![The Supreme Court on May 26, 2026 set aside a Bombay High Court direction requiring demolition of an operational shopping mall and hotel in Navi Mumbai, holding that ordering restoration of the subject plot after 17 years of commercial operation, a ₹450 crore investment and employment of approximately 8,000 persons would be disproportionate and contrary to the very public interest that the PIL petitioners sought to vindicate [K. Raheja Corp. Private Limited v. The State of Maharashtra and Others, 2026 INSC 551, Civil Appeal Nos. 13092–13097 of 2025]. A Bench of Justice P.S. Narasimha and Justice Alok Aradhe regularised the allotment of the subject plot in Sector 30A, Vashi, Navi Mumbai, made in favour of the Developer by the City and Industrial Development Corporation of Maharashtra (CIDCO), on payment of ₹3,18,31,37,664 (Rupees Three Hundred Eighteen Crores Thirty-One Lakhs and Thirty-Seven Thousand Six Hundred Sixty-Four) computed at the ready reckoner rate of ₹54,400 per square metre applicable to the area as of November 2014, together with interest at 8 per cent from December 1, 2014 to April 30, 2026. “The central question before this Court is not merely one of the legality of the original allotment which was undoubtedly irregular but whether, in light of the profound and irreversible economic and social consequences that have since crystallised over two decades, the public interest is better served by demolition or by a rigorously supervised regularisation coupled with full financial restitution to the public authority,” the Court framed the issue. Background: Navi Mumbai, CIDCO and the IT Park Allotment In the late 1960s, the Government of Maharashtra decided to develop Navi Mumbai as a planned twin city to Mumbai, appointing CIDCO as the New Town Development Authority. Lands across 96 villages in Thane and Raigad Districts were acquired en bloc and placed at CIDCO’s disposal for systematic planned development. Sector 30A at Vashi, Navi Mumbai, was earmarked for an International Infotech Park, with a total area of 57,180 square metres, of which 31,232 square metres were allotted to IT companies. By the early 2000s, the global IT sector witnessed a prolonged downturn. Taking cognizance of this changed economic reality, CIDCO’s Board of Directors, by resolution dated April 30, 2003, approved the conversion of 22,337 square metres within Sector 30A for residential, commercial and office use. On August 20, 2003, the Developer applied for allotment of land in the sector. By resolution dated September 17, 2003, CIDCO’s Board approved allotment of plots measuring 29,000 square metres, including the subject plot of 3,611 square metres bearing Plot Nos. 39/1 and 39/6 to 39/15, at an FSI of 3.0 at the rate of ₹10,250 per square metre, in anticipation of formal Government approval, and conditional upon the Developer developing a garden on the adjoining Plot No. 40. A formal Letter of Allotment was issued on October 8, 2003 and a Lease Agreement was executed on December 16, 2003. Two public interest litigations challenging the allotment were filed before the Bombay High Court. The Developer completed construction of a shopping mall and hotel with a built-up area of approximately 10,50,000 square feet at an investment of ₹450 crores, and an occupancy certificate was issued by the Navi Mumbai Municipal Corporation on September 16, 2008. The mall and hotel have been in continuous commercial operation since 2009. The Sankaran Committee Report The Chief Secretary, Government of Maharashtra directed Dr. D.K. Sankaran, Additional Chief Secretary, to conduct an inquiry into CIDCO’s affairs during the relevant period. The Sankaran Committee, in its report dated March 31, 2005, found that the subject plot ought to have been disposed of by competitive tender, that the market value in September 2002 was ₹20,791 per square metre against the allotment price of ₹10,250 per square metre, and that this had caused a financial loss of approximately ₹50 crores to CIDCO. The Committee recommended cancellation of the allotment and its disposal by public tender. It also found that CIDCO had made 61 allotments in violation of its regulations, causing an aggregate estimated loss of ₹347 crores. High Court’s Order and Subsequent Developments By its common judgment dated November 20 and 21, 2014, the Division Bench of the Bombay High Court held the allotment to be completely illegal and arbitrary in violation of Article 14 of the Constitution, and directed the Developer to restore the subject plot to its original condition and hand over vacant possession to CIDCO within six months. However, recognising the complexity of the situation, the High Court also granted the Developer liberty to apply for regularisation, keeping that question expressly open. The PIL petitioners did not challenge this liberty, nor did they challenge CIDCO’s regularisation policy. During the pendency of the appeals before the Supreme Court, the Government of Maharashtra constituted a one-man Banthia Committee under Mr. J.K. Banthia, former Chief Secretary, to examine the feasibility and terms of regularisation. The Banthia Committee, in its report dated July 20, 2017, identified three alternatives for regularisation — the Developer paying two-thirds, three-fourths or the full fair market value as of November 2014 — and ultimately recommended regularisation on payment of the full fair market value as of approximately 2014, given the scale of irreversible investment and the magnitude of public and economic interest involved. CIDCO’s Board of Directors, by resolution dated February 4, 2026, approved regularisation on payment of ₹257.87 crores computed using the Sankaran Committee’s methodology — that is, interest on the ₹50 crore differential loss quantified in 2005, accrued from December 16, 2003 to the date of payment. The Developer expressed willingness to pay this amount and filed an interlocutory application for disposal of the appeals on that basis. Why Demolition Cannot Be the Answer: Proportionality and Irreversibility The Court held that the doctrine of proportionality, deeply embedded in constitutional jurisprudence, demands that the severity of a remedial measure must bear a rational and proportionate relationship to the nature and magnitude of the wrong sought to be remedied. A remedy that causes public harm disproportionate to the public benefit it achieves is not a remedy that law ought to countenance. The Court identified four factors rendering demolition contrary to public interest: a ₹450 crore investment that cannot under any legal order be recovered; continuous commercial operation for over 17 years since 2009 following the grant of an occupancy certificate in 2008; approximately 150 retailers operating within the mall and approximately 8,000 individuals drawing their livelihood from the complex; and irreversible third-party rights of retailers, hotel operators, employees and consumers crystallised over 17 years. “Demolition of a fully operational commercial complex after seventeen years, Rs. 450 crores of investment, 8,000 livelihoods, and Rs. 100 crores of annual tax revenue would not vindicate the public interest. The financial prejudice caused to CIDCO by the irregularity of the original allotment is entirely capable of being remedied through a rigorous financial recovery mechanism. The social and economic harm caused by demolition, by contrast, would be catastrophic and irreparable,” the Court held. Rejection of Sankaran Methodology; Banthia Committee Approach Adopted The Court rejected the Developer’s contention that it should be treated at parity with other allottees regularised under the CIDCO policy of June 6, 2005, observing that those other allottees were principally multi co-operative housing societies and individuals, occupying an entirely different position in terms of scale, commercial purpose and financial capacity from a large commercial enterprise that had developed a 10,50,000 square feet complex. The principle of equality under Article 14 does not require that unequals be treated as equals. The Court further rejected CIDCO’s Resolution dated February 4, 2026, which had adopted the Sankaran Committee’s methodology, finding that no cogent reasons had been assigned for discarding the Banthia Committee’s approach. The Court held that the Sankaran Committee’s 2005 valuation could not serve as the baseline for a 2026 regularisation because it did not account for the dramatic appreciation in land values over the subsequent decade, and because its mandate was to assess cancellation or recovery, not to determine a regularisation price for an already developed and fully operational commercial complex nearly two decades later. The Court adopted the Banthia Committee’s central insight: once the allotment has been judicially declared illegal, the original concessional price paid by the Developer becomes irrelevant as a baseline. Regularisation is a fresh grant of legal legitimacy, prospective in nature, for which the Developer must pay the land’s actual worth at the time of the court’s judgment. The Court identified November 2014 — the date of the High Court’s judgment — as the appropriate reference date, and applied the State-published ready reckoner rate of ₹54,400 per square metre applicable to Sector 30A, Vashi at that time. Operative Directions The Court directed as follows. The Developer shall pay ₹3,18,31,37,664 being the fair market value of the subject plot of 30,582 square metres at the ready reckoner rate of ₹54,400 per square metre as of November 2014, together with interest at 8 per cent from December 1, 2014 to April 30, 2026. The amount already paid by the Developer at the rate of ₹10,250 per square metre shall be adjusted and deducted from the total amount payable. The Developer shall additionally pay ₹1 crore in lieu of its unfulfilled obligation to develop a garden on Plot No. 40. Subject to payment of the aforesaid amounts within four months, the allotment shall stand regularised. The dispute regarding Plot No. 39/16, which is the subject matter of a pending writ petition before the High Court, shall be decided by the High Court on its own merits. The impugned common judgment insofar as it directed restoration of the subject plot and delivery of vacant possession to CIDCO was quashed and set aside. The civil appeals were disposed of with no order as to costs. Case Details Case Title: K. Raheja Corp. Private Limited v. The State of Maharashtra and Others Citation: 2026 INSC 551; Civil Appeal Nos. 13092–13097 of 2025 Court: Supreme Court of India Bench: Justice P.S. Narasimha and Justice Alok Aradhe Date of Judgment: May 26, 2026](/secure/uploads/2026/06/lj_3400_Demolition_of_Fully_Operational.webp)
The Supreme Court on May 26, 2026 set aside a Bombay High Court direction requiring demolition of an operational shopping mall and hotel in Navi Mumbai, holding that ordering restoration of the subject plot after 17 years of commercial operation, a ₹450 crore investment and employment of approximately 8,000 persons would be disproportionate and contrary to the very public interest that the PIL petitioners sought to vindicate [K. Raheja Corp. Private Limited v. The State of Maharashtra and Others, 2026 INSC 551, Civil Appeal Nos. 13092–13097 of 2025].
A Bench of Justice P.S. Narasimha and Justice Alok Aradhe regularised the allotment of the subject plot in Sector 30A, Vashi, Navi Mumbai, made in favour of the Developer by the City and Industrial Development Corporation of Maharashtra (CIDCO), on payment of ₹3,18,31,37,664 (Rupees Three Hundred Eighteen Crores Thirty-One Lakhs and Thirty-Seven Thousand Six Hundred Sixty-Four) computed at the ready reckoner rate of ₹54,400 per square metre applicable to the area as of November 2014, together with interest at 8 per cent from December 1, 2014 to April 30, 2026.
“The central question before this Court is not merely one of the legality of the original allotment which was undoubtedly irregular but whether, in light of the profound and irreversible economic and social consequences that have since crystallised over two decades, the public interest is better served by demolition or by a rigorously supervised regularisation coupled with full financial restitution to the public authority,” the Court framed the issue.
Background: Navi Mumbai, CIDCO and the IT Park Allotment
In the late 1960s, the Government of Maharashtra decided to develop Navi Mumbai as a planned twin city to Mumbai, appointing CIDCO as the New Town Development Authority. Lands across 96 villages in Thane and Raigad Districts were acquired en bloc and placed at CIDCO’s disposal for systematic planned development. Sector 30A at Vashi, Navi Mumbai, was earmarked for an International Infotech Park, with a total area of 57,180 square metres, of which 31,232 square metres were allotted to IT companies.
By the early 2000s, the global IT sector witnessed a prolonged downturn. Taking cognizance of this changed economic reality, CIDCO’s Board of Directors, by resolution dated April 30, 2003, approved the conversion of 22,337 square metres within Sector 30A for residential, commercial and office use. On August 20, 2003, the Developer applied for allotment of land in the sector. By resolution dated September 17, 2003, CIDCO’s Board approved allotment of plots measuring 29,000 square metres, including the subject plot of 3,611 square metres bearing Plot Nos. 39/1 and 39/6 to 39/15, at an FSI of 3.0 at the rate of ₹10,250 per square metre, in anticipation of formal Government approval, and conditional upon the Developer developing a garden on the adjoining Plot No. 40.
A formal Letter of Allotment was issued on October 8, 2003 and a Lease Agreement was executed on December 16, 2003. Two public interest litigations challenging the allotment were filed before the Bombay High Court. The Developer completed construction of a shopping mall and hotel with a built-up area of approximately 10,50,000 square feet at an investment of ₹450 crores, and an occupancy certificate was issued by the Navi Mumbai Municipal Corporation on September 16, 2008. The mall and hotel have been in continuous commercial operation since 2009.
The Sankaran Committee Report
The Chief Secretary, Government of Maharashtra directed Dr. D.K. Sankaran, Additional Chief Secretary, to conduct an inquiry into CIDCO’s affairs during the relevant period. The Sankaran Committee, in its report dated March 31, 2005, found that the subject plot ought to have been disposed of by competitive tender, that the market value in September 2002 was ₹20,791 per square metre against the allotment price of ₹10,250 per square metre, and that this had caused a financial loss of approximately ₹50 crores to CIDCO. The Committee recommended cancellation of the allotment and its disposal by public tender. It also found that CIDCO had made 61 allotments in violation of its regulations, causing an aggregate estimated loss of ₹347 crores.
High Court’s Order and Subsequent Developments
By its common judgment dated November 20 and 21, 2014, the Division Bench of the Bombay High Court held the allotment to be completely illegal and arbitrary in violation of Article 14 of the Constitution, and directed the Developer to restore the subject plot to its original condition and hand over vacant possession to CIDCO within six months. However, recognising the complexity of the situation, the High Court also granted the Developer liberty to apply for regularisation, keeping that question expressly open. The PIL petitioners did not challenge this liberty, nor did they challenge CIDCO’s regularisation policy.
During the pendency of the appeals before the Supreme Court, the Government of Maharashtra constituted a one-man Banthia Committee under Mr. J.K. Banthia, former Chief Secretary, to examine the feasibility and terms of regularisation. The Banthia Committee, in its report dated July 20, 2017, identified three alternatives for regularisation — the Developer paying two-thirds, three-fourths or the full fair market value as of November 2014 — and ultimately recommended regularisation on payment of the full fair market value as of approximately 2014, given the scale of irreversible investment and the magnitude of public and economic interest involved.
CIDCO’s Board of Directors, by resolution dated February 4, 2026, approved regularisation on payment of ₹257.87 crores computed using the Sankaran Committee’s methodology — that is, interest on the ₹50 crore differential loss quantified in 2005, accrued from December 16, 2003 to the date of payment. The Developer expressed willingness to pay this amount and filed an interlocutory application for disposal of the appeals on that basis.
Why Demolition Cannot Be the Answer: Proportionality and Irreversibility
The Court held that the doctrine of proportionality, deeply embedded in constitutional jurisprudence, demands that the severity of a remedial measure must bear a rational and proportionate relationship to the nature and magnitude of the wrong sought to be remedied. A remedy that causes public harm disproportionate to the public benefit it achieves is not a remedy that law ought to countenance.
The Court identified four factors rendering demolition contrary to public interest: a ₹450 crore investment that cannot under any legal order be recovered; continuous commercial operation for over 17 years since 2009 following the grant of an occupancy certificate in 2008; approximately 150 retailers operating within the mall and approximately 8,000 individuals drawing their livelihood from the complex; and irreversible third-party rights of retailers, hotel operators, employees and consumers crystallised over 17 years.
“Demolition of a fully operational commercial complex after seventeen years, Rs. 450 crores of investment, 8,000 livelihoods, and Rs. 100 crores of annual tax revenue would not vindicate the public interest. The financial prejudice caused to CIDCO by the irregularity of the original allotment is entirely capable of being remedied through a rigorous financial recovery mechanism. The social and economic harm caused by demolition, by contrast, would be catastrophic and irreparable,” the Court held.
Rejection of Sankaran Methodology; Banthia Committee Approach Adopted
The Court rejected the Developer’s contention that it should be treated at parity with other allottees regularised under the CIDCO policy of June 6, 2005, observing that those other allottees were principally multi co-operative housing societies and individuals, occupying an entirely different position in terms of scale, commercial purpose and financial capacity from a large commercial enterprise that had developed a 10,50,000 square feet complex. The principle of equality under Article 14 does not require that unequals be treated as equals.
The Court further rejected CIDCO’s Resolution dated February 4, 2026, which had adopted the Sankaran Committee’s methodology, finding that no cogent reasons had been assigned for discarding the Banthia Committee’s approach. The Court held that the Sankaran Committee’s 2005 valuation could not serve as the baseline for a 2026 regularisation because it did not account for the dramatic appreciation in land values over the subsequent decade, and because its mandate was to assess cancellation or recovery, not to determine a regularisation price for an already developed and fully operational commercial complex nearly two decades later.
The Court adopted the Banthia Committee’s central insight: once the allotment has been judicially declared illegal, the original concessional price paid by the Developer becomes irrelevant as a baseline. Regularisation is a fresh grant of legal legitimacy, prospective in nature, for which the Developer must pay the land’s actual worth at the time of the court’s judgment. The Court identified November 2014 — the date of the High Court’s judgment — as the appropriate reference date, and applied the State-published ready reckoner rate of ₹54,400 per square metre applicable to Sector 30A, Vashi at that time.
Operative Directions
The Court directed as follows. The Developer shall pay ₹3,18,31,37,664 being the fair market value of the subject plot of 30,582 square metres at the ready reckoner rate of ₹54,400 per square metre as of November 2014, together with interest at 8 per cent from December 1, 2014 to April 30, 2026. The amount already paid by the Developer at the rate of ₹10,250 per square metre shall be adjusted and deducted from the total amount payable. The Developer shall additionally pay ₹1 crore in lieu of its unfulfilled obligation to develop a garden on Plot No. 40. Subject to payment of the aforesaid amounts within four months, the allotment shall stand regularised. The dispute regarding Plot No. 39/16, which is the subject matter of a pending writ petition before the High Court, shall be decided by the High Court on its own merits.
The impugned common judgment insofar as it directed restoration of the subject plot and delivery of vacant possession to CIDCO was quashed and set aside. The civil appeals were disposed of with no order as to costs.
Case Details
- Case Title: K. Raheja Corp. Private Limited v. The State of Maharashtra and Others
- Citation: 2026 INSC 551; Civil Appeal Nos. 13092–13097 of 2025
- Court: Supreme Court of India
- Bench: Justice P.S. Narasimha and Justice Alok Aradhe
- Date of Judgment: May 26, 2026
