In a major relief to Reliance Industries Limited (RIL), the Bombay High Court on April 8, 2026, directed the Mumbai Metropolitan Region Development Authority (MMRDA) to refund approximately ₹647 crore (₹646.77 crore plus interest) that the authority had demanded and partially collected as “additional premium/penalty” for alleged delay in completing the iconic Convention & Exhibition Centre and Commercial Complex project in Bandra-Kurla Complex (BKC).
A Division Bench comprising Chief Justice Shree Chandrashekhar and Justice Suman Shyam allowed RIL’s writ petition (WP No. 242 of 2018) and quashed two demand notices issued by MMRDA — dated September 12, 2017 and June 13, 2019. The court held that the demands were arbitrary, unreasonable and violative of Article 14 of the Constitution.
Chronology of Events: How the Dispute Unfolded
- December 2005: MMRDA invites bids for leasing Plot No. C-64 (approx. 75,000 sq m) in G-Block, BKC, for a Convention & Exhibition Centre and Commercial Complex.
- February 15, 2006: Reliance is declared the successful bidder. Total premium agreed: ₹1,104 crore for 1,15,000 sq m built-up area.
- September 1, 2006: Lease Deed executed for 80 years. Article 2(d) requires completion of construction “fit for occupation” within four years from the date of the lease (i.e., by September 2010). Article 2(e) provides for extension of time only on payment of additional premium (25–40% of premium paid).
- 2007: FSI in G-Block increased from 2.0 to 4.0. MMRDA allots additional 72,500 sq m built-up area to Reliance for ₹696 crore. Supplementary Lease Deed signed on July 13, 2007.
- October 15, 2007: Bombay High Court passes interim order in WP No. 1165 of 2007 restraining Reliance from utilising 31,500 sq m of the additional commercial FSI. The project, being composite (common basement and foundation), is effectively stalled.
- June 12, 2008: Plinth-level Commencement Certificate (CC) issued only for Convention Centre, but construction cannot proceed due to the court stay.
- 2009–2011: Reliance repeatedly informs MMRDA that the integrated design makes separate construction impossible. It offers to surrender the additional FSI and seeks refund, but MMRDA refuses.
- February 1, 2012: MMRDA clarifies in writing that the period of court stay will be excluded while calculating the four-year timeline.
- March 12, 2012: WP No. 1165 of 2007 withdrawn; court stay vacated.
- March–April 2012: MMRDA allots further 1,25,000 sq m additional built-up area for ₹1,837.5 crore. Total built-up area now stands at 3,12,500 sq m. Total premium paid by Reliance: ₹4,005 crore.
- 2013–April 2014: Multiple statutory clearances obtained (Environment Clearance in June 2013, MCGM permissions, aviation height clearance, High-Rise Committee approval). Composite Commencement Certificate for the entire project issued on April 16, 2014.
- August 26, 2015: MMRDA amends its policy and extends the construction timeline from 4 years to 6 years for all new leases executed after this date.
- November 18, 2016: Under pressure to obtain further CCs, Reliance gives an undertaking to pay additional premium (if demanded) before receiving Occupation Certificate.
- September 12, 2017: MMRDA issues first demand-cum-show cause notice alleging 7 years and 12 days delay and demands penalty (amount not legible in notice).
- November 30, 2017: Reliance files writ petition challenging the demand.
- February 2019: Reliance deposits ₹646.77 crore under protest and furnishes bank guarantees to secure part Occupation Certificate for 44,621 sq m.
- June 13, 2019: MMRDA issues second demand for another ₹1,116.83 crore towards the additional built-up area.
- July 12, 2021: High Court grants interim relief directing MMRDA to process Occupation Certificate applications without insisting on the second demand.
- January 22, 2026: Final arguments concluded.
- April 8, 2026: Judgment pronounced — Reliance wins on all counts.
Court’s Key Reasoning
The bench held that:
- The project was composite and integrated — common basement and services made it impossible to complete the original portion independently of the additional FSI.
- Delays were caused by factors beyond Reliance’s control: court stay (over 4 years), multiple statutory approvals, and fresh Commencement Certificates required after additional allotments.
- The four-year timeline in the 2006 Lease Deed could not be applied rigidly once MMRDA itself allotted massive additional built-up area and later extended the timeline to six years for newer lessees.
- Denying the six-year benefit to Reliance while granting it to later lessees was arbitrary and discriminatory.
- The 2017 and 2019 demand notices were vague, not preceded by proper show-cause notice, and issued in violation of principles of natural justice.
- The ₹646.77 crore was paid under coercion (to obtain Occupation Certificate and avoid lease termination). Hence, the doctrine of waiver/estoppel did not apply.
The court relied heavily on its earlier judgment in Raghuleela Builders Pvt Ltd vs MMRDA (2019), where similar demands were struck down.
Final Order
- Both demand notices quashed.
- MMRDA directed to refund ₹646,77,68,594 within 90 days, failing which interest will be payable at the rate stipulated in the Lease Deed.
- Bank guarantees to remain valid for 90 days.
- No costs imposed on either party.
Senior Advocate Vikram Nankani, instructed by A.S. Dayal & Associates, appeared for Reliance. Dr. Birendra Saraf, Senior Advocate, represented MMRDA.
The judgment is expected to have far-reaching implications for several other developers in BKC who have faced similar penalty demands from MMRDA.
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