Pay Rs 730 crore rental arrears or face eviction: HC to Madras Race Club

CHENNAI: The Madras Race Club, occupying 161 acres of prime leased government property in Guindy since 1946, has been directed by the Madras high court to pay up the arrears of 12,381 crore within two months. Of this, the revised rental arrears of 730 crore should be paid in a month, the court said, making it clear that otherwise the club would face eviction.
Justice S M Subramaniam delivered the verdict on Wednesday, rejecting the race club's petition challenging the demand notices for 730 crore. "In the event of not settling any part or the entire arrears of the revised rent due to the state, the authorities are directed to initiate appropriate recovery proceedings against the club," the judge said. The court then posted the petitions for June 16 for reporting compliance.
It was on the April Fools Day in 1946 that nearly 160.6 acres of government land was leased to the Madras Race Club (MRC) for 99 years at a lease rent of 614 a year.
The issue pertains to pleas moved by MRC challenging the demand notices issued by the revenue authorities to pay enhanced lease rent at 14% of the market value of the land from December 18, 1970.
The MRC contended that horse racing is a game of skill, as confirmed by the Supreme Court, and, therefore, there is no reason to enhance the rent over and above the agreed rent on April 1, 1946 - the date of entering into the lease agreement.
The club said, the entire lease rent for 99 years has been paid by the club in advance and there is no clause in the lease deed for enhancement of rent.
Rejecting the contention, Justice Subramaniam said: "An inevitable question is, whether any bureaucrat of the state, judges, ministers, politicians or any person as a matter of fact will lease out their property for a meagre annual rent of Rs 614.13 for 99 years in Chennai city. It is beyond one's imagination." He further said: "Even if such mistakes were committed by the pre-Independence Madras Government at the behest of the British rule, after the commencement of Constitution, the Tamil Nadu government ought to have initiated all appropriate steps to protect the government property."
In the present case, only during 1970 action was initiated to revise the lease rent through policy decision by enforcing uniform revision for all the leased-out government properties, the judge added.
"Not providing any clause for enhancement of lease for 99 years is undoubtedly in violation of the principles of public interest and opposed public policy," the court said.
The club has lost its credibility and more so, it is a chronic defaulter in payment of revised rent running to several crores, the judge said. The court further directed the revenue authorities to issue demand notices for the accrued arrears of revised rent from 2004 to date which roughly amounts to Rs 12,381 crore providing two months to settle the arrears. TNN