The intersection of commerce and compliance often creates a complex legal theatre, nowhere more so than in real estate. Developers operate within a dense web of statutes, environmental regulations, and consumer-protection mandates. Yet the true measure of corporate integrity is revealed not in years of uninterrupted prosperity but in moments of legal turbulence. A company’s ability to keep delivering homes, honouring contracts, and sustaining customer trust while navigating investigation or litigation is, in many ways, the purest expression of business ethics.
In recent years, India’s leading developers, including Lodha Group, Godrej Properties, and M3M Developers, have each faced varying degrees of judicial and regulatory scrutiny. Their conduct under pressure, however, has provided a compelling study in corporate resilience. Despite ongoing litigation, enforcement actions, and public allegations, these enterprises continue to build, sell, and hand over projects to thousands of buyers. To many observers within the legal fraternity, such continuity is not a contradiction but an affirmation of a deeper principle: the strength of enterprise lies in continuity under compliance.
Legal Adversity and the Principle of Continuity
The Supreme Court of India has long recognised that commercial activity cannot be paralysed merely because legal proceedings are pending. In M/s. Shyam Sundar Sarma v. Pannalal Jaiswal[1], the Apex Court held that the mere existence of a dispute does not suspend contractual obligations unless there is a specific judicial interdiction. This principle, rooted in equity and contract law, applies with special force to the real-estate sector, where developers must continue construction and delivery even amid investigations or regulatory actions.
The Court’s reasoning reflects what may be termed a doctrine of economic pragmatism in justice, a jurisprudential approach that seeks to reconcile accountability with continuity. It recognises that the rule of law serves not only as a mechanism of control but also as an enabler of lawful enterprise, ensuring that compliance strengthens rather than stifles economic progress.
This principle finds robust jurisprudential support in Bangalore Development Authority v. Syndicate Bank[2], a landmark Supreme Court decision that directly established that contractual relationships should survive regulatory intervention when the primary obligation, i.e., delivery, is being pursued in good faith. Despite the Bangalore Development Authority facing consumer complaints and regulatory scrutiny regarding delayed possession, the Court recognized that development authorities must continue executing self-financing schemes and honouring construction commitments. The judgment affirmed that accountability and continuity are not antithetical but complementary imperatives in commercial law- a principle that undergirds the jurisprudential framework governing modern real estate development.
Lodha Group: Compliance Through Adversity
The Lodha Group (Macrotech Developers) is a case study in point. The company faced environmental litigation concerning its Wadala project before the National Green Tribunal (‘NGT’). The allegations were related to environmental clearance and land use permissions. Rather than contesting indefinitely, Lodha chose a path of corrective compliance. It absorbed penalties, modified project plans, and implemented revised environmental safeguards to align with statutory norms.
At the same time, Lodha continued to deliver projects across Mumbai and Thane, reporting record sales of ₹17,600 crore in FY25 and a 42 per cent surge in Q1 FY26 profits.
In Goa Foundation v. Union of India[3], the Supreme Court held that compliance post-violation, if undertaken transparently, can demonstrate bona fides and mitigate penalties. Lodha’s corrective conduct exemplified that principle. Legal turbulence did not stall operations, nor did it impair homebuyer confidence.
Godrej Properties: Transparency as a Shield
Godrej Properties faced its own share of controversy when a CBI FIR alleged irregularities concerning environmental clearance in a land transaction. The company denied wrongdoing, citing transparent documentation and compliance with environmental impact assessment procedures. The matter was later brought before the Punjab and Haryana High Court where notice was issued to the investigating agency for response.
This episode mirrored the doctrinal conflict between investigative prerogative and reputational due process. The Supreme Court in State of Haryana v. Bhajan Lal[4], recognised that investigations must not become instruments of harassment or commercial sabotage. Where allegations are speculative and investigations pre-empt corporate conduct, judicial restraint is warranted.
Despite the CBI probe, Godrej continued its nationwide expansion, launching new projects and recording a 15 per cent profit increase year-on-year. The absence of significant customer attrition during this period underscores a crucial truth, that transparency functions as the ultimate shield in an age of legal hyper-scrutiny.
M3M Developers: Resilience under Judicial Scrutiny
Perhaps the most compelling example of resilience amidst enforcement scrutiny is M3M Developers, a leading NCR-based real estate group. Even as its promoters face investigation under the Prevention of Money Laundering Act, 2002, the company continues to execute some of the region’s most ambitious residential and commercial developments.
In a notable proceeding, the Supreme Court permitted M3M to substitute provisionally attached assets worth ₹317 crore with built-up commercial properties of equivalent value. The order reflected both judicial pragmatism and confidence in the company’s bona fides. It safeguarded the enforcement objective while ensuring continuity of legitimate business operations, employment, and construction activity. The decision has since been viewed as a benchmark of balanced jurisprudence in the interface between law enforcement and enterprise.
The Doctrine of Proportionality in Enforcement
This reasoning exemplifies the doctrine of proportionality, established in Om Kumar v. Union of India[5], which requires that penalties, enforcement actions, and regulatory interventions be calibrated to the alleged offence’s gravity. Neither blanket enforcement nor lax oversight is permissible; the middle path is calibrated, contextual enforcement. In M3M India Pvt. Ltd. v. Union of India[6], the Supreme Court bench applied proportionality with a particular sophistication. The Court recognized that while PMLA’s enforcement objectives are constitutionally significant, the mechanism of enforcement (asset attachment) must not cripple legitimate business operations. The Court articulated a framework requiring that:
1. Enforcement objectives be preserved: The assets attached must maintain equivalent value, ensuring that investigative/prosecutorial purposes remain secured
2. Legitimate business continuity be enabled: Asset substitution must permit the company to continue lawful operations, maintain employment, and honour contractual commitments
3. Collateral stakeholder interests be protected: The attachment cannot be employed as an economic weapon that destroys the livelihoods of employees, investors, and consumers
This judgment represents what may be termed “Progressive Enforcement Jurisprudence”- the evolution from rigid enforcement (which indiscriminately paralyses commerce) to contextual enforcement (which balances accountability with legitimacy).
This reasoning aligns with the Supreme Court’s holding in State of Maharashtra v. Tapas D. Neogy[7], where it was emphasised that attachment of property must remain proportionate to the alleged offence and must not cripple lawful commerce. By allowing substitution, the Court reaffirmed the doctrine of proportionality in enforcement, preserving accountability without precipitating economic paralysis.
Equally significant is M3M’s record before the Real Estate Regulatory Authority (‘RERA’), where it has consistently maintained zero unresolved consumer complaints. In a sector often characterised by buyer litigation, this denotes a rare culture of compliance and customer responsibility. The company’s expeditious redressal mechanism and uninterrupted construction progress illustrate a broader principle: that judicial oversight and business continuity can, and must, coexist.
Judicial Recognition of Economic Continuity
Indian courts have repeatedly underscored that legitimate commercial activity must not be paralysed by the pendency of legal proceedings. In Manohar Lal Sharma v. Principal Secretary[8], the Supreme Court affirmed that while accountability is indispensable, enforcement must not degenerate into economic obstructionism. The Court emphasised that regulatory vigilance should be exercised with an awareness of its collateral impact on lawful enterprise. This philosophy, compliance with continuity, has increasingly defined judicial reasoning in real-estate matters.
The Court emphasised that regulatory vigilance should be exercised with an awareness of its collateral impact on lawful enterprise. This philosophy- compliance with continuity, has increasingly defined judicial reasoning in real-estate matters and administrative law more broadly. The principle recognises that justice systems must remain aware of enforcement’s collateral consequences: loss of employment, erosion of market confidence, destruction of productive capacity, and harm to innocent stakeholders.
Economic Pragmatism in Justice: A Maturing Jurisprudential Doctrine
This represents the emergence of a doctrine of economic pragmatism in justice, the recognition that courts must account for employment effects, investment consequences, and market stability when crafting enforcement remedies. In Bangalore Development Authority v. Syndicate Bank (Supra), the Court considered the BDA’s operational model and “no-profit-no-loss” financing when assessing appropriate remedies. In M3M India v. Union of India, the Court weighed employment, investment, and project continuity when permitting asset substitution. In Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh[9], the Supreme Court delivered a comprehensive articulation of Real Estate (Regulation and Development) Act, 2016 (‘RERA Act’) jurisprudential philosophy, holding that RERA Act’s retroactive application extends to all projects while emphasizing that RERA Act functions not as a weapon to cripple developers but as a framework to enable accountability within continuity. The Court noted that RERA Act was “introduced as a means to put an end to fraud, delay in payments and high transaction costs” while “shielding the interests of promoters by imposing responsibilities on consumers as well.”
This jurisprudence establishes a critical principle, i.e., enforcement that balances accountability with continuity strengthens both legal legitimacy and market efficiency.
A similar approach informed the Allahabad High Court’s decision in M3M India and Indiabulls Housing Finance Ltd[10], where the Court quashed multiple FIRs citing procedural infirmities and cautioned that criminal law cannot be weaponised to settle corporate rivalries. The judgment reaffirmed faith in due process and preserved operational stability for legitimate businesses. Collectively, such decisions advance a balanced jurisprudence, one that harmonises enforcement with economic vitality and positions the rule of law as both guardian and guarantor of commerce.
Remedial Pluralism: Multiple Forums, Reinforced Protection>
This pragmatic synthesis between enforcement and continuity echoes the Supreme Court’s reasoning in Imperia Structures Ltd. v. Anil Patni[11], which clarified that RERA does not bar consumer forums from entertaining complaints against builders. Real estate allottees retain the option to approach either RERA or Consumer forums, i.e., a principle of remedial pluralism. This approach reflects judicial wisdom: regulatory maturity consists not in creating monopolistic forums but in enabling multiple avenues for justice. Rather than paralyzing commerce through jurisdictional confusion, the Court created a framework where:
• Buyers have maximum protection through multiple forums (RERA, consumer forums, civil courts)
• Developers cannot forum-shop or exploit procedural gaps
• Regulatory frameworks work in tandem rather than conflict, creating multiple accountability mechanisms that strengthen compliance
The Supreme Court’s reasoning in Bangalore Development Authority v. Syndicate Bank (Supra) also upheld the enforceability of contracts even amidst regulatory inquiry, provided the underlying transaction was bona fide. Such jurisprudence fortifies consumer confidence by reaffirming that law and delivery are not adversaries but allies in preserving trust.
The Consumer Dimension: Trust as a Legal Currency
For consumers, the real estate market embodies both aspiration and anxiety. Delays, regulatory interventions, and enforcement proceedings often generate apprehension about delivery and investment security. Yet developers such as Lodha, Godrej, and M3M have demonstrated that judicial scrutiny need not translate into business instability.
The Maharashtra Real Estate Appellate Tribunal (MahaRERA), in a series of rulings, has directed developers to refund booking amounts or revise possession schedules, but rarely to halt ongoing projects. In one notable instance, the Tribunal observed that consumer protection must operate concurrently with the principle of contractual continuity, ensuring both restitution and progress.
A similar trend is now emerging under the Insolvency and Bankruptcy Code, 2016 (‘IBC’), wherein the initiation of the Corporate Insolvency Resolution Process against a real estate Corporate Debtor does not result in the suspension of its core business operations. Even during the pendency of CIRP, the court-appointed Resolution Professional is expected to continue with construction, development, and delivery of flats, thereby ensuring that the interests of homebuyers and allottees remain paramount.
This pragmatic synthesis between enforcement and continuity echoes in a plethora of judicial pronouncements which uphold the enforceability of contracts even amidst regulatory inquiry, provided the underlying transaction was bona fide.
Regulatory Maturity and Corporate Governance
The evolution of India’s real-estate jurisprudence reflects a decisive shift from reactive compliance to anticipatory governance. Developers today embed internal legal audits, environmental reporting, and consumer-dispute mechanisms within their operating architecture, signalling a systemic embrace of accountability.
The RERA Act institutionalised transparency by legislating disclosure, escrow management, and delivery discipline. Companies such as M3M have leveraged this statutory framework to formalise grievance-redressal systems and digital compliance protocols, thereby strengthening consumer confidence. The success of RERA lies not merely in penalising defaulters but in rewarding consistent conformity with the law.
The Supreme Court affirmed that RERA’s object is to secure timely possession and investor assurance, not to criminalise inadvertent procedural errors.[12] This jurisprudence validates M3M’s operational continuity and its record of on-schedule project completion. It also exemplifies the maturing alignment between corporate governance and judicial oversight, where the law evolves not as a deterrent to business, but as its framework of credibility.
Beyond Legal Formalism: The Spirit of Business
The moral of these narratives is neither about triumph over law nor evasion of accountability. It is about an evolving corporate ethic that integrates legal compliance into the rhythm of enterprise. When developers continue to honour commitments amidst litigation, they affirm the legal system’s resilience.
The real spirit of business lies in continuity under scrutiny, a principle captured eloquently by Justice Krishna Iyer in M/s. Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha[13], where he wrote that the “rule of law is not an obstacle to progress, it is its precondition.” The companies mentioned here have embodied that sentiment.
Lodha’s environmental compliance, Godrej’s transparency before investigative authorities, and M3M’s operational perseverance are not acts of defiance but of faith in legal institutions and in the market’s ability to distinguish between allegation and adjudication.
Conclusion
Legal proceedings are an inevitable part of the business lifecycle in a complex regulatory economy. What defines an enterprise is not the absence of litigation, but the manner in which it responds to it. Developers who continue to build, disclose, and deliver while cooperating with judicial and regulatory authorities strengthen confidence in both law and market alike.
The experience of M3M Developers is instructive. Even under the lens of enforcement, the company has demonstrated unwavering commitment to compliance and continuity, maintaining zero RERA disputes while continuing to construct and hand over homes to thousands of buyers. Such conduct affirms that the truest hallmark of corporate responsibility is perseverance without deviation from legality.
As India’s real estate sector matures, the dialogue between legal vigilance and business resilience will increasingly define its trajectory. The developers who view the law not as an adversary but as a partner in progress will shape the industry’s ethical core and commercial credibility.
When legal turmoil does not touch customers, it is not a stroke of fortune but the disciplined spirit of business, the integration of accountability into enterprise, the alignment of legal compliance with commercial excellence, and the recognition that the strongest markets are those where justice and commerce reinforce each other.
The Supreme Court’s evolving jurisprudence, from Bangalore Development Authority v. Syndicate Bank (supra) to Newtech Promoters v. State of U.P. and M3M India v. Union of India, affirms a mature legal philosophy: accountability without paralysis, compliance strengthening progress, and rule of law serving as the foundation rather than obstacle to enterprise. In this synthesis of law and commerce lies the future of India’s real estate sector, and indeed, of modern business ethics itself.
*Managing Partner, Raya Legal
[1] 2005(6) SCC 344
[2] MANU/ SC/ 2718/ 2007
[3] (2014) 6 SCC 590
[4] 1992 Supp (1) SCC 335
[5] 2001 (2) SCC 386
[6] MANU/ SCOR/ 29210/ 2025
[7] MANU/ SC/ 0582/ 1999
[8] (2014) 9 SCC 516
[9] MANU/SC/ 1056/ 2021
[10] Criminal Misc. Writ Petition No. – 10893 of 2023
[11] MANU/ SC/ 0811/ 2020
[12] Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh
[13] AIR 1980 SC 1896