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- 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 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 115th 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 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 9th 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 13th 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.
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 13th 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 2nd 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.
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 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 15th 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 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 3rd 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 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) 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 12th 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 138th 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 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 12th September 2017, as well as the earlier communications dated 12th 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 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 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).
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 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 & Ors.((2020) (1) ABR 397: 2019 SCC OnLine Bom 4529.) 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 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. 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.(2010 (3) Mh. L.J.)
(b) Assistant Excise Commissioner & Ors. vs. Issac Peter & Ors.((1994) 4 SCC 104.)
(c) State of UP & Ors. vs. Chaudhari Ran Beer Singh,((2008) 5 SCC 550.)
(d) Goetze (India) Ltd. vs. Employees State Insurance Corporation((2008) 8 SCC 705.)
(e) Transmission Corporation of Andhra Pradesh Ltd. & Anr. Vs. Sai Renewable Power Pvt. Ltd. & Ors.((2011) 11 SCC 34.)
(f) Banda Development Authority, Banda vs. Motilal Agarwal & Ors.((2011) 5 SCC 394.)
(g) Punjab Financial Corporation vs. Surya Auto Industires((2010) 1 SCC 297.)
(h) Joshi Technologies International IBC vs. U.O.I. & Ors.((2015) 7 SCC 728.)
(i) The Godhra Electricity Co. Ltd. & Anr. vs. The State of Gujrat & Anr((1975) 1 SCC 199.)
(j) Dhanraj vs. Vikram Singh & Ors.(2023 SCC OnLine SC 724.)
(k) Dalip Singh vs. State of U.P & Ors.((2010) 2 SCC 114.)
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 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 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.
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 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,((1974) 4 SCC 3.) 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.
46. It would be further pertinent to note herein that in an earlier decision rendered by a co-ordinate Bench of this Court dated 20th 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 12th 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 12th September, 2017 was served for recovery of penalty/additional premium along with interest calculated thereon.
47. By the Judgment and Order dated 20th November 2019, in Raghuleela Builders Pvt. Ltd. & Anr. (Supra), a Division Bench of this court had set aside the impugned Demand Notice dated 12th 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 exfacie 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 20th 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.
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 27th 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 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 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 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 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 9th 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 workmanlike 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:
(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 |
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 13th June 2006. On 1st August, 2006, SNDL had assigned its rights over the plot in favour of the Petitioner. On 25th 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 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 3rd 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 20th 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 29th October 2007. While the aforesaid process was underway, on 18th November 2008, the Respondent No. 1 had offered additional built-up area to the 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 18th 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 9th 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., 9th June 2006, yet, the CC for the entire building was issued only on 18th 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.
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 13th 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 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.
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 12th 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 |
WHEREAS the Mumbai Metropolitan Region Development Authority issued a Show Cause Notice dated 22/08/2014 for nonpayment 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.
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 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 9th 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 14th 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 9th 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 29th 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 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 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 28th 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 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 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.
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 Limited(1913 SCC Online PC 4.) 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 9th June,2006, yet, as has been 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.
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 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 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.
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 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 26th August, 2015. If that be so there can be no doubt about the fact 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 26th 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.((2024) 1 SCR 11.) the Hon’ble 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 8th 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 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.