In a relief to the state government, the Bombay High Court on Wednesday held that the state’s decision to fix rents based on the value of ready reckoner (RR) rate for the lands leased by it in Mumbai was ‘reasonable’ and ‘keeping with the times’. It observed that the new method adopted through 2012 and 2018 Government Resolutions (GRs) to increase the lease rent was ‘fair’ and the revised rates “cannot be termed as exorbitant or extortionate.” The bench, however, held that, “the government was not justified in revising or resetting the lease rent every five years even though the leases of petitioners were to be renewed for a period of 30 years.
” Advertisement The HC set aside the specific clause in the impugned GR regarding the same and observed that the lease deed did not give the right to the state to “unilaterally change the lease rent intermittently during the tenure of the lease.” It rejected the state’s ‘futile’ argument that the five-year renewal was required without which there will be ‘future fall of property prices in Mumbai ’. “Land in a city like Mumbai is a finite resource and it is not reasonable to expect land values to fall, except in exceptional and extraordinary circumstances.
Even if land values were to come down for a temporary period (for example during the Covid-19 pandemic), they would stand corrected thereafter. Land in Mumbai is a precious commodity, and prices of land are expected to only go up,” the bench obse.