M/S Allied Fruits & Florists Pvt. ... vs Ndmc & Anr.
2011 Latest Caselaw 115 Del

            *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                         Date of decision: 10th January, 2011

+              W.P.(C) 403/2008 & CM No.816/2008 (for stay)

%        M/S ALLIED FRUITS & FLORISTS PVT. LTD.
         & ANR                                .... PETITIONERS
                      Through: Mr. Rakesh Tiku with Mr. Prakash
                                Gautam, Advocates.

                                     Versus
         NDMC & ANR.                                  ..... RESPONDENTS
                            Through:      Ms. Kanika Agnihotri & Mr.
                                          Vaibhav Agnihotri, Advocates for
                                          R-1 NDMC.
                                          Mr. Mukul Talwar, Adv. for R-2.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
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            Yes
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioners claim that the petitioner no.2 Sh. Panna Lal has been

carrying on business of sale of fruits and vegetables from Shop No.58-B,

Khan Market, New Delhi since 1960s; that the shop was acquired by Ms.

Neelam Chopra (not impleaded as a respondent by the petitioners but

impleaded as respondent no.2 vide order dated 17th January, 2008) in the

year 1969 and the petitioner no.2 being already a sitting tenant under an

oral tenancy became a tenant under the respondent no.2 and continued to

pay the rent to the respondent no.2; that over the period of time the rent

was increased to `2,000/- per month and the respondent no.2 also used to

take away vegetables and grocery items free of charge from the said shop.

The petitioners further claim that earlier the petitioner no.2 was carrying

on business from the said shop in the name and style of M/s Allied Fruits

& Florists but when the children of the petitioner no.2 joined the business,

the petitioner no.1 company was incorporated in which the petitioner and

his children only are share holders and directors. The petitioners claim that

the respondent no.2 to coerce the petitioners into vacating the shop started

lodging complaints against the petitioners and with the same design also

complained to the respondent no.1 NDMC of the petitioners carrying on

business in the said shop without license. It is the case of the petitioners

that considering the nature of the business being run in the said shop, the

petitioners do not require any license from the respondent no.1 NDMC but

by way of abundant caution applied for a license. The respondent no.1

NDMC asked the petitioners to produce a „No Objection Certificate‟

(NOC) from the landlord. The petitioners claim that owing to the disputes

with the landlord i.e. respondent no.2, it is not possible for them to obtain

the NOC from the respondent no.2. The respondent no.1 NDMC

accordingly vide order dated 2nd January, 2008 impugned in the present

writ petition rejected the application of the petitioners for health license

owing to the objection by the respondent no.2 landlord. The present writ

petition has been filed seeking declaration that considering the business

and activities of the petitioners of sale of fresh fruits and vegetables and

other branded grocery items from the shop of the petitioners, there is no

requirement for the petitioners to obtain any license under Section 327/331

of the New Delhi Municipal Council Act, 1994 and alternatively claiming

direction to the respondent no.1 NDMC to grant license to the petitioners

without insisting upon the NOC from the respondent no.2.

2. Notice of the writ petition was issued and vide interim order dated

17th January, 2008 the operation of the order dated 2nd January, 2008

stayed.

3. The respondent no.2 has filed a counter affidavit denying that the

petitioner no.2 was a tenant in the shop or had been paying any rent. It is

stated that the respondent no.2 after purchase of the shop in the year 1969

started a business of sale of fresh fruits and vegetables therefrom in the

name and style of M/s Allied Fruit Mart and is the sole proprietor thereof

and the petitioner no.2 was employed as a Manager incharge of the said

shop. The respondent no.2 along with her counter affidavit has filed the

affidavits submitted by the petitioner no.2 in the year 1970 and in the year

2001 as employee/Manager of the shop and admitting the respondent no.2

as the proprietor of the business, for the purposes of enhancement of

electricity load and obtaining the Sales Tax registration. It is further

pleaded that the respondent no.2 vide notice dated 25th June, 2007

terminated the services of the petitioner no.2 and the petitioners are illegal

trespassers in the shop. The counsel for the respondent no.2 has argued

that the petitioners having concealed the documents admittedly signed by

the petitioner no.2 (and signatures whereon are accepted in the rejoinder)

admitting the respondent no.2 to be the proprietor of the business of M/s

Allied Fruit Mart and employment of the petitioner no.2, are not entitled to

any relief on this ground alone.

4. The respondent no.1 NDMC in response to the contention of the

petitioners that the insistence of the respondent no.1 NDMC on NOC from

the landlord is without any authority of law, has referred to Section 327 of

the NDMC Act empowering the Commissioner, NDMC to lay down the

terms and conditions of grant of license and has referred to the technical

instructions (annexed to the counter affidavit of the respondent no.1

NDMC) requiring "proof of legal occupation of the premises" as a

condition for obtaining health license and which technical instructions

were approved by the respondent no.1 NDMC.

5. Though the petitioners as aforesaid have also sought a declaration

that the petitioners for the business being carried on in the shop do not

require any license from the respondent no.1 NDMC but the counsel for

the petitioners has given up the said relief. The only question which thus

survives is whether the respondent no.1 NDMC is right in demanding

NOC from the respondent no.2 landlord as a condition for grant of health

license to the petitioners.

6. The requirement as aforesaid in the technical instructions of the

respondent no.1 NDMC is of submission of "proof of legal occupation of

the premises". In working out of the said requirement, the respondent no.1

NDMC insisted upon NOC from the landlord. The question which arises

is as to what is legal occupation of the premises.

7. The admitted position is that the petitioner no.2 instituted CS(OS)

No.574/2007 against the respondent no.2 in this Court for restraining the

respondent no.2 from forcibly dispossessing the petitioner no.2 and his

sons from the said shop by any illegal or unfair means except by due

process of law. The counsel for the respondent no.2 on 27 th May, 2008

made a statement in the said suit that the respondent no.2 has no objection

to the suit being decreed in terms of the said prayer and further made a

statement that the respondent no.2 shall not dispossess the petitioner no.2

or his sons from the suit premises except by following due process of law.

The respondent no.2 is also stated to have filed a counter claim in the said

suit for mandatory injunction to the petitioner no.2 to vacate the shop and

to deliver the possession thereof.

8. I have enquired from the counsel for the respondent no.2 whether

the respondent no.2 has claimed any mesne profits for use and occupation

of the shop also from the petitioner no.2. It is informed that mesne profits

at the rate of `5,00,000/- per month have been claimed from the petitioner

no.2 and which are also under adjudication in the suit/counter claim

aforesaid.

9. I am of the opinion that once the respondent no.2 admits the

possession of the petitioner no.2 and his sons of the shop and has taken

recourse for vacation of the shop and also has claimed mesne profits, the

respondent no.2 cannot at the same time prevent the petitioner no.2 from

use of the said shop and which would be the result if the petitioners are

denied license. Mesne profits are expected to represent the profits which

had accrued from the property of which the person against whom mesne

profits are claimed is in unauthorized possession of. The claimant for

mesne profits cannot on the one hand claim mesne profits and on the other

hand create circumstances which would prevent the person against whom

the same are claimed from earning any profits therefrom. Section 2(29) of

the NDMC Act includes within the definition of "occupier", any person

who is liable to pay to the owner damages for the use and occupation of

any land or building. Thus, any person against whom a claim for damages

for use and occupation is made would necessarily be said to be in lawful

occupation of the premises.

10. The MCD is not competent to consider or investigate and adjudicate

title to the property and find out the right of a person to occupy the

property with respect to which license is sought. Here, the respondent no.2

being the recorded owner of the property has admitted the possession of

the petitioner no.2 and taken recourse to legal proceedings for eviction of

petitioner no.2. In these circumstances, the respondent no.1 NDMC cannot

refuse grant of license at least to the petitioner no.2. The Indian

jurisprudence respects possession and the petitioner no.2 by reason of

being in admitted possession also would be entitled to the licence. The

same view was also taken by the Division Bench of the Calcutta High

Court in Abdul Rashid Vs. Calcutta Municipal Corporation AIR 1991

Calcutta 234.

11. Insofar as the claim of the petitioner no.1 company is concerned, the

counsel for the petitioners on enquiry confirms that the petitioner no.1

company is nothing but an alter ego of the petitioner no.2 and has no

independent claim to the premises.

12. The petition therefore succeeds to the aforesaid extent. The

respondent no.1 NDMC is directed to consider the application of the

petitioners for grant of license without insisting upon production of NOC

from the respondent no.2. It is however made clear that the grant of

licence be it in favour of petitioner no.1 or petitioner no.2 shall not

create/vest any rights in favour of petitioners and shall be subject to the

outcome of the proceedings aforesaid initiated by the respondent no.2

against the petitioner no.2.

The writ petition is disposed of. No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 10th January, 2011 bs (Corrected and released on 31st January, 2011)