Can govt enhance lease in contractual agreements, asks CJ



Daily Thanthi


CHENNAI: The Chief Justice of Madras High Court directed the State government on what authority it has ordered to enhance the rent amount for the 160-acre land leased out to the Madras Race Club. The club had moved the High Court challenging the single judge order and enhancement of lease rent ordered by the State. When the case came up for hearing before the first bench comprising Chief Justice SV Gangapurwala and Justice D Bharatha Chakravarthy, the counsel appearing for the club contended that the agreement was entered into in 1945, during the British government, for leasing the land for an annual rent of Rs 614 for 99 years. Noting that the agreement does not stipulate enhancement of lease rent, the counsel argued that the rent cannot be revised through a government order. Hence, the demand notice issued by the Revenue Department to enhance the rent by 14 per cent was liable to be quashed, said the counsel. Advocate General (AG) R Shunmugasundaram said the State government enhanced the land lease rent in 1970 as per the change in ground value, and said the State can enhance the rent through an order. Intervening at this juncture, Chief Justice Gangapurwala said the State has the powers to enhance the amount if it is a statutory agreement. However, he added, in this case, it is a contractual agreement and then wondered if the State has any powers to enhance the lease rent if it is a contractual agreement. As the AG sought time to get instruction, the bench adjourned the matter to January 23 for further hearing. In April, the single judge had directed the club to pay Rs 730.86 crore towards rental arrears from 1970 to 2004 within a month. If it failed to pay the arrears within the stipulated time, the government should evict it and retrieve the land, ordered the judge. The court then directed the government to raise a demand within a month for another Rs 12,381 crore, the rental arrears from 2004 to till date.