The Bombay high court has said that the Navi Mumbai Municipal Corporation (NMMC) cannot reserve plots of land for public purposes which were earlier auctioned by City and Industrial Development Corporation (CIDCO) to private developers for residential/ commercial purposes.
A division bench of Justices Girish Kulkarni and RN Laddha, while hearing a batch of petitions by developers, has asked CIDCO to accept lease premium for allotment from the developers without insisting on delayed payment charges or interest.
NMMC & CIDCO formation
CIDCO was set up as a new town development authority for designated sites to build New Bombay, now Navi Mumbai, by a notification on Mar 20, 1971. The NMMC was formed in 1991. Even after formation of NMMC, CIDCO did not lose its authority to dispose of plots of land which were vested with it.
In February 2021, CIDCO issued public tenders inviting bids for allotment of residential cum-commercial plots of land at Navi Mumbai. The petitioners were successful allottees and they deposited substantial amounts as earnest money With Cidco. The amounts were to be adjusted in the total consideration to be paid by them, namely, the lease premium to be paid to the Cidco. They were asked to deposit the lease premium within 10 weeks from the date of allotment.
The petitioners subsequently learnt that the NMMC had proposed to reserve the plots allotted to them for different public purposes.
A public interest litigation (PIL) was filed by two citizens challenging land allotment to developers contending that the same were reserved for public purposes.
Uncertainty on the issue of plots allotted cleared
In August 2022, the HC dismissed the PIL stating that CIDCO has a right to auction land in its possession. “The NMMC, in law, [cannot] impose such reservation on CIDCO plots/lands as [this is] outside its power and authority to do so,” the HC had said then. The Supreme Court, in February 2023, upheld the HC order. This cleared the “uncertainty” on the issue of plots allotted to the petitioners being reserved by the NMMC.
Pending PIL, the developers did not deposit the lease premium contending that if the HC was to rule in favour of the PIL petitioners then their allotments would not have materialised.
Ruling in favour of petitioner developers, the HC noted that they were correct that before making payments, “every uncertainty not only from the CIDCO but also from NMMC and State Government was required to be removed”.
The judges said that dismissal of the PIL by the SC has “paved the way for finalising the allotments of these plots in favour of the petitioners by the CIDCO” and the authority needs to accept payment which was suspended.
Asking Cidco to accept the amount, the HC stated that it will not insist on any delayed payment charges or interest, on such installments. The HC also clarified that the developers are entitled to develop the plots subject to the terms and conditions of the allotment letter.
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