Telangana High Court
Sri Lakshmi Venkateshwara ... vs The State Of Telangana on 5 February, 2025
THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL
AND
THE HON'BLE SMT. JUSTICE RENUKA YARA
WRIT APPEAL Nos.124 AND 125 OF 2025
COMMON JUDGMENT:
(Per Hon'ble Smt. Justice Renuka Yara)
Since the issue involved in both these Writ Appeals is one and
the same, they are being disposed of by way of this common
judgment.
2. Heard Sri T.Srikanth Reddy, learned counsel for the appellant,
Sri A.Jagan, learned Government Pleader for Prohibition and Excise,
for the official respondents and Sri A.Venkatesh, learned Senior
Counsel representing Sri P.Vamshi Krishna, learned counsel for
respondent Nos.8 and 9 in W.A.No.124 of 2025 and respondent Nos.7
and 8 in W.A.No.125 of 2025.
3. These intra Court appeals are directed against the common
order, dated 13.12.2024, passed by a learned Single Judge of this
Court in W.P.Nos.28529 and 29567 of 2024, respectively.
4. For the sake of convenience, the facts and the submissions
made in W.A.No.125 of 2025 are hereunder discussed.
5. The background facts of the case are that the appellant has
taken a premises bearing No.8-2-293/82/A/197, Jubilee Hills,
Hyderabad, on lease from respondent Nos.7 and 8 and is running a
Cafe and Bar in the name and style of 'LE VANTAGE'. The appellant
entered into a rental agreement bearing document No.6316 of 2016
dated 03.12.2016 with respondent Nos.7 and 8, who are the owners of
the said premises. The said lease expired in the year 2019 and there
was no extension of lease. When the respondent Nos.7 and 8 refused
to extend the lease, the appellant filed a suit in O.S.No.2225 of 2019
on the file of VII Junior Civil Judge, City Civil Court, Hyderabad,
seeking perpetual injunction to restrain the respondent Nos.7 and 8
from forcibly evicting the appellant from the said premises. The
appellant also filed a suit in O.S No.1801 of 2019 on the file of IV
Additional Senior Civil Judge, City Civil Court, Hyderabad, seeking
specific performance of the registered lease deed for further extension
of lease by 3 more years. Consequently, respondent Nos.7 and 8, who
are the landlords, instituted a suit in O.S.No.195 of 2020 on the file of
IV Additional Senior Civil Judge, City Civil Court, Hyderabad, for
eviction of the appellant. Currently, the suit in O.S No.1801 of 2019
has become infructuous as the period for which the lease was to be
extended by way of specific performance was lapsed. The only right
subsisting in favour of the appellant as a tenant holding over is the
right to be in possession of the premises, until evicted through due
process of law.
6. The appellant was granted licence to run a Café and Bar vide
Licence No.17/2016-17 dated 26.03.2016 for the period commencing
from 23.06.2017 and ending with 30.09.2017. The licence was
periodically renewed for running the Cafe and Bar. The respondent
No.6 issued proceedings dated 19.09.2022 for renewal of licence
across the State of Telangana. The appellant paid necessary licence
fee for renewal of the licence. As per the amended Rule 9A of the
Telangana Excise (Grant of Licence of Selling by Bar and conditions of
Licence) Rules, 2005 (for short, 'the Rules of 2005'), in terms of
G.O.Ms.No.46, Revenue (Excise-II) Department dated 10.05.2023, the
annual renewal of 2B licence shall be deemed subject to conditions
that the proof of payment of requisite renewal fee, proof of payment of
first instalment of BET, Bank Guarantee, proof of payment of Trade
Licence for current year and Form 4B Affidavit are attached. The
appellant paid the necessary amount vide Challan No.6302555881
dated 27.09.2023, hence 2B licence is deemed to be renewed on
30.09.2024 as per the amended Rule 9A of the Rules, 2005. However,
the respondent No.6 refused to renew the 2B licence on the ground
that the appellant failed to submit valid sale deed/lease deed from the
owner of the premises.
7. Aggrieved by the refusal to renew licence, the appellant filed
W.P.No.29567 of 2024 to declare the proceedings in
Cr.No.B4/454/2022/DPEO(H), dated 19.10.2024 issued by
respondent No.6 as illegal, arbitrary and violative of the order dated
16.10.2024 passed in W.P.No.28529 of 2024, wherein, the appellant
was permitted to continue day-to-day operations of Le-Vantage Café
and Bar, including lifting the stock from TGBCL Depot (Excise)
through its ID.No.1703291 in view of the Rule 9A of the Telangana
Excise (Grant of Licence of Selling by Bar and conditions of Licence)
Rules, 2005 (for short, 'the Rules, 2005').
8. The learned Single Judge, upon examining the case of the
appellant and the respondents on the basis of the judgments of this
Court in Mandakini Restaurant and Bar v. Deputy Commissioner
of Prohibition and Excise 1 and Alla Venkata Krishna Reddy v.
The Government of Andhra Pradesh 2 dismissed the aforesaid writ
petition, holding that when the firm is not having valid lease deed,
there can be no question of renewal of the licence. Aggrieved by the
same, the present Writ Appeal is preferred.
9. In the grounds of appeal, the appellant contended that one of the
partner, who is the son of respondent No.7, the landlord, brought the
lease of the subject land as his investment and therefore, no separate
lease is required. Further, the appellant contends that the unofficial
respondent Nos.7 and 8 have waived rather estopped from insisting
2008(4) ALD 188
2013(6) ALD 130
the renewal of the lease deed, as they joined the son of respondent
No.7 as partner in the appellant partnership firm by bringing the
leased premises into partnership firm. The appellant contends that its
rights as a lessee would not come to an end automatically, when a civil
suit is pending. The grant of licence/renewal cannot be at the whims
and fancies of the owners of the premises, who have developed greedy
eye on the business of the appellant. The appellant contended that
absolute injunction order is passed in its favour and the said
document has to be considered in accordance with Section 31 of
Telangana Excise Act, Rules 5, 6, 9 and 10 of the Rules, 2005 and the
licence of the appellant ought to have been renewed.
10. According to the appellant, the learned Single Judge erred in
relying upon the judgment of Mandakini Restaurant and Bar's case
(1 supra), which is based on the un-amended Rule. There is an error
in the finding of the learned Single Judge while holding that Rule 6 of
the Rules, 2005 needs to be followed even while renewing the original
licence. As per the amended Rule 9A of the Rules, 2005, there is no
mention that all the conditions set out while granting licence have to
be complied again. Though the lease deed was not extended, the
appellant has the absolute injunction order in I.A.No.513 of 2019 in
O.S.No.2225 of 2019 and the said order can replace the lease deed in
proof of possession. Until the appellant is evicted under due process
of law, the appellant continues to be in possession and, therefore,
entitled for extension of the licence for carrying on the business. The
appellant contends that under Rule 6 of the Rules, 2005, the
conditions mentioned for grant of initial licence are not applicable for
renewal of licence. Also, Rule 9A of the Rules, 2005, does not speak
about valid subsisting lease deed for renewal of licence.
11. Further, according to the appellant, there is failure on the part of
the Single Judge in considering the existence of interim order passed
in favour of the appellant and the covenant of the lease deed, which
contemplates extension of the lease deed on enhancement of 10% of
the rental amount. Lastly, the appellant sums up its contentions in
the appeal claiming that as long as it is in lawful possession of the
premises, it can also exercise its right to do business under Article 19
of the Constitution of India. On the basis of aforementioned grounds,
the appellant prayed to set aside the impugned common order passed
by the learned Single Judge.
12. During the course of arguments, learned counsel for the
appellant would submit that the appellant is in legal possession of the
premises on the strength of the temporary injunction granted by the
learned VII Junior Civil Judge, City Civil Court, Hyderabad and,
therefore, they also have right to run the business in the said
premises, until evicted under due process of law. While so, the same
is vehemently opposed by the counsel for the landlords i.e. respondent
Nos.7 and 8 claiming that legal possession on the basis of a temporary
injunction order granted by a Court would not automatically extend
the right to continue to do business in the premises. Learned counsel
for the landlords would contend that an injunction order protects the
right of the appellant to be in possession until evicted under due
process of law, but the said injunction order would not give any right
to the appellant to continue to do business, as the said right is
dependent upon the statute governing the issuance of licence and
renewal of licence. The counsel for the landlords would contend that
the licence to run the Café and Bar expired, and in order to continue
to do business, the appellant has to get renewal of the licence by
meeting the terms and conditions stipulated under Rule 9A of the
Rules of 2005.
13. Learned counsel for the appellant in support of his contentions
relied upon the judgment of the High Court of Karnataka dated
27.03.2024 in W.P.No.22657 of 2023 (LB-BMP) arising from a dispute
between a landlord and tenant, wherein the tenant was running a
Hotel in the name and style of 'Velvette Hotel' under trade licence
granted on 31.07.2019. At the time of renewal of licence, the Health
Officer, BBMP office sought No Objection Certificate (NOC) from the
landlord. In the context, due to disputes, the landlords objected to
continuance of the hotel business activity of the petitioner therein. In
the said case, the High Court of Karnataka held that requirement of
NOC is only procedural requirement and cannot be insisted in all
circumstances and proceeded to state that the outcome of the
arbitration proceedings between the landlord and tenant would have a
bearing on the right of the petitioner to carry on business and such
contingence would arise only when the litigation attains finality and
accordingly, the respondent Nos.1 and 2 therein were directed to
consider the request for renewal or fresh licence without reference to
NOC from the landlord.
14. Learned counsel for the appellant also relied upon the judgment
of the High Court of Karnataka dated 25.01.2011 in W.A.No.2570 of
2009. The said appeal arises from the dismissal of the writ petition by
a learned Single Judge, which was filed seeking grant of licence, on
the ground that the landlady has not consented for grant of licence. A
civil case was instituted between the landlady and tenant. Since the
dispute was not yet adjudicated by the civil Court, the learned single
Judge had held that trade licence cannot be granted. The said order
has been assailed by way of writ appeal, wherein, it was held that
there is no specific provision wherein consent of the landlord is
mandatory in all circumstances. It is held that after the termination of
lease, though the possession is unlawful, the lessee cannot be
prevented from putting the premises to use. While so, the landlord
can at best seek mesne profits in accordance with law. The property
can be put to use only by obtaining the trade licence from BBMP.
Since the consent of the landlord is not mandatory and since it is only
a procedural requirement, the denial of renewal of trade licence is held
unsustainable.
15. In response to the contentions of the learned counsel for the
appellant, the learned counsel for the landlords would submit that the
citations relied upon by the appellant are not with regard to renewal of
an excise licence for running a Bar, but for renewal of licence to run
hotel. Learned counsel for the landlords submits that the facts and
circumstances of the citations referred by the learned counsel for the
appellant are not applicable to the facts and circumstances of the
present case. Instead the citations referred by the learned Single
Judge in Mandakini Restaurant and Bar's case (1 supra) and Alla
Venkata Krishna Reddy's case (2 supra) are squarely applicable to
the facts of the present case, as said cases referred to the disputes
between the landlord and tenant in the context of renewal of excise
licence under Rule 9A of the Rules of 2005. It is contended that this
Court has held that the conditions that apply for issuance of a licence
under Rule 9A of the Rules, 2005 are also applicable while renewing
the licence. In that context, learned counsel for the landlords referred
to judgment of the Hon'ble Supreme Court of India in C.Albert Morris
v. K.Chandrasekaran and others 3 wherein, a reference was made to
the case of M.C.Chockalingam and others v. Manickavasagam and
others (MANU/SC/0338/1973), where the main question dealt was
that whether a tenant who is not a statutory tenant is entitled to claim
to be in lawful possession of premises following termination of tenancy
or on expiry of the lease. The Hon'ble Supreme Court held in
M.C.Chockalingam's case, that litigious possession cannot be
regarded as lawful possession. Consequently, any right which the
dealer has over the site was a right which had been acquired in terms
of the lease. When the lease expires and when the landlord declined to
renew the same and also called upon the erstwhile tenant to surrender
possession, the erstwhile lessee can no longer assert that he had any
right to the site.
16. Learned counsel for the landlords referred to judgment rendered
by a learned single Judge of this Court in W.P.No.36681 of 2018 dated
22.02.2016, wherein it was held that "continuance of possession over
the leased premises by virtue of the legal protection would not have
the effect of extending the lease for the purpose of Rule 6 or Rule 9A of
the Rules, 2005". As Rule 6 of the Rules, 2005, specifically requires
production of a lease deed from the owner of the premises, the
protection afforded by the injunction order insofar as the possession of
2006(1) ALD 106(SC)
the respondent No.5 therein is concerned cannot be a substitute for
the legal requirement of producing a lease deed. The possession of
respondent No.5 therein would only be protected by such injunction,
but she is not entitled to seek renewal of a Bar licence without a lease
deed in relation to the said premises.
17. Having considered the rival contentions of the appellant-tenant
and the respondents-landlords, there is a need to examine whether the
amended Rule 9A of the Rules, 2005 supports the contention of the
appellant about the conditions meant for grant of a licence are not
applicable for renewal of said licence. A close reading of the Rule 9A,
renewal of 2B licence before and after amendment, shows that there
was only a minor amendment made about renewal of 2B licence
deemed subject to conditions specified, while the rest of the conditions
remained the same. Only for the purpose of facilitating the running of
business while the renewal application is pending, there is a deemed
grant of renewal of licence, otherwise the amended Rule 9A also
requires same conditions to be fulfilled for renewal of 2B licence,
which includes an affidavit in Form 4B. The affidavit in Form 4B
requires production of a valid lease deed for the property where the
Bar is located. Thus, the Rules clearly stipulate that the appellant has
to produce a valid lease deed for the property for renewal of the
licence. The appellant cannot escape the obligation to produce a valid
lease deed for the premises in order to get renewal of 2B licence.
While so, on account of disputes between the appellant and its
landlords, there is no extension of lease deed and the suit filed seeking
specific performance of extension of a lease deed for execution of fresh
lease deed has become infructuous.
18. The current status of the appellant is that there is no valid lease
deed for the premises and the suit filed in connection thereof has
become infructuous. The only subsisting right of the appellant is to be
in possession of the leased premises, until evicted under due process
of law. In the said facts and circumstances, even as per amended
Rule 9A of the Rules, 2005, the appellant has to produce a fresh lease
deed before the licencing authority for renewal of 2B licence. The
citations referred by the appellant are not related to renewal of 2B
licence for running Bar, but are in connection with running Hotel
business in the State of Karnataka. The citations referred by the
counsel for landlords in Mandakini Restaurant and Bar's case (1
supra) and Alla Venkata Krishna Reddy's case (2 supra) are dealing
with issuance of 2B licence with respect to leased premises when there
is no extension of lease and, therefore, squarely applicable to the facts
of the present case. The dicta laid down by the Hon'ble Supreme
Court in M.C.Chockalingam's case that litigious possession is not
legal possession and right arisen from a legal lease cannot be extended
upon expiry of the lease is a rationale, which is binding to the present
case. On the basis of the ratio laid down in Mandakini Restaurant
and Bar's case (1 supra) and Alla Venkata Krishna Reddy's case (2
supra), the appellant has only a right to be in possession of the leased
premises until evicted under due process of law. However, the said
possession does not entitle him to get extension of 2B licence. Since
the appellant is not entitled to grant 2B licence, the question of
interfering with the action taken by respondent Nos.2 to 5 in sealing
the Bar counter Fridge Liquor Store and Liquor Fridge does not arise.
Thus, there are no grounds to interfere with the impugned common
order passed by the learned Single Judge of this Court. The appeals
lack merit and are liable to be dismissed.
19. Accordingly, the Writ Appeals are dismissed. There shall be no
order as to costs.
Miscellaneous applications, if any, pending in these appeals,
shall stand closed.
___________________
SUJOY PAUL, ACJ
____________________
RENUKA YARA, J
Date: 05.02.2025
ssp
