In your interest.
Online Personal Finance Magazine
No beating about the bush.
The Royal Western India Turf Club (RWITC) is now mired in another controversy. It has terminated its contract with ‘Gallops’, a restaurant run by the BJR Group. BJR had stopped paying the agreed annual lease amount of Rs3.25 crore to RWITC from 1 July 2009; it has also dragged RWITC to the Bombay Small Causes Court.
Evidently, the cancellation of the contract comes at a time when the Brihanmumbai Municipal Corporation’s (BMC) estate department is preparing to send an eviction notice to RWITC for sub-letting portions of the plot allotted to it on a 99-year lease agreement and allowing illegal constructions. According to senior officials from the BMC, a notice has already been drafted. However, assistant municipal commissioner Vasant Prabhu from the BMC’s estate department declined to comment on the issue. Incidentally, Gallops is not the only restaurant operating from the racecourse—Olive and Indigo also operate from the same premises.
BJR has not paid RWITC Rs3.25 crore as per its agreement with the Club, since 1st July, claiming that they are sub-tenants and have been on the premises for 22 years and hence were liable to pay only standard rent of a few lakh rupees a year instead of the amount agreed upon. The agreement states that BJR has to pay RWITC Rs3.25 crore annually for leasing the land.
RWITC, which runs the Mahalaxmi Racecourse, had terminated its contract with BJR on Saturday, for allegedly flouting rules of the agreement and claiming tenancy on the land even as the rules state that they only have the right to manage the space as opposed to tenancy rights.
RWITC claims that BJR failed to get BMC clearance for supposedly building unauthorised structures. RWITC further claims that instead of doing away with the irregularities, it was taken to court by BJR, which is claiming tenancy and refusing to pay the committed conducting fee in accordance with a new agreement signed for managing the restaurant for 10 years. This agreement was finalised in 2008.
However, this agreement between the two parties has come under a close scanner now as RWITC’s lease on the land expires in 2013.
Vivek Jain, chairman, media and marketing committee for RWITC has been quoted in various media reports stating that the Club had terminated its contract with BJR only after it was given every opportunity to adhere to the agreement. Mr Jain said, “Their action is confrontationist and unfortunate. We will strive to enforce our rights.”
RWITC, which loses money on racing, earns profits by hiring out the lawns for weddings. It also earns royalty from catering and leasing out land for restaurants. In 2008, BMC had served RWITC with two notices, pertaining mainly to the restaurants, which the civic body said were in breach of the lease agreement.
— Aaron Rodrigues