Classify buildings on their use while levying development charges: HC

Civic bodies ought to classify buildings on the basis of its predominant purpose (residential or commercial) while levying development charges, the Bombay high court

Civic bodies ought to classify buildings on the basis of its predominant purpose (residential or commercial) while levying development charges, the Bombay high court (HC) said on Friday, while directing the Brihanmumbai Municipal Corporation (BMC) to not take any coercive steps for the recovery of the charges from Macrotech Developers Ltd.

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The division bench of justice KK Tated and justice Milind Jadhav directed the civic body to accept the ₹13.15 crore from the developer, instead of the ₹26.30 crore the corporation had demanded for.

The bench also directed BMC to issue a commencement certificate to the commercial wing of the building developed by Macrotech Developers up to 26 habitable floors, after ₹13.15 crore is paid by the latter.

Macrotech moved HC after the civic body on July 1 demanded ₹26.30 crore towards development charges for the issuance of commencement certificate for the habitable floors of the fourth - commercial wing of its project, World Towers at Worli.

Senior advocate Sharan Jagtiani, who represented the developer, submitted that the development charges levied were in contradiction to sections 124A and 124B of the Maharashtra Regional and Town Planning (MRTP) Act, 1966. He added that the predominant user of the development which is being carried out by the developer was residential, as 78℅ of the construction is residential in nature, and therefore, the developer was liable to pay development charges at the rate of 4℅ of the ready reckoner (for residential buildings) and not at 8℅, required to be paid for commercial constructions.

Senior advocate Anil Sakhare, who represented BMC, strongly opposed the prayer for interim relief. He submitted that if interim relief was granted to the developer, there was a possibility that he will complete the work and vanish without making any payments to the civic body, in case the court upholds the civic body’s demand notice later.

The argument, however, failed to impress upon the bench.

“On a careful perusal and consideration of the provisions of section 124A read with section 124B of MRTP Act, the petitioner has, prima facie, made out a case for seeking interim relief,” the bench said, adding that it was clear that the building was required to be classified for the purpose of levy of development charges on the basis of its “predominant user” as stated in the provisions.

The bench also noted that of the total floor space index of 1,95,524 square metres to be utilised at the site, a majority (1,52,646 square metres) was being utilised for residential purposes, clearly indicating that the predominant purpose was residential.