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Madras HC directs MRC to pay Rs 730.86 cr rental arrears within a month


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Chennai: The Madras High Court has directed the Madras Race Club (MRC) to pay Rs 730.86 crore within a month to Tamil Nadu government towards rental arrears from 1970 to 2004 for 160.68 acres of land leased to it at Guindy in Chennai city in 1945, failing which it should be evicted.

The court directed the government to raise a demand for another Rs 12,381 crore towards the rental arrears from 2004 to till date.

Passing orders, while disposing of three writ petitions filed by MRC, Mr Justice S.M.Subramaniam also ordered that MRC should be evicted from the property, with police assistance, if it failed to remit Rs 730.86 crore within one month and take over the land.

As far as the other amount of Rs 12,381 crore was concerned, the the Court directed the government to raise the demand within a month and the club should honour it within two months thereafter. In the event of failure to settle the arrears, either partly or in full,
the government was directed to initiate recovery proceedings against the club, besides initiating action against individuals liable to settle the dues.

A total of 160 acres and 86 cents of government land was given on lease for 99 years to the MRC in the year 1946 with Rs 614 and 13 paisa as rent per annum.

Subsequently, the Mambalam-Guindy Tahsildar had sent a notice to the MRC asking it to pay the revised rent from December 18,1970.

Responding to it, the Club, said that the agreement made in 1946 contained no clause regarding rent hike. Rejecting this explanation, the government ordered the MRC to
pay the rent arrears of Rs 730,86,81,297 till 2017, following which the Club moved the High Court challenging it.

The Judge said that the government has the authority to increase the rent based on the market value and ordered the MRC to pay the rent arrears of Rs 730.86 crores in one month.

Further, the court said “the government should re-examine the pre-independence lease agreement and send a notice in one month asking them to pay the final rent arrears of Rs 12,381 crore within two months time.”

The 160 acres of land reserved for a few rich people has no public interest and that this land located in the heart of the city can be reclaimed and used for public welfare, the Court noted.

Increasing the lease amount of government lands is a policy decision of the government and it cannot be said that it is improper or illegal, the Judge observed.

“An inevitable question is whether any bureaucrat of the State, honourable judges, ministers, politicians and any person as a matter of fact will lease out their property for a meagre annual rent of Rs 614 for 99 years,” the court wondered.

Pointing out that the State government is facing financial crunch, the Court also directed the government to re-examine the lease agreements of government lands across Tamil Nadu to ensure public welfare and protect government revenue.


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