Bombay HC Quashes Port Authority Retrospective Rent Hikes for Colaba Tenants
The Bombay High Court has quashed retrospective rent hikes imposed by the Mumbai Port Authority on 154 residential and commercial tenants located between Colaba and Sewri. The court ruled that rent rates established under a compromise proposal upheld by the Supreme Court in the 2004 Jamshed Hormusji Wadia case will continue to govern the tenancies until March 31, 2024.
A division bench comprising Justice Bharati Dangre and Justice Manjusha Deshpande on Wednesday set aside a series of gazette notifications through which the port authority attempted to enforce a revised Scale of Rates dating from October 2012 to September 2022. The judges held that the port authority could not unilaterally implement rates that conflicted with the Supreme Court's earlier ruling.
The judgment also cancelled demand notices that sought to recover differential lease and tenancy arrears from 62 writ petitioners, several intervening applicants, and other affected occupants. Some of these tenants had faced retrospective financial liabilities amounting to crores of rupees.
The underlying legal dispute arose after the Tariff Authority for Major Ports sanctioned the revised Scale of Rates, which the Mumbai Port Authority subsequently adopted. Revised rates spanning October 1, 2012, to September 30, 2017, were notified on October 29, 2021, while rates covering October 1, 2017, to September 30, 2022, were notified on December 18, 2021. The High Court set aside these notifications along with related speaking orders.
The bench clarified that the port authority remains at liberty to determine fresh rents after March 31, 2024, provided it follows the principles laid down by the Supreme Court in the Jamshed Hormusji Wadia case. The court emphasized that future rates must remain fair and reasonable, noting that the authority cannot resort to profiteering and rack renting.
Additionally, the court examined challenges to the Port Land Guidelines and Manual 2015 regarding rent fixation based on land market value. Because the central government framed the guidelines, the court read down the relevant provision regarding its application to the port authority.
