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Informist, Thursday, Apr. 9, 2026

 

NEW DELHI – The Bombay High Court has set aside the Mumbai Metropolitan Region Development Authority's INR 17.64 billion demand notices against Reliance Industries Ltd. for alleged delay in the completion of construction of a convention and exhibition centre and commercial complex in the Bandra-Kurla Complex, Mumbai, and for extension of time to complete the construction of the building.  

 

The high court asked the Mumbai authority to refund INR 6.47 billion, which Reliance Industries had deposited as additional premium and penalty for the alleged delay in completing the construction. The refund to Reliance Industries should be given within 90 days, failing which, the amount would carry interest at the same rate at which interest was payable by the company under the lease agreement, the court said. The bank guarantees furnished by Reliance Industries, including the one for INR 13.13 billion, should be kept valid for 90 days from the date, it added.

 

The demand for payment of the penalty and additional premium for alleged delay in completing the construction was not maintainable under Article 2(d) and (e) of the lease deed between Reliance Industries and the Mumbai authority, the court said. Such an amount was realised by the Mumbai authority in a most arbitrary, high-handed, unfair, and unreasonable manner by subjecting Reliance Industries to undue pressure and threat of termination of the lease, thus putting its business interest in peril, it said.

 

Reliance Industries was made to deposit the penalty amount under coercion, the court said. The imposition of the penalty was also not preceded by a proper show cause notice, thus acting in clear contravention of the principle of natural justice, the court said.

 

In 2005, the Mumbai authority invited bids to lease a plot in the Bandra-Kurla Complex for the construction of a convention and exhibition centre and a commercial complex. Reliance Industries was declared the successful bidder. 

 

The lease deed stated that Reliance Industries had to build and complete the convention and exhibition centre and commercial complex, fit for occupation, within four years. In case of failure to adhere to the time limit, extension of time may be granted upon payment of additional premium at the prescribed rates, the agreement said. 

 

Thereafter, demand notices were issued to Reliance Industries in 2017 for payment of an additional premium and a penalty of INR 6.47 billion, which the company deposited under protest. In 2019, the Mumbai authority demanded an additional INR 11.17 billion from Reliance Industries as a premium, along with interest, for the extension of time to complete the building's construction, using the additional built-up area of 72,500 square metres allotted under a supplementary lease in 2007. Challenging these notices, Reliance Industries moved the high court.

 

On Thursday, the company's shares ended 1.3% lower at INR 1,330.00 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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