J.C. Sreevasthava vs The Govt. of A.P. and another

The petitioner in this writ petition is the owner of a proprietary concern by name "Deltronics" which he set up for manufacturing electronic components in Shed No. B-1 allotted to him by the 2nd respondent-Corporation in its Technocrat Industrial Estate at Balanagar. By letter No. SIDC/EA G/TIE/B-1/90, dated 31-5-1990, the 2nd respondent-Corporation, in continuation of its termination notice dated 26-3-1990 issued the following notice :--

"1. That your tenancy for shed No. B-1, TIE, Balanagar was terminated w.e.f. 26-4-1990 by us, for the reasons mentioned in our notice cited above. Thereafter, you represented through letter dt. 17-4-90 stating that the amount will be paid before 15-6-90. Your request is not acceded. We had given notice dt. 23-5-90 informing you that the shed would be taken up by the Corporation on 28-5-90 under Panchanama. In spite of our notice you kept the unit locked on 28-5-90.

It is now clear that you are not prepared to hand over the vacant possession of the unit and you are only adopting the delaying methods. As such the Corporation is left with no other alternative except to break open the locks of the unit on 3-6-90 in the presence of local Panchas, and you are requested to be present there on that day.

You are, therefore, requested to vacate and deliver the peaceful possession of the shed B-l, TIE, Balanagar to the Estate Officer of the Corporation on or before 2-6-90 and obtain a receipt to that effect, failing which, we will be constrained to take possession of the shed and premises on 3-6-90 in the presence of Panchas.

We further inform you that besides the action of the eviction, "the Corporation has every right to recover the balance defaulted amount of Rs. 7,141/- together with interest from you either by filing suit in the court of law or by moving the District Collector, under R. R. Act, for recovery of the dues as land revenue."

In this writ petition, the petitioner prays for a writ of Certiorari, or any other appropriate order, calling "for the records of the proceeding of the second respondent" in the said letter dated 31-5-1990 and quashing the same.

The petitioner states that he was allotted the said Shed No. B-1 by the 2nd respondent through its allotment letter dated 12-7-1974 and that subsequently, he entered into sale-cum-lease agreement and took possession of the said shed. According to him, the said agreement provided for payment of the''monthly instalment at Rs. 671/- for a period of 20 years commencing from the date of allotment i.e., 1974 and for execution of a pucca sale deed to the allottee after the full payment is made. He states that he fell into arrears by the year 1987 and that he filed Writ Petition No.4492 of 1987 when the 2nd respondent resorted to oral threats to re-take possession of the said shed. This Court, pending the said writ petition, granted interim orders in W.P.M.P. No. 5967 of 1987 and after he cleared of the entire arrears in instalments and complied with the orders of this Court, the said writ petition was finally closed on 13-8-1987. Subsequently also, he fell into arrears. The 2nd respondent gave a registered notice through Advocate on 28-3-1990 calling upon him to clear the arrears of monthly rent which accrued to Rs. 11,891/-up to 31-3-1990. Thereafter, he made a payment of Rs. 5,000/- through cheque on 17-4-1990 and sought by letter time up to 15-6-1990 for payment of the balance amount. But the 2nd respondent refused to give him time and by letter dated 31-5-1990, received by him on 2-6-1990, informed him that his request for clearance of the balance of arrears before 15-6-1990 was not accepted and that, therefore, the agreement of sale-cum-lease between the petitioner and the 2nd respondent was terminted and that the 2nd respondent proposed to re-take possession of the said Shed B-1. The petitioner then offered to pay Rs. 2,000/- in cash and further sum of Rs. 2,641/- by cheque to the Bill Collector of the 2nd respondent on 2-6-1990. But the Bill Collector of the 2nd respondent sought instructions from his higher authorities through Telephone and refused to receive the same. According to the petitioner on 3-6-1990, the Officers of the 2nd respondent-Corporation came to the said shed B-l and overlocked the petitioner''s business premises.

When this writ petition came up for admission on 5-6-1990, Sri G. Suryanarayana Murthy, the learned Standing Counsel for the 2nd respondent took notice and sought time for obtaining instructions. Subsequently, he filed the counter-affidavit dated 8-6-1990 of the Secretary of the 2nd respondent-Corporation. The petitioner filed his reply affidavit dated 19-6-1990 and on behalf of the 2nd respondent an additional counter-affidavit dated 19-6-1990 of its Secretary was also filed.

In the said counter-affidavit on behalf of the 2nd respondent, it is stated that the petitioner is a chronic defaulter. The petitioner paid only Rs.600/- in 1975 and Rs.1426/- in 1975-76. Thereafter, for a period of 5 years, he did not pay a single paisa towards the H.P. instalments. In 1981-82 he paid only Rs. 1000/- and in 1982-83 he paid Rs. 6,000/- and again from 1983-86 he did not make any payment. Under the circumstances, the 2nd respondent got issued a notice dated 21-1-1987 stating that Rs. 82,983-37 Ps. was due as on 31-12-1986 and that if he failed to pay the same on or before 31-1-1987, he should handover vacant possession of the shed on 2-2-1987. As he did not comply with the said notice, the Estate Officer of the 2nd respondent-Corporation took possession of the said shed B-1 in the presence of ''panchas'' and put locks to it. The petitioner then filed Writ Petition No.4492 of 1987 before this Court and obtained interim orders on 14-4-87 directing the removal of locks put to the said shed on condition of his depositing. Rs. 15,000/- within one month and paying thereafter Rs. 10,000/- for every quarter pending disposal of the W.P.M.P. Pursuant to the said direction, the locks were removed by the 2nd respondent and possession of the said shed was handed back to the petitioner. On 13-8-1987 this Court disposed of the writ petition making the interim order as the final order in the writ petition. The petitioner did not comply with the said directions of this Court and defaulted in making payment of the instalment of Rs. 10,000/- which fell due on 14-2-1988. The 2nd respondent gave a notice to the petitioner on 18-2-1988 asking him to make the said payment, but the petitioner failed to pay the same and the 2nd respondent, therefore, once again took steps to take possession of the said shed by conducting a ''Panchanama'' on 2-4-1988. As the Estate Officer was in the process of taking possession of the said shed after conducting panchanama on the said day, the petitioner promised to pay Rs. 15,000/- by issuing 2 cheques one for Rs. 10,000/- and another for Rs. 5,000/- dated 6-4-1988. After receipt of the said cheques, the Estate Officer handed over possession to the petitioner. Thereafter, once again, the petitioner committed default for a period of approximately 17 months. Under the said circumstances, the 2nd respondent issued notice to the petitioner on 26-3-1990 terminating the lease-cum-sale agreement and asked the petitioner to handover possession of the said shed within 30 days failing which action would be taken as per the terms of the agreement. The petitioner was also asked to pay the rental arrears of Rs. 11,891/- but he paid only Rs. 5000/- and sought time for the payment of the balance till 15-6-1990. The 2nd respondent replied on 31-5-1990 declining to give further time to the petitioner and intimating the petitioner that possession of the said shed would be taken on 3-6-1990, Accordingly, the 2nd respondent look steps to take possession of the said shed after conducting Panchanama., But the 2nd respondent could obtain possession of only a portion of the said shed and put its locks over that portion only. The remaining portion was found to be in the custody of a sub-tenant, who is running a unit under the name and style of M/s. Tiger Detective Agency and he did not permit the Officials of the 2nd respondent to take possession of the portion of the said shed in his occupation. It is also stated in the said counter-affidavit that the Eslate Officer got information from the said sub-tenant that he was paying a sum of Rs. 3,200/- towards rent per month to the petitioner for the said portion in his occupation. It is also stated in the said counter-affidavit that the petitioner himself locked the portion of the said shed in his occupation for the past 10 years and he is not doing any business there as admitted by him in his letter dated 2-6-1990.

It is contended in the said counter-affidavit on behalf of the 2nd respondent that Cl.4 of the lease-cum-sale agreement authorises and enables the 2nd respondent to take possession of the said shed B-1 from the petitioner in case of defaults committed by him as provided therein and that the petitioner cannot be permitted to make profit by keeping the said shed in his possession without running any unit for which the said shed was agreed to be given to him by the 2nd respondent. It is also contended that inasmuch as the petitioner did not question the termination of the lease-cum-sale agreement by the 2nd respondent by letter dated 28-3-1990, he cannot question the taking over of possession in exercise of its rights under the said Cl. 4 and that if the petitioner has any grievance, the proper remedy is by way of suit and not by invoking the jurisdiction of this Court under Art. 226 of the Constitution of India.

In the additional counter-affidavit, further material is filed to establish that a portion of the said shed is in fact, in possession of a sub-tenant running a unit under the name and style of M/s. Tiger Detective Agency and that it is paying a .rent of Rs. 3,500/- per month to the petitioner. In support of the said averment on behalf of the 2nd respondent letter No. SPL/A2/90, dated 16-6-90 of the General Manager, District Industries Centre, Balanagar, Hyderabad addressed to the Estate Officer of the 2nd respondent is filed. On behalf of the 2nd respondent, the lease-cum-sale agreement dated 11-3-1975 between the 2nd respondent and the petitioner is also filed. The 2nd respondent also filed letter No.SMP/ APSSIDC/226/90, dated 22-6-1990 of Srini-vasa Metal Pressings stating that they are a registered small scale industry engaged in the manufacture of electrical stampings and press components and that they are tenants of M/s. Diltronics and that they hold a valid lease/ rent deed and that they have been paying rents regularly to it. It is further stated that the annual monthly rent being paid to the petitioner by the said sub-tenant is Rs. 3,500/-and not Rs.3,200/-.

In his reply affidavit, the petitioner denies that he is a chronic defaulter in payment of rents to the 2nd respondent. He contends that the agreement between him and the 2nd respondent dated 11-3-1975 is really a conditional sale subject to lease within the time prescribed under the said agreement to make the sale absolute. He also denies that he gave a portion of the said shed on suB-1ease to a sub-tenant running a unit under the name and style of M/ S. Tiger Detective Agency. He states that he was ill for a long time and that that was the reason why he only applied to the 2nd respondent for permitting him to sublease the shed. He also denies that he kept the premises closed for the last 10 years. He also states that the said shed is not the exclusive property of the 2nd respondent for it to take possession and that he also invested funds for const ruction of the shed. He further contends that the 2nd respondent has no legal authority to lock the said shed arbitrarily without approaching the Civil Courts for evicting him, as the said agreement between himself and the 2nd respondent is covered by the provisions of the Transfer of Property Act, 1882. He also states that even now, he is willing to pay the balance dues payable to the 2nd respondent and also make a lump sum payment of Rs.71,900/- and obtain an outright sale deed in his name as he is entitled to under the provisions of the said agreement.

From the above, it is clear that the petitioner has been a chronic defaulter in payment of the various instalments under the lease-cum-sale agreement dated 11-3-1975. The 2nd respondent made two attempts earlier to take possession of the said shed No.B-1 allotted to the petitioner. The petitioner approached this Court earlier by way of Writ Petition No.4492 of 1987 and only after interim directions dated 14-4-1987 in W.P.M.P. No.5967 of 1987 were given, he made payments in respect of amounts that became due then. The petitioner is not right tin stating that the said writ petition was closed only after all the instalments as directed in the W.P.M.P, in the aid writ petition were paid. After the said writ petition was closed on 13-8-1987 in terms of the interim orders dated 14-4-1987 also, the petitioner was to pay some instalments and he once again committed default in the payment of the said instalments. By letter dated 18-2-1988 the 2nd respondent required the petitioner to pay the instalment for February, 1988 of Rs. 10,000/- which fell due. Thereafter, the 2nd respondent took steps to take possession once again of the said shed and then only the petitioner paid the amounts that were due and payable by him to the 2nd respondent. The petitioner does not deny that thereafter he once again committed default and in view of the said defaults, he was addressed a termination notice dated 28-3-1990 by the 2nd respondent. By another letter dated 31-5-1990, the 2nd respondent terminated the said tenancy with effect from 26-4-1990 and refused the request of the petitioner for extending the time for payment of the rental dues. In that letter, the 2nd respondent also requested the petitioner to vacate and deliver peaceful possession of the said shed B-1 by 2-6-1990 failing which they stated that they would be taking possession of the said shed and premises on 3-6-1990 in the presence of Panchas. It is this letter in respect of which a Writ of Certiorari is sought now by the petitioner for quashing the same. In his letter dated 17-4-1990 the petitioner admitted that due to financial stringencies, he could not clear off arrears of rent in time and promised to clear off the dues at the earliest, positively within the next three months. Again in his letter dated 2-6-1990 addressed to the Managing Director of the 2nd respondent, the petitioner stated as follows :--

"1. I took the Shed on lease/ sale in the year 1974. I was to pay an amount of Rs.671/- per month towards lease/part of sale consideration till October 1994. On paying the amounts thus, the ownership will be transferred in my name.

Though there has been delays in payment of the instalments for the past 15 years, and the current dues are only Rs. 7,141-00 till date.

For the past 10 years my Unit remained closed due to various reasons and mainly due to my ailing health. In spite of all these difficulties I am today paying Rs. 2,500/- and I undertake to pay the remaining balance out of Rs. 7,140/- by 15-6-1990 positively. Under these circumstances I request you kindly not to terminate the agreement and 1 take possession of the Unit and permit me to continue in the shed and pay the running instalments."

In this letter, the petitioner stated that for the past 10 years, his unit remained closed due to various reasons and mainly due to his ill-health. According to the 2nd respondent, the petitioner has given a portion of the said B1 on suB-1ease and he was collecting a rent of Rs. 3,500/- from the said suB-1essee. These facts clearly show that the action of the 2nd respondent in terminating lease-cum-rent agreement is not in any way unreasonable even assuming that this Court under Art. 226 of the Constitution can enquire into the action of the 2nd respondent in exercise of its rights under the said agreement.

The Supreme Court in Bareilly Development Authority and Another Vs. Ajay Pal Singh and Others, . held as follows :--

"There is a line of decisions where the contract entered into between the State and the persons aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Art. 226 of the Constitution of India so as to compel the authorities to remedy a breach of contract pure and simple."

The Supreme Court also observed in that case that after a contract is entered into "the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines the rights and obligations of the parties inter se. In this sphere they can only claim rights conferred upon them by the contract in the absence of any statutory obligations on the part of the authority (i.e., BDA in this case) in the said contractual field."

A Division Bench of this Court also observed in National Thermal Power Corporation Ltd. Vs. Bhanu Construction Co. P. Ltd. and Others, as follows :

"The only limitation is that before entering into the contract, it (i.e., the Government, or an Officer of the Government, or an agency or instrumentality of the State) must act consistent with the guarantee contained in Art. 14..... But once a contract is entered into, it is the terms of the contract that govern, and no question of Art. 14, or arbitrary action,.arises. The very concept of one party to the contract acting arbitrarily and thereby violating Art. 14 is misplaced. The action may be wrongful; but it is not such an action as is amenable to writ jurisdiction on the ground that it is arbitrary. If a contract is terminated wrongfully, it cannot be questioned in a writ petition saying that the termination is arbitrary, or unreasonable. The concept of arbitrary or unreasonable action amenable to writ jurisdiction is relevant only where the State acts under a statute, or in exercise of its executive/ administrative power."

In this writ petition, the petitioner has not complained of violation of any statutory provision or rule by the 2nd respondent. Moreover, as rightly contended by the learned counsel for the 2nd respondent, the termination of lease-cum-sale agreement by the 2nd respondent is not questioned in this writ petition and only the consequential action of the 2nd respondent demanding vacant possession of the said shed No. Bl is questioned. It cannot be disputed by the petitioner that the said shed is giver/to him by the 2nd respondent only for the purpose of running a small scale industrial unit and not for conveying property rights therein to him irrespective of whether he bona fide utilises it for the said purpose.

Under the circumstances, I do not see any unreasonableness or unfairness in the action of the 2nd respondent which entitles interdiction by this Court on the ground that the said action is violative of Art. 14 of the Constitution. I do not also find any violation of the principles of natural justice or fairness in action of the 2nd respondent. The inter se rights between the petitioner and the 2nd respondent have to be resolved by action in a Civil Court and I therefore, make it clear that the observations made by me in this writ petition are oniy for the purpose of disposing of this writ petition in accordance with the principles of administrative law.

The writ petition is therefore, dismissed. No costs.

Order accordingly.