Synopsis

The petitioner (lessee) was granted lease of two plots in Bandra-Kurla Complex (BKC) for construction of a building with an initial built‑up area of 14,100 sq. mtrs. The lease deed (2006) required completion within four years, failing which additional premium/penalty was payable. During construction, the authority allotted additional built‑up area (28,100 sq. mtrs.) and executed a supplementary lease deed (2015) which explicitly stated “there shall be no time limit for construction of the said additional built up area.” The petitioner faced delays due to: (i) undisclosed pre‑existing underground piles; (ii) time consumed in obtaining statutory approvals (environment clearance, height clearance, etc.); and (iii) the need to revise plans for the additional area. The authority demanded penalty of Rs. 52.80 crores for delay. The petitioner paid under protest and challenged the demand. The High Court allowed the writ petition, holding that: (i) the authority had breached its duty under Section 108(a) of the Transfer of Property Act by not disclosing the underground piles; (ii) under the doctrine of prevention, the authority could not claim penalty for delays it caused; (iii) the supplementary lease deed removed the time limit; (iv) the demand was arbitrary, discriminatory, and violated natural justice; and (v) the amount paid under duress was refundable under Section 72 of the Contract Act.

Court: High Court of Judicature at Bombay (Ordinary Original Civil Jurisdiction)
Coram: Shree Chandrashekhar, CJ & Suman Shyam, J.
Date: April 8, 2026
Citation: 2026:BHC-OS:8908-DB
Core Law: Constitutional Law (Article 14), Contract Law, Transfer of Property Act, 1882 (Section 108), Indian Contract Act, 1872 (Section 72), Principles of Natural Justice, Doctrine of Prevention.

2. Legal Framework

• Constitution of India: Article 14 (arbitrariness, equality), Article 226 (writ jurisdiction).

• Transfer of Property Act, 1882: Section 108(a) – lessor’s duty to disclose material defects in the property.

• Indian Contract Act, 1872: Section 53 (reciprocal obligations – prevention of performance), Section 72 (refund of money paid under coercion).

• Mumbai Metropolitan Region Development Authority Act, 1974: Section 44 (alternative remedy – held not efficacious).

• Doctrine of Prevention: A party cannot enforce a penalty or claim liquidated damages if it has itself prevented the other party from performing within the stipulated time.

• Maxim: Nullus commodum capere potest de injuria sua propria – no one can take advantage of his own w

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