Bombay High Court Ruling: Co-Promoter Liable to Pay Refund if Flat Delayed
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In a recent judgment dated 7th November 2023, the Bombay High Court addressed a significant legal dispute between Samartha Development Corporation and the Municipal Corporation of Greater Mumbai (MCGM) concerning the levy of development charges under the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). The case delved into the retrospective application of an amendment made to Section 124B(2) of the MRTP Act and its Second Schedule, particularly in relation to a development project undertaken by the petitioner.

Overview of the Dispute

The petitioner, Samartha Development Corporation, sought permission from the MCGM to develop a Maternity Home/Dispensary (Wing ‘A’) and a Commercial Building (Wing ‘B’) in Mumbai. The MCGM issued an Intimation of Disapproval (IoD) in April 2007, followed by Commencement Certificates (CC) for the project. However, disputes arose regarding the payment of development charges, especially concerning the method of calculation prescribed by an amendment to the MRTP Act in 2010.

Key Arguments and Ruling

The central question before the court was whether the amended Section 124B(2) of the MRTP Act and its Second Schedule could be retrospectively applied to the petitioner’s project. The court held that the amendment should only operate prospectively from the date of its commencement, i.e., 27th December 2010. Despite the MCGM’s contention that the new rates applied because the construction work was ongoing, the court emphasized that the relevant date for determining the applicability of the revised rates was the date of issuance of the final CC.

The court also addressed the issue of refund, ordering the MCGM to refund the excess development charges paid by the petitioner for Wing ‘B’, calculated at the rate prevailing at the time of the final CC issuance, which was Rs 500 per square meter. The refund was directed to carry simple interest at 9% per annum from the date of the initial deposit made by the petitioner.

Implications and Order

The judgment provides clarity on the retrospective application of amendments to the MRTP Act concerning development charges. By affirming that the amendments should only apply prospectively, the court upheld principles of fairness and legality in urban planning regulations. This ruling sets a precedent for similar disputes in the future and underscores the importance of clarity and consistency in the application of statutory provisions governing development projects.


The Bombay High Court’s judgment in Samartha Development Corporation v Municipal Corporation of Greater Mumbai & Ors offers comprehensive insights into the legal intricacies surrounding the retrospective application of amendments to the MRTP Act. By meticulously examining the facts and legal arguments presented, the court delivered a nuanced ruling that balances the interests of all parties involved while upholding the rule of law.

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