The Bombay High Court dismissed a clutch of pleas filed by developers, including L&T Asian Realty Project LLP and an Adani group-linked company, against a suit on slum development fraud (L&T Asian Realty Project LLP & Ors v. State of Maharashtra & Ors.).

Justice Gauri Godse rejected four interim pleas filed by L&T Asian Realty Project LLP, L&T Realty Limited, Shiv Infra Vision Pvt Ltd, Slum Rehabilitation Authority’s Chief Executive Officer, and Portsmouth Buildcon Pvt Ltd, an Adani group-linked entity. 

The Court ruled that it was an "unnecessary attempt" to stall the commercial suit and imposed costs of ₹2 lakh on each of them.

The pleas by L&T and others had invoked Order 7 Rule 11 of the Code of Procedure Code to seek rejection of the suit filed by KS Chamankar Enterprises and its partner.

Chamankar had alleged fraud, conspiracy and mala fide removal as slum project developers. 

Justice Godse concluded that the suit disclosed a clear cause of action and triable issues which cannot be decided at the preliminary stage.

By way of background,KS Chamankar Enterprises (plaintiff), had been appointed as developers for three slum societies. It claimed that it constructed a composite rehab building before being abruptly terminated by the Slum Rehabilitation Authority (SRA).

It was replaced by Shiv Infra Vision as the new developer.

Chamankar challenged the same before the High Court. 

The suit by KS Chamankar alleged that blacklisted developers, including L&T-linked entities and Portsmouth Buildcon, colluded with SRA officials to engineer their ouster and secure control of the Mumbai slum rehabilitation project.

In response, the L&T and Adani-linked group entities sought rejection of the commercial suit for multiple reasons including lack of cause of action, limitation and mandatory pre-institution mediation under Section 12A of the Commercial Courts Act. 

Justice Godse held that none of these defences can justify rejection of the suit at this stage, and issues like limitation and alleged bar under the Slum Act raise mixed questions of law and fact to be decided at trial.

The judge found that despite settled law on the narrow scope of Order VII Rule 11 and Section 12A, the developers kept pressing multiple technical objections, a large number of decisions and consumed considerable court time. 

“Such attempts by the defendants defeat the very object of the Commercial Courts Act, namely, the speedy disposal of suits and also unnecessarily consume the court’s time,” the Court observed. 

The Court directed each of the four entities to pay costs of ₹200,000 to the plaintiff within two weeks, effectively imposing an aggregate cost of ₹8 lakh on the developers and SRA CEO for their bid to scuttle the suit.