Macrotech Developers Limited has received a major reprieve from the Bombay High Court as it has struck down the penalty levied by the Mumbai Metropolitan Region Development Authority (MMRDA) on the construction firm. In December 2014, the MMRDA sent a notice to the developer asking them to pay Rs 34.40 crore as premium for balcony enclosures in seven residential complexes built at the Wadala Truck Terminus (TT).
Macrotech challenged the MMRDA’s notice at the Bombay High Court in early 2015 following the MMRDA mentioning that an additional Rs 1.17 lakh penal interest has been added since the payment date lapsed on June 20, 2014.
The builder’s legal counsel argued that the MMRDA had no authority to fix the rate of premiums for balcony enclosures. Interestingly, the MMRDA had pitched Rs 2,000 as the premium for an enclosed balcony in July 2011. However, the MMRDA decided to take it up to Rs 20,000, thus taking the total premium to Rs 34.40 crore until June 20, 2014.
The division bench of the Bombay High Court, headed by Justice KK Tated and Justice Sarang Kotwal, wasn’t impressed by the MMRDA’s argument that its metropolitan commissioner used his discretion to hike up the prices. The justices struck down the MMRDA notice saying it failed to prove that it had the authority to collect premiums for balcony enclosures from developers.
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