Bombay High Court rules against Thane Municipal Corporation in dispute with builder over buy back policy

The Bombay High Court recently ruled against the Thane Municipal Corporation in a case involving a builder, Sheth Developers, and a disputed buy back policy. The Corporation had refused to grant the builder development permission with additional developable space, citing the abeyance of the buy back policy due to an enquiry raised in the State legislative assembly.

The builder challenged this rejection before the HC, arguing that it was arbitrary and violated principles of legitimate expectations and promissory estoppel. The HC, in its decision on November 1, found the rejection to be “manifestly arbitrary” and in violation of established legal principles.

The dispute centered around the TMC’s decision to keep the Buy-Back Policy in abeyance, despite the builder fulfilling its end of the agreement. The HC emphasized the importance of honoring promises made under such policies and ensuring non-arbitrariness in administrative actions.

The HC also highlighted the doctrine of promissory estoppel and substantive legitimate expectations as crucial in upholding the right to equality under Article 14. The court noted that the provisions of the UDCPR 2020 were not materially distinct from the 2016 policy, and therefore, the TMC was required to apply the policy based on principles of promissory estoppel and legitimate expectations.

Overall, the HC’s ruling serves as a reminder to authorities to act fairly and uphold promises made under policies, ensuring transparency and accountability in administrative actions.