Kerala High Court
Mathai Syriac Nelco Medicals, ... vs Kerala State Road Transport ... on 9 March, 1994
Equivalent citations: AIR1995KER119, AIR 1995 KERALA 119, (1994) 1 KER LJ 923
Bench: M. Jagannadha Rao, K.G. Balakrishnan
JUDGMENT Jagannadha Rao, C.J.
1. These two appeals arise out of two different writ petitions, but raise the same question. In WA 308 of 1994 (which arises out of OP 1867 of 1994), there is a single appellant and in WA 313 of 1994 (which arises out of OP 2136 of 1994), there are two appellants.
2. The dispute is between the appellants (writ petitioners) and the Kerala State Road Transport Corporation (KSRTC). The appellant in WA 308 of 1994 is a licencee of Stall No. 1 of the KSRTC buildings, Thiruvalla from 1972 onwards and the licence on each occasion was for three years. He has been conducting a medical shop in that Stall. The renewal was from 1-12-1990 to 30-11-1993. Ext. P1. Before the expiry of the licence, the District Transport Officer, Thiruvalla served a notice dated 20-10-1993 wherein it was stated that the KSRTC had resolved to fix the period of licence of the Stalls as one year from the first day of April every year and that in view of the same, it was proposed to extend the period of licence of the appellant up to 31-3-1994 subject to the existing terms and conditions. The said notice is Ext. P2. Earlier, before the above said extension, there was a proposal to have the appellant evicted by notice dated 11-10-1993; Ext. P3 and the appellant had submitted a representation on 15-10-1993, Ext. P4. The grievance of the appellant was that without disposing of Ext. P4 representation, the KSRTC had issued a tender notification, Ext. P5 on 20-1-1994 inviting tenders for grant of the licence for conduct of the business in these Stalls for the period from 1-4-1994 to 31-3-1995. The tenders were to reach by 10-2-1994. Questioning the above said notice the present writ petition was filed and the same having been dismissed, the writ appeal is preferred.
3. The appellants in WA 313 of 1994 are also questioning the notification, Ext. P5 issued by the KSRTC inviting tenders for grant of licence in respect of the business conducted in their shops from 1-4-1994. First appellant has been conducting his business since 1969, when it was auctioned to him for three years. The licence was periodically renewed and the rent was being increased. The last renewal expired on 31-12-1993, but has since been extended up to 31-3-1994. Second appellant herein has also been there since 1969 conducting business in another shop.
4. The question, therefore, is whether when the appellants were continuing in the KSRTC Stalls as licencees from 1969 or 1972 onwards, as the case may be, can the KSRTC now act by issuing notification calling for tenders wherein the licence to occupy these shops is going to be settled by way of tenders. Admittedly, appellants were running the Stalls under periodical licence of three years each and each time the rent was increased. The contention of the appellants' counsel is that inasmuch as appellants have been continuing for a long period, there is a legitimate expectation that they will be continued further. In any event, the action to call for tenders in regard to the right to conduct the business in these Stalls is only intended to dislodge the existing licencees and, therefore, it is arbitrary.
5. Learned counsel for the appellants strongly relied on the decision of the Supreme Court in Dwarkadas Marfatia and sons v. Board of Trustees, Bombay Port (AIR 1989 SC 1642). Appellants contend that even though one of us (Balakrishnan, J.) had rejected a similar contention in the decision reported in K. S. Ammini v. K.R.T.C. (1993 (2) Ker LJ 423), there was only a contention based on legitimate expectation and no contention was raised relying upon arbitrary termination of existing licence which the Supreme Court has held invalid in M/s. Dwarkadas Marfatia and Sons' case (AIR 1589 SC 1642) above referred to.
6. So far as the legitimate expectation of the appellants is concerned, it has been held in K. S. Ammini's case (1993 (2) Ker LJ 423) that the principle of legitimate expectation forms part of the procedural law and has not been extended for the enforcement of substantive right. Reference was made to the decision of the Supreme Court in F.C.I. v. Kamdhenu Cattle Feed Industries (1993 (1) SCC 71) : (1993 SC 1601). Subsequently, in Union of India v. Hindustan Development Corporation (1993) (3) SCC 499) : (AIR 1994 SC 988), the Supreme Court observed that for legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim ordemand on the ground of aright. However, earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves cannot amount to an assertable expectation and a mere disappointment does not attract legal consequences. A pious hope even leading to a moral obligation cannot amount to a legitimate expectation. The legitimacy of an expectation can be inferred only if it is founded on the sanction of law of custom or an established procedure followed in regular and natural sequence. The Supreme Court further observed that the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallised right as such is involved. Further, the protection of such legitimate expectation does not require the fulfilment of the expectation where an over-riding public interest requires otherwise. In other words, where a person's legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the Court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. If it is a question of policy, even by way of change of old policy, the Courts cannot interfere with a decision. Of course, if a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminartory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 of the Constitution, but a claim based on mere legitimate expectation without anything more cannot be ipso facto give a right to invoke these principles. The Courts should restrain themselves and restrict such claims duly to the legal limitations, mentioned above.
7. It is now well settled that public authorities like the KSRTC are entitled to secure the best income from their properties. In fact, they are bound to see that their properties fetch the maximum income. When they sell their properties by way of tenders, they have to see that maximum value is obtained and when they are purchasing properties, they are to see that the Undertaking does not spend more than what is necessary. In the present case, we have a situation where the Corporation is trying to get maximum income from the licence holders of these shops. Public interest is certainly involved when the KSRTC is trying to get as much income as possible by way of calling tenders. Inasmuch as public interest is involved, we do not find any scope for application of the principles of legitimate expecta-tion, even though appellants were there from 1969 or 1972 on periodical licence.
8. In this context, it is necessary to refer to Clause (15) of the previous licence, which reads as follows :
"15. Nothing herein contained shall be construed as creating a tenancy in favour of the Licencee or in the said building and the Corporation may of its own motion upon the termination of the licence re-enter and retake and absolutely retain possession of the said building without any manner becoming liable to the licensee. The Corporation has every right to occupy the stall without resorting to legal means."
The above said clause in the immediately previous licence will also show that what was agreed was that no tenancy should be deemed to have been created under the previous licence. In fact, it was not urged before us by learned counsel for the appellants that the earlier licence amounted to a lease.
9. Coming to the question whether the calling for the tenders for grant of licence to .
these shops with effect from 1-4-1994 is arbitrary, we are of the view that it is not arbitrary. We have already stated while dealing with the submission regarding legitimate expectation that the KSRTC is sup posed to make efforts to get maximum income from its properites and that if public interest is involved, the principle of legitimate expectation may not apply as decided by the Supreme Court. Even in regard to the question whether the calling for the tenders is arbitrary, and is violative of Article 14 of the Constitution of India, we have to bear-in-
mind that the public sector undertaking like the KSRTC can make, and must make, utmost income from its properties. It is a matter of common knowledge that the KSRTC running in losses over a long period of time, and if it tries to call for tenders for its own shops and increase the licence fee payable for these shops, such action cannot be said to be arbitrary.
10. Reliance was placed by learned counsel for the appellants on the decision of the Surpeme Court in Dwarkadas Marfatia & Sons v. Board of Trustees, Bombay Port Trust, AIR 1989 SC 1642. In out opinion, the said decision is clearly distinguishable, and the principles laid down in that case do not apply to the case before us. In that case, the Bombay Port Trust was granted exemption from the provisions of the Rent Control law. There was a lease granted to the tenants and this lease was renewed periodically, and this went on for a long period of time. Subsequently, the Bombay Port Trust decided to terminate the tenancy of one of the parties and allot the same to another tenant who was having major portion of the same plot. This was done with a view to allow the other person to develop the plot commercially. The Supreme Court, while holding that the termination of an existing lease by a public authority which was exempt from the provisions of the Rent Control Law could be the subject matter of judicial review, if such termination was arbitrary, held ultimately on the facts of that case that the termination was not against public interest. After laying down that the principle of judicial review was permissible, in the case of termination of a lease by a public authority, to find out whether such termination was arbitrary, the Supreme Court held ultimately on the facts of that case that the termination was lawful and not arbitrary. They pointed out that if the termination of the lease resulted in the leasehold right of the tenant being allotted to another tenant who was having major portion in the same plot, and the purpose was to see that the other tenant developed the plot commercially, there was nothing arbitrary. In paragraph 33 of the above said decision, their Lordships observed as follows (at p 1651 of AIR):
"33. Our attention was drawn to the fact that Dhanji Javji had held 80% of the reconsttituted plot. The plot 5B had been developed inasmuch as a building of ground plus 5 upper storeys had been erected as was the maximum possible notwithstanding the fact that the appellant had not yet surrendered their portion. As against this, on plot 5A where the Bombay Port Trust offered a joint tenancy to the three occupants, since there was no occupant holding a major portion thereof, there had been no development whatsoever and in fact there has been litigation going on to remove all the 3 occupants. In that view of the matter the Bombay Port Trust, perhaps, was justified in coming to the conclusion that the only possible way to develop the properties of the Bombay Port Trust in compliance with the Town Planning Scheme was by allotting plots to holders of major portions thereon. Such a decision cannot be faulted."
11. In the present case before us, there is neither a tenancy nor any termination during the continuance of the tenancy, or even a tenancy holding over. In fact at the request of the appellants, the KSRTC granted extension upto 31-3-1994, and then called for tenders in regard to the licence period from 1-4-1994. If development of the property of Bombay Port Trust by allotting the same to the person holding a major portion of a plot was in public interest, in the interest of the Bombay Port Trust, and was held to be not arbitrary on facts in the above mentioned decision of the Supreme Court, we fail to see how the action of the KSRTC in trying to call for tenders for grant of licence to its own shops, after the termination of the licence period, can be said to be arbitrary or violative of Article 14 of the Constitution of India.
For all the aforesaid reasons, there are no merits in these two Appeals, and they are accordingly dismissed.