Bombay High Court dismisses over 100 petitions by developers, housing societies challenging levy of ₹800 crores of development charges

The Bombay High Court on Thursday dismissed more than 100 petitions filed by developers and residential societies challenging levy of development charges by authorities collectively amounting to more than ₹800 crores [Shivaji Nagar Rahivashi Co-op. Hsg. Soc. Ltd. & Ors. v. State of Maharashtra & Ors.].A bench of Justices RD Dhanuka and Kamal Khata found no merits in the petitions and dismissed the same in a detailed 238 page judgment..The petitioners were carrying out redevelopment of their respective buildings and claimed that such levy by planning authorities like Brihanmumbai Municipal Corporation (BMC) and Maharashtra Housing and Area Development Authority (MHADA) under Section 124F of the Maharashtra Regional Town Planning Act was illegal and without jurisdiction.Senior Advocates Dr Milind Sathe and Advocate Saket Mone arguing for the lead petitioners, submitted that the exemption, which is granted to the State government or the Central government or any Planning Authority under Section 124F of the MRTP Act would also apply in case of the applications made by these petitioners for carrying out redevelopment of the land.The argument was that since the development was being undertaken on land “vested with” a government authority, they were exempted from payment of development charges. Thus, it was irrelevant whether a civic authority or a private party was carrying out redevelopment, it was contended. The petitioners, therefore, sought an order setting aside the demand notices issued by the planning authorities imposing an amount collectively to the tune of over ₹800 crores on all petitioners.They also sought a refund of such amounts which had been deposited under protest till the petitions were to be finally decided..Advocate General Ashutosh Kumbhakoni and advocate Akshay Shinde, appearing for the State and the MHADA, pointed out that development charges by the planning authority were in the nature of fee and not tax.He argued that exemption could be claimed under Section 124F only if the land owned by these authorities is sought to be developed by such authorities itself, for their own benefits and for their own purposes and not by others proposing to carry out redevelopment on such lands.Senior Advocate Aspi Chinoy and advocate Joel Carlos for BMC opposed the petitions contending that lands vested with them could not be equated with ownership, and Section 124F provides exemption only in that strict sense..The Court deduced from the submissions that even if the lands may be owned by either the State or the planning authorities, upon redevelopment of these plots by the developer, the building would be owned by either the society or occupants for whose benefit these buildings would be developed.It, therefore, agreed with the contentions raised by AG and Chinoy and hence dismissed the petitions.[Read Judgment]