Bombay High Court
MAINODDIN SHAMSHODDIN TAMBOLIversusLATUR CITY MUNICIPAL CORPORATION THROUGH ITS COMMISSIONER
- Disposal
- DISPOSED OFF
Holding
The successor municipal corporation is bound by the lease deed’s requirement to constitute a three‑member committee for any rent increase, rendering the demand notices issued under Section 79(d) invalid.
Summary
The petitioners, who are leaseholders of premises under a 30‑year lease dated 18 May 2005 executed by the erstwhile Latur Municipal Council, challenged demand notices issued by the Latur City Municipal Corporation under a resolution dated 7 September 2018 that increased rent based on market rates. They argued that the lease contains a clause requiring the constitution of a three‑member committee for any rent revision, and that Section 79(d) of the Maharashtra Municipal Corporation Act, 1949 could not be applied to leases entered into before the corporation’s formation. The corporation contended that the resolution and Section 79(d) authorized the rent increase without a committee. The Court held that the successor corporation is bound by the terms of the original lease, including the requirement to form a three‑member committee before altering rent, and therefore the demand notices were invalid. Consequently, the Court quashed the demand notices and set aside the district court’s orders dismissing the petitioners’ appeals, directing the corporation to constitute the committee and hear the petitioners before any rent increase.
Issues considered
- Whether Section 79(d) of the Maharashtra Municipal Corporation Act, 1949 applies to lease agreements executed before the formation of the municipal corporation.
- Whether the lease deed’s clause requiring a three‑member committee for rent revision binds the successor municipal corporation.
- Whether the corporation can increase rent by resolution without complying with the lease’s procedural requirement.
Legislation cited
- Maharashtra Municipal Corporation Act, 1949 — s. 79(d)
Subjects
- lease deed
- municipal corporation
- rent increase
- Section 79(d)
- three‑member committee
- successor corporation
- demand notice
- writ petition
- quashing
Judgment
2026:BHC-AUG:23860
999-WP-2390-2021.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
999 WRIT PETITION NO. 2390 OF 2021
Kalpana Ramakant Ganjewar
VERSUS
Latur City Municipal Corporation Latur
WITH
WRIT PETITION NO. 1148 OF 2020
Pradnya Pramod Ambekar
VERSUS
Latur City Municipal Corporation Latur Through Its Commissioner
WITH
WRIT PETITION NO. 1055 OF 2020
Hadmanaram Jograram Devasi
VERSUS
Latur City Municipal Corporation Latur Through Its Commissioner
WITH
WRIT PETITION NO. 1057 OF 2020
Mainoddin Shamshoddin Tamboli
VERSUS
Latur City Municipal Corporation Through Its Commissioner
WITH
WRIT PETITION NO. 1056 OF 2020
Laxman Vishwanath Kale
VERSUS
The Latur City Municipal Corporation Through Its Commissioner
WITH
WRIT PETITION NO. 1030 OF 2020
Adibkhan Raufkhan Pathan Kelgaonkar Through Mother Seema Begum
Raufkhan Pathan
VERSUS
Shubham Page 1 of 8
999-WP-2390-2021.doc
Latur City Municipal Corporation Latur Through Its Commissioner
WITH
WRIT PETITION NO. 1052 OF 2020
Himtaram Sadaji Choudhari
VERSUS
The Latur City Municipal Corporation Through Its Commissioner
WITH
WRIT PETITION NO. 1053 OF 2020
Adilkhan Raufkhan Pathan Kelgaonkar Through Mother Seema Begum
Raufkhan Pathan
VERSUS
Latur City Municipal Corporation Latur Through Its Commissioner
WITH
WRIT PETITION NO. 1058 OF 2020
Kondanbee Pashaminya Patel
VERSUS
Latur City Municipal Corporation Latur Through Its Commissioner
WITH
WRIT PETITION NO. 1054 OF 2020
Javedkhan Moh Pashakhan Pathan
VERSUS
Latur City Municipal Corporation Latur Through Its Commissioner
...
Mr. P. R. Tandale for the Petitioners.
Mr. A. V. Hon for the Respondents.
Smt. A. S. Mantri for State.
….
CORAM : SIDDHESHWAR S. THOMBRE, J.
DATE : 12 JUNE 2026
P. C.:
1. Heard learned counsel for respective parties.
Shubham Page 2 of 8
999-WP-2390-2021.doc
2. In all these Petitions the Petitioners assail the orders dated 22 nd July
2019, passed by District Judge-2 Latur in RCA Nos.29, 61, 52, 60, 30, 40,
41, 44, 33 and 36 of 2019 respectively, whereby the appeals filed by the
Petitioner came to be dismissed and the demand notices dated 19 th January
2019, issued by the Respondent-Corporation based upon a Resolution dated
7th September 2018 came to be confirmed.
3. Mr. Tandale, learned counsel for the Petitioners submits that the
erstwhile municipal council Latur had executed a lease deed dated 18 th May
2005 with the Petitioners for a period of 30 years. Pursuant to those lease
deeds these Petitioners were put in possession of the premises. There is a
specific clause in lease deed that if the municipal council intends to increase
the rent, they shall constitute a three member committee and the decision of
such committee would be binding upon the lease holders. He submits that in
contravention of the said clause, Respondent-corporation passed a resolution
dated 7th September 2018 and in pursuance of which impugned notices were
issued. He further submits that the resolution dated 7th September 2018 is
applicable only to the shops which are newly constructed by the
Respondent-corporation and not to the Petitioners’ whose shops were leased
out by the erstwhile municipal council.
4. He further submits that clause No.5 of the resolution dated 7 th
September 2018 states that constitution of three member committee would
take considerable time and therefore to prevent financial loss, municipal
Shubham Page 3 of 8
999-WP-2390-2021.doc
corporation, by the said resolution, resolved to increase the rent. He submits
that the impugned notices were issued under Section 79(d) of the
Maharashtra Municipal Corporation Act, 1949, but the said provision is not
applicable to the areas leased out prior to existence of present Respondent -
Corporation. Aggrieved by the said notices, Petitioners filed respective
appeals before District Court, Latur but the said appeals have been dismissed
without consideration of these aspects. He, therefore, prayed that the order
passed by the learned District Judge, Latur, be quashed and set aside, and
that the petition be allowed.
5. Per contra, Mr. V. D. Hon learned senior counsel i/by Mr. Ashwin Hon,
learned counsel for the Respondent vehemently opposed the present
Petitions on the ground that the Petitioners have not challenged the
Resolution dated 7th September 2018 passed by Respondent-Corporation.
Learned counsel submits that the resolution dated 7th September 2018
passed by the Respondent-Corporation specifically contains Clause 5,
wherein it was resolved that constitution of a three-member committee
would entail considerable delay. It was further resolved that, in order to
avoid financial loss to the Corporation, and in view of Section 79(d) of the
Maharashtra Municipal Corporation Act, 1949, the rent ought to be
determined on the basis of the prevailing ready reckoner rate and market
value. It is further contended that the present petitioners, being shop owners
in occupation of premises situated in the heart of the city, are liable to pay
Shubham Page 4 of 8
999-WP-2390-2021.doc
rent accordingly. Considering the fact that the erstwhile Municipal Council
has now been constituted as a Municipal Corporation, and the provisions of
the Maharashtra Municipal Corporations Act have become applicable
thereto, the present petitioners are liable to pay rent as per the ready
reckoner rate and prevailing market value, in pursuance of Section 79(d) of
the said Act. Learned senior counsel further submits that in pursuance of the
resolution dated 7th September 2018, the respondent Corporation issued a
notice under Section 79(d) of the Act. He further submits that the District
Judge has duly considered all these aspects and has rightly dismissed the
appeals preferred by the petitioners. He, therefore, prays for dismissal of the
present petition.
6. Having heard the learned counsel for the parties and having perused
the impugned orders passed by the learned District Judge, it is not in dispute
that lease deeds were executed for a period of 30 years commencing from
18th May 2005. Admittedly, the said period of 30 years has not yet expired.
It is further not in dispute that the agreement entered into by the erstwhile
Municipal Council is binding upon the present Municipal Corporation, in
view of the statutory provisions under the Maharashtra Municipal
Corporation Act, whereby all acts and obligations of the erstwhile Municipal
Council stand vested in and are binding upon the successor Municipal
Corporation.
7. There is a specific clause in the lease agreement dated 18th May 2005
Shubham Page 5 of 8
999-WP-2390-2021.doc
which reads as under:-
“d) At present we accept rent finalized by the general body wide it’s
resolution no.15/5 dated 07/07/2004. In future if the rent is changed by
the Three mens committee we will accept the rent whatever will be
finalized by the Three mens committee.”
The bare perusal of the said clause
clearly shows that if rent has to be
increased, a three-member committee
shall be constituted and the decision of
such committee shall be binding on the
parties. The said clause further stipulates
that the revised rent shall be determined
and finalized by the said three-member
committee. It would be useful to refer to
Section 79(d) of the said Act, which reads
as follows:
79. Provision governing the disposal of Municipal property.— With respect
to the disposal of property belonging to the Corporation other than
property vesting in the Corporation exclusively for the purposes of the
Transport Undertaking the following provisions shall have effect, namely:—
(d) the consideration for which
any immoveable property or any
right belonging to the Corporation
may be sold, leased or otherwise
transferred shall not be less than
Shubham Page 6 of 8
999-WP-2390-2021.doc
the current market value of such
premium, rent or other
consideration ;
8. It is not in dispute that if any property is leased out by the Municipal
Corporation, the rent must be charged in consonance with the prevailing
market value. However, it is equally true that the lease deed executed by the
erstwhile Municipal Council is binding upon the present respondent
Corporation as well, and all the terms and conditions thereof continue to
govern the parties. The successor Municipal Corporation, having stepped
into the shoes of the erstwhile Municipal Council, is equally bound by the
obligations arising under the said lease deed, and the contractual covenants
therein are enforceable against it. The clause Nos.3 and 5 of the resolution
dated 7th September 2018 reads as under:-
3. महाराष्ट् महानगरपालिका अधिनियम 1949 चे कलम 79 (क) व (ड) नु सार
महानगरपालिकेची स्थावर मालमत्ता भाडे पट्याने दे ता ये ते. व त्यापोटी प्राप्त होणारा मोबदला हा
अधिमु ल्य भाडे किंवा अन्य मोबदला यां च्या चालु बाजार किंमतीपे क्षा कमी असता कामा नये .
त्यानु सार मु दत सं पले ल्या सर्व गाळया बाबत धोरण ठरविणे आवश्यक आहे .
5. नगरपालिका सर्वसाधारण सभा दिनांक 07/07/2004 ठराव क् रं . 15 (5) नु सार
त्रीसदस्यीय समितीव्दारा भाडे निश्चिती करण्याबाबत वे ळ लागत असल्यामु ळे नगरपालिकेचे
आर्थिक नु क्सान टाळण्यासाठी तळमजला प्रति चौ. मीटर 30 रु प्रति महा व प्रथम
मजल्यासाठी रु 20 प्रति चौ. मीटर प्रति महा भाडे आकारणी करावी असे ठरावात नमु द केले
आहे . तथापी खालील नमु द शॉर्पीग कॉम्पले क्सच्या करारनाम्यामध्ये त्रीसदस्यीय समिती मार्फ त
भाडे निश्चिती करण्यात ये ईल असे नमु द केले आहे .
Clause 3 and 5 of the said resolution together record that the
Shubham Page 7 of 8
999-WP-2390-2021.doc
constitution of a three-member committee would require
considerable time. I am of the opinion that successor municipal
corporation is bound by the terms of lease deed entered into by
erstwhile municipal council. Therefore, the impugned notices
issued in pursuance of resolution dated 7 th September 2018 are
contrary to the lease deed dated 18th May 2005. Therefore I am
inclined to allow the Writ Petition by setting aside the demand
notices and consequentially the orders passed in respective
appeals.
9. In view thereof, the Writ Petitions are allowed. The impugned demand
notices dated 19th January 2019 issued by Respondent-corporation are
quashed and set aside. Consequently, the orders dated 22nd July 2019,
passed by District Judge-2 Latur in RCA Nos.29, 61, 52, 60, 30, 40, 41, 44,
33 and 36 of 2019 are also quashed and set aside.
10. The Respondent-corporation is at liberty to constitute three members
committee as per the lease deed and take a decision about the increase of
the rent. Respondent-corporation shall inform the Petitioners about
constitution of the said committee and shall hear the Petitioners before
increasing the rent.
[SIDDHESHWAR S. THOMBRE, J.]
Shubham Page 8 of 8
Checking your session…