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Judgment
Dr. G.Jayachandran, J
Heard the learned counsel for the petitioner and the learned counsel for the respondents.
The petitioner herein is the successful bidder for the shop No.9 phase-II, Pathuvanchery, Madambakkam village, which is under the control of the third respondent. She has quoted Rs.7900/- rent per month and had taken possession of the shop as per the order dated 25.07.2016. The term of lease was three years and it is due to expire on 24.07.2019. Meanwhile, the third respondent has caused notice demanding Rs.64,748/- as rental arrears. According to the petitioner the said demand of Rs.64,748/- is erroneous and contrary to the lease agreement. The third respondent in his counter has submitted a Memo of Calculation has below:-
Sr. No.
Period
Petitioner paid amount
Basic, Rent, VAT, GST and Hike rent
Outstanding Amount
1.
August 2016 to Novermber 2016
Rs.36,182/- (including VAT 14.05%)
No GST
Nil
2.
December 2016 to March 2016
Rs.36.182/- (including VAT 14.05%)
No GST
Nil
3.
April 2017 to July 2017
Rs.36.182/- (including VAT 14.05%)
No GST
Nil
4.
August 2017 to March 2019
Rs.1,58,000/- (Only Base Rent, without VAT or GST) for 20 months
(A) 5% Hike Rent with 18% GST from August 2017 to March 2018 (8 months)
(B) 5% Hike Rent with 18% GST from August 2018 to July 2018 (8 months)
(C) 5% Hike Rent with 18% GST from August 2018 to March 2019 (8 months)
Base Rent:7,900 + 395 (5% hike) 8295X8: Rs.66,360/-
GST: Rs.11,945/-
Base Rent:7,900 + 395 (5% hike) 8295X4: Rs.33,180/-
GST: Rs.5972/-
Base Rent:8295 + 415 (5% hike) 8710X8: Rs.69,680/-
GST: Rs.12,542/-
Breakup
Rent:66,360
GST: 11,945
Rent:33,180
GST :5,972
Rent:69,680
GST :12,542
Grand Total:1,99,679 Already paid:1,58,000 Total Due : 41,689
From the above Memo of Calculation, it appears that the third respondent has hiked the rent every year by 5% and added 18% GST and now demand a sum of Rs.41,679/-, after giving credit of Rs.1,58,000/- by the petitioner.
The learned counsel for the petitioner would contend that as per the lease agreement, the respondent cannot hike the rent every year. Even according to G.O.Ms.No.92 dated 03.07.2007 of the Municipal Administration and Water Supply Department, there can be hiked by 15% for every three years of block and not 5% every year. Therefore, the Memorandum of Calculation stated in the counter is erroneous.
This Court is totally in agreement with the petitioner submission in this regard. While the auction notice as well as the agreement clearly indicates that the monthly rent of Rs.7900/- per month for a period of three years unilaterally, the third respondent cannot hike the rent at the rate of 5% every year. G.O.Ms.No.92 dated 03.07.2007 contemplates hike of rent by 15% every block of three years only, if the successful bidder in the auction opt for extension of lease for further period of three years. Even that is restricted to a maximum period of 9 years.
In such circumstances, the petitioner herein if interested to continue his contract, shall given an undertaking to pay the enhanced rent by hike of 15% from what he is paying presently. Further, the petitioner cannot seek extension for paying the statutory due payable under GST, whatever he is liable to pay he has to pay within a period of one week. On such payment of GST and if the petitioner is interested to renew the lease with an undertaking that he will pay the enhanced rent by 15%, the same may be considered positively and appropriate orders be passed.
If the petitioner fails to pay the arrears towards GST or to make a request for renewal with enhanced rent, the third respondent is entitled to evict the petitioner herein on the expiry of lease period i.e., 25.07.2019.
With the above observations, this writ petition is disposed of. No costs. Consequently, the connected miscellaneous petition is closed.