High Court Slams Developers, Makes It Mandatory To Pay Development Fee

Mumbai, 21st October 2022: The High Court on Thursday gave an important ruling that developers carrying out redevelopment projects on land owned by the Mumbai Municipal Corporation, MHADA, or the state government will have to pay the development fee to the Municipal Corporation. The court also ordered the developers to deposit the development fee with the municipality. This decision has given relief to the Municipal Corporation, but a shock to the developers.

Developers were given necessary permissions to redevelop projects on leased land owned by the government, municipal corporation, or MHADA. For this, the developers were asked to pay development charges. This amount is more than Rs 100 crore.

More than a hundred developers had challenged the notices issued by the municipality regarding payment of development charges in the High Court. A bench of Justice Ramesh Dhanuka and Justice Kamal Khata dismissed the petition while giving its verdict on Thursday. Also, the notices issued by the municipality were considered correct. It was claimed by the developers that development charges cannot be levied on the redevelopment of leasehold land. However, the court observed that this claim was untenable.

Why Exemption Under Section 125 F of the MRTP Act?

There is no reason for this. This section empowers the government to partially exempt development charges from certain authorities for development carried out for specific purposes. But there is no provision to give full exemption, argued lawyer Joel Carlos on behalf of the municipality and lawyer Akshay Shinde on behalf of the government and MHADA while opposing the petitions. The court accepted this argument.