Bombay High Court quashes ₹1,100 crore demand by MMRDA against Reliance Industries

The Bombay High Court on April 8 set aside demands of over ₹1,100 crore raised by the Mumbai Metropolitan Region Development Authority (MMRDA) against Reliance Industries Ltd for alleged delay in completing construction of its convention-cum-commercial complex in Mumbai suburbs [Reliance Industries Limited v. MMRDA & Ors.]

A division bench of Chief Justice Shree Chandrashekhar and Justice Suman Shyam said that the additional premium claimed by MMRDA was illegal, arbitrary and hit by Article 14 of the Constitution.

On April 8, the bench quashed a 2017 demand-cum-show cause notice and a 2019 communication by which MMRDA sought ₹1,116.83 crore more from Reliance towards additional premium for extension of time to complete construction in Bandra-Kurla Complex area of Mumbai. 

The Court directed MMRDA to refund ₹646.77 crore already recovered from Reliance under protest within 90 days, failing which the amount will carry interest at the same rate that the authority itself charges lessees for delayed premium under the lease.

Reliance was originally leased 1.15 lakh square meters of area in 2006, for which it paid ₹1,104 crore. 

The MMRDA progressively raised the permissible Floor Space Index (FSI) in BKC, allocating multiple subsequent portions of additional area. This cumulative increase resulted in a total development potential of 3.12 lakh square meters on the same plot, for which an aggregate premium of ₹4,005 crore was received.

The Court accepted that the project was conceived and sanctioned as a single composite structure which meant the “original” and “additional” areas could not realistically be segregated for the purpose of completion timelines.

MMRDA maintained that construction had to be completed within four years of the lease date. They argued that any extension, even if necessitated by court-ordered restraint or delays in obtaining regulatory approvals, would require the payment of an additional premium. 

The Court rejected this argument, ruling that time was not an essential condition for these BKC leases. 

Further, it held that the four-year construction period must be calculated from the issuance of the first commencement certificate (which occurred in June 2008). 

Crucially, the Bench held that the authority's own 2015 policy, which extended the period to six years, could not be restricted only to leases executed after August 2015.

The Court termed the pre‑/post‑2015 cut‑off arbitrary and discriminatory and extended the six‑year benefit to Reliance as a similarly placed lessee. 

It also held that amounts paid by Reliance under threat of lease termination and denial of occupation certificates were made under coercion and are refundable.

Senior advocate Vikram Nankani with advocates Vikramaditya Deshmukh, Ashwin Dave, Ameya Nabar and Swati Jain, briefed by AS Dayal & Associates appeared for Reliance.

Senior advocate Birendra Saraf with advocates Nishant Chotani, Nivit Srivastava, Sneha Patil,  Aditi Sinha, Hrishikesh Joshi and Isha Vyas briefed by Maniar Srivastava Associates appeared for MMRDA.

[Read Judgment]