Companies and tenants situated near Mumbai’s port trust are now distressed because of a notice from the government. They have received hefty bills of the pending rent amounts from the last years. The Mumbai Port Trust, the owner of the concerned land, has demanded the Taj Mahal Hotel to pay an outstanding lease rent of 762 crores for the years 2021-22. The Tata Group, in its petition filed in the Bombay High Court, has stated that the rent is too high and unfair. Other tenants are facing the same problem.
At one point in time, in this oldest business district of Mumbai, the head offices of many global companies were situated. The present form of Mumbai has emerged out of the deep-water natural harbour, and the Port Trust was established in 1873 for the administrative needs of shipping and ancillary businesses such as warehouses, refineries, and hotels. Rather than selling it out, the trust had leased out 2300 acres of the land for 99 years, and the lease periods, including that of Taj Hotel, came to end at the start of the new century.
After this, some leases, including that of Taj, were extended, and while some tenants paid the outstanding rents, some did not. The Port Trust has said that the fare hike has been decided on the basis of a formula linked to the market rate, and no new lease has been made in the last 20 years. Because of this impasse, many beautiful buildings, other than the Taj and some other structures, are not being maintained. Due to the uncertain legal circumstances, tenants are not interested in making investments of money.
They cannot give their land to other tenants. The pace of change in the situation is likely to accelerate due to the dispute over the Taj. In the meanwhile, the Port Trust is coming up with new and more flexible rules to ease out the process of lease renewal.
