S.R. Shanmuga Gounder and Another vs The Commissioner Erode Municipality

A. Raman, J.—The Petitioner in Writ Petition No. 107 67/99 is the lessee and licencee, as the case may be, of the 1st and 2nd floor of ''Nathaji Vanika Maiyam Complex''. The Petitioner in W.P. No. 10768/99 is the lessee/ licensee ,as the case may be, of the 3rd floor of ''Nathaji Vanika Maiyam Complex''. The Petitioner in W.P. No. 20280/99 is an employee in the saree showroom at ''Nethaji Vanika Maiyam Complex''. This petition is filed by a worker employed in the shops of the Respondents 2 and 3, who are the Petitioners in W.P. Nos. 10767 and 10768/99.

The prayer in W.P. Nos. 10767 and 10768/99 is for issuance of writ of Certiorarified Mandamus to call for the records of the Respondent dated 10.06.1999 and quash the same, and consequently direct the Respondent viz., the Commissioner, Erode Municipality to renew the lease granted in favour of the Petitioners. The relief asked for in W.P. No. 20280/99 is a writ of mandamus, directing the 1st Respondent to renew the lease of the 1st, 2nd and 3rd floor of Nathaji Vanika Maiyam Complex, Erode for a further period of three years, commencing from 01.04.1998.

The Petitioner in W.P. No. 10767/99 viz., Shanmuga Gounder, participated in the public auction held by the Respondent/ Municipality, on 16.11.1994 for the lease/licence as the case may be of the 1st and 2nd floor of ''Nethaji Vanika Maiyam complex'' and his bid for Rs. 50,100/- for the 1st floor and Rs. 23,000/- per month for the 2nd floor, being the highest, were accepted by the Municipality. The Municipality confirmed the same by its proceedings dated 30.01.1995. The licence or lease is for a period of three years.

As regards the Petitioner in W.P. No. 10768/99, Mrs. Ramayee, she bid at the auction conducted by the Respondent for the lease/licence of the 3rd floor of ''Nethaji Vanika Maiyam Complex'' for a sum of Rs. 15,000/- per month. Her bid being the highest was confirmed by the Municipality, on 30.01.1995 and she was granted a lease or licence as the case may be, for a period of three years. Therefore, it is clear that the lease or licence, whatever it is termed, which was for a period of three years had come to an end by 31.03.1998. It was from 1.4.1995 to 31.3.1998. Now, the present petitions are filed by the Petitioners Shanmuga Gounder and Ramayee, requiring the Respondent viz., the Erode Municipality to grant them renewal of lease for another period of three years. The writ petition in W.P. No. 20280/99 is filed by a worker employed under the Petitioners Shanmuga Gounder and Ramayee, for Mandamus, directing the Municipality to grant renewal of lease for a period of three years.

At the outset, I would like to make it clear that it is neither necessary, nor prudent in this proceeding to consider whether the right that was granted to the Petitioners Shanmuga Gounder and Ramayee, is in the nature of lease or licence, though counsel appearing on either side would address arguments before this Court, one contending it to be a lease and the other contending it to be a licence. In the view now I am taking, it is best to relegate it for consideration in a proper proceeding. Therefore, I refrain from deciding whether it is a lease or licence.

The sheet-anchor of the Petitioners'' case is the order passed by the Apex Court in C.A. Nos. 1991-1994/1991. But, it appears that it was a case, where the G.O. relating to lease of building belonging to the Government was in challenge. From the extract of the judgment of the Apex Court, it appears that it is stated to have observed that the lessees are not to be dispossessed as long as they pay enhanced lease rent at 15% in a block of three years over and above the rent due. In my opinion, the said decision cannot come to the aid of the Petitioners. The order of the Supreme Court is not produced. The background of facts in which the order came to be passed could not be now gathered. But, it does not matter. The agreement here had come into existence long subsequent to the said decision, and the contract was entered into between the parties afterwards in 1993. It had come to end by efflux of time. Further, it is a building belonging to the Municipality. A reading of the order of the Supreme Court as extracted, does not show that it is to have effect in future and to hold away for all the times to come. Merely because the Erode Municipality was a party in that proceeding, it cannot be stated that it operates as res judicata. The Petitioner was not a party. The Municipality is not bound by the same since this is an agreement which has come into existence between the parties afterwards and relating to a different property and involving different facts and circumstances. Hence, the Petitioner can''t rely upon it nor can seek to fetter the rights of the Municipality, using the same.

The learned Senior Counsel Mrs. Nalini Chidambaram for the Petitioner would submit that there is non-application of mind on the part of the authorities concerned and that there is error apparent on the face of record and that there is violation of fundamental rights. According to the learned Senior Counsel for the Petitioners, the agreement entered into between the parties especially, Clause-II provides an option for renewal for a further period of three years. She further contended that the proceedings of the Municipality refer to an Order in W.P. No. 11392/98 whereas, there is no such order relating to the subject matter in W.P. No. 11392/98, but there is an order in W.P. No. 11932/98, relating to lease of the properties of the Panchayat and thus, there is an error apparent on the face of record.

She further contended that the Petitioners have exercised their right for renewal within 45 days before the expiry of the lease, by their letter dated 7.1.1998. By their letter, they have offered to pay 15% increase of the rent, which therefore, must be deemed as a fair rent payable in respect of the property in view of the decision of the Supreme Court, and therefore, the communication dated 10.06.1999 by the Respondent is bad in law. It is contended that no reasons are stated in the order except to state that the request for renewal is rejected and requiring the Petitioners to surrender possession of the property."

The Learned Counsel for the Respondent Mr. P. Srinivas would contend that the Petitioners have come to Court, suppressing certain vital facts. They have caused damage to the property and carried out alterations without the consent and knowledge of the Municipality, and therefore, they are not entitled to the relief.

The contention is countered by the learned Senior Counsel for the Petitioners by quoting the Cill''s case, wherein the Apex court has held that the validity of the impugned order should be only tested not on the basis of any averments made in the counter, which has come into existence subsequently, but merely on the basis of the order itself. Whether the Petitioners have caused damage to the property or not, cannot be now decided and therefore, the impugned order cannot be judged on the basis of the allegations made in the counter, but only upon the materials in the impugned proceedings without reference to the material in the counter.

IT. Learned Counsel for the Petitioners would contend that there is a considerable delay in dealing with the request of the Petitioner since the impugned order has been passed only on 10.6.1999, whereas early as on 7.1.1998, they have opted to have renewal and the period of lease having expired by 1.4.1998, and the delay in dealing with the request of the Petitioners, is therefore, of such nature, as is likely to affect the fundamental rights of the Petitioners.

On the question of delay, learned Counsel for the Municipality would submit that there was a suit in O.S. No. 59/1997 filed by one of the parties relating to the basement of the same premises, stating that they are entitled to have the use of the basement and asked for mandatory injunction, which was decreed by the court. Again, an appeal was preferred in A.S. No. 38/98 and the appeal was dismissed and as the matter relating to the basement of the very property was pending they could not take immediate action.

I am of the view that the Petitioners have got an effective alternate remedy. They want renewal for a further period of three years. According to the learned Senior Counsel, there is also a Clause in the agreement providing for a grant of renewal and that the Petitioner has exercised the right to seek renewal by applying within the period provided and demanding renewal of the same, and offering to pay 15% increase in the rent. Therefore, the Petitioners Shanmuga Gounder and Ramayee are entitled to renewal of the lease. It is also pointed out by the counsel that the rent paid by them has been accepted by the Municipality and therefore, a case is made out for invoking the jurisdiction of this Court under Article 226 of the Constitution.

The Petitioners are in effect seeking enforcement of a contractual right. The enforcement of the contract, they are seeking is not a statutory right, but it rests purely within the realm of private law. As pointed out already, there is no breach of fundamental right. What they are trying to enforce now is an ordinary legal right. There is no infringement of fundamental right in this case, since the Petitioners have no fundamental right to insist upon the same. Further, there is an alternative and effective remedy provided.

According to the Petitioners, there is already a clause in the contract, which is to the effect that the Municipality shall grant renewal of lease. It is further argued that they have offered and paid contractual rent plus a 15% over and above sum and the same had been accepted. Therefore, the remedy of the Petitioners will be to go to a Civil Court and ask for specific performance of the contract. Clause-II of the lease deed reads as follows:

on the expiry of the period for which the lease is granted unless the lease is renewed by the lessor, the lessee should vacate the premises. The lessor will on the written request of the lessee made within 45 days before the expiration of the terms of the lease hereby granted, grant to the lessee, lease of the premises for further term of three years, subject to the condition that the lessees should agree in writing to pay the market rate approved by the Municipal Council.

Learned Counsel Mr. P. Srinivas would contend that the Clause reads that on the expiry of the period for which the lease is granted, unless the lease is renewed by the lessor, the lessee should vacate the premises. Further he submitted that the lessee has not agreed in writing to pay the market rate approved by the Municipal Council. Therefore, when according to the Petitioners they are entitled to renewal in view of Clause-II more so when they have offered to pay 15% over and above the same pursuant to the direction of the Apex Court and the same has been accepted, the counsel for the Respondent would argue that they have not agreed to pay the market rate as approved by the Municipal Council in writing and therefore, they are not entitled to renewal.

It is a matter which cannot be now decided in the writ proceeding because what is the market rate, is a matter to be decided. Whether the payment of 15% offered over and above the contract rate should be taken as market rate, is a question that cannot be considered here. The Municipality will have necessary opportunity to adduce evidence regarding the rent prevalent in the area to show what is the market rate prevailing in that area, and to refute that the rent equivalent to 15% over and above the existing rate is not the market rate. It is all matters of evidence and these disputed questions of fact can be gone into and decided only in a civil suit. Civil suit is the effective remedy, where alone whether the Petitioners are entitled to renewal or not, can be conveniently gone into.

Thus, this is a case, where the Petitioners are trying to enforce at best a contractual obligation, for which there is an effective and alternate remedy. There is no infringement of fundamental right in this case. The question raised by the Petitioner would lead to detailed examination of evidence regarding related points of dispute, about the nature of rights, the readiness of the parties, and regarding market rate of rent which can be done effectively and conveniently only in a suit. There is non-application on the part of the authority.

From the mere mentioning of the W.P. number wrongly, an argument of non-application of mind cannot follow. There is no unconscionable delay in the case. Admittedly, a suit was laid in the court relating to a part of the same building. Further, I am unable to hold that any prejudice- has been caused to the Petitioner on account of the delay. The Petitioner has kept quite from 1.4.98. There is no violation of principles of natural justice. On the other hand, if renewal is granted to the Petitioner, it may amount to violation of principles of natural justice. Therefore, I am of the view that the writ petition cannot lie.

Learned Senior Counsel for the Petitioners would submit that the Petitioners had invested several thousands of rupees in the business. If they are thrown out by the Municipality, it would cause considerable hardship and loss and that further, people employed under them will also be thrown into streets, and therefore, it will cause prejudice to the Petitioners. According to her, by granting renewal, the Municipality is not going to suffer any loss, for they are in fact getting enhanced rent, and therefore, a direction should be issued.

The Petitioners knew that when they bid that it is only for three years. They have thus with open eyes entered into such a transaction. They cannot be permitted to take advantage of their own folly. I am unable to agree with this contention. If the contention of the Petitioners counsel is accepted, then a group of persons can monopolies the entire business. If one is the successful bidder for a period then he can carry on unto eternity. That is neither the spirit nor the intention of the judgment of the Apex Court. Such a practice would only lead to monopoly. It will deprive others to have equal opportunity of participating in the bid and run business of their own. If such a trend is permitted, then the property of the Municipality will be occupied by a particular person or set of persons who would be dominating the entire show. Thus, it will lead to unhealthy trade practice besides shutting out for ever the members of the public from participating in such endeavours. Auctioning of the places is a policy decision of the authority concerned. Such action would permit new persons to enter into business and thus would put an end to monopoly. Such public auction gives an opportunity to every person to make bid. It does not prevent the Petitioners herein from participating in the auction. The right of the Municipality to augment their income by such auction cannot be prevented. If there are workers engaged by the Petitioners, it is for the workers to look up to their employers viz., the Petitioners. They cannot fight the battle for the Petitioners.

In a batch of cases viz., in W.P. Nos. 2428 to 2431 and 3872/97, a single Judge of this Court has held that it would be travesty of justice to permit jurisdiction under Article 226 of the Constitution to be invoked to perpetuate the occupation of public property at the cost of public revenue. This Court, after referring to Sales Tax Officer and Anr. v. Shree Durga Oil Mills and Anr. 1997(1) ST 416 has observed that the court will not interfere with any action taken by the Government in public interest and public interest must override any consideration of private loss or gain. In yet another decision relating to a similar matter in Kannan and 9 Ors. v. Panruti Municipality 1998 W.L.R.69 a learned single Judge of this Court has held that a Writ of Mandamus cannot be issued on the basis of G.O. Ms. No. 265). The Government has issued instruction to the Municipality regarding the lease of lands belonging to the Municipality. There are no Rules even under the District Municipality Act, governing the same. On the basis of various decisions of the Supreme Court and also the High Courts, only those orders could be law viz., law made by Legislature or intra vires statutory orders and orders made in exercise of power conferred by statutory Rules, but not administrative orders having no statutory sanction. The Municipality, the owner of the bunks, is justified in issuing the notice for reasons, which it feels to be justified in terminating the arrangements., 22. In a decision rendered in W.P. Nos. 5175 to 5180/98, S.S. Subramani, J. has held that public authority has to act in fairness. But ''to Act in fairness'' does not mean that it should act to its own detriment, nor does it mean that it can allow the occupants to continue despite their refusal to pay reasonable enhancement of rent.

In yet another decision reported in 1998 W.L.R.734 (Palanisamy, M and 7 Ors. v. The Sriramapuram Town Panchayat) S. Jagadeesan, J. has held that the relief sought for by the Petitioners in the writ petition cannot be granted since the rights of the parties are governed by the lease agreement entered into between them.

Therefore, the relief asked for by the Petitioners cannot be granted. For in my opinion, such a writ petition will not lie at all 25. The judgment of the Apex Court cannot form the basis for the Petitioners herein. If the Petitioners'' contention is accepted, then it would amount to the Municipality granting a permanent lease and thus, tying up the Municipal Property for ever and the Municipality will not be able to do anything with regard to that property. I don''t think that is the spirit of the judgment of the Supreme Court. That judgment was rendered as a just solution to decide those cases. It cannot be equated to a precedent.

Tomlin''s Law Dictionary defines the word ''precedent'' as follows:

Precedents without judicial decision on argument are of no moment and an extra -judicial opinion given in or out of court, is no good precedent.

Here, it is not the case that the Supreme Court has not disposed of the case on merits, but more on equitable grounds, it has chosen to dispose of the matter. For we don''t know the mind of the Supreme Court in the decision except their expression that they feel that the Municipality better allow them to continue by paying 15% rent over and above the same. The G.O. which was questioned there, has been subsequently held by this Court to be an administrative notification. Hence, I have to hold that these writ Petitioners viz., W.P. Nos. 10767 and 10768 of 1999 are therefore liable to be dismissed.

Now, coming to W.P. No. 20280/99,1 cannot accept the contention that the Petitioner herein is an aggrieved party. He is not a lessee or licencee. There is no contract as between him and the Municipality. He is only a worker employed by the Petitioners in W.P. Nos. 10767 and 10768 of 1999 in their show-rooms. Hence, it is obvious that he has been set up by the Petitioners to file this petition. The Petitioner has submitted that he has been recognised as a worker and has enclosed along with the petition a list showing the names of the workers, their salary, the E.S.I, contribution and P.F. contribution. All these would show that the Petitioner and those who are working in the show-rooms have been recognized by Shanmuga Gounder and Ramyee as workers. If their employees take any step to oust them or retrench them or remove them it is always open for them to move the appropriate Forum. They cannot be called as workers employed by the Municipality nor they claim to be so. As far as the Municipality is concerned they are strangers and as far as they are concerned, the Municipality is a stranger. It may be that if the licensees /lessees are not granted further lease/licence, they have to close down the shop, in which case, these persons will be turned out. But, that cannot be taken as a ground for maintaining this petition. They have no locus standi to ask for such direction to the Municipality to grant renewal of lease. They can ask the Municipality to provide them with work. Even they have to move the appropriate Forum. For it is not the Petitioners in W.P. Nos. 10767 and 10768 of 1999, who are disowning them. It is not the case of the Petitioner that the Petitioners in writ petition Nos. 10767 and 10768 of 1999 have terminated their service or about to terminate their services. In such circumstances, their remedy is elsewhere. As on today, they continue to be their workers. Their right has not been infringed upon by the Municipality. It is not a case, where it can be stated that any right of the Petitioner has been invaded by the Municipality directly or indirectly. Therefore, the Petitioner has no locus standi to maintain this petition. Further, in this case, the Petitioner cannot ask for a direction to the 1st Respondent to renew the licence in favour of Respondents 2 and 3. When Respondents 2 and 3 themselves have no right to ask for such a direction, just because the Petitioner is a workman under them, he cannot also ask for similar direction. Hence, I have to hold that this writ petition is not maintainable, and the Petitioner is not entitled to any of the reliefs in this petition. ently, W.P. No. 20280/99shall stand dismissed.

In the result, W.P. Nos. 10767 and 10768 and 20280 of 1999 are dismissed, but in the circumstances, there is no order as to cost. Consequently WMP. No. 29790/99 shall stand dismissed.