HC orders status quo after Madras Race Club appeals against direction to pay ₹13,111.86 crore in rental arrears

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The first Division Bench of the Madras High Court on Wednesday ordered maintenance of status quo after Madras Race Club filed a writ appeal against a single judge’s March 29 order directing the State government to collect ₹13,111.86 crore in rental arrears from the club or evict it from the 160.68-acre government land at Guindy.

Acting Chief Justice T. Raja and Justice D. Bharatha Chakravarthy directed the High Court Registry to list the appeal for hearing in the third week of June and ordered status quo in the interim. The interim order was passed after the court heard senior counsel Satish Parasan for the club and Advocate-General R. Shunmugasundaram for the government.

In his submission, Mr. Parasaran said the club had leased the property from the government for the first time on May 7, 1923, for a short period. In 1946, it entered into another agreement and leased the property for 99 years with effect from 1945. The lease deed was also registered at the Sub-Registrar’s office at Saidapet.

Since Guindy was then situated on the outskirts of Chennai city, the annual rent for the property was fixed at ₹614.13 and the club paid the entire rental amount for 99 years in advance. According to the deed, the lease would come to an end only in 2045 and even thereafter, the club could extend it for another 99 years on mutually acceptable terms, he said.

Despite such a clear agreement, the State government unilaterally began revising the rent on the basis of the market value of the land, and the club filed three writ petitions in 2017 challenging the revision. Justice S.M. Subramaniam disposed of the petitions on March 29 this year and directed the government to collect the arrears from the club or evict it.

The single judge had ordered that the club pay ₹730.86 crore towards rental arrears from 1970 to 2004 within a month or it would be evicted. He further directed the government to raise a demand within a month for another ₹12,381 crore, the rental arrears from 2004 to till date and wanted the club to honour it within two months thereafter.

Assailing the order, the club contended that it could not be evicted before the expiry of the lease period, especially when it had paid the entire rental amount for 99 years in advance. It also highlighted that the lease deed had been registered and it provides for a further extension for 99 more years.

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