Bombay High Court Directs BMC to Deposit Rs 12.66 Crore with Interest for NSCI Jumbo Covid Centre Use
The Bombay High Court has issued a significant order, directing the Brihanmumbai Municipal Corporation (BMC) to deposit a substantial sum of Rs. 12.66 crore along with an annual interest rate of 5% as compensation to the National Sports Club of India (NSCI) in Worli. This directive pertains to the civic body's utilization of the NSCI premises as a Jumbo Covid Centre during the peak of the pandemic, a period that spanned approximately 30 months.
Court Cites Huge Discrepancy in Compensation Calculations
A bench comprising Justices Ravindra V. Ghuge and Abhay J. Mantri highlighted a "huge difference" in the financial calculations presented by the petitioner, NSCI, and the respondent, BMC. The NSCI had initially claimed that nearly Rs. 40.11 crore was owed to them as compensation for the use of their facility. In contrast, the BMC contested this claim, arguing that they had not utilized the open area surrounding the constructed Jumbo Quarantine Centre, thereby disputing the higher amount.
On February 5, the court questioned the BMC's "erroneous" estimate for the compensation payment. The bench sought a personal explanation from BMC Commissioner Bhushan Gagrani, emphasizing the need for clarity and accountability in the financial assessments. This move underscored the court's scrutiny of the civic body's handling of the compensation issue.
BMC's Defense and Court's Response
In response to the court's queries, senior advocate Atul Damle submitted an affidavit dated February 6 on behalf of Commissioner Gagrani. The affidavit "painstakingly tried to persuade" the court to accept the BMC's calculation of Rs. 12,66,56,278.9 as a token payment, deeming it a "plausible and justifiable conclusion." The BMC further argued that no defined formula was adopted to calculate the compensation and that a 2020 circular relied upon by the NSCI was not applicable in this case.
However, the bench remained skeptical, noting, "Prima facie, much needs to be said about the calculations and justifications made by the Commissioner." Despite this, the court acknowledged that a specific amount had been admitted by the BMC as of April 2023 and remained unpaid. Consequently, the court deemed it appropriate to levy interest at 5% per annum until March 16, 2026, to be deposited in the court.
Key Directives and Future Proceedings
The Bombay High Court has set a deadline of March 16, 2026, for the BMC to deposit the calculated amount along with the accrued interest. The NSCI has been permitted to withdraw this sum pending the final hearing of their plea, provided they give an undertaking to redeposit any excess amount within 30 days if the final adjudication determines a lower compensation.
The court clarified that this deposit and withdrawal would be without prejudice to the rights and contentions of both parties. Additionally, the bench noted that if there are any outstanding property taxes owed by the NSCI, the BMC may initiate appropriate statutory procedures. The next hearing in this case has been scheduled for March 18, 2026.
This ruling highlights the ongoing legal complexities surrounding pandemic-related resource utilization and compensation disputes. It underscores the judiciary's role in ensuring fair financial settlements between public bodies and private entities during emergencies.
