Srinivasan, J.

The fourth respondent in the writ petition is the appellant herein. The parties will be referred to according to their rank in the writ petition.

2. The petitioners owned two buildings, situate within Mahe Municipality, and leased out the same to one M/s. Chandramathi and the fourth respondent. The said two persons entered into a partnership on 4. 1975, to run a business under the name and style of “Mahe Metals” for manufacturing aluminum foils. Application was made for issue of licence under Sec.355 of the Pondicherry Municipal Decree (Levy and Validation of Taxes, Duties, Cesses and Fees) Act, 1973 (Act 1 of 1973) and for permission under Sec.356 of the said Act. The permission under Sec.356 of the Act was issued in favour of Thirumathi C.V. Chandramathi, Thavakkara House, Near Konar Vayal-cettancoon-Tellicherry, Door No.685/1, Parakkal, Mahe under licence No.49/76/ LAD/C.5 Pondicherry dated 8. 1976. The address mentioned in the licence for location of the industry was Door No.685/1 Prakkal-Mahe. The nature and purpose of the industry was set out to be manufacture of aluminum circles and utensils. The details of the machinery authorised to be installed were also set out in the licence. Condition No.7 in the licence read as follows:

“The licence shall not be transferred to any other person by the person to whom it is issued and in case of change in the ownership of the unit by transfer, lease or otherwise, a fresh licence shall be applied for by the person who has acquired such ownership.”

Clause 8 provided that the licence was liable to be cancelled by the Licensing Authority if he is satisfied that there has been a violation of any of the conditions of the licence. By an order in No. 1750/76/LAD/C.5, dated 211. 1976 an amendment was issued to the licence by adding the Door No.685/2 in the column for location of the industry in addition to Door No.685/1 already mentioned in the licence.

3. A separate licence was issued under Sec.355 of the Act bearing licence No.394/78. That was renewed in the next year under No.394/79. The licence was being renewed periodically as required by the provisions of the Act till 1983-84. At that time, certain difference of opinion crept up between the two partners Mrs.Chandramathi and the fourth respondent and no application for renewal of licence was made. According to the petitioners, the factory was being run during the years 1984-85, 1985-86 and 1986-87 without any licence. But the contention of the fourth respondent was that the factory was not run during that period. The differences were settled between the two partners and a deed of release was executed on 35. 1985 by Mrs.Chandramathi who received a sum of Rs.1,10,000 from the fourth respondent and relinquished her interest in the firm. On the same day, thereafter, another person, by name K.E. Rehmath, was inducted as partner of the business by the fourth respondent. Fresh deed of partnership was entered on 4. 1987. According to its terms, it came into existence even on 35. 1985.

4. The licence which was issued previously had expired on 30.3.1985. On 17. 1986 an order was passed by the competent authority, suspending the licence as it has already expired. On 9. 1986, the fourth respondent applied for renewal of licence and paid the licence fee in the year 1985-86 and also a fee for the delay in filing the application for renewal. On 19. 1986, another application for renewal was made for the period 198687 along with payment of fine for the delay. The firm M/s. Mahe Metal filed a suit in O.S. No.7 of 1987 on the file of the Sub Court, Mahe for a declaration that the factory was being run validly by virtue of a statutory presumption under Sec.457( 13) of the Act and for an injunction against the Municipality. The suit was dismissed for want of statutory notice on 13. 1987. The firm made a representation to the Government on 4. 1987, for issue of renewal licence. On 15. 1987 an order was passed setting aside the orde