BBMP settles rent dispute with traders in MG Road’s Public Utility Building; to get Rs 7-cr arrears

Bengaluru: The Bruhat Bengaluru Mahanagara Palike (BBMP) has reached a settlement with approximately 50 traders from the Public Utility Building on MG Road, ending a lengthy rent dispute.

The traders had delayed their payments for several years while engaging in legal battles.

As part of the out-of-court reconciliation, the traders have agreed to pay Rs 7 crore in outstanding dues, while the BBMP has proposed extending their lease for an additional three years.

The traders’ association has formally committed to paying rent from January 2014, in line with a court ruling issued in August 2023.

Under the new agreement, the rent will be Rs 20 per square foot for basement shops, Rs 30/sqft for ground-floor shops, and Rs 20/sqft for first-floor shops. A 7 per cent annual rent increase has also been agreed upon.

This settlement is expected to resolve a legal dispute that has stretched over a decade. The reconciliation was led by Munish Moudgil, Special Commissioner (Revenue), and R Snehal, Zonal Commissioner (East).

The Public Utility Building houses 88 shops, with three currently closed and four others seized by the BBMP over non-payment of dues. The BBMP first leased these shops in 2006, but disagreements over rent led to prolonged court cases. Traders had repeatedly taken legal action whenever the BBMP issued demand notices, which delayed the resolution.

Of the 88 shops, only 50 have agreed to the reconciliation deal.

A senior BBMP official stated, “We will terminate the licences of the remaining traders and vacate the premises.”

At least seven cases were pending in various courts, with some rulings in favour of the BBMP and others in favour of the traders.

The BBMP’s proposed rent rates, which were similar to those at the Jayanagar commercial complex, did not stand up in court due to deviations from the original agreement.

Despite the settlement, the rent agreed upon will still be significantly lower than what other tenants pay along MG Road. This is largely due to the building’s poor maintenance, which has made it less attractive to the public.