The local bodies have the power to grant extension of lease and the scope and effect of Rules 12(1)(3)(c) of the Rules framed under Tamil Nadu Municipalities Act is that the lease of vacant lands and buildings including bunks and stalls shall be granted only in public auction for one year in the first instance.

The Order of the Court was as follows :

These writ petitions are filed to quash the Notification of auction published by the respondents and direct the respondents to grant renewal of lease for a further period.

2. The reliefs asked for in these writ petitions are mainly based upon the Judgment of the Apex Court rendered in Civil Appeal Nos. 1991-94 of 1991 arising out of SLP (G) Nos. 2509/86 etc. The Judgment was rendered by the Supreme Court on 23-4-1991. It runs as follows :-

"Leave granted in SLPs. and Rule Nisi issued in writ petition.

It is not in dispute that the petitioners are in occupation of municipal buildings, shops, bunks, stall etc. having obtained the same by public auction. They have been occupying the premises for more than five to six years. They have been paying the rent which was determined at the public auction. It is the case of the Municipality that the petitioners have no right to continue in the premises and the Municipality wants to bring those premises to public auction again so that more rent could be secured from the new bidders.

It may be relevant to note that the Government has made an order dated 29th April, 1985 stating that the existing leases in Municipal properties shall be extended from the year 1985-86 and the lease amount shall be calculated for 1985-86 and the lease amount shall be calculated for 1985-86 at an increased rate 15% more than the lease amount for 1984-85 at an increased rate 15% more than the lease amount for 1984-85. The counsel for the petitioners submits that the petitioners are agreeable to pay the increased rate 15% for once in three years and they should be allowed to continue in their respective premises.

We have given our anxious consideration to the contentions urged by both the parties. It seems to us that there is no point in dispossessing the petitioners if they are prepared to pay the enhanced rent as per the said Government Order. They are in the premises doing business apparently with considerable investment. The periodical changes of premises seems to be detrimental to their interests. If the municipality is assured of reasonable rent, it is proper that the petitioners be allowed to continue in the premises. They must however, pay the rent at the increased rate 15% more than the amount which is payable once in a block period of three years commencing from 1-4-1998. The increased rate of 15% for the period from 1-4-1988 to 1-4-1991 shall be payable within three months from today.

The appeals and the writ petitions are accordingly allowed, setting aside the judgment of the High Court."

3. According to the petitioners, the decision of the Supreme Court is the law declared by the Supreme Court under Article 141 and therefore, it is binding on all the Courts and authorities concerned. In fact, the main platform upon which the case of the petitioners is hoisted is the above decision of the Supreme Court.

4. A reading of the Judgment of the Supreme Court would show that the decision was not rendered on a consideration of the issues nor in that Judgment, reasons are given. There is no ratio decidendi. On the other hand, a reading of the decision would show that it was a decision in the nature of consent. For we find that the Supreme Court has observed as follows :-

"The counsel for the petitioners submits that the petitioners are agreeable to pay the increased rate 15% for once in three years and they should be allowed to continue in their respective premises."

5. The questions whether the petitioners are under law entitled to insist upon extension of lease/licence, whether after the expiry of the period, they are entitled to continue in the premises and force the local bodies to further extend the period, whether the local bodies have such a power to grant extension of lease and what is the scope and effect of Rules 12(1)(3)(c) of the Rules framed under Tamil Nadu Municipalities Act, were not decided either directly or by implication. The Judgment proceeds to St