Bombay High Court grants interim relief to 13 shops facing eviction since 2008

The Bombay High Court has temporarily protected 13 commercial tenants, all shops, including a restaurant at the National Textile Corporation’s (NTC) Jam Manufacturing Mills in Lalbaug, from eviction, while the larger legal question of their tenancy rights heads to the Supreme Court.

These tenants have been fighting eviction since 2008. If the Supreme Court eventually rules that the Public Premises Act overrides state rent protections, PSUs across Mumbai could gain sweeping power to push out legacy tenants.

The Court Order, In Brief

• Justice M.M. Sathaye granted interim relief on June 10, in what he called an “ad hoc arrangement”
• Tenants must pay ₹10,000/month from September 2012 through the end of June this year
• Matter posted for further hearing on August 5
• The judge was explicit that this isn’t a valuation ruling. “Since the petitions are pending, to avoid prejudice to either party, for the time being, I am not discussing anything about market rate or interim compensation or rent-fetching potential of the shops involved or their areas.”

How This Case Started

The 13 petitioners took NTC to court in 2008, challenging eviction orders passed that year by the estate officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. Their case has been pending ever since and hasn’t yet been admitted by the High Court.

They’re members of the Public Sector Tenant Action Committee, which has filed a fresh plea before the Supreme Court asking for a larger bench to reconsider the underlying legal question — one that affects thousands of tenants occupying PSU-owned buildings (including banks and insurance companies) across prime South Mumbai addresses.

The ₹10,000 Question: From When?

• The core disagreement in court was the start date for payment:
• Tenants’ counsel Nimesh Mehta argued payment should apply from September 2012, in line with a Supreme Court direction involving other adjacent tenants
• NTC’s counsel, Bhushan Joshi wanted it backdated to July 2008 — the original eviction order date
• Joshi argued that the Supreme Court had already settled the issue earlier this year, ruling that the Public Premises Act prevails over the more protective State Rent Act. He also argued that although NTC had volunteered in 2008 to maintain the status quo, the High Court has never formally stayed the eviction — and the case dragging on is causing “serious prejudice” to the mill.
• The court sided with the September 2012 date, giving tenants eight weeks to clear the amount.

Nimesh Mehta Spoke to CNBC-TV18 on the Case AheadQ: Could you outline the profile of the 13 petitioners and the nature of their businesses?

Nimesh Mehta: “The present proceedings before the Bombay High Court relate to 13 occupants, most of whom belong to families that have been carrying on business from these premises for over a century.

They are small retail shopkeepers operating modest establishments, with shop sizes generally ranging between 250 and 300 sq. ft. In a few cases, the structures are small wooden cabins measuring around 50 sq. ft. These are not large commercial establishments but small family-run retail businesses that have existed for generations.”

Q: Does the ₹10,000 monthly deposit set a new benchmark for contractual rent going forward?

Nimesh Mehta: “As regards rent, the contractual/licensed rent payable to the National Textile Corporation (NTC) was approximately ₹1,000 per month. However, NTC is presently not accepting rent. Pursuant to the Court’s interim directions, the occupants are directed to deposit ₹10,000 per month as compensation/occupational charges. Therefore, ₹10,000 is not rent but compensation payable under the Court’s order.”

Q: If the Supreme Court rules against your clients, would that automatically alter the legal status of all legacy tenants across Mumbai?

Nimesh Mehta: “The immediate outcome of this litigation will directly concern the 13 petitioners before the Court, as each tenancy and occupancy is based on its own facts and legal history. However, the larger constitutional questions regarding the Public Premises Act vis-à-vis State welfare and rehabilitation policies could have wider legal significance. If a Constitution Bench lays down principles on these issues, those principles would serve as binding precedent for courts dealing with similar disputes in future. That said, every case would still have to be decided on its own facts.”

Q: Given the conflicting judicial precedents, what is your primary legal strategy going forward?

Nimesh Mehta: “In our view, the legal issues involved require consideration by a larger Constitution Bench of seven or nine judges because there are conflicting judicial precedents on the interplay between the Public Premises Act and State welfare and rehabilitation laws. Our submission is that land, housing, rehabilitation, and welfare policies fall primarily within the State’s legislative domain. Therefore, the issue before the Supreme Court is whether the provisions of the Public Premises Act can override statutory rehabilitation and welfare protections granted by the State.”

What’s at Stake

A ruling in NTC’s favour wouldn’t automatically evict every legacy tenant in Mumbai — each case turns on its own facts. But it would hand PSUs a strong legal template to challenge decades-old low-rent arrangements on their properties, with implications reaching well beyond these 13 shops in Lalbaug.

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(Edited by : Juviraj Anchil)