K.Aboobacker Haji vs M/S Hotel Green Chillies on 1 July, 2025

[Cites 12, Cited by 0]

Kerala High Court

K.Aboobacker Haji vs M/S Hotel Green Chillies on 1 July, 2025

The present intra court appeal is at the instance of the third party alleging to be the owner of the property in question, where the business under the name and style of Hotel Green Chillies, Calicut was being run which involves adjudication of an issue that whether the Municipal Corporation, Calicut in rejecting the application of the respondent for issuing D&O licence under Section 492 of the Kerala Municipality Act, 1994, was justified in law or not.

2. The facts necessary for adjudication of the lis, in brief, enumerated are under:

The first appellant, who is claiming to be the owner of the property, had submitted an application for issuance of D&O licence to the concerned Municipality in August 2018 as per the Municipality Act to run the bakery, fastfood under the name and style 'Hotel Green Chillies', Mavoor Road, Calicut. The year mentioned in the aforementioned licence was 2018-

19.

3. The Licence was issued on 28.4.2018. After 2025:KER:49387 WA NO. 1407 OF 2024 4 obtaining the aforementioned licence, a partner ship deed of 10.8.2018 was entered into between the respondents namely Sri.P.K Faizal Ahammed, Sri. Ashraf K with Sri.K.Aboobacker Haji whereas the first person ie., P.K Faizal Ahammed was described as a Managing partner of the firm with respective percentage of profits and liabilities.

4. An application on behalf of the partners ie., Sri.P.K Faizal Ahammed and Sri. Ashraf K was submitted for renewal of D&O licence for carrying on the business under the name and style 'Hotel Green Chillies' which was rejected by the Corporation on the ground that the fresh application has to be submitted. Accordingly, an application dated 20.9.2023 was submitted which was rejected vide communication dated 27.11.2023 acknowledging the receipt of the application as 20.9.2023 on the ground that the earlier licence was in the name of Sri.K.Aboobacker Haji and therefore the application cannot be considered. It is the said document was assailed in the writ petition on the ground that as per the provisions of sub Section 447(6) of the Kerala Municipality Act, 1994, application was submitted for issuance of D&O licence within the time prescribed and the concerned authority does not 2025:KER:49387 WA NO. 1407 OF 2024 5 communicate any permission or otherwise within 30 days of the receipt of the application, shall be deemed to have been allowed.

5. The Municipality reiterated the stand taken in the communication assailed before the writ court and denied that at any point of time, Municipal Corporation had advised the petitioners in the writ petition to submit a fresh application when the earlier application had been rejected.

6. Learned Single Judge vide judgment under challenge allowed the writ petition. The order is short and therefore we deem it appropriate to extract the same.

The petitioners had made an application for a D & O licence on 20.09.2023 for running a restaurant and cool bar, as is seen from Ext.P5. Ext.P6 is the acknowledgement issued by the Corporation dated 20.9.2023. Learned Counsel for the petitioner contends that no orders were passed either allowing or rejecting the application within 30 days from the receipt of the application, which resulted in the operation of Section 447(6) of the Kerala Municipalities Act, 1994, entitling the petitioner to a deemed licence, for the period required in the application subject to the Acts, Rules and bylaws and all conditions which should have been ordinarily imposed.

2. Learned counsel appearing for the additional respondents who had filed a complaint before the Corporation alleging that the petitioners are running a business without a licence, submits that a renewal application filed for running the business was returned as it was not filed by the proper person. It is to be noted that the petitioners accepted the said stand of the 2025:KER:49387 WA NO. 1407 OF 2024 6 Corporation by filing a new application through Ext P5.

3. Learned counsel for the petitioner cites the judgments in Abdul Shafeek v. Asamannoor Grama Panchayath and another [2018 (3) KHC 170] and Sudhakaran v. Pallichal Grama Panchayath and another [2016 (2) KHC 481]. In view of the admitted fact that no order was passed either allowing or rejecting the application, it is declared that the petitioner is entitled to a deemed licence within the meaning of Section 447 (6) for the period sought for in Ext.P5 application, namely 2023-2027.

4. Consequently, there will be a direction to the second respondent to issue a permit in writing acknowledging the fact that the petitioners are entitled to a deemed licence for the period 2023-2027. However, it is made clear that the Corporation shall ensure that the petitioners carry on the business on the strength of the deemed licence referred to above by adhering to all the provisions of law and the Corporation will be free to invoke the provisions of the Act and Rules in case any violation is committed by the petitioners while running the business. The Corporation shall issue the required certificate/licence as directed above within three weeks from today.

7. The aforementioned order has been now assailed before this Court in the intra court appeal on behalf of K.Aboobacker Haji and another on the ground of having not been impleaded as a party as well as the fact that there was an incorrect interpretation before the Municipality for the reason that there was a rent agreement dated 1.8.2018 and subsequently a partnership deed of 10.8.2018. Moreover the earlier licence was issued in the name of the appellant, which 2025:KER:49387 WA NO. 1407 OF 2024 7 was only valid for a period of one year and there was no business for the period of five years till the application in 2023 was submitted by the contesting respondents-writ petitioners but did not deny the fact that the partnership deed continued for a certain period by carrying on the business under the name and style 'Hotel Green Chillies'. The factum of reconstitution as alleged by the contesting respondents was also emphatically denied.

8. This Court while admitting the writ appeal on 9.9.2024 also passed an interim order prohibiting the contesting respondents ie., respondent No.1 to 4 from carrying on the business on the strength of the deemed licence that was recognized by the learned Single Judge in the impugned judgment.

9. The aforementioned order was assailed before the Supreme Court in SLP No.22100 of 2024 and vide order dated 24.9.2024 while issuing notice there was an interim order. The order reads as under:

Issue notice.

In the meanwhile, there shall be stay of the judgment and order passed by the High Court.

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10. It is a matter of record that later on, the Supreme Court vide order dated 7.5.2025 disposed of the SLP with a direction to dispose of the pending intra court appeal as expeditiously as possible. The order reads thus:

1. Heard the learned counsel appearing for the respective parties.

2. While we are not inclined to interfere with the impugned judgment and order passed by the High Court, we request the High Court to take up and dispose of the writ appeal as expeditiously as possible.

3. With these observations, the Special Leave petition is disposed of. Pending application(s), if any, shall stand disposed of.

11. It is a matter of record that pursuant to the disposal of the SLP as per the counter affidavit filed by the Municipal Corporation in this Court dated 10.6.2025, it has been ascertained from paragraph No.5 that Corporation had on 27.5.2025 closed the hotel of the writ petitioners-contesting respondents.

12. Mr. M.K Sumod, learned counsel for the respondents submitted that no doubt the first appellant had taken the licence for 2018 on 28.4.2018 in his name but realizing that would not be feasible, entered into a partnership deed on 10.8.2018. Thus, the terms and conditions of the rent agreement dated 1.8.2018 were superseded, and the parties subsequently entered into a partnership deed, which was also registered with the Registrar of Firms. The business was carried out for a period of five 2025:KER:49387 WA NO. 1407 OF 2024 9 years and the necessity only arose for submission of the application for renewal when the period of five year expired.

Had the licence been for a period of one year, the necessary application could have been filed after the expiry of the one year as alleged. In other words, as per the provisions of Section 447(4), in the absence of any period mentioned in the licence, the validity of the licence would be for a period of five years. It is in that background, the application for renewal was submitted which was rejected by the authority calling upon the contesting respondents to obtain the consent of the owner as per the provisions of 447(3) and (4) of the Section 492 of the Municipality Act, 1994.

13. In support of the submission relied upon the judgment of the Supreme Court in M.G Meethu v. Corporation of Trivandrum (2013) SCC online Ker 1898 and Sudhakaran v. Corporation of Trivandrum and Another (2016 (14) SCC 263) to contend that for renewal, the consent of the landlord is not required. Even the partnership firm was also issued a PAN number ie., the entire transaction of the business was carried out under the name and style of 'Hotel Green Chillies'. Thus the entire transaction of the business was carried out under 2025:KER:49387 WA NO. 1407 OF 2024 10 the name and style of 'Hotel Green Chillies'.

14. On the other hand, Sri.V.Krishna Menon, Senior counsel appearing on behalf of the Municipal Corporation reiterated the stand taken in the communication challenged before the Single Bench regarding the refusal to issue licence in the absence of the consent of the owner and as well as the fact that the application could not have been issued in the name of different persons when the original licence was issued in the name of Sri.K.Aboobacker Haji. It was also explained that certain facts were inadvertently omitted in the counter affidavit filed before the learned Single Bench in as much as that the Corporation had only received two applications from the writ petitioner, first one was for renewal which had been rejected on 29.9.2023 and the second was received on 20.9.2023 bearing No.11254. However, the Corporation did not receive the application bearing No.13032 dated 20.9.2023 much less the writ petitioner did not furnish any consent and no objection from the land owner of the building where they intended to carry business of the hotel cum restaurant.

15. During the pendency of the writ petition, writ petitioners on 17.5.2025 had submitted a fresh application 2025:KER:49387 WA NO. 1407 OF 2024 11 through the K-Smart portal which was returned on 20.5.2025 calling upon to resubmit the same along with the no- objection/consent from the landlord of the building. However again on 22.5.2025 the application was resubmitted by the writ petitioners but till now, had not submitted any objection or consent of the landlord.

16. The aforementioned argument was countered on the ground that the second application during the pendency was submitted and pursuant to the judgment cited in support of the contentions, there would be no statutory requirement in law for seeking the renewal of the application if it is not a first application. Therefore there has to be an adjudication on the controversy pending in this Court.

17. We have heard the learned counsel for the parties and appraised the paper book. The first and primary issue is with regard to the consent of the landlord and for that, the provisions of Section 492 of the Kerala Municipality Act are required to be extracted. The same reads as under:

492. General provisions regarding licences and permissions.

(1)Every licence and permission granted under this Act or any rule or bye-law made thereunder shall specify the 2025:KER:49387 WA NO. 1407 OF 2024 12 period, if any, for which, and the restrictions, limitations and conditions, subject to which, the same is granted and shall be signed by the Secretary.

(2)Every licence issued by the Secretary shall specify the person to whom, the premises in respect of which, and the trade or business or undertaking for which the licence is granted and for any change in the person, the premises or the business, trade, or undertaking, a fresh licence or permission shall betaken with or without payment of further fee as the Municipality may fix. (3)Where any person intending to obtain a licence or permission for the first time and where the applicant is a person other than the owner of the premises in question, he shall, along with the application produce the written consent of the owner of the premises and the period of the licence shall not exceed the period, if any, specified in the consent.

(4)Where the applicant seeking renewal of a licence or permission in respect of the trade or business licensed in the premises mentioned in sub-section (3) is a person different from the original licensee or not the legal heir of the original license the consent of the owner shall be required.

(5)Save as otherwise expressly provided by or under this Act, for every such licence or permission, fees may be charged on such units and at such rates as may be fixed by the Municipality with due regard to the expenditure to be incurred for rendering service to the trade and for regulation of the trade for which the licence or permission is granted.

(6)The Municipality may-(a)place the collection of such fees under management of such person as may appear to it proper; or(b)farm out such collection for any period not exceeding three years at a time and on such terms and conditions as it may think fit.

(7)Every order of a Municipality refusing to grant or suspending, revoking or modifying a licence or permission shall be published on the notice board of the Municipality.

(8)Every order of a Municipality refusing to grant, or suspending, cancelling or modifying a licence or permission shall be in writing and shall state the grounds 2025:KER:49387 WA NO. 1407 OF 2024 13 on which it proceeds.

(9)Subject to the provisions in this Chapter and regarding buildings and private markets and subject to such sanction as may be required for the refusal of a licence or permission, any licence or permission granted under this Act or any rule or bye-law made thereunder, may, at any time, be suspended or revoked by the Secretary if any of its restrictions, limitations or conditions is evaded or infringed by the grantee, or if the grantee is convicted of a breach of any of the provisions of this Act or of any rule, bye-law or regulation made thereunder in any matter to which such licence or permission relates, or if the grantee has obtained the same by misrepresentation or fraud.(10)It shall be the duty of the Secretary to inspect places in respect of which a licence or permission is required by or under this Act, and he may enter any such place between sunrise and sunset and also between sunset and sunrise if it is open to the public or any industry is being carried on in it at the time and if he has reason to believe that anything is being done in any place without a licence or permission where the same is required by or under this Act, or otherwise than in conformity with the same, he may, at any time, by day or night, without notice, enter such place for the purpose of satisfying himself whether any provision of law, rule, bye-

law, regulations, any condition of a licence or permission or any lawful directions, regulations, or prohibition is being contravened, and no claim shall lie against any person for any damage or inconvenience caused by the exercise of powers under this sub-section by the Secretary or any person to whom he has lawfully delegated his power or by any force necessary for effecting an entrance under this sub-section. (11)Where any licence or permission is suspended or revoked or where the period for which it was granted or within which application for renewal should be made, has expired, whichever expires later, the grantee shall for all purposes of this Act or any rule or bye-law made thereunder be deemed to be without a licence or permission until the order suspending or revoking the licence or permission is cancelled or, subject to sub- section (15) until the licence or permission is renewed, as the case may be.

2025:KER:49387 WA NO. 1407 OF 2024 14 (12)Every grantee of any licence or permission shall, at all reasonable times, while such licence or permission remains in force, produce the same when demanded by the Secretary.

(13)Where any person is convicted of an offence in respect of the failure to obtain a licence or permission or make a registration required by the provisions of this Act or any rule orbye-law made thereunder, the Magistrate shall, in addition to any fine which may be imposed, recover summarily and pay over to the Municipality the amount of the fee chargeable for the licence or permission or registration and, may in his discretion also recover summarily and pay over to the Municipality such amount, if any, as he may fix as the costs of the prosecution.

(14)Recovery of the fee under sub-section (13) shall not entitle the person convicted to a licence or permission or to registration under this Act.

(15)The acceptance by the Municipality of the prepayment of the fee for a licence or permission or for registration shall not entitle the person making such prepayment to the licence or permission or to registration, as the case may be, but only to refund of the fee in case of refusal of the licence or permission or of registration, but an applicant for the renewal of a licence or permission or registration shall until communication of orders on his application be entitled to act as if the licence or permission or registration had been renewed, and save as otherwise specially provided in this Act, if orders on an application for licence or permission or for registration are not communicated to the applicant within thirty days after the receipt of the application by the Secretary, the application shall be deemed to have been allowed for the year or for such less period as is mentioned in the application, and subject to the law, rules, bye-laws, regulations and all conditions ordinarily imposed.

18. It is a matter of record that on 28.4.2018, concededly, a licence was issued in the name of K.Aboobacker 2025:KER:49387 WA NO. 1407 OF 2024 15 Haji to run the business under the name and style 'Hotel Green Chillies' for the purpose of bakery and other purposes. After expiry of four (4) months had entered into an agreement of rent with the writ petitioners ie., the respondent Nos.1 to 4 on certain terms and conditions but nine (9) days thereafter had entered into a partnership deed dated 10.8.2018 with the first respondent as a Managing partner under the name and style 'Hotel Green Chillies' and an application for obtaining the PAN number was submitted which was issued in the name of the 'Hotel Green Chillies'. Even the tax returns were filed in the income tax department and other statutory requirements of law. Though in the licence issued in the name of the appellant period was mentioned 2018-19, it has to be construed whether the provisions of Section 447(4) in the absence of any mentioning of the period, the validity of the licence was for five (5) years or otherwise. If we accept the argument that it was only for one year then the only inference drawn is that for a period of five (5) years, the business was carried out without licence. That cannot be a valid acceptance of the argument for the reason that no occasion arose either at the instance of the appellant or party respondents ie., the writ 2025:KER:49387 WA NO. 1407 OF 2024 16 petitioners to submit an application in view of the plain and simple reading of the language contained in Section 447(4) of the Act as the cause of action in favour of one of the partners arose only in 2023. The application dated 20.9.2023 with Sl.No.13032 though Corporation allegedly did not receive, was in fact replied by the Corporation on an application alleged to have been submitted on other Sl.No.11254 received in the office of the Corporation on 20.9.2023 to obtain the consent of the landlord and also on the point that earlier licence was issued in the name of Sri.K.Aboobacker Haji ie., the appellant.

19. The cumulative reading of the aforementioned facts leads to irresistible conclusion that first licence had already been issued. The question that now arises requires consideration of sub-sections 3 and 4 of Section 492 of the Act. The concept of renewal has undergone a sea change as earlier whenever the driving licences or the passports were expiring, an application for renewal was submitted but now whenever such application has been made, new driving licence or the passport is issued. It is in that context also, an application was submitted by the writ petitioners for renewal of the licence by the two partners to run the business under the 2025:KER:49387 WA NO. 1407 OF 2024 17 name and style of partnership firm.

20. It is a matter of record that the partnership deed dated 10.8.2018 is at will and so far it has not been dissolved by sending a notice of dissolution by either of the subsisting partners. In our considered view, the decision of the Corporation directing the parties to obtain the consent of the landlord considering it to be the first application was wholly erroneous, illegal and unjustified. We cannot remain oblivious of the fact that after having obtained the licence for the first time by the appellant allowed the partnership firm to carry on the business and thereafter cannot volte face and take a plea of non impleadment in the writ petition as had agreed the business to be carried out under the name and style of 'Hotel Green Chillies' without any demur, particularly during the subsistence of the partnership deed. Section 447 of the Act is required to be extracted.

447. Purpose for which places may not be used without licence.

[(1) No place within a municipal area shall be used, -

(a)generally for industries, factories, trades, work places and other services which directly or indirectly adversely affect public interests such as environment, public safety and public health or cause nuisance;

(b)and particularly for such matters as may be prescribed, -

2025:KER:49387 WA NO. 1407 OF 2024 18

(i)without payment of licence fee at such rate as may be prescribed by the Government for each purpose or at such rate as the Municipality may fix subject to the said rate by a notification published in such manner as may be prescribed; and

(ii)except in accordance with the terms of the licence granted in Such manner as may be prescribed:

Provided that the licence shall be deemed to contain conditions to the effect that anything done in accordance with the licence shall not be detrimental to any public interest and in the matter of services, admission and service to the place wherein it is provided shall be available to any member of the public:

Provided further that if adequate steps for the protection of environment/ public interest have not been taken as per the conditions of the licence, the use of a land for which licence is required under this section for such matters as may be prescribed, if not otherwise proved, shall be deemed to have been causing nuisance:Provided also that a notification of the Municipality under this section shall come into force on the date of completion of sixty days from the date of its publication.] (2)The owner or occupier of every such place shall within thirty days of the publication of the notification apply to the Secretary for a licence for the use of such place for such purpose.

(2A) The Secretary or the officer authorized by him shall, issue an acknowledgement to the applicant on receipt of application along with the supporting document in such form, as may be prescribed, and shall verify the application and a supporting documents immediately on receipt, and if any supporting document required is not attached with the application the Secretary or the officer authorized by him shall immediately inform the applicant in writing the missing document, if any, and allow the applicant to submit the missing document at the earliest but not later than five days from the date of receipt of application.] "[(3) The Secretary or the Officer authorized by him shall, within five days from the date of receipt of all supporting documents along with the prescribed clearance from other departments or authorities, by 2025:KER:49387 WA NO. 1407 OF 2024 19 order and subject to such terms and conditions as he deems fit, grant the licence for use of the place for conducting any industries, factories, trades, entrepreneurship activities or other services, as the case may be.

4) The period of licence granted under sub-section (3)] or a licence deemed to have been granted under sub-

section (6) shall, unless a date is specified therein, expire on completion of five years) from the date of its issue.

(5) Every application for any licence or permission or for its renewal under this Act or the rules or bye-laws made thereunder, shall be made not less than thirty days and not mone than ninety days before the earliest day on which such licence or equired or the licence expires. ((5A) The license once granted under this section shall remain in force for a period of five years and shall be renewed without any application on payment of the prescribed fee, thirty days before the end of validity of the licence for a further period of five years). (6) If the order on an application for any licence or permission are not communicated to the applicant within thirty days after the receipt of the application by the Secretary or within such longer period, as may be prescribed in any class of cases the application shall be deemed to have been allowed for the period required in the application, subject to the Act, rules and bye-laws and all conditions which would have been ordinary imposed.)

21. As per the provisions of sub Section 6 of 447, it is clear that in case there is no decision in the application for renewal within 30 days, it is deemed to have been renewed. It is in that background, the learned Single Judge ordered for renewal. Thus we are in agreement with the findings of the learned Single Bench issuing directions to the Municipal 2025:KER:49387 WA NO. 1407 OF 2024 20 Corporation to issue licence deemed to have been renewed in the absence of any communication either accepting, rejecting within the period prescribed under sub Section 6 of Section 447 of the Act. Accordingly, we dismiss the aforementioned writ appeal leaving the parties to seek the adjudication of the grievance inter se the dispute qua the partnership or otherwise in competent court of law or through the mediation settlement but for the purpose of adjudication of the present intra court appeal ie., pertaining to issuance of licence, parties cannot be left at the peril, either of the parties as well as of the Municipal Corporation to carry on the business as it would be the violation of fundamental right of Article 19(1)(g) as well as Article 21 of the Constitution of India. The doors locked by the Municipality are ordered to be broken forthwith.

Sd/-

AMIT RAWAL JUDGE sd/-

sab                                      P. V. BALAKRISHNAN
                                               JUDGE
                                             2025:KER:49387
WA NO. 1407 OF 2024

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                 APPENDIX OF WA 1407/2024

PETITIONER ANNEXURES

Annexure A1       TRUE COPY OF THE SALE DEED EXECUTED ON

28.12.2010 AND REGISTERED ON 19.01.2011 AS REGISTERED DOCUMENT NO. 68/2011 Annexure A2 TRUE COPY OF THE PARTNERSHIP DEED DATED 10.8.2018 Annexure A3 TRUE COPY OF THE COMMUNICATION DATED 27.11.2023 Annexure A4 TRUE COPY OF THE COMMUNICATION DATED 29/09/2023 Annexure A5 TRUE COPY OF THE APPLICATION DATED 21/08/2023 ALONG WITH THE RELEVANT NOTE FILE SEEKING RENEWAL OF LICENSE Annexure A5(a) TRUE COPY OF THE APPLICATION SEEKING ISSUANCE OF FRESH LICENSE DATED 15/09/2023 ALONG WITH THE NOTE FILE Annexure-A True copy of the order of the Hon'ble Supreme Court dated 7.5.2025 in Special Leave to Appeal (C) No. 22100 of 2024

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