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1995 Supreme(AP) 343
Andhra Pradesh High Court
Judges : B.SUDERSHAN REDDY, LINGARAJA RATH
Commissioner of Provident fund, Hyderabad - Appellant
Versus
Dr.V.S.V.Ramesh, through General Power of Attorney holder - Dr.V.V.Subba Rao, guntur - Respondent
Decided On : 07-13-95
A State is bound by its contractual obligations and its actions are subject to judicial review. A State cannot avoid its contractual obligations by taking shelter behind technicalities of law and driving the other party to Courts of law to get the desired relief.
Headnote:
RENTAL PREMISES - ENHANCEMENT OF RENT - JURISDICTION OF HIGH COURT - WRIT PETITION - MAINTAINABILITY - STATE AS OCCUPIER OF PREMISES - FAIR RENT - DETERMINATION BY CPWD - BINDING EFFECT - ADJUSTMENT OF EXCESS RENT PAID.
Fact of the Case:
The appellant, a State under Article 12 of the Constitution of India, occupied the respondent's premises since 1981 under a sub-lease. The original rent was Rs. 11,000/- per month, which was later increased to Rs. 15,400/- per month in 1984. In 1988, the respondent demanded an enhanced rent of Rs. 30,000/- per month, which was fixed by the CPWD. The appellant challenged the enhanced rent in a writ petition before the High Court.
Finding of the Court:
The High Court held that the writ petition was maintainable as the appellant was a State and its actions were subject to judicial review. The Court also held that the appellant was bound by the CPWD's determination of fair rent, as it had held out to the respondent that it would abide by the CPWD's recommendations. However, the Court directed that the excess rent paid by the appellant from 1-12-1984 to 10-11-1988 at the rate of Rs. 15,400/- per month be adjusted against the enhanced rent payable from 10-11-1988 at the rate of Rs. 30,000/- per month.
Issues: 1. Whether a writ petition is maintainable to enforce a contractual obligation against a State? 2. Whether the appellant was bound by the CPWD's determination of fair rent? 3. Whether the excess rent paid by the appellant from 1-12-1984 to 10-11-1988 could be adjusted against the enhanced rent payable from 10-11-1988?
Ratio Decidendi: 1. A writ petition is maintainable to enforce a contractual obligation against a State if the State's actions are administrative in nature and fall short of adherence to the principles of natural justice, fair play, equity, and good conscience. 2. The appellant was bound by the CPWD's determination of fair rent as it had held out to the respondent that it would abide by the CPWD's recommendations. 3. The excess rent paid by the appellant from 1-12-1984 to 10-11-1988 could be adjusted against the enhanced rent payable from 10-11-1988.
Final Decision: The appeal was dismissed with costs throughout. Hearing fee Rs. 1,000/- (Rupees one thousand only).
( 1 ) THE judgment of the learned Single Judge directing the appellants to pay enhanced rent of Rs. 30,000/- per month for the premises occupied by the 2nd appellant with effect from 10-11-1988 is assailed before us on the submission of a direction to pay enhanced rent to be properly the subject matter before a Civil court to be urged, and should not be directed under the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.
( 2 ) MR. R. N. Reddy, learned Counsel for the appellants, has strenuously contended before us that the relationship between the parties being contractual, a variation in the terms of payment is outside the purview of the Court in its extraordinary jurisdiction.
( 3 ) ADMITTEDLY the 2nd appellant has been occupying the premises of the respondent No. 1 since 1981 under a sub-lease from one Ch. Nageswar Rao. It is the case of the respondent No. 1, who came in Writ Petition No. 16805 of 1990 before this Court, that the sub-lease expired on 13-11-1984 after which the respondent No. 1 took symbolic possession of the premises. The original rent paid was Rs. 11,000/-, but a letter was addressed by Ch. Nageswara Rao to the 2nd appellant to increase it to Rs. 15,400/- per month. A copy of the letter was filed as material paper by the appellants with out its date, but it is submitted by mr. R. N. Reddy before us that the letter was of 19-9-1984, a fact we are inclined to accept in view of the intrinsic evidence available from two other letters of 18-12-1984 and 1-2-1985 respectively, one addressed by appellant No. 2 to the c. P. W. D. and the order from the 2nd appellant to Sri Ch. Nageswara Rao, both of which papers of rent being made, the 2nd appellant referred the matter to the c. P. W. D. for verification and recommendation of the fair rent to be fixed. On 8-10-1988 respondent No. 1 addressed a letter to the 2nd appellant demanding rs. 30,000/- for the premises. This letter was delivered to the 2nd appellant on 8-11-1988. Thec. P. W. D. fixed the fair rentatrs. 30,000/-by its certificate issued. on 10-11-1988, but the enhanced rent was not paid. Writ petition No. 16805 of 1990 was filed to direct the appellants to pay the rent. The learned Single Judge negativing the plea advanced against the maintainability of the writ petition directed for payment of rent which is being assailed before us.
( 4 ) MR. R. N. Reddy submits before us, while urging about the non- maintainability of the Writ Petition, that as per the directions of this Court rent of Rs. 15,400/- is being paid to respondent No. 1 from 1-12-1984 and mat order should be maintained directing the parties to go before the Civil Court for fixation of the fair rent and that until such fixation is made they are agreeable to continue to pay at the rate of Rs. 15,400/- per month. It is also submitted mat the arrears of the rent have been already paid at the same rate.
( 5 ) UNDOUBTEDLY a contractual obligation is ipso facto not enforceable through the Writ Jurisdiction only because one of the parties to the contract is State or is state under Article 12 of the Constitution of India. But, while it is so yet all actions of the State inasmuch as they are administrative in nature are liable to be tested on the anvil of Rule of Law and with the tests of fair play, good conscience and equity applied. This is so since unlike a private citizen a State is expected to act fairly in all its actions and not prompted by discriminatory or arbitrary considerations. Dealing with the question, one of us (Lingaraja rath, J. ,) observed in Raja Mohapatra vs. Board of Secondary Education as follows:-". . . Buthowever the decision of all such bodies either rendered in a quasi- judicial proceedings or taken administratively is subject to the same limitations to which the decisions of other quasi-judicial or administrative authorities are subject to, and if circumstances exist which made the decision vulnerable in law, the Court
