Public property must be managed in a fiduciary capacity to maximize revenue. Statutory provisions prohibit lease extensions beyond 25 years, and any subsequent lease of such property must be granted through a transparent public auction to ensure fair competition and prevent arbitrary exercise of power.

ORAL ORDER

Heard Heard Sri T.C. Krishnan, learned counsel for the writ petitioner;

Sri P. Vengal Reddy, learned Standing Counsel for the Municipal Corporation;

and Sri Srinu Babu, learned Assistant Government Pleader for MAUD.

2. The present Writ Petition is filed seeking the following relief:

“For the reasons stated in the accompanying affidavit the petitioner herein prays that this Hon’ble Court may be pleased to issue a writ, order or direction more particularly one in the nature of Mandamus, to declare the acts on the part of 2nd respondent in seeking to evict Members of petitioner association for the shop bearing Nos.1, 7,10 to 16, 23, 26 to 32, 34 to 52, 54 to 60, 62 to 66 situated at Indira Priyadarsini Vegetable Market, Tilak road, Tirupati Town and District pursuant to notice vide ROC No. 12855/1999/A1 dated 24.2.2026 which was served on 23.3.2026 without considering the explanation made by the members of petitioner association dated 31.3.2026 amounts to erroneous, arbitrary and violative of Articles 14 and 21 of the Constitution of India besides being violative of principles of natural justice and consequently direct the 2nd respondent not to evict the members of petitioner association from the demised shop rooms as referred above without considering their explanation in the interest of justice and to pass necessary order or orders as this Hon’ble Court may deem fit.”

3. The Writ Petitioner is an Association of lessees who have taken shops belonging to Respondent No.2 Corporation (Tirupati Municipal Corporation) on lease; that the members of the Petitioner’s Association have been on lease for more than 25 years in the said shops; that some of them have even committed default in payment of timely rents; that, therefore, Respondent No.2 had issued a Notice to all lessees, except the lessee of Shop No. 53, on 24.02.2026 (Ex.P.1); that the said Notice would indicate that under the IBSNT Scheme, the lease granted to the members of the Petitioner’s Association for a period of 25 years would come to an end by 31.03.2026; that the Respondent Corporation intends to conduct a Public Auction in respect of those shops, except Shop No.53, and therefore the lessees were informed to clear all pending arrears up to date till 31.03.2026; and that the said Notice would also indicate that a copy has been addressed to the Revenue Inspector with a direction to collect all arrears in respect of the shops and thereafter to lock up the shops and report to the Corporation.

4. It is further submitted by learned Counsel for the Petitioner that the members of the Petitioner’s Association submitted an Explanation on 31.03.2026 raising several complaints about deficiency of service on the part of the Respondent Corporation. Due to the threat of eviction, the present Writ Petition is filed challenging the Impugned Notice dated 24.02.2026 (Ex.P.1).

5. After sifting through the facts as narrated hereinabove, this Court notices that Section 148 of the Municipal Corporation Act, 1955 categorically imposes a bar on extending any lease of Corporation property beyond 25 years. The law is well settled with regard to the scope and ambit of Section 148 that not only the Commissioner but even the Government has no authority to extend the lease period beyond 25 years. The law is also settled categorically that once the 25-year period of lease is over, be it under extension or under renewal after every three years, or by any other mode of lease extending beyond the lease period of 25 years, the only method by which a fresh le