Delhi High Court

Dbs Financial Services Ltd. vs India Tourism Development Corp. ... on 19 March, 2009

Author: Hima Kohli

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       W.P.(C) 4304/1993


%                                      Date of decision : 19.03.2009
IN THE MATTER OF :

DBS FINANCIAL SERVICES LTD.                   ...... Petitioner
                        Through : Mr. S.K. Luthra, Adv.


                    Versus


INDIA TOURISM DEVELOPMENT CORP. LTD. & ORS.
                                         ....          Respondents
                      Through : None.


CORAM

* HON'BLE MS.JUSTICE HIMA KOHLI

    1. Whether Reporters of Local papers may be allowed to see the
       Judgment? Yes.

    2. To be referred to the Reporter or not? Yes.

    3. Whether the judgment should be reported in the Digest? Yes.


HIMA KOHLI, J. (ORAL)

The present writ petition has remained on the regular board

of this Court since 06.01.2009. However, the respondent has remained

unrepresented. It is pertinent to note that when the Rule was issued in

this writ petition on 11.10.1995, none was present on behalf of the

respondent. Though the order-sheet reflects that counter affidavit

was filed by the respondent, the same was not on the record. Counsel

for the petitioner was directed to place a photocopy thereof served by

the respondent on him, on the record. The petitioner was also directed

to issue a letter to the nominated counsel for ITDC requesting him to

appear in this matter. Pursuant thereto, the petitioner has filed a copy

of the letter dated 22.01.2009 written to the nominated counsel of

ITDC, alongwith a copy of the counter affidavit, which have been duly

placed on the record under index dated 28.01.2009 and 13.03.2009.

Despite the same, appearance has not been entered on behalf of the

respondent.

2. The present writ petition is filed by the petitioner praying

inter alia for issuance of a writ of certiorari for quashing the order

dated 2.4.1993 passed by the respondent No.2/Estate Officer under

Section 7 of the Public Premises (Eviction of Unauthorized Occupants)

Act, 1971 (in short 'the Act') and the recovery notice for Rs.32,962.85

paise dated NIL, issued by the respondent No.3/Assistant Collector,

Government of Delhi for enforcing the order dated 2.4.1993, passed by

the Estate Officer/ITDC.

3. In a nutshell, the facts of the case are that the petitioner is

a company registered under the Indian Companies Act. It was carrying

on its business of running a credit card scheme under the name and

style of Diners Club India Ltd. As per the said scheme, the petitioner

had enrolled a large number of members either in the capacity of the

credit card holders or as establishment members. The respondent

No.1/ ITDC is in the hotel business and the subject matter of the

present dispute relates to one of its units, namely, Hotel Janpath. It is

stated on behalf of the petitioner that the said unit entered into an

agreement dated 28.5.1969 with the petitioner company and agreed

to become an establishment member by honouring the credit cards

issued by the petitioner to its members and in turn, the petitioner

company agreed to pay the value of the purchases made from the

respondent, on the basis of credit cards by the members of the

petitioner, on presentation of the bills/charges received within a period

of 30 days after they were incurred. It was stipulated in the

agreement governing the parties that in case their bills/charges were

received beyond a period of 30 days from the date they were incurred,

reimbursement thereof would be made only when the charges were

recovered by the petitioner from its members. In this context,

reference is made by the counsel for the petitioner to Clause 4 of the

agreement dated 28.5.1969.

4. It is stated by the counsel for the petitioner that the

petitioner company transferred its entire business of credit card

scheme to the City Bank w.e.f. 1.7.1990. Prior thereto, on 19.8.1989,

the petitioner received a statement of account of Hotel Janpath from

the respondent No.1, pertaining to charges incurred for the period

w.e.f. 10.7.1989 to 13.7.1989. As per the contract between the

parties, the charge slips ought to have been submitted to the

petitioner within 30 days from 13.7.1989 i.e. on or before 13.8.1989.

However, as the charge slips were received beyond the period of 30

days, on receipt thereof the petitioner communicated to its members,

calling upon them to pay the respective amounts directly to Hotel

Janpath under intimation to it.

5. Thereafter, on 4.11.1992, the petitioner received a notice

from the respondent No.2/Estate Officer under Section 7 of the Act

calling upon the petitioner to show cause as to why an order requiring

the petitioner to pay a sum of Rs.32,962.85 paise, towards arrears of

rent together with simple interest should not be not made. Enclosed

with the said notice was an application dated 3.11.1992, filed by the

respondent No.1 before the Estate Officer. In the aforesaid application,

the respondent No.1 stated that the petitioner had not made payment

of Rs.32,962.85 paise despite repeated reminders and hence the

provisions of the Act were invoked.

6. Counsel for the petitioner states that immediately upon

receipt of the aforesaid notice, the petitioner filed its reply before the

Estate Officer pointing out that the amount was not payable by the

petitioner in terms of the agreement governing the parties. This was,

however, followed by the impugned order dated 2.4.1993 passed by

the Estate Officer holding that a sum of Rs.32,962.85 paise was due as

rent payable by the petitioner with simple interest @ 18% per annum

w.e.f. 4.11.1992, till final payment.

7. The petitioner is aggrieved by the impugned notice dated

2.4.1993 and the subsequent demand raised on the petitioner by the

respondent No.3 on the basis of the said notice, on the ground that

the Estate Office was not vested with any jurisdiction to take notice of

the recovery or to initiate proceedings for recovery under the Act, on

the basis of an application filed by the respondent No.1, as the

recovery did not pertain to rent of any public premises or use and

occupation of any public premises, but pertained to charges arising on

account of utilization of hotel services by customers/patrons, for

consumption of food and beverages, etc. He submits that the said

demand is therefore beyond the scope of Section 7 of the Act. The

provisions of Section 7 of the Act contemplates the power to require

payment of rent or damages in respect of the public premises. Sub-

Section (1) of Section 7 of the Act stipulates as below :

"7 (1) "Where any person is in arrears of rent payable in respect of any public premises, the estate officer may, by order, require that person to pay the same within such time and in such installments as maybe specified in the order."

8. A bare reading of the aforesaid provision makes it apparent

that only in case a person is in arrears of rent payable in respect of any

public premises, can the Estate Officer require that person to pay the

same within a stipulated time. The term "rent" is defined under

Section 2(f) of the Act, which is reproduced herein below :

"2(f) "rent", in relation to any public premises, means the consideration payable periodically for the authorized occupation of the premises, and includes -

(i) Any charge for electricity, water or any other services in connection with the occupation of the premises,

(ii) Any tax (by whatever name called) payable in respect of the premises, where such charge or tax is payable by the Central Government or the corporate authority."

9. A bare perusal of the aforesaid definition clause makes it

apparent that charges payable on account of consumption of food and

beverages in a hotel premises are beyond the pale of the definition of

"rent", as contained in the Act, as they cannot be treated as charges

payable for authorized occupation of a public premises or for

consumption of electricity, water or any other services in connection

with occupation of a public premises. A visitor to a hotel who avails

of the services of a hotel for consumption of food and beverages can

by no stretch of imagination be treated as either an authorized

occupant of a public premises, or for that matter, an unauthorized

occupant of the same. The question of „occupation of a premises‟ in

such circumstances does not arise as the limited services availed of by