PETITIONER: UNION TERRITORY CHANDIGARH & ANR Vs. RESPONDENT: RAM CHANDER & SONS & ORS. DATE OF JUDGMENT: 22/08/1999 BENCH: R.P.Sethi, S.Saghir Ahmad JUDGMENT:
SETHI, J.
L…..I………T…….T…….T…….T…….T…….T..J
Delay condoned in SLP(C)…./99 (CC 902/99).
Leave granted. Sector 17 is a commercial centre in
Chandigarh, the city beautiful of India which is also the
capital of Punjab and Haryana, the two most prosperous
States of the country. Shopkeepers of this commercial
centre are aggrieved of the enhancement of the rent of their
leased premises from Rs.2,671/- to Rs.14,000/- per month
which, according to them, is irrational, unwarranted by law
and arbitrary being 600 per cent increase. The shops under
their occupation are stated to have been initially leased
out to them at a paltry rent of Rs.525/- with effect from
10th May, 1968. Whereas the respondent Union Territory have
steadily enhanced the rent from time to time, the appellants
herein have unsuccessfully put all types of hurdles
conceivable under the present legal system. Almost admitted
facts leading to the filing of the present appeals are that
the appellants were leased commercial premises in Sector 17
of Chandigarh in or about the years 1963-64. However,
formal lease deeds were executed between the Lessor and the
Lessees in May, 1968 on payment of monthly rent of Rs.525/-
per mensem in advance by the 19th day of the month for which
it fell due. The lease was initially for a period of five
years from the date of the grant which could be terminated
by the Lessor by giving one month’s advance notice in
writing to the Lessees. The lease was renewable only once
for another term of five years with 20% increase in the rent
reserved under the deed. In the event of non payment of the
rent on the due date or breach or non observance by the
Lessee of any of the conditions of the lease deed, it was
lawful for the Lessor, notwithstanding the waiver of any
previous cause or right for re-entry, to terminate the lease
and enter into and upon the building or any part thereof and
to re-possess, retain and enjoy the same and in that event
the Lessee was not entitled to the refund of lease money or
any part thereof or to any compensation whatsoever on
account of such resumption. After the expiry of the initial
period of 10 years, the rent of the leased premises was
increased to Rs.2,671/- per month with effect from 1.3.1982.
Being aggrieved by the increase of rent, the Lessees filed
writ petitions in the High Court of Punjab & Haryana in
which their plea was not accepted and a Division Bench of
the High Court vide its judgment dated 4th August, 1988 held
that there was no evidence to show that the enhanced rent
was, in any way, unreasonable or arbitrary. The Court
further observed, “in fact we had a feeling that this is
much lower than the fair payable rent in respect of such
premises”. However, as by then the Lessees had agreed to
pay the enhanced rent with effect from 1st March, 1982 till
the end of February, 1991, the Court set aside the orders of
termination of their leases which had been passed on their
failure to pay the enhanced rent. The petitions were
disposed of holding:
“The result would be that he shall be deemed to
continue to be lessee under the Estate Administration. We
shall now execute a lease deed agreeing to pay rent as
aforesaid. The rent shall be revisable for the period from
March 1, 1991 as per the existing rules of the Estate
Administration. The arrears for the period of March 1, 1982
till July 31, 1988, shall be paid on or before September 30,
1988 and the rent for the month of August, 1988 shall be
paid on or before the 10th of September, 1988 and for the
month of September 1988, it shall be paid on or before the
10th October, 1988 and for every subsequent month on or
before the 10th of each subsequent month.”
After the expiry of the period prescribed by the High
Court, the Lessees were allowed to remain in possession but
were slapped with a notice on 19th August, 1992 intimating
them to renew the lease subject to enhancement of rent from
Rs.2,671/- to Rs.14,000/- with effect from 1.3.1992 pending
decision of the Chandigarh Administration for the
intervening period i.e. 1.3.1991 to 29.2.1992 for the
increase of rent at enhanced rates which was intimated to be
binding upon the Lessees as and when increased. The Lessees
were called upon to renew fresh lease deeds in favour of the
respondents containing the terms and conditions detailed
therein. Feeling that the enhanced rent was illegal,
unfair, arbitrary and uncalled for, the Lessees of the shops
in Sector 17 filed various writ petitions in the High Court
of Punjab & Haryana at Chandigarh. One set of such
petitions Nos.10520-21 of 1996 entitled Dr.Sahib Singh &
Sons vs. Chandigarh Administration were disposed of vide
judgment Annexure P-4 upholding the right of the Union
Territory Chandigarh to enhance the rent with appropriate
directions needed in the peculiar facts and circumstances of
the case. Contending that their cases were different than
Sahib Singh’s matter, the appellant herein insisted for a
fresh hearing and a separate judgment. The prayer was
accepted and the Division Bench vide its detailed judgment
dated 19th December, 1997 dismissed the petitions but in the
circumstances directed that if the appellants convey their
consent to the terms and conditions incorporated in the
impugned notices within three months, the respondents may
renew the lease granted to such of the appellants subject to
their paying the arrears of rent within six months. The
respondents were entitled to charge appropriate interest on
the amount of arrears of rent between 1.3.1992 to the date
of the stay orders obtained by them from the High Court.
For the period during which the payment of the rent at the
rates specified in the impugned notices remained stayed by
the Court, the appellants were directed to pay interest @
18% per annum. The amount of interest was required to be
paid by the appellants within six months from the date of
the judgment. Thus, all such appellants who failed to give
their consent in terms of the direction or failed to pay
arrears along with interest within the time specified in the
judgment were to forfeit their right to remain in possession
of the properties leased out to them and the respondents in
that event were declared to be absolutely free to recover
possession thereof in accordance with law. The Court
directed the respondents to take urgent steps to enhance the
rent of other similar properties situated in Sector 17
regarding which the complaints were made by the appellants
on the plea of discrimination. It may be noticed that by
the time the High Court delivered the judgment in the case
of the appellants, this Court had dismissed the SLP (C)
No.18466 of 1997 which was filed against the judgment in
Sahib Singh’s case, by order dated 29th September, 1997. To
protract the litigation further, the appellants filed Review
Petitions before the High Court praying therein to
reconsider the matter or atleast absolve the appellants of
their liability to pay the interest as awarded by the main
judgment. The Review Petitions were also dismissed on 17th
July, 1998. Immediately after the pronouncement of the
orders in review petitions, the counsel for the appellant
made a statement that his clients were prepared to pay the
amount of interest for which he wanted some time. He
requested for the grant of six months time for the purpose
but the Court allowed three months time in the interests of
justice. These appeals are directed against the main
judgment of the High Court dated 19th December, 1997 and the
orders in Review Petitions dated 17th July, 1998. It is
contended that the impugned judgment and order is against
law, without jurisdiction and the result of arbitrary
exercise of powers. Learned counsel who appeared for the
appellants have vehemently argued that admittedly in the
absence of the rules, required to be framed under the
Capital of Punjab (Development & Regulation) Act, 1952, the
respondent Administration had no jurisdiction to enhance the
rent. Alternatively, conceding that such power existed,
they have argued that the exercise of power has been unfair
and arbitrary. It is submitted that the respondent being
the regulator and dispenser of special services and provider
of large number of benefits including the granting of leases
are required to act fairly and reasonably. The discretion
of the respondents even if assumed is not unlimited and that
the respondents cannot give or withhold leases in its
arbitrary discretion or at its sweet will. It is further
submitted that the High Court was not justified in awarding
the interest for the period of stay granted by it in the
cases filed by the appellants. There is no dispute that
Capital of Punjab (Development & Regulation) Act, 1952
(hereinafter referred to as `the Act’) being Punjab Act
No.27 of 1952, is applicable to the city of Chandigarh with
effect from 1968. The Act was enacted at a time when the
construction of a new capital of the then Punjab at
Chandigarh was in progress. It was considered necessary to
vest the State Government with a legal authority to regulate
the sale of building sites and to promulgate building rules
on the lines of municipal bye-laws so long as a properly
constituted local body did not take over the administration
of the city. Section 3 of the Act provides:
3. “Power of Central Government in respect of
transfer of land and buildings in Chandigarh.- (1) Subject
to the provisions of this section, the Central Government
may sell, lease or otherwise transfer, whether by auction,
allotment or otherwise, any land or building belonging to
the Government in Chandigarh on such terms and conditions as
it may, subject to any rules that may be made under this
Act, think fit to impose.
(2) The consideration money for any transfer under
sub-section (1) shall be paid to the Central Government in
such manner and in such instalments and at such rate of
interest as may be prescribed.
(3) Notwithstanding anything contained in any other
law for the time being in force, until the entire
consideration money together with interest or any other
amount, if any, due to the Central Government on account of
the transfer of any site or building, or both, under
sub-section (1) is paid, such site or building, or both, as
the case may be, shall continue to belong to the Central
Government.”
Sub-Section (1) of Section 3 itself authorises the
Central Government to sell, lease or otherwise transfer any
land or building belonging to it in Chandigarh on such terms
and conditions as it may think fit to impose. Conditions
for sale, lease and transfer can be regulated by rules which
may be made under the Act. Section 22 of the Act authorises
the Central Government to make rules for carrying out the
purposes of the Act which include:
“(a) the terms and conditions on which any land or
building may be transferred by the Central Government under
this Act.
(b) the manner in which consideration money for any
transfer may be paid;
(c) the rate of interest payable, and the procedure
for payment of instalments, interest, fees, rents or other
dues payable under this Act;
(d) the terms and conditions under which the transfer
of any right in any site or building may be permitted;
(e) erection of any building or the use of any site;
(f) levy of fees or taxes under section 7;
(g) the terms and conditions for the breach of which
any site or building may be resumed;
(h) the conditions with regard to the buildings to be
erected on sites transferred under this Act;
(i) the form of notice and the manner in which notices
may be served;
(j) the form and manner in which appeals and
applications under this Act may be filed and the court fees
leviable on such appeals and applications;
(k) the matters referred to in sub-section (2) of
section 5;
(l) any other matter which has to be or may be
prescribed.”
The combined reading of Sections 3 and 22 of the Act
would indicate the existence of an obligation on the Central
Government to make rules for the purposes of regulating the
terms and conditions relating to the transfer of property
including leasing it out. However, failure to make the
rules would not render the transfer of the property made
under the terms of the lease as illegal, void or
inoperative. Learned counsel appearing for the appellants,
after some arguments, also conceded the vesting of powers in
the respondents to sell, lease or otherwise transfer the
property in the Union Territory of Chandigarh subject to
such conditions as it thought fit. They did not insist that
the lease could not be made or the terms including the
enhancement of rent could not be imposed without framing the
rules. We are also of the opinion that power to transfer
the property including leasing it out is authorised by
Section 3 itself and its terms and conditions left to the
satisfaction of the Central Government. Though, not legally
obliged to make the rules, the Central Government was
obliged to take steps in making the rules regulating the
transfer of properties contemplating transfer of properties
by the modes envisaged under the Section, for allaying
apprehensions of the citizens regarding discrimination and
arbitrariness. It would have been in the interests of the
Central Government itself to frame the rules for infusing
confidence and rationality, reasonableness and fairness in
their actions. We trust and hope that the Central
Government would not loose any further time in making the
rules as mandated by the Section and embark upon enhancement
of rent, if deemed necessary, only under such rules, as and
when made for the purposes of carrying on the objects of the
Act to their logical conclusions. In the absence of the
rules, the action of the respondents regarding imposition of
terms and conditions of the lease including the enhancement
of rent is required to be fair and reasonable and not
actuated by considerations which could be termed as
arbitrary or discriminatory. The government cannot act like
a private individual in imposing the conditions solely with
the object of extracting profits from their lessees.
Governmental actions are required to be based on standards
which are not arbitrary or unauthorised. This Court in
Ramana Dayaram Shetty vs. The International Airport
Authority of India & Ors. (AIR 1979 1629=1979 (3) SCC 489)
while agreeing with the observations of Mathew,J. held:
“We agree with the observations of Mathew, J., in v.
Punnan Thomas v. State of Kerala AIR 1969 Ker 81 (FB) that:
“The Government, is not and should not be as free as an
individual in selecting the recipients for its largess.
Whatever its activity, the Government is still the
Government and will be subject to restraints, inherent in
its position in a democratic society. A democratic
Government cannot lay down arbitrary and capricious
standards for the choice of persons with whom alone it will
deal” The same point was made by this Court in Erusian
Equipment and Chemicals Ltd. Vs. State of West bengal
(1975) 2 SCR 674; (AIR 1975 SC 266) where the question was
whether black-listing of a person without giving him an
opportunity to be heard was bad? Ray, C.J., speaking on
behalf of himself and his colleagues on the Bench pointed
out that black-listing of a person not only affects his
reputation which is in Poundian terms as interest both of
personality and substance, but also denies him equality in
the matter of entering into contract with the Government and
it cannot, therefore, be supported without fair hearing. It
was argued for the Government that no person has a right to
enter into contractal relationship with the Government and
the Government, like any other private individual, has the
absolute right to enter into contract with any one it
pleases. But the court, speaking through the learned Chief
Justice, responded that the Government is not like a private
individual who can pick and choose the person with whom it
will deal, but the Government is still a Government when it
enters into contract or when it is administering largess and
it cannot, without adequate reason, exclude any person from
dealing with it or take away largess arbitrarily. The
learned Chief Justice said that when the Government is
trading with the public, “the democratic form of Government
demands equality and absence of arbitrariness….The
activities of the Government have a public element and,
therefore, there should be fairness and equality. The State
need not enter into any contract with anyone, but if it does
so, it must do so fairly without discrimination and without
unfair procedure.” This proposition would hold good in all
cases of dealing by the Government with the public, where
the interest sought to be protected is a privilege. It
must, therefore, be taken to be the law that where the
Government is dealing with the public, whether by way of
giving jobs or entering into contracts or issuing quotas or
licences or granting other forms of largess, the Government
cannot act arbitrarily at its sweet will and, like a private
individual, deal with any person it pleases, but its action
must be in conformity with standard or norm which is not
arbitrary, irrational or irrelevant. The power or
discretion of the Government in the matter of grant of
largess including award of jobs, contracts quotas, licences
etc., must be confined and structured by rational, relevant
and non- discriminatory standard or norm and if the
government departs from such standard or norm in any
particular case or cases, the action of the Government would
be liable to be struck down, unless it can be shown by the
Government that the departure was not arbitrary, but was
based on some valid principle which in itself was not
irrational, unreasonable or discriminatory.”
Even the administrative orders and not quasi judicial
are required to be made in a manner consonance with the
rules of natural justice, when they affect the rights of the
citizens to the property or the attributes of the property.
While exercising the powers of judicial review the Court can
look into the reasons given by the Government in support of
its action but cannot substitute its own reasons. The Court
can strike down an executive order, if it finds the reasons
assigned were irrelevant and extraneous. The courts are
more concerned with the decision making process than the
decision itself. This Court in Kumari Shrilekhs Vidyarthi &
Ors. Vs. State of U.P. & Ors. [1991 (1) SCC 212] held
that every State action, in order to survive, must not be
susceptible to the vice of arbitrariness which is the crux
of Article 14 and basic to the rules of law, the system
which governs us, arbitrariness being the negation of the
rule of law. Non-arbitrariness, being a necessary
concomitant of the rule of law, it is imperative that all
actions of every public functionary in whatever sphere must
be guided by reason and not humour, whim, caprice or
personal predilections of the persons entrusted with the
task on behalf of the State and exercise of all powers must
be for public good instead of being an abuse of the power.
Action of renewability should be gauged not on the nature of
function but public nature of the body exercising that
function and such action shall be open to judicial review
even if it pertains to contractual field. The State action
which is not informed by reason cannot be protected as it
would be easy for the citizens to question such an action
being arbitrary. In the instant case, the respondent
Administration relied upon Memo No.317 dated 16.3.1992 of
the Executive Engineer CP Division No.3 Chandigarh ,
Government of Punjab circular dated 15th May, 1996 and
affidavit of Shri Krishanjeet Singh, Executive Engineer, CP
Division No.5, Union Territory, Chandigarh filed in Civil
Writ No.10521/96 to justify their action of enhancement of
rent being fair and reasonable. Memo dated 16.3.1992
referred to earlier Memo No.122 dated 3.2.87 and the meeting
held in the office of the Chief Engineer, U.T. Chandigarh
on 4.3.1992. It was mentioned in the memo that the rates of
rent earlier recommended had become obsolete and that the
accommodation was not available to the Government on hire
basis at those rates keeping in view the plinth area which
had been revised for the purposes of calculating the rent of
private buildings hired by the Government with effect from
1.3.1992. It was further stated in the memo that:
“The land rates already conveyed in Memo No.122 dated
3.2.87 shall be applicable,, but the rental value will be
calculated @ 9% per annum.
S.No. Description Rates proposed for adoption Remarks
1 . Ground Floor Rs.2450.00 Sqa. The plaint area rates. 2
. First Floor Rs.2250.00 P.So
3 . Second floor and so on Rs.2250.00 P.So
4 . Extra for terrace tiles/terrace flooring in rooms
verandha except toilets Rs. 65.00
5 . Extra for glazed/spartik or equivalent tiles in
flooring and dado in toilets and kitchen Rs. 350.00
6 . Extra for marble flooring Rs. 900.00
7 . Extra for teek wood joinery only alongwith brass
fittings Rs. 440.00 For door and window only. 8 .
Concrete paving beyond plint area of the building Rs.
100.00
9 . Land scaping of grassed Rs.1000.00 Kanal of
grassed area.
Note:
1. The amount so evolved for the building portion may
be reduced by 20% and thereafter rental volume may be
calculated @ 9% PA. 2. Since the rates have been made
applicable w.e.f. 1.3.1992 depreciation @ 1% per year of
the age of the building should be taken (only for building
portion except cost of land).
II. Cost of Land a) Upto Ist Kanal (upto Rs.453.00
(Four hundred 500 sq.yards) and fifty three only) P.Sq.
yds.)
b) II Kanal (501 to 1000 sq.yds) Rs.356.00 (Rupees
three hundred and fifty six only per sq.yds.
c) For remaining area (above Rs.227.00 (Rupees two
1000 sq.yds) hundred and twenty seven only per Sq.Yds.)
d) Extra for preferential plots 10%
III) Rental value for cost of land so evolved will be
calculated @ 9% per annum.
B) For commercial purposes rent so evolved on the
above rates shall be increased five times.” (underlying
supplied)
Government of Punjab circular dated 15th May, 1996 was
also on the subject of periodical revision of rent of
private buildings. While justifying the action of
enhancement of rent and showing it to be reasonably and
fairly fixed, Shri Krishanjeet Singh in his affidavit
(Annexure P-5) had stated: “The assessment at monthly rent
of Rs.14,000/- in respect of the aforesaid SCO was assessed
as follows:
Covered area of SCO is 2066.62 sq.ft. which comes to
192.06 sq.meters. The cost of construction per Sq.Meter at
ground floor in the year 1992 was Rs.2450/- for such
buildings. This figure of Rs.2450/- is based on actual cost
of construction of similar other type of buildings in
Chandigarh. Thus, the total cost of construction of ground
floor comes to Rs.4,70,547/- (192.06 sq.mtrs. x 2450/-).
SCO 51 being an old construction, the total cost of
construction was reduced by 20%. After that 1% per annum
depreciation was also permitted for 29 years as per the
norms. The details are given hereunder:
Total cost of construction Of ground floor
Rs.470547.00
2450 x 192.06 less 20% Rs. 94109.00 ____________
Rs.376438.00
Less 1% depreciation per Annum for 29 years
Rs.109167.00 ____________ Rs.267271.00
3. That for the determination of the annual rent
value, 9% of net cost of construction is to be taken which
comes to Rs.24054/- (9% of Rs.267271/- = Rs.24054/-). This
figure of Rs.24054/- represents rental value per annum, on
the total cost of construction which may be marked as “A”.
For calculating the cost of land on which aforesaid SCO has
been built which has an area of 2066 sq.ft. which is equal
to 229.62 sq.yards. As per letter Annexure R/A Rs.453/- is
the cost of per sq.yard which amounts to total cost of land
as Rs.104018/-. This figure has been arrived at by
multiplying 229.62 sq. yards by Rs.453/- (229.62 sq.yards x
Rs.453/-). For determing the annual rental value again we
have to deduct 9% of cost of land i.e. Rs.104018/- which is
rental value per annual as Rs.9362/-. This may be marked as
“B”. Thus the annual rental value of the aforesaid SCO
comes to Rs.33416/- by adding “A” and “B”. For determining
the rental value per month Rs.33416/- is to be divided by 12
and we would get the rent per month which is equal to
Rs.2785/-. The aforesaid SCO being commercial this is to be
multiplied by 5 times which comes to Rs.13925/- say
Rs.14000/-.”
In the written statement filed in the petitions of the
appellants, the respondent had stated:
“13. That the admitted portion of the para 13 of the
writ petition calls for no comments. It is submitted that
Competent Authority granted approval vide Annexure R/2 for
charging the rent w.e.f. 1.3.1992 on the basis of the
reassessment of rent made by the Engineering Department,
Chandigarh Administration. During the year 1970 Govt. of
India through Finance Secretary Memo dated 25.5.1970
informed that the market rent or the rent calculated under
FR 45 with Departmental charges, whichever is higher is
recoverable in respect of Govt. accommodation used for
commercial purpose. The Finance Secretary vide letter dated
12.6.1975 approved the charging of rent at the rate of
Rs.1.10 per sq.foot in respect of shops/booths in Sector
17-E. Accordingly the lessees in Sector 17 were informed
that from 1.3.1982 rent of Rs.2671/- per month for a shop
and Rs.1090/- for a booth will be charged. Three writ
petitions as already submitted (CWP No.3581, 3582, 3583 of
1983) were filed. This Hon’ble High Court disposed of these
writ petitions vide judgment annexed with this writ petition
as Annexure P/3. A perusal of this judgment shows that the
approval was granted for charging of the rent in respect of
SCO/Booths in Sector 17-E, Chandigarh w.e.f. 1.3.92 at the
rate as contained in this letter. Thus, the figure of
Rs.14000/- per month is based on the re-assessment of rent
by the Engineering Department of Chandigarh Administration.
The petitioner is, thus, liable to pay this market rent.
14. That in reply to the averments as contained in
para 14 of the writ petition it is submitted that the shops
mentioned by the petitioner in this para are not rented out
by the Chandigarh Administration to the various parties.
The said shops are owned by the private individuals and are
further rented out to the parties mentioned in the para.
But the present shop in occupation of the petitioner is
rented by the Government. The market rent calculated @
Rs.14,000/- per month in respect of ground floor of the SCO
in question and in occupation of the petitioner is based on
the assessment made by the Engineering Department of
Chandigarh Administration and the same is justified
reasonable, constitutional and as such deserves to be
upheld.”
The High Court examined the matter in depth and
rightly concluded that the procedure adopted and made the
basis for enhancing the rent could not be termed to be
either arbitrary, discriminatory or unreasonable. We agree
with the conclusions arrived at by the High Court and find
no infirmity in the action of the respondents in raising the
rate of rent on the basis of the grounds noticed by us
hereinabove. Such an action is stated to have been
uniformly applied with respect to all the shopkeepers
similarly situated and placed. Mere inaction in respect of
certain tenants could not be made the basis for setting
aside the action initiated against the appellants and
others. The respondents assured and the High Court rightly
issued appropriate directions for initiating similar actions
against those who are left out. Dealing with such a
situation this Court in Chandigarh Administration & Anr.
Vs. Jagjit Singh & Anr. [1995 (1) SCC 745]has held:
“Generally speaking, the mere fact that the
respondent-authority has passed a particular order in the
case of another person similarly situated can never be the
ground for issuing a writ in favour of the petitioner on the
plea of discrimination. The order in favour of the other
person might be legal and valid or it might not be. That
has to be investigated first before it can be directed to be
followed in the case of the petitioner. If the order in
favour of the other person is found to be contrary to law or
not warranted in the facts and circumstances of his case, it
is obvious that such illegal or unwarranted order cannot be
made the basis of issuing a writ compelling the
respondent-authority to repeat the illegality or to pass
another unwarranted order. The extraordinary and
discretionary power of the High Court cannot be exercised
for such a purpose. Merely because the respondent-authority
has passed one illegal/unwarranted order, it does not
entitle the High Court to compel the authority to repeat
that illegality over again and again. The illegal/
unwarranted action must be corrected, if it can be done
according to law – indeed, wherever it is possible, the
Court should direct the appropriate authority to correct
such wrong orders in accordance with law – but even if it
cannot be corrected, it is difficult to see how it can be
made a basis for its repetition. By refusing to direct the
respondent-authority to repeat the illegality, the Court is
not condoning the earlier illegal act/order nor can such
illegal order constitute the basis for a legitimate
complaint of discrimination. Giving effect to such pleas
would be prejudicial to the interests of law and will do
incalculable mischief to public interest. It will be a
negation of law and the rule of law. Of course, if in case
the order in favour of the other person is found to be a
lawful and justified one it can be followed and a similar
relief can be given to the petitioner if it is found that
the petitioners’ case is similar to the other persons’ case.
But then why examine another person’s case in his absence
rather than examining the case of the petitioner who is
present before the Court and seeking the relief. Is it not
more appropriate and convenient to examine the entitlement
of the petitioner before the Court to the relief asked for
in the facts and circumstances of his case than to enquire
into the correctness of the order made or action taken in
another person’s case, which other person is not before the
case nor is his case. In our considered opinion, such a
course -barring exceptional situations – would neither by
advisable nor desirable. In other words, the High Court
cannot ignore the law and the well-accepted norms governing
the writ jurisdiction and say that because in one case a
particular order has been passed or a particular action has
been taken, the same must be repeated irrespective of the
fact whether such an order or action is contrary to law or
otherwise. Each case must be decided on its own merits,
factual and legal, in accordance with relevant legal
principles. The orders and actions of the authorities
cannot be equated to the judgments of the Supreme Court and
High Courts nor can they be elevated to the level of the
precedents, as understood in the judicial world.”
It is not the case of the appellants that the favour
done to those whose rent has not been enhanced is legal or
valid. Such an omission is also not referable to any lawful
action of the respondents. The question of discrimination
would arise only if it is found that the order in favour of
the left over was legal and valid and that the case of the
writ petitioners was similar in material respects to the
case of such persons. No such allegation has been made or
arguments addressed. There is, therefore, no basis for the
appellants to urge the violation of Article 14 alleging
discrimination against them. Regarding awarding of the
interest by the High Court for the period of stay it is
argued that as in Sahib Singh’s case no such direction was
issued, the appellants could not be burdened with the
liability of paying the interest and that at the rate of 18%
per annum was excessive and exorbitant. It is settled
principle of law that as and when a party applies and
obtains a stay from the Court of law, it is always at the
risk and responsibility of the party applying. Mere passing
of an order of stay cannot be presumed to be the conferment
of any additional right upon the litigating party. This
Court in Shree Chamundi Mopeds Ltd. Vs. Church of South
India Trust Assn. [1992(3) SCC 1] held that the said
portion of order by the court mean only that such order
would not be operative from the date of its passing. The
order would not mean that the order stayed had been wiped
out from existence. The order of stay granted pending
disposal of a case comes to an end with the dismissal of
substantive proceeding and it is the duty of the Court in
such cases to put the parties in the same position they
would have been but for the interim orders of the Court.
Again in Kanoria Chemicals and Industries Ltd. & Ors. Vs.
U.P. State Electricity Board & Ors. [1997 (5) SCC 772] the
Court held that the grant of stay had not the effect of
relieving the litigants of their obligation to pay late
payment with interest on the amount withheld by them when
the writ petition was dismissed ultimately. Holding
otherwise would be against public policy and the interests
of justice. In case law Kashyap Zip Industries vs. Union
of India [1993 (64) ELT 161], interest was awarded to
Revenue for the duration of stay under court’s order, since
the petitioners therein were found to have the benefit of
keeping back the payment of duty under orders of the Court.
The High Court was, therefore, not wrong in directing the
payment of interest on the amount of arrears of rent for the
period when the stay order was obtained till the period the
writ petitions were dismissed. We, however, feel that
awarding of interest @ 18% per annum from the aforesaid
period was on the excessive side. The respondent-authority
could not be equated with private commercial institutions
and conferred with an amount of compensation in the form of
interest which, in the judicial parlance, may amount to
penalty, despite the fact that the persons found to have
jeopardised the process of law were rightly held liable to
compensate the respondent- authority by way of interest. In
our opinion 15% per annum interest for the aforesaid period
would have been just and proper. We, however, agree with
the findings of the High Court that the respondents are free
to charge appropriate interest on the amount of arrears of
rent between 1.3.1992 to the date when the stay orders were
passed by the High Court. We are sure that in determining
such rate of interest the respondent-authority would act
fairly and justly. In C.A. No._______of 1999 (@ SLP (C)
Nos. 17894-95) filed by M/s.New Rajan Watch Company it was
admitted that the lease in their case was executed on 9th
April, 1990 on a monthly rent of Rs.1090/- to be paid in
advance by 10th day of every month for which it fell due.
One of the terms of the lease deed was:
“The lease shall be for period of three years from the
date of the grant of the lease and shall be terminable at
any time by the lessor by giving one month advance notice in
writing to the lessee and it shall be terminable immediately
without notice by the lessor under clause 9 hereof. The
lease hereby granted shall be renewable once for another
term of three years on the rent as determined by the
government.”
The appellants in these appeals have urged that the
respondents had no jurisdiction to enhance the rent during
the subsistence of the lease deed for a period of three
years from the date of its execution. There appears to be
substance in the submission which has not been taken note of
by the High Court. These appellants, however, not justified
to urge that even for the period of next three years they
were entitled to the renewal of lease deed on the same rent
or the rent enhanced at the rate of 20% at the most.
Condition No.4 reproduced hereinabove clearly and
unambiguously authorised the respondent-authority to renew
the lease for another term of three years on the rent as may
be determined by the Government. It is, therefore, evident
that for the first period of three years commencing from 9th
April, 1990 the respondent-authority was not justified in
enhancing the rent of the shop leased out to M/s.New Rajan
Watch Company. The enhancement of rent shall, however,
deemed to be legal, proper and valid with effect from 9th
April, 1993. In the circumstances, the appeals are disposed
of by upholding the judgments and orders impugned except to
the extent indicated hereinabove. The impugned judgments
and orders shall stand modified to the extent that instead
of paying 18% interest for the period of stay the appellants
shall be liable to pay the interest at the rate of 15% per
annum. In case of M/s.New Rajan Watch Company the enhanced
rent shall be deemed to be effective with effect from 9th
April, 1993 and the appellants in those cases be held
entitled to the payment of contractual rate of rent only for
the period of three years. It is made clear that the rent
of the appellants and other lessees similarly situated and
placed shall not be further enhanced without the framing of
rules as mandated by Section 3 read with Section 22 of the
Act. Costs made easy.