30 petitions on MbPT’s steep rent hike await end of HC’s winter vacation

What the Mumbai Port Authority’s order means for someone like Bandra businessman Iqbal Ibrahim whose deceased father was the original lessee of a 6940 square metre plot at Cotton Green, is that he now has to shell out arrears of ₹75 crore.

Mumbai: When the Bombay High Court reconvenes after the winter break, one of the key issues it will be looking at is the clutch of 30 odd petitions that have been filed over the last 3 months against the decision of the Mumbai Port Trust (MbPT) effecting a steep retrospective hike from 2012 on rentals on all its properties across Mumbai.

Mumbai Port Authority is the biggest landlord in the city with its ownership over 944 hectares of prime land. While the port authority uses around 1,860 acres for its own activities, the rest of the land is leased out to individuals, industrial units and other business establishments, including 300 residential plots. (HT PHOTO)

What the Mumbai Port Authority’s order means for someone like Bandra businessman Iqbal Ibrahim whose deceased father was the original lessee of a 6940 square metre plot at Cotton Green, is that he now has to shell out arrears of ₹75 crore. On August 30 this year, Ibrahim received a notice from the Mumbai Ports Authority (MPA) asking him to pay arrears of compensation of ₹75.02 crore for the period between October 1, 2012 to July 31, 2022. The notice stated that the amount was revised based on the gazette notification of October 28, 2021 by the Tariff Authority of Major Ports (TAMP).

Mumbai Port Authority is the biggest landlord in the city with its ownership over 944 hectares of prime land. While the port authority uses around 1,860 acres for its own activities, the rest of the land is leased out to individuals, industrial units and other business establishments, including 300 residential plots. In 2015, TAMP, going by the union shipping ministry’s orders approved the Mumbai Port Authority’s proposal to hike rentals. This policy is applicable to all expired leases, 15-monthly leases, monthly tenancies and vacant plots falling under the respective ready reckoner rates.

But now that the Port Authority has begun sending notices these tenants have begun to panic. Fakruddin Fidaali Potia who runs the Potia Industrial Estate at Darukhana, Byculla, has filed a petition that paying the revised tariff from ₹84.5 per square meter to ₹938 per square meter per month for the period between 2012 and 2022 is beyond his means. He would have no option but to vacate the premises, the petition states.

Yet another petition has been filed by Colaba resident Homi Kaka who occupies Sethna House along with other family members. He was also served with a demand notice demanding payment of an exorbitant amount towards arrears for rent/compensation for the building for the period of ten years.

All the petitions are filed by advocate Prerak Chowdhary over the last three months and they refer to a Supreme Court order of 1994 wherein MbPT was asked to renew the leases of all its tenants for a 30-year period with an annual increase of 4 per cent per annum. The petitioners state that the increase in rent at the rate suggested by the Apex Court would not have been exorbitant. But the revised rent imposed by MbPT was not based on the ready reckoner value of the respective areas and was arbitrary.

Ebrahim’s petition, for instance, states that he had been paying the rent/compensation regularly to MbPT as per the bills sent by the port authority and hence the demand for payment of ₹75 crore in terms of arrears was arbitrary and unaffordable and hence the order should be quashed.

The tariff change was affected after the Major Port Authority Act, 2021 replaced the older Mumbai Port Trust Act on November 3, 2021. According to the petition, the tariff change was done without following proper procedure and the lessee were not given an opportunity to be heard or raise objections to the proposed hike. The tariff had remained unchanged since 2012 as the lease agreements had not been renewed and the MbPT was collecting provisional rent / compensation from the lessees. Hence, the demand notice sought payment of charges from 2012 till 2022.

The petitions have also sought directions to the Mumbai Port Authority to collect rent at the rates prevailing prior to the Tariff change order and also sought a stay on the implementation of the demand order as it is against laws of natural justice and violates the fundamental rights of the tenants and lessees.

The division bench of acting chief justice S V Gangapurwala and justice S G Dige which heard some of the petitions in November had directed clubbing of all the petitions, as they involved the same issue, so that they may be heard together. The bench has posted the bunch of petitions for further hearing on January 19, 2023 after advocates Farnaaz Karbhari and Rahul Jain from HSA Advocates, who represented MbPT in all the matters, sought time to file affidavits in response to the petitions.