Limiting extended construction timelines to subsequent leases is arbitrary, discriminatory, and violates Article 14.

The Petitioner entered into a Lease Deed on June 9, 2006, with Respondent No. 1 (MMRDA) for Plot Nos. C-57 and C-58 at Bandra-Kurla Complex (BKC) to construct a star-category hotel

Article 2(d) of the Deed required the construction to be completed within four years from the lease date (i.e., by June 8, 2010)

significant delays occurred due to mandatory statutory clearances, including Environmental Impact Assessment (EIA) and height clearances from Civil Aviation authorities

MMRDA issued the first Commencement Certificate (CC) only on October 29, 2007—16 months after the lease began

MMRDA allotted additional Built-Up Area (BUA) to the Petitioner in 2008 and 2010 (allowing 12th and 13th floors), but the original four-year timeline remained unchanged

The Petitioner completed the building on June 14, 2011, within five years

MMRDA issued a Demand Notice on September 12, 2017, for additional premium (penalty) totaling approximately ₹25.42 crores for the delay

To obtain the Occupation Certificate (OC), the Petitioner furnished an undertaking and paid part of the amount under protest

In 2015, MMRDA policy changed the completion period from four to six years, but only for leases executed after August 26, 2015

1. Whether the Writ Petition is maintainable despite involving contractual terms and alleged delay/laches

2. Whether the demand for additional premium under Article 2(d) was valid given that the delay was caused by statutory approvals and MMRDA’s allotment of additional BUA

3. Whether restricting the benefit of the policy extension (from 4 to 6 years) only to post-2015 leases was arbitrary and discriminatory under Article 14 of the Constitution

The Court applied the principle of fairness and non-arbitrariness under Article 14 of the Constitution of India, which strikes at state actions that treat equals as unequals

demanding penalties when delays are beyond the lessee's control is arbitrary

Section 72 of the Indian Contract Act, 1872, regarding the refund of money paid under coercion or duress

the doctrine of judicial discipline was applied, necessitating that coordinate benches follow earlier decisions on similar facts unless referring to a larger bench

The Court observed that the Petitioner could not commence construction without a Commencement Certificate, which was delayed by MMRDA and other statutory bodies for over a year

Applying a rigid four-year timeline from the lease execution date—while clearances were pending—was deemed "unconscionable" and "unfair"

The Court found that MMRDA’s own action of allotting additional BUA (12th and 13th floors) mid-project fundamentally altered the scope of work, making the original deadline impossible to meet

Regarding the 2015 policy extension, the Court held that there was no "intelligible differentia" to exclude pre-2015 lessees from the benefit of a six-year completion window, as the difficulties faced were identical

The Court rejected the Respondents' plea on maintainability, noting that MMRDA is a State instrumentality and its demand for "free hotel suites" and penalties lacked legal authority

The Petitioner’s undertaking to pay was ruled as obtained under "economic duress," as it was a prerequisite for the OC, and thus did not constitute a waiver of rights

It held that the Petitioner was entitled to a six-year completion period (up to June 2012) and since the hotel was completed in June 2011, no penalty was payable

The Court directed MMRDA to refund the amount of ₹8,93,92,318/- paid by the Petitioner under protest within 90 days, failing which it would carry interest

The rule was made absolute with no order as to costs