MUMBAI: The Bombay High Court has ordered the Mumbai Metropolitan Region Development Authority (MMRDA) to refund ₹646 crore imposed on Reliance Industries Limited (RIL) as a penalty for an alleged seven-year delay in completing a convention and exhibition centre and commercial complex in Bandra Kurla Complex (BKC).
The court invalidated two penalty demand notices from MMRDA—one from 2017 for ₹646 crore and another from 2019 for ₹1,116 crore, with the latter being stayed by the court in 2020.
The High Court criticized MMRDA for collecting ₹646 crore from RIL in February 2019 in a manner deemed “arbitrary, high-handed, unfair, and unreasonable,” which put undue pressure on RIL and threatened its business interests.
In December 2005, MMRDA, as the owner of the BKC plot, invited bids for leasing out 75,000 sq meters to construct the convention center, with RIL being declared the successful bidder in 2006. MMRDA approved the lease, mandating construction of 115,000 sq m within four years for a premium of ₹1,104 crore, with a lease term of 80 years.
Chief Justice Shree Chandrashekhar and Justice Suman Shyam, in a judgment on April 8, stated that “no additional premium or penalty was either payable or recoverable from RIL,” as MMRDA was obligated to apply a six-year extension clause similarly to other projects.
MMRDA, represented by senior counsel Birendra Saraf, argued that it justifiably invoked conditions from the 2006 lease deed, which required construction within four years. In 2007, an additional built-up area was approved with a premium of ₹696 crore.
Senior counsel Vikram Nankani for RIL contended that no time limit was specified when granting additional construction area, making the four-year completion deadline inapplicable.
The High Court concurred that the conditions did not impose a penalty, instructing MMRDA to refund the amount to RIL within 90 days, or face interest penalties. The court also highlighted that the six-year extension policy, implemented for lease deeds after 2015, was “highly arbitrary and discriminatory,” and asserted its benefits should apply to RIL and three similar cases challenging penalty demands.
