Mumbai: The Bombay High Court (HC) has quashed retrospective rent hikes imposed by the Mumbai Port Authority (MbPA) on 154 residential and commercial tenants between Colaba and Sewri, ruling that the rent rates under a compromise proposal upheld by the Supreme Court (SC) in 2004 in the Jamshed Hormusji Wadia case would continue to apply to the tenants until March 31, 2024.
A division bench of Manjusha Deshpande and Bharati Dangre on Wednesday set aside a series of gazette notifications through which the MbPA had sought to impose revised Scale of Rates (SOR) from October 2012 till September 2022, holding that the port authority could not unilaterally adopt rates that were contrary to the compromise proposal upheld by the SC. The court also quashed demand notices seeking recovery of differential lease and tenancy arrears from 62 writ petitioners, a handful of intervening applicants and other affected tenants, with some facing liabilities running into crores of rupees.
The court, however, clarified that the MbPA would be at liberty to fix fresh rents after March 31, 2024, adhering to the principles laid down by the Supreme Court in the Jamshed Hormusji Wadia case. The court also considered a challenge to provisions in the Port Land Guidelines and Manual (PGLM) 2015 guidelines relating to fixation of SOR on the basis of the market value of land. The ruling is significant for the Darukhana tenants as it prevents retrospective recovery of higher rents from 2012 till 2024, besides reinforcing that any future rent revision by the MbPA must be based on fairness and reasonableness and comply with principles laid down by the Supreme Court. This decision provides the petitioners with immediate relief, as their rent obligations are now governed by the original, more favorable compromise rates until March 31, 2024,” a statement issued by the DISMA said.
The court set aside these notifications, related speaking orders and other notifications seeking to impose revised SOR retrospectively. Since the guidelines were framed by the central government and made applicable to the MbPA, the court read down the provision insofar as it applied to the port authority.
The revised rates must be fair and reasonable, the court stressed, making it clear that the port authority could not resort to “profiteering and rack renting” while determining rents.
“The court has rendered a decisive verdict, invalidating the Mumbai Port Authority’s revised rent rates and reaffirming the supremacy of the compromise proposal previously upheld by the apex court in the Jamshed Wadia case.
