Supplementary lease deeds granting unlimited time for completion override original construction time-limits in composite projects.

The Petitioner, a non-profit company, was allotted Plot No. C-63 in Bandra-Kurla Complex (BKC) by the Respondent (MMRDA) on a long-term lease for the construction of an office complex

A Lease Deed was executed on April 9, 2008, which stipulated that construction must be completed within four years (Article 2(d)), failing which additional premium/penalty would be charged for extensions (Article 2(e))

Initially, the Floor Space Index (FSI) was 2.00, but it was later enhanced to 4.00, leading the Petitioner to acquire additional built-up area (BUA)

A Supplementary Lease Deed (SLD) was executed on April 22, 2013, which expressly stated in Article 2(c) that there would be "no time limit" for completion of the building using the additional BUA

Despite this, MMRDA issued demand notices in 2014 and 2017 seeking penalties for the delay in completion beyond the original four-year window

The Petitioner paid approximately ₹22.63 Crores under protest and filed this Writ Petition challenging the demand notices

1. Whether the Writ Petition is maintainable given the existence of an alternative remedy under Section 44 of the MMRDA Act and the presence of disputed questions of fact.

2. Whether the demand for penalty/additional premium is contrary to the terms of Article 2(c) of the Supplementary Lease Deed.

3. Whether the Respondent’s policy of granting a six-year completion period only to leases executed after August 2015 is arbitrary and discriminatory under Article 14 of the Constitution.

The court primarily applied Article 14 of the Constitution of India, which mandates fairness in State action and prohibits arbitrariness

It relied on the principle of Contra Proferentem, which dictates that any ambiguity in a contract drafted by one party (the State) must be resolved against that party

The court further applied Section 72 of the Indian Contract Act, 1872, regarding the obligation to refund money paid under coercion or duress

It followed the precedent in Raghuleela Builders Pvt. Ltd. v. MMRDA, which held that applying time-extension benefits only to post-2015 leases constitutes an arbitrary classification without intelligible differentia

The Court first addressed maintainability, holding that while contractual, the dispute involved the "public law character" of a State instrumentality (MMRDA), and Section 44 of the MMRDA Act did not provide an efficacious remedy for interpreting lease terms

On the merits, the Court observed that Article 2(c) of the SLD specifically waived the time limit for the "integral" composite construction

The Court reasoned that once the additional BUA was allotted for the same building, segregating the construction into phases with different deadlines was impossible, as facilities like fire systems and elevators are common to the entire structure

Applying the Contra Proferentem rule, the Court found that any ambiguity between the 2008 and 2013 deeds must be resolved in favor of the Petitioner

Furthermore, the Court found the Respondent's 2017 demand notice vague and in violation of natural justice, as no specific breach was detailed

Finally, it held that the Petitioner’s payments were made under "duress and coercion" to save the project from lease determination, triggering the right to a refund under Section 72 of the Contract Act

It held that the "no time limit" clause in the Supplementary Lease Deed displaced the original four-year restriction

The Court directed MMRDA to refund the total penalty amount of ₹22,63,59,150/- to the Petitioner within 90 days, failing which the amount would carry interest at 14% per annum from the date of the order until realization