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Judgment
R. Banumathi, J.—By consent of both sides, the Appeals themselves were taken up for final disposal. Since both the appeals are arising out of the common order and the point for consideration are one and the same, both the Appeals were taken up together and disposed of by this Common Judgment. For convenience, the parties are referred as per their array in W.A.No. 796 of 2010.
Whether the 2nd Respondent Municipality is to be injuncted from interfering with the running of business by the Appellant and whether the impugned proceedings of the Commissioner in Na.Ka.No. 215/09/A3 dated 5.2.2010 and communication of the Station Officer, Fire Services and Rescue Department dated 02.7.2010 are liable to be quashed are the points falling for consideration in these Writ Appeals, which arise out of order of the learned single Judge dismissing the Writ Petitions.
Briefly stated the case of Appellant is as follows: In Bodinaickanur Municipality bus stand, an extent of 6252.5 sq.ft. consisting of a hotel and a dormitory room bearing Shop Nos.3 and 4 were leased in favour of Venkatachalam Reddiar from 1965 and thereafter the property was leased to Appellant''s father late Nammalwar from the year 1974 and his father died on 02.1.1996. After his demise on application to the 2nd Respondent Municipality, by the proceedings dated 14.3.1997 of the 2nd Respondent - Municipality, the lease was transferred in favour of the Appellant and since then the Appellant is running a vegetarian restaurant under the name and style of Sri Pungaj Bhavan. According to the Appellant, he is in possession and enjoyment of the building with the boundaries measuring 6252.5 sq.ft and he is regularly paying the rent to the above premises and there are no arrears of rent. By the proceedings of the 2nd Respondent Municipality in Na.Ka.No. 7313/2005/A3 dated 8.3.2006, the lease was renewed in favour of the Appellant from 01.4.2006 to 31.3.2009. On 12.1.2009, the Appellant applied to the Municipality to renew his lease for a further period of three years from 1.4.2009 to 31.3.2012 and the Appellant has also paid a sum for Rs.2,000/- as fee towards renewal of lease. By the proceedings in Na.Ka.No. 215/2009/A3 dated 3.7.2009, the Appellant was directed to pay a sum of Rs.3,404/- to renew his application. But by the impugned proceedings, dated 5.2.2010, the Appellant was directed to vacate the premises within thirty days which was challenged in W.P.No. 2857/2010.
After filing of the W.P.No. 2857/2010, the Fire Service, Bodinaickkanur has issued notice in X/K/No. 2041/2010-1 dated 6.4.2010 under which the Fire Service directed the Appellant to instal requisite equipments to extinguish fire in case of emergency for obtaining no objection certificate. Challenging the said communication of Fire service dated 6.4.2000 the Appellant has filed W.P.No. 9063 of 2010 contending that the impugned communication has been issued to the Appellant without considering the existence of mechanical devices and equipments to extinguish the fire inside the hotel premises and the impugned order is vitiated by non-application of mind.
The 2nd Respondent Municipality filed counter stating that Appellant has taken the lease of shop Nos.3 and 4 measuring 1750 sq.ft., and he was running a hotel. Under the guise of lease, the Appellant has encroached and is in occupation of 6250 sq.ft. i.e., twice that of the leased extent of 1750 sq.ft., The request of the Appellant seeking for extension of lease for a period of three years was placed before the Council on 15.9.2009 and after deliberation, the Council decided to cancel the lease and utilise the same for public welfare to provide sufficient toilet and urinal in the Bodi bus stand, for which the Appellant cannot raise any objection. In its counter, the Municipality has also referred to the civil suit filed by the Appellant in O.S.No. 155 of 2009 for permanent injunction restraining the Municipality from interfering with the possession of the Appellant of the said extent of 6252.2 sq.ft.
After referring to number of decisions relied upon by the Appellant as to the power of judicial review in the sphere of contractual relations by the State and its instrumentality, the learned single Judge has held that the Appellant has not shown sufficient cause or reason to grant the relief. The learned single judge held that the Appellant 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 and the learned single Judge observed that when the civil suit is pending it would not be appropriate for the Court to decide the issues arising for consideration in the Civil Suit.
Case of the Appellant is that an extent of 6252.5 sq.ft. was leased out to him. According to him, it was originally leased in favour of Venkatachalam Reddiar in 1965 and thereafter the property was leased to his father Nammalwar from the year 1974 and after the death of the Appellant''s father, by the proceedings of the 2nd respondent Municipality in Na.Ka.NO.1649/96/A3 dated 14.3.1997, the lease was transferred in favour of the Appellant to the same extent as that of the earlier lessees.
Case of 2nd Respondent Municipality is that licence was granted to the Appellant for shop Nos.3 and 4 to an extent of 1750 sq.ft. Further case of 2nd Respondent Municipality is that licence was granted to the Appellant only to an extent of 1750 sq.ft. whereas the Appellant has encroached and is in occupation of 6252.5 sq.ft. The resolution of 2nd Respondent Municipality Council dated 28.01.2010 also reiterates that an extent of 1750 sq.ft. was leased out to the Appellant and he is in encroachment of a larger extent of 6252.5 sq.ft. By the resolution dated 28.01.2010, licence granted to the Appellant was cancelled on the ground that it is required for larger public interest of expansion of bus stand and also on the ground that the Appellant has encroached a larger extent of 6252.5 sq.ft. twice that of the leased extent of 1750 sq.ft.
In view of the stand taken by the parties, on our direction, 2nd Respondent Municipality has produced the Minutes containing resolutions and also relevant records from which a xerox copy of the relevant documents were produced. We have also perused the original registers. By G.O.Ms.No. 147 Municipal Administration and Water Supply Department dated 30.12.2000, the Government directed that the market rental value has to be fixed by calculating the rent on square feet basis. Pursuant to the said Government Order, on comparison of the rental value, the market rental value was fixed for Shop Nos.3 and 4. In the said calculation sheet for determining the market rental value as per G.O.Ms.No. 147 MA & WS Department dated 30.12.2000 and while fixing the market rental value at Rs.3/- per sq.ft., it was noted as under:
The Restaurant, the lodge in the bus stand and the out side shop Nos.3 and 4 are of an extent of 1750 sq.ft...The rate of rent comes to Rs.3/- per sq. ft.
In the agreement executed by the Appellant, it is stated that the licence was renewed in respect of Shop Nos.3 and 4 from 01.04.2003. When the Appellant was granted licence only for Shop Nos.3 and 4 - an extent of 1750 sq.ft., the Appellant cannot contend that he was granted licence for an extent of 6252.5 sq.ft.
Even though the Appellant contends that an extent of 6252.5 sq. ft was leased out to the earlier lessees and also to the Appellant, the Appellant has not produced any document to show that the extent of 6252.5 sq.ft was leased out to him. During the course of argument, the Appellant has produced copy of the lease deed dated 1.4.1965 in favour of one Venkatachalam Reddiar, wherein an extent of 6726 sq.ft was allegedly leased out to Venkatachalam Reddiar. Copy of the lease deed produced by the Appellant was totally unreadable. That apart, there is no link to hold that the same extent of 6726 sq.ft. continued to be leased to the Appellant''s father as well as to the Appellant. It is also not known as to how the said 6726 sq.ft. had become 6252.5 sq.ft.
As per the resolutions/records of 2nd Respondent Municipality, the Appellant was granted licence only to an extent of 1750 sq.ft. While so, the Appellant has filed the Civil Suit in O.S.No. 155 of 2009 for Permanent Injunction restraining the 2nd Respondent Municipality from interfering with his possession and enjoyment of 6252.5 sq.ft. on the premise that the licence was granted to him to the said extent of 6252.5 sq.ft. The resolutions/records produced by the 2nd Respondent Municipality assert that the licence was granted to the Appellant only in respect of Shop Nos. 3 and 4 - 1750 sq.ft. The Civil Suit filed by the Appellant proceeds on footing as if the licence was granted to him to an extent of 6252.5 sq.ft. We do not wish to say on the very maintainability of the suit. Ofcourse, it is for the 2nd Respondent Municipality to produce the documents in the Civil Suit.
Case of Appellant is that an extent of 6252.5 sq.ft. bearing Shop Nos.3 and 4 was leased infavour of Venkatachalam Reddiar from 1965 and thereafter, the property was leased to his father Nammalwar from the year 1974 and his father died on 02.01.1996. Further case of Appellant is that after the demise of his father, on application to the 2nd Respondent Municipality, by the Proceedings dated 14.3.1997 in Na.Ka.No. 1649/96/A3, the lease was transferred infavour of the Appellant and since then the Appellant has been running a vegetarian restaurant. The learned Counsel for Appellant contended that when the Appellant has been running the vegetarian restaurant for more than three decades, his licence cannot be terminated. It was further argued that the licence granted to others was extended and only for the Appellant, the licence came to be terminated which is arbitrary and illegal.
The 2nd Respondent Municipality has got absolute power over the properties. When the 2nd Respondent Municipality had passed a resolution that the property is required for public purpose taking into consideration the interest of the public, the Appellant cannot contend to continue in the same place. Once the licence is terminated and the occupation is held to be unauthorised, the Appellant has no right to continue in occupation of the shops. In W.A.No. 1150 of 1997, licence was granted to various allottees by the Corporation of Madras, the occupants have committed default in payment of rent and those licensees were issued eviction notice. Eviction notice was issued on the ground that the occupants have committed default in payment of rent and also on the ground of expansion of Broadway Bus Terminal to ease the traffic congestion in the George Town area and in particular Broadway in and around the High Court. Holding that expansion of bus terminal is a public requirement, the First Bench of Madras High Court held that "...The mandamus as prayed for cannot be issued as the petitioners have no right to insist or to carry on trade at the particular location or place of shop and there is no obligation on the part of the respondents to allow the traders to continue the trade in the stalls without any time limit. No mandamus could be issued to prevent the authority from exercising the statutory power conferred on them and more so when such exercise are found to be bonafide and it is in the larger interest of the public". After termination of licence, the Municipality is entitled to deal with the property as it likes or chooses. After termination, the licensee has no semblance of right and his occupation becomes unauthorised and cannot claim right to continue the business carried on by it.
Learned Counsel for Appellant contended that termination of licence is arbitrary and on non-existing grounds. It was further argued that 35 other persons licence was extended and only for the Appellant, the licence was not extended and the act of the 2nd Respondent Municipality is arbitrary. As pointed out earlier, the resolution dated 28.01.2010 clearly states that expansion of bus stand is contemplated at the estimate of Rs.50,00,000/- and the area is required for expansion of bus stand. By perusal of the plan produced before us shows that Shop Nos. 3 and 4 and the encroached area are on the northwestern side of the bus stand. In a portion, bus shelter work is under progress and the remaining bus shelter is to be carried out in the portion in which the Appellant was granted licence. That apart, the Municipality has also decided to provide sufficient toilet and it has decided to construct free Urinal on the same line as constructed by Trichy and Salem Municipal Corporations. The place encroached by the Appellant is required for construction of public free Urinal and in the welfare of the general public interest. Sufficient materials have been placed before the Court by the 2nd Respondent Municipality to substantiate its decision. The materials set out in the counter-affidavit and also the resolution and documents produced by the Municipal Council would amply strengthen the stand taken by the 2nd Respondent. Expansion of the bus stand and the proposal for construction of free Urinal is a necessity and bonafide public requirement. Public interest will prevail upon the individual interest. More so, when the Appellant has encroached twice the extent of the lease. When the area is required for construction of bus shelter and also construction of free Urinal, the Appellant cannot challenge the resolution cancelling the licence. The prayer sought for by the Appellant not to interfere with the carrying on trade cannot be granted.
Learned Counsel for Appellant mainly contended that even in the contractual sphere the action of the State/instrumentality or State has duty to act fairly, justly and reasonably and 2nd Respondent Municipality arbitrarily refused to extend the licence of the Appellant alone and therefore, the impugned order is vitiated by arbitrariness. In support of his contention, the learned Counsel for Appellant placed reliance upon Kumari Shrilekha Vidyarthi and Others Vs. State of U.P. and Others, , wherein the Supreme Court has held that the breach of contract involves breach of statutory obligation when the order complained of was made in exercise of statutory power by a statutory authority, though cause of action arises out of or pertains to contract, brings within the sphere of public law. The freedom of the Government to enter into business with anybody it likes is subject to the condition of reasonableness and fair play as well as public interest. The learned Counsel for Appellant has also placed reliance upon Ramaraju Vs. The State of Tamil Nadu and Others, ; Mahabir Auto Stores and others Vs. Indian Oil Corporation and others, ; Food Corporation of India Vs. M/s. Kamdhenu Cattle Feed Industries, ; Sterling Computers Limited and Others Vs. M and N Publications Limited and Others, ; LIC of India and Another Vs. Consumer Education and Research center and Others, ; Dwarkadas Marfatia and Sons Vs. Board of Trustees of the Port of Bombay, ; U.P Awas Evam Vikas Parishad Vs. Gyan Devi (Dead) by L.Rs. and another, etc. etc., ; M.P. Oil Extraction and Another Vs. State of M.P. and Others, ; State of Assam and Others Vs. Banshidhar Shewbhagavan and Company, ; Jagdish Prasad Tiwari Vs. Ramdhani Mishra, ; P.J. Irani Vs. The State of Madras, and State of Bombay Vs. K.P. Krishnan and Others,
The question in exercise of judicial review and how far the Court appreciate the facts was considered in State of U.P. and Another Vs. Johri Mal, wherein the Supreme Court held that if a decision is challenged as irrational, it would be well-nigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case.
As discussed earlier, case of 2nd Respondent Municipality is that the area is required for expansion of the bus stand and for construction of free Urinal is amply supported by the documents, resolutions/records produced by the 2ndrRespondent Municipality. When the Appellant has encroached large portion and when the 2nd Respondent Municipality requires it for larger public interest, we do not find any arbitrariness warranting interference, exercising jurisdiction under Article 226 of Constitution of India. We do not find any reason to interfere with the order of the learned single Judge and this Writ Appeal is liable to be dismissed.
In the result, both the Writ Appeals are dismissed. Consequently, connected M.Ps. are also dismissed. No costs.