An occupant whose license has expired is in unauthorized occupation, justifying eviction. Compensation for such occupation must be proven by cogent evidence of prevailing market rates; relying on internal policies to impose arbitrary, exorbitant, or inapplicable charges without such proof is legally unsustainable.

Headnote:(A) Public Premises (Eviction of Unauthorised Occupants) Act, 1971 - Sections 2(g), 5, 7 - Eviction of unauthorized occupants - Expiry of license - Continued occupation after expiry of license constitutes unauthorized occupation under the statute - Owner entitled to seek eviction upon expiry of authority to occupy. (Paras 19, 21, 26, 28)

(B) Damages - Assessment of - Burden of proof - While determining damages for unauthorized use of premises, reliance solely on internal policies without independent evidence of prevailing market rental value is insufficient - Damages awarded must be reasonable and supported by cogent evidence, not arbitrary, excessive, or based on inapplicable policy frameworks. (Paras 39, 40)

Facts of the case:
Petitioners were granted a license for the use of land for industrial purposes. Upon the expiry of the license period, they continued to use the premises. Notice was issued for eviction and recovery of arrears of license fees and damages based on an internal commercial policy. The authorities directed both eviction and the payment of substantial damages. These orders were challenged before the appellate authority, which dismissed the appeals.

Findings of Court:
The occupation became unauthorized upon the expiry of the license under the relevant statute. The eviction order is lawful and justified. However, the award of damages based on the internal commercial policy was set aside as the policy was not applicable to the industrial nature of the premises, and the authority failed to produce independent evidence to justify the exorbitant assessment of damages.

Issues: Whether the occupation of the premises was unauthorized; whether the order of eviction was legal; and whether the assessment of damages based on an internal policy was tenable without independent assessment of market value.

Ratio Decidendi: Mere expiry of a license creates unauthorized occupation under the statute, justifying eviction. However, damages for unauthorized occupation must be established by cogent evidence regarding prevailing market rental rates and cannot be imposed based on arbitrary or inapplicable internal policy guidelines.

Result: Petitions disposed of; eviction and recovery of base license fee upheld, but the demand for damages set aside.

ORDER

Per: Justice Vinay Saraf:

1. This order will dispose of M.P.No.5575/2024 and M.P.No.6415/2024 as the issue involved in both the petitions are identical.

2. These Misc. Petitions have been preferred by the petitioners being aggrieved by the orders passed by Principal District Judge, Bhopal in R.C.A.No.66/2023 and 67/2023 on 18.09.2024; whereby the learned District Judge dismissed the appeals preferred by the petitioners assailing the order dated 15.06.2023 passed by the Estate Officer, Bharat Heavy Electricals Limited (BHEL) Bhopal in Case No.3940/2022 and 3938/2022 under section 5(1) and 7 of the Public Premises (Eviction of Unauthorised Occupants), Act, 1971 directing the eviction of the petitioners from the lease premises and recovery of the arrears of licence fee till delivery of the possession.

3. With the consent of parties, arguments heard for the purpose of final disposal of the petitions.

4. Heard Shri Manoj Kumar Sharma, learned Senior counsel for the petitioner and Shri Ashok Lalwani, learned Senior counsel for the respondent.

5. For the sake of convenience, the facts are being taken from M.P.No.5575/2024.

SHORT FACTS OF THE CASE

6. The short facts of the case are that the petitioner was allotted industrial plot no.6, area 12500 sq. ft. on licence basis in the ancillary area, Habibganj, BHEL, Bhopal on 23.01.2009 for a period from 01.04.2003 to 31.03.2011 for the purpose of carrying on the business of sawmill and stone. Certificate of licence was issued in favour of petitioner and licence deed was also executed on 23.01.2009. Originally the petitioner’s father was allotted the plot in the year 1979 and thereafter he constructed temporary structure for operating industrial activity and started manufacturing of wooden and stone furniture etc. After expiry of the licence on 31.03.2011, the petitioner applied for renewal of licence period as per the licence deed, however, without any execution of renewal deed or any communication of renewal of licence, the petitioner continued its operation till 2021-2022 and the respondent was charging licence fee without any demur.

7. The respondent introduced a new Shop Policy, 2014 and thereafter made the demand of licence fee of Rs.3,84,820/- per month @ 30.785 sq. ft. per month from the petitioner, which was not paid by the petitioner, therefore, the notice was issued to the petitioner requiring to renew the licence by paying the deficit licence fee from 2018 to 2022. Petitioner raised objection and refused to pay the enhanced licence fee. Consequently, the respondent on 04.11.2022 initiated the proceedings under sections 5 and 7 of the Public Premises (Eviction of Unauthorised Occupants), Act, 1971, (hereinafter referred to as “the Act, 1971”) which was registered as Case No.3940/2022 upon the allegation that the licence period of petitioner has already been expired and petitioner has not handed over the vacant possession of the land to the respondent and not made the payment of the balance licence fee. The Estate Officer issued a notice to the petitioner under section 4 of the Act, 1971 and thereafter passed the final order on 15.06.2023 by which the Estate Officer has allowed the application of the respondent and directed the petitioner to vacant the premises and handover the possession of the same to the respondent and to pay the amount to the tune of Rs.2,38,49,561/- towards arrears of licence fees and damages. The petitioner challenged the order passed by the Estate Officer in Regular Civil Appeal No.66/2023 before Principal District Judge, Bhopal.

8. After hearing both the parties, the Principal District Judge by order dated 18.09.2024 dismissed the appeal preferred by the petitioner and upheld the order passed by the Estate Officer.

9. The order passed by the Estate Officer and the Principal District Judge are under challenge in the instant misc. petition filed under Article 227 of the Constitution of India.

SUBMISSION ON BEHALF OF PETITIONER

10. Shri Manoj Kumar Shar

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2025 Supreme(Online)(MP) 11149

HIGH COURT OF MADHYA PRADESHSanjeev Sachdeva, CJ, Vinay Saraf, JSmt. Preeti Kour Saluja – AppellantVersusBharat Heavy Electrical Limited – RespondentMP 6415/2024

Cases Referred (2)

HIGH COURT OF MADHYA PRADESH
Sanjeev Sachdeva, CJ, Vinay Saraf, J
Smt. Preeti Kour Saluja – Appellant
Versus
Bharat Heavy Electrical Limited – Respondent
MP 6415/2024