Deposit ₹23.89 Cr To Restore Water Supply: Bombay HC To Sahara Star Hotel After BMC Disconnects Supply Over Reassessed Property Tax

In the ongoing dispute between the Brihanmumbai Municipal Corporation (BMC) and the Sahara Hospitality Limited, with regards to the property tax of the popular 'Sahara Star' - the five star hotel near Mumbai International Airport, the Bombay High Court recently made it clear if the hotel owners deposit Rs 23.89 crores within a period of four weeks, the water connection of the hotel would be restored.

A division bench of Chief Justice Shree Chandrashekar and Justice Aarti Sathe also stayed the five notices issued to the hotel by the BMC demanding property tax, which the hotel claims was basically a 'retrospective reassessment' of the property tax.

The bench noted that the Sahara Hospitality Limited has undergone liquidation in the recent past and that it has recently come out of Corporate Insolvency Resolution Process (CIRP).

"We thus grant four weeks' time for making a deposit of Rs.23,89,31,590 in this Court within four weeks. On filing an undertaking by the director of the Company that the said amount shall be deposited with the Registry of this Court within four weeks, the water connection at the premises of the Company shall be restored forthwith," the order passed on April 8, reads.

The bench further ordered, "The demand notices/attachment orders issued on January 1, 2026, February 12, 2026, February 16, 2026 and two on February 23 2026 shall remain stayed till next date of hearing."

According to sources privy to the dispute, the hotel has filed the undertaking and the water supply has been restored again.

On the day of hearing before the bench, Senior Advocate Chetan Kapadia told the judges that the procedure adopted by the BMC has seriously violated the rights of his client Company to carry on business.

"...inasmuch as the water supply at the premises of the Company has been disconnected and that shall amount to civil death of the Company. The impugned demands in respect of three properties have been raised for the first time in 2026 and the Corporation has sought to recover the alleged arrears of property taxes since 2001 and that too under the caption provisional assessment," Kapadia submitted.

The BMC on the other hand, vehemently opposed the prayer for the interim relief (of staying the notices) and argued that the civic body determined the property tax amounts after an inspection of the subject properties and it was also found that certain illegal constructions were raised and, therefore, notices were issued. According to the BMC, a Special Notice was also issued which was not responded to by the Company owning the hotel in question.

The Sahara Hospitality Limited has challenged the arbitrary and retrospective reassessment of property tax by the BMC in respect of its hotel - Sahara Star, situated at Vile Parle (East), Mumbai.

"The Petitioner's property is a single, composite hotel structure which has consistently been assessed as one unit, and such assessments had attained finality without any dispute. In February 2026, the BMC, for the first time, undertook a retrospective reassessment by artificially creating multiple property accounts and levying tax from 2019 onwards in respect of areas which were either not in existence or were under development. The civic body has raised inflated demands aggregating to approximately Rs 69.19 crores and issued warrants of attachment for approximately Rs 181.96 crores, including disproportionate penalties, without furnishing any assessment basis or granting an opportunity of hearing," the plea reads.

The present petition has thus been filed by the hotel owning Company to quash demand notices, restoration of water supply and protection against further coercive action.

The bench has, however, directed the filing of the undertaking and has adjourned the matter for hearing after six weeks.

Appearance:

Senior Advocate Chetan Kapadia along with Advocate Pooja Jain appeared for the Petitioner.

Additional Government Pleader Mohit Jadhav represented the State.

Advocates Pralhad Paranjpe, Oorja Dhond and Komal Punjabi represented the BMC.

Case Title: Sahara Hospitality Limited vs Municipal Corporation of Greater Mumbai [Writ Petition (L) 11536 of 2026]

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