Madras High Court
M.K.Loganathan vs The Government Of Tamilnadu on 23 June, 2021
W.A.No.1460 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 23.06.2021
CORAM
THE HON'BLE MR.JUSTICE M.M.SUNDRESH
and
THE HON'BLE MS.JUSTICE R.N.MANJULA
W.A.No.1460 of 2021
and C.M.P.No.9107 of 2021
M.K.Loganathan .. Appellant
Vs
1.The Government of Tamilnadu,
Rep. by its Secretary,
Municipal Administration and
Water Supply Department,
Fort St.George, Chennai - 600 009.
2.The Director of Municipal Administration,
Municipal Administration Department,
Ezhilagam,Chepauk,
Chennai - 600 005.
3.The Regional Director of Municipal Administration,
Sarathi Nagar,
Kagitha Pattarai, Vellore - 12.
4.The District Collector,
Vellore District, Vellore.
5.The Commissioner,
Ranipet Municipality,
Vellore District,
Vellore. .. Respondents
Page 1 of 16
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W.A.No.1460 of 2021
Appeal filed under Clause 15 of the Letters Patent against the
order dated 04.07.2018 made in W.P.No.13150 of 2018.
For Appellant : Mr.S.Subbiah, Sr.Counsel
for Mr.W.M.Abdul Majeed
For Respondents : Mr.S.John J.Raja Singh
Government Counsel
JUDGMENT
(Delivered by M.M.SUNDRESH, J.)
This appeal has been preferred by the appellant who is the
licensee of the fifth respondent, aggrieved over the enhancement of
the rent fixed. The appellant was one among the licensees, who eke
out his livelihood from a shop owned by the fifth respondent. Like
scores of others, he completed nine years. A Government Order was
passed in G.O.Ms.No.92 Municipal Administration and Water Supply
dated 03.07.2007 facilitating the grant of licences to such of those
licensees who have completed nine years of payment of enhanced
rent. If not agreeable, the shop in question would be brought to public
auction. The Government Order stipulates that the enhanced rent will
have to be fixed as per the market value.
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W.A.No.1460 of 2021
2. Accordingly, the revision was made by the fifth respondent by
taking note of the prevailing market value among other factors such as
the advantages or physical features of the shops the licensees possess.
According to the fifth respondent, the shop in possession of the
appellant is situated in the midst of the busy market area. Hence, a
Committee constituted by the fifth respondent made the survey and
scanned the prevailing market value of the property and arrived at a
fair rent.
3. The rent fixed by the fifth respondent as suggested by the
Committee constituted has been put to challenge before the learned
Single Judge on the ground of arbitrariness and not following the due
procedure. The learned Single Judge while taking note of the earlier
decisions rendered, dismissed the writ petition filed. The following is
the relevant part of the order passed:
"9. The Division Bench of this Court in A.Sathar
Vs. The District Collector, Coimbatore and
Another (AIR 1998 MAD 217) has held as
follows:-
“...We are of the view that the appellant
has no vested right to continue in occupation of
the premises in question belong to the second
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W.A.No.1460 of 2021
respondent/panchayat which is entitled to lease
out the properties owned by it by public auction.
As rightly pointed by the learned single judge,
properties owned by the Municipality are also a
source of revenue to the Municipality and the
interest of the Municipality has to be balanced as
against the interest of the shop owner lessee. It
cannot be disputed that the lessees may also be
entitled to a fair terms and the Government, had,
therefore, allowed the lessees to continue their
occupation for a second term. As already seen
the appellant was given extension of lease period
from time to time from the year 1988 to
31.02.1997 on terms. Even the last lease was
extended for three years by enhancing the rent
by 30 per cent. Under these circumstances, it is
not fair on the part of the appellant to ask for the
extension of the lease for further term of three
years from 01.04.1997 to 31.03.2000 on an
enhancement of 15 per cent of the previous rent.
The extension granted earlier by the Panchayat,
to the appellant would not meant that the
appellant is entitled to continue in possession of
the premises in question for ever by paying
ridiculously low rent. We are of the view that the
extension of the lease to the appellant is against
the interest of the Panchayat. As already noticed
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the rental income from the properties owned by
the Panchayat is one of the sources of income of
the Panchayat. Therefore, the interest of the
Panchayat cannot be jeopardized by permitting
the appellant to continue in possession of the
premises in question at the enhanced rate of 15
per cent as prayed for. There are absolutely no
merits in this writ appeal and the same is
dismissed.”
10. In the case of O.A.Nowshad Farooq
vs. The Commissioner, Tiruelveli Municipal
Corporation, Tirunelveli and another
(W.P(MD)No.3535 of 2009, dated 30.04.2009),
reported in Indiankannon.org/doc/1721899, it
has been held that the petitioner is not entitled
for an automatic renewal of his licence on the
basis of the Government Order in G.O.Ms.No.92,
Municipal Administration and Water Supply
Department, dated 03.07.2007 as well as the
Government Order in G.O.Ms.No.181, Municipal
Administration and Water Supply Department,
dated 19.09.2008. It is also observed that the
Government Order is not applicable to the
existing licensees and thereby, licence would be
renewed for a further period and there is no such
condition incorporated in the Government Order.
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11. In WA(MD)No.546 of 2010, dated
19.08.2010 (P.Ravi vs. 1.Madurai City Municipal
Corporation Council, represented by its Hon'ble
Mayor, Madurai City Municipal Corporation,
Tallakulam, Madurai and another, the Division
Bench of this Court has observed in para 6 as
follows:-
“6.In the award of public largesse,
particularly involving the revenue, the municipal
Corporation should have the paramount interest
of augmenting the revenue. ....... We may also
point out that even in case of the
Government Orders granting such benefit,
those Government Orders should be
considered and interpreted to be of
advantage of the Corporation and not to the
licensee. This again is on the principle of
augmenting the revenue to the Corporation. As
the appellant had not satisfied this Court as to
his entitlement for the renewal of licence for a
further period of two years, though he has relied
upon the Government Order dated 25.5.2009."
12. Similar issue came up in the case of
M.Periya Samy vs. The Assistant Director of
Town Panchayats, Madurai, Madurai District
and The Executive Officer, T.Kallupatti Town
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W.A.No.1460 of 2021
Panchayat, T.Kallupatti, Madurai reported in
Indiankannon.org/doc/21280938, wherein,
the shops situated in T.Kallupatti Town
Panchayat Bus Stand Commercial Complex were
auctioned in the year 2012 for a period three
years and after expiry of the licence period, the
Panchayat issued a notification to bring the shops
for public auction. The existing licensee
questioned the auction on the ground that he is
entitled for extension of licence period as per
G.O.Ms.No.92, Municipal Administration and
Water Supply Department, dated 03.07.2007.
The Division Bench of this Court held that the
licence period is only for three years and after
expiry of the same, it is for the local authority, to
decide, as to whether extension of the lease has
to be made, by upward revision of lease amount,
as per the terms and conditions of the
Government Order or to go for public auction, to
augment more revenue, holding so rejected the
case of the licensees.
13. Another Division Bench of this Court, in
the case of P.Muthusamy Vs. State of Tamil
Nadu reported in (2014) 5 MLJ 129, has held
as follows:-
“21.The object of letting out the shops is to
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W.A.No.1460 of 2021
collect more revenue for the respondent-
Municipality, which is meant to be used for
welfare measures. The Government Orders, as
narrated above, are very specific about the
purpose of auction followed by lease/licence.
Since the transactions are commercial in nature,
the petitioners, being licensees, cannot insist that
the rent, which as they think, just and proper
alone is liable to be paid. Since the licence is to
be granted by the respondent-Municipality, while
making offer, the said authority can impose its
own terms in accordance with law. While
accepting the said offer, the petitioners cannot
insist that the condition attached therein cannot
be imposed. A perusal of the Government
Orders referred to above as well as the orders
impugned make it clear that the rent has been
fixed based upon the prevailing market value and
not otherwise. What has been given by way of
extension to an existing licensee was only a
concession. The subsequent extension has been
made during the pendency of the writ petitions.
The said decision was made in view of the
undertaking given by the licensees. An
undertaking was given in connection with the
payment as well as on the withdrawal of the writ
petitions. The Government orders also state that
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W.A.No.1460 of 2021
in the event of non compliance of the conditions
imposed including the payment of appropriate
rent, a licensee is liable to be removed.
22.The resolution has been passed after
making detailed discussion and it was also
passed as a consequence of the earlier order
dated 14.12.2012 by which rent was fixed. Since
the said rent so fixed was not paid, the
respondent-Municipality was made to pass the
impugned resolution. Therefore, it cannot be said
that the impugned resolution has bee unilaterally
passed and as such, the said decision is in
accordance with the Government Orders passed,
which confer the power on the respondent-
Municipality to take action towards the eviction
from the shops in the event of non payment of
rent payable. The extraction of the related
paragraphs of the resolution would clearly show
that relevant materials have been taken into
consideration while passing the same. The
respondent-Municipality has got its own duty ad
obligation to perform. Appointments will have to
be made to the public office and salaries will
have to be paid. Money will have to be spent
towards the welfare measures. The assessment
made also indicates that the proposed auction
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would bring more money. The best way to get
the maximum revenue is by way of public
auction. This will also create a level playing field
enabling others to participate along with the
petitioners/licensees. Therefore, we do not find
any arbitrariness in the action of the respondent-
Municipality. The reliance made by the
petitioners on the communication dated
12.03.2009 cannot be accepted since it cannot
overreach the Government Orders which speak
about removal when conditions are not complied
with. The fact that the Commissioner of
Municipal Administration directed the
respondent-Municipality to fix the market rent as
the rent payable based upon the Government
would also show that there is no quarrel with the
position that the market rent shall be the basis
for the fixation of the rent payable by the
licensees. In any case, the petitioners, being the
defaulters, cannot contend that they should be
allowed to continue forever. As the orders
impugned have been passed by taking into
consideration of the relevant materials, we do
not find any room for interference.”
The above order of the Division Bench was
followed by a learned Single Judge in the case of
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C.Vinoba Vs. The Commissioner, Palladam
Municipality (2015(3) CTC 170).
14. In (2016)3 MLJ 698 in the case of
P.P.M.S.C.L.W.Assn. vs. Commissioner, after
considering a number of decisions of this court as
well as the Supreme court, in para 26, held as
follows:-
“26.There is no two option of a vital fact
that the 2nd respondent/Municipality is the
competent/appropriate authority to determine
what rent a particular shop of the Panchayat may
fetch and it is well settled principle in Law that a
lease cannot be extended much to the detriment
of panchayat and in any event, the panchayat
cannot be a loser on any score.”
15. The Division Bench, in the unreported
judgment in W.A.No.616 of 2018, dated
23.04.2018, while considering the similar
argument that the revision of license fee has
been enhanced arbitrarily and without affording
an opportunity to the licensees, repelled the
contention.
16. Keeping in view, the principles laid
down in the above referred decisions, I do not
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W.A.No.1460 of 2021
find force in the submission of the learned Senior
Counsel for the petitioners. The revision of
licence fee is worked out based on the market
value of the property by the competent
committee and it was only an offer and hence the
grievance of the petitioners, it is an arbitrary
exercise of power of the respondents cannot be
countenanced."
4. Learned Senior Counsel appearing for the appellant contended
that the order of the learned Single Judge requires interference as no
renewal is sought for nor a fresh licence. But the challenge is only to
the arbitrary rent fixed unilaterally. The appellant ought to have been
put on notice and a different yardstick ought to have been followed.
Reliance has been made on the judgment of a Division Bench of this
Court reported in 2019 6 CTC 512.
5. Having heard the learned Senior Counsel appearing for the
appellant, we do not find any reason to interfere with the well merited
order passed by the learned Single Judge. What has been given in
favour of the appellant is only a licence to use the premises of the fifth
respondent for a fixed term. Therefore, it cannot be termed as a lease
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W.A.No.1460 of 2021
per se. Secondly, as rightly held by the learned Single Judge, this is
only an offer to such of those licensees whose term though expired
were in possession of their respective shops given to them for a period
of nine years. Therefore, what is given is only a concession. Once the
property belongs to the fifth respondent, a proper mode is by way of
public auction. In the absence of any vested right and based upon the
concession by way of an offer, the appellant cannot question the
licence fee fixed though it is termed as a rent. It is only the licence fee
as the status of the appellant is only a licensee. Even, on merits, we do
not find reason to interfere with the well merited order of the learned
Single Judge.
6. The object for fixation of the licence fee is to augment the
revenue. A procedure has been followed in tune with the Government
Order by way of constituting a Committee to consider the relevant
materials. It is not as if the Committee has taken into consideration of
the extraneous materials. If the appellant does not wish to continue
the shop, nothing prevents him from participating in the public auction
along with the others. Therefore, the observation of the learned Single
Judge that what is given to the appellant is an offer and offer being
conditional, it is not open to the appellant to contend to the contrary,
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more so, when there is no arbitrariness seen apparently on the face of
it. The learned Single Judge has rightly considered the earlier
judgment passed. Reliance as been made on the circular of the
Commissioner, Municipal Administration, Chennai, dated 30.11.2016.
Even the said circular clearly stipulates the guideline value to be taken
into consideration. In fact, the circular clarifies the Government Order
by stating that the purpose of granting the concession is to allow the
existing licensees to continue till the completion of the election. Thus,
looking from any perspective, we dot not find any reason to interfere
with the well merited order passed by the learned Single Judge. After
all, the paramount consideration is to augment higher revenue and if
the appellant does not wish to take the offer, it is well open to him not
to accept it, in which case, the fifth respondent would be entitled to
bring the shop for public auction.
7. For the foregoing reasons, the writ appeal stands dismissed.
No costs. Consequently, the connected miscellaneous petition is closed.
8. After the disposal of the appeal, learned Senior Counsel
submitted that further time may be granted for payment of licence fee
as fixed by the fifth respondent payable by the appellant. In such view
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of the matter, the appellant is granted a further period of eight weeks
from the date of receipt of a copy of this judgment for payment of
licence fee.
(M.M.S., J.) (R.N.M., J.)
23.06.2021
Index:Yes
mmi/ssm
To
1.The Secretary,
Municipal Administration and
Water Supply Department,
Fort St.George,
Chennai - 600 009.
2.The Director of Municipal Administration,
Municipal Administration Department,
Ezhilagam,Chepauk,
Chennai - 600 005.
3.The Regional Director of Municipal Administration,
Sarathi Nagar,
Kagitha Pattarai,
Vellore - 12.
4.The District Collector,
Vellore District, Vellore.
5.The Commissioner,
Ranipet Municipality,
Vellore District,
Vellore.
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W.A.No.1460 of 2021
M.M.SUNDRESH, J.
and
R.N.MANJULA,J.
mmi
W.A.No.1460 of 2021
23.06.2021
https://www.mhc.tn.gov.in/judis/
