Madras High Court
C.Vinoba vs The Commissioner on 24 September, 2014
Author: V.Ramasubramanian
Bench: V.Ramasubramanian
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 24.9.2014
CORAM
THE HON'BLE MR.JUSTICE V.RAMASUBRAMANIAN
Writ Petition Nos.19035 and 19915 of 2014
1. C.Vinoba
2. V.Murugesan
3. M.Sivakumar
4. J.Makbook
5. Rathinasamy
6. A.Kalaiarasan
7. P.Babu
8. M.Nallasamy
9. T.Kadarkarai Nadar
10.M.Balasubramaniam
11.R.Muragasamy
12.T.Basheer
13.M.Abdul Shamadu
14.M.Mohan
15.V.Rajkumar
16.Ganapathy Nadar
17.E.Sampath Kumar
18.M.Sivakumar
19.S.Sirajudin
20.K.Ganesh Nadar
21.P.N.Palanisamy
22.Ramasamy
23.Nageshwari
24.A.Subbaiya Gounder
25.N.S.Arumugam
26.K.N.Palanisamy
27.A.Padmanabhan
28.K.V.Davis
29.E.Sahul Hameed
30.K.R.Mayilsamy
31.M.Moorthy
32.Prema Muthuvel
33.K.Ladha
34.M.Mohan Petitioners in
35.S.A.Jahir Hussain .. both WPs.
Vs.
The Commissioner Respondent in WP
Palladam Municipality No.19035/14 & R1
Palladam, Tirupur District. .. in WP No.19915/14
E.Rathana .. R2 in WP 19915/14
E.Nandagopal .. R3 in WP 19915/14
(Impleaded vide order dated
24.9.2014 M.P.Nos.4 & 5/2014)
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Petitions under Article 226 of the Constitution of India, praying for the issue of
(i) writ of Mandamus forbearing the respondent-Municipality from resorting Shop Nos.1 to 40, Anna Commercial Complex, NGR Road, Palladam under public auction and permit the petitioners to continue the shop for the period of three years ending on 31.3.2017 as per G.O.Ms.No.92, Municipal Administration and Water Supply Department and Section 321(11) of the Tamil Nadu District Municipalities Act as per the application of the petitioners dated 19.02.2014, 20.02.2014, 21.02.2014, 22.02.2014, 23.02.2014, 24.02.2014, 25.02.2014, 26.02.2014, 27.02.2014, 28.02.2014 and 05.3.2014 respectively; and
(ii) writ of Certiorarified Mandamus calling for the records relating to the auction notice in Na.Ka.No.1552-2013-A1 (Ve.Aa.No.195/2014/ Se.Ma.Tho.A/Tiruppur dated 18.7.2014) which was published in Daily Thanthi-Tiruppur dated 19.07.2014 on the file of the respondent, quash the same and direct the respondent to permit the petitioners to continue the shop for the period of three years ending 31.3.2017 as per G.O.Ms.No.92, Municipal Administration and Water Supply Department and Section 321(11) of the Tamil Nadu District Municipalities Act as per the application of the petitioners dated 19.02.2014, 20.02.2014, 21.02.2014, 22.02.2014, 23.02.2014, 24.02.2014, 25.02.2014, 26.02.2014, 27.02.2014, 28.02.2014 and 05.3.2014 respectively.
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For Petitioners : Mr.S.Doraisamy
For Respondent- : Mr.P.H.Arvind Pandian
Municipality Addl. Advocate General,
Assisted by Mr.A.S.Thambusamy
For Impleaded Mr.M.Gnanasekar
Respondents : For Mr.G.Padmanapan
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Orders Reserved on : 12.09.2014
Orders Pronounced on : 24.09.2014
O R D E R
The petitioners in both these writ petitions have taken on licence, the shops put up by the Palladam Municipality in the building owned by the Municipality. The license was originally granted for a period of three years and it is being renewed from time to time.
2. It appears that the term of the present licenses expired on 31.3.2014 and the respondent-Municipality issued a notice to the licensees on 10.02.2014 calling upon them to express willingness for renewal of license on or before 28.02.2014. The applicants claim to have expressed willingness.
3. However, no order either renewing the licenses or rejecting the request for renewal was passed. But, the respondent-Municipality stopped receiving the rent from 1st July 2014. Therefore, apprehending that they may be evicted, the licensees joined together and filed a writ petition in W.P.No.19035 of 2014 seeking the issue of a writ of Mandamus to forbear the respondent-Municipality from putting into public auction shop Nos.1 to 40 in the Commercial Complex built by the respondent-Municipality and for a consequential direction to the respondent-Municipality to renew their licences for a further period up to 31.3.2017 as per G.O.Ms.No.92, Municipal Administration and Water Supply Department dated 03.7.2007 and as per Section 321(11) of the Tamil Nadu District Municipalities Act.
4. On 18.7.2014, this Court ordered notice of motion in the said writ petition W.P.No.19035 of 2014 and directed the matter to be posted on 14.8.2014.
5. But, on the same day, namely 18.7.2014, the Municipality issued an auction notice and the same was published in the newspapers on 19.7.2014, inviting offers in sealed covers, to be submitted on or before 31.7.2014. Therefore, challenging the auction notice, the petitioners came up with the second writ petition, namely W.P.No.19915 of 2014. The second writ petition came up on 25.7.214 for orders as to admission. This Court directed the Additional Government Pleader to take notice and get instructions on 31.7.2014.
6. On 31.7.2014, when the matter came up before me, I directed the respondent-Municipality to proceed with the auction and inform the Court the highest bids received for the shops. But, I also directed the respondent-Municipality not to confirm the auction. Consequently, the respondent-Municipality proceeded with the auction. But, they have not so far confirmed the auction. However, a counter was filed.
7. Thereafter, two of the successful bidders came up with applications in M.P.Nos.4 and 5 of 2014 for impleading themselves as parties. The impleading petitions are now allowed, in order to facilitate consideration of all aspects.
8. I have heard Mr.S.Doraisamy, learned counsel for the petitioners, Mr.P.H.Arvind Pandian, learned Additional Advocate General, assisted by Mr.A.S.Thambusamy, learned counsel appearing for the Municipality and Mr.M.Gnanasekar, learned counsel for the newly impleaded parties.
9. The grievance of the petitioners are: (i) that they have been running petty business enterprises in the shops belonging to the respondent-Municipality, for the past more than three decades, depending upon the same for their livelihood; (ii) that as per G.O.Ms.No.92, Municipal Administration and Water Supply Department dated 03.7.2007, the petitioners are entitled to have the licences renewed, provided they are willing to pay the market rate of rent; and (iii) that by virtue of Section 321(11) of the Tamil Nadu District Municipalities Act, 1920, there is a deemed renewal in their favour, by virtue of the failure of the respondent-Municipality to pass any order on their application for renewal.
10. The respondent-Municipality contests the claim of the petitioners on the following grounds:
(i) that G.O.Ms.No.92, Municipal Administration and Water Supply Department dated 03.7.2007 is not applicable to the cases of the petitioners, as the Government Order speaks only about two periods of nine years each; (ii) that Section 321(11) applies only to licences or permission or registration relating to place of business or activities carried on by a person in a private building or place and not to the license of shops belonging to the Municipality;
(iii) that in any event, the respondent-Municipality already passed an order on 11.4.2014 rejecting the request for renewal and displayed the same in the notice board of the office in terms of Section 321(3A); and
(iv) that as per the decision of the Division Bench in P.Muthusamy v. State of Tamil Nadu [(2014) 5 MLJ 129], the Municipality is entitled to augment its financial resources by cancelling the existing licences and put into auction the shops.
11. I have carefully considered the above submissions. There is no dispute about the fact that the petitioners are in occupation of the shops in question, at least for three decades. The petitioners claim to be carrying on petty business enterprises in the very same shops for the past about 30 years. The respondent-Municipality has not denied this allegation. On the contrary, the respondent-Municipality claims that the benefit of G.O.Ms.No.92 is not applicable to the petitioners, as their licences have been in force at least for two periods of nine years each.
12. Therefore, there are no disputes on facts. Hence, only two questions arise for consideration. They are
(i) as to whether the petitioners have a right in terms of G.O.Ms.No. 92, Municipal Administration and Water Supply Department dated 03.7.2007 to have the licences renewed at the market rate; and
(ii) as to whether the licences in favour of the petitioners automatically stood renewed in terms of Section 321(11) of the Act.
Question No.(i):
13. The first question revolves around an interpretation to G.O.Ms.No. 92, Municipal Administration and Water Supply Department dated 03.7.2007. There is a historical background as to how G.O.Ms.No.92, Municipal Administration and Water Supply Department dated 03.7.2007 came to be issued by the Government.
14. The Tamil Nadu District Municipalities Act, 1920 contains a few provisions in Chapter V that deal with "Powers of Municipal Authorities in respect of property, contracts and establishment". Section 64 requires the Executive Authority to maintain an inventory of all immovable property owned by the Municipal Council and the copy of such inventory to be deposited in the office of the Revenue Divisional Officer. But, Chapter V does not contain any provision for leasing out or licensing the properties that vest with the Municipalities. Though Section 68 deals with delegation of authority to contract and Section 68-A confers powers to frame Rules for prescribing the conditions subject to which contracts may be made, there is no indication as to how the properties which vest with the Municipal Council could be leased out or licensed.
15. Chapter XII of the Act generally deals with licences and fees. Some provisions under Chapter XII deal with places for keeping of animals. Some provisions deal with places used for industries and factories, some more deal with slaughtering houses, some deal with public and private markets and some deal with cart stands. However, Section 259, which deals with public markets declares that all markets which are acquired, constructed, repaired or maintained out of the municipal fund, shall be deemed to be public markets and that such markets shall be open to all persons of whatever caste or creed. Section 260 lists out the powers of the Municipal Council in respect of public markets. But, unfortunately, the focus of Section 260 is basically on the fees that could be collected from places used as public markets. Section 260 reads as follows:
"Powers in respect of public markets.-
(1) The council may provide places for use as public markets.
(2) The council may in any public market levy any one or more of the following fees at such rates and may place the collection of such fees under the management of such persons as may appear to it proper or may farm out such fees for any period not exceeding three years at a time and on such terms and subject to such conditions as it may deem fit:
(a) fees for the use of or, for the right to expose goods for sale in, such markets;
(b) fees for the use of shops, stalls, pens or stands in such markets;
(c) fees on vehicles or pack-animals carrying, or on persons bringing, goods for sale in such markets;
(d) fees on animals brought for sale into, or sold in, such markets; and
(e) license fees on brokers, commission agents, weighmen and measures practising their calling in such markets.
(3) The council may, with the sanction of the State Government, close any public market or part thereof."
16. But, nevertheless, there is an indication in Sub-section (2) of Section 260 that the Act contemplates licensing of public markets for a period of three years at one stretch.
17. Chapter XVI deals with miscellaneous provisions, one of which is a general provision regarding licence and permissions under Section 321. But, Section 321 also does not deal with the manner in which the public markets are to be licensed or leased out. It is in the above background of the statutory scheme that the Government started issuing executive instructions, after finding that every licence of every municipal property led to a series of litigation. Government originally passed G.O.Ms.No.285 dated 29.4.1985. Thereafter, the Government passed G.O.(2D)No.147, Municipal Administration and water Supply Department dated 30.12.2000, providing guidelines as to how the shops in the municipal markets are to be let out. But, experience showed that about 2200 cases came to be filed in various Courts, while implementing the guidelines issued in various Government Orders. This Court also issued certain directions in Tamil Nadu Municipal Shop Merchants Association v. State of Tamil Nadu [AIR 2000 Madras 393] indicating that leases/licences of municipal properties cannot become a heritable right and that the licensees cannot be permitted to continue in possession of the shops under the guise of right of renewal. The Court indicated that the properties of local bodies cannot be allowed to be fettered by perpetuity.
18. Therefore, taking into account all the above and after holding consultations with various stakeholders, the Government came up with G.O.Ms.No.92, Municipal Administration and Water Supply Department dated 03.7.2007. In paragraph 4 of the said order, the Government directed certain instructions to be followed. Paragraph 4(iii) of the said Government Order indicated that after the initial period of 9 years of licence, the local bodies should re-assess the rental value. After such re-assessment, the Municipalities may give a preferential treatment to the existing licensee to have the licence renewed at the re-assessed market rate.
19. In other words, the Government attempted to strike a balance in G.O.Ms.No.92, Municipal Administration and Water Supply Department dated 03.7.2007, between the rights of the existing licensees to have continuity and the right of the local bodies to get a fair rent.
20. In P.Muthusamy v. State of Tamil Nadu [(2014) 5 MLJ 129], a Division Bench of this Court was concerned with a batch of cases, one of which was a public interest litigation, seeking a direction to the respondent-Municipality to bring the shops belonging to a Municipality for fresh auction. The other writ petitions were by the licensees for renewal of licenses.
21. After considering the rival contentions, the Division Bench found in that case that the licensees of the shops have been paying a very meagre amount and that when the rents were re-fixed as per the Government Order in G.O.(2D)No.147 dated 30.12.2000, writ petitions were filed challenging the fixation of rent. The writ petitions were allowed directing the Municipality to give an opportunity of hearing to the licensees. But, in the interregnum, some petitioners agreed to pay the enhanced rent. Thereafter, the Municipality passed fresh orders and those orders came to be challenged. In the meantime, G.O.Ms.No.92 came to be passed. But, since the licensees did not pay the enhanced rent, the extension of licenses granted during the pendency of the writ petitions were cancelled and an auction was notified. It was at that stage that the batch of writ petitions came to be filed, one as a public interest litigation for fresh auction and some challenging the fresh auction and refusal to renew.
22. In their decision, relied upon by the respondent-Municipality, the Division Bench did not hold that G.O.Ms.No.92 dated 03.7.2007 was not to be followed. As a matter of fact, the Division Bench interpreted G.O.Ms.No.92 to mean that the intention behind the Government Order was the augmentation of their financial revenue. Nowhere it is stated in the judgment of the Division Bench that the Government Order need not be followed. On the other hand, the Division Bench pointed out in paragraph 21 that the intention behind the Government Orders was to improve the revenues of the Municipality. In paragraph 22, the Division Bench pointed out that every local body needs money for its welfare measures and that the best way to get maximum revenue is by way of public auction.
23. The petitioners have no quarrel with the proposition that the financial resources of the Municipality can be improved and that they are obliged to pay the fair market rent for the shops in question. As a matter of fact, the petitioners are agreeable for the fixation of fair market rent, by adopting any method. The very purpose of my permitting the auction to go on, as scheduled on 31.7.2014, was to find out the fair market rent that could be fetched in the shops, if they are let out in open auction.
24. The above object of finding of the fair market value of the shops has now been achieved. After the auction, the respondent-Municipality filed a tabular statement containing the shop numbers, the names of the existing licensees, the rent paid by them as on date, the names of the highest bidders in the auction and the offers made by such highest bidders in respect of each shop. The statement is as follows:
Sl. No. Shop No. Old lessee name Rent being paid Names of the new bidders Present upset price Differen-tial amount 1 1 C.Vinoba 5,366/-
E.Nandhagopal 35,000/-
29,634/-2 2
C.Vinoba 5,366/-
E.Rathna 14,100/-
8,734/-3 3
V.Murugesan 5,366/-
K.Krishnavel 22,000/-
16,634/-4 4
V.Murugesan 5,366/-
M.Kathiresan 23,000/-
17,634/-5 5
M.Sivakumar, Suresh, Vidhyaprakash 5,366/-
P.Dhanaseelan 22,000/-
16,634/-6 6
Maqbool 5,366/-
S.Kandasamy 26,500/-
21,134/-7 7
Rathinasamy 5,366/-
S.Kandasamy 12,000/-
6,634/-8 8
Murugasamy 5,366/-
S.Paramasivam 10,000/-
4,634/-9 9
P.Babu 5,366/-
N.Manigandan 12,000/-
6,634/-10 10
M.Nallasamy 5,366/-
N.Manigandan 12,400/-
7,034/-11 11
Kadarkarai Nadar 5,366/-
Manimegalai 21,100/-
15,734/-12 12
Kadarkarai Nadar 5,366/-
K.Thangapandi 12,500/-
7,134/-13 13
M.Balasubramaniam 5,949/-
P.Vijayalakshmi 11,000/-
5,051/-14 14
Murugasamy 5,366/-
P.Kartheesan 23,500/-
18,134/-15 15
D.Basheer 5,432/-
S.Kandasamy 12,000/-
6,568/-16 16
M.Abdul Sameed 5,366/-
A.Yasser Arafat 8,100/-
2,734/-17 17
M.Mohan 4,740/-
M.Radhika 9,100/-
4,360/-18 18
V.Rajkumar 5,366/-
R.Gnanasoundari 12,500/-
7,134/-19 19
Ganapathi Nadar 5,366/-
Chitralekha 15,500/-
10,134/-20 20
Sampath Kumar 5,366/-
M.Srinivasan 8,500/-
3,134/-21 21
M.Sivakumar 5,366/-
S.Sumathi 9,000/-
3,634/-22 22
E.S.Sirajudeen 5,366/-
Mohamed Jeenath Yasser 11,000/-
5,634/-23 23
Ganesh Nadar 5,724/-
Kimaram Ramasamy 8,500/-
2,776/-24 24
Ganesh Nadar 6,427/-
Dhanraj Chowdhary 9,000/-
2,573/-25 25
P.N.Palanisamy 3,949/-
A.Sivakumar 12,000/-
8,051/-26 26
C.Ramasamy 3,523/-
M.Kanagaraj 8,100/-
4,577/-27 27
Nageshwari 3,523/-
Muthulakshmi 9,000/-
5,477/-28 28
A.Subbiah Gounder 3,523/-
S.Jeganathan 8,100/-
4,577/-29 29
N.S.Arumugam 2,786/-
J.Mohan Prasad 8,500/-
5,714/-30 30
K.N.Palanisamy 3,523/-
P.Dilip Kumar 8,500/-
4,977/-31 31
K.N.Palanisamy 3,523/-
M.Srinivasan 8,100/-
4,577/-32 32
A.Padmanabhan 3,292/-
R.Hairunnisa 10,800/-
7,508/-33 33
K.V.Davis 3,857/-
Bakiyalakshmi 17,000/-
13,143/-34 34
Sahul Hameed 3,481/-
M.Yoosuff 9,000/-
5,519/-35 35
K.R.Mayilsamy 3,857/-
M.Palanisamy 9,500/-
5,643/-36 36
M.Moorthy 4,302/-
K.Vijayakumar 9,500/-
5,198/-37 37
Prema Muthuvel 3,523/-
Mohamed Jeenath Yasser 12,600/-
9,077/-38 38
K.Latha 3,857/-
Sahul Hameed 11,900/-
8,043/-39 39
M.Mohan 3,439/-
Muthulakshmi 12,200/-
8,761/-40 40
S.A.Zahir Hussain 3,523/-
Krishnamurthy 13,300/-
9,777/-
Total 1,87,707 5,28,400 3,40,693
25. As per the statement, the total revenue that of the 40 shops put together, yields as on date, is Rs.1,87,707/-. The total amounts now quoted by the highest bidders for all the 40 shops put together is Rs.5,28,400/-.
26. Therefore, it is clear that if the writ petitions are now dismissed, the Municipality will be able to let out these 40 shops for a total amount of Rs.5,28,400/- per month. However, it is submitted by Mr.P.H.Arvind Pandian, learned Additional Advocate General that the Municipality is not happy with the rents quoted in respect of 8 shops. Therefore, according to him, the Municipality may not confirm the auction in respect of 8 shops. Perhaps these 8 shops are the ones which had fetched Rs.8,100/- and Rs.8,500/- per month per shop.
27. Insofar as the petitioners are concerned, they are now agreeable to pay together, the total amount now fetched in the auction for all the 40 shops put together. The petitioners have filed individual affidavits agreeing to pay the total rent that the respondent-Municipality would now be able to collect, if the auction is confirmed.
28. But, there is one difference. Every shop has fetched different amounts in the auction. Each petitioner is not willing to match the highest offer that was fetched in the auction in respect of the same shop. On the contrary, all the 40 shop owners are willing to share the entire burden equally. This is not acceptable to the Municipality.
29. Moreover, it is contended by Mr.P.H.Arvind Pandian, learned Additional Advocate General that if the petitioners wanted renewal of the licences, they should have participated in the auction. If they were not successful, they could have taken advantage of Clause No.7 of the auction notice, which permits any person to improve the offer by 10% over and above the highest bid and challenge the highest bid and seek re-auction. Since the petitioners did not adopt such a procedure, the learned Additional Advocate General submits that it is not possible now to accept the offers made by them.
30. Though technically the stand taken by the respondent-Municipality cannot be found fault with, there is one aspect which cannot be lost sight of. The counter filed by the respondent-Municipality was actually after the conduct of the auction on 31.7.2014. In paragraph 9 of the counter affidavit, it is stated by the respondent-Municipality that the petitioners themselves participated in the auction through their relatives and became successful in respect of 13 shops. According to the respondent-Municipality, the sub-tenants of the licensees, who are now in possession, became the highest bidders in respect of 16 shops. The respondent-Municipality has stated that only 11 persons are new to the entire exercise.
31. In the light of such a stand taken by the respondent-Municipality in paragraph 9 of the counter affidavit, the option now open to the Court is only to choose between the devil and deep-sea. If the writ petitions are allowed on condition that they pay the total amount or something more than the total amount now fetched in the auction, the same may amount to a breach of the procedure. But, if the writ petitions are dismissed, 13 out of the writ petitioners, even according to the respondent-Municipality, will continue to occupy the shops, since they have participated through their relatives. Even as per the counter affidavit of the respondent-Municipality, only 11 persons who participated in the auction were new individuals. 16 persons, according to the respondent-Municipality, are sub tenants of the licensees. Therefore, if I reject the case of the petitioners, I have to direct a fresh auction to be conducted. If the fresh auction does not yield the total amount now fetched, the result will be more detrimental to the Municipality. Therefore, keeping these options in mind, let me now got to the next issued raised.
Question No.(ii):
32. The second issue raised in the writ petitions is about the applicability of Section 321(11) of the Tamil Nadu District Municipalities Act, 1920. It reads as follows:
"Section 321:
General provisions regarding licences and permissions:
....
(11) The acceptance by the municipal council of the pre-payment of the fee for a licence or permission or for registration shall not entitle the person making such pre-payment 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 received by the applicant within sixty days after the receipt of the application by the executive authority, 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 laws, rules, by-laws, regulations and all conditions ordinarily imposed."
According to the petitioners, the scope of Section 321(11) fell for consideration at least thrice before various Judges of this Court.
33. In Muruga Konar v. Madurai Municipality [(1954) 2 MLJ 217], this Court was concerned with a second appeal arising out of a suit for permanent injunction restraining the Madurai Municipality from initiating any prosecution for running a mutton stall. The Court held that by virtue of Section 312(11), the application for licence shall be deemed to have been granted. However, the property in question in that case does not appear to be the property of the Municipality. The licence in question was a licence that is normally necessary for any business establishment to obtain from the local body.
34. In S.Govinda Iyer v. Municipal Council [CDJ 1966 MHC 062], a Division Bench of this Court was concerned with an application under Section 250 of the Madras District Municipalities Act, for the installation of an electric machine. The Division Bench invoked the deeming fiction in Section 321(11). A careful look at paragraph 7 of the decision in the said case would show that the licence in question was actually for running a factory or the installation of a machinery in a factory. The case did not concern the licence of a building belonging to a Municipal Corporation.
35. Similarly, the decision in P.K.Ramaswamy v. Municipality of Coimbatore [CDJ 1968 MHC 323] also dealt with an application under Section 250 of the District Municipalities Act for permission to install a machinery. Therefore, prima facie all the three cases relied upon by the learned counsel for the petitioner, dealt with permissions and licences to be obtained from the local bodies for running business establishments in buildings or properties other than those owned by the Municipality.
36. Licences that are dealt with by Section 321, are those that are granted for the purpose of running a factory or industrial establishment or a business enterprise. Section 321 has nothing to do with the letting out of properties belonging to the Municipalities. As I have pointed out earlier, letting out of properties owned by Municipalities, is not very clearly dealt with by any provision contained in the Act, except the indication generally found in Sections 259 and 260 that deal with public markets. Section 321 has no application to the licensees of buildings owned by the Municipalities for the purpose of locating public markets. Hence, the second contention of the petitioners cannot be accepted.
37. Once the second contention of the petitioners is liable to be rejected, the only question to be decided is as to whether the petitioners should be granted renewal of licence at or above the market rate now quoted by the highest bidders in the auction, or to allow the Municipality to confirm the auction in favour of the highest bidders. In my view, both options do not appear to be fair to the Municipality. Once it is found that the petitioners had set up their own relatives to bid in the auction and once the Municipality has come on record that there are sub-tenants, I cannot allow the auction where such things have happened, to be confirmed. At the same time, allowing the petitioners to pay the highest bid amounts now secured in the auction also does not appear to be a good option. As seen from the tabular statement made by the respondent-Municipality, shop No.1 has fetched the highest bid of amount of Rs.35,000/-. The lowest bid amount, which has not been accepted by the respondent-Municipality, is Rs.8,100/-.
38. Admittedly, all the shops are of the same measurement. If we look at the existing rents, it will be clear that the highest rent now paid by any licensee is Rs.6,427/- and the lowest paid by any licensee is Rs.2,786/-. The shop No.29, whose rent is the lowest as on date, has fetched only Rs.8,500/. Shop No.24 which now fetches the highest rent, namely Rs.6,427/-, has fetched only Rs.9,000/- in the present auction. But, shop No.1, whose present rent is Rs.5,366/-, has fetched the higher rent of Rs.35,000/-. Therefore, the whole exercise of auction, appears to be completely farcical and does not reflect the true market value in respect of all the shops. Hence, I am of the view that directing the respondent-Municipality to put the shops to fresh auction and permit the petitioners to participate in the auction will be the best alternative. To ensure that the auction is fair, free and transparent and to ensure that large number of people participate, the Municipality shall take the assistance of police force. The Municipality shall, before going in for a fresh auction, have an assessment of the market rate of rent, through the Executive Engineer of the Public Works Department, so that a benchmark can be fixed in the auction.
39. In the result, the writ petitions are disposed of to the following effect:
(i) the prayer of the petitioners for renewal of the licences is rejected;
(ii) the respondent-Municipality shall not confirm the auction held on 31.7.2014 in favour of the highest bidders;
(iii) the respondent-Municipality shall have the shops assessed for their fair market rent through the Executive Engineer of the Public Works Department, within a period of two months from the date of receipt of a copy of this order;
(iv) thereafter, the respondent-Municipality shall put up the shops to fresh auction, on the basis of the assessment made by the Executive Engineer of the Public Works Department, keeping the assessment as the benchmark;
(v) in the auction so conducted, the petitioners shall also be permitted to take part; and
(vi) till then, the petitioners shall be permitted to continue to occupy the shops, not on the existing rents, but at the rate of Rs.13,210/- per shop (arrived at by dividing Rs.5,28,400/- by 40). This rent of Rs.13,210/- per month shall be paid with effect from 01.4.2014, since the existing licences expired on 31.3.2014.
No costs. Consequently, M.P.Nos.1 of 2014 and 1 to 3 of 2014 in W.P.Nos.19035 and 19915 of 2014 respectively, are closed and M.P.Nos.4 and 5 of 2014 are allowed.
Index : Yes 24.9.2014 Internet : Yes kpl To The Commissioner Palladam Municipality Palladam, Tirupur District. V.RAMASUBRAMANIAN,J. kpl Order in W.P.Nos.19035 & 19915 of 2014. 24.9.2014.