No additional lease premium is leviable for construction delays caused by pending litigation involving the planning authority.

CIDCO allotted a plot in Kharghar to one Mr. Mapara in 2005, executing a lease agreement in October 2010

In December 2010, the Petitioner entered into an agreement with Mr. Mapara to acquire the leasehold rights

Due to Mr. Mapara’s subsequent refusal to perform the contract, the Petitioner filed a suit for specific performance in 2011, impleading CIDCO as a defendant

The Trial Court granted an interim injunction restraining the defendants from transferring or disposing of the property

The suit was decreed in favor of the Petitioner in 2018, and execution proceedings followed

In June 2024, CIDCO issued demand notices for Additional Lease Premium (ALP) totaling ₹80,72,507/- for the period 2014–2024, citing the failure to complete construction within the four-year period prescribed in the lease

The Petitioner challenged these notices, arguing that the delay was due to pending litigation and judicial restraint

1. Whether the Petitioner, as a transferee under a decree for specific performance, is liable to pay Additional Lease Premium (ALP) for a period where construction was delayed due to active litigation and judicial orders

2. Whether the benefit of CIDCO’s Board Resolution providing for 0% ALP during litigation periods applies to the Petitioner

The court examined the Navi Mumbai Disposal of Lands (Amendment) Regulations, 2008, specifically Regulation 7, which mandates construction completion within four years

Regulation 8, which allows for time extensions upon payment of ALP

Regulation 10, which requires a transferee to observe all conditions of the original lease

The court further applied the CIDCO Board Resolutions (BR 11885 and 12209), which establish a policy that ALP shall be levied at 0% for periods where a licensee is restrained from commencing or continuing construction due to court cases or judicial orders, provided CIDCO is a party to the litigation

The court rejected CIDCO’s contention that construction could have proceeded because the interim injunction only restrained "transfer" and not "construction."

The court reasoned that it was "impossible" for the Petitioner to commence construction or apply for building permissions while his title was still being disputed by Mr. Mapara in a pending suit

It noted that the Petitioner only obtained legal possession and the right to execute the tripartite agreement after the decree was passed and executed

The court found that since CIDCO was a party to the suit, the conditions of the Board Resolution for 0% ALP were met

The court held that holding the Petitioner liable for the breach committed by the original allottee (Mr. Mapara) during the litigation period was "harsh," "unfair," and "arbitrary"

It clarified that while Regulation 10 requires a transferee to step into the shoes of the lessee, such compliance is only feasible once the decree is executed

The court held that ALP must be levied at 0% for the period the Petitioner was restrained by the circumstances of the litigation and judicial orders

It further observed that CIDCO remains at liberty to pursue claims against the original allottee, Mr. Mapara, if permissible under law, but cannot penalize the Petitioner