Abdul Salam Nath & Ors vs Union Of India & Ors
2021 Latest Caselaw 210 j&K/2

                                IN THE HIGH COURT OF JAMMU AND KASHMIR
                                              AT SRINAGAR

                                                              Reserved on:18.02.2021
                                                           Pronounced on: 24.02.2021

                                                                   OWP No.1312/2016

                          Abdul Salam Nath & Ors.                            ...Petitioner

                                      Through: -Mr. A. R. Bhat, Advocate, vice Mr. M. Y.
                                                 Bhat, Sr. Advocate.

                          Vs.

                          Union of India & Ors.                         ...Respondents
                                      Through: - Mr. T. M. Shamsi, ASGI.


                          CORAM: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE.


                                                      JUDGMENT

1) Petitioners have challenged tender notice dated 30th

of October, 2016, whereby respondent No.3 has invited

tenders from contractors to run shops/services at Air

Force Station, Srinagar. The petitioners have also

challenged the policy dated 12.08.1988 framed by

respondents for retendering of these shops/services. A

further direction has been sought by the petitioners upon

respondents to permit them to conduct the business in

their respective shops without any interference with a

direction that the respondents be restrained from

MOHAMMAD ALTAF BHAT 2021.02.25 14:15 I attest to the accuracy and integrity of this document

charging any enhanced rent and that no further tender

notice in respect of those shops should be issued.

2) The case of the petitioner is that they have been

allotted various shops at Air Force Station by the

respondents after they had participated in the tendering

process. According to the petitioners, they are running

their business from these shops for years together and

some of them even since 1980's and that they are

regularly paying rent to the respondents in terms of

conditions of agreement. The petitioners have placed on

record copies of some of the agreements executed by

them with the respondents as also some rent receipts.

According to the petitioners, although they happen to be

the tenants of the respondents, yet the respondents issue

tender notices after every four years but in terms of the

policy in vogue, the petitioners, as tenants, are given

preference and they are being permitted to continue their

tenancy in respect of these shops on payment of higher

rent.

3) It is averred that in the year 2016, respondents

issued a tender notice that was published in Daily

Greater Kashmir on 29.08.2016, whereby tenders were

invited for running 41 shops/services as mentioned in MOHAMMAD ALTAF BHAT 2021.02.25 14:15 the said tender notice for one year i.e. from 1st of October, I attest to the accuracy and integrity of this document

2016 to 30th of September, 2017. The tenders were to be

opened on 08.09.2016. The petitioners are stated to have

responded to this tender notice. According to the

petitioners, when the tenders were opened on

08.09.2016, they were found successful as per the terms

and conditions of the policy in vogue and they were

informed that after opening of the tenders, they will

continue to remain in possession of the shops. Thus, the

petitioners invested more money in their business on the

representation of the respondents.

4) It is averred by the petitioners that they were given

to understand that their rent will be hiked by 10% to

which the petitioners agreed but when they approached

the respondents for deposition of the rent, the same was

refused by the respondents on the ground that the

matter is under consideration of the higher authorities.

5) It is the case of the petitioners that the respondents,

with a mala fide intention and in order to favour some

blue eyed persons, have issued the impugned tender

notice thereby inviting tenders for the shops/services

that they are under the occupation of the petitioners.

6) The petitioners have challenged the action of the

respondents on the ground that they have a relationship MOHAMMAD ALTAF BHAT 2021.02.25 14:15 I attest to the accuracy and integrity of this document

of tenant and landlord with the respondents, as such, the

respondents cannot invite tenders for these shops/

services without terminating tenancy of the petitioners in

accordance with law; that the action of the respondents

is arbitrary and discriminatory, inasmuch as no such

practice of periodical tendering is being resorted to by

other similar departments like Army; that the

respondents are estopped from issuing tender notice after

extending promise to the petitioners that their contracts

will be extended subject to hike of 10% rent; that the

impugned policy of the respondents where under

periodical re-tendering of the shops and services is being

undertaken by them is violative of doctrine of promissory

estoppel and legitimate expectation; that the impugned

tender notice is a result of mala fides so as to evict the

petitioners and to adjust blue eyed persons of the

respondents.

7) The respondents have resisted the petition by filing

reply thereto. In their reply, it has been claimed by the

respondents that the shops in question were allotted to

the petitioners for a specific period of time on licence

basis and after expiry of period of licence, they have no

right to retain these shops. It is submitted by

MOHAMMAD ALTAF BHAT respondents that the agreement of petitioners expired on 2021.02.25 14:15 I attest to the accuracy and integrity of this document

30th of September, 2016 and, accordingly, tenders were

invited from general public after expiry of 4½ years in

terms of policy on the subject and the same was

published in a local newspaper on 29th of August, 2016,

inviting sealed tenders for various shops/services for a

period of one year from 1st of October, 2016 to 30th of

September, 2017. The last date for submission of tenders

was fixed as 8th of September, 2016, and at the time of

opening of tenders on 08.09.2016 certain irregularities

were observed by the Board of Officers. Keeping in view

the law and order situation prevailing at the relevant

time, which, according to the respondents, prevented

wide publicity of the tender notice coupled with the

irregularities observed in the tendering process, the

competent authority was prompted to go for fresh

tendering and till that time, the petitioners were allowed

to continue to run their business from the said shops up

to 30th of November, 2016. Accordingly, the impugned

tender notice came to be published on 30th of October,

2016, inviting tenders for these shops/services for a

period of one year from 1st of October, 2016, to 30th of

September, 2017.

8) It is averred that as soon as the tender notice was

MOHAMMAD ALTAF BHAT issued, the petitioners approached this Court by way of 2021.02.25 14:15 I attest to the accuracy and integrity of this document

instant writ petition and an interim order came to be

passed in their favour on 8th of November, 2016. It is

contended by the respondents that because of this

interim order, the tendering process could not be

finalized and the petitioners continue to enjoy the

possession of the shops in question on the strength of

interim order passed by this Court, even beyond the

period of agreement executed in their favour. The

respondents have further contended that as per the

policy governing the allotment of shops, under no

circumstances a contract can be renewed after the expiry

of five years of contract without calling for fresh tenders.

It is claimed that even this period of five years after the

execution of last agreement by the petitioners with the

respondents has come to an end long time back.

9) In short, the contention of respondents is that the

status of the petitioners was that of a licencee and after

the expiry of their agreements, their position has been

rendered as that of an unauthorized occupant and, as

such, they have no right to continue in the occupation of

the shops in question nor can they challenge the action

of the respondents with regard to invitation of fresh

tenders in accordance with the policy guiding the

MOHAMMAD ALTAF BHAT allotment of shops in question.

2021.02.25 14:15 I attest to the accuracy and integrity of this document

10) I have heard learned counsel for the parties and I

have also gone through the written arguments and the

pleadings of the parties.

11) The petitioners have based their case on the

contention that their relationship with the respondents is

that of a tenant whereas respondents on the other hand

claim that the petitioners are only licensees in respect of

the shops/properties in question. In order to determine

as to whether relationship between the petitioners and

the respondents is that of a tenant and landlord or that

of a licencee and licensor, we need to go to the covenants

of the agreement which governs the relationship between

the parties. The conduct of the parties before and after

the creation of this relationship is also an important

factor which needs to be considered.

12) The Supreme Court in the case of C. M. Beena and

another v. P. N. Ramachandra Rao, (2004) 3 SCC 595,

while drawing a distinction between "lease" and "licence"

has laid down tests for determination as to whether there

is a "lease" or "licence" existing between the parties. Para

8 and 9 of the judgment are relevant to the context and

the same are reproduced as under:

"8. The crucial issue for determination is as to whether there is a lease or licence MOHAMMAD ALTAF BHAT 2021.02.25 14:15 I attest to the accuracy and integrity of this document

existing between the parties. Though a deed of licence may have been executed it is open for the parties to the document to show that the relationship which was agreed upon by the parties and was really intended to be brought into existence was that of a landlord and tenant though it was outwardly styled as a deed of licence to act as a camouflage on the Rent Control Legislation. 'Lease' is defined in Section 105 of the Transfer of Property Act 1882 while 'licence' is defined in Section 52 of the Indian Easements Act 1882. Generally speaking the difference between a 'lease' and 'licence' is to be determined by finding out the real intention of the parties as decipherable from a complete reading of the document, if any, executed between the parties and the surrounding circumstances. Only a right to use the property in a particular way or under certain terms given to the occupant while the owner retains the control or possession over the premises results in a licence being created; for the owner retains legal possession while all that the licensee gets is a permission to use the premisee for a particular purpose or in a particular manner and but for the permission so given the occupation would have been unlawful (See Associated Hotels of India Ltd. v. R.N. Kapoor). The decided cases on the point are ligion. For our purpose it would suffice to refer to a recent decision of this court in Corporation of Calicut v; K Sreenivasan.

9. A few principles are well settled. User of the terms like 'lease or 'licence', 'lessor', 'rent' or 'licence fee' are not by themselves decisive of the nature of the right created by the document. An effort should be made to find out whether the deed confers a right to possess exclusively coupled with transfer of a right to enjoy the property or what has been parted with is merely a right to use the property while the possession is retained by the owner. The conduct of the parties before and after the creation of relationship is of relevance for finding out their intention."

MOHAMMAD ALTAF BHAT 2021.02.25 14:15 I attest to the accuracy and integrity of this document

13) From the above ratio laid down by the Supreme

Court, it is clear that for coming to a conclusion as

regards the nature of relationship between the petitioners

and the respondents, we need to not only go to the

covenants of the agreement executed between the parties

but we have also to examine the conduct of the parties.

14) The original agreements executed in favour of the

petitioners have been produced by the respondents

before the Court for their examination. These agreements

reveal that the same are valid from 15th of November,

2012 to 30th of September, 2013, with a renewal clause

for further one year or more unless terminated earlier.

These agreements provide in each case, the type of

business which the licencee has to conduct from the

premises in question and permits the licencee to deal

with only that trade and not with any other trade. The

covenants further provide that the licencee has to keep

sufficient stock and variety of items in the shop to cater

to the requirements of the Air Force Personnel and the

licencee as per the covenants of the agreement is

debarred from keeping or selling any goods of the like

description to those which feature in the Canteen Store

Department Price List. Importantly, the agreement

MOHAMMAD ALTAF BHAT debars the legal representatives of the licencee from 2021.02.25 14:15 I attest to the accuracy and integrity of this document

taking up the demised premises after the death of the

licencee and such legal representative has only a right to

remove the belongings of his predecessor-in-interest. The

agreement contains a covenant whereby respondents

have reserved a right to restrict the entry to the demised

shops.

15) From the aforesaid covenants of the agreement,

execution whereof is not disputed by the petitioners, it

becomes clear that the petitioners have been given only

right to use the properties in question in a particular

manner and for a particular purpose. Their occupation of

the shops is not heritable and their activities and

business run from these shops is governed by the

guidelines and the restriction imposed by the

respondents in terms of the covenants of the agreement.

16) So far as conduct of the parties qua their

relationship is concerned, it is not in dispute that the

respondents have been inviting periodical tenders from

interested persons for running business/services from

these shops. Although it is the case of the petitioners

that there was an understanding that after the issuance

of tenders and upon participation of the petitioners

therein, the respondents would renew their license MOHAMMAD ALTAF BHAT 2021.02.25 14:15 subject to hike of licence fee but then the fact of the I attest to the accuracy and integrity of this document

matter remains that these shops were being put to tender

by the respondents from time to time and the petitioners

used to participate in tendering process.

17) From the covenants of the agreements executed

between the parties as well as from the conduct of the

parties qua their relationship, as discussed hereinbefore,

one comes to an irresistible conclusion that the

relationship between the parties was that of a licensee

and licensor and not that of a landlord and tenant.

18) Having held as above, it is an admitted case of the

parties that the licence agreement between the

petitioners and respondents has since expired and the

petitioners are enjoying the possession of the premises

only on the basis of interim order passed by this Court.

Once the period of licence in favour of a licencee comes to

an end, the possession of the licencee becomes that of an

unauthorized occupant and the same cannot be

protected by any court of law.

19) So far as the contention of the petitioners that after

the issuance of tender notice in September, 2016, they

emerged as successful tenderers and they were given to

understand that their agreements will be renewed subject

to hike of 10% in rent, is concerned, the same has been MOHAMMAD ALTAF BHAT 2021.02.25 14:15 I attest to the accuracy and integrity of this document

categorically denied by the respondents in their reply.

The respondents have taken a stand that there were

some irregularities in the tendering process and that due

to unfavourable law and order situation prevailing in

Srinagar at that point of time, wide publicity could not be

given to the tender notice, as such, they decided to resort

to retendering and the petitioners were permitted to

continue their business till November, 2016.

20) Since the petitioners have not placed anything on

record to even remotely suggest that they had succeeded

in the tendering process undertaken in the September

2016 and that they were promised by the respondents

with regard to renewal of their agreement(s). The

respondents have vehemently denied this assertion,

thereby giving rise to a disputed question of fact, which

the Court cannot decide in these proceedings. Thus,

without proof of foundational facts for attraction of

doctrine of promissory estoppel, the same cannot be

invoked in favour of the petitioners in the facts and

circumstances of the case.

21) So far as the challenge to the policy under which

the respondents have allotted shops to the petitioners,

particularly with regard to the covenants of the policy MOHAMMAD ALTAF BHAT 2021.02.25 14:15 which made, it is obligatory upon the respondents to I attest to the accuracy and integrity of this document

retender the allotment of shops after every five years, is

concerned, the same is without any basis. The petitioners

cannot challenge a policy under which they have been

allotted the shops. The property, which has been allotted

to the petitioners, belongs to the respondents and they

are well within their right to adopt any lawful process of

allotment of these shops which leads to earning

maximum commercial benefits for themselves or in a

manner beneficial to the welfare of the Air Force

Personnel, for whose benefit the respondents are

supposed to utilize the usufruct of these shops. The only

restriction or guideline which the respondents are

required to follow, being a public authority, is that they

have to resort to fair and reasonable process while

making allotment of these shops. The fact that the

respondents are resorting to periodical tendering of these

shops shows that they have been adhering to the

principles of fair play and reasonableness.

22) Although the petitioners have leveled allegations of

mala fides against the respondents' action of retendering

of shops yet no specific instances have been spelled out

by the petitioners to show that such action of the

respondents has resulted in any favouritism. In fact, as

MOHAMMAD ALTAF BHAT per the petitioners' own case, they have been 2021.02.25 14:15 I attest to the accuracy and integrity of this document

participating in the tendering process from time to time

and upon their emergence as successful tenderers,

agreements have been renewed in their favour from time

to time. Even under the impugned tender notice, the

petitioners have not been barred from participation and

they were free to participate in the said tendering

process. Thus the petitioners have not been

discriminated in any manner by issuance of the

impugned tender notice.

23) For the foregoing reasons, I do not find any merit in

this writ petition and the same is, accordingly, dismissed.

Interim order, if any, shall cease to be in operation.

24) The record be returned to the learned counsel for

respondents.

(Sanjay Dhar) Judge Srinagar 24.02.2021 "Bhat Altaf, PS"

Whether the order is speaking: Yes/No Whether the order is reportable: Yes/No

MOHAMMAD ALTAF BHAT 2021.02.25 14:15 I attest to the accuracy and integrity of this document