The Supreme Court on Monday directed the Mumbai Metropolitan Region Development Authority (MMRDA) to deposit Rs 646.78 crore with its registry by November 6 in its legal battle with Reliance Industries Limited (RIL) over penalties linked to construction delays at Mumbai's Bandra-Kurla Complex (BKC).
A bench of Justices Dipankar Datta and Sheel Nagu passed the order while hearing MMRDA's appeal against an April 8, 2026, Bombay High Court judgment that quashed the penalties imposed on Reliance and directed the authority to refund the amount, Bar and Bench reported.
The Supreme Court issued notice to Reliance and directed the company to file its counter-affidavit by October 30. Rejoinders have been scheduled for November 6, while connected cases involving similar disputes will be heard on November 18.
Dispute over construction delays at BKC
The dispute dates back to 2006, when MMRDA allotted Reliance a 75,000-square-metre plot at BKC to develop a convention centre and commercial complex. The lease required the company to complete construction within four years, failing which an additional premium would become payable.
Subsequent allotments increased the permissible built-up area to 3,12,500 square metres. However, construction was delayed amid litigation over development rights and the time taken to secure statutory approvals.
In September 2017, MMRDA issued a demand notice alleging a delay of seven years and 12 days. It subsequently raised another demand of Rs 1,116.83 crore in June 2019.
MMRDA challenges Bombay High Court ruling
Reliance challenged the demands before the Bombay High Court, which ruled in its favour in April 2026. The High Court held that the construction deadline should be calculated from the issuance of an effective commencement certificate rather than the execution of the lease deed.
It quashed the demands, directed MMRDA to refund Rs 646.78 crore and ordered the release of a bank guarantee worth approximately Rs 1,312 crore.
Challenging the ruling, MMRDA argued that the High Court had effectively rewritten the lease agreement by changing the starting point for calculating the construction deadline. The authority also cited undertakings given by Reliance in 2016 to pay additional premiums for extensions.
Supreme Court orders disputed amount to be secured
During Monday's hearing, Senior Advocate Abhishek Manu Singhvi, appearing for Reliance, suggested that the company could receive the refund against a fresh bank guarantee to safeguard MMRDA's interests during the proceedings.
The bench, however, directed the authority to deposit the disputed amount with the court registry.
"We direct the authority to deposit it with the registry," the Court said.
The bench also clarified that amounts ordered to be refunded in connected cases should be secured through deposits.
"Whatever is the amount directed to be refunded, you deposit, let it be secured," the Court said.
The Supreme Court will hear the connected matters on November 18.