The Bombay High Court took issue with a demand of 24% interest on alleged ground rent arrears by MHADA as a condition for conveying land ownership to a cooperative society. MHADA also sought advance ground rent till 2026 totaling over INR 18 crore. The HC said the demand was unacceptable and directed MHADA to execute a land lease agreement and conveyance deed for the commercial building within three weeks. It asked MHADA to consider its observations while revising the demand legally within the next 10 weeks, failing which conveyance cannot be delayed.
The Bombay High Court took issue with a demand by MHADA of 24% interest on alleged ground rent arrears for a land in Oshiwara as a condition for conveyance. MHADA also sought advance payment of ground rent till 2026. The HC noted that the demand was unacceptable.
MHADA's counsel PG Lad then withdrew the demand on instructions from MHADA, but sought permission to issue a revised demand strictly as per law.
A 2021 MHADA resolution had demanded advance ground rent from 2021-2026 and GST arrears for the same period. The demand totaled over INR 18 crore. This shocked the members of the Oshiwara Link Plaza Commercial Premises Cooperative Society Ltd, which comprises shop owners.
The HC was concerned by a previous notice claiming retrospective premium and rent from 1996 without details. The interest component alone was nearly INR 12.5 crore. The HC said if MHADA can charge 24% interest, it should also pay the same rate and accept deposits at this rate.
The Society had approached HC challenging the demand which was a precondition for conveyance of the commercial building's ownership. Through counsel Anil Singh, the Society sought directions to MHADA to execute a land lease agreement and building conveyance deed.
The HC directed MHADA to do so within three weeks. The HC said that seeking a revised legally valid demand was reasonable, but warned MHADA's officers to consider its observations. Any revised demand must be made within 10 weeks, after which conveyance cannot be delayed, ruled the HC.
Legal counsel Anil Singh fairly said that execution of lease of conveyance deed will not be used against MHADA in case of a revised demand.
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