important POINT
Maximum consideration in a normal and fair competition can be had only through Public auction which is expected to be fair and transparent.

Headnote:(a)NDMC Act, 1994 – Section 141(2) – Lease terminating on completion of the period by efflux of time and non-renewal of the same despite NDMC offering renewal – The lease being for fixed terms, earlier two renewals were of no consequence – There being no unqualified acceptance of NDMC’s offer of renewal of lease subject to execution of fresh agreement, no valid licence existed. (Para 5)
       (b)NDMC Act, 1994 – Section 141(2) – For the purpose of renewal, the parameters are different and it cannot only be restricted to public auction and the present occupants would have preference subject to their acceptance of the scheme and acceptability of their offer – Section 141(2) being explicit that the lease amounts should not be less than market value, appellant’s contention of renewal of lease on fair rent and not through public auction, not acceptable. (Para 10 and 11)
       (c)NDMC Act, 1994 – Section 141(2) – There being no agreement after 2003 and the NDMC proposing to have multiplexes whereas the present arrangement is one of uni-plex, and also Government adopting a policy of renewal of specified properties at enhanced rates; and parameters of limitation in Section 141(2) relating to public auction; the appeal does not have merit – Appeal dismissed. (Paras 15 to 17 and 24)
       (d)NDMC Act, 1994 – Section 141(2) – NDMC is obligated to adopt the procedure by which it can get maximum possible return/consideration for such immovable property – The methodology which can be adopted for receiving maximum consideration in a normal and fair competition would be the public auction which is expected to be fair and transparent – Public auction not only ensures fair price and maximum return and it also militates against any allegation of favouritism on the part of the Government authorities while giving grant for disposing of public property – The courts have accepted public auction as a transparent mean of disposal of public property – Disposal of public property partakes the character of trust and it should be for public purpose and in public interest – Invitation for participation in public auction ensures transparency and it would be free from bias or discrimination and beyond reproach. (Paras 22 and 23)
       AIR 1981 SC 1722; (1985)3 SCC 267; (1993)1 SCC 445; (1993)2 SCC 279; (1994)1 SCC 475; (1995)4 SCC 595; AIR 1996 SC 3458; (1997)5 SCC 432; (2002)3 SCC 496 – Relied upon.
       Facts of the case :
       By the order dated 13.11.2001 passed by the respondent-New Delhi Municipal Council (‘NDMC’), the appellants were held to be unauthorized occupants of the premises in dispute namely, that of Chanakya Cinema Complex situated in Diplomatic Enclave, New Delhi. Prayer was also to set aside the letter dated 22.1.2002 issued by the NDMC seeking the vacant and peaceful possession of the aforesaid complex. The resolution passed by the NDMC dated 28.8.2001 was also impugned to the extent it allowed the appellants to continue in possession from 1st October, 2000 to 30th September, 2003 only. Prayer was also made for renewal of the lease/licence of the appellants with the usual option for renewing the lease/licence on appropriate terms and conditions. It is to be noted that appellant No.1 was the original lessee while appellant No.2 is the shareholder of appellant No.1-Company. The writ petition was filed by the company through one of its Directors Shri Rajesh Khanna.
       Learned Single Judge noted that whatever may have been the situation in the past, the basic issue was whether the terms of lease permitted the tenancy beyond 30th September, 2003 as contended by the appellants. It was held that the appellants’ case was that renewal due in 2000 was to be effective from 1st October, 2000 on mutually agreed terms. Since the terms have not been mutually arrived at, in essence parties have not agreed to renewal in 2000. Undisputedly, the appellants’ case was a lease for fixed terms. The earlier two renewals were therefore of no consequence. The licence granted to appellant No.1 was from time to time and without premium. Specific periods were indicated in the terms of licence itself. The writ application was accordingly dismissed. The order was questioned before the Division Bench.
       After analyzing the basic issue formulated for the dispute, the Division Bench found no merit in the LPA and dismissed the same.
       Findings of the Court :
       No infirmity in the judgment of the Division Bench of the High Court.
       Result : Appeal dismissed.

JUDGMENT

Dr. ARIJIT PASAYAT, J.—

1.Leave granted.

2.Challenge in this appeal is to the order passed by a Division Bench of the Delhi High Court dismissing the Letters Patent Appeal filed by the appellants. Challenge before the Division Bench was to the order passed by a learned Single Judge dismissing the Writ Petition filed by the appellants. Challenge in the Writ Petition was to the order dated 13.11.2001 passed by the respondent-New Delhi Municipal Council (in short ‘NDMC’). By the said order, the appellants were held to be unauthorized occupants of the premises in dispute namely, that of Chanakya Cinema Complex situated in Diplomatic Enclave, New Delhi. Prayer was also to set aside the letter dated 22.1.2002 issued by the NDMC seeking the vacant and peaceful possession of the aforesaid complex. The resolution passed by the NDMC dated 28.8.2001 was also impugned to the extent it allowed the appellants to continue in possession from 1st October, 2000 to 30th September, 2003 only. Prayer was also made for renewal of the lease/licence of the appellants with the usual option for renewing the lease/licence on appropriate terms and conditions. It is to be noted that appellant No.1 (hereinafter referred to as the ‘company’) was the original lessee while appellant No.2 is the shareholder of appellant No.1-Company. The writ petition was filed by the company through one of its Directors Shri Rajesh Khanna.

3.Learned Single Judge noted that whatever may have been the situation in the past, the basic issue was whether the terms of lease permitted the tenancy beyond 30th September, 2003 as contended by the appellants. It was held that the appellants’ case was that renewal due in 2000 was to be effective from 1st October, 2000 on mutually agreed terms. Since the terms have not been mutually arrived at, in essence parties have not agreed to renewal in 2000. Undisputedly, the appellants’ case was a lease for fixed terms. The earlier two renewals were therefore of no consequence. The licence granted to appellant No.1 was from time to time and without premium. Specific periods were indicated in the terms of licence itself. The writ application was accordingly dismissed. The order was questioned before the Division Bench.

4.After analyzing the basic issue formulated for the dispute, the Division Bench found no merit in the LPA and dismissed the same. The following observations were made by the Division Bench.

“27.No formal licence deed was also executed and there was no unqualified acceptance to the offer contained in the NDMC’s letter dated 2nd December, 1991. Therefore, in the eyes of law, no valid licence was granted for the third block i.e. 1st October, 1990 to 30th September, 2000.

28.Be as it may, vide order dated 25th May, 2001 stay granted in CWP No. 3244/1992 was also vacated on the ground that even the period of third block had come to an end. This petition was also dismissed as withdrawn on 20th May, 2002. Even otherwise the NDMC’s letter dated 2nd December, 1991 did not contain any renewal clause. Therefore, contractually there was no entitlement to seek renewal after 30th September, 2000 and in fact there was no such lease in operation under which this right could be exercised. However, while vacating the stay vide order dated 25th May, 2001 since the Division Bench observed that request of the appellants for renewal of the licence agreement for further period be considered, the NDMC adverted to this aspect. Request of the appellants included allowing them to convert the cinema complex into a multiplex. Again, it was not in terms of lease that the question of ‘extension’ of lease period was considered. But it was the request of the appellants which was to be considered, and NDMC agreed to bestow its consideration in view of the observations of this court in its order dated 25th May, 2001. As consideration of this request was to take some time, the Council first passed resolution dated 28th August, 2001 extending the lease for a period

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2007 Supreme(SC) 1140

2007(6) Supreme 17Supreme Court of india(From Delhi High Court)Dr. Arijit Pasayat & S.H. Kapadia, JJ.Aggarwal & Modi Enterprises Pvt.Ltd. & Anr. — PetitioenrversusNew Delhi Municipal Council — RespondentAppeal (civil) 4002 of 2007(Arising out of SLP (C) No. 21183 of 2005)Decided on : 31-08-2007

important POINTMaximum consideration in a normal and fair competition can be had only through Public auction which is expected to be fair and transparent.

Cases Referred (10)

important POINT
Maximum consideration in a normal and fair competition can be had only through Public auction which is expected to be fair and transparent.