Court Upholds Land Lease Rent Hike in Posh Mumbai Locality
Bombay HC rejects petitions challenging land lease rate hike in Bandra, says move not arbitrary
Real EstateMaharashtraBombay High CourtLand LeaseReady ReckonerReal Estate MaharashtraJul 11, 2024
The 'Ready Reckoner' rate, also known as the 'Circle Rate', is the minimum valuation fixed by the state government for properties in a specific area.
A division bench of Justices B.P. Kolabawala and S.R. Sundaresan observed that while the government's proposals could not be revised every five years, the lease rent should remain the same throughout the entire term of the lease agreement.
The court dismissed petitions filed by several housing societies in Bandra, challenging the government's proposals in 2006, 2012, and 2018 to revise the lease rent.
The court noted that these societies had been given large tracts of land in prime locations in Bandra almost free of cost. It observed that if one looked at the amount these societies were paying for the government land, it would not be considered excessive.
The government had adopted a policy decision to use the 'Ready Reckoner' rate to determine the lease rent payable.
Various societies had claimed that the proposals were illegal, as they sought to increase the lease rent by '400 to 1900 times', which was 'exorbitant'.
Frequently Asked Questions
What is the 'Ready Reckoner' rate?
The 'Ready Reckoner' rate, also known as the 'Circle Rate', is the minimum valuation fixed by the state government for properties in a specific area.
Why did the Bombay High Court uphold the government's decision?
The court ruled that the move was not arbitrary, considering Bandra is a high-end real estate area.
What was the challenge raised by the housing societies?
The societies claimed that the proposals were illegal, as they sought to increase the lease rent by '400 to 1900 times', which was 'exorbitant'.
What is the significance of the court's ruling?
The ruling upholds the government's policy decision to use the 'Ready Reckoner' rate to determine the lease rent payable.
What is the impact of the decision on the real estate sector?
The decision is likely to have a significant impact on the real estate sector, particularly in high-end localities like Bandra in Mumbai.
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