HC directs Cosmopolitan Club to pay Rs 25 cr to TN govt

The Madras High Court has directed the more than 100-year-old Cosmopolitan Club here to pay Rs 25 crore to the Tamil Nadu Revenue Department by May 30 towards revised rent for 77.70 acres of prime land leased out to it for the past 25 years.
"This court is of the view that the club is occupying 77.70 acres of prime land in the centre of the city and therefore the government is entitled to receive fair rent on the said property," Justice C.S.Karnan said passing orders on a petition by the club challenging a notice by the department.
In the January 29, 2014 notice, the Tahasildar of Mambalam-Guindy Taluk had asked the club to remit Rs.119,78,58,312/- being the revised rent for the period between 01.07.1971 and 30.06.1996 that is for a period of 25 years on the basis of the market value and on the June 16, 1998 report of the Accountant General (AG).

After recording the elaborate submissions by the counsels for the club and the government, the Judge said authorities renewed the lease period for a further extension of 30 years vide a G.O dated 09.11.1996 with a specific condition that the lease rent will be revised for every subsequent five years. The club had agreed to this and occupied the land.
Besides, the order has been passed on the strength of the said government order and the AG's report after determining the market value of the property.
"Therefore, the impugned order is well considered on the basis of the said government order and the market value. As such, the impugned order is sustainable under law and also suitable for execution," the Judge held.

The Cosmopolitan Club has eminent personalities and several Judges as its presidents and as on date it has more than 4,000 members.

Recalling the long legal battle between the club and the government over the lease amount, the Judge noted that the government allotted the land in December 1956 for the purpose of Golf Course. The club by expending several lakhs of rupees took extensive steps to develop the Golf Course.
The Revenue Department in a June 28, 2002 order cancelled the lease and ordered resumption of the land, which was challenged by the club in the high court and an interim stay was granted by High Court, which is still in force.

While that being so, the department served the notice seeking payment of Rs.119,78,58,312 as lease amount for the period from July 1, 1971 to June 30, 1996 based on the communication received from the AG.
The order had been passed after a prior notice to the Club and demanded fair rent on the basis of market value. Therefore, the order was not violating the principle of natural justice, the Judge ruled.
He directed the club to pay Rs.25 crores at Rs one crore per year without prejudice and orderd the government also to issue show cause notice thereafter and conduct a comprehensive inquiry and decide actual arrears of rent for the relevant period.

The Judge also gave liberty to the Club to file an appeal against his order if it was not satisfied with it.