Bombay HC quashes retrospective Mumbai Port Authority rent hikes, says authority cannot indulge in ‘profiteering and rack renting’

The Bombay High Court has quashed revised rents imposed retrospectively by the Mumbai Port Authority on its tenants, holding that the authority cannot indulge in “profiteering and rack renting” and must ensure that future rent revisions are fair and reasonable.

A division bench of Justices Bharati Dangre and Manjusha Deshpande passed the order while deciding 145 petitions filed by long-standing tenants challenging revised lease rents, arrears and demand notices.

The dispute arose after the Port Authority revised rents under the 2015 Policy Guidelines for Land Management (PGLM), including a formula linking rent to the highest market value of land. The tenants argued that the rates were substantially higher than those under a compromise formula approved by the Supreme Court in the Jamshed Hormusji Wadia case.

The High Court held that the compromise rates would apply to the petitioners until March 31, 2024, subject to Supreme Court modifications. It also quashed notifications revising rents for the periods October 2012-September 2017 and October 2017-September 2022, along with related demand notices for arrears.

The bench said the PGLM methodology amounted to “profiteering and rack renting.” It clarified that the authority can revise rents prospectively under the Major Port Authorities Act, 2021, but such rates must be “fair and reasonable.”