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In a recent development, the Bombay High Court criticized the Brihanmumbai Municipal Corporation (BMC) for demanding a penalty of Rs 22.80 crore from industrial and commercial tenement owners of Kamla Industrial Park at Charkop in Kandivali. The penalty was imposed for regularizing unauthorized constructions made by the developer. The court, comprising Justice Gautam Patel and Justice Kamal Khata, struck down BMC's penalty demand, citing it as inequitable and unjust, considering the municipal inaction that allowed the violations to occur.
The case revolved around Kamla Industrial Park Limited (KIPL), a company formed by the tenement owners. The original property was owned by Metallica Industries Limited, which appointed Kamla Group, owned by Jitendra Jain, to develop it. Despite BMC granting a commencement certificate for ground-plus-five floors, the developer constructed ground-plus-eight floors and sold all 374 industrial and commercial tenements to buyers in 2010 and 2011. When BMC noticed the unauthorized construction, it issued a stop-work notice in 2013.
In response, BMC demanded a penalty of Rs 22.80 crore, along with other charges, from the tenement owners to regularize the additional floors. KIPL was willing to pay the other fees but opposed the penalty, leading them to approach the High Court. The court's ruling emphasized that BMC should not benefit from its own inaction, expressing dismay at how municipal officers allowed illegalities to occur without taking any preventive measures. The court found BMC's demand for a substantial penalty unacceptable, given its lack of intervention when the violations were taking place.
Furthermore, the court accepted the tenement owners' argument that BMC should have pursued its claim for penalty payment before the National Company Law Tribunal (NCLT). This decision highlighted the need for municipal authorities to act promptly against illegal constructions and take appropriate legal steps to address violations rather than demanding penalties after the fact.
The court's ruling underscores the importance of timely intervention by municipal bodies to prevent unauthorized constructions, protecting the interests of both property owners and potential buyers. It serves as a reminder of the responsibilities of local authorities in ensuring adherence to building regulations and maintaining the integrity of the real estate market.
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