Licenses for municipal properties cannot be treated as heritable rights; renewal is contingent upon settling arrears and does not confer a legal right.

ORDER :

C.V. Karthikeyan, J.

Both these Writ Petitions had been filed in the nature of a Writ of Certiorari calling for the records of the impugned notices dated 01.03.2017 issued by the Municipal Commissioner, Wallajapet Municipality, Wallajapet, Vellore District relating to the shops of the petitioners and to quash the same.

2. In the affidavit filed in support of the Writ Petitions, it had been stated that the writ petitioners in both the Writ Petitions are small traders and lessees of shops owned by the Wallajapet Municipality. It had been stated that they are carrying on business in selling clothes, taking xerox copies, running barber shops, saloon and such other small business shops. They claimed that they have been paying the rent to the said Municipality. By the impugned notice, the Municipal Commissioner had enhanced the license fee/rent. The present Writ Petitions have been filed challenging such increase.

3. The learned counsel for the petitioners contended that the petitioners had raised loans for their businesses and had spent considerable amounts investing in the businesses. The petitioners have also built up reputation and good will in the area. It was further stated that without any reason, the rent had been increased at the rate of 25% of the prevailing rent. It had been stated that the guidelines which had been laid down to be followed for increase in the rent had not been followed. It had been claimed by the learned counsel that the petitioners are ready and willing to pay a reasonable rent and therefore sought interference of this Court and protection from paying the exorbitant rent demanded.

4. Notice had been directed to the respondents. The learned counsel for the respondents pointed out that the issue raised is no longer resintegra and placed reliance on a Judgment of the Division Bench of this Court in W.A.No. 535 of 2018 wherein by Judgment dated 07.08.2023 the Division Bench examined a demand notice by which the rent for the shops leased to the appellants therein had been increased and a demand was placed for monthly rent to be paid. The Division Bench had held as follows:-

“8. The Division Bench of this Court in while deciding the scope of G.O.No.92, Municipal Administration and Water Supply Department dated 3.7.2007 in P.Malliga Vs.The Commissioner, Erode City Municipal Corporation, Erode. [WA.Nos.366, 367, 793, 953 and 955 of 2021 dated 17.4.2021] has held as follows:

“11. The scope of G.O.Ms.No.92, Municipal Administration and Water Supply Department dated 03.07.2007 came up for consideration before the Division Bench of this Court in the decision in P.Muthusamy v. State of Tamil Nadu [2014 (5) MLJ 129]. In the said decision, it has been held that Municipality/Local Body is entitled to augment its financial resources by cancelling the existing licenses and put into Auction the shops.

12. In Tamil Nadu Municipal Shop Merchants Association v. State of Tamil Nadu [AIR 2000 Mad 393], it has been held that leases/licences of Municipal properties cannot become a heritable right and that the licencees cannot be permitted to continue in possession of shops under the guise of right of renewal.

13. The respondent/Corporation has issued the Tender Notification and Public Auction for lease/licence for a period of 3 years from 2019-2022 and the said notification came to be published on 23.01.2019 and as per General Condition No.46, it is stated that "While implementation of Municipal Schemes, the places for which lease/licenses have been granted, in the event of requirement, the lessees /licencees shall hand over the same immediately without imposing any condition".

14. No doubt, the appellants/writ petitioners are having subsisting right as lessees till 31.03.2025 and in the light of the above cited decision in Tamil Nadu Municipal Shop Merchants Association v. State of Tamil Nadu [AIR 2000 Mad 393], leases/licences of Municipal properties cannot become a heritable right and that the licencees cannot be permitted to c