Natural Justice, Anti‑Mala Fides and Personal Liability in Municipal Stop‑Work Orders: Commentary on M/s Atria Constructions & Pooja B. Jain v. Pune Municipal Commissioner & Ors

1. Introduction

This common judgment of the Bombay High Court (G.S. Kulkarni & Arif S. Doctor, JJ., pronounced on 21 November 2025) in:

Writ Petition No. 1022 of 2025 – M/s Atria Constructions v. Pune Municipal Commissioner & Ors; and
Writ Petition No. 10414 of 2025 – Pooja B. Jain & Ors (flat purchasers) v. Pune Municipal Commissioner & Ors,

lays down an important set of principles at the intersection of:

municipal and town planning law (Section 267 of the Maharashtra Municipal Corporation Act, 1949; Section 54 of the MRTP Act, 1966);
administrative law and natural justice;
environmental and pollution control regulation (Environmental Clearance and MPCB consents); and
arbitration and private commercial disputes between developers.

The factual setting is a large residential project, “Rajgruhi Residency”, in Pune, comprising four wings (A–D). Wings A and B were developed earlier by respondent no. 5, Wellbuild Merchants Pvt. Ltd. (“Wellbuild”), with M/s Atria Constructions (“Atria”) initially as contractor. Under later Development Agreements, Atria became the developer for Wings C and D. Wing D is complete; many flats have been sold; Wing C is partially constructed.

Amidst a falling‑out between Atria and Wellbuild, and ongoing arbitration proceedings, a stop‑work notice dated 10 December 2024 was issued by municipal officers, effectively halting the project and, crucially, stalling the Occupation Certificate (OC) for Wing D. Flat purchasers, sandwiched between feuding developers and municipal action, approached the Court in the second writ petition.

The Court finds that:

the stop‑work action is procedurally void for egregious violation of natural justice;
the decision‑making process was tainted by mala fides and extraneous considerations, including the misuse of municipal machinery by Wellbuild and the participation of unrelated “activists”;
the construction of Wing D is not rendered illegal merely because a revised Environmental Clearance (EC) has been applied for, where the existing construction is within the overall EC limits; and
personal and exemplary costs are warranted against the responsible municipal officers and Wellbuild.

The judgment establishes a strong precedent on:

the mandatory procedural safeguards before issuing stop‑work notices;
the rule that the same authority who hears must decide (“one who hears must decide”);
the impermissibility of using statutory powers to settle private contractual disputes; and
personal financial accountability of public officials and private developers for mala fide misuse of the legal and regulatory process.

2. Summary of the Judgment

2.1 Outcome in Writ Petition No. 1022 of 2025 (Atria Constructions)

The Court:

Quashes the stop‑work notice dated 10 December 2024 issued under Section 267(1) MMC Act and Section 54 MRTP Act, declaring it:
- “perverse, illegal, improper, invalid, arbitrary, malafide” and
- void for violation of natural justice and abuse of power.
Holds that:
- the vague hearing intimation of 6 December 2024 was not a legally valid show‑cause notice;
- the authority that issued the notice did not conduct the hearing; and
- the final order was passed by subordinate officers who had not themselves heard the parties.
Rejects the municipal and Wellbuild contention that construction of Wing D is illegal for lack of a revised EC, noting that:
- a valid EC of 13 October 2017 covers the project up to 72,032.18 sq. m.; and
- the constructed area (approx. 68,132.86 sq. m.) lies within that sanctioned limit.
Finds that:
- Wellbuild, having failed to secure relief under the Arbitration and Conciliation Act (ACA), misused the municipal machinery to pressurise Atria; and
- the municipal officials allowed themselves to be influenced by private actors and “busybodies”.

On relief and sanctions, the Court:

Allows the writ petition, granting the writ of mandamus sought.
Directs that:
- the municipal officers involved (including the City Engineer) shall, jointly and severally, pay costs of Rs. 5,00,000 to Atria within two weeks; failing which, the Municipal Commissioner shall recover the amount in accordance with law;
- Wellbuild shall pay Rs. 25,00,000 as exemplary costs to Atria within two weeks.
Orders the Municipal Commissioner to investigate the role and motive of the municipal officials involved in issuing the stop‑work notice and to file an action‑taken report within six weeks.

2.2 Outcome in Writ Petition No. 10414 of 2025 (Flat Purchasers – Pooja B. Jain & Ors)

Given the quashing of the stop‑work order, the Court holds that flat purchasers of Wing D are unjustly suffering due to private disputes between Atria and Wellbuild and arbitrary municipal intervention.

The Court:

Directs respondent nos. 1–4 (Pune Municipal Corporation and its officers) to issue Completion/Occupation Certificate for Rajgruhi Residency, Tower D, on the basis of the application made by Atria, in accordance with law.
Makes Rule absolute, with no further costs in that petition.
Refuses a request by Wellbuild for a stay of both orders.

3. Factual Background

3.1 The Project and Contractual Structure

Project: “Rajgruhi Residency” on S. No. 63/1/1+1/2+2, Kondhwa Budruk, Pune – four wings (A, B, C, D), each planned as 4 podiums + amenities + 20 floors.
Original owner/developer: Wellbuild Merchants Pvt. Ltd. (“Wellbuild”).
2019 MoU:
- On 25 October 2019, a Memorandum of Understanding between Atria and Wellbuild recorded that Atria would invest Rs. 40 crore to ensure completion of the project.
Development Agreements 2021:
- 18 August 2021 & 26 August 2021: Development Agreement and Power of Attorney appointing Atria as “developer” to complete primarily Wings C and D.
- Earlier, Atria had executed construction for Wings A and B as contractor; those wings are complete and in occupation under a Part OC, and societies have been formed.

3.2 Status of Construction

Wings A & B:
- Completed by/for Wellbuild, with Atria as contractor.
- OC granted; flat purchasers in occupation; co‑operative societies formed.
Wing D:
- Commencement Certificate (CC) dated 13 October 2021; total FSI for Wing D: 15,870.02 sq. m., 80 flats.
- By December 2023, construction fully completed (stilt + 4 podiums + amenity + 20 floors).
- 58 flats sold via registered agreements; 17 booked; purchasers awaiting possession; OC application filed.
Wing C:
- Construction progressed only up to the 4th habitable floor (after podiums/parking levels).
Nala (storm water drain) realignment:
- The project land includes a DP‑planned storm water drain (nala) to be realigned.
- Work order by PMC Drainage Department dated 2 February 2024 permits Atria to realign the nala at its cost, with conditions:
  - complete by 1 February 2025; and
  - final building completion certificate depends on completion certificate from Drainage Department.
- Atria claims about 70% of the realignment is complete; PMC acknowledges persistent obstruction by societies of Wings A and B despite warnings.

3.3 Escalation of Private Dispute

Termination and Arbitration:
- Wellbuild issued a termination notice dated 16 April 2022 to Atria under the Development Agreement.
- Wellbuild filed an application under Section 9 ACA (CMA 544/2024); Atria filed a cross‑application (CMA 582/2024).
- Order dated 20 September 2024:
  - Wellbuild’s Section 9 application rejected;
  - Atria’s Section 9 application partly allowed.
- Section 37 ACA appeals by both parties were dismissed by a Division Bench on 22 November 2024, sustaining interim relief in favour of Atria and rejecting Wellbuild’s reliefs.
- Parties then agreed on arbitration before a retired High Court judge; liberty given to move under Section 17 ACA for interim relief; existing High Court orders to operate as ad‑interim till the tribunal’s decision.
Civil Suit against Societies:
- Atria filed Special Civil Suit No. 2012 of 2024 (2 December 2024) against societies of Wings A and B for obstruction to nala realignment and illegal use of the ramp of Tower C.
- Ad‑interim ex parte injunction restraining societies from obstructing nala works and illegal ramp use.
Wellbuild’s Parallel Administrative Pressure:
- Approached Maharashtra Pollution Control Board (MPCB) urging non‑processing of Atria’s consent applications.
- On 29 August 2024, Wellbuild’s director withdrew a pending application for revised EC.
- Complaints channelled through an RTI activist, “social activists”, politicians, and residents of Wings A & B, aiming to block OC for Wing D.

3.4 Consents and Environmental Clearance (EC)

MPCB “Consent to Establish” (CTE) and “Consent to Operate” (CTO):
- Original CTE (CE1505000801) dated 12 January 2016 in favour of Wellbuild – built‑up area 56,950.70 sq. m., valid until commissioning or 5 years (up to 12 January 2021).
- CTO obtained by Wellbuild on 3 July 2021; subsequent renewals expired by 3 June 2023.
- Wellbuild’s application for revalidation (UAN 000161756) rejected on 14 January 2024 for non‑response to show‑cause.
- Atria applied for CTE revalidation on 2 February 2024 (UAN 0000197009); MPCB Consent Committee recommended revalidation on 14 November 2024; revalidation granted on 19 December 2024 up to 12 January 2026.
- Atria’s CTO renewal application dated 16 April 2024 was similarly recommended on 14 November 2024; renewal granted on 19 December 2024 (valid to 30 June 2025) and later Part III CTO renewed to 30 June 2026.
Environmental Clearance (EC):
- EC dated 10 December 2015 for 56,950.70 sq. m. built‑up.
- Revised EC dated 13 October 2017 for 72,032.18 sq. m. built‑up (FSI + non‑FSI) for a plot of 18,000 sq. m. – this EC covers the overall project, including Wing D, with configuration 4 podiums + amenity + 20 floors.
- Subsequent revised IODs:
  - IOD dated 22 February 2023 (later withdrawn);
  - IOD dated 26 December 2023 with increased total built‑up to 84,131.86 sq. m. submitted to SEAC for revised EC (Proposal No. SIA/MH/INFRA2/450922/2023).
- SEAC 187th meeting (27 December 2023) recommended revised EC subject to conditions (e.g., EV charging, non‑potable construction water), forwarding proposal to SEIAA.
- SEIAA meeting (27 February 2025) remanded proposal to SEAC for investigation; SEAC’s 14 May 2025 meeting observed that the change of project proponent from Wellbuild to Atria had not been regularised in the earlier EC; directed that this be corrected first.

3.5 The Municipal Proceedings and Stop‑Work Order

Notice dated 6 December 2024:
- Issued by Executive Engineer, Building Development Department, Zone‑2, PMC.
- Served via WhatsApp around 4:57 pm on Friday, 6 December 2024.
- Content: only states that a hearing regarding construction on the plot S. No. 63/1/1+1/2+2 is fixed on 9 December 2024 at 11:30 am in the City Engineer’s office and calls upon Atria to remain present with necessary documents.
- No mention of any alleged violations, statutory provisions invoked, or potential consequences.
Hearing on 9 December 2024:
- Conducted by City Engineer and Deputy Engineer, not by the Executive Engineer who issued the notice.
- Attendees included:
  - representatives and counsel for Wellbuild;
  - an alleged RTI/social activist (intervenor, Vikas Kuchekar); and
  - other persons not contractually or legally connected to the project.
- Atria submitted written response and relied on MPCB Consent Committee minutes (14 November 2024) recommending CTE and CTO revalidation.
Stop‑Work Notice dated 10 December 2024:
- Issued under Section 267(1) MMC Act and Section 54 MRTP Act.
- Signed by the Junior Engineer and Deputy Engineer as “Designated Officers”; City Engineer is said to have “approved” issuance of stop‑work.
- Directs immediate stoppage of work on Wings C and D; warns of police action and cost recovery if work continues.
- Purports to immunise itself from challenge by citing Section 433(c) MMC Act (bar on suits or legal proceedings questioning designated officer’s orders).
- Records current construction status:
  - Wing C – up to 4th floor complete (with multiple parking levels);
  - Wing D – up to 20th floor complete (with parking levels).
- Relies on:
  - failure to complete nala realignment despite permission dated 22 May 2023 and work order of 2 February 2024;
  - “Refusal of Consent to Establish” dated 14 January 2024 by MPCB and alleged lack of CTO for each project; and
  - alleged deviations from EC of 4 October (13 October) 2017 and non‑submission of revised EC per revised IOD.

4. Key Legal Issues

The Court crystallised two core issues (apart from several associated points):

Jurisdiction and procedure: Whether, given that the 6 December 2024 notice was issued by the Executive Engineer, the City Engineer/“Designated Officer” and subordinate engineers had jurisdiction to pass the stop‑work order dated 10 December 2024 under Section 267(1) MMC Act, especially when:
- no proper show‑cause notice was issued; and
- the officer who heard was not the officer who ultimately “decided”.
Environmental legality: Whether construction undertaken by Atria under the EC dated 13 October 2017 and sanctioned plans could be treated as illegal merely because Atria had applied for a revised EC for an increased built‑up area.

5. Court’s Legal Reasoning and Precedents Applied

5.1 Violation of Natural Justice: Absence of a Real Show‑Cause Notice

The 6 December 2024 intimation was held not to be a valid “show‑cause notice”:

It did not spell out any alleged violations (no mention of EC breaches, MPCB consents, nala work, etc.).
It did not indicate the statutory provisions invoked (Section 267 MMC / Section 54 MRTP).
It did not inform Atria of the case it had to meet or the potential that work may be stopped.

The Court reiterated that any order affecting civil rights must be preceded by:

a clear and precise show‑cause notice setting out alleged defaults;
reasonable opportunity to respond; and
a reasoned order, following a fair hearing.

Relying on Maneka Gandhi v. Union of India (AIR 1978 SC 597), the Court emphasised that even administrative decisions involving civil consequences must comply with the doctrine of natural justice. “Fair play in action” is the core; the rule is designed to prevent miscarriage of justice.

Applying these principles, the Court held:

Atria was “taken by surprise” by the reasons later articulated in the stop‑work notice, as those grounds were never set out in advance.
No complaints or documents allegedly forming the basis of the notice were supplied to Atria.
The process was thus “grossly in breach” of natural justice, rendering the stop‑work notice legally unsustainable.

5.2 “One Who Hears Must Decide”: Defect in Decision‑Making Authority

A major defect identified was institutional and personal discontinuity in decision‑making:

Notice of hearing: issued by the Executive Engineer.
Hearing: conducted by the City Engineer and Deputy Engineer.
Final stop‑work order: signed and issued by the Junior Engineer and Deputy Engineer as “Designated Officers”, purportedly with City Engineer’s approval.

The Court held that such a procedure is “wholly unknown to law”. It applied the well‑settled rule that:

“The person who hears is the person who must decide.”

Key precedents:

Union of India v. Shiv Raj (2014) 6 SCC 564:
- Relied on Gullapalli Nageswara Rao, where the Supreme Court held that if “one person hears and another decides, then personal hearing becomes an empty formality”.
- In Rashid Javed v. State of U.P., the Court stressed that divided responsibility in hearing and deciding “is destructive of the concept of hearing”.
- Automotive Tyre Manufacturers Association v. Designated Authority (2011) 2 SCC 258 similarly invalidated decisions where the hearing and decision were undertaken by different officers.
Golden Chariot Airport, Mumbai v. Airports Authority of India (2009 (3) Mh.L.J. 684):
- Held that the officer entrusted with a decision must apply his own mind, record his own mental process, and cannot merely rubber‑stamp or adopt another’s reasoning.
- Where the decision does not reflect the decision‑maker’s own reasoning, it is “no judgment at all”.

The Court applied these principles to hold:

The “Designated Officers” who issued the stop‑work order had not themselves heard the parties.
No valid delegation or statutory mechanism permitted this segmented, multi‑actor process.
The impugned stop‑work order thus stood vitiated for violation of natural justice and lack of jurisdiction.

5.3 Extraneous Influence and “Busybodies”: Colourable Exercise of Power

Perhaps the most striking aspect of the reasoning is the Court’s condemnation of the involvement of unrelated third parties – RTI/“social activists” and others – at the 9 December 2024 hearing.

The Court noted:

These persons had:
- no contractual or proprietary stake in the project;
- no formal statutory role in enforcement under the MMC or MRTP Acts; and
- could not satisfactorily explain how they acquired detailed inside information about the contractual dispute, arbitration orders, and internal project documents.
One such person (intervenor Vikas Kuchekar) filed an intervention application in the High Court; his intervention was separately rejected by a detailed order.

Referring implicitly to principles from Ayaaubkhan Noorkhan Pathan v. State of Maharashtra (2013) 4 SCC 791 (on locus standi and “busybodies”) and explicitly to:

Bahadursinh Lakhubhai Gohil v. Jagdishbhai M. Kamalia (2004) 2 SCC 65; and
Dr S.P. Kapoor v. State of Himachal Pradesh (1981) 4 SCC 716,

the Court held:

Where a decision of a statutory authority is taken at the behest or suggestion of a person with no statutory role, that decision is ultra vires.
“Post‑haste” decisions in suspicious circumstances justify a presumption of mala fides.

In Bahadursinh Lakhubhai Gohil, the Supreme Court observed:

“It is also well settled that if any decision is taken by a statutory authority at the behest or on the suggestion of a person who has no statutory role to play, the same would be ultra vires.”

The High Court applied this to conclude that municipal officials acted under extraneous influence, at the behest of Wellbuild and allied “activists”, to achieve through administrative muscle what Wellbuild could not accomplish through legitimate legal proceedings under the Arbitration and Conciliation Act and in the civil court.

5.4 Environmental and Pollution Control Aspects

5.4.1 Was Wing D’s Construction Illegal for Lack of Revised EC?

Wellbuild and PMC argued that:

the 2017 EC was tied to then‑existing layouts and plans;
later revisions (2021 and 2023 plans) increased the built‑up area;
any construction beyond 14,599.71 sq. m. for Wing D required a fresh or revised EC before execution; and
Atria, having applied for revised EC in 2023, accepted the need for new approval but nonetheless continued construction – allegedly making Wing D illegal.

They relied on:

Vanashakti v. Union of India (2025 SCC OnLine SC 1139); and
Keystone Realtors Pvt. Ltd. v. Anil V. Tharthare (2020) 2 SCC 66,

where expansion beyond EC limits without prior EC was held impermissible, and ex post facto EC frowned upon.

The Court, however, found the factual premise flawed:

The project had a valid EC dated 13 October 2017 for 72,032.18 sq. m. built‑up.
An architect’s certificate established that the total constructed area at the time of the stop‑work order was 68,132.86 sq. m., within the EC limit.
For Wing D, the configuration (4 podiums + amenity + 20 floors) and height (approx. 68.45 m) in the revised IODs were consistent with the EC parameters; there was no evidence of increased height or additional floors.
The sanctioned plan (13 October 2021) provided for 80 flats in Wing D; only 80 flats were constructed; no excess flats were shown.

On this basis, the Court held:

This is not a case of construction carried out without any EC.
Nor is it a case of construction beyond the overall EC cap of 72,032.18 sq. m.
Atria’s application for revised EC (to reflect increased project area up to 84,131.86 sq. m.) does not retroactively make already‑permitted construction illegal.

5.4.2 Ex Post Facto Modification of EC and CREDAI v. Vanashakti

The Court specifically addresses Vanashakti v. Union of India, in which the Supreme Court had held that ex post facto ECs were not permissible and had quashed certain Office Memoranda easing regularisation of violation cases. However, the High Court notes the subsequent majority decision in:

Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Anr. (2025 SCC OnLine SC 2474)

which recalled the earlier Vanashakti judgment. On this “very recent position in law”, the High Court concludes that:

Atria’s post‑facto application for modification of the EC is not per se non‑maintainable.
Given that construction so far is within EC limits, the revised EC process pertains more to future or additional construction than to the legality of existing Wing D.

Accordingly, the Court distinguishes:

cases where there is no EC at all or substantial over‑building; from
the present case, where:
- an EC exists;
- construction is within its quantitative parameters; and
- the revised EC application concerns enhanced future area and certain environmental conditions (EV charging, water use, etc.).

5.4.3 MPCB Consents and Non‑Application of Mind

The stop‑work order cited:

“Refusal of Consent to Establish” (14 January 2024) to argue that Atria lacked CTE/CTO; and
absence of consent to operate for each project as a serious violation.

However:

Atria produced MPCB Consent Committee minutes of 14 November 2024 recommending:
- revalidation of CTE; and
- renewal of CTO,
which were placed before the City Engineer at the hearing.
Subsequently (19 December 2024), CTE and CTO renewals were formally issued, with validity into 2025 / 2026.

The Court finds that:

No consideration was given to the MPCB recommendations already on record.
Even on the date of the stop‑work order, PMC’s reasoning was “patently without application of mind” and “oblivious of the correct position on record”.

5.5 Nala Realignment and Effect of Civil Court Injunction

The stop‑work order also relied on non‑completion of nala shifting as per the Municipal Commissioner’s order dated 22 May 2023 and work order dated 2 February 2024, and “frequent complaints from citizens”. The Court notes:

Atria had already undertaken and completed approximately 70% of the nala work.
Obstruction by societies of Wings A and B had been:
- acknowledged by PMC’s own warnings (letters dated 5 May 2024 and 17 October 2024) highlighting potential danger to life and property; and
- restrained by ad‑interim injunction of 2 December 2024 in Special Civil Suit No. 2012/2024.

The Court holds that:

The municipal stop‑work order effectively nullified the civil court’s injunction by penalising Atria for the societies’ obstruction.
Using stop‑work proceedings to indirectly defeat a subsisting court order is an abuse of municipal power and contrary to the rule of law.

5.6 Distinguishing Cases on Illegal Construction and No Equity for Wrongdoers

Wellbuild relied on:

Municipal Committee Katra v. Ashwani Kumar (C.A. 14970‑71 of 2017, 9 May 2024); and
Willingdon View CHS v. Municipal Commissioner, BMC (SLP(C) No. 20175 of 2025, order dated 1 August 2025),

to argue that a party which undertakes illegal construction cannot seek equitable relief, and courts should not grant “sympathy” based on hardship to flat purchasers.

The High Court accepts the legal principle but finds that Atria is not in the position of a wrongdoer:

Construction of Wing D is within the EC limits and sanctioned plans.
Consents from MPCB have been secured (CTE and CTO), albeit after some procedural complexity.
Any application for revised EC has not been shown to render earlier sanctioned construction illegal.

Accordingly, cases where developers flagrantly violated sanctioned FSI or built without EC are distinguished on facts, and refusal of relief on “no equity for a wrongdoer” grounds is rejected.

5.7 Misuse of Municipal Machinery to Settle Private Disputes

The Court repeatedly underscores that:

The root conflict is a private, monetary dispute between Wellbuild and Atria regarding revenue shares from Wings C and D.
Wellbuild:
- failed to secure interim injunctions under Section 9 ACA;
- failed to reverse those orders in Section 37 appeals; and
- is now a party to arbitration.
After these failures, Wellbuild:
- mobilised complaints via RTI/social activists and residents’ associations; and
- leveraged municipal processes to obstruct Atria’s project and the issuance of OC for Wing D.

The Court describes this as:

“Misuse of the official machinery” of the PMC.
An attempt by Wellbuild “to obtain an unfair advantage” by exploiting resourceful intermediaries.
A deliberate effort “to nullify orders passed by the courts” under the Arbitration and Conciliation Act.

This leads directly to the Court’s decision to award exemplary costs against Wellbuild and direct an inquiry into the conduct of municipal officers.

5.8 Accountability and Costs: Personal Liability of Public Officials

In a significant move, the Court imposes personal financial liability on the municipal officers involved:

The City Engineer and other “concerned officials” who passed the stop‑work notice must jointly and severally pay Rs. 5,00,000 to Atria.
If not paid in two weeks, the Municipal Commissioner is directed to recover the amount in accordance with law (i.e., presumably through disciplinary/financial recovery mechanisms).

The Court justifies this by noting:

If no costs are imposed, the message would be that officials can indulge in arbitrary and mala fide actions “and comfortably get away”, encouraging repetition in future cases.
Officials endowed with “drastic powers” owe an onerous duty to exercise those powers lawfully and fairly; their actions must not be arbitrary, mala fide or high‑handed.

Separately, Wellbuild is directed to pay Rs. 25,00,000 as exemplary costs to Atria, reflecting:

its role as the “prime mover” behind the misuse of municipal processes; and
its persistent attempts to undermine judicial orders and arbitration by resorting to administrative and political pressure.

The Court also directs the Municipal Commissioner to:

“Investigate the role of these officials and the object and motive” behind the impugned action; and
file an action‑taken report within six weeks.

5.9 Relief to Flat Purchasers and Legitimate Expectation

The companion petition by 49 flat purchasers (including Pooja B. Jain) emphasised that:

they are innocent purchasers who have paid consideration and are awaiting possession of flats in a building which is physically complete; and
they are suffering because of:
- a private developer‑to‑developer dispute; and
- an arbitrary, legally flawed municipal stop‑work action.

Accepting this contention, the Court:

Recognises the legitimate expectation of flat purchasers that municipal authorities will:
- act fairly and in accordance with law; and
- not withhold OCs on arbitrary or mala fide grounds.
Directs PMC to process and issue the Completion/Occupancy Certificate for Wing D as per Atria’s proposal “in accordance with law”.

In doing so, the Court balances:

the need to ensure environmental and regulatory compliance; with
the imperative not to punish flat purchasers for disputes or power games among developers and officials unless genuine, substantiated illegality is shown.

6. Complex Legal Concepts Simplified

6.1 Stop‑Work Notice (Section 267 MMC Act; Section 54 MRTP Act)

A stop‑work notice is a coercive order issued by municipal/town planning authorities directing that construction activity on a site be immediately halted. Under:

Section 267(1) MMC Act: empowers a “Designated Officer” to stop building work being carried on contrary to the Act or regulations.
Section 54 MRTP Act: provides for action against unauthorised development, including stop‑work, demolition, etc.

Because such orders can have severe civil and financial consequences (project delay, buyer hardship, investment loss), they must comply with:

statutory pre‑conditions; and
natural justice (specific show‑cause notice, fair hearing, reasoned order).

6.2 Environmental Clearance (EC)

An Environmental Clearance is prior approval granted under the Environmental Impact Assessment (EIA) Notification, required for certain categories of projects (including large construction projects above defined thresholds of built‑up area).

Key points:

Granted for the project as a whole, specifying maximum permissible built‑up area, configuration, and environmental safeguards (water, waste management, green belt, etc.).
Material change in scope or intensity (higher built‑up area, major design changes) requires a revised/amended EC.
Post‑facto ECs (regularising completed illegal construction) were sharply limited by earlier judgments, but the legal position was re‑opened and clarified in CREDAI v. Vanashakti.

6.3 MPCB “Consent to Establish” and “Consent to Operate”

Under the Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981, the MPCB issues:

Consent to Establish (CTE): required before starting construction of a project; ensures design and proposed activities will not violate pollution norms.
Consent to Operate (CTO): required before operating/occupying the project; confirms actual implementation of pollution control measures.

These consents are time‑bound and must be renewed. Here:

Atria had valid revalidated CTE and CTO as of December 2024, although the impugned PMC order failed to take that into account.

6.4 Arbitration and Sections 9, 17 and 37 of the Arbitration and Conciliation Act

Section 9 ACA: enables parties to seek interim relief (e.g., injunctions, status quo orders) from courts before or during arbitration.
Section 17 ACA: similar interim relief mechanism before the arbitral tribunal, once constituted.
Section 37 ACA: provides for appeals against certain orders under Sections 9 and 34.

In this case:

Wellbuild’s Section 9 application for interim relief against Atria was rejected by the District Judge and the High Court (under Section 37).
Atria’s Section 9 application was partly allowed; its interim protections were continued as ad‑interim by the High Court, to be considered afresh under Section 17 ACA by the arbitrator.

6.5 Natural Justice: “Fair Play in Action” and “One Who Hears Must Decide”

The doctrine of natural justice is a cornerstone of Indian administrative law. Two primary limbs are:

Audi alteram partem – “hear the other side”:
- Notice of the case to be met;
- Reasonable opportunity to present a defence;
- Supply of material relied on; and
- Right to rebut or cross‑examine, where appropriate.
Nemo judex in causa sua – no one should be a judge in his own cause; decisions must be free from bias or conflict of interest.

The connected rule that the “one who hears must decide” ensures that:

the decision‑maker personally hears submissions, evaluates evidence, and forms an independent view;
the hearing is not reduced to a meaningless ritual filtered through someone else’s perceptions; and
reasons recorded are genuinely those of the authority vested with the statutory power.

6.6 Locus Standi and “Busybodies”

In administrative inquiries, particularly those affecting private rights, locus standi (standing) requires that complainants or participants have:

a direct legal interest; or
a recognised public interest role within the statutory framework.

“Busybodies” – individuals or NGOs with no real stake or statutory role but eager to intervene – are often discouraged, particularly where their participation risks distorting due process or serving private agendas. The Court’s rejection of the intervenor’s application and criticism of his unexplained presence at the municipal hearing reflects this concern.

7. Impact and Significance

7.1 On Municipal Governance and Urban Planning Practice

The judgment delivers a clear message to municipal authorities:

Stop‑work powers are exceptional and must be exercised with scrupulous adherence to law and natural justice.
Vague, generic notices of “hearings” are not sufficient where drastic action is contemplated.
Decision‑making must be:
- institutionally coherent (same authority issues notice, hears and decides); and
- personally accountable (no rubber‑stamping or reliance on extraneous influences).
Administrative bars like Section 433(c) MMC Act do not oust constitutional judicial review under Article 226, especially where illegality, mala fides, or violation of natural justice is evident.

The imposition of personal monetary liability and an internal inquiry requirement is likely to:

encourage greater caution and documentation when invoking Section 267 MMC or Section 54 MRTP;
deter casual or politically influenced issuance of stop‑work orders; and
establish an internal precedent within PMC for disciplining officers who act beyond their powers or under private pressure.

7.2 On Developers and Construction Projects

For bona fide developers, the judgment provides:

a degree of protection against malicious or collusive interference by competitors / erstwhile partners using municipal and environmental regulators as leverage; and
clarity that having:
- a valid EC;
- sanctioned plans; and
- MPCB consents,
entitles them to demand adherence to due process before drastic measures like stop‑work are ordered.

Conversely, the decision also warns developers:

to honour environmental and planning conditions faithfully;
to keep all consents and approvals updated and correctly transferred (e.g., project proponent name changes); and
that courts will not rescue them where construction is genuinely beyond EC or sanctioned parameters.

7.3 On Environmental Compliance Jurisprudence

The judgment contributes to ongoing judicial calibration of environmental compliance rules:

It re‑affirms the requirement of EC for large projects but recognises that:
- where an EC exists and construction remains within its quantitative and qualitative parameters,
- the mere pendency of a revised EC application does not render existing construction illegal.
It aligns with CREDAI v. Vanashakti in clarifying that post‑facto modifications of EC, especially where no substantive over‑building is alleged, are not automatically barred.
It highlights the need for:
- better coordination between urban local bodies and SEAC/SEIAA; and
- careful fact‑based scrutiny rather than reflexive punitive measures.

7.4 On Flat Purchasers and Housing Rights

For homebuyers, the decision underscores:

Courts’ willingness to protect purchasers from collateral damage arising from:
- developer‑to‑developer disputes; and
- arbitrary municipal action,
where no clear illegality in construction is established.
The importance of:
- timely formation of co‑operative societies;
- awareness of underlying approvals (EC, CC, OC); and
- invoking writ jurisdiction where administrative abuse blocks rightful occupation.

7.5 On Administrative Law and Rule of Law

More broadly, the judgment reinforces and concretises several key principles of administrative law:

Natural justice applies robustly to municipal and planning decisions with civil consequences.
Person who hears must decide is not a mere technicality; breach vitiates the decision.
Mala fides can be inferred from:
- post‑haste actions;
- unexplained involvement of outsiders; and
- alignment of administrative timing with defeats in judicial proceedings.
Decisions taken at the behest of private actors with no statutory role are ultra vires.
Public officials can be subjected to personal financial consequences for arbitrary and high‑handed exercise of power.

8. Conclusion

The Bombay High Court’s judgment in M/s Atria Constructions & Pooja B. Jain v. Pune Municipal Commissioner & Ors is a detailed and robust reaffirmation of core constitutional and administrative law principles applied to the field of urban development and environmental regulation.

Its key contributions can be distilled as follows:

Natural Justice as a Non‑Negotiable Precondition: Before issuing a stop‑work order under Section 267 MMC or Section 54 MRTP, authorities must:
- serve a clear, specific show‑cause notice;
- disclose material relied upon;
- grant a meaningful hearing; and
- issue a reasoned order by the same authority who heard the case.
Illegality of Decisions Taken at the Behest of Outsiders: Municipal powers cannot be used as instruments in private developer feuds. Decisions influenced by actors with no statutory role are ultra vires and liable to be struck down.
Environmental Compliance Must Be Fact‑Based: Where a project has a valid EC and construction is within its limits, the pendency of a revised EC application does not convert ongoing or completed construction into “illegal development”.
Protection of Flat Purchasers: Courts will intervene to ensure that innocent homebuyers are not left stranded by arbitrary administrative actions, especially where construction is substantively lawful.
Accountability Through Personal Costs and Inquiry: By imposing personal costs on officials and exemplary costs on Wellbuild, and by directing an internal investigation, the Court emphasises that misuse of power – whether administrative or private – will attract real consequences.

In essence, the judgment sends a strong signal that:

the rule of law and procedural fairness govern even the most technically complex domains of construction and environmental regulation;
municipal authorities must resist pressure from private actors and “busybodies”; and
development, environmental protection, and housing rights must all be balanced through lawful, transparent and accountable decision‑making.