Bombay High Court Directs BMC to Deposit Rs 12.66 Crore with Interest for NSCI Covid Centre Use
The Bombay High Court has issued a significant order, directing the Brihanmumbai Municipal Corporation (BMC) to deposit Rs 12.66 crore along with 5% per annum interest as compensation to the National Sports Club of India (NSCI) in Worli. This payment is for the use of NSCI premises as a Jumbo Covid Centre during the pandemic, highlighting a major dispute over financial calculations between the parties.
Court Cites Huge Discrepancy in Compensation Calculations
A bench comprising Justices Ravindra V Ghuge and Abhay J Mantri of the Bombay High Court, in a hearing on Wednesday, noted a "huge difference" between the compensation calculations presented by the petitioner, NSCI, and the BMC. The court had previously questioned the BMC's "erroneous" estimate on February 5, leading to a demand for a personal explanation from BMC commissioner Bhushan Gagrani.
The NSCI had approached the high court last year, claiming that nearly Rs 40.11 crore was due as compensation for the 30-month use of its facility during the pandemic. In contrast, the BMC denied these claims, arguing that it had not utilized the open area around the constructed Jumbo Quarantine Centre and that no defined formula was adopted for the compensation calculation.
BMC's Submission and Court's Response
Senior advocate Atul Damle, representing the BMC, submitted an affidavit dated February 6 from commissioner Bhushan Gagrani, attempting to justify the BMC's figure of Rs 12,66,56,278.9 as a token payment. The affidavit argued that this amount was a "plausible and justifiable conclusion" by the BMC, against NSCI's claim of Rs 40.11 crore.
However, the bench expressed skepticism, stating, "Prima facie, much needs to be said about the calculations and justifications made by the Commissioner." Despite this, the court acknowledged the admitted amount and ordered the BMC to deposit it with 5% annual interest by March 16, 2026, into the court.
Interest and Withdrawal Conditions
The High Court levied a 5% per annum interest on the compensation amount, calculated until March 16, 2026. It permitted NSCI to withdraw the deposited funds, provided the club gives an undertaking to redeposit any excess amount within 30 days if, after final adjudication, it is found that more was paid than owed.
The court clarified that this deposit and withdrawal would be without prejudice to the rights and contentions of both parties. Additionally, it noted that if there are any outstanding property taxes owed by NSCI, the BMC may initiate appropriate statutory procedures.
Background and Legal Context
The dispute centers on the use of NSCI's premises as a Jumbo Covid Centre during the pandemic, a critical facility for handling the health crisis in Mumbai. The BMC contended that a 2020 circular related to compensation, which NSCI relied on as a lessee, was not applicable in this case, adding complexity to the legal arguments.
The court has posted further hearing of the plea to March 18, allowing time for the deposit and potential resolution of the matter. This case underscores the ongoing legal challenges in pandemic-related compensation and the role of judicial oversight in ensuring fair dealings between public bodies and private entities.
Omkar Gokhale, a journalist reporting for The Indian Express from Mumbai, has covered this development, bringing expertise in legal and judicial reporting. His work adds credibility to the reporting of such high-stakes legal matters in Maharashtra.
