HC strikes down MbPAs retrospective rent hikes

The court 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

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.

Mumbai, India - May 12, 2026: Heavy police security was deployed at the Mumbai Port Authority colony in Darukhana, Coal Bunder, as authorities began demolishing homes alleged to be illegal, some of which residents claim have existed since 1949, leading to evictions, in Mumbai, India, on Tuesday, May 12, 2026. (Photo by Anshuman Poyrekar/Hindustan Times) (Anshuman Poyrekar/HT Photo)

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 dispute relates to the SOR sanctioned by the Tariff Authority for Major Ports (TAMP) and subsequently adopted by the MbPA. Revised rates based on the SOR from October 1, 2012 till September 30, 2017 were notified on October 29, 2021, whereas revised rates from October 1, 2017 till September 30, 2022 were notified on December 18, 2021.

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. 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.

Advocate Prerak Choudhary, who represented the 62 writ petitioners and some intervening applicants, termed the judgment a major relief for the affected tenants, a bulk of them from the Darukhana Iron Steel and Scrap Merchants Association (DISMA).

“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.

Choudhary said the judgment covered a large number of tagged petitions and credited the collective efforts of several advocates, law firms, solicitors and counsels who represented the affected tenants.

He said that the petitioners, including his clients, had all adopted the arguments advanced by senior counsel Darius Khambatta, who had appeared for the lead petitioners and led arguments on behalf of the petitioner group. Khambatta’s brilliant arguments had helped secure relief for all the petitioners, Choudhary said.

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.

The DISMA welcomed the order as “a landmark victory for justice, fairness and the rule of law”.

“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. 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.