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2008 Supreme(Del) 681
151 (2008) DELHI LAW TIMES 479
DELHI HIGH COURT
S. Ravindra Bhat, J.
HEERA MIDHA & ANR. -Petitioners
Versus
INDIAN TOURISM DEVELOPMENT CORPORATION -Respondent
W.P.(C) 7273/2007, W.P.(C) 18418/2006, W.P.(C) 425/2007, W.P.(C) 17698-99/ 2006, W.P.(C) 575/2007, W.P.(C) 734/2007, W.P.(C) 750/2007, W.P.(C) 989/2007, W.P.(C) 1095/2007, W.P.(C) 822/2007, W.P.(C) 16582/2006, W.P.(C) 16442-43/ 2006, W.P.(C) 16446-47/2006, W.P.(C) 6434/2007, W.P.(C) 835/2007, W.P.(C) 4903/ 2007, W.P.(C) 4904/2007, W.P.(C) 5995/2007, W.P.(C) 19049-50/2006, W.P.(C) 16602-03/2006, W.P.(C) 7279/2007, W.P.(C) 17496/2006, W:P.(C) 17497/2006, W.P.(C) 5905/2007, W.P.(C) 1159/2007, W.P.(C) 17495/2006, W..P.(C) 16451-52/ 2006, W.P.(C) 16449/2006, W.P.(C) 16448/2006, W.P.(C) 16436-37/2006, W.P.(C) 16323/2006, W.P.(C) 8466 of 2007
Decided on 1.7.2008
For the Petitioners:Mr. Jagdeep Kishore, Advocate.
For the Respondent/ITDC:Mr. Ajay Kapur and Mr. Rajeev Kumar Singh, Advocates.
Headnote:
PUBLIC PREMISES (EVICTION OF UNAUTHORIZED OCCUPANTS) ACT, 1971 - [SECTION 2(E), 2(G), 4, 5, 7, 11, 14, 15] - GUIDELINES ISSUED BY CENTRAL GOVERNMENT - [2002] - ARBITRARINESS - FAIRNESS - REASONABLENESS - JUDICIAL REVIEW - CONTRACTUAL RIGHTS - STATE AND ITS INSTRUMENTALITIES - RENEWAL OF LICENCE - ENHANCEMENT OF LICENCE FEE - GUIDELINES ISSUED BY CENTRAL GOVERNMENT - APPLICABILITY - PUBLIC PREMISES - UNAUTHORIZED OCCUPANT - OCCUPATION BY LICENSEE - TERMINATION OF LICENCE - EVICTION PROCEEDINGS - JURISDICTION OF ESTATE OFFICER - BAR OF JURISDICTION OF COURTS - ADMINISTRATIVE INSTRUCTIONS - STATUTORY PROVISIONS - DISCRETIONARY POWER - GUIDELINES - SCOPE AND APPLICABILITY - COMMERCIAL PREMISES - LETTING OR LICENSING - PART OF BUSINESS ACTIVITY - GUIDELINES - APPLICABILITY - JUDICIAL REVIEW - SCOPE AND EXTENT - ADMINISTRATIVE POLICY DECISION - JUDICIAL INTERFERENCE - STATE AS SHAREHOLDER - RIGHTS AND OBLIGATIONS - FAIR COMPETITION - NON-DISCRIMINATION - REASONABLE METHODS - AUGMENTATION OF RESOURCES - PUBLIC CAUSE - PUBLIC GOOD - FAIR AND REASONABLE METHODS - STATE AS LANDLORD - REVISION OF RENT - COMPENSATION AGAINST LOSS - INFLATIONARY TENDENCIES - COST OF MAINTENANCE - TAXES - COSTS OF ADMINISTRATION - STATE AS BENEVOLENT LANDLORD - EXPANDING OR STIMULATING ACTIVITIES - PUBLIC INTEREST - EVICTION OF LESSEES - RACK-RENTING - PROFITEERING - WHIMSICAL OR UNREASONABLE EVICTIONS OR BARGAINS - PRICE FIXATION - JUDICIAL SCRUTINY - FAIRPLAY - NON-ARBITRARINESS - MATTERS OF RATE, COST OR PRICE FIXATION - GREATER LEEWAY - AGENCY JUDGMENTS - CONSTITUTIONAL LIMITATIONS - FISCAL AND FINANCIAL MATTERS - LEGISLATIVE AND POLICY JUDGMENTS - GREATER WEIGHT - LIBERAL CLASSIFICATION OF GOODS, SERVICES AND OBJECTS OF TAXATION - MATTERS TO BE DEALT WITH - ZONING AND PRICE FIXATION MECHANISM - JUDICIAL INQUIRY - RATIONAL BASIS - ENLIGHTENED JUDGMENT - COMMISSION - JUDICIAL FUNCTION - EXHAUSTION - RATIONAL BASIS FOR CONCLUSIONS - MARKET DRIVEN CONSIDERATIONS - LOCATIONAL ADVANTAGES - AMENITIES - PECULIAR USE - RATE PAYABLE BY WILLING LICENSEE - GENERAL RATE - PREVAILING RATE - SIMILAR PREMISES - LIKE ADVANTAGES - OFFERS RECEIVED BY ADVERTISEMENT - RATES ACCEPTABLE TO OTHER PARTIES - LICENCE DEEDS - OVERALL CONSPECTUS OF CIRCUMSTANCES - PROCEDURE ADOPTED IN FIXING LICENCE FEE - ARBITRARINESS - UNFAIRNESS.
Fact of the Case:
The petitioners, occupants/licensees of spaces in Hotel Ashok, Hotel Janpath and Hotel Samrat, owned by the ITDC, were inducted on license basis, at different points in time. The license arrangements were expressed in writing; those documents fixed the periods of occupation, the license fee agreed to be paid, and the amenities which the licensees were entitled to enjoy. The spaces provided were commercial, in the form of shops, and in some cases, for office purposes. The IIDC also provided air-conditioning facility in most instances. The petitioners referred to a Resolution dated 30.5.2002 (hereafter called “guidelines”) by.1he Central Government, Ministry of Urban Development and Poverty alleviation which indicated guidance to prevent arbitrary use of power to evict tenants from the public premises and to limit the use of powers of the Estate Officer. These guidelines were notified in the Gazette on 8.6.2002. It is alleged by the petitioners that the ITDC wrote to them, stating that it did not wish to renew the license and that the status of the petitioners as occupiers would cease with effect from specified dates. The petitioners protested, highlighting that in most instances they were in lawful and peaceful occupation of the licensed spaces for long periods, and in a few cases for over three decades. The petitioners also informed that the space licensed were their source of livelihood and they had their business established in those places. ITDC was therefore requested to act fairly in respect of the petitioners and reconsider the matter. It is alleged that in the end of August, and September 2006, ITDC while agreeing to renew the license, however, imposed terms and conditions of renewal which were onerous, arbitrary, and such that the petitioners did not have an option to renew the license. It is contended that the ITDC agreed to renew the license on payment of astronomical license fee, which amounted to an increase of over 200 to 400% as compared with the existing license fee. The petitioners again represented to the ITDC for fair treatment, and reduction of the increase in license fee. Instead of considering these requests reasonably, the ITDC issued notices under Sections 4 and 7 of the Act directing the petitioners to appear before the Estate Officer. It is submitted that the said notice is not in accordance with the mandate issued by Section 4 of the PP Act in that Section 4 mandates that the notice should specify the grounds on which the order of eviction is proposed to be made. The petitioners attack the action of ITDC in agreeing to renew the / license but at a vastly increased license fee as unreasonable, arbitrary and unfair and violative of their right to livelihood.
Finding of the Court:
The Court held that the guidelines of 2002 do not apply to the ITDC in cases like the present one, where letting or licensing premises is an essential part of its activity. This finding is in line with the decisions of the Supreme Court in Jiwan Dass (supra) and Ashoka Marketing. The Court cannot read into the statute any additional fetter, by the interpretive process suggested on behalf of the petitioners. The impugned order cannot be declared as arbitrary; the ITDC was within its rights to expect higher returns. The procedure adopted in fixing the license fee, offered to the petitioners cannot be faulted with; it is neither arbitrary nor unfair.
Issues: 1. Applicability of the guidelines of 2002; 2. Is the decision to not renew the petitioners licences arbitrary; 3. Are the fresh terms offered to the petitioners for grant of licence, unreasonable and arbitrary.
Ratio Decidendi: 1. The guidelines of 2002 do not apply to the ITDC in cases like the present one, where letting or licensing premises is an essential part of its activity. 2. The impugned order cannot be declared as arbitrary; the ITDC was within its rights to expect higher returns. 3. The procedure adopted in fixing the license fee, offered to the petitioners cannot be faulted with; it is neither arbitrary nor unfair.
Final Decision: Writ Petition dismissed.
S. Ravindra Bhat, J.:-
The petitioners invoke the writ jurisdiction of this Court, questioning the validity of the conditions being imposed by the ITOC (hereafter called "ITOC"), an instrumentality of State, not renewing licences (of premises), which are characterized as onerous, unreasonable, arbitrary and contrary to the guidelines issued by the Central Government.
They also seek orders to prevent the use of powers by the ITDC to evict genuine tenants from public premises under its control. Although the pleadings present some variants, essentially the reliefs claimed are twofold; one, to enjoin the ITOC from invoking its powers under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (hereafter called lithe Act") and, two, to direct it to renew the licence arrangement hitherto enjoyed by the petitioners.
2. It is averred by the petitioners that the ITDC has a policy of renewing the licence with an enhanced licence fee @ 15-20%. When they applied to the ITOC to renew their licence, the latter, allegedly arbitrarily and unreasonably agreed to renew the licence of the petitioner but at an enhanced licence fee which is @ 200- 458% times more than existing fee. The petitioners allege that ITDC has no basis for renewing the licence at such an unreasonable enhancement, and also aver that this is not the first time that the ITDC has acted discriminately and arbitrarily.
3. The petitioners are occupants/ licensees of spaces in Hotel Ashok, Hotel Janpath and Hotel Samrat, which are owned by the ITDC. They were inducted on licence basis, at different points in time. The licence arrangements were expressed in writing; those documents fixed the periods of occupation, the licence fee agreed to be paid, and the amenities which the licensees were entitled to enjoy. The spaces provided were commercial, in the form of shops, and in some cases, for office purposes. The IIDC also provided air-conditioning facility in most instances.
4. The details of the licences, periodicity, etc, as disclosed by the petitioners (in many cases they have not revealed the exact dates of occupancy, periods of renewal, etc.) are extracted in the form of a common concerning the three different hotels, with relative writ petition numbers, name of the concern, etc.
5. The petitioners refer to a Resolution dated 30.5.2002 (hereafter called “guidelines") by.1he Central Government, Ministry of Urban Development and Poverty alleviation which indicated guidance to prevent arbitrary use of power to evict tenants from the public premises and to limit the use of powers of the Estate Officer. These guidelines were notified in the Gazette on 8.6.2002. It is alleged by the petitioners that the ITDC wrote to them, stating that it did not wish to renew the licence and that the status of the petitioners as occupiers would cease with effect from specified dates. The petitioners protested, highlighting that in most instances they were in lawful and peaceful occupation of the licensed spaces for long periods, and in a few cases for over three decades. The petitioners also informed that the space licensed were their source of livelihood and they had their business established in those places. ITDC was therefore requested to act fairly in respect of the petitioners and reconsider the matter.
6. It is alleged that in the end of August, and September 2006, ITDC while agreeing to renew the licence, however, imposed terms and conditions of renewal which were onerous, arbitrary, and such that the petitioners did not have an option to renew the licence. It is contended that the ITDC agreed to renew the licence on payment of astronomical licence fee, which amounted to an increase of over 200 to 400% as compared with the existing licence fee. The petitioners again represented to the ITDC for fair treatment, and reduction of the increase in licence fee. Instead of considering these requests reasonably, the ITDC issued notices under Sections 4 and 7 of the Act directing the peti
