BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 01/10/2010 CORAM THE HON'BLE MR.JUSTICE M.JAICHANDREN W.P.(MD).No.2857 of 2010 & W.P.(MD).No.9063 of 2010 and M.P.(MD).Nos.1 & 2 of 2010 in W.P.(MD).No.2857 of 2010 and M.P.(MD).No.2 of 2010 in W.P(MD).No.9063 of 2010 N.Pappa Kannan .. Petitioner in both WPs Vs 1.The Collector, Theni District, Theni. 2.The Municipal Commissioner, Bodinaickkanur Municipality, Bodinaickkanur. 3.The Board of Council, Bodinaickkanur Municipality, Bodinaickkanur. ..Respondents in W.P(MD).No.2857 of 2010 1.The Divisional Officer, Fire Service and Rescue Department, Theni Division, Theni. 2.The District Collector, Theni District, Theni. 3.The Municipal Commissioner, Bodinaickkanur Municipality, Bodinaickkanur, Theni District. 4.The Station Officer, Fire Service and Rescue Station, Bodinaickkanur, Theni District-625 513. ..Respondents in W.P(MD).No.9063 of 2010 W.P(MD).No.2857 of 2010 Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus to call for the records relating to the impugned proceedings in Na.Ka.No.215/09/A3, dated 05.02.2010, and quash the same and consequently forbear the second respondent from interfering with the petitioner's right to carry on business in the name and style of Sr.Pungaj Bhavan inside the municipal bus stand for the further period of 01.04.2009 to 31.04.2012. W.P(MD).No.9063 of 2010 Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorari to call for the records pertaining to the impugned order of the first respondent vide Ref.x.K.No.2041/n/2010-2011, dated 06.04.2010 and the consequential order of the fourth respondent, dated 02.07.2010, quash the same. !For petitioner ... Mr.S.S.Sundar (for both WPs) W.P.(MD).No.2857 of 2010 ^For R.1 ... Mr.R.Manoharan Govt.Advocate For R.2 ... Mr.Pala.Ramasamy Spl.Govt.Pleader W.P(MD).No.9063 of 2010 For R.1 & 2 ... Mr.R.Manoharan Govt.Advocate ******
:COMMON ORDER
Since the issues arising for consideration, and the facts and
circumstances of both the Writ Petitions are similar in nature, a common order
is passed.
2. In W.P.(MD).No.2857 of 2010, the petitioner has prayed for a Writ
of Certiorarified Mandamus to call for the records and to quash the impugned
proceedings of the second respondent, dated 05.02.2010, made in
Na.Ka.No.215/09/A3 and to restrain the second respondent from interfering with
the petitioner’s right to carry on his business inside the municipal bus stand,
Bodinaickkanur, from 01.04.2009 to 31.04.2012. Like wise, in W.P.(MD).No.9063
of 2010, the petitioner has prayed for a Writ of Certiorari to call for the
records pertaining to the impugned order of the first respondent, issued vide
Ref.x.K..No.2041/n/2010-2011, dated 06.04.2010, and the consequential order of
the fourth respondent, dated 02.07.2010, and to quash the same.
3. The petitioner has stated that he is carrying on his business in the
name and style of “Sr.Pungaj Bhavan”, inside the municipal bus stand,
Bodinaickkanur, Theni District, in an extent of 6252.5 Sq.ft. It has been
further stated that the property bearing shop Nos.3 and 4 had been leased out in
favour of one Venkatachalam Reddiar, from the year 1965. Thereafter, the
property had been leased out to the petitioner’s father Late.Nammalwar, from the
year, 1974. After the death of the petitioner’s father, on 02.01.1996, the
lease had been transferred in favour of the petitioner, by the proceedings of
the second respondent, dated 14.03.1997. The petitioner is running a vegetarian
restaurant in the premises in question, catering to those, who are using the
municipal bus stand at Bodinaickkanur.
4. It has also been stated that, by the proceedings of the second
respondent, in Na.Ka.No.7313/2005/A3, dated 08.03.2006, the lease had been
renewed in favour of the petitioner, from 01.04.2006 to 31.03.2009. While so,
on 02.07.2009, the petitioner had requested the second respondent to renew the
lease in favour of the petitioner for a further period of three years. The
petitioner had also paid a sum of Rs.3,404/- for the renewal of the lease, as
per the direction issued by the second respondent, on 13.04.2009. He has also
been paying the rent, with 15% hike in the monthly lease amount, till date,
without fail. The respondent municipality in its Agenda No.29, had proposed to
renew the lease, from 01.04.2009 to 31.03.2012, in its proceedings, in
Na.Ka.No.215/09/A3, dated 28.01.2010. While so, the third respondent had
granted the extension of lease to 35 lessees, who are similarly placed, like the
petitioner. However, the request of the petitioner for extension of lease had
been rejected, contrary to the principles of legitimate expectation and
promissory estoppel.
5. The only ground based on which the request of the petitioner, for
the extension of the lease period, had been rejected is that the petitioner has
been, unauthorisedly, occupying a large extent of the property, larger than the
area that had actually been alloted to him under the lease. As such, the
petitioner had encroached upon an area, which he is not entitled to, under the
lease agreement and he had also put up certain constructions thereon, without
the permission of the authorities concerned. The allegation against the
petitioner regarding the encroachment is baseless and arbitrary in nature. In
fact, the petitioner had filed a Civil Suit, in O.S.No.155 of 2009, on the file
of the District Munsif Court, Bodinaickkanur, against the second respondent,
praying for a decree and permanent injunction restraining the respondents
therein from demolishing the eastern wall of the restaurant, under the guise of
removing the unauthorised constructions. An order of interim injunction had
also been obtained by the petitioner, in I.A.No.154 of 2009. While so, the
second respondent had issued the impugned proceedings, dated 05.02.2010, asking
the petitioner to vacate the premises, within a period of 30 days. Thus, the
request of the petitioner for the renewal of the lease had been rejected.
6. It has been further stated that the petitioner has been
carrying on his business in the premises in question, for the past 13 years and
his livelihood depends, solely, on the said business. There are more than 23
employees working in the Hotel, catering to thousands of persons. It has also
been stated that the respondents, having directed the petitioner to pay the
additional deposit, with a hike of 15%, as per the Government order, in
G.O.Ms.No.92, Municipal Administration and Water Supply Department, dated
03.07.2007, the rejection of the request of the petitioner, for the extension of
the lease, by the respondents, is contrary to the principles of legitimate
expectation and promissory estoppel. There is no encroachment by the
petitioner, as alleged by the respondents. Even though the petitioner has been
prepared to offer a higher lease amount, as fixed by the respondents, the
respondents have rejected the request of the petitioner, without considering the
same. As such, the impugned proceedings of the respondents, are arbitrary,
illegal and void.
7. The learned counsel appearing on behalf of the petitioner had
relied on the following decisions in support of his contentions:-
7.1. In Raghunandan Panda v. State of Orissa, reported in (1975) 1
SCC 106, it has been held as follows:-
“3. It has been pointed out by a Division Bench of this Court to which one
of us was a party in the case of Union of India v. K.P. Joseph that “Generally
speaking an administrative order confers no justiciable right but this rule like
all other general rules is subject to exceptions”. Some decisions of this Court
to illustrate the exceptions have been noticed thereafter in the judgment at
page. 755. It has been pointed out further “To say that an administrative order
can never confer any right would be too wide a proposition. There are
administrative orders which confer rights and impose duties”. In this case,
however, it is difficult to accept the argument put forward on behalf of the
appellant that the Rules confer any rights on him. No person has a vested right
to get any lease of the government land; of course, he has got a right to get
his application for lease disposed of fairly and not arbitrarily. If, therefore,
it could be held in favour of the appellant that his claim for lease of the plot
in question was capriciously, arbitrarily and unfairly rejected and that the
lease granted to respondent No.3 was arbitrary and unfair a case could be found
in his favour.”
7.2. In State of Assam v. Banshidhar Shewbhagavan & Co., reported in
AIR 1981 SC 1957, it has been held as follows:-
“8….There can be no doubt that if any authority exercised any power conferred
on him by law in bad faith or for collateral purpose, it is an abuse of power
and a fraud on the statute. In such a case there can be no difficulty in
striking down that act of the authority by the issue of an appropriate writ
under Article 226 of the Constitution.”
7.3. In Dwarkadas Marfatia and Sons v. Bombay Port Trust, reported
in (1989) 3 SCC 293, it has been held as follows:-
“23……….Where any special right or privilege is granted to any public
or statutory body on the presumption that it must act in certain manner, such
bodies must make good such presumption while acting by virtue of such
privileges. Judicial review to oversee if such bodies are so acting is
permissible.
24. …… The Port Trust is statutorily exempted from the operation of
the Rent Act on the basis of its public/governmental character. The legislative
assumption or expectation as noted in the observations of Chagla, C.J. in
Rampratap Jaidayal case1 cannot make such conduct a matter of contract pure and
simple. These corporations must act in accordance with certain constitutional
conscience and whether they have so acted, must be discernible from the conduct
of such corporations. In this connection, reference may be made on the
observations of this Court in Som Prakash Rekhi v. Union of India5 reiterated in
M.C. Mehta v. Union of India6 wherein at p. 148 this Court observed: (SCC p.
480, para 55)
“It is dangerous to exonerate corporations from the need to have constitutional
conscience ; and so, that interpretation, language permitting, which makes
governmental agencies, whatever their mien, amenable to constitutional
limitations must be adopted by the court as against the alternative of
permitting them to flourish as an imperium in imperio.”
……….
27. We are inclined to accept the submission that every activity of a
public authority especially in the background of the assumption on which such
authority enjoys immunity from the rigours of the Rent Act, must be informed by
reason and guided by the public interest. All exercise of discretion or power by
public authorities as the respondent, in respect of dealing with tenants in
respect of which they have been treated separately and distinctly from other
landlords on the assumption that they would not act as private landlords, must
be judged by that standard. If a governmental policy or action even in
contractual matters fails to satisfy the test of reasonableness, it would be
unconstitutional.”
7.4. In Mahabir Auto Stores v. Indian Oil Corpn., reported in AIR 1990
SC 1031, it has been held as follows:-
“It is well settled that every action of the State or an instrumentality of the
State in exercise of its executive power, must be informed by reason. In
appropriate cases, actions uninformed by reason may be questioned as arbitrary
in proceedings under Article 226 or Article 32 of the Constitution. …….. It
appears to us, at the outset, that in the facts and circumstances of the case,
the respondent company IOC is an organ of the State or an instrumentality of the
State as contemplated under Article 12 of the Constitution. The State acts in
its executive power under Article 298 of the Constitution in entering or not
entering in contracts with individual parties. Article 14 of the Constitution
would be applicable to those exercises of power. Therefore, the action of State
organ under Article 14 can be checked.”
7.5. In Shrilekha Vidyarthi v. State of U.P., reported in AIR 1991 SC
537, it has been held as follows:-
“21. The Preamble of the Constitution of India resolves to secure to all its
citizens Justice, social, economic and political; and Equality of status and
opportunity. Every State action must be aimed at achieving this goal. Part IV of
the Constitution contains ‘Directives Principles of State Policy’ which are
fundamental in the governance of the country and are aimed at securing social
and economic freedoms by appropriate State action which is complementary to
individual fundamental rights guaranteed in Part III for protection against
excesses of State action, to realise the vision in the Preamble. This being the
philosophy of the Constitution, can it be said that it contemplates exclusion of
Article 14 – non-arbitrariness which is basic to rule of law – from State
actions in contractual field when all actions of the State are meant for public
good and expected to be fair and just? We have no doubt that the Constitution
does not envisage or permit unfairness or unreasonableness in State actions in
any sphere of its activity contrary to the professed ideals in the Preamble. In
our opinion, it would be alien to the constitutional scheme to accept the
argument of exclusion of Article 14 in contractual matters. The scope and
permissible grounds of judicial review in such matters and the relief which may
be available are different matters but that does not justify the view of its
total exclusion. This is more so when the modern trend is also to examine the
unreasonableness of a term in such contracts where the bargaining power is
unequal so that these are not negotiated contracts but standard form contracts
between unequals.
……
However, to the extent, challenge is made on the ground of violation of Article
14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the
fact that the dispute also falls within the domain of contractual obligations
would not relieve the State of its obligation to comply with the basic
requirements of Article 14. To this extent, the obligation is of a public
character invariably in every case irrespective of there being any other right
or obligation in addition thereto. An additional contractual obligation cannot
divest the claimant of the guarantee under Article 14 of non-arbitrariness at
the hands of the State in any of its actions.
23. Thus, in a case like the present, if it is shown that the impugned State
action is arbitrary and, therefore, violative of Article 14 of the Constitution,
there can be no impediment in striking down the impugned act irrespective of the
question whether an additional right, contractual or statutory, if any, is also
available to the aggrieved persons.”
7.6. In Sterling Computers Ltd. v. M & N Publications Ltd., reported in
(1993) 1 SCC 445, it has been held as follows:-
“17…..The powers of public authorities are therefore essentially
different from those of private persons. A man making his will may, subject to
any rights of his dependants, dispose of his property just as he may wish. He
may act out of malice or a spirit of revenge, but in law this does not affect
his exercise of his power. In the same way a private person has an absolute
power to allow whom he likes to use his land, to release a debtor, or, where the
law permits, to evict a tenant, regardless of his motives. This is unfettered
discretion. But a public authority may do none of these things unless it acts
reasonably and in good faith and upon lawful and relevant grounds of public
interest.
There are many cases in which a public authority has been held to have
acted from improper motives or upon irrelevant considerations, or to have failed
to take account of relevant considerations, so that its action is ultra vires
and void.”
……
By way of judicial review the court cannot examine the details of the
terms of the contract which have been entered into by the public bodies or the
State. Courts have inherent limitations on the scope of any such enquiry. But at
the same time as was said by the House of Lords in the aforesaid case, Chief
Constable of the North Wales Police v. Evans8 the courts can certainly examine
whether “decision-making process” was reasonable, rational, not arbitrary and
violative of Article 14 of the Constitution.
19. If the contract has been entered into without ignoring the procedure
which can be said to be basic in nature and after an objective consideration of
different options available taking into account the interest of the State and
the public, then Court cannot act as an appellate authority by substituting its
opinion in respect of selection made for entering into such contract. But, once
the procedure adopted by an authority for purpose of entering into a contract is
held to be against the mandate of Article 14 of the Constitution, the courts
cannot ignore such action saying that the authorities concerned must have some
latitude or liberty in contractual matters and any interference by court amounts
to encroachment on the exclusive right of the executive to take such decision.
28……Public authorities are essentially different from those of private
persons. Even while taking decision in respect of commercial transactions a
public authority must be guided by relevant considerations and not by irrelevant
ones. If such decision is influenced by extraneous considerations which it ought
not to have taken into account the ultimate decision is bound to be vitiated,
even if it is established that such decision had been taken without bias….
7.7. In Food Corpn. of India v. Kamdhenu Cattle Feed Industries,
reported in 1993 SC 1601, it has been held as follows:-
“7. In contractual sphere as in all other State actions, the State and all
its instrumentalities have to conform to Article 14 of the Constitution of which
non-arbitrariness is a significant facet. There is no unfettered discretion in
public law: A public authority possesses powers only to use them for public
good. This imposes the duty to act fairly and to adopt a procedure which is
‘fairplay in action’. Due observance of this obligation as a part of good
administration raises a reasonable or legitimate expectation in every citizen to
be treated fairly in his interaction with the State and its instrumentalities,
with this element forming a necessary component of the decision-making process
in all State actions. To satisfy this requirement of non-arbitrariness in a
State action, it is, therefore, necessary to consider and give due weight to the
reasonable or legitimate expectations of the persons likely to be affected by
the decision or else that unfairness in the exercise of the power may amount to
an abuse or excess of power apart from affecting the bona fides of the decision
in a given case. The decision so made would be exposed to challenge on the
ground of arbitrariness. Rule of law does not completely eliminate discretion in
the exercise of power, as it is unrealistic, but provides for control of its
exercise by judicial review.
8. The mere reasonable or legitimate expectation of a citizen, in such a
situation, may not by itself be a distinct enforceable right, but failure to
consider and give due weight to it may render the decision arbitrary, and this
is how the requirement of due consideration of a legitimate expectation forms
part of the principle of non-arbitrariness, a necessary concomitant of the rule
of law. Every
legitimate expectation is a relevant factor requiring due consideration in a
fair decision-making process. Whether the expectation of the claimant is
reasonable or legitimate in the context is a question of fact in each case.
Whenever the question arises, it is to be determined not according to the
claimant’s perception but in larger public interest wherein other more important
considerations may outweigh what would otherwise have been the legitimate
expectation of the claimant. A bona fide decision of the public authority
reached in this manner would satisfy the requirement of non-arbitrariness and
withstand judicial scrutiny. The doctrine of legitimate expectation gets
assimilated in the rule of law and operates in our legal system in this manner
and to this extent.
7.8. In LIC of India v. Consumer Education & Research Centre, reported in
(1995) 5 SCC 482, it has been held as follows:-
“”27. In the sphere of contractual relations the State, its instrumentality,
public authorities or those whose acts bear insignia of public element, action
to public duty or obligation are enjoined to act in a manner i.e. fair, just and
equitable, after taking objectively all the relevant options into consideration
and in a manner that is reasonable, relevant and germane to effectuate the
purpose for public good and in general public interest and it must not take any
irrelevant or irrational factors into consideration or appear arbitrary in its
decision. Duty to act fairly is part of fair procedure envisaged under Articles
14 and 21. Every activity of the public authority or those under public duty or
obligation must be informed by reason and guided by the public interest.
………
The purpose of contract law is not simply to create conditions of liability, but
also to respond to the social process of promising.”
7.9. In U.P.Awas Evam Vikas Parishad Vs. Gyan Devi, reported in
(1995) 2 SCC 326, the Supreme Court has held that the principle of legitimate
expectation would apply even in cases when a person has no enforceable right, if
he is likely to be affected by an order passed by the public authority.
7.10. In M.P.Oil Extraction Vs. State of M.P. reported in (1997) 7
SCC 592, it has been held that the doctrine of “legitimate expectation”
operates in the domain of public law and in an appropriate case, constitutes a
substantive and enforeceable right.
7.11. In Tamil Nadu Shop Municipal Shop Merchants Association and
etc. Vs. State of Tamil Nadu and Ors reported in AIR 2000 Mad 393, it has been
held as follows:-
“17. There is another aspect of the matter. The petitioners came to enjoy the
right pursuant to a contract. They bid at the auction and became successful
bidders pursuant to which they were permitted to occupy the shops or stalls and
run their business. Admittedly, in all these cases, the period for which the bid
was made has ended. The petitioners all claim that they must be granted a
further period and that they are prepared to pay enhanced rent or licence fee as
the case may be at 15%. The right of the petitioners therefore arises out of a
contract. The right is civil in nature. At best, it is contractual in its
effect. Time and again the Apex Court has held that a judjcial review of
contractual obligations or enforcement of contractual obligations cannot be
permitted under Article-226. Therefore, the petitioners cannot maintain a claim
under Article 226 for the enforcement of the contractual obligations. It is not
possible to accept the contention of the learned counsel for the petitioner that
he can approach the Court under Article 226. The local bodies cannot be
compelled under law to grant leases/ licences in favour of the petitioners
forever.
…..
22. The Apex Court has held in the decision reported, in
MANU/SC/1368/1997:(1997)8SCC770 (M.C.Metha V. Union of India) that provisions of
an Act have to be so construed as to keep individual or a class interest
subordinate to the larger public interest. One has to take into consideration
the larger interest of the people at large or the Society. Public bodies have
the right to put the properties belonging to them in auction and augment their
income and thus deal with it in a manner more advantageous to them. Any
direction not to hold auction or to renew the lease will not only put an
unwarranted limit on their right but would work against the larger interest of
the Society……….
26. The Municipalities or the Panchayats as the case may be, put up buildings
in the bus stand or in the parking stands. In some cases, they also put up some
shopping complexes. There are stalls in the public markets where the right to
expose goods are leased out. In W. P. Nos. 4904 and 4905 of 2000 the Municipal
Council is not made a party. The property vests
with the Municipal Council, who are the owners. The Director of Municipal
Administration is but an authority having some powers over the Municipal
Council. The Director of Municipal Administration cannot become the owner of the
property, though he may have some right or power to issue directions to the
Municipal Council now and then in that regard. A reading of Sections 260 and 261
to which I have already referred to would show that the council may provide
places for use of public markets and may farm out the same and the control of
which will be only with the Executive Authority. But surprisingly enough, the
Municipalities have not been made parties. Merely because Director of Municipal
Administration has got a controlling power over the Executive authority of the
local body, without impleading the concerned Municipalities, the petitioners
cannot ask this Court to issue directions.
….
33. The decision reported in 1999 Writ LR 155 (V. Chellappa v. Commissioner,
Tirunelveli Municipal Corporation) is to the effect that non-statutory contracts
and right touching an immovable property cannot be enforced and Article 226 of
the Constitution and that the petitioners cannot resist the right of the
Municipality to auction and that the Municipality can hold the properties and
put it to better use to augment more income in public interest in the manner
most advantageous to it and that any direction not to hold auction or renew the
licence is nothing but putting a limit on such right, which is impermissible in
law.
…..
There is no provision under the District Municipalities Act which has been
pointed out
that the rights or lease granted to the appellants were perpetual under the
District Municipalities Act. The Municipal Authorities, it has been statutorily
provided by the illustration, may grant for six years i.e., three years and
three years and no more. The argument advanced by the learned counsel for the
appellants, if accepted that after the expiry of three years, the lease has lobe
extended, it is nothing but a lease perpetuity. Lease in perpetuity or extension
or renewal without time limit amounts to lease in perpetuity which is not
permissible in law and in terms of the statutory provisions. This is not the
intention of the statute and this will create a monopoly in favour of a person
who has once taken the lease in an open auction. This apart it causes a loss,
the local authority, when the property can be auctioned at much higher price and
the appellants arc not debarred from participating in the auction.”
50. I cannot agree with this contention. There are number of
Municipalities, town Panchayats and Corporations. They own buildings, stalls
etc. either located in the bus-stand or in the shandy or in other public places,
cart-stands etc. Some of the public bodies have their own shopping complexes.
The situation is peculiar to each local body. There is no uniformity in the
same. One cannot expect all the local bodies to have a uniform practice though
it may be desirable to have such uniform practice. The local bodies have to act
according to the exigencies of the time, their set up, the situation they have
to face and the circumstances that govern them. It cannot be the same for all
the local bodies. Some local bodies may have certain peculiar problems in that
field. In fact, the learned Senior Counsel Mr. Masilamani at the beginning of
his argument submitted that the local bodies are only like private land owners.
If they can be equated to
private land owners, then, it has to be equally stated that one private land
owner need not, will not and does not act as the other private owner and that
the approaches will be different.
…….
51. I am not able to accept the contention that there is any violation of
Article 14 in that regard. There is no discrimination. For every classification
is in some degree likely to produce some inequity and mere production of
inequity is not an abrogation of Article 14. It is only a reasonable exercise of
power by the Local Body. The Government has only the Supervisory power. The
Government has the Rule making power under the Act and with a view to stream-
line the procedure, the Government issues administrative instructions and brings
about amendments to the Rules regarding leases and lincences. Hence. It is not
possible to expect an uniform authority. What holds good to a petitioner
Municipality may not hold good to another Municipality. What holds good for
licence relating to a restaurant in a Municipal bus-stand may not hold good when
applied to a licence to exposed goods in market. The policy of fixity of tenure
cannot be also achieved in such cases. Because, that would defeat the very
purpose of public auction. Normally, it is only granted for a period of one year
or three years. It cannot be stated that the present policy is not to the
benefit of the people. If certain person with open eyes take properties in a
public auction, knowing fully well that the period of licence or lease is only
for a period of three years and if such persons are to make investments, they
cannot turn round later on to say that they have made huge investments and
therefore, on that ground they must be granted further extension of lease. If
that argument is to be accepted, then it will be easy for every one who comes
into the picture at the first instance, make a show of investment and claim that
he has made huge investments and continue to be in the property forever. Rightly
or wrongly and knowing fully well about the terms and conditions of the lease,
and the period of lease, they have come into the properties. If they are foolish
enough to make huge Investments in the hope that they will be able to get
further extension of lease, they have to blame themselves. They cannot be
allowed to take advantage of their own false sense of hope. Nor they can on that
ground, be allowed to get away with the same.
……
53. The local bodies herein are not claiming any higher right. All the parties
have entered into a contract which had come into existence after they became the
highest bidders in the auction. Therefore, the petitioners are bound by the
contracts. Therefore. when parties are governed by contracts, the parties can
only resort to terms and conditions of the lease to ventilate their grievance or
seek redressal. They cannot resort to a procedure under Article 226. Contractual
obligations can never be enforced through Article 226. Further, the local bodies
are not seeking to exercise any superior right or power. The leases/licenses
have expired only by efflux of time. They want to reauction the properties. It
is the common and ordinary right of the owner of the property to enjoy the
property in the manner he wants. If the property is leased out for a particular
period, the owner is entitled to reclaim the property after the expiry of the
period and take further steps with regard to the same. Therefore, this is not a
case where it can be stated that the local bodies are claiming any higher right.
But what they want to exercise is only their rights under the terms and
conditions of the lease. The contention that there cannot be two different
standards with regard to normal activity is, in my opinion, not well founded.
For there are no different standards at all obtaining. If we term the action of
the local bodies in auctioning out the rights by way of public auction as a
normal commercial activity, then, they are entitled to do so. Such a lease
cannot be compared to a lease under the Tamil Nadu Buildings (Lease and Rent
Control) Act. The contention of the learned counsel based upon the view of the
matter from the angle of the Tamil Nadu Buildings (Lease and Rent Control) Act
is only a misplaced argument. They are two different fields, where different
reasons govern the matter. It may be that the landlord under the Tamil Nadu
Buildings (Lease and Rent Control) Act cannot claim more rent than that fixed
unless he resorts to the provisions of the Act. It is also true that since the
property is leased out, the tenant can hold the property forever unless the
landlord claims that he requires the premises bona fide or the tenant commits
default in payment of rent. The petitioners counsel cannot draw an analogy from
that to contend that since the property is leased out to the petitioners, they
can continue to be in possession of the property for indefinite period of time
and that they cannot be asked to pay over and above than what they were paying
prior to that. The two enactments operate in two different fields. They cannot
be mixed up. Nor an inspiration can be drawn to contend that there is any
discrimination and different norms with regard to lessees and licencees of the
local bodies.”
7.12. In T.Ramaraju Vs. The State of Tamil Nadu and others, reported in
2005 (2) CTC 741, a Full Bench of this Court has held that encroachments on road
margin, coming under the purview of the municipalities, can be removed only
after following the procedures contained in Chapter IX of the Tamil Nadu
District Municipalities Act, 1920, especially, the provisions contained in
Sections 182 and 183(6) of the Act. The concerned municipalities, before
initiating steps to remove the encroachments, shall issue notice to the
encroachers, in writing, giving them atleast two weeks time to remove the
encroachment. If the encroachers avoid receiving the notice, such notice can be
effected by affixture and not by any other means, such as through public
announcement or beating of drums or by general notice in newspapers.
7.13. In Kannan and others Vs. The Commissioner, Panruti
Municipality reported in (1998) 1 MLJ 576, it has been held as follows:-
“13. The Municipality has got an absolute power over those properties. The
Government has only a supervisory power over it. Under the District
Municipalities Act, all its properties absolutely vest in the Municipality. In
such a case, the Municipality has got absolute power to decide as to how its
properties should be dealt with. In these cases, the Municipality has passed
Resolution that it apprehends encroachment in its lands and public is also
experiencing great difficulty in view of the location of the bunks. Of course,
the petitioners dispute the above statement of the Municipality. But when a
public body passes a Resolution taking into consideration the interest of the
public, naturally the petitioners cannot claim that they should be permitted to
continue the shops in the very same place.
…….
19. The question of certiorari will never arise in these cases. The Municipality
the owner of the bunks, is justified in issuing the notice for reasons, which it
feels to be justified in terminating the arrangement. The Resolution of the
Municipality is not challenged in any of the writ petitions. The challenge is
only is respect of the notice, as against which no relief could be granted, for,
these notices are issued only as a consequence of the resolution passed by the
respondent-Municipality.”
7.14. In V.Chellappa and another Vs. Commissioner, Tirunelveli
Municipal Corp., Tirunelveli & another, reported in 1998 (1) CTC 465, it has
been held as follows:-
“14. These petitions are liable to be dismissed in view of the decision of the
Supreme Court in A.I.R. 1989 S.C.1026 and State of Rajasthan v. Bhavani Singh
and others, MANU/SC/0192/1992:AIR 1992 SC 1018, wherein it has been held that
non-statutory contracts and right touching an immovable property cannot be
enforced under Art. 226 of the Constitution.
15. For these reasons, I hold that the petitioners are not entitled to resist
the right of the respondent to auction, because, such right springs from the
very right of ownership of the property so long as there is no statutory
prohibition. It can hold the property and put it to better use to augment more
income in public interest in the manner most advantageous to it. Any direction
not to hold auction or to renew the licences is nothing but putting a limit on
such right, which is impermissible in law.
16. Therefore, the petitioners being licencees, where their right to collect
fees is not affected during the subsistence of the licence period, they have no
right to resist the action of the respondents either to bring the property to
auction or confirmation of the auction already held or to refuse to renew any
such licence.”
7.15. In M.Palanisamy and others Vs. The Sriramapuram Town Panchayat
through its Executive Officer, Sriramapuram, Dindigul reported in 1998 (2) CTC
683, it has been held as follows:-
“While exercising the jurisdiction, this Court has to keep in view the conduct
and nature of the right which the petitioners are seeking to enforce and the
relevant circumstances under which they are seeking for a direction to decide
whether the jurisdiction under Article 226 of the Constitution should be
exercised or not. It would be travesty of justice to permit jurisdiction under
Article 226 of the Constitution to be involved to perpetuate their occupation of
public property at the cost of public revenue. In such circumstances, the Apex
Court in Sales Tax Officer and Another v. M/s Shree Durga Mills and another,
1997 (1) ST 418, has held that the Court will not interfere with any action
taken by the Government in public interest-Public interest must override any
consideration of private loss or gain. This jurisdiction is meant to preserve
the right and not to create a right where the petitioners have no semblance of
any right to see renewal. where the properties were put to argument more income
for the benefit of the public, I do not think that the petitioners are entitled
to any relief from this Court. Auction of plots is policy decision of the
authority to enable the new persons to enter into the business and to discourage
the monopoly of the old and established method of earning more income, resorting
to sub-leases of public property. In such a situation, where the local
authority, after due publication adopted the fairest means of disposal of its
property by way of lease through public auction and gives an opportunity to
everyone to make a bid, cannot be found fault with and if at all, the
petitioners thought that they are likely to be affected or affected by auction
and causing dislocation of their business, nothing prevented them to participate
in the auction and claim the shops, instead, they cannot cling on to a non-
existing right and resort to litigation, prevent the local authority from
augmenting more income from its property, earning better revenue for the public
good.”
8. In the counter affidavit filed on behalf of the third
respondent, the averments and allegations made by the petitioner, in his
affidavits filed in support of the Writ Petitions, have been denied. It has
also been stated that it is false to state that the lease had been granted in
favour of the petitioner’s father, for an extent of 6252.5 Sq.ft, in shop Nos.3
and 4, in the Municipal bus stand, at Bodinaickkanur, in the year, 1974. In
fact, shop Nos.3 and 4, together, measures to an extent of 1750 Sq.ft only. The
lease granted in favour of the petitioner, in respect of those shops, had
expired, on 31.03.2009. The petitioner had not produced the ‘no objection
certificate’ from the Fire Service Department, as it is a necessary requirement
for the renewal of the lease in his favour. Even though the lease had been
granted to the petitioner only for an extent of 1750 Sq.ft, he is running a
restaurant in an extent of 6252.5 Sq.ft, by encroaching upon the property
belonging to Bodinaickkanur Municipality. The Revenue Divisional Officer,
Uthamapalayam, had also conducted an enquiry, under Section 133 of the Criminal
Procedure Code, 1974, to prevent the petitioner from causing nuisance. However,
the petitioner is running the Hotel in question, on the strength of the interim
order of stay granted by this Court, in the miscellaneous petition, in
M.P.(MD).No.1 of 2010, filed along with the present Writ Petition.
9. It has also been stated that the petitioner is not entitled to
demand extension of lease in his favour, in respect of the larger extent of the
property, contrary to the original lease granted in his favour. Further, the
third respondent municipality is taking steps to demolish the illegal
encroachments for the purpose of extension of the municipal bus stand at
Bodinaickkanur and to provide better facilities to the public using the said bus
stand. As such, the Writ Petitions filed by the petitioner are devoid of merits
and therefore, they are liable to be dismissed, with costs.
10. In view of the averments made in the affidavits filed on
behalf of the parties concerned and in view of the submissions made by the
learned counsels appearing on their behalf, this Court is of the considered view
that the petitioner has not shown sufficient cause or reason to grant the
relief, as prayed for, in the present Writ Petitions. The petitioner has not
been in a position to show that he is entitled to the extension of the lease,
for carrying on his business in the municipal bus stand, at Bodinaickkanur. in
an extent of 6252.5 Sq.ft. It is not in dispute that the petitioner had filed a
Civil Suit, in O.S.No.155 of 2009, on the file of the District Munsif Court,
Bodinaickkanur, praying for a decree of permanent injunction, against the second
respondent. He had also obtained an order of interim injunction in his favour,
in I.A.No.154 of 2009. While so, it would not be appropriate for this Court to
decide the issues arising for consideration in the said Civil Suit, in the
present Writ Petition, at this stage. Further, nothing has been shown on behalf
of the petitioner to substantiate his claim that the respondents had infringed
the principles of legitimate expectation and promissory estoppel.
11. In fact, as per the lease agreement, the petitioner had agreed
to vacate the premises in question, as and when it was found necessary, by the
third respondent municipality, in public interest. In such circumstances, it is
not open to the petitioner to demand that the lease, which had expired, on
31.03.2009, should be extended for a further period of three years, from
01.04.2009 to 31.04.2012. As such, the Writ Petitions are devoid of merits and
therefore, they are liable to be dismissed. Accordingly, both the Writ
Petitions are dismissed. Consequently, connected miscellaneous petitions are
closed. No costs. However, it is made clear that it would be open to the
concerned Civil Court to decide the issues arising for its decision, in
O.S.No.155 of 2009, on merits and in accordance with law, without being
influenced by the observations made by this Court, in this order.
ssm
To
1.The District Collector,
Theni District,
Theni.
2.The Board of Council,
Bodinaickkanur Municipality,
Bodinaickkanur.
3.The Divisional Officer,
Fire Service and Rescue Department,
Theni Division,
4.The Municipal Commissioner,
Bodinaickkanur Municipality,
Bodinaickkanur,
Theni District.
5.The Station Officer,
Fire Service and Rescue Station,
Bodinaickkanur,
Theni District-625 513.