Bombay High Court directs MHADA, BMC to refund ₹5.19 crore to developer in 6 weeks

Bombay High Court directs MHADA, BMC to refund ₹5.19 crore to developer in 6 weeks

Developer had sought refund as the project was not cleared due to CRZ regulations.

Urvi MahajaniUpdated: Tuesday, February 21, 2023, 08:56 PM IST
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Bombay High Court | Wikimedia Commons

Mumbai: The Bombay High Court (HC) has directed the Maharashtra Housing and Area Development Authority (MHADA) and the BMC to refund over ₹5 crore paid by a developer towards a No Objection Certificate (NOC) for a redevelopment project undertaken at Versova, which never materialised due to Coastal Regulation Zone (CRZ) norms.

The HC was hearing a petition filed by SD SVP Nagar Redevelopment Pvt Ltd and its authorised signatory Leena Ranadive seeking that MHADA and the BMC be directed to return the amount.

According to the plea, MHADA owned a cluster plot at Versova which was developed and divided into 31 plots that were allotted to various individuals. These allottees then formed the Versova Andheri Shantivan Cooperative Housing Society Ltd. On the society's application, MHADA and the society executed a lease deed dated October 15, 1993.

Structures required redevelopment

The society and its members constructed some buildings and tenements on this land, but by 2010, these structures were dilapidated and required redevelopment. In 2012, redevelopment rights were granted to the petitioner developer. The developer made an application to MHADA and even the society gave its nod. Since the society was a lessee from MHADA its consent was required for redevelopment. The authority asked for a payment of ₹5,19,20,186 which was paid by the developer. Of the total, some payments were to MHADA and some were to the BMC. However, the developer could not get final approval as the land falls under CRZ-II regulations.

An RTI query

On November 6, 2020, the developer wrote to MHADA seeking a refund and the NOC was cancelled on March 31, 2021, on the developer's request. MHADA refunded a sum of ₹2,38,24,764 by RTGS in April 2021. However, the developer didn't get returns from the BMC. An RTI query revealed that a certain amount has been transferred to the 'Maharashtra Nivara Nidhi' and would have to be routed back to MHADA for it to make a refund to the developer.

The court noted, “If the development does not happen and the NOC itself for redevelopment stands cancelled, then there is clearly a complete failure of consideration and there is no possibility of either MHADA or the MCGM retaining any part of the amount.” The HC asked the authorities to release the amount within six weeks.

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