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Kerala HC asks government's decision on rent waiver for IT companies

The Kerala high court on Wednesday asked the state government to inform whether it has taken a decision on the plea of IT companies operating out of Smart City in Kochi for rent waiver in view of Coronavirus recession a.k.a the Great Lockdown.

Justice Anu Sivaraman asked the government to inform its decision after considering a petition filed by four IT companies based out of SmartCity Kochi, which is an IT special economic zone (SEZ) in which the state government is said to own a 16 per cent stake.

During the hearing, a counsel representing Smart City (Kochi) Infrastructure Pvt Ltd submitted that it is a private company and the state government’s order of April 27th for rent waiver to IT companies is not applicable to it. Such a waiver can only be availed by IT companies operating in buildings owned by the government. Notification issued in favour of SmartCity clearly identifies it as a private company, the counsel argued.

On a petition filed by the four companies, the court had recently passed an order directing the state government to consider the representation filed by the companies seeking waiver of rent and other financial benefits in tune with the government order of April 27th.

Rent, maintenance, and electricity charges for two months have not been paid by the IT companies yet, the counsel representing SmartCity submitted. The government’s order only exempts payment of rent. Being a private company, SmartCity cannot function if the IT companies do not pay rent as it has to pay staff and contractors owing to the government’s order that employees cannot be laid off, the counsel told the court.

The counsel representing the IT companies submitted that there is ambiguity on whether the government’s order is applicable in the case of these companies and the government’s decision is expected. The chief minister himself is acting as the chariman of SmartCity and the government holds 20 per cent of the shares of SmartCity. We all were under the impression that it still is under the ownership of the government. Therefore, there is ambiguity in whether the petitioner companies are bound to pay the rent in view of the government’s order, the counsel submitted while seeking three weeks’ time so that the government takes a decision. Following the submission, the court asked the government to inform its decision.


June 11, 2020

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