Madras High Court questions T.N. Government’s authority to revise rent for land leased out to Madras Race Club

Madras HC Chief Justice questions TN govt's revision of annual rent for 160.68 acres of govt land leased to MRC in 1945. Govt land given by contractual lease; govt unable to cite clause empowering rent revision. MRC paid 99 years of lease amount in advance; govt cannot unilaterally revise rent & demand ₹13,111.86 cr in arrears.

Madras High Court Chief Justice Sanjay V. Gangapurwala on Monday questioned the authority under which the Tamil Nadu government had revised the annual rent for 160.68 acres of government land leased out to Madras Race Club (MRC) at Guindy in Chennai in 1945 and demanded a whopping amount of ₹13,111.86 crore in rental arrears.

Presiding over the first Division Bench, along with Justice D. Bharatha Chakravarthy, the Chief Justice told Advocate-General R. Shunmugasundaram that the government land appeared to have been given to MRC by way of a contractual lease. Therefore, he wanted to know which clause of the contract empowers the government to revise the rent.

Since the A-G sought time to get instructions from the officials concerned, the judges adjourned the hearing of a couple of writ appeals filed by MRC to January 23 and ordered that the interim order of status quo, already issued by another Division Bench of the High Court while admitting the appeals on April 19 this year, shall continue till then.

Earlier, during the arguments, senior counsel Satish Parasaran and advocate R. Parthasarathy, representing MRC, told the Bench that the club had been given the 160.68 acres of land on lease for a period of 99 years. The lease deed was registered in 1946 and the lease period would expire only in 2045.

The annual lease amount for the property, now being used as a race course, was fixed at ₹614 and 13 annas and the club paid the entire lease amount for 99 years in advance. It was also pointed out that this 160.68 acres of land was different from another 30 acres which the club had purchased separately for recreational activities.

Counsel contended that the government could not unilaterally keep revising the rent on the basis of the market value of the land, in the absence of a specific provision to do so under the registered lease deed, and then demand a fanciful amount of ₹13,111.86 crore in supposed rental arrears.