Mumbai: Gallops restaurant must pay Rs 40 crore in dues to Turf Club

High Court arbitrator dismisses restaurant’s tenancy claim; Turf club says Gallops needs to cough up more than Rs 40 crore in dues

Gallops, is the oldest restaurant on the Mahalaxmi turf
Gallops, is the oldest restaurant on the Mahalaxmi turf

The BJRs (this is an acronym for promoters Bobby Singh, Jasmine Singh and Rahul Malik) who run the landmark 'Gallops' restaurant in the members enclosure of the Mahalaxmi race course have been in dispute with the Royal Western India Turf Club (RWITC) since 2009, when BJR filed a claim for tenancy under the Maharashtra Rent Control Act, and stopped paying, "the Club its dues from the year 2009/10 onwards till date, the principal amount owed to the RWITC as on date is over Rs 40 crore," says Vivek Jain, chairman RWITC.

Gallops restaurant at the Mahalaxmi Racecourse
Gallops restaurant at the Mahalaxmi Racecourse

Now, Justice Ferdinand Rebello, appointed arbitrator by the High Court in November 2014 in an order on May 12 this year, has dismissed the claim of M/s BJRs (Gallops) that they are 'tenants' and hence only entitled to 'pay standard rent'. The Arbitrator has confirmed that he has jurisdiction to settle the dispute and the agreement between the between the RWITC and BJRs was a conducting agreement giving only catering rights.

Vivek Jain (left) with another racing professional at Mahalaxmi during the Breakfast of Champions meet
Vivek Jain (left) with another racing professional at Mahalaxmi during the Breakfast of Champions meet

Long-standing feud
The racecourse and Gallops have been embroiled in a longstanding feud at Mahalaxmi. Gallops is the oldest Food & Beverages (F &B) outlet on the turf, much before other players came in, sniffing the potential of the location.

In 2008, the RWITC gave a catering contract to Gallops (BJRs) on for 10 years at an initial R10 crore with escalation after 3 years. The initial conducting fee was R3.25 crore + taxes per annum.

Then, in mid-2009, the BJRs sent notice of tenancy and agreed only to pay "standard rent," after which it filed a suit for declaration of tenancy, in November that year. With the case in court, BJRs obtained an ad interim injunction from the Small Causes Court on November 20, 2009 in support of their tenancy claim.

The Turf club then invoked arbitration proceedings in the same month. The hearings were completed end of last year and this order came on May 12.

Salient points are: BJRs had prayed for a declaration that the respondent (BJRs/ Gallops) was a tenant of the Gallops premises. This stands rejected and the RWITC was able to establish that during the entire period of 23 years from 1986 to 2009 (when the restaurant was run) BJRs did not write a single letter to the RWITC claiming that it was a tenant on its premises.

A relieved Jain said, "This is a thumping order in favour of the Club. The basic issue of tenancy raised by BJRs and which was the reason for the dispute was rejected by Arbitrator. They can appeal the order, but under the Arbitration Act, on limited grounds only."

Asked if this fight was "worth it" as many members of the club were concerned about the club's legal bills, draining the RWITC of finance in cash strapped times, Jain said, "The amount is hugely substantial. The legal fee represents a fraction of the dues to the Club, as a public body we had to contest their various cases against us." BJRs representatives were unavailable for comment. Calls to the restaurant were answered by a man who gave his name as 'Joy' and stated that the three promoters were, "out of the country and could not be reached for comment. Gallops said they would tell a representative to get back to the reporter, but it never did.

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