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Judgment
R. Jayasimha Babu, J.—We do not find any error in the order of learned single Judge who dismissed the Appellants'' writ petition on the
ground that they derive no right from the Government Order in G.O. No. 285, Municipal Administration and Water Supply Development, dated
29.4.1985, to claim a right to remain in the Municipal premises in perpetuating, subject to their paying a higher rent, higher by 15% over the pre-
existing levels, once in three years.
G.O.Ms. No. 285 was issued after considering the petitions from stall-holders in various Municipalities. The Government decided that those
stall-holders would be allowed to continue in the premises for one more year from 1.4.1985 to 31.3.1986, subject to their agreeing to pay 15%
increase in rent. The Government further directed that, ""the Municipal Councils resort to public auction of the lease once in every three years and
that the system of public auction of the municipal properties mentioned above shall be implemented from 1.4.86. A successful bidder shall not be
allowed to take part in the public auction, at the most, for more than two times"".
To the said Government Order, was annexed a notification issued in exercise of the Government''s power u/s 303(1) and Section 303(2)(d) of
the Tamil Nadu District Municipalities Act, 1920, by which, the rules relating to receipts and expenditure of the Municipal Councils were amended.
By that notification issued in exercise of Government''s power under Sections 303(1) and 303(2)(d) of the Tamil Nadu District Municipalities Act,
1920, in Rule 12(1) Sub-rule (3) for clauses(b) and(c) of the Rules relating to the Receipts and Expenditure of the Municipal Councils published
with the local self Government Notification No. 618, dated the 1st May, 1933, at pages 215 to 218 of Part-IA of the Fort St. George Gazette,
dated the 13th June, 1933, as subsequently amended, the clauses set out in the notification were substituted. The clauses so substituted read thus:
(b) The lease of vacant lands and buildings, including bunks and stalls etc. shall be granted only in public auction once in every three years in the
first instance, commencing from 1.4.1986. The leaseholder shall pay the lease amount for the first year at the rate of highest bid in the public
auction. The lease amount for the second year shall be at an increased rate at 15% (fifteen per cent) over and above the lease amount for the year,
in addition to the lease amount for the first year. The lease amount for the third year shall be at an increased rate at 15%(fifteen per cent) over and
above the lease amount for the second year, in addition to the lease amount for the second year.
Provided that the existing leases in respect of the properties mentioned above shall be extended for the year 1985-86 and the lease amount shall
be collected for 1985-86 at an increased rate at 15% more than the lease amount for 1984-85, in addition to the lease amount for that year. The
lease amount for twelve months from 1.4.1985 to 31-3-1986 shall be 15% (fifteen per cent) over and above the lease amount for the year 1984-
85.
Provided further that the sub-rule shall not apply to the Co-operative Organisations, Government Departments and Government undertakings,
which if they so desire, can, without participating in the public auction taken on lease the lands and buildings, including bunks and stalls etc., at the
lease rates fixed by the Public Works Department.
(C). A successful bidder in the public auction of the properties mentioned in the preceding sub-clause, shall at the most, participate in the public
auction not more than two times. Application for renewal of lease should reach the Executive Authority 90 (ninety) days prior to the expiry of the
lease period.
It is thus clear that what the Government Order contemplated was given statutory basis, by amending the statutory rules. It is clear that the
statutory rules now hold the field, and the rules require that the auction be held in the public once in three years and that a person who had bid
twice successfully, is not to be allowed to take part in the further auctions. The rule does not recognise any right in any person who has been
successful at one auction to claim a right to remain in the premises for ever by merely agreeing to pay 15% more than the rate at which the lease
rental was being paid for the earlier three year period.
Learned Counsel for the Appellants also invited our attention to an order made by the Apex Court on 23.4.1991 in Civil Appeal Nos. 1991 to
1994 of 1991 with W.P. No. 400 of 1986. The Apex Court therein referred to the Government Order of 29th April 1985. The Apex Court
noticed the fact that the Petitioners before the Court were in possession of the Municipal properties as tenants for some time and instead of
directing the auction being held on 1.1.1986, the court directed the Municipality to remove 15% increase in the rent once in a block period of three
years commencing from 1.4.1988. The court did not direct that in future also, the block period should continue without limitation and that these
tenants are to be regarded as permanent tenants of the Municipal properties, merely giving 15% increase over the previous rate of rental. No such
issue was raised before the Court, nor, was any such decision rendered. The Court did not strike down the relevant statutory rules. The rule
certainly binds insofar as the Petitioners before the Supreme Court were concerned in that case. They can claim the benefit of the decision of the
Supreme Court to the extent specifically provided in that decision.
The Appellants cannot derive any assistance from the judgment of the Supreme Court, which did not confer even on the Appellants therein, the
status of permanent tenants contrary to the statutory rules. The Government Order on which the Appellants rely certainly does not confer any such
right. The Government Order can no longer be relied upon by anyone after the rules came to be amended. What holds the field is the rule and not
the Government Order.
We find no substance in the appeals and the same are dismissed. No costs. Consequently, C.M.P. Nos. 16265 and 16266 of 1988 are also
dismissed. VCJ/CH/VCS.