The Supreme Court has set aside a Bombay High Court direction that would have effectively resulted in demolition of a fully operational shopping mall and hotel developed by K. Raheja Corp. in Navi Mumbai.
Instead, the bench of Justice Alok Aradhe adopted a regularisation approach and directed the developer to pay more than ₹318.31 crore towards regularisation of the allotment, while emphasizing that public interest cannot be served by remedies that inflict disproportionate economic damage.
The case arose from disputes surrounding the allotment of land in Sector 30A at Vashi, Navi Mumbai, originally earmarked for Information Technology development. The matter involved challenges to land allotment procedures undertaken by the City and Industrial Development Corporation (CIDCO), where allegations of irregularity and undervaluation had surfaced years earlier.
The Government of Maharashtra had developed Navi Mumbai as a planned twin city through CIDCO. Sector 30A at Vashi had originally been earmarked as an International Infotech Park for IT industry development. However, following a downturn in the global IT sector, CIDCO approved conversion of portions of the land for residential, commercial and office purposes.
Subsequently, K. Raheja Corp. applied for allotment of land in the area. In September 2003, CIDCO approved allotment of approximately 29,000 square metres of land at ₹10,250 per square metre with an FSI of 3.0. The allotment was also subject to a condition requiring the developer to develop a garden on an adjoining plot.
Soon thereafter, the allotment became the subject matter of public interest litigations before the Bombay High Court.
The controversy intensified following a detailed inquiry by the Sankaran Committee constituted by the Maharashtra Government.
The Committee found that the land should have been disposed of through competitive bidding rather than by allotment without a transparent process. It observed that while the market value of the land was estimated at ₹20,791 per square metre, the allotment had taken place at only ₹10,250 per square metre, allegedly causing a loss of approximately ₹50 crore to CIDCO. The Committee consequently recommended cancellation of the allotment and sale through public tender.
The report also observed broader irregularities involving 61 allotments, resulting in estimated losses of approximately ₹347 crore.
By a common judgment in November 2014, the Bombay High Court held the allotment to be illegal and arbitrary and violative of Article 14 of the Constitution.
The High Court directed restoration of the plot to its original condition and required the developer to hand over vacant possession within six months. However, it simultaneously left open the possibility of regularisation and permitted the developer to seek appropriate relief in that regard.
Following the High Court order, the matter reached the Supreme Court through appeals filed by the developer, employees associated with the mall and hotel, and retailers.
The Supreme Court considered whether demolition of a fully operational commercial complex after nearly two decades would actually advance public interest.
The Court highlighted that the developer had invested approximately ₹450 crore in developing the shopping mall and hotel, which had been operational since 2009. It also took note of the fact that approximately 150 retailers operated within the mall and nearly 8,000 individuals depended on it for their livelihoods.
The Court observed: “A Court must weigh not only the wrong that has been committed but also the reality as it now stands.”
Applying the doctrine of proportionality, the Court held that demolition would result in catastrophic and irreversible economic and social consequences.
The Bench stated that demolition after seventeen years of operation, ₹450 crore investment, thousands of livelihoods and substantial annual tax generation would not truly serve public interest. Instead, financial restitution and penal regularisation would better balance competing concerns.
The Court rejected CIDCO’s reliance on the Sankaran Committee formula for computing the regularisation amount.
It instead accepted the rationale of the Banthia Committee, which had observed that once an allotment was judicially found illegal, the original concessional price became irrelevant and regularisation should occur at prevailing market rates at the time of judicial intervention.
The Court accepted the 2014 ready reckoner rate of ₹54,400 per square metre applicable to Sector 30A, Vashi as the appropriate benchmark.
After applying the valuation and interest calculations, the Court held that the developer would be liable to pay an aggregate amount of ₹318.31 crore.
Additionally, the Court directed payment of ₹1 crore for failure to develop the Japanese Garden as originally agreed.
The Supreme Court directed that the developer shall pay ₹318.31 crore towards regularisation. Amounts already paid by the developer shall be adjusted. An additional ₹1 crore shall be paid in lieu of the unfulfilled garden obligation. Upon payment within four months, the allotment shall stand regularised. Issues relating to another disputed plot (Plot No. 39/16) would continue before the High Court independently.
Case Details
Case Title: K. Raheja Corp. Private Limited Versus The State Of Maharashtra & Ors. Etc.
Citation: JURISHOUR-1410-SC-2026
Case No.: Civil Appeal Nos. 13092–13093 Of 2025
Date: 26/05/2026
