Telangana High Court

M/S Vishnujith Infra Developers Pvt. ... vs The Telangana State Road Transport ... on 27 March, 2024

Author: Nagesh Bheemapaka

Bench: Nagesh Bheemapaka

       HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

             WRIT PETITION No. 1008 OF 2024

ORDER:

This Writ Petition is filed seeking to declare the

action of the 2nd respondent in issuing termination notice No.

DIRJ/COM/BOT/110(38)-VOL2/2012-13, dated 02.11.2023

and a consequential notice DIRJ/COM/BOT/110(38)-

VOL2/2012-13 dated 06.11.2023 and thereby, trying to

interfere and dispossess the tenants of petitioner company from

the property i.e. "Jeevan Reddy Mall and Multiplex" in Survey

Nos. 401/69, 401/1 and 416/2, Bus Depot, Armoor, Nizamabad

District, as illegal, arbitrary, violative of principles of natural

justice and against all settled principles of law. Consequently, a

direction is sought to set aside the same.

2. Petitioner is a private limited company incorporated

in 2013, having its registered office at D. No. 3-1-109/5, Near

New LIC Building, Armoor, Nizamabad District and is engaged

in development of land, building and construction activities. It is

stated, the erstwhile Andhra Pradesh State Road Transport

Corporation is the absolute owner and possessor of the land in

Survey Nos. 401/69, 401/1 & 416/2, admeasuring 5142 Sq.mt.

(6150 Sq. yards), at Bus Depot, Armoor, Nizamabad District.

The Corporation invited bids for the above extent of land vide its

Request for Proposal dated 18.12.2012. Petitioner company

accepted the bid dated 21.02.2013 vide its letter of acceptance

dated 18.04.2013, accordingly the Corporation entered into a

Land Lease Deed for the purpose of development of vacant land

with petitioner company represented by its old Director Mr. P.

Srinivasa Rao vide registered document bearing No. 3117 of

2017 dated 21.03.2017 on the terms and conditions set out

thereunder. The Corporation and petitioner company have

entered into an Authorization Agreement dated 05.07.2013

wherein petitioner agreed for implementing the project site

involving design, financing, construction, marketing, operation,

maintenance, management and transfer of the project facility

and the levy, demand, collection, retention and appropriation of

tariff from the project facility. The term of the lease is for 33

years and the lease rentals for the first year is Rs. 30,75.000/-

with a yearly enhancement @5% on lease amount. Thereafter,

the 1st respondent executed lease deed on 08.10.2013 in favour

of petitioner leasing out an additional 909 Sq. yards for the

purpose of implementing the project under Built Operate

Transfer scheme (BOT) dated 05.07.2013. Subsequently, the 1st

respondent and petitioner entered into a Supplementary Deed

dated 23.12.2017, wherein Clause 5.2.1 of Authorization

Agreement forming part of registered lease deed is amended on

the conditions stipulated therein.

It is the case of petitioner that since the date of

execution of lease deeds, petitioner represented by the erstwhile

Directors is in possession of the above leased out property

admeasuring 6150 Sq. yards and 909 Sq. yards, totalling to

7059 Sq. yards. The said Directors have kept the land vacant till

2017 and have not taken any steps to procure building

permissions from the departments concerned and have not

commenced any development activities till 2017. Thereafter,

Smt. A. Rajitha Reddy has taken over petitioner company in

March, 2017 and the entire liability of the 1st respondent was

taken over by her. Thereafter, petitioner immediately obtained

building permission from Armoor Municipal Corporation vide

permit No. 3069/W4/2017/0343 dated 25.08.2019 for the

purpose of construction of building namely "Jeevan Reddy Mall

& Multiplex" comprising 2 cellars, ground floor plus 6 upper

floors, total admeasuring 3,20,000 sft. Petitioner company has

commenced the construction activity in September, 2019 and

completed in 2021. They also obtained Occupancy Certificate

from Armoor Municipal Corporation on 30.6.2021.

Petitioner states that due to Covid-19 pandemic in

India, there was complete lock down and Central Government

imposed certain restrictions. Further, there were no occupants

approaching petitioner company for taking lease of the building

complex except ground floor and first floor which was sub-let by

petitioner company to Reliance stores under sub-lease

agreement dated 03.01.2019 for 15 years with a monthly rental

amount of Rs. 10,27.080/-. Due to Covid-19 restrictions,

petitioner could not sub-let the vacant portion to

cinemas/multiplex for which petitioner company incurred huge

losses and could not obtain any rentals from the vacant portion

of the complex. However, the Telangana Government in March

2022 accorded permissions to run the movies in

theatres/cinema multiplex. In view of the same, PVR cinemas

approached petitioner in order to take the 4th, the 5th and the

6th floors in "Jeevan Reddy Mall & Multiplex" on lease and

accordingly, petitioner sub-let the said floors to PVR Cinemas

under sub-lease agreement dated 09.08.2023. However,

possession of the said floors was handed over to PVR Cinemas

on 23.03.2023 after obtaining permission from the

Commissioner of Police to run the cinemas. The term of the said

sub-lease is for 18 years with a monthly rental amount of Rs.

20.00 lakhs. However, the 2nd floor and the 3rd floor are vacant.

According to petitioner, while in this situation, it

was put to the utter shock and surprise, since the 2nd

respondent issued notice No.DIR(J/COM/BOT/110(38)-VOL-

2/2012-13 dated 02.11.2023, requesting petitioner to pay the

outstanding dues @ Rs. 7,23,71,801/- as on the pending

commitments of the Authorization Agreement within a period of

7 days. Prior to the same, the 2nd respondent issued series of

notices dated 29.04.2023, 03.08.2023, 25.09.2023 and

16.10.2023 to petitioner requesting to pay the outstanding dues

of Rs. 8,64,61.472/- as on 16.10.2023. Petitioner clearly admits

that it had paid an amount of Rs. 1,50,00,000/- on 26.10.2023

and also paid an amount of Rs. 2,40,00,000/- on various dates

through cheques to the 2nd respondent leaving a balance

amount of Rs. 4,83.71.801/-. The details of payments made by

petitioner are as mentioned below in tabular form:

Sl.No. Cheque No. Date of Cheque Amount (In Rs)

1 067928 8.12.2023 17,00,000

2 067928 8.12.2023 10,00,000

3 067930 8.12.2023 20,00,000

4 067931 8.12.2023 20,00,000

5 067932 8.12.2023 15,00,000

6 067933 8.12.2023 25,00,000

7 067934 8.12.2023 10,00,000

8 067935 8.12.2023 10,00,000

9 067923 8.12.2023 25,00,000

10 067925 8.12.2023 10,00,000

11 067926 8.12.2023 24,00,000

12 067927 8.12.2023 14,00,000

13 067943 16.12.2023 10,00,000

14 067944 16.12.2023 10,00,000

15 067942 16.12.2023 10,00,000

16 067941 16.12.2023 10,00,000

Rs.2,40,00,000 Total

However, it is the case of petitioner that it is facing

financial crises due to the fact that the 2nd and the 3rd floors

approximately to the extent of 1.00.000 Sq. ft. in "Jeevan Reddy

Mall & Multiplex" are vacant since 2017 and petitioner paid

rental amounts from 2013 along with interest to the 2nd

respondent. At present, the ground floor, 1st floor, 4th floor, 5th

floor and 6th floor were occupied by sub-lessees. However, on

07.12.2023, the officials of the 2nd respondent have entered the

mall illegally and announced on mic (microphone) that they will

take possession of subject property soon and asked the tenants

to vacate subject property. The Respondents have been illegally

interfering with the property and are trying to evict petitioner

from the property without giving any notice or an opportunity to

petitioner and without following due process of law. Petitioner

company is willing to pay balance outstanding rental dues of

Rs.4,83,71,801/- with interest and penalties to the 2nd

respondent in 16 monthly instalments, in spite of the same, the

officials of the 2nd respondent are continuously threatening

petitioner over phone call that they will evict petitioner from the

said property. Petitioner is facing financial crisis and 1,00,000

Sq.ft. in "Jeevan Ready Mall & Multiplex" is still vacant. If any

adverse steps are taken by the 2nd respondent in evicting

petitioner from the said property by terminating lease contract,

it will not only affect petitioner company but it will also affect

the business of sub-lessees which cannot be compensated.

Further, petitioner states that they leased out

portion of building in "Jeevan Reddy Mall & Multiplex" i.e.,

ground and first floor to Reliance Store and 4th, 5th, and 6th

floors to PVR Cinema. According to petitioner, due to illegal

interference by the officials of the 2nd respondent, sub-lessees

are apprehensive about facing illegal eviction from property. In

such an event, petitioner will be deprived from monthly lease

rental amounts from sub-lessees and it would be very difficult

for petitioner to sub-lease the property to new lessees and

petitioner would incur huge losses. Petitioner paid Rs.

2,40,00,000/- to the 2nd respondent and petitioner company is

willing to pay balance outstanding dues to the 2nd respondent in

16 monthly instalments. Petitioner, on numerous occasions,

requested the 2nd respondent for extension of time to pay the

balance outstanding rental amount of Rs. 4,83,71,801/- with

interest and penalties but the officials of the 2nd respondent are

continuously threatening petitioner with dire consequences that

they would illegally evict petitioner from the said property

without giving any notice or without following due process of

law.

Heard Sri Chadrasen Reddy, learned Senior

Advocate appearing on behalf of Sri K.S. Suneel and Sri

Swaroop Oorilla, learned Special Government Pleader on behalf

of Additional Advocate General for the respondents.

3. At the stage of admission, this Court passed interim

order in view of clear admission of outstanding dues by

petitioner to the 2nd respondent at Paras 8, 9 and 10 of the writ

affidavit and also considering the submission of learned Senior

Counsel that petitioner is willing to pay, this Court gave

direction vide interim order dated 11.01.2024 which reads as

under:

" Learned Senior Counsel submits that his client is willing to pay Rs.1 Crore on or before 31.01.2024, and the remaining 1 Crore on or before 15.02.2024. On complying with such condition, the respondents are hereby directed not to interfere with peaceful possession and enjoyment of the petitioner's tenants in the subject property i.e., "Jeevan Reddy Mall & Multiplex" situated in Survey Nos.401i69, 40111, and 416/2, Bus Depot Armoor, Nizamabad District. It is made clear that in case of default by the petitioner, the respondents

are at liberty to initiate action against the petitioner in accordance with law."

4. Petitioner complied with the first part payment of

Rs.1 crore within time i.e. on or before 31.01.2024, but failed to

make the second part payment within stipulated time i.e., on or

before 15.02.2024, but however, made the payment on

28.02.2024.

5. During the course of arguments, learned Special

Government Pleader submitted statement showing the

particulars of payment of dues outstanding as on 28.02.2024

which amounts to Rs.3,52,76,367/- which statement is also

verified and endorsed by the 2nd respondent and the Accounts

Officer of the respondent Corporation. The copy of the said

statement as on 28.02.2024 was handed over to learned Senior

Counsel for verification of the same with respect to outstanding

dues of petitioner company.

6. Learned Senior Counsel submits a copy of

Statement showing the particulars of amount payable, paid and

balance amount payable to the respondent Corporation which

amounts to Rs.3,13,74,312/- inclusive of Service Tax and GST

Amount (i.e., Principal due as on 28.02.2024 is of

Rs.1,36,61,088/- and GST amount is of Rs.1,77,13,224/-).

However, learned Senior Counsel produced the letter dated

10.03.2024 issued by Chartered Accountant along with copy of

Statement wherein it was stated that after verification of GSTR-

2A reports of the company pertaining to financial year's 2017-

2018 to 2023-24 which are downloaded from GST Website, it

was found that the Corporation has not uploaded any invoices

for the above lease charges paid/payable by the Company till

date.

7. However, on verification of the statement submitted

by petitioner, they mentioned that the amount accumulated

towards GST is Rs. Rs.1,77,13,224 and payments made by

petitioner company towards GST amount is 'nil'. Unless GST

amount is paid by petitioner along with principal amount, the

respondent corporation would not be in a position to deposit the

tax component with GST officials. In the instant case, petitioner

admitted the fact that GST amount paid is 'nil', in such an

event, petitioner company taking cue from Chartered

Accountant letter dated 10.03.2024 and further alleging that,

had the GST amount paid by petitioner to the respondent

Corporation is deposited with GST authorities by the respondent

Corporation, petitioner company ought to have received the

Input Tax Credit amount. However, since GST amount is not

paid by petitioner company along with principle amount, the

question of the Corporation depositing the same to the GST

Authorities does not arise.

8. From the conduct of petitioner, it is clearly

discernable that though petitioner had specifically admitted at

Paragraphs 8, 9 and 10 of writ affidavit that balance amount

would be paid in 16 instalments, but, after obtaining interim

orders from this Court, petitioner company is shirking away in

making payments to the Corporation on one pretext or the

other. This conduct of petitioner, that too after obtaining

interim orders from this Court cannot be countenanced in any

manner.

9. It is trite law that recovery of public money cannot

wait indefinitely. Recently, the Calcutta High Court in Brahm

(Alloys) Ltd. V. West Bengal Financial Corporation [W.P.A.

9084 of 2020 With CAN 1 of 2021] held as under:

" In such circumstances, the respondent no.1 was fully justified in proceeding with the sale of the assets of the borrower, particularly in view of the previous conduct of the petitioners. A fresh lease of life cannot now be granted to the petitioners, since such opportunity was previously given to them but the petitioners miserably failed to avail of the same. Recovery of public money cannot wait indefinitely."

10. Though the above judgment is only having a

persuasive value over this Court, this Court is of the considered

view that petitioner company is delaying to make payments after

obtaining interim order from this Court,that too having admitted

the liability in their own affidavit from Paragraphs 8 to 10.

11. Therefore, petitioner deserves no further

consideration from this Court in view of involvement of recovery

of public money, as such, this Court directs petitioner company

to clear the outstanding dues of Rs.3,52,76,367/- as on

28.02.2024 within a period of one month from the date of

receipt of a copy of this order, failing which, the respondents

are at liberty to initiate action against petitioner in accordance