TN Govt Terminates Lease Agreement, to Take Over Madras Race Club

Chennai: With a staggering revised rent arrears of Rs 730.86 crore and beset with allegations of illegal construction, the historic Madras Race Club (MRC) at Guindy here, has been left stunned by the surprising and sudden move by the Revenue department to take possession of the sprawling property that saw many horse races.

Trainers and jockeys who were performing their morning track work were asked to move out on Monday and nearly 500 horses were locked inside the stables when the revenue authorities sealed the MRC announcing to take possession of the 160 acres of land.

The Tamil Nadu government, which revoked the 99-year lease agreement signed in 1945 with the Madras Race Club, a familiar landmark in Chennai, is set to take possession of the sprawling property by following due procedures.

The government informed the Madras High Court that due procedures of issuing notices to the MRC will be followed before taking possession of the land leased to the club.

The Government Order issued on September 6 cites a report by the Chennai Collector that points to violations by the club such as illegal construction of the banquet hall, allowing Madras Gymkhana Club to continue their activities in the leased portion, construction of buildings without permission from the state government and allowing the golf club to function.

The government had only issued a GO to "terminate the lease" and not for taking possession of the land, Advocate General P S Raman said.

"Separate proceedings will be initiated by issuing notices to the club regarding termination of lease agreement and taking possession of the land," he informed the division bench of the Madras High Court comprising Justices S S Sundar and K Rajasekar, when an urgent motion moved by MRC to stall the eviction process came up for hearing on Monday.

Senior counsel A L Somayaji, appearing for the club, submitted that the government has attempted in an "undemocratic manner" to take possession of the land without even hearing his client.

The bench, while noting that it is a fundamental principle that notices should be issued before proceeding to evict, closed the motion petition stating that the MRC could challenge the termination order if it wished.

The limitation commenced with a demand notice from the Revenue department seeking the payment of revised rent and the club challenged the notice issued to it in the Madras High court. But a single judge in 2023 directed the club to pay a substantial sum of the rent amount (Rs 730.86 crore) within a month or face eviction.

The club went on an appeal against this order and subsequently the division bench stayed certain parts of the order and directed maintenance of status quo.

The MRC has been holding 148.32 acres of land (out of 160 acres) since March 8, 1946 after the land was leased for recreational activities such as horse racing, games and sports.

Of the total land (160 acres), 4.90 acres were later given to the aquatic complex, 3.86 acres to Tamil Nadu Urban Habitat Development Board (TNUHDB) and about 3.78 acres were demarcated for public roads.

The club was granted a lease of 99 years in 1945 for Rs 614.13 per year. The state government attempted to increase the rent in 1970 but the club responded saying that the 1945 agreement had no such clause. But the government demanded an arrears of Rs 730.86 crore upto 2017.

The latest move by the government comes a month after the Nilgiris district administration took back 52.34 acres of land that the MRC had leased in Udhagamandalam West village after the club failed to pay Rs 822 crore arrears in rent as of 2021.

Advocate Vaibhav R Venkatesh argued that the lease agreement is valid till April 1, 2045 and that the club should not be deprived of the property particularly when an appeal pertaining to rent arrears was still pending before the court.