Lessees of government property have no vested right to claim renewal of their lease. Public authorities must ensure transparency and fair revenue generation; therefore, the auction process is the mandatory and preferred mode for the allotment of commercial premises upon the expiry of an existing lease.

COMMON ORDER

1.By consent of both parties, these Writ Petitions are taken up for final disposal at the admission stage itself.

2.Heard the learned counsel on either side and perused the materials available on record.

3.The petitioners are lessees of the following shops in the building owned by the respondent. Their lease period expire on 05.08.2025.

4.Taking into account of the expiry of the lease period ie., on 05.08.2025, the respondent Panchayat issued the impugned tender notices, calling for public auction for the ensuing period upon the expiry of the lease period of the respective petitioners on 05.08.2025. Hence, the petitioners have submitted representations to the respondents that they are ready and willing to pay the enhanced amount of 30% rental for a further period of three years and that before the expiry of their lease period, calling for tender without giving opportunity of providing extension of the lease period by obtaining 30% to the petitioners, the petitioners' right of business is affected and also there was a violation of principles of natural justice. Hence, the petitioners have filed these Writ Petitions for the relief stated supra.

5.The learned counsel for the petitioners would submit that the petitioners are entitled for extension of lease period, as per Clause (vi) of G.O.Ms.No.66, Municipal Administration and Water Supply Department, dated 06.08.2024 and that they are entitled for possession of the property, till the expiry of the lease period.

6.To appreciate the petitioners' contention, it is relevant to extract the impugned tender notice in W.P.(MD) No.14161 of 2025:

7.From the above tender notice, it is clear that from the date of the handing over the possession of the shop, after the expiry of the period, the further period would commence. Therefore, no prejudice would be caused to the petitioners to participate in the tender.

8.The petitioners claim renewal of the lease upon payment of enhanced rent of 30%. The petitioners have no vested right to seek extension of lease. The said issue has already been settled by this Court in various decisions.

8.1. The Hon'ble Division Bench decision of this Court P.Muthusamy V.State of Tamil Nadu rep. by its Secretary to Government, Municipal Administration and Water Supply Department, Chennai and Another reported in (2014) 5 MLJ at Page Nos. 129 and 130 has held as follows:

8.2.The another Hon'ble Division Bench Judgment of this Court in W.A.No.1471 of 2014 (between C.Vinoba and 34 others V. The Commissioner, Palladam Municipality , Palladam, Thiruppur District and Two Others at Paragraph No.5 also reiterated the said principle and declined to accept the similar request of the petitioner on the basis of the G.O.Ms.No.92, Municipal Administration and Water Supply department dated 03.07.2007:

The appellants cannot claim renewal as a matter of right. The Municipality has several functions to perform for the welfare of the people of the locality. The collection of market rent is one of the source of income of the municipality. Thus, the municipality cannot be permitted to allot shops on nominal rent without assessing the market value of the same. It is well certain that auction is the best mode of allotment of shops.”

8.3. The same was also followed and reiterated by the another Hon'ble Division Bench Judgment of this Court in W.A.No.686 of 2015 dated 24.07.2015 (between T.M.Duraisamy V. The State of Tamil Nadu rep. by