'Sophisticated Form Of Extortion': Bombay High Court Slaps Rs 5 Lakh Costs On 'Unscrupulous' Tenant For Frivolous Petition

The Bombay High Court while slapping a fine of Rs 5 lakh on a tenant for 'obstructing' redevelopment of a nearly 83-year-old building, observed that often such petitions by tenants amount to 'sophisticated form of extortion' and thus such 'obstructionist' behaviour of the tenants must be deterred.A division bench of Justices Ajay Gadkari and Kamal Khata noted that filing petitions in the court is the 'quickest and cheapest' method, often resorted to by the tenants to stall redevelopment of old and dilapidated buildings."No Court, whether a Writ Court or any other, can be permitted to become a tool for tenants to obstruct the genuine redevelopment efforts of property owners. Filing Writs Petitions has increasingly become the quickest and cheapest method to stall redevelopment projects, with little or no downside for tenants. It is at a meagre expense – a calculated gamble. If the tenant succeeds, the rewards are substantial; if dismissed the financial loss is negligible," the bench said in its judgment pronounced on November 12 but made available recently. For instance, even assuming that filing a Writ in the Bombay High Court costs a tenant a certain minimum amount of rupees, the resulting delays can impose significant financial burden on landlords or developers, including mounting costs for alternate accommodations. In many cases, developers are forced to capitulate due to these pressures, making such actions an attractive proposition for tenants, where redevelopment projects are often worth crores of rupees, the bench explained."From a review of Judgments over the past years, we observe such litigations often amount to a sophisticated form of extortion. There necessarily must be an effective deterrent to this obstructionist behaviour by tenants," the bench underscored.In many such cases, the judges pointed out, courts have observed/noticed that, tenants often demand reinstatement at the same location, monetary compensation and/or additional space or in some cases – rightly, parity with other tenants. Landlords, on the other hand, may face logistical limitations in accepting or refusing such demands. The judges made it clear that such matters are purely contractual and must be resolved between the developer and the tenant."However, Courts cannot be misused as instruments to pressure landlords or developers into granting tenants' undue advantages. Unfortunately, cases like this have become routine. Writ Petitions are filed, projects are delayed and Courts repeatedly affirm that tenancy rights are protected, allowing redevelopment to proceed. It is precisely to counter these sort of petitions that we deem it necessary to impose substantial costs. High-stake cases warrant high deterrent costs to discourage frivolous and mischievous Petitions. Without such measures, the judicial process risks becoming a cheap tool for unscrupulous litigants seeking to exploit it for personal gain," the judges observed, while imposing a cost of Rs 5 lakh on the petitioner, to be paid to the Armed Forces Battle Casualties Welfare Fund within a period of four weeks.The order was passed on a plea filed by one Khimjibhai Patadia, a tenant living in a dilapidated building in Mumbai's Kandivali area, who challenged the report of the Technical Advisory Committee (TAC), which recommended redevelopment of the building in question, which was constructed way back in 1940s. He was served with an eviction notice by the Brihanmumbai Municipal Corporation (BMC) after it categorised the said building as 'dangerous and dilapidated.'The petitioner alleged that the landlord of the said building was trying to evict him through 'devious' means and infringe his 'tenancy rights.'The bench, however, pointed out that time and again 'tenancy rights' have been protected by the High Court as well as the Supreme Court and thus, the instant plea was filed only with an motive to delay the redevelopment. The court, therefore, dismissed the petition with exemplary costs.Appearance:Advocate Ramchandra Kachave appeared for the Petitioner.Advocates Sheetal Metkari and Komal Punjabi represented the BMC.Advocates Mayur Khandeparkar, Dhawani Bokaria and Amita Jasani instructed by Purnanand & Co. represented the Landlord.Case Title: Khimjibhai Patadia vs Municipal Corporation of Greater Mumbai (Writ Petition (L) 30632 of 2024)Citation: 2024 LiveLaw (Bom) 625Click Here To Read/Download Judgment

'Sophisticated Form Of Extortion': Bombay High Court Slaps Rs 5 Lakh Costs On 'Unscrupulous' Tenant For Frivolous Petition

Narsi Benwal

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'Sophisticated Form Of Extortion': Bombay High Court Slaps Rs 5 Lakh Costs On 'Unscrupulous' Tenant For Frivolous Petition

Narsi Benwal

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