HC orders status quo after Madras Race Club appeals against direction to pay outstanding rent of ₹13,111.86 crore

The first division bench of the Madras High Court on Wednesday ordered status quo after the Madras Race Club filed a writ appeal against the March 29 order of a single judge, directing the state government to collect Rs 13,111.86 crore in outstanding rent from the club. Or it was directed to evict. 160.68 acres of government land in Guindy.

Acting Chief Justice T. Raja and Justice D. Bharat Chakraborty 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 court passed the interim order after hearing senior advocate Satish Parasan for the club and advocate general R Shanmugasundaram for the government.

In his submission, Mr. Parasaran said that the club had taken the property on lease 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 in the office of the sub-registrar at Saidapet.

Since Guindy was then located 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 in advance for 99 years. As per the deed, the lease will expire only in 2045 and even after that, the club can extend it for another 99 years on mutually acceptable terms, he said.

Despite such an explicit agreement, the state government unilaterally started revising the rent based on the market value of the land and the club filed three writ petitions in 2017 challenging the revision. Justice SM Subramaniam disposed of the petitions on March 29 this year and directed the government to either recover the dues from the club or evict it.

The single judge had ordered that the club pay Rs 730.86 crore towards rent dues from 1970 to 2004 within a month or it would be evicted. He further directed the government to demand another Rs 12,381 crore within a month for rent arrears since 2004 and wanted the club to honor the same within two months.

Opposing the order, the club argued that it cannot be evicted before the expiry of the lease period, especially when it has paid the entire rental amount in advance for 99 years. It also highlighted that the lease deed was registered and it provides further extension for 99 more years.