A vacation bench comprising Justices Adarsh Kumar Goel and L Nageswara Rao also gave its nod to the state government to come out with a policy for regularizing the structures in the Digha village.
The bench asked the state government not to take any coercive action against the residents during the monsoon season till July 31.
Residents of the village had challenged the Bombay High Court order of last year in which Maharashtra Industrial Development Corporation (MIDC) and City and Industrial Development Corporation of Maharashtra Limited (CIDCO) were directed to initiate the process of demolition of 99 buildings illegally constructed in the village.
Counsel appearing for Maharashtra government supported the stand of residents and said there were 99 buildings in the area in which thousands of people were living.
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The counsel further said the state government was contemplating a concrete policy for regularising the structures which can be examined by the Bombay High Court.
It had directed the state government not to go ahead with the policy without its permission observing that the decision to regularise illegal structures will have disastrous consequence and also set an unhealthy precedent for other cities.