The Bombay High Court has quashed a series of notifications and demand notices through which the Mumbai Port Authority sought to retrospectively revise rents payable by its long-standing tenants, holding that the exercise could not override the rent formula approved by the Supreme Court in Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai, (2004) 3 SCC 214. The Division Bench of Justice Manjusha Deshpande and Justice Bharati Dangre ruled in a batch of 145 writ petitions concerning rent fixation by the Mumbai Port Authority and the Tariff Authority for Major Ports (TAMP).
The petitions were filed by tenants and occupants of Mumbai Port Trust properties challenging various communications, tariff orders and notifications that revised their rents. The petitioners contended that the enhanced rates had been fixed through an arbitrary process and contrary to the principles governing rent revision laid down in the earlier litigation concerning Mumbai Port Trust properties.
The Court held that the rent rates fixed under the earlier compromise proposals, which had received the imprimatur of the Supreme Court in Jamshed Wadia, would continue to govern the petitioners until March 31, 2024, subject to the modifications made by the Supreme Court.
The Bench found that the respondents’ subsequent exercise of declaring revised Statements of Rates could not be sustained where it departed from the compromise formula and the Supreme Court’s decision. It therefore quashed the e-Gazette notification dated October 29, 2021, which fixed rates for the period from October 1, 2012 to September 30, 2017, as well as the December 18, 2021 notification fixing rates for October 1, 2017 to September 30, 2022. The Court held that these notifications not only overreached the earlier formula but also operated retrospectively.
The Court similarly set aside the connected speaking orders, Gazette notifications, circulars and demand notices through which the revised rates and retrospective differential rent were sought to be recovered from the petitioners. The demand notices seeking payment of retrospective arrears were specifically quashed.
At the same time, the Bench clarified that the Mumbai Port Authority is not barred from fixing rents after expiry of the period covered by the compromise proposal. It held that, after March 31, 2024, the Authority is at liberty to independently determine rents under the applicable statutory framework, but must follow the Supreme Court’s principle that there can be no profiteering or rack renting and that the rates must be fair and reasonable.
The Court also read down the provision in the Policy Guidelines for Land Management (PGLM) 2015 requiring fixation of Statements of Rates on the basis of the market value of land, insofar as it applied to the Port Authority.
The Court ultimately made the writ petitions absolute in the aforesaid terms, disposed of the pending interim applications and made no order as to costs.
