned action of the Respondent No
1, which are required to be adjudicated on the touch stone of
Article 14 of the Constitution. As such, we are of the considered
opinion that such pleas cannot be brushed aside merely on the
ground of delay, more so, since such delay has evidently not given
rise to any parallel right of a third party.
45. In view of the fore going discussions, we are of the view that
the Writ Petition is maintainable in law as well as in the facts and
circumstances of the case.
13 (1974) 4 SCC 3.
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46. It would be further pertinent to note herein that in an earlier
decision rendered by a co-ordinate Bench of this Court dated 20 th
November 2019 in Raghuleela Builders Pvt. Limited and Anr. vs.
The Mumbai Metropolitan Regional Development Authority & Ors.
(Supra) wherein, identical issues were involved, this Court had
entertained the Writ Petition. In that case also the Petitioners had
challenged a similar Demand Notice dated 12 th September, 2017
issued by the Respondent No.1 by invoking similar provisions of the
Lease Deed demanding payment of a sum of Rs. 432 Crores as
penalty for the delay in completion of construction of the building.
That was also a case wherein, although the initial built up area was
30550 sq. meters, which was to be consumed by constructing 9
(nine) floors in the building, yet, subsequently, due to the increase
in the FSI, the Respondent No.1 had allotted additional built up
area of 67000 sq. meters to the Petitioner resulting in construction
of 11 additional floors in the same building. Due to the addition of
the built up area, the construction of the building could not be
completed within four years, as stipulated in Article 2(d) of the
original Lease Deed, as a result of which, Demand Notice dated 12 th
September, 2017 was served for recovery of penalty/additional
premium along with interest calculated thereon.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
47. By the Judgment and Order dated 20 th November 2019, in
Raghuleela Builders Pvt. Ltd. & Anr. (Supra), a Division Bench of
this court had set aside the impugned Demand Notice dated 12 th
September 2017 by holding that such a demand was not
maintainable in the eyes of law. That apart, it was also observed
that in view of the change in policy of the MMRDA increasing the
time limit for completion of the building "Fit for occupation", from
four years to six years, the demand for penalty/additional premium
for delay in completion of construction within four years was ex-
facie unreasonable, unjustified and discriminatory.
48. The Special Leave Petition (C) No. 6411 of 2020 preferred by
the Respondent No.1 assailing the Judgment and Order dated 20 th
November 2019 was dismissed by the Hon'ble Supreme Court by
the order dated 27th July 2020 by taking note of the findings
recorded in paragraphs No. 38 and 40 of the Judgment and Order
dated 20th November 2019. However, it was clarified that since the
judgment of the Division Bench of the Bombay High Court was
rendered in the facts of that case, hence, it cannot influence any
other matter in this behalf. With the above observation the Special
Leave Petition was dismissed.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
49. In the order dated 27th July 2020 the Hon'ble Supreme Court,
while dismissing the Special Leave to Appeal (C) No(s) 6411/2020,
had observed as follows:-
"We are not inclined to exercise our jurisdiction under Article 136
of the Constitution of India in the given facts of the case and more
so as reflected from paragraphs 38 and 40 of the impugned
judgment.
Mr. K. K. Venugopal, learned Attorney General for India
expresses some apprehension on account of there being other
matters pending.
We clarify that the present matter is in the given facts of
the case as stated aforesaid and thus, cannot be said to influence
any other matter in this behalf.
The special leave petition is dismissed in terms aforesaid.
Pending applications shall also stand disposed of."
50. It appears that the Respondent No. 1 had filed a Review
Petition seeking review of the order dated 27 th July 2020, which
was also dismissed by the Hon'ble Supreme Court vide order dated
29th September 2020 passed in Review Petition (Civil) No. 1764 of
2020 arising out of SLP (C) No. 6411 of 2020.
51. In the order dated 27th July 2020, the Hon'ble Supreme
Court had no doubt observed that the decision in Raghuleela
Builders Pvt. Ltd. & Anr. (Supra) was in the facts of that case.
However, we are of the view that we can take note of the legal
principles, if any, emanating from the said decision. In Raghuleela
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Builders Pvt. Ltd. & Anr this court has entertained a similar Writ
Petition seeking identical reliefs.
52. The the question of maintainability of a Writ Petition is a
mixed question of law and facts. Therefore, such question would
obviously have to be considered having due regard to the peculiar
facts and circumstances of each case. Having regard to the facts and
circumstances of this case and considering the fact that a similar
Writ Petition, raising similar issues in Raghuleela Builders Pvt. Ltd.
& Anr. (Supra) had earlier been entertained by this Court, hence,
for the sake of maintaining uniformity in judicial decision, we are
not inclined to non-suit the Petitioner merely on the plea of
maintainability as raised by the Respondents.
On Merit :-
53. At the very out set it must be noted here-in that as per Article
2(d) of the Lease Deed, the lessee is required to complete the
construction within four years from the date of execution of the
Lease deed. However, Article 2 (c) of the Lease Deed makes it clear
that no work shall commence or be carried out contrary to the
Development Control Regulations and the Building Regulations
Shree Naman Hotels-oswp-3209-2017-J-R.doc
applicable to the plot of land and until the plans, elevations,
sections, specifications and details shall have been approved.
Therefore, in view of Article 2(c), the construction of the building
cannot commence until the receipt of all statutory approvals
including the approval of building plan etc. Article 2(a) of the Lease
Deed mentions that the lessee shall within three months submit
plans etc for approval. However, there is no condition in the Lease
Deed laying down and time line for granting of such approval by
the authority.
54. In a construction of this nature, permission of multiple
statutory authorities including the Municipal Corporation, Fire
department, Environment clearance, height clearance etc. will be
necessary, without which the Commencement Certificate cannot be
issued. Unless the Commencement Certificate is issued by the
Authority, the construction work also cannot commence. These
statutory authorities are not bound by the terms and conditions of
the Lease Agreement. Notwithstanding the same, the Lease
Agreement is completely silent as to who will be responsible in case
of delay in granting approval by these statutory authorities coming
Shree Naman Hotels-oswp-3209-2017-J-R.doc
in the way of early commencement and completion of the
construction.
55. Not only that, the Lease Deed is also silent as to what would
be the effect on the time line of four years for completion of the
construction as laid down in Article (d), in case, there is delay in
granting of statutory approvals. If there is delay in granting
permissions/ approval by the statutory authorities for any reason
whatsoever, leading to delay in commencement of construction,
then in that event, the Lessee will be left with no option to
complete the construction within the stipulated time. Yet, as per
Article 2(d), as interpreted by the Respondent No 1, the lessee
would still be liable to pay penalty for the delay in completing the
construction beyond the period of four years from the date of
execution of the Lease Deed. Viewed from that perspective, Article
2(d) of the lease deed appears to be ex-facie unfair, unreasonable
and hence, unconscionable. However, since the Articles of the Lease
Deed are not under challenge, hence, the said aspect of the matter
need not detain this Court.
56. After hearing the arguments of both the sides and on
examining the materials brought on record, we are of the
Shree Naman Hotels-oswp-3209-2017-J-R.doc
considered opinion that the core controversy involved in this
proceeding would be pertaining to the issue as to whether or not,
the insistence/demand for additional premium/penalty made by
the Respondent No. 1 on the ground of delay in completing the
construction of the building beyond the period of four years from
the date of execution of the Lease Deed was in accordance with law
? To answer the said question, it would be necessary for this Court
to refer to Articles 2(d) and 2(e) of the Lease Deed dated 9 th June
2006, which are reproduced hereinbelow for ready reference:-
"2. The Lessee hereby agrees to observe and perform the
following conditions that is to say:
(d) Time limits for commencement and completion of
construction work: That the Lessee shall within three months
from the receipt of approval of his plans and specifications of
building or buildings intended to be erected on the land,
commence and within a period of four years from the date of
this lease at his own expense and in a substantial and workman-
like manner and with the sound materials and in compliance
with the said Development Control Regulations and Building
Regulations and all Municipal Rules, bye-laws and Regulations
applicable hereto and in strict accordance with the approved
plans, elevations, sections, specifications and details, to the
satisfactions of the Metropolitan Commissioner and confirming
to the building lines marked on the plan hereto annexed, and
the Development Control Regulations and Building Regulations,
build and completely finish, fit for occupation a building to be
used as building with all requisite drains and other proper
convenience thereto.
(e) Extension of time stipulated for construction of building
or development of land:
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(i) If the Lessee shall not perform and observe the
limitations of the time mentioned in clause 2(d) above
for construction of the intended building or otherwise
development of land leased to him for reasons beyond
his control, the Metropolitan Commissioner may permit
extension of such time on payment of additional
premium at the following rates:
Up to 1 year ______ 25 percent of the premium
Between 1 and 2 years ______ 35 percent of the premium
Between 2 and 3 years ______ 40 percent of the premium
(ii) If the Metropolitan Commissioner shall refuse to permit
such extension of time or shall find the Lessee of having
committed breach of any condition or covenant during
limitation of time mentioned in clause 2(d)
hereinbefore, the Metropolitan Commissioner may
forfeit and determine the Lease; provided that in the
event of such determination of lease 25 percent of the
premium paid by the Lessee to the Lessor shall stand
forfeited and the remaining 75 percent of such premium
shall be refunded to him; provided further that the
power to so determine the Lease shall not be exercised
unless and until the Metropolitan Commissioner shall
have given to the Lessee or left on some part of the
demised premises a notice in writing of his intention to
do so and of specific breach of the covenant or condition
in respect of which forfeiture is intended and default
shall have been made by the Lessee in remedying such
breach within three months from the service of a notice
on him on the notice being left on the demised
premises."
57. As has been noted hereinabove, after the execution of the
Lease Deed on 9th June,2006, physical possession of the plot of land
was handed over by the Respondent No. 1 to SNDL on 13 th June
2006. On 1st August, 2006, SNDL had assigned its rights over the
plot in favour of the Petitioner. On 25 th August,2006, the Petitioner
had applied for height clearance from the Ministry of Civil
Aviation , requesting for increase in the height of the building from
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56.27 mtrs. to 90 mtrs. so as to consume the full FSI. In the
meantime notification dated 14th September,2006 came to be issued
by the Ministry of Environment and Forest laying down that
Environment Impact Assessment (EIA) would be required for such
projects. On 3rd October,2010, the Petitioner had applied for
permission to start excavation but the same was declined on the
ground that Environment Clearance will be necessary. Accordingly,
the Petitioner had applied for EIA which was received on 3 rd
February 2007. Thereafter, the Petitioner had applied for
permission to start excavation and shoring work which was granted
by the Respondent No. 1 on 8th March 2007. Therefore, until 8th
March, 2007, there was no scope for the Petitioner to commence
even the excavation work.
58. It would be significant to note herein that on 20 th March
2007, additional FSI was granted to the Petitioner on payment of
sum of Rs. 1,99,56,035/-. Thereafter, Commencement Certificate
for the work up to the plinth level was issued on 29 th October 2007.
While the aforesaid process was underway, on 18 th November 2008,
the Respondent No. 1 had offered additional built-up area to the
Shree Naman Hotels-oswp-3209-2017-J-R.doc
Petitioner. However, no time limit was laid down for completing the
construction with the additional FSI.
59. On 31st December 2008, the Petitioner paid a sum of Rs.
6,22,34,818/- for 1,849.46 sq. mtrs of additional BUA (lobby/stair
case free of FSI) and on 18 th March 2009, Commencement
Certificate (CC) for two level basement+ground+12 upper floors
was received.
60. From the above facts, it would be evident that although the
Lease Deed was executed on 9 th June 2006 containing the
stipulation in the form of Article 2(d) making it mandatory for the
Lessee to complete the construction of the building within four
years from execution of the Lease Deed, i.e., 9 th June 2006, yet, the
CC for the entire building was issued only on 18 th March 2009, i.e.,
nearly after two years and nine months since the date of execution
of the Lease Deed thereby, leaving a period of barely one year and
three months for the Petitioner to complete the construction. In a
construction of a high rise building of this nature containing 13
floors, it would be wholly inconceivable for any Lessee to
commence and complete the construction of the building within a
period of one year and three months.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
61. In the above context, it would be further pertinent to note
herein that on 1st July 2010, the Petitioner had paid a sum of
Rs.5,96,61,133/- as premium for the additional lobby and passage
area free from FSI. Thereafter, the final CC for two level
basement+ground+13 floors, as per the amended plan, was
received by the Petitioner on 15th October 2009 and 7th July 2010.
62. It is the undisputed position of fact that the Petitioner had
completed the construction of the building upto the 13 th floors on
14th June 2011, which fact has also been duly acknowledged in the
Completion Certificate dated 17th June 2011 issued by the Chief
Town and Country Planning Division of Respondent No. 1.
Notwithstanding the same, the formal request made by the
Petitioner by the letter dated 29th September 2011 for issuance of
Occupation Certificate was not acted upon apparently on the
ground that the Petitioner had failed to pay the proposed penalty
due to the delay in completion of construction of the building.
63. At this stage, it would be significant to note herein that
although the Respondents had demanded additional
premium/penalty due to the alleged delay in completing the
construction of the building within four years from the date of
Shree Naman Hotels-oswp-3209-2017-J-R.doc
execution of the Lease Deed i.e. within 8th June, 2010, yet, until
12th October 2011,no formal demand for payment of the additional
premium/penalty was raised by the Respondent No. 1.
64. In the above context, it would be further pertinent to
mention herein that apparently on being demand by the
Respondent No. 1, on 3rd October 2011, the Petitioner had
submitted a Notarized undertaking to the Respondent No. 1 not to
commence operation of the hotel until the payment of additional
premium is made. Upon receipt of the said undertaking, the Chief
of the Town & Country Planning Division of the Respondent No. 1,
had addressed a letter on 11th October 2011 informing the
Petitioner about the issuance of the Occupation Certificate for two
level basement+ground+13 upper floors for the Five Star category
hotel on land bearing No. C-57 and C-58 (combined) in 'G' Block in
BKC. The Occupation Certificate had, however, clearly mentioned in
Clause-11 that the Applicant, i.e., the Petitioner shall not commence
operation of the hotel until the payment of additional premium
towards extension of time for completion of construction, as per the
provisions of the lease Deed, is made to the MMRDA, as assured by
the communication dated 3rd October, 2011.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
65. As has been noted herein above, the formal request for
payment of additional premium/penalty was made by the
Respondent No. 1 for the first time, by addressing the letter dated
12th October 2011 to the director of Shree Naman Hotels Pvt. Ltd.
The letter dated 12th October 2011 was followed up by the
communications dated 1st September 2014 and 23rd April 2015
thus, renewing the demand for payment of outstanding dues along
with interest, on the additional premium/penalty. Such demand
had culminated in the Notice dated 12 th September 2017,the
contents whereof are reproduced herein below for ready
reference:-
EXHIBIT = 'P'
MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY
_________________________________________________________
No.LEC/BKC (G)/SNDL(C-57 & 58)/179/2017 Date: 12th September 2017
NOTICE
WHEREAS the Mumbai Metropolitan Region Development
Authority issued a Show Cause Notice dated 22/08/2014 for non-
payment of requisite dues and non-performance of the Lease Deed
conditions as stated therein.
WHEREAS you have submitted your say along with
explanation vide your letter dated 19/09/2014 & 22/09/2014.
WHEREAS your representation/explanation is examined
thoroughly and no merit was found in the submission/ explanation
given by you.
AND WHEREAS the explanation submitted vide your letter
19/09/2014 & 22/09/2014 dated with reference to the Show
Cause Notice is unsatisfactory and hence was summarily rejected
vide our letter dated 23/12/2014.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
WHEREAS you were instructed to pay the outstanding dues
as stated in the Notice under reference within a period of 30 days.
However, till date you did not pay the requisite dues to MMRDA
and thus failed to comply with your obligations.
AND WHEREAS the amount due to the Authority along
with the interest due thereon is as shown in the statement annexed
hereto as Annexure. An amount due to Authority is un-paid till
date & thus you have therefore committed breach of the terms and
conditions of the said Deed of Lease and therefore, the Authority
has power to recover the said due amount as stated hereinbefore
as arrears of land revenue and also resume the said land as per the
Article 5 and 6 of the said Deed of Lease.
NOW THEREFORE, in exercise of the powers conferred by
Articles 5 and 6 of the said Deed of Lease, I, the Dy. Metropolitan
Commissioner for and on behalf of the Metropolitan Commissioner
of the Authority hereby call upon you to remedy or cause to be
remedied within 30 days from the date of this notice. Please take
further notice that in the event of the default to comply with this
requisition, the Authority will have the right to determine the
Lease and enter upon the premises and proceed further to recover
the due amount stated hereinbefore as arrears of land revenue."
Sd/-
(A.R. Wankhade)
Dy. Metropolitan Commissioner,
M.M.R.D.A.
To,
The Director,
Shree Naman Hotels Pvt. Ltdl,
Naman Centre, Plot No. C-31-32,
G-Block, Bandra-Kurla Complex,
Bandra (East), Mumbai - 400 051.
66. From the facts alluded to hereinabove, it is evident that after
the allotment of the additional built-up area, two additional floors
in the form of 12th and 13th floors, besides other common area
spaces, were added to the built-up area originally sanctioned by the
Respondent No. 1. Such addition in the built-up area did not come
Shree Naman Hotels-oswp-3209-2017-J-R.doc
with any time limit for completing the construction nor was it a
part of the original Lease Deed dated 9th June,2006.
67. It is axiomatic that with the allotment of additional built up
area, there would be fundamental changes in the drawings and
building plan, which would require fresh approval followed by
issuance of Commencement Certificate. Therefore, even as per the
terms of the Lease Agreement, it would not permissible for the
lessee to commence construction of the building without obtaining
such approvals. Under such circumstances, it is apparent that due
to allotment of additional built up area, it would no longer be
feasible for the Lessee to stick to the original time line for
completion of the construction as contemplated by Article 2(d) of
the Lease Deed dated 9 th June 2006. Notwithstanding the same, the
Respondent No.1 had applied pressure on the Petitioner to extract
additional monetary benefits from the Petitioner by relying upon
Article 2(d) on the ground of delay in completing the construction.
68. Be that as it may, it is the case of the Petitioner is that there
was no delay in completing the construction beyond the period of
four years. However, even if it is assumed that there was any delay,
the construction was evidently and admittedly completed on 14 th
Shree Naman Hotels-oswp-3209-2017-J-R.doc
June, 2011 i.e. within the period of six years from the date of
execution of the Lease Deed. Therefore, since the MMRDA has
already taken a policy decision to extend the time period for
completing the construction from four years to six years, as such,
in any view of the matter, no penalty would be payable by the
Petitioner on account of delay in completing the construction.
69. It would be significant to note here-in at the cost of repetition
that as per Article 2(a) of the Lease Deed dated 9 th June 2006, no
work can begin until plans are approved and the requirement of
Development Control Regulations and Building Regulations are
met. As per the Development Regulations, Commencement
Certificate can be issued only after all the statutory approvals
including approval of building plan is obtained. Unless
Commencement Certificate is issued, it would not be permissible to
commence construction.
70. In the present case, the first Commencement Certificate upto
to the plinth level was issued only on 29 th October, 2007 i.e. after a
delay of more than 1 year four month from the date of execution of
the Lease Deed. Thereafter, another Commencement Certificate was
issued on 18th March,2009 i.e. after a delay of more than 2 years
Shree Naman Hotels-oswp-3209-2017-J-R.doc
and 9 months. There is nothing on record to show that the
Petitioner was, in any way, responsible for such delay.
71. In a construction of this nature involving issuance of multiple
Commencement Certificates preceded by changes in design lay out
pursuant to allotment of additional built up area allotted by the
Respondent No 1 itself by realizing adequate premium, it would be
highly unfair for the MMRDA to insist on a time line for completion
of the construction based on a clause in the original Lease Deed
which did not contemplate such subsequent developments.
Therefore, demanding payment of penalty for delay in completion
of the construction, without making adequate adjustment in the
time frame, in our opinion, would be wholly arbitrary, irrational,
unreasonable and hence, liable to be declared so by this court.
72. As has been noted above, there is nothing on record to
suggest that there was any delay in completing the construction
due to the negligence on the part of the Lessee i.e. the Petitioner.
On the contrary, it appears that the construction was delayed due to
the delay in issuance of statutory approvals/ permissions including
environmental clearance. As per the terms and conditions of the
Lease Deed, the construction cannot commence without the
Shree Naman Hotels-oswp-3209-2017-J-R.doc
approval of the building plan and issuance of the Commencement
Certificate, which are beyond the control of the lessee. As such, by a
reasonable and harmonious construction of the Articles of the Lease
Deed, we are of the opinion that, save and except in a case where
there is willful negligence on the part of the lessee, the time line of
four years for completing the construction ought to be computed
from the date of issuance of the Commencement Certificate and not
from any prior date. Since the Commencement Certificate in this
case was issued on 29th October, 2007, hence, we are of the opinion
that even under Article 2(d) of the Lease Deed, the period of four
years would, at best, run from the date of issuance of the first
Commencement Certificate, in which case, the Petitioner would be
entitled to time till 28 th October,2011 for completing the
construction.
73. In present case, the construction was admittedly completed
by the Petitioner on 14th June, 2011. Therefore, having regard to
the facts and circumstances of the case, we are of the view that the
condition precedent for invoking the Article 2(d) of the Lease Deed
was not met in this case. As such, viewed from that angle also, in
our opinion, there was no legal justification for the Respondent
Shree Naman Hotels-oswp-3209-2017-J-R.doc
No.1 to insist on additional premium/penalty from the Petitioner
even under Article 2(d) on account of alleged delay in completing
the construction beyond the period of four years.
74. In so far as the undertaking given by the Petitioner to pay the
additional premium/ penalty is concerned, it must be noted herein
that the Writ Petitioner had not only objected to the demand for
payment of additional premium/penalty for the alleged delay in
completing the construction but had also deposited the amount
under protest, thereby categorically conveying that the deposit was
not made voluntarily or in discharge of its contractual obligation.
Such protest was not only raised contemporaneously but the same
was also in writing and unambiguous in nature, thus, putting the
Respondent No. 1 on clear notice that the Petitioner has not
accepted the decision in principle.
75. It also appears from the materials on record that apparently
due to the pressure mounted by the Respondent No. 1 demanding
payment of additional premium/penalty, the Petitioner was
compelled to deposit the penalty as otherwise the Petitioner would
not only be prevented from obtaining the Occupation Certificate
thus, causing serious economical prejudice to its interest but the
Shree Naman Hotels-oswp-3209-2017-J-R.doc
same would also expose the Petitioner to the risk of termination of
the Lease. Since the Petitioner had evidently made the deposit of
penalty under duress and under compelling circumstances, hence,
the principles of waiver, estoppel and acquiescence would not
operate against it in this case. From the protest raised by the
Petitioner, it was apparent that the Petitioner had reserved its right
to agitate the matter at an appropriate time, thus, keeping the
cause alive. Therefore, we hold that Petitioner would be entitled to
claim refund / seek waiver of additional premium/ penalty on
account of alleged delay, if any, in completing the construction.
76. Section 72 of the Indian Contract Act provides that a person
who receives payment made by the payee under coercion must
repay or return the same.
77. In Fatima Khatoon Chowdrain vs. Mahmoed Jan Chowdhury
(1868) 12 Moo Ind App 65, the Privy Council has held that
payment made not voluntarily but under species of compulsion
would be liable to be returned.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
78. In Valpy vs Manley (1845) 1 CP 594, the Court of England &
Wales has held that money paid under the constraint of threats to
interfere with the legal right is sufficient to make it recoverable.
79. In Ram Kishen Singh vs. Dooli Chand (1881) 8 IA 93 before
the Privy Council, it was held that if a person pays money to save
his property which has been wrongly attached in execution, he is
entitled to recover it.
80. Relying upon the case of Ram Kishen Singh (Supra), the
Privy Council in the case of Kanhaya Lal vs The National Bank of
India Limited14 has held that if a payment is made under protest
and involuntarily, under coercion, the party making such payment
would be entitled to claim refund of the same.
81. In the present case, the Petitioner was forced to give an
undertaking to pay the additional premium under the
circumstances, as noted above, created by the Respondent No. 1.
The arbitrary and high handed action of the Respondent No 1 is
further apparent from the fact that although there was no such
condition in the Lease Deed dated 9 th June,2006, yet, as has been
14 1913 SCC Online PC 4.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
mentioned above, the Respondents had demanded 2 suits for 50
nights and conference facility for 20 persons on 20 occasions free of
charge, fee or rent as a condition for issuing the Occupancy
Certificate to the Petitioner. On a pointed query made by this court
as to under what authority, such demand was made by the
Respondents, the learned Senior Counsel for the Respondents could
not give any convincing reply.
82. In view of the foregoing discussion, we are of the considered
opinion that the demand for payment of the penalty/additional
premium was not maintainable under Article 2(d) of the Lease
Deed. Moreover, such amount was demanded/realized by the
Respondent No. 1 without serving any prior Show Cause Notice
upon the Petitioner thus, acting in clear contravention of the
principle of natural justice. Even a proper Demand Notice was not
served upon the Petitioner before realizing the amount. As such, we
hold that not only the demand for additional premium/ penalty, but
even the retention of any part thereof, as might have been
deposited by the Petitioner under protest, was without the
authority under the law.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
83. In the case of Bank of Baroda, Mumbai & Anr (Supra), relied
upon by Mr Samdani, the primary issue was as to whether the
Respondent No. 1 (MMRDA) was bound to charge premium as per
the provisions of the regulation as applicable during the relevant
period because of the fact that the amendment to the regulations
did not show that it had any retrospective effect. In Assistant Excise
Commissioner & Ors. (Supra), it was held that even in a contract
between the parties which is governed by statutory provisions, the
terms and conditions of the contract would be binding both upon
the Government and the Licensee and neither of them can depart
therefrom. It was also not be open to any officer of the Government
either to modify, amend or alter the terms and conditions. In
Chaudhari Ran Beer Singh (Supra), the Hon'ble Supreme Court has
held that in matters of policy decision, the scope of interference by
the Court is extremely limited. In Goetze (India) Ltd. (Supra), the
Hon'ble Supreme Court has held that when the liability to pay the
interest is statutory, there is no power of waiver of the same; in
Transmission Corporation of Andhra Pradesh Ltd. (Supra), the
Hon'ble Supreme Court has held that when the parties have entered
into the field of contract simpliciter, their rights are controlled by
the contracts executed between them. Therefore, in the absence of
Shree Naman Hotels-oswp-3209-2017-J-R.doc
challenge to the contract, it would not be permissible for the Court
to go behind the contact and permit questioning of the statutory
jurisdiction vested in the regulatory commission. However, as
would be apparent from the facts alluded to herein above, it is
apparent that the issues involved in the Writ petition do not involve
any challenge to a particular Clause/Article in the Lease Deed or to
any statutory provision. On the contrary, the core controversy in
this petition is pertaining to the question of application of the terms
and conditions of the Lease Deed to the facts and circumstances of
this case. Therefore, we are of the opinion that the ratio laid down
in the abovenoted decisions relied upon by Mr Samdani would not
be of any assistance to the Respondents in the facts and
circumstances of the present case.
84. Having held as above, we deem it appropriate to reiterate
herein that the learned Counsel for the Petitioner has argued that
the case of the Writ Petitioner is squarely covered by the decision of
this Court in the case of Raghuleela Builders Pvt. Ltd. & Anr .
(Supra). The said assertion has, however, been strongly resisted by
the Respondent's Counsel by submitting that in view of the
observations made by the Hon'ble Supreme Court in the order
Shree Naman Hotels-oswp-3209-2017-J-R.doc
dated 27th July 2020, no reliance can be placed on the said
judgment for any purpose for deciding the present Writ Petition. On
a careful examination of the Judgment rendered in Raghuleela
Builders Pvt. Ltd. & Anr . (Supra) we also find that the said decision
was rendered in the facts of that case. However, one of the issues
raised in the said proceedings was pertaining to the question as to
whether, the decision of the MMRDA to apply the extension of time
from 4 years to 6 years for completing the construction only to the
post August 2015 was valid in the eyes of law, is also an issue raised
in the present proceeding. While answering the said question, it
was held in Raghuleela Builders Pvt. Ltd. & Anr . (Supra), as
follows:-
"38. The MMRDA constituted a single member committee of
retired Judge of the Supreme Court to decide whether the
MMRDA should give concession in recovery of premium
considering the time required for plot owner to obtain
permissions from various authorities for construction of building
thereon. It is contended that one member committee has
concluded that the charging of premium for extension of time for
completing construction in Bandra-Kurla Complex area,
specifically in case where additional built up area has been
allotted by the MMRDA, was illegal. In its 138th meeting held on
26th August 2015, the MMRDA had acknowledged the difficulties
faced by the lessees and that the condition of completion of
construction within 4 years of the execution of the lease was
adversely affecting the tendering process. The MMRDA had
appointed an expert one man committee of retired Supreme Court
Judge in that regard. The single member committee has advised
that the period of 6 to 7 years be granted for completion of
construction.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
39. The lease deed entered into by the MMRDA with the
lessees are as per form D, prescribed under the MMRDA (Disposal
of Lands) Regulations 1977. Clause 2(a) of the lease deed
provides that for building plans to be submitted to country and
town planing division for approval within 3 months from the date
of lease. Clause 2(c) of the lease deed provides that no work is to
be carried out until all plans, elevations, specifications are
approved by the concerned authorities. Clause 2(d) provides that
within 3 months of the approval of plans, the lessee is to
commence construction which is to be completed within four
years of the lease. Clause 2(e) provided for extension of time.
Clause 2(e) contemplates a situation when the time for
completion of construction can be extended, parties to the
contract contemplated that certain uncertainties or situations may
arise which may require more time for completion of the
construction. In view of this, time is not essence of the contract
between the parties and rightly so since construction of any
building in Bandra Kurla Complex, several permissions are
required from the various authorities and not only from the
MMRDA who is planning authority for the Bandra Kurla area,
namely,
(1) The environmental clearance under the Environmental
Impact Notification from the Ministry of Environment and Forest.
(2) Building height clearance from the Ministry of Civil
Aviation because of the close proximity to Airport.
(3) Clearance from the high rise committee.
(4) Permission from the the MCGM.
(5) Permission from the traffic police.
Each of these authorities is required to be approached
separately since there is no single window clearance / nodal
agency which would co-ordinate with the aforesaid authorities for
granting of all necessary permissions. In view of the delay in
obtaining permissions which are beyond the control of lessee, no
work could be carried out as per clause 2(d) of the lease deed.
40. The MMRDA had issued a letter of allotment dated 20th
March 2012 allotting additional 67,000 sq. meters at
consideration of 984 crore. Part payment of Rs.196 crore was
received on 20th March 2012. The supplementary lease deed was
executed for additional built up area of 67,000 sq. meters. The
letter of allotment dated 20th March 2012, the acceptance of part
payment of consideration for additional built up area allotted,
diluted the time period of four years and there was no question of
application of condition of occupation certificate for built up area
Shree Naman Hotels-oswp-3209-2017-J-R.doc
within 4 years when additional built up area was allotted for
raising additional 11 floors on the same building.
41. The resolution passed by MMRDA for extending the time
period for completing construction from 4 years to 6 years only
for leases executed after 26th August 2015 also appears to be
arbitrary, discriminatory, without basis and justification. The said
set of circumstances are prevailing for the construction being
carried out under the leases executed prior to 26th August 2015.
Therefore, not extending this benefit of this extension of time
from 4 years to 6 years to the prior leases in respect of other plots
in the BKC, is completely arbitrary, discriminatory, capricious and
violative of Article 14 of the Constitution of India. There is no
reasonable basis or justification for this decision. The
classification sought to be made between the leases prior and
subsequent to 26th August 2015 is not founded on intelligible
differentia and neither does this differentia has any logic, rational,
nexus to the object sought to be achieved. The MMRDA has
sought to treat equals as unequal. The lessees of plots are being
discriminated on the basis of their date of execution of their
leases. The lessees who are placed in similar circumstances
prevailing for construction in Bandra Kurla area are entitled to
equal treatment guaranteed under Article 14 of the Constitution
of India."
85. It is not in dispute that the Lease Deed involved in
Raghuleela Builders Pvt. Ltd. & Anr . (Supra) was also in Form 'D' of
the Regulations of 1977 wherein the same Articles 2 (d) and (e)
were involved. The Writ Petitioner there-in was also a similarly
situated lessee from whom penalty for delay in completing the
construction beyond the period of 4 years was raised by the
Respondent No 1. The Petitioner in that case had also raised
identical plea as regards the applicability of the time extension
Clause. The Lease Deed in that case was also executed prior to 26 th
August, 2015. If that be so there can be no doubt about the fact
Shree Naman Hotels-oswp-3209-2017-J-R.doc
that the legal principles discussed and the findings & observations
recorded in paragraphs 38 and 41 of Raghuleela Builders, in so far
as applicability of the 6 years time extension clause is concerned,
would be squarely applicable to the facts of the present case.
Therefore, the Respondent No. 1 would be duty-bound to extend
the benefit of extension of time for completion of construction upto
six years to the present Petitioner as well.
86. In the facts and circumstances of this case, we are also of the
opinion that there is no legal justification for the Respondent No. 1
to confine the benefit of the time extension clause only to those
Lease Agreements which were executed after 26 th August 2015 as
such an approach would be highly arbitrary and discriminatory in
nature. Therefore, having regard to the peculiar facts and
circumstances of this case, we do not find any justifiable ground to
take a different view on the aforesaid issue.
87. Law is well settled that for maintaining judicial discipline and
propriety, a decision rendered by a Coordinate Bench on the same
issue must be respected and followed by a Coordinate Bench. In the
case of Mary Pushpam vs. Televi Curusumary & Ors. 15 the Hon'ble
15 (2024) 1 SCR 11.
Shree Naman Hotels-oswp-3209-2017-J-R.doc
Supreme Court has observed that when a decision of a Coordinate
Bench of the same High Court is brought to the notice of the Bench,
it is to be respected and would be binding, subject to the right of
the Bench of such co-equal forum to take a different view and refer
the question to a larger Bench. In other words, any decision of a
Coordinate Bench would be binding on a Bench of equal strength
subject to the condition that if a different view is sought to be
adopted then the matter would have to be referred to a larger
Bench.
88. The above legal principle has taken a firm footing in the
Indian Jurisprudence by a long line of judicial pronouncements. We
do not deem it necessary to burden this judgment by referring to all
those decisions. However, suffice it to mention that unless there are
justifiable grounds to take a different view in the matter warranting
reference to a larger Bench, the previous decision of a coordinate
Bench would be binding on a Bench of equal strength.
89. Consequently, it is held that even as per Article 2(d) of the
Lease Deed dated 9th June 2006, the Writ Petitioner would be
entitled to six years time for completion of the construction with
effect from the date of execution of the Lease Deed, i.e., upto 8 th
Shree Naman Hotels-oswp-3209-2017-J-R.doc
June 2012. Since the construction of the Hotel building was
admittedly completed on 14th June 2011, i.e. within six years
hence, even as per Article 2(d) no penalty would be payable by the
Petitioner on account of delay in completing the construction.
90. For the reasons stated above, we hold that the Demand
Notice dated 12th September 2017, demanding additional
premium/ penalty from the Petitioner, is illegal and without the
authority of law. The same is accordingly set aside.
91. This Writ Petition, therefore, succeeds and the same is hereby
allowed in terms of payer clause (A).
92. It appears from the statement annexed to the Demand Notice
dated 12th September 2017 that the Petitioner has already
deposited a total amount of Rs.8,93,92,318/- together with
interest, as additional premium/penalty due to delay in completion
of the construction. The Respondent No. 1 is, therefore, directed to
verify and refund the entire amount deposited by the Petitioner, as
additional premium/penalty, within a period of 90 (ninety) days
from the date of receipt of the Certified Copy of this order, failing
which, the amount would carry interest at the same rate at which
Shree Naman Hotels-oswp-3209-2017-J-R.doc
interest was payable by the Petitioner under the Lease Agreement
due to delay in paying premium, to be calculated on the above
amount from the date of this order till the date of the refund.
93. With the above observations, the Rule is made absolute.
94. The Writ Petition stands disposed of.
95. Parties to bear their own costs.
(SUMAN SHYAM, J) (CHIEF JUSTICE)
