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1999 Supreme(Kar) 388
Karnataka High Court
S.P.ENTERPRISES - Appellant
Versus
COMMISSIONER, BANGALORE MAHANAGARA PALIKA - Respondent
Decided On : 08-06-99
The main legal point established in the judgment is that the Corporation cannot refuse to renew trade licences relying upon sub-clause (c) of Clause 21.1 of the Building Bye-laws for buildings constructed prior to 27th April 1984. The judgment also establishes that places earmarked for car parking cannot be used for commercial activities and that the Corporation is entitled to demolish unauthorized constructions in such places.
Headnote:
trade licence - Building Bye-laws - 21.1 - The court examined the provisions of the Building Bye-laws and the rights of the parties governed by the Bye-laws framed for regulating business in hotels, lodging houses, etc. The court held that the Corporation cannot refuse to renew trade licences relying upon sub-clause (c) of Clause 21.1 of the Building Bye-laws for buildings constructed prior to 27th April 1984. The court also declared that places earmarked for car parking cannot be used for commercial activities and that the Corporation is entitled to demolish unauthorized constructions in such places.
Fact of the Case:
The petitioners sought direction to the respondent-Corporation to consider the applications for renewal of their trade licences and to quash the endorsement given to each of the petitioners. The petitioners had been carrying on business in restaurants or pubs in the premises, which were the subject matter of dispute, and the respondents were refusing to renew their trade licences on the ground that the premises were situated in a cellar portion of the buildings.
Finding of the Court:
The court found that the Corporation cannot refuse to renew trade licences relying upon sub-clause (c) of Clause 21.1 of the Building Bye-laws for buildings constructed prior to 27th April 1984. The court also declared that places earmarked for car parking cannot be used for commercial activities and that the Corporation is entitled to demolish unauthorized constructions in such places. The court held that the Corporation's action of refusing to entertain or receive the applications for renewal of trade licences was illegal and arbitrary.
Issues: The issues involved were whether the Corporation could rely on clause (c) of Bye-law No. 21 of the Building Bye-laws to refuse renewal of trade licences, the validity of resolutions passed by the Standing Committee, and whether the Corporation could refuse to receive the applications for renewal of trade licences.
Ratio Decidendi: The court held that the Corporation cannot refuse to renew trade licences relying upon sub-clause (c) of Clause 21.1 of the Building Bye-laws for buildings constructed prior to 27th April 1984. The court also declared that places earmarked for car parking cannot be used for commercial activities and that the Corporation is entitled to demolish unauthorized constructions in such places. The court further held that the Corporation's action of refusing to entertain or receive the applications for renewal of trade licences was illegal and arbitrary.
Final Decision: The court directed the Corporation to consider the applications for renewal of trade licences on their merits and in the light of the court's observations. The court also directed the Corporation to permit the petitioners to carry on their business as per the terms and conditions of the existing licences until the applications for renewal are considered. The court gave a deadline for filing renewal applications and directed the Corporation to take a decision on each application within four months.
( 1 ) IN all these petitions, the petitioners have sought for a "direction to the respondent-Corporation to consider the applications for renewal of their licence to carry on business (hereinafter referred to as "the trade licence") and also to quash the endorsement given to each of the petitioners.
( 2 ) IT is the case of the petitioners that they have been carryingon business either in Restaurants or Pubs in the premises, which are the subject matter of dispute in these petitions, for the last several years; and the respondents, without any justification, are refusing to renew their trade licences on the ground that the premises in question are situated in a Cellar portion of the buildings.
( 3 ) SRI B. K. Sampath Kumar and Sri K. L. Manjunath, learned Counsel appearing for the petitioners, submitted that since the petitioners have been carrying on business in the premises in question for the last several years and the licences were granted to them to carry on business in the premises in question after inspection of the premises by the Officers of the Corporation, it is not permissible for the respondents at this stage to refuse to renew the licences on the ground that the petitioners are carrying on their business in the cellar portion of the building/s in question. According to them, the renewal of the trade licence sought for by each of the petitioners in the facts and circumstances of the case, is automatic. They submitted that in so far as the grant of trade licence is concerned, the rights of the parties are governed by the Bye-laws framed for the purpose of regulating the carrying of business in hotels, lodging houses, boarding houses, choultries, rest houses, restaurants, eating houses etc. , (hereafter referred to as "the Boarding Houses and Restaurant Bye- laws") and, therefore, it is not permissible for the respondents to rely upon Bye-law 21 of the Building Bye-laws (hereinafter referred to as "the Building Bye-laws"), which came into force in the year 1984, governing grant of building licence for construction of a building, to deny the licences sought for by the petitioners. They further submitted that at any event of the matter, the Building Bye-laws of the year 1984 cannot be made retrospectively applicable in respect of the premises in which some of the petitioners have been carrying on business prior to the date of the coming into force of the said bye-laws. It is their further submission that the petitioners having made huge investments for the purpose of their business, they had legitimate expectation that the trade licences earlier issued to them, would be renewed every year without there being any objection. in support of this plea of legitimate expectation, Sri Sampath Kumar relied upon the decision of the Supreme Court in the case of M. R oil EXTRACTION AND ANOTHER vs STATE OF M. P. AND others, and drew my attention to paragraphs 29 and 31 of the judgment and also another decision of the Supreme Court in the case of NAVJYOTHl COOP-GROUP HOUSING SOCIETY vs UNION of INDIA and drew my attention to paragraphs 15 and 16 of the judgment. It is also his further submission that even assuming that the respondents, at the stage of the renewal of the licence, would have the power to decide the question as to whether the licence should be renewed or not, such decision has to be taken only after receipt and consideration of each of the applications of the existing licencees; and the right of the existing licences to carry on business cannot be denied by means of Circular dated 8th of March 1999, a copy of which has been produced as Annexure-E to Writ Petition no. 10287/98.
( 4 ) HOWEVER, Sri Ashok Haranahalli, Sri K. N. Puttegowda, Sri Muralidhar, Sri Prashanth, Sri Gunashekhar, Sri B. G. Rajashekar and sri Muniyappa, learned Counsel appearing for the Corporation, strongly countered the submissions of the learned Counsel for petitioners. It is their submission that Bye-law 21 of the Buildi
