In a major boost for the Brihanmumbai Municipal Corporation (BMC) and setback for the developers who have developed projects on lands belonging to the BMC or MHADA or the Maharashtra government, the Bombay High Court ruled on Thursday that they will have to pay Development Charges to the civic body.
A division bench of Justices RD Dhanuka and Kamal Khata dismissed over 100 petitions filed by developers challenging the demand notices issued by the BMC asking them to pay the development charges.
“The submission of learned counsel (for petitioner developers) that the Development Charges cannot be imposed in respect of redevelopment of leasehold land is concerned, in our view, this submission is totally untenable,” observed the court in a detailed 238-page judgment.
The developers were given requisite permissions to redevelop projects, on lease, which stood on land belonging to government, BMC or MHADA. Collectively, the demand notice for development charges by the BMC to the developers amounted to over Rs 100 crores.
Milind Sathe, MM Vashi and Girish Godbole, counsels for the developers, argued that these projects are exempted from levy, imposition, demand and recovery of development charges by the BMC under section 124F of the Maharashtra Regional Town Planning Act, 1966 (MRTP Act). Terming demand of development charges by the BMC as “illegal, contrary to law, without jurisdiction and without authority of law”, the developers had sought quashing of the same.
Opposing the pleas, BMC counsels Joaquim Reis, Aspi Chenoy and Joel Carlos argued that there was no reason as to why exemption should be granted under section 125F of the MRTP Act. The section gives powers to the government to grant partial exemption from payment of Development Charges for the development being carried out by the specific Authorities for specific purpose.
However, the provision clearly indicates that the said provision does not provide for exemption from paying development charges for development / redevelopment of properties if it is sought to be done by third party.
Agreeing with the arguments of the BMC, the HC said: “There is no such distinction made in Section 124A of the MRTP Act that leasehold plot cannot be developed or that no Development Charges would be required to be paid for carrying out development or redevelopment by a third party on leasehold plot.”
The developers has contended that ‘development’ under Section 2(7) of the MRTP Act did not include the words ‘demolition of the structures and erection of new building’ and thus it was clear intention of the legislature, not to bring ‘demolition of the structure and erection of new building’ within the ambit of Section 124A of the MRTP Act.
Dismissing the argument, the HC said that a building cannot be redeveloped without first demolishing it. “If the building is required to be redeveloped, it cannot be done unless the existing structures are demolished. The definition of expression ‘development’ includes redevelopment’,” added the court.
