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RIL owes Rs 1,577 cr to MMRDA as BKC contract penalty; authority seeks legal advice

Of the Rs 1,632.23 crore that is due to MMRDA as premium from its plots in Bandra-Kurla Complex, RIL alone owes Rs 1,576.9 crore.

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The Mumbai Metropolitan Region Development Authority (MMRDA) is seeking legal advice to recover crores of rupees from Mukesh Ambani's Reliance Industries Ltd (RIL).

Of the Rs 1,632.23 crore that is due to MMRDA as premium from its plots in Bandra-Kurla Complex, RIL alone owes Rs 1,576.9 crore.

"This premium is actually a penalty for delayed construction. MMRDA provides four years to private or government organisations to construct buildings. If it is not done within the stipulated time frame, the premium is triggered," said a senior MMRDA official.

In January 2006, RIL paid Rs 1,104 crore to buy 7.5 hectares in Bandra-Kurla Complex (BKC) to build a world class convention-cum-exhibition centre. The convention centre deal has witnessed a legal battle between the two Ambani brothers in October 2007, with the Anil Ambani-owned Reliance Communication Infrastructure Ltd (RCIL) moving court against MMRDA, accusing it of granting concessions worth Rs 7,000 crore to RIL in the deal.

RCIL also filed another case against MMRDA saying that it did not inform the company that additional space could be utilised and if it were aware about it, the company would have paid a higher price. As per the tender conditions, the successful bidder would be allowed to construct up to 50,000 sq m that could be exploited commercially. In February 2006, RCIL lost the litigation.

In May 2010, RIL approached MMRDA seeking a refund of the Rs 696 crore it paid for the additional 72,500 square metre built-up area it was granted in March 2007, claiming it was unable to use the additional space.

It was a Right to Information (RTI) query by Anil Galgali has brought to light that MMRDA is yet to receive Rs1632.23 crore as premium for its plots in the business district.

The other defaulters are Naman Hotels (Rs23.68 crore), Indian Newspaper Society (Rs28.12 crore), Commissioner of Income Tax (Rs5.30 crore) and Maharashtra Maritime Board (Rs7.21 crore).

"We have sought legal advice from a retired judge on what steps can be taken to recover the dues from RIL, which they aren't willing to pay. As it is about delay in construction due to litigation, it comes under policy decision and it will be applicable for all such cases. The next move will be made, depending upon the legal advice," added the official.

RIL did not respond to dna's queries on the issue.

PREMIUM DUE

RIL: Rs 1, 576.90 crore
Naman Hotels : Rs 23.68 crore
Indian News Paper Society : Rs 28.12 crore
Commissioner of Income Tax : Rs 5.30 crore
Maharashtra Maritime Board : Rs 7.21 crore

TOTAL : Rs 1,632.23 crore

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