Mumbai Lease Rent Hike Upheld by Bombay HC Based on Ready Reckoner Rate
The Bombay High Court has upheld the state government's decision to increase lease rents based on the ready reckoner rate, citing that land values in Mumbai are expected to only go up.
MumbaiLease RentReady Reckoner RateBombay High CourtProperty PricesReal Estate MumbaiJul 11, 2024
The bench, however, held that the government was not justified in revising or resetting the lease rent every five years, even though the leases of petitioners were to be renewed for a period of 30 years. The HC set aside the specific clause in the impugned GR regarding the same and observed that the lease deed did not give the right to the state to 'unilaterally change the lease rent intermittently during the tenure of the lease.
The court rejected the state's argument that the five-year renewal was required without which there will be 'future fall of property prices in Mumbai.' The bench noted that 'land in a city like Mumbai is a finite resource and it is not reasonable to expect land values to fall, except in exceptional and extraordinary circumstances.
A division bench of Justices B P Colabawalla and Somasekhar Sundaresan on July 10 passed a verdict in a batch of pleas filed by cooperative housing societies, occupants of bungalows in Bandra, and two charitable institutions, against GRs of 2012 and 2018 fixing a new method for lease rents and renewals.
The petitioners had claimed that due to impugned GRs, the lease rents, which were earlier fixed as per market rates of 1968, were increased exorbitantly (in some cases 400 to 1,900 times compared to earlier rates). The state government, on the other hand, argued that the increase was 'not only fair and reasonable but fully justified.
The court also asked the government to process the applications made by petitioners on or before March 7, 2024, that sought conversion of their land from Leasehold to Occupancy class after calculating arrears of lease rent.
Information The government's decision to hike lease rents was challenged by cooperative housing societies and occupants of bungalows in Bandra, citing that the increase was 'unreasonable' and 'contrary to public policy.
The petitioners argued that the revised rates would result in a significant burden on them.The Bombay High Court is the high court of the state of Maharashtra, India. It has jurisdiction over the state of Maharashtra and the Union Territory of Dadra and Nagar Haveli.
Frequently Asked Questions
What was the basis of the Bombay High Court's ruling on lease rent hike?
The court held that the hike was based on the ready reckoner rate, which is a fair and transparent method for valuing land in Mumbai.
How much were the lease rents increased for some petitioners?
In some cases, the lease rents were increased by 400 to 1,900 times compared to earlier rates.
What was the state government's argument in favor of the lease rent hike?
The state government argued that the increase was 'not only fair and reasonable but fully justified' and that the petitioners had enjoyed the property with no increase in rent for 30 years.
What is the significance of the Bombay High Court's ruling?
The ruling upholds the state government's decision to hike lease rents, which could have implications for property prices in Mumbai.
What is the ready reckoner rate?
The ready reckoner rate is the minimum rate at which a property can be registered or leased in a particular area.
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