The Supreme Court has set aside a Bombay High Court order directing the demolition of a fully operational shopping mall and hotel in Navi Mumbai, ruling that such a move would not serve public interest after nearly 17 years of commercial operations, a Rs 450 crore investment and the creation of around 8,000 jobs.
In its May 26, 2026 judgment in K. Raheja Corp. Private Limited v. The State of Maharashtra and Others, a Bench comprising Justice P.S. Narasimha and Justice Alok Aradhe allowed the regularisation of the land allotment made by the City and Industrial Development Corporation (CIDCO) for the commercial complex in Sector 30A, Vashi.
The Court directed the developer to pay Rs 318.31 crore, calculated using the ready reckoner rate applicable in November 2014, along with 8 per cent annual interest from December 1, 2014, to April 30, 2026. The amount already paid for the land will be adjusted against the final payment.
“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 observed.
The dispute relates to a CIDCO land allotment made in 2003 for a commercial project in Vashi. Although a committee later found procedural irregularities in the allotment process, the shopping mall and hotel were completed at an investment of around Rs 450 crore and have been operating since 2009 after receiving an occupancy certificate.
Rejecting demolition, the Court said the doctrine of proportionality required balancing legal violations with wider public consequences. “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,” it held.
The Court also directed the developer to pay an additional Rs 1 crore towards an unfulfilled obligation to develop a public garden. Subject to payment of the prescribed amount within four months, the land allotment will stand regularised, while the Bombay High Court’s demolition order has been quashed.
Source: Law Street Journal
