Delhi High Court
K.T.Corporation & Others vs India Toursim Development ... on 18 May, 2009
Author: Sanjiv Khanna
LPA NO.441/2008
[+ Connected Matters) Page No.1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LETTERS PATENT APPEAL NOS. 441, 442, 443, 444,
445, 446, 447, 448, 449, 450, 454, 455, 456, 457,
459, 460, 461, 485, 599, 600, 601, 735 & 736 OF
2008.
% Date of decision: May 18th , 2009
K.T. CORPORATION & ANOTHER .... Appellants in LPA 441/2008
TOBACCO GIFT CORNER & ANOTHER .... Appellants in LPA 442/2008
UNIVERSAL TRAVELS & ALLIED SERVICES
& ANOTHER .... Appellants in LPA 443/2008
LITTLE KASHMIR & CO. & ANOTHER .... Appellants in LPA 444/2008
MANOHAR LAL BHUJJAN MALL & ANOTHER
.... Appellants in LPA 445/2008
BHAG CHAND JAIN & ANOTHER .... Appellants in LPA 446/2008
RAMADAN & ANOTHER .... Appellants in LPA 447/2008
VINOD KUMAR ....Appellant in LPA 448/2008
RUBY PALACE .... Appellant in LPA 449/2008
MACRO SERVICES P.LTD& ANOTHER .... Appellants in LPA 450/2008
MACRO OUTSOURCING P. LTD & ANOTHER
.... Appellants in LPA 454/2008
VICTORY CARPETS .... Appellant in LPA 455/2008
MAHALAXMI .....Appellant in LPA 456/2008
RAMZANA & CO. & ANOTHER .... Appellants in LPA 457/2008
RAJESH KUMAR KAUSHIK & ANOTHER .... Appellants in LPA 459/2008
SUSHMA KAUSHIK & ANOTHER .... Appellants in LPA 460/2008
HEERA MIDHA & ANOTHER .... Appellants in LPA 461/2008
REGAL SHOES .... Appellant in LPA 485/2008
DEEP CHAND JAIN & ANOTHER ..... Appellant in LPA 599/2008
SUNIT KUMAR JAIN & ANOTHER .... Appellants in LPA 600/2008
ROMILA BAHL & ANOTHER .... Appellants in LPA 601/2008
HIMALAYAN TOURS & TRAVELS .... Appellants in LPA 735/2008
SATPAL FOTRA & ANOTHER .... Appellants in LPA 736/2008
Mr. Manish Sharma, Advocate with
Mr. Rohan Sharma and Mr. Vishal Malhotra,
Advocates for appellants in LPA
Nos.441/2008, 450/2008 and 454/2008.
Mr. H.L. Tiku, Sr. Advocate with Mr.
Thakur Sumit and Ms. Yashmeet Kaur for
appellant in LPA Nos. 443/2008, 444/2008,
447/2008, 449/2008, 445/2008, 456/2008,
457/2008, 485/2008 and 736/2008.
Mr. Jagdeep Kishore, Advocate for
the appellants in LPA Nos. 459/2008,
460/2008, 461/2008, 599/2008, 600/2008
and 601/2008.
LPA NO.441/2008
[+ Connected Matters) Page No.2
versus
INDIA TOURISM DEVELOPMENT
CORPORATION AND ANOTHER .... Respondents
Through, Mr. Rajiv Nayar, Senior Advocate
with Mr. Atul Sharma, Advocate for the
respondent ITDC in LPA Nos. 442/2008,
443/2008, 445/2008, 446/2008. 447/2008
and 448/2008.
Mr. Ajay Kapur with Mr. G. Panmei,
Advocate for respondent in LPA Nos.
441/2008, 444/2008, 447/2008, 449/2008,
450/2998, 454/2008, 455/2008, 456/2008,
457/2008, 459/2008, 460/2008, 461/2008,
485/2008, 599/2008, 600/2008, 601/2008,
735/2008 and 736/2008.
CORAM:
HON'BLE MR. JUSTICE AJIT PRAKASH SHAH, CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
1. Whether Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not ? YES
3. Whether the judgment should be reported
in the Digest ? YES
SANJIV KHANNA, J.:
1. This common judgment will dispose of the present intra
court appeals filed by occupants of shops/office spaces in
Hotel Ashoka, Hotel Janpath and Hotel Samrat allotted to
them by the respondent-India Tourism Development
Corporation (hereinafter referred to as ITDC, for short). By
the impugned judgment under appeal dated 1st July, 2008,
learned Single Judge has dismissed the writ petitions
filed by the appellants challenging the action of ITDC to
LPA NO.441/2008
[+ Connected Matters) Page No.3
initiate proceedings under Public Premises (Eviction of
Unauthorised Occupants) Act, 1971 (hereinafter referred to
as Act, for short) and for direction to ITDC to renew the
license arrangement with them.
2. The appellants herein have been in occupation of
shops/office spaces as per details set out in para 4 of the
impugned judgment, which are not being repeated for the
sake of brevity.
3. The case made out by the appellants before us and the
learned single Judge was that ITDC has been renewing
license deeds from time to time on enhanced license fee
after increasing the last paid license fees by 10-30%. It is
stated that no uniform policy was/is followed and the license
fee of different shops/office spaces was/is different, with
substantial variation between the amount being demanded
and paid from the allottees. It is stated that ITDC does not
have any policy or guidelines for renewal or increase in
license fee and is guilty of adhocism and arbitrariness. It is
alleged that in 26th August, 2006, ITDC decided not to renew
the license though the appellants had already made request
for renewal. Thereafter, ITDC decided to renew the license
in respect of the shops/office space on enhanced license fee
of Rs.250/- per sq. ft. for Hotel Ashoka, Rs.225/- per sq. ft.
LPA NO.441/2008
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for Hotel Samrat and Rs.176-220/- per sq.ft. for Hotel
Janpath. It is stated that in many cases the increase
demanded was 450% higher than the earlier license fee
being charged. It is submitted that the increase is arbitrary
and ITDC being a State cannot act as a private landlord and
demand exorbitant license fee. It is also submitted that in
the absence of any policy framed by ITDC, Office
memorandum dated 19th February, 1992 and the guidelines
dated 30th May, 2002 issued by the Government of India for
proceedings under the Act are applicable. It is stated that
ITDC has violated the said guidelines/memorandum and
therefore their decision to initiate proceedings for eviction
and to claim damages under the Act should be quashed and
set aside.
4. The relevant Clauses of the terms and conditions of the
license deed, which are identical except for the quantum of
license fee, read as under:
"2. The license may be
renewable at the option of the Licensor
on the expiry of the period stipulated
under clause 1 and on such terms and
conditions as the Licensor may impose
in his own discretion. The duration of
the extended period shall be determined
by the licensor but will not be for more
than two years for each such extension.
The License will apply for the renewal of
his license 6 (six) calendar months
LPA NO.441/2008
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before expiry of the license and on
failure to do so, the Licensor will be free
to negotiate with and to allot the license
premises to any other party. It is also
clearly understood by and between the
parties that the licensor will exercise the
sole discretion with regard to the
renewal of the license and also the
terms and conditions of the renewed
license and the Licensor's decision in
this regard shall be final and binding on
the Licensee.
3. At the time of each such renewal,
the Licensee shall execute a fresh
License Deed in respect of the premises
given on license to it. In case the
Licensee fails to get the license renewed
for the period coming into effect from
the expiry of this License Deed, the
Licensee shall be considered to be in
unauthorized occupation of the Licensed
Space and the Licensor shall be within
its right to initiate proceedings under
the due process of law.
4. If any fresh license
agreement/deed is not executed for any
reason, whatsoever, thirty (30) days
prior to the expiry of the initial period of
Two Years granted hereunder, it will
be presumed that the License has not
been renewed and the use of the
premises by the Licensee, after such
date shall be considered as
unauthorized. The company/Licensor
shall be at liberty to enter into such
arrangements as it may deed fit, with
any other party permitting the use of
the premises by such other party after
the expiry of the initial period of license
with the Licensee and the Licensee shall
not interfere with the same directly or
indirectly nor shall cause any damage,
loss or expenses to the Licensor in this
LPA NO.441/2008
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regard.
II. LICENSE FEE & SECURITY
DEPOSITS.
1. xxxxx
2. xxxxx
3. xxxxx
4. xxxxx
5. xxxxx
6. Any payment made by the
Licensee after the expiry of license
agreement or termination of Agreement
and till execution of new Agreement or
renewal of the agreement shall be
treated by the Licensor as damages and
not license fee, except payments made
towards outstanding license fee
pertaining to a period prior to the date
of termination or expiry of the license
agreement as the case may be. The fact
that the License terms any such
payment as license fee and not
damages shall not alter the nature of
such payment.
III. TERMINATION OF LICENSEE
1. xxxxx
2. xxxxx
3. xxxxx
4. Upon the expiry of the period of
this license or earlier termination of the
license for any cause whatsoever, the
Licensee shall have no right to carry on
business at the said licensed premises.
The Licensor shall have undisputed right
to make use of the said licensed
premises at his discretion thereafter. It
will be lawful for the Licensor without
notice to enter upon the licensed
premises after the termination/expiry of
the license.
5. xxxxxx
V. APPLICABLE LAWS & NOTICE
LPA NO.441/2008
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1. In respect where provisions of
Public Premises (Eviction of
Unauthorised Occupants) Act, 1971 can
be invoked by the Licensor in respect of
the licensed premises the provision of
the said Act shall apply."
5. In view of the aforesaid Clauses of the written
instrument, the appellants cannot as per the contractual
terms claim right to renewal by proportionate increase in the
license fee. The appellants were always aware of their rights
and obligations, while giving their tenders or agreeing to
renewal terms, which were accepted without demur and
protest. The license as per the written instrument was for a
fixed period on the license fee as stipulated, with no vested
or legal rights to the appellants to claim mandatory renewal,
with or without proportionate or fixed increase. As per terms
of the contract i.e. written instrument the appellants cannot
claim any right to renewal and compel ITDC to extend the
license period.
6. The next question is whether ITDC being a State under
Article 12 of the Constitution can be compelled and
mandated by issue of a Writ direction to extend or renew
the license on terms which the court feels are just, fair and
reasonable. Another contention of the appellants is that the
LPA NO.441/2008
[+ Connected Matters) Page No.8
ITDC has acted in an arbitrary, discriminatory and
highhanded manner.
7. ITDC, respondent herein is a Government Corporation and
therefore State under Article 12 of the Constitution of India.
However, ITDC as a Corporation is not performing any public
functions or duties. It is operating and maintaining hotels as
a commercial venture. The object and purpose of ITDC is to
earn profit and as such ITDC performs limited social
obligations or purpose, keeping in view the nature of its
activities. ITDC is a business venture in which commercial
considerations and profit motive are primary/main concern
and guiding factor. With this objective, ITDC is competent
and entitled to frame its own policies in respect of grant of
licenses and their renewal. However, the policy so framed
cannot be discriminatory and one which is arbitrary, so as to
offend Article 14 of the Constitution of India. Action should
not be actuated by bias or malafides. Quantum or the
increase as demanded by ITDC cannot be set aside in
exercise of power of judicial review unless the same is
arbitrary and takes into consideration irrelevant facts. The
scope of judicial interference by this Court under Article 226
of the Constitution of India is therefore limited and narrow.
Keeping these aspects and principles in mind, we have
LPA NO.441/2008
[+ Connected Matters) Page No.9
examined the contentions raised by the appellants with
reference to alleged arbitrary exercise of power and
discretion by ITDC.
8. Learned Single Judge while examining the aspect of
quantum of enhanced license fee has noticed that ITDC had
given offers fixing the rent or license fee. The rent/license
fee as mentioned by ITDC was based on license fee being
paid by the occupants in other five star hotels. ITDC while
fixing the rates was also influenced by the offers received by
them in new tenders for the vacant shops and office spaces.
In some cases said rates were accepted by some of the
existing occupants. We do not think that the policy decision
of ITDC taken in July, 2006 to insist and ask for market
rent/market license fee can be faulted and interfered with on
the ground of violation of Article 14. Learned counsel for the
petitioner submitted that the ITDC has not taken into
consideration certain aspects like location disadvantages,
mandatory low profit services in five star hotels etc. We are
not concerned with the individual cases or a particular
problem. On the other hand, the Court has to examine
whether the price or the rate fixed was determined with due
consideration and regard to relevant material and whether
extraneous matters have been excluded from determination.
LPA NO.441/2008
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(Refer, Sita Ram Sugar Company Ltd versus Union of
India, (1990) 3 SCC 223). Right and desire to get market
license fee for shops and offices in a five star hotel is valid
and not extraneous consideration. In the present cases,
market rates can be a valid criteria for fixing license fee.
Further, the appellants always have the right to participate
in the tenders which will be floated by ITDC and make their
offers. This will take care of individual aspects like location
disadvantage or low profit services.
9. The appellants herein are commercial establishments who
have set up shops or commercial offices in the premises
located in the said three Hotels. The prime aim and objective
of these commercial establishments managed and run by the
appellant allottees is to earn profit for their personal gain.
There is no public function or duty being performed by the
appellants or for that matter even by the ITDC. A lower
license fee will obviously result in higher profit earning by the
appellants. In a way by charging lower license fee, ITDC is
subsidizing business costs of the appellants and providing
and benefiting the appellants with State largesse. There is no
justification and reason for ITDC to do so and in fact ITDC
will be guilty of violation of Article 14 by conferring State
largesse and giving benefits to the appellants to the exclusion
LPA NO.441/2008
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of others. In case, ITDC renews licenses and enters into
contracts or renews the licenses at less than the market fee,
it will be guilty of administering largesse to selected
individuals at the expense of public. There must be adequate
and justifiable reasons why State largesse should be granted
to a particular person to the exclusion of others. We agree
with the findings given by the learned Single Judge that the
license fee charged by ITDC can be market driven and they
are entitled to charge license fee as per the rates prevailing
in the five star hotels. ITDC is not expected and cannot be
compelled to continue and renew license agreements so as to
subsidize private vendors, whose purpose and motive is to
enhance private profits by occupying low cost
accommodation.
10. In Ramana Dayaram Shetty versus International
Airport Authority of India reported in (1979) 3 SCC 489
the Supreme Court agreed with the observation of Mathew,
J. in V.Punnan Thomas versus State of Kerala reported
in AIR 1969 Ker. 81 and held:
"The Government is not and should not
be as free as an individual in selecting
the recipients for its largesse. Whatever
its activity, the Government is still the
Government and will be subject to
restraints, inherent in its position in a
democratic society. A democratic
LPA NO.441/2008
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Government cannot lay down arbitrary
and capricious standards for the choice
of persons with whom alone it will deal."
11. Referring to the above two judgments, the
Supreme Court in Style (Dress Land) versus Union
Territory, Chandigarh reported in (1999) 7 SCC 89 upheld
the increase in lease money from Rs.2,671/-p.m. to
Rs.14,000/-p.m. after expiry of the earlier lease period
w.e.f. 1st March, 1992. Referring the stand taken by Union
territory of Chandigarh that the shops in question were
occupied by private individuals and some of them were
further let-out the Supreme Court agreed that the State
Authority was entitled to charge market rent and the same
was justified, reasonable and constitutional. The judgment
of the High Court was upheld and it was held that the
procedure adopted and made basis for enhancing the rent
to market value cannot be said to be arbitrary,
discriminatory or unreasonable. In the said case, the
Supreme Court also reiterated the principle that inaction in
respect of some individual/tenants cannot be made basis for
setting aside action initiated against others. Reference was
made to the decision of the Chandigarh Administration
versus Jagjit Singh , (1995) 1 SCC 745 wherein it has
LPA NO.441/2008
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been held that if an Order in favour of a third person is
found to be contrary to law or not warranted by facts and
circumstances, such illegal or unwarranted order cannot be
made the basis for issuing a writ compelling the authority to
repeat the illegality or to pass another unwarranted order.
In such cases, a party cannot urge violation of Article 14 of
the Constitution alleging discrimination.
12. ITDC does not enjoy monopoly and is in open and direct
competition with privately run hotels which are in
abundance in Delhi. ITDC does not enjoy any special
privilege or advantage being an instrumentality of the State,
unlike Development Authorities or housing boards under
special statues constituted for social and public purpose and
obligations in mind. Appellants per force because of status
of ITDC as a State are not compelled to negotiate, deal and
interact with the ITDC. ITDC does not enjoy a dominating
position or substantial market share to control market
rents/license fee for floor spaces in five star hotels. In a
competitive market, ITDC is competing with others and
cannot charge exorbitant license fee. Market or license fee is
per se determined and fixed by market forces. Letting of
shops and offices is a part of the business of ITDC and
constitutes a portion of its profits and commercial activity.
LPA NO.441/2008
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ITDC being a hotel and in hospitality business has to be
given full freedom and play in joints to determine and
decide what is more beneficial and commercially profitable
for them, unless for some justified public reason ITDC being
a State should not be permitted to do so or acts in a
discriminatory manner in violation of Article 14 of the
Constitution. ITDC while taking commercial or financial
decision have to be given freedom of play in joints. It is for
ITDC to determine how and in what manner they want to
manage and run the hotel including shops and offices which
are let out/given to third parties on license fee basis.
Renting out is a part of the commercial venture and
contributes to their income. In purely commercial or
financial matters, the Courts should not substitute their
judgments for that of ITDC. The Court cannot supplant its
own views for they are more equitable, reasonable, better
suited or viable. The Court is only concerned with the
decision making process and whether extraneous matters
have been taken into consideration for reaching the final
conclusion and whether the decision falls foul of Article 14
being arbitrary or discriminatory. The action of the ITDC
cannot be faulted on the said grounds and its desire and
attempt to get market license fee is not arbitrary or unreasonable.
LPA NO.441/2008
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13. The Policy decision questioned was taken by the ITDC in
the end of 2006, cannot be declared arbitrary and illegal
because some renewals had taken place prior to the said
decision. Renewals which had taken place prior to the policy
decision form a separate class. In these circumstances, the
learned Single Judge has rightly accepted the plea of the
ITDC that arrangements finalized before the policy decision
cannot be the basis for declaring the policy as violative of
Article 14 and arbitrary.
14. Learned counsel for the appellants has heavily relied upon
the Office Memorandum/Guidelines dated 19th February,
1992 and 20th February, 2002. In support of the contention,
it was submitted that these guidelines are binding and in
terms thereof ITDC like a private landlord cannot evict the
appellants for commercial motives.
15. The 1992 guideline in Clause (iii) thereof has crystalised the
object of issuing the said guidelines as under :-
"....At the same time, it will be open
to the public authority to secure periodic
revision of rent in terms of the provisions
of the Rent Control Act in each State, or
move under genuine grounds under the
Rent Control Act for resuming possession.
In other words, the public authorities
would have rights similar to private
landlords under the Rent Control Act in
dealing with genuine legal tenants."
LPA NO.441/2008
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16. The 19th February, 1992 guidelines were issued as State and
State controlled Corporations had been granted immunity from
rent control legislations enacted to protect tenants from
landlords. It was highlighting this aspect that the Supreme
Court in M/s. Dwarkadas Marfatia and Sons versus Board
of Trustees of the Port of Bombay (1989) 3 SCC 293
examined the action of the Port Trust in initiating proceedings
under the Act and in that context it was observed:
"23. The contractual privileges are
made immune from the protection of
the Rent Act for the respondent because
of the public position occupied by the
respondent authority. Hence, its actions
are amenable to judicial review only to
the extent that the State must act
validly for a discernible reason not
whimsically for any ulterior purpose.
Where any special right or privilege is
granted to any public or statutory body
on the presumption that it must act in
certain manner, such bodies must make
good such presumption while acting by
virtue of such privileges. Judicial review
to oversee if such bodies are so acting is
permissible.
24. x x x x x
25. x x x x x
26. x x x x x
27. We are inclined to accept the
submission that every activity of a public
authority especially in the background of
the assumption on which such authority
enjoys immunity from the rigours of the
Rent Act, must be informed by reason
and guided by the public interest. All
exercise of discretion or power by public
LPA NO.441/2008
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authorities as the respondent, in respect
of dealing with tenants in respect of
which they have been treated separately
and distinctly from other landlords on
the assumption that they would not act
as private landlords, must be judged by
that standard. If a governmental policy
or action even in contractual matters
fails to satisfy the test ofreasonableness,
it would be unconstitutional. See the
observations of this Court in Kasturi Lal
Lakshmi Reddy and R.D.Shetty v.
International Airport Authority of India."
17. After 1989, the Delhi Rent Control Act, 1958 is no longer
applicable to the properties fetching rent of Rs.3,500/- p.m. or
more and the normal law of eviction i.e. under the Contract
Act, 1872 and the Transfer of Property Act, 1882 apply. In the
present cases, license fee being paid by the petitioners is
admittedly more than Rs.3,500/- p.m. They are, therefore,
even otherwise not protected under the Delhi Rent Control Act,
1958. The advantage and benefit of the Act stands neutralized
and immunity from rent control legislation is inconsequential.
18. The 2002 guidelines are in similar terms and the words of
1992 guidelines quoted above have been reproduced therein.
In New India Assurance Company Ltd. Vs. Nuslee N.
Wadia, (2008) 3 SCC 279 the Supreme Court noticed that
there are number of guidelines which had been issued from
time to time to ensure that action of the State under the Act is
LPA NO.441/2008
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fair, reasonable and not arbitrary. Reference was specifically
made to the Circular dated 23rd July, 2003 drawing a distinction
between business houses or commercial entrepreneurs vis-à-vis
other tenants who may require succor and protection. Para 3 of
the Circular dated 23rd July, 2003 reads as under:-
"3. The Government Resolution
dated 30-5-2002 embodies the
guidelines dated 14-1-1992 for
observance by the public sector
undertakings. However, clarification was
issued vide OM No.21011/790Pol.1
IV.H.11 dated 7-7-1993 that the
guidelines are meant for genuine non-
affluent tenants and these are not
applicable to the large business houses
and commercial entrepreneurs."
19. Learned Single Judge in the impugned judgment has
referred to the decisions of the Supreme Court in Hari Singh
and others versus Military Estate Officer, 1973 (1) SCR
515, Ashoka Marketing Ltd versus Punjab National Bank,
AIR 1991 SC 855, Kaiser- I- Hind versus National Textile
Corporation (Maharashtra North) Ltd., (2002) 8 SCC 182
and observed that Constitutional validity of the Act has been
repeatedly upheld even in relation to commercial premises.
Learned Single Judge has further observed that the guidelines
and the administrative instructions can supplement and not
supplant the law and the statutory provisions and therefore the
guidelines cannot be read as undermining the provisions of
LPA NO.441/2008
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statutory enactment and the consequences enjoined by the
definition of "unauthorized occupant" under the Act. The
guidelines cannot re-write and negate the definition of the term
"unauthorized occupation" as defined in Section 2(g), which
reads as under:-
"unauthorized occupation", in relation
to any public premises, means the
occupation by any person of the public
premises without authority for such
occupation, and includes the continuance
in occupation by any person of the public
premises after the authority (whether by
way of grant or any other mode of
transfer) under which he was allowed to
occupy the premises has expired or has
been determined for any reason
whatsoever."
20. The Supreme Court in New India Assurance Company
Ltd. (supra) had the occasion to consider the effect of the
said guidelines and similar plea of the tenant/licensee.
Referring to the guidelines it was observed that the same
cannot control the statutory provisions and the effect thereof is
advisory in character and no legal right is conferred upon the
tenant or the occupant. However, in the said case as the New
India Assurance Company had themselves referred to the
guidelines issued by the Central Government, the ultimate
effect of the application of the guidelines was not finally
determined.
LPA NO.441/2008
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21. The appellants have also relied upon the doctrine of
legitimate expectation. Legitimate expectation is not a legal
right but a benefit, relief or a remedy which may ordinarily flow
from a promise or an established practice. The term
"established practice" refers to regular, consistent and
practicable certain conduct, process or activity of the decision
making authority. However, the expectation should be
legitimate i.e. logical, reasonable and valid. As legitimate
expectation is not a right, it is not legally enforceable as such
and is given a class just above "fairness in action" but below
promissory estoppel. Referring to the said principle in Ram
Pravesh Singh versus State of Bihar, (2006) 8 SCC 381,
the Supreme Court has observed that legitimate expectation
can only entitle a person to seek opportunity to show cause
before the expectation is dashed or ask for explanation as to
the cause for denial. In the present case, in view of the written
contract and the explanation given by the ITDC, the plea based
upon doctrine of legitimate expectation cannot be accepted.
The action of the ITDC in floating tenders or asking for market
license fee cannot be categorized as unreasonable, illogical or
invalid while exercising power of judicial review.
22. The respondent-ITDC being a State even in matters of
contractual obligation must act uniformly and guided by reason.
LPA NO.441/2008
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Without adequate reasons and justification ITDC cannot
exclude any person dealing with them or take away the
largesse arbitrarily. It cannot act on its own sweet-will and like
a private individual pick and choose as they please. All equals
should be treated in a similar manner and should not be
discriminated. Supreme Court in Style (Dress Land) (supra)
has held that all powers of the State must be exercised for
public good and action of renewability should be gauged not by
the nature of function but public nature of the body exercising
that function and action of a state contrary to Article 14 is open
to judicial review even if it pertains to contractual field.
Therefore there is need and it is desirable that ITDC should
have a uniform policy for the like. No one should be given
special advantage or favour without valid grounds in conformity
with Article 14 of the Constitution. Of course policy can be
amended and modified from time to time as per the needs and
requirements.
23. Some of the appellants in their written submissions have
expressed their willingness to abide by the terms and pay
license fee as in the case of Barlingtons and Maharani of
India. In case ITDC has renewed the contract with the said
two parties, the appellants will be entitled to ask for renewal on
the same terms and conditions subject of course to ITDC
LPA NO.441/2008
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rejecting their requests for valid and cogent reasons which
differentiates their case. However, we do not agree with the
contention of the appellants that ITDC should give first offer of
renewal/refusal to the present occupants depending upon the
highest tender received by ITDC in the open tender. It is rightly
pointed out by ITDC that this will have an adverse impact on
the offers made by the third parties and cause prejudice. This is
a matter of policy, and the stand and reasons given by ITDC
are not arbitrary or based on irrelevant considerations.
Similarly, the plea raised by the appellant-occupants relying
upon the order in O.M.P. No. 394/2008 titled Decibel Versus
I.T.D.C. is misconceived. In the said case, the Court while
disposing of an application under Section 9 of the Arbitration
and Conciliation Act, 1996 had merely recorded the contention
of counsel of the occupant that they should be permitted to
meet the best offer received by ITDC. Learned single Judge
had merely observed that the occupant therein shall be entitled
to make an offer and the same if maintainable under the law
can be considered by the respondent ITDC. Thus no directions
or findings have been given to ITDC.
24. In view of the above findings, the Appeals are dismissed.
The appellants cannot be given any relief as prayed for.
However the appellants have liberty to make an offer to ITDC
LPA NO.441/2008
[+ Connected Matters) Page No.23
in terms of renewal, if any, in the case of Barlington and
Maharani of India . It will be open to the ITDC to consider
the said offers, accept or reject the same. While rejecting any
offer, the respondent-ITDC will examine whether the case of
the said licensee is different from the Barlington or
Maharani of India and communicate reasons for rejection.
No costs.
(SANJIV KHANNA)
JUDGE
(AJIT PRAKASH SHAH)
CHIEF JUSTICE
MAY 18, 2009
P/VKR
