Although the state government is exempt from the Rent Control Legislations, where it is the landlord, it cannot do as it pleases and “act like a private landlord and indulge in rack renting, profiteering and/or indulging in whimsical and unreasonable evictions or bargains”, the Bombay High Court (HC) has observed. The court has upheld the government’s decision to charge rent, at the time of lease renewal, based on ready reckoner (RR) rate, saying that the same is not “extortionate, exorbitant and/ or manifestly arbitrary”, as the properties were located in Bandra, a very sought after and high-end real estate area in Mumbai. However, it said that the rent cannot be revised every five years and has to remain the same for the entire tenure of the lease.
The court disposed of a batch of petitions, filed mostly by housing societies in Bandra, challenging government resolutions (GR) of 2006, 2012 and 2018, revising terms of rent on long-term leases granted to housing societies. The 2006 GR contemplated charging lease rent based on the value of the land as pre the RR. The 2012 and 2018 GRs set out the methodology for calculating the lease rent.
These GRs also provided for conversion of leasehold plots to freehold (ownership). Senior counsels Rafiq Dada and Navroz Seervai, for several petitioners, contended that linking the rent and the value of the lands, is prohibited by earlier HC rulings. The counsels argued that the GRs are clearly illegal as they seek to increase the .
