The Supreme Court refused to order demolition of a large shopping mall and hotel complex in Navi Mumbai despite finding serious irregularities in the original land allotment made by CIDCO nearly two decades ago.
Instead, the Court directed developer K. Raheja Corp. Pvt. Ltd. to pay more than ₹318 crore for regularisation of the allotment, saying public interest would suffer more from demolition than from a financially penalised regularisation.
Background Of The Case
The dispute arose from the allotment of land in Sector 30A, Vashi, Navi Mumbai, originally earmarked for Information Technology development. In 2003, CIDCO allotted around 30,000 square metres of land to K. Raheja Corp. for a commercial project at a rate of ₹10,250 per square metre.
The allotment was challenged through public interest litigation before the Bombay High Court. A committee headed by senior bureaucrat D.K. Sankaran later found that the land should have been allotted through a competitive tender process and estimated a loss of nearly ₹50 crore to CIDCO.
Despite the litigation, the developer completed construction of the shopping mall and hotel complex with an investment of about ₹450 crore. The project became operational in 2009 and has remained functional since then.
In 2014, the Bombay High Court held the allotment illegal and directed restoration of the land to its original condition, effectively requiring demolition of the structures. However, the High Court had also left open the possibility of regularisation.
Court’s Observations
The Supreme Court said the issue before it was not limited to whether the original allotment was irregular, but whether demolition after 17 years would actually serve public interest.
The bench observed that constitutional courts must apply the principle of proportionality while granting remedies. It noted that thousands of livelihoods and substantial economic activity had become linked with the project over the years.
“The social and economic harm caused by demolition, by contrast, would be catastrophic and irreparable,” the Court observed while explaining why demolition was not an appropriate solution in the present circumstances.
The Court also recorded that nearly 150 retailers operate from the mall and around 8,000 people depend on it for employment.
At the same time, the bench clarified that the developer could not escape financial consequences merely because the project had already been completed.
“The Developer must bear the full cost of legality,” the Court said while discussing the basis for regularisation.
Decision Of The Supreme Court
Rejecting CIDCO’s 2026 calculation method based on older valuations, the Supreme Court accepted the broader approach suggested by the Banthia Committee, which recommended using 2014 market rates for regularisation.
The Court calculated the market value of the land at over ₹166 crore using the ready reckoner rate of ₹54,400 per square metre applicable in 2014. After adding interest at 8% from December 2014 till April 2026, the total liability was fixed at ₹318.31 crore.
The bench directed the developer to pay the amount within four months. It also imposed an additional ₹1 crore payment because the promised garden development on another plot was never completed.
The Court ultimately set aside the Bombay High Court’s direction requiring restoration of the land and held that the allotment would stand regularised upon payment of the ordered amount.
Case Details
Case Title: K. Raheja Corp. Private Limited v. State of Maharashtra & Ors.
Case Number: Civil Appeal Nos. 13092–13093 of 2025 along with connected matters
Judge: Justice Alok Aradhe and Justice Pamidighantam Sri Narasimha
Decision Date: May 26, 2026
