Bombay High Court Orders 5% Interest on BMC's Rs 12.66 Crore NSCI Covid Center Compensation
The Bombay High Court has taken a firm stance in the ongoing dispute between the Brihanmumbai Municipal Corporation (BMC) and the National Sports Club of India (NSCI) over compensation for the use of NSCI's Worli premises as a Jumbo Covid Center during the pandemic. On Wednesday, the court levied a five percent per annum interest on the compensation amount, emphasizing the need for timely payment.
Court Questions BMC's Calculations and Seeks Commissioner's Explanation
A bench comprising Justices Ravindra V Ghuge and Abhay J Mantri had previously raised concerns on February 5 about the "erroneous" estimate provided by the BMC. The court highlighted a "huge difference" between the petitioner's claim of nearly Rs 40.11 crore and the BMC's calculated figure of Rs 12,66,56,278.9. In response, the bench sought a personal explanation from BMC commissioner Bhushan Gagrani, underscoring the gravity of the discrepancy.
Senior advocate Atul Damle presented Gagrani's affidavit dated February 6, attempting to justify the BMC's stance as "plausible and justifiable." However, the bench noted, "Prima facie, much needs to be said about the calculations and justifications made by the Commissioner," indicating skepticism towards the BMC's approach.
Interest Imposed and Deposit Deadline Set
The High Court has ordered the BMC to deposit the interest amount by March 16, 2026. This interest applies to the Rs 12.66 crore compensation calculated by the BMC, covering nearly three years since April 2023. The court permitted NSCI to withdraw this interest pending the final hearing of its plea, provided the club gives an undertaking to redeposit any excess amount within 30 days if the final adjudication deems it necessary.
"Nevertheless, since a particular amount has been admitted and said decision was taken as on April, 2023 and since it is yet to paid to the petitioner, we deem it appropriate to levy interest at 5% per annum till March 16, 2026, to be deposited in this court," the bench stated in its order.
Background of the Dispute and BMC's Defense
The NSCI approached the High Court last year, asserting that approximately Rs 40.11 crore was owed as compensation for the 30-month use of its facility during the Covid-19 crisis. The BMC contested this claim, arguing that it had not utilized the open areas around the constructed Jumbo Quarantine Center, which contributed to the lower compensation estimate.
The court clarified that the deposit and withdrawal processes 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 pursue appropriate statutory procedures separately.
Next Steps in the Legal Proceedings
The bench has scheduled the next hearing for March 18, 2026, allowing time for the interest deposit and further deliberations. This case highlights the complexities of pandemic-related compensations and the judiciary's role in ensuring fair settlements between public bodies and private entities.
As the legal battle continues, stakeholders await the final adjudication, which will determine the exact compensation owed and potentially set precedents for similar disputes in the future.
