Telangana High Court
M/S Vishnujith Infra Developers Pvt. ... vs The Telangana State Road Transport ... on 27 March, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 1008 OF 2024
ORDER:
This Writ Petition is filed seeking to declare the action of the 2nd respondent in issuing termination notice No. DIRJ/COM/BOT/110(38)-VOL2/2012-13, dated 02.11.2023 and a consequential notice DIRJ/COM/BOT/110(38)- VOL2/2012-13 dated 06.11.2023 and thereby, trying to interfere and dispossess the tenants of petitioner company from the property i.e. "Jeevan Reddy Mall and Multiplex" in Survey Nos. 401/69, 401/1 and 416/2, Bus Depot, Armoor, Nizamabad District, as illegal, arbitrary, violative of principles of natural justice and against all settled principles of law. Consequently, a direction is sought to set aside the same.
2. Petitioner is a private limited company incorporated in 2013, having its registered office at D. No. 3-1-109/5, Near New LIC Building, Armoor, Nizamabad District and is engaged in development of land, building and construction activities. It is stated, the erstwhile Andhra Pradesh State Road Transport Corporation is the absolute owner and possessor of the land in Survey Nos. 401/69, 401/1 & 416/2, admeasuring 5142 Sq.mt. (6150 Sq. yards), at Bus Depot, Armoor, Nizamabad District. The Corporation invited bids for the above extent of land vide its 2 Request for Proposal dated 18.12.2012. Petitioner company accepted the bid dated 21.02.2013 vide its letter of acceptance dated 18.04.2013, accordingly the Corporation entered into a Land Lease Deed for the purpose of development of vacant land with petitioner company represented by its old Director Mr. P. Srinivasa Rao vide registered document bearing No. 3117 of 2017 dated 21.03.2017 on the terms and conditions set out thereunder. The Corporation and petitioner company have entered into an Authorization Agreement dated 05.07.2013 wherein petitioner agreed for implementing the project site involving design, financing, construction, marketing, operation, maintenance, management and transfer of the project facility and the levy, demand, collection, retention and appropriation of tariff from the project facility. The term of the lease is for 33 years and the lease rentals for the first year is Rs. 30,75.000/- with a yearly enhancement @5% on lease amount. Thereafter, the 1st respondent executed lease deed on 08.10.2013 in favour of petitioner leasing out an additional 909 Sq. yards for the purpose of implementing the project under Built Operate Transfer scheme (BOT) dated 05.07.2013. Subsequently, the 1st respondent and petitioner entered into a Supplementary Deed dated 23.12.2017, wherein Clause 5.2.1 of Authorization 3 Agreement forming part of registered lease deed is amended on the conditions stipulated therein.
It is the case of petitioner that since the date of execution of lease deeds, petitioner represented by the erstwhile Directors is in possession of the above leased out property admeasuring 6150 Sq. yards and 909 Sq. yards, totalling to 7059 Sq. yards. The said Directors have kept the land vacant till 2017 and have not taken any steps to procure building permissions from the departments concerned and have not commenced any development activities till 2017. Thereafter, Smt. A. Rajitha Reddy has taken over petitioner company in March, 2017 and the entire liability of the 1st respondent was taken over by her. Thereafter, petitioner immediately obtained building permission from Armoor Municipal Corporation vide permit No. 3069/W4/2017/0343 dated 25.08.2019 for the purpose of construction of building namely "Jeevan Reddy Mall & Multiplex" comprising 2 cellars, ground floor plus 6 upper floors, total admeasuring 3,20,000 sft. Petitioner company has commenced the construction activity in September, 2019 and completed in 2021. They also obtained Occupancy Certificate from Armoor Municipal Corporation on 30.6.2021. 4
Petitioner states that due to Covid-19 pandemic in India, there was complete lock down and Central Government imposed certain restrictions. Further, there were no occupants approaching petitioner company for taking lease of the building complex except ground floor and first floor which was sub-let by petitioner company to Reliance stores under sub-lease agreement dated 03.01.2019 for 15 years with a monthly rental amount of Rs. 10,27.080/-. Due to Covid-19 restrictions, petitioner could not sub-let the vacant portion to cinemas/multiplex for which petitioner company incurred huge losses and could not obtain any rentals from the vacant portion of the complex. However, the Telangana Government in March 2022 accorded permissions to run the movies in theatres/cinema multiplex. In view of the same, PVR cinemas approached petitioner in order to take the 4th, the 5th and the 6th floors in "Jeevan Reddy Mall & Multiplex" on lease and accordingly, petitioner sub-let the said floors to PVR Cinemas under sub-lease agreement dated 09.08.2023. However, possession of the said floors was handed over to PVR Cinemas on 23.03.2023 after obtaining permission from the Commissioner of Police to run the cinemas. The term of the said sub-lease is for 18 years with a monthly rental amount of Rs. 20.00 lakhs. However, the 2nd floor and the 3rd floor are vacant. 5
According to petitioner, while in this situation, it was put to the utter shock and surprise, since the 2nd respondent issued notice No.DIR(J/COM/BOT/110(38)-VOL- 2/2012-13 dated 02.11.2023, requesting petitioner to pay the outstanding dues @ Rs. 7,23,71,801/- as on the pending commitments of the Authorization Agreement within a period of 7 days. Prior to the same, the 2nd respondent issued series of notices dated 29.04.2023, 03.08.2023, 25.09.2023 and 16.10.2023 to petitioner requesting to pay the outstanding dues of Rs. 8,64,61.472/- as on 16.10.2023. Petitioner clearly admits that it had paid an amount of Rs. 1,50,00,000/- on 26.10.2023 and also paid an amount of Rs. 2,40,00,000/- on various dates through cheques to the 2nd respondent leaving a balance amount of Rs. 4,83.71.801/-. The details of payments made by petitioner are as mentioned below in tabular form:
Sl.No. Cheque No. Date of Cheque Amount (In Rs) 1 067928 8.12.2023 17,00,000 2 067928 8.12.2023 10,00,000 3 067930 8.12.2023 20,00,000 4 067931 8.12.2023 20,00,000 5 067932 8.12.2023 15,00,000 6 067933 8.12.2023 25,00,000 7 067934 8.12.2023 10,00,000 8 067935 8.12.2023 10,00,000 6 9 067923 8.12.2023 25,00,000 10 067925 8.12.2023 10,00,000 11 067926 8.12.2023 24,00,000 12 067927 8.12.2023 14,00,000 13 067943 16.12.2023 10,00,000 14 067944 16.12.2023 10,00,000 15 067942 16.12.2023 10,00,000 16 067941 16.12.2023 10,00,000 Rs.2,40,00,000 Total However, it is the case of petitioner that it is facing financial crises due to the fact that the 2nd and the 3rd floors approximately to the extent of 1.00.000 Sq. ft. in "Jeevan Reddy Mall & Multiplex" are vacant since 2017 and petitioner paid rental amounts from 2013 along with interest to the 2nd respondent. At present, the ground floor, 1st floor, 4th floor, 5th floor and 6th floor were occupied by sub-lessees. However, on 07.12.2023, the officials of the 2nd respondent have entered the mall illegally and announced on mic (microphone) that they will take possession of subject property soon and asked the tenants to vacate subject property. The Respondents have been illegally interfering with the property and are trying to evict petitioner from the property without giving any notice or an opportunity to petitioner and without following due process of law. Petitioner company is willing to pay balance outstanding rental dues of Rs.4,83,71,801/- with interest and penalties to the 2nd 7 respondent in 16 monthly instalments, in spite of the same, the officials of the 2nd respondent are continuously threatening petitioner over phone call that they will evict petitioner from the said property. Petitioner is facing financial crisis and 1,00,000 Sq.ft. in "Jeevan Ready Mall & Multiplex" is still vacant. If any adverse steps are taken by the 2nd respondent in evicting petitioner from the said property by terminating lease contract, it will not only affect petitioner company but it will also affect the business of sub-lessees which cannot be compensated.
Further, petitioner states that they leased out portion of building in "Jeevan Reddy Mall & Multiplex" i.e., ground and first floor to Reliance Store and 4th, 5th, and 6th floors to PVR Cinema. According to petitioner, due to illegal interference by the officials of the 2nd respondent, sub-lessees are apprehensive about facing illegal eviction from property. In such an event, petitioner will be deprived from monthly lease rental amounts from sub-lessees and it would be very difficult for petitioner to sub-lease the property to new lessees and petitioner would incur huge losses. Petitioner paid Rs. 2,40,00,000/- to the 2nd respondent and petitioner company is willing to pay balance outstanding dues to the 2nd respondent in 16 monthly instalments. Petitioner, on numerous occasions, requested the 2nd respondent for extension of time to pay the 8 balance outstanding rental amount of Rs. 4,83,71,801/- with interest and penalties but the officials of the 2nd respondent are continuously threatening petitioner with dire consequences that they would illegally evict petitioner from the said property without giving any notice or without following due process of law.
Heard Sri Chadrasen Reddy, learned Senior Advocate appearing on behalf of Sri K.S. Suneel and Sri Swaroop Oorilla, learned Special Government Pleader on behalf of Additional Advocate General for the respondents.
3. At the stage of admission, this Court passed interim order in view of clear admission of outstanding dues by petitioner to the 2nd respondent at Paras 8, 9 and 10 of the writ affidavit and also considering the submission of learned Senior Counsel that petitioner is willing to pay, this Court gave direction vide interim order dated 11.01.2024 which reads as under:
" Learned Senior Counsel submits that his client is willing to pay Rs.1 Crore on or before 31.01.2024, and the remaining 1 Crore on or before 15.02.2024. On complying with such condition, the respondents are hereby directed not to interfere with peaceful possession and enjoyment of the petitioner's tenants in the subject property i.e., "Jeevan Reddy Mall & Multiplex" situated in Survey Nos.401i69, 40111, and 416/2, Bus Depot Armoor, Nizamabad District. It is made clear that in case of default by the petitioner, the respondents 9 are at liberty to initiate action against the petitioner in accordance with law."
4. Petitioner complied with the first part payment of Rs.1 crore within time i.e. on or before 31.01.2024, but failed to make the second part payment within stipulated time i.e., on or before 15.02.2024, but however, made the payment on 28.02.2024.
5. During the course of arguments, learned Special Government Pleader submitted statement showing the particulars of payment of dues outstanding as on 28.02.2024 which amounts to Rs.3,52,76,367/- which statement is also verified and endorsed by the 2nd respondent and the Accounts Officer of the respondent Corporation. The copy of the said statement as on 28.02.2024 was handed over to learned Senior Counsel for verification of the same with respect to outstanding dues of petitioner company.
6. Learned Senior Counsel submits a copy of Statement showing the particulars of amount payable, paid and balance amount payable to the respondent Corporation which amounts to Rs.3,13,74,312/- inclusive of Service Tax and GST Amount (i.e., Principal due as on 28.02.2024 is of Rs.1,36,61,088/- and GST amount is of Rs.1,77,13,224/-). However, learned Senior Counsel produced the letter dated 10 10.03.2024 issued by Chartered Accountant along with copy of Statement wherein it was stated that after verification of GSTR- 2A reports of the company pertaining to financial year's 2017- 2018 to 2023-24 which are downloaded from GST Website, it was found that the Corporation has not uploaded any invoices for the above lease charges paid/payable by the Company till date.
7. However, on verification of the statement submitted by petitioner, they mentioned that the amount accumulated towards GST is Rs. Rs.1,77,13,224 and payments made by petitioner company towards GST amount is 'nil'. Unless GST amount is paid by petitioner along with principal amount, the respondent corporation would not be in a position to deposit the tax component with GST officials. In the instant case, petitioner admitted the fact that GST amount paid is 'nil', in such an event, petitioner company taking cue from Chartered Accountant letter dated 10.03.2024 and further alleging that, had the GST amount paid by petitioner to the respondent Corporation is deposited with GST authorities by the respondent Corporation, petitioner company ought to have received the Input Tax Credit amount. However, since GST amount is not paid by petitioner company along with principle amount, the 11 question of the Corporation depositing the same to the GST Authorities does not arise.
8. From the conduct of petitioner, it is clearly discernable that though petitioner had specifically admitted at Paragraphs 8, 9 and 10 of writ affidavit that balance amount would be paid in 16 instalments, but, after obtaining interim orders from this Court, petitioner company is shirking away in making payments to the Corporation on one pretext or the other. This conduct of petitioner, that too after obtaining interim orders from this Court cannot be countenanced in any manner.
9. It is trite law that recovery of public money cannot wait indefinitely. Recently, the Calcutta High Court in Brahm (Alloys) Ltd. V. West Bengal Financial Corporation [W.P.A. 9084 of 2020 With CAN 1 of 2021] held as under:
" In such circumstances, the respondent no.1 was fully justified in proceeding with the sale of the assets of the borrower, particularly in view of the previous conduct of the petitioners. A fresh lease of life cannot now be granted to the petitioners, since such opportunity was previously given to them but the petitioners miserably failed to avail of the same. Recovery of public money cannot wait indefinitely."
10. Though the above judgment is only having a persuasive value over this Court, this Court is of the considered view that petitioner company is delaying to make payments after 12 obtaining interim order from this Court,that too having admitted the liability in their own affidavit from Paragraphs 8 to 10.
11. Therefore, petitioner deserves no further consideration from this Court in view of involvement of recovery of public money, as such, this Court directs petitioner company to clear the outstanding dues of Rs.3,52,76,367/- as on 28.02.2024 within a period of one month from the date of receipt of a copy of this order, failing which, the respondents are at liberty to initiate action against petitioner in accordance with law. Needless to say that the outstanding due as on 28.02.2024 according to the terms of Lease Agreement only is considered for the present in this Writ Petition.
12. The Writ Petition is disposed of with above direction. No order as to costs.
13. Consequently, the miscellaneous Applications, if any shall stand closed.
--------------------------------------
NAGESH BHEEMAPAKA, J 27th March 2024 ksld