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Delhi District Court

M/S Hr Cafe India Pvt. Limited vs India Tourism Development Corporation ... on 9 October, 2020

   IN THE COURT OF SH. DINESH KUMAR SHARMA
       PRINCIPAL DISTRICT & SESSIONS JUDGE/
                 APPELLATE AUTHORITY
                      NEW DELHI
In the matter of :
PPA No.04/2018

M/s HR Cafe India Pvt. Limited
A subsidiary of M/s JSM Corporation Pvt. Ltd.
TODI Building, 3rd Floor
Mathuradas Mill Compound
Lower Parel, Mumbai­400013.            ..... Appellant

                                         Versus

India Tourism Development Corporation Limited
A Company incorporate under the provisions
of Companies Act, 1956
Having its registered office at
Core­8, 6th Floor, Scope Complex
7, Lodhi Road, New Delhi­110003.
Unit:Hotel Samrat, Chanakya Puri
New Delhi­110021.                       .....Respondent

                           Date of filing         : 15.02.2018
                           Date of arguments      : 09.10.2020
                           Date of judgment       : 09.10.2020


JUDGMENT

1. Vide this judgment, I propose to dispose off this appeal u/S 9 of The Public Premises (Eviction of Unauthorised PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 1 of 10 Occupants)Act, 1971 ("PP Act" in short) r/w Section 151 CPC, challenging the order dated 05.02.2018 whereby the Estate Officer interalia held that the appellant is liable to pay Rs.3,10,57,239/­ as outstanding license fee for the use of additional space plus interest @ 6% p.a. from 29.09.2015 i.e. the date of issue of notice by the Estate Officer till its payment.

2. Short of details, the appellant company is a subsidiary of M/s JSM Corp.Pvt Ltd. and was granted license to operate a Fine Dining International Pan Asian Cuisine Restaurant & Bar under the name and style of 'SHIRO' in Samrat Hotel for five years by the respondent vide license deed dated 10.12.2009. The appellant vide communication dated 10.02.2010 requested the General Manager, Hotel Samrat to allow the appellant to use a non­airconditioned space adjacent to the area of the restaurant and also enquired about the cost of using the said non­ airconditioned space. However, the respondent did not respond to the request. The license granted to the appellant terminated by efflux of time on 09.12.2014 and the appellant had commenced the closure procedure well within time and the restaurant stopped functioning on 30.11.2014. The concerned authorities were duly informed of appellant's decision to discontinue the lease vide letter dated 06.09.2014. Respondent was requested to adjust the PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 2 of 10 rental amounts due against the deposit and bank guarantee held by them worth Rs.49,22,640/­. The respondent did not allow the appellant to remove the goods lying in the premises and raised a demand of an additional amount for occupation of additional area. The plea of the appellant is that they had been paying the license fee regularly of the area given to vide license deed dated 10.12.2009. However, the respondent raised a demand vide letter date 05.12.2014 and subsequent letter dated 26.12.2014 for a sum of Rs.310.13/­lacs for occupying the additional space besides Rs.83.25/­lacs on account of license fees, electricity charges, water charges and PNG charges. ITDC also raised demand of Rs.44,267/­ on account of citi ledger payments.

3. The respondent filed an application u/S 7 PP Act for recovery of license fee of Rs.3,10,57,239/­ as on 31.03.2015 alongwith interest @ 18%p.a. The proceedings before the Estate Officer concluded on 05.02.2018 and the Estate Officer in exercise of his powers conferred upon him under PP Act held the appellant liable to pay Rs.3,10,57,239/­ as outstanding license fee for the use of additional space plus interest @ 6% p.a. from 29.09.2015 i.e. the date of issue of notice by the Estate Officer till its payment.

M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 3 of 10

4. The appellant aggrieved of this, filed the present appeal challenging the impugned order predominantly on the ground that the Estate Officer failed to follow the basic principle of law and fastened the liability upon the appellant on the ground that the appellant has failed to prove that it was not liable to pay the outstanding license fee for the additional area used by them other than the license area during the period of license agreement executed between the parties. Amongst other pleas taken by the respondent, the appellant has pleaded that the demand was raised for the period between 10.12.2009 to 09.12.2014 by the respondent vide letter dated 05.12.2014 and subsequent letter dated 26.12.2014. It has been submitted that the demand raised by the respondent was badly barred by limitation. The appellant in support of its contention has relied on the judgments (1)Sudhir Engineering Company Vs Nitco Roadways Ltd., 1995(34) DRJ 86, (2)Sait Tarajee Khimcand & Ors. Vs Yelamarti Satyama & Ors., AIR 1971 SC 1865, (3) New Delhi Municipal Committee Vs Kalu Ram & Others, (1976) 3 SCC 407,(4) Lakhanpal Rawat Vs Union of India, 2010 (2)MPLJ 426, (5)State of Kerala & Ors. Vs V.R.Kalliyanikutty & Anr., (1999) 3 SCC 657,(6) Jagdish Singh Vs Madhuri Devi, (2008) 10 SCC 497, (7) Pawan Kumar Vs The State of Haryana And Anr., (1995) 110 PLR 506 and (8) PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 4 of 10 M/s Kranti Associates Pvt. Ltd. & Anr. Vs Sh.Masood Ahmed Khan & Others, arising out of SLP(Civil) No.20428 of 2007 decided on 08.09.2010.

5. Sh.H.S.Sharma and Sh.Satya Narayan Vashishth, Ld.Counsel for the appellant submitted that the order of the Estate Officer cannot be sustained in the eyes of law as the same is not in conformity with the procedure established by law. Sh. Sushant Kumar,Ld.Counsel for the respondent has submitted that though the Estate Officer might not have given certain reasons in the judgment but the conclusion arrived at is in accordance with the law.

6. I have heard Sh.H.S.Sharma and Sh.Satya Narayan Vashishth, Ld.Counsel for the appellant and Sh.Sushant Kumar, Ld.Counsel for the respondent and also perused the record carefully.

7. This court without going into the merits of the case prima facie is of the view that the Estate Officer has not followed the basic principles of law. It is pertinent to mention here that Section 8 PP Act specifically provides as under:

"8.Power of estate officers.­An estate officer shall, for the purpose of holding any inquiry under this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), when trying PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 5 of 10 a suit in respect of the following matters, namely:--

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) any other matter which may be prescribed."

8. Section 7 of PP Act reads as under:­ "7. Power to require payment of rent or damages in respect of public premises.­ (1) Where any person is in arrears of rent payable in respect of any public premises, the estate officer may, by order, require that person to pay the same within such time and in such instalments as may be specified in the order.

(2)Where any person is, or has at any time been, in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments as may be specified in the order. [2(A) While making an order under sub­section (1) or sub­section (2), the estate officer may direct that the arrears of rent or, as the case may be, damages shall be payable together with [compound interest] at such rate as may be prescribed, not being a rate exceeding the current rate of interest within the meaning of the Interest Act, 1978 (14 of 1978).] (3) No order under sub­section (1) or sub­section (2) shall be made against any person until after the issue of a notice in writing to the person calling upon him to show cause [within seven days from the date of issue thereof], why such order should not be made, and until PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 6 of 10 his objections, if any, and any evidence he may produce in support of the same, have been considered by the estate officer."

9. The conjoint reading of Section 7 sub­section (3) PP Act and Section 8 PP Act makes it clear that the intention of the legislature is that the Estate Officer before passing an order shall give the sufficient opportunity to the parties to produce the documents and lead any evidence in support of their case. The Estate Officer being Quasi­Judicial authority is bound to adhere to the principle of fairness, equity and natural justice.

10. The bare perusal of aforesaid provisions, makes it clear that the Estate Officer being a quasi judicial authority is bound to go in accordance with the law.

11. I have tested the impugned order on the touch stone of principles stated above. It is advantageous to record the concluding paras of impugned order which are as under:

"I have gone through the entire record of the case and heard both the parties. The respondent has failed to produce any document to prove that he is not liable to pay outstanding license fee for the additional area used by them other than the licensed area during the period of license agreement executed between the parties. Therefore, in the absence of any document, this court PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 7 of 10 is of the opinion that the respondent is liable for recovery of License Fee of Rs.3,10,57,239/­ as on 31.03.2015. In the facts and circumstances of the case, I am of the view that the said amount will carry interest @ 6% p.a. It is not disputed that the license was in occupation of the premises till 2014 end and the License Deed was in operation and therefore the ground of delay is not tenable. It is also a fact that the Respondent agreed that whatever extra space they have acquire or need to acquire for the restaurant's operational needs, Samrat will charge additional amount over and above Rs.13,80,000/­ per month that they had to pay as license fee and will get the space approved by the hotel management and with regard to toilets, they can start work.

On the basis of ongoing discussion, documents, etc. and evidence led before this court and the judgments of the Hon'ble courts, I, in exercise of the powers conferred upon me under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 order that the respondent is liable to pay Rs.3,10,57,239/­ as outstanding license fee for the use of additional space plus interest @ 6% p.a. from 29.09.2015 i.e. the date of issue of notice by the Estate Officer till its payment."

M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 8 of 10

12. The bare perusal of above makes, it is clear that the Estate Officer has fastened the liability upon the appellant on the ground that it had failed to prove that he was not liable to pay the outstanding license fee. The procedure adopted by the Estate Officer is foreign to the established law and procedure. The respondent had filed an application before the Estate Officer for recovery of Rs.3,10,57,239/­ as license fee as on 31.03.2015 alongwith interest @ 18% from 01.04.2015 till delivery of actual possession of the public premises by appellant, for the usage of additional space. Thus, the respondent was under legal duty to prove that the appellant had used the additional space and did not pay the requisite license fee. The impugned order does not mention any where that the respondent has proved that the additional space was taken by the appellant. During the course of submissions before this court also, the respondent has not been able to show any material to prove the same. The consistent plea of the appellant is that it had not used any additional space other than the space covered by license deed dated 10.12.2009. The order of the Estate Officer is also silent on the ground of limitation. The Estate Officer did not give any reason as to why the payment raised by the respondent is not barred by limitation. During the course of submissions, Ld.Counsel for the appellant PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 9 of 10 has very fairly submitted that law of limitation is applicable in the present proceedings. In this regard law has very well been laid down in NDMC Vs Kalu Ram & Other's case (Supra). I consider that the order of the Estate Officer is not sustainable in the present form. Hence, the matter is remanded back with the direction to the Estate Officer to give a fresh hearing and decide the matter in accordance with law and procedure. Parties are directed to appear before the Estate Officer on 06.11.2020 at 2pm.

13. Appeal is disposed of accordingly.

14. Record of the Estate Officer be sent back along with copy of this judgment.

15. Appeal file be consigned to Record Room.

                                         DINESH        DINESH KUMAR
                                         KUMAR         SHARMA
                                                       Date: 2020.10.09
                                         SHARMA        16:27:27 +0530

Announced through electronic (DINESH KUMAR SHARMA) mode on 09.10.2020. Principal District & Sessions Judge/ Appellate Authority New Delhi PPA No.04/18 M/s HR Cafe India Pvt. Ltd. vs ITDC Page No. 10 of 10