The Bombay High Court has struck down retrospective rent increases imposed by the Mumbai Port Authority (MbPA) on 154 residential and commercial tenants across areas between Colaba and Sewri, providing relief to tenants facing substantial arrears.
A division bench of Justices Manjusha Deshpande and Bharati Dangre ruled that the rent rates applicable under a compromise proposal upheld by the Supreme Court in 2004 in the Jamshed Hormusji Wadia case would remain applicable to the affected tenants until March 31, 2024.
The court set aside a series of gazette notifications through which MbPA had attempted to implement revised Scale of Rates (SOR) retrospectively for the periods between October 2012 and September 2022. It held that the port authority could not independently impose rates that were inconsistent with the compromise arrangement approved by the Supreme Court.
The bench also quashed demand notices issued to recover differential lease and tenancy arrears from 62 petitioners, several intervening applicants and other affected tenants. Some of the demands had reportedly amounted to crores of rupees.
Court Allows Fresh Rent Fixation After March 2024
The dispute arose over SOR rates sanctioned by the Tariff Authority for Major Ports and subsequently adopted by MbPA. Rates applicable between October 2012 and September 2017 were notified in October 2021, while those for October 2017 to September 2022 were notified in December 2021.
While cancelling the retrospective notifications and related orders, the court clarified that MbPA can determine fresh rents from April 1, 2024, provided they follow the principles established by the Supreme Court. The court also emphasised that the revised rents must be fair and reasonable and cannot involve “profiteering and rack renting”.
The bench also examined provisions of the Port Land Guidelines and Manual, 2015, concerning SOR fixation based on land market values. Since the guidelines were framed by the Centre, the court read down their applicability to MbPA.
Advocate Prerak Choudhary, who represented 62 petitioners and some intervening applicants, welcomed the ruling.
“The judgment brings respite to the petitioners who were aggrieved by the SOR rates imposed upon them, the effect of which had styled them as defaulters in arrears of crores. It is a welcome judgment that brings smiles to the faces of MbPA tenants,” Choudhary told HT.
Source: Hindustan Times
