The court affirmed that retrospective rent enhancement without tenant consent is invalid, emphasizing adherence to statutory guidelines for future rent calculations.

ORDER :

HARINATH N., J.

1. The petitioners were allotted shops under the IDSMT Scheme. The petitioners participated in the auction and were allotted shops situated within the municipal limits of Palasa–Kasibugga Municipality, in IDSMT shopping complex and the Mahatma Gandhi Rehabilitation Complex.

2. The learned counsel for the petitioners submits that the petitioners are challenging the final notices issued on various dates, i.e., 22.03.2019, 20.03.2019, 09.05.2019, 30.11.2023, calling upon the petitioners to pay the enhanced rent retrospectively from December 2016 to March 2019, apart from enhancing the rent by 400%. The grievance of the petitioners in all the writ petitions is same, as such; a common order is being passed.

3. It is submitted that the respondent cannot unilaterally enhance the rent at an abnormal rate contrary to the prevailing circumstances, market conditions, and the nature of the petitioners’ petty business. The respondent municipality has called upon the petitioners to pay the enhanced rent from December 2016 to March 2019 and has also calculated the dues payable at the enhanced rate for the said period, demanding the amount as arrears of rent. This Court had earlier granted interim directions suspending the final notices issued, subject to the petitioners paying 1/4^th of the demanded amount.

4. The learned counsel appearing for the petitioners places reliance on the common order passed by the learned Single Judge of this Court in a batch of writ petitions, W.P.No.19228 of 2020 and batch, wherein the issue relating to enhancement of rent by 33 1/3% while renewing the lease was under challenge. In that case, two different rent hike proposals had been issued – one in July 2020 and another in October 2020. The learned Judge partly allowed the writ petitions by holding that the Municipality is entitled to enhance the rent by 33 1/3% along with applicable GST. The demands for enhanced rent retrospectively were set aside.

5. The leaned Single Judge further held that it is for the petitioners to consent to the extension of the lease, and the respondents were directed to calculate the rents afresh from the date of the order and make a demand for the enhanced rent as per G.O.Ms.No.56 , dated 05.02.2011. The petitioners were directed to convey their willingness or refusal to continuing in the premises within two weeks, and if the petitioners do not agree/consent, the respondents were at liberty to take steps to evict them as per the law. The learned counsel for the petitioners submits that the case of the present petitioners is similarly placed and, therefore, similar orders may be passed directing the respondents to enhance the rent by 33 1/3 % and set aside the demand for arrears of rent at the enhanced rate.

6. The learned counsel for the petitioners submits that there are no separate rules governing the lease of properties constructed under the Rehabilitation Scheme and that the same is confirmed vide the communication addressed by the 2^nd respondent to the 3^rd respondent.

7. It is submitted that as per G.O.Ms.No.56 , dated 05.02.2011, the respondents could have enhanced the rent by 33 1/3%, and the petitioners are agreeable for paying the rent at the enhanced rate of 33 1/3 %. It is further submitted that the petitioners are running petty businesses such as hair-cutting salons, mobile repair shops, mini stationary shops, kirana stores, and cycle repair shop etc. The enhancement of rent at the rate of 400% would severely impact the petitioners financially and deprive them of their livelihood.

8. The learned Standing counsel appearing for the 3^rd respondent submits that G.O.Ms