Sheik Iqbal Vs. Commissioner, Kandukur Municipality - Court Judgment

Excerpt:
contract - lease - rule 12 of a.p. municipalities (regulation of receipts and expenditure) rules,1968 - petitioner filed suit for renewal of lease for period of three years by excepting 33 and 1/3% enhanced lease amount - lessees has no right to insist for automatic renewal - normal rule for granting lease by public auction - discretion conferred upon municipality - held, petitioner has no right to question validity and correctness of action of municipality in grant of renewal of lease. - - the same has been rejected bythe respondent-municipality- by proceedings dated 13-2-1997 stating that the petitioner's request cannot be considered as he failed to pay the full amount. 30,000/-.5. according to the respondent-municipality the request of the petitioner could not be considered for renewing the lease by enhancing 33 1/3% over and above the existing rent, inasmuch as the petitioner failed to pay the rents regularly to the respondent-municipality in respect of another shop i. for good reasons, the respondent-municipality thought it fit and proper not to renew the lease in favour of the petitioner. rule 12 of the rules prescribes both grant of lease, as well as renewal.order1. in the instant writ petition the petitioner prays for issuance of an appropriate writ particularly one in the nature of mandamus declaring the action of the respondents in seeking to auction the lease hold rights of shop no. 17, vegetable market, kandukuru by proceedings in roc no. 158/ 97, gi, dated 15-2-1997 without extending the lease in his favour by accepting 33 1/3% enhanced lease amount as arbitrary and illegal. the petitioner also prays for issuance of a consequential direction directing the respondents not to auction the lease hold rights of the said shop- the petitioner seeksfurther direction directing the respondents to extend the lease for a further period of three years by accepting 33 1/3% enhanced lease amount.2. the petitioner was the successful bidder in respect of shop no. 12 allotted by vegetable market, kandukuru, for short 'the shop' in the auction held on 27-3-1996. the petitioner offered the highest bid of rs.96,000/- per year commencing from 1-4-1996 to 31-3-1997, though in the affidavit filed in support of the writ petition, it is stated that his highest offer was only rs.30,000/-. the petitioner is stated to have made a representation to the respondents to reduce the lease amount, as the same, according to him, was very excessive. the same was rejected by the council on 10-5-1996 and directed the petitioner to vacate the premises. thereafter the respondent-municipality by proceedings dated 24-6-1996 directed the petitioner to vacate the premises. however, the municipal counsel by its resolution dated 31-7-1996 resolved to lease out the said shop to the petitioner on condition of the petitioner paying the entire lease amount of rs. 30,000/-. the petitioner is stated to have deposited the amount of rs. 27,000/- on 7-8-1996 and he had already deposited a sum of rs.3,000/-with the municipality in the auction held in march, 1996.3. the petitioner is stated to have made representation on 28-1-1996 requesting the municipality to extend the lease in favour of the petitioner in respect of the said shop by accepting the enhanced rent of 33 1/3% as was done in the case of others. the same has been rejected by the respondent-municipality by proceedings dated 6-2-1997 on the ground that there were certain amounts due to be paid by the petitioner. the petitioner again made a representation on 10-2-1997 making similar request and bringing to the notice of the respondent-municipality that the petitioner had already paid rs.30,000/- as demanded by the municipality and there are no dues whatsoever from the petitioner payable to the respondent-municipality. the same has been rejected bythe respondent-municipality- by proceedings dated 13-2-1997 stating that the petitioner's request cannot be considered as he failed to pay the full amount. the petitioner is stated to have made another representation on 15-2-1997 making similar request. while the matter stood thus, the respondents issued notice in roc no.158/97, g1, dated 15-2-1997 proposing to auction the lease hold rights of all the shops at vegetable market, kandukur whose leases have not been extended, by accepting 33 1/3% lease amount. the auction was scheduled to be held on 5-3-1997. it is at this stage, the petitioner filed this writ petition.4. in the counter-affidavit, it is stated in categorical terms that for the lease commencing from 1-4-1996 to 31-3-1997 in respect of the said shop no. 17, the petitioner offered highest bid of rs.96,100/- per year. the petitioner has to deposit 1/3 of the bid amount within seven days from the date of accepting the bid by the commissioner. the petitioner instead of depositing the said amount made a representation on 6-4-1996 requesting to reduce the rent, since the bid amount, according to the petitioner was very high. however, the municipal council by its resolution dated 31-7-1996 resolved to reduce the auction amount to rs. 30,000/- on condition that the petitioner should pay entire lease amount in lump sum. there is no dispute whatsoever that the petitioner had paid the said amount of rs.30,000/-.5. according to the respondent-municipality the request of the petitioner could not be considered for renewing the lease by enhancing 33 1/3% over and above the existing rent, inasmuch as the petitioner failed to pay the rents regularly to the respondent-municipality in respect of another shop i.e., shop no.4 situated in the same vegetable market and committed default in payment of rents. it is also stated that in the auction that was held on 12-3-1997 one mannam malakondaiah offered rs.90,000/- as rent per year. the said shop no. 17 is still in possession of the petitioner. this would show that renewal of lease on the enhanced rent of 33 1 /3% overand above the existing rent i.e., at the rate of rs. 30,000/- per year would have resulted in enormous loss to the respondent-municipality is the submission made on behalf of the learned standing counsel for the municipality.6. the learned counsel for the petitioner sri srinivas reddy submits that the very same respondent-municipality acceded to the request of another lessee in respect of shop no. 18 and renewed lease for a period of three years by accepting 33 1/3% enhancing the lease amount from the existing tenant. it is the submission of the learned counsel that the same benefit should have been given to the petitioner also. the respondent-municipality cannot be allowed to practice discriminatory treatment and follow different yard sticks and methods in case of each of the lessees. they arc required to follow uniform method even in the matter of granting of renewal to the existing tenants. it is also urged by the learned counsel for the petitioner that the endorsement dated 13-2-1997 informing the petitioner that his request for renewal cannot be considered is vitiated by non-application of mind. no amounts whatsoever were due from the petitioner to the respondent-municipality, inasmuch as a sum of rs.30,000/-as directed by the council by its resolution dated 31-7-1996 was already paid.7. it is required to notice that the petitioner has not stated in the affidavit filed in support of the writ petition that he is the highest bidder in respect of the another shop no.4. ft is also not stated in the affidavit filed in support of writ petition that certain amounts were due to be paid by the petitioner to the respondent-municipality in respect of the said shop. it is also required to notice that the petitioner in the affidavit filed in support of the writ petition has stated that the highest bid offered by him was rs. 30,000/-whereas in reality, the offer of the petitioner was rs.96,100/- as rent per year. it is the respondent-municipality which has reduced the lump sum to rs.30,000/-on the application filed by the petitioner, that too after a lapse of three months from the date of public auction. it is thus clear thatthe petitioner had approached this court with unclean hands. the facts that are required to be stated by the petitioner are not stated.8. can it be said that the action of the respondent-municipality is discriminatory, in my considered opinion the respondent-municipality may renew the lease for a period of three years at a time without conducting public auction, if the present allottee agrees to renew the lease in his favour at an amount which will be at 33 1/3% above the earlier rent or the prevailing market value of such shops situated in the vicinity whichever is higher. rule 12 of the a.p.municipalities (regulation of receipts and expenditure) rules, 1968, for short 'the rules' enables the municipality to exercise such discretionary power in appropriate cases. the said rule does not confer any corresponding right upon the lessee/tenant, but it merely confers a discretion upon the respondent-municipality. the respondent-municipality in my considered opinion is bound to exercise its discretion in a reasonable manner. public interest require that the respondent-municipality shall always make efforts in augumenting its financial resources, so that the amounts so realised shall be spent for the public purpose and for the purposes enumerated under the provisions of the act itself. such enabling provision does not confer any corresponding right upon the existing tenants/lessees. even the said rule which authorises the municipality to take such decision to renew the lease on condition of the existing tenant/lessee paying 33 1/3% over and above the existing rate should not be less than the prevailing market value. in the very case, it is now demonstrated that in the auction held on 27-3-1996, there is an offer of an intending bidder agreeing to pay a sum of rs. 96,000/- as annual lease amount, in such circumstances, would there be any decision to compel the respondent-municipality to part away with its property in favour of the petitioner by accepting 33 1/3% rent over and above the existing rent of rs. 30,000/-per annum. in my considered opinion, such direction directing the respondent-municipality would be detrimental to the public interest.9. the respondent-municipality is stated to have taken such decision to renew the lease in favour of another lessee in respect of shop no. 18 and according to the petitioner refusal to consider the case of the petitioner would amount to discrimination. admittedly, the lessee of shop no. 18 is not situated similar to that of the petitioner. there is no allegation even by the petitioner that the lessee of shop no. 18 is also a defaulter in payment of rents regularly to the respondent-municipality. it is not as if he has offered some amount towards rent per annum and later on requested for reduction of the same on the ground that he was not in a position to pay the amount as undertaken in the bid. it is not as if he is also obtained lease in respect of other shop and committed default. therefore, the petitioner cannot equate himself with the lessee of shop no. 18 and then contend that the respondent-municipality has treated the petitioner and the lessee of shop no. 18 on a different footing. such plea is not available to the petitioner. for good reasons, the respondent-municipality thought it fit and proper not to renew the lease in favour of the petitioner. the discretion exercised by the municipality cannot be said to be unreasonable or unfair. the discretion, in fact, is exercised by the municipality in the public interest. this court in penukollu ramachandra rao and others v. government of andhra pradesh and others, 1997(6) ald 166, had an occasion to consider more or less similar facts and held that lessees have no right to insist for automatic lease and observed as follows:'in case of institutions, the procedure of holding auction may be dispensed with either by the council with the sanction of the government or by the government, itself, subject to certain conditions. this is the scenario regulating the lease of shops by the municipality. rule 12 of the rules prescribes both grant of lease, as well as renewal. it is clear from a bare reading of the rule that the lessees have no right to insist for automatic renewal. the normal rule for granting lease is by public auction and discretion is conferred upon themunicipality to renew the lease for a period of three years at a time subject to the condition of the present lessee agreeing to such renewal in his favour at an amount which will be 33 1/3% above the earlier rent.'it is thus not possible to accede to the submissions made by the learned counsel for the petitioner that the respondent-municipality had practised discrimination. the facts leading to grant or renewal in favour of the lessees in respect of shop no. 18 are not before the court. it is not as if the petitioner had assailed the same. thus the petitioner had no right to question the validity and correctness of the action of the respondent-municipality in grant of renewal of the lease in favour of the lessee in respect of shop no. 18. nothing can be presumed at this stage about the said decision. at any rate such decision itself cannot confer an enforceable right upon the petitioner herein. the petitioner cannot base his claim for the relief on such decision stated to have been taken by the respondent-municipality.10. for the aforesaid reasons, i do not find any merit in the writ petition. the writ petition fails and is accordingly dismissed. no costs.

Judgment:
ORDER

1. In the instant writ petition the petitioner prays for issuance of an appropriate writ particularly one in the nature of Mandamus declaring the action of the respondents in seeking to auction the lease hold rights of Shop No. 17, Vegetable Market, Kandukuru by proceedings in ROC No. 158/ 97, GI, dated 15-2-1997 without extending the lease in his favour by accepting 33 1/3% enhanced lease amount as arbitrary and illegal. The petitioner also prays for issuance of a consequential direction directing the respondents not to auction the lease hold rights of the said shop- The petitioner seeksfurther direction directing the respondents to extend the lease for a further period of three years by accepting 33 1/3% enhanced lease amount.

2. The petitioner was the successful bidder in respect of Shop No. 12 allotted by Vegetable Market, Kandukuru, for short 'the shop' in the auction held on 27-3-1996. The petitioner offered the highest bid of Rs.96,000/- per year commencing from 1-4-1996 to 31-3-1997, though in the affidavit filed in support of the writ petition, it is stated that his highest offer was only Rs.30,000/-. The petitioner is stated to have made a representation to the respondents to reduce the lease amount, as the same, according to him, was very excessive. The same was rejected by the Council on 10-5-1996 and directed the petitioner to vacate the premises. Thereafter the respondent-Municipality by proceedings dated 24-6-1996 directed the petitioner to vacate the premises. However, the Municipal Counsel by its resolution dated 31-7-1996 resolved to lease out the said shop to the petitioner on condition of the petitioner paying the entire lease amount of Rs. 30,000/-. The petitioner is stated to have deposited the amount of Rs. 27,000/- on 7-8-1996 and he had already deposited a sum of Rs.3,000/-with the Municipality in the auction held in March, 1996.

3. The petitioner is stated to have made representation on 28-1-1996 requesting the Municipality to extend the lease in favour of the petitioner in respect of the said shop by accepting the enhanced rent of 33 1/3% as was done in the case of others. The same has been rejected by the respondent-Municipality by proceedings dated 6-2-1997 on the ground that there were certain amounts due to be paid by the petitioner. The petitioner again made a representation on 10-2-1997 making similar request and bringing to the notice of the respondent-Municipality that the petitioner had already paid Rs.30,000/- as demanded by the Municipality and there are no dues whatsoever from the petitioner payable to the respondent-Municipality. The same has been rejected bythe respondent-Municipality- by proceedings dated 13-2-1997 stating that the petitioner's request cannot be considered as he failed to pay the full amount. The petitioner is stated to have made another representation on 15-2-1997 making similar request. While the matter stood thus, the respondents issued notice in ROC No.158/97, G1, dated 15-2-1997 proposing to auction the lease hold rights of all the shops at Vegetable Market, Kandukur whose leases have not been extended, by accepting 33 1/3% lease amount. The auction was scheduled to be held on 5-3-1997. It is at this stage, the petitioner filed this writ petition.

4. In the counter-affidavit, it is stated in categorical terms that for the lease commencing from 1-4-1996 to 31-3-1997 in respect of the said shop No. 17, the petitioner offered highest bid of Rs.96,100/- per year. The petitioner has to deposit 1/3 of the bid amount within seven days from the date of accepting the bid by the Commissioner. The petitioner instead of depositing the said amount made a representation on 6-4-1996 requesting to reduce the rent, since the bid amount, according to the petitioner was very high. However, the Municipal Council by its Resolution dated 31-7-1996 resolved to reduce the auction amount to Rs. 30,000/- on condition that the petitioner should pay entire lease amount in lump sum. There is no dispute whatsoever that the petitioner had paid the said amount of Rs.30,000/-.

5. According to the respondent-Municipality the request of the petitioner could not be considered for renewing the lease by enhancing 33 1/3% over and above the existing rent, inasmuch as the petitioner failed to pay the rents regularly to the respondent-Municipality in respect of another Shop i.e., Shop No.4 situated in the same Vegetable Market and committed default in payment of rents. It is also stated that in the auction that was held on 12-3-1997 one Mannam Malakondaiah offered Rs.90,000/- as rent per year. The said shop No. 17 is still in possession of the petitioner. This would show that renewal of lease on the enhanced rent of 33 1 /3% overand above the existing rent i.e., at the rate of Rs. 30,000/- per year would have resulted in enormous loss to the respondent-Municipality is the submission made on behalf of the learned Standing Counsel for the Municipality.

6. The learned Counsel for the petitioner Sri Srinivas Reddy submits that the very same respondent-Municipality acceded to the request of another lessee in respect of shop No. 18 and renewed lease for a period of three years by accepting 33 1/3% enhancing the lease amount from the existing tenant. It is the submission of the learned Counsel that the same benefit should have been given to the petitioner also. The respondent-Municipality cannot be allowed to practice discriminatory treatment and follow different yard sticks and methods in case of each of the lessees. They arc required to follow uniform method even in the matter of granting of renewal to the existing tenants. It is also urged by the learned Counsel for the petitioner that the endorsement dated 13-2-1997 informing the petitioner that his request for renewal cannot be considered is vitiated by non-application of mind. No amounts whatsoever were due from the petitioner to the respondent-Municipality, inasmuch as a sum of Rs.30,000/-as directed by the Council by its Resolution dated 31-7-1996 was already paid.

7. It is required to notice that the petitioner has not stated in the affidavit filed in support of the writ petition that he is the highest bidder in respect of the another Shop No.4. ft is also not stated in the affidavit filed in support of writ petition that certain amounts were due to be paid by the petitioner to the respondent-Municipality in respect of the said shop. It is also required to notice that the petitioner in the affidavit filed in support of the writ petition has stated that the highest bid offered by him was Rs. 30,000/-whereas in reality, the offer of the petitioner was Rs.96,100/- as rent per year. It is the respondent-Municipality which has reduced the lump sum to Rs.30,000/-on the application filed by the petitioner, that too after a lapse of three months from the date of public auction. It is thus clear thatthe petitioner had approached this Court with unclean hands. The facts that are required to be stated by the petitioner are not stated.

8. Can it be said that the action of the respondent-Municipality is discriminatory, in my considered opinion the respondent-Municipality may renew the lease for a period of three years at a time without conducting public auction, if the present allottee agrees to renew the lease in his favour at an amount which will be at 33 1/3% above the earlier rent or the prevailing market value of such shops situated in the vicinity whichever is higher. Rule 12 of the A.P.Municipalities (Regulation of Receipts and Expenditure) Rules, 1968, for short 'the Rules' enables the Municipality to exercise such discretionary power in appropriate cases. The said Rule does not confer any corresponding right upon the lessee/tenant, but it merely confers a discretion upon the respondent-Municipality. The respondent-Municipality in my considered opinion is bound to exercise its discretion in a reasonable manner. Public interest require that the respondent-Municipality shall always make efforts in augumenting its financial resources, so that the amounts so realised shall be spent for the public purpose and for the purposes enumerated under the provisions of the Act itself. Such enabling provision does not confer any corresponding right upon the existing tenants/lessees. Even the said Rule which authorises the Municipality to take such decision to renew the lease on condition of the existing tenant/lessee paying 33 1/3% over and above the existing rate should not be less than the prevailing market value. In the very case, it is now demonstrated that in the auction held on 27-3-1996, there is an offer of an intending bidder agreeing to pay a sum of Rs. 96,000/- as annual lease amount, In such circumstances, would there be any decision to compel the respondent-Municipality to part away with its property in favour of the petitioner by accepting 33 1/3% rent over and above the existing rent of Rs. 30,000/-per annum. In my considered opinion, such direction directing the respondent-Municipality would be detrimental to the public interest.

9. The respondent-Municipality is stated to have taken such decision to renew the lease in favour of another lessee in respect of Shop No. 18 and according to the petitioner refusal to consider the case of the petitioner would amount to discrimination. Admittedly, the lessee of Shop No. 18 is not situated similar to that of the petitioner. There is no allegation even by the petitioner that the lessee of Shop No. 18 is also a defaulter in payment of rents regularly to the respondent-Municipality. It is not as if he has offered some amount towards rent per annum and later on requested for reduction of the same on the ground that he was not in a position to pay the amount as undertaken in the bid. It is not as if he is also obtained lease in respect of other shop and committed default. Therefore, the petitioner cannot equate himself with the lessee of Shop No. 18 and then contend that the respondent-Municipality has treated the petitioner and the lessee of Shop No. 18 on a different footing. Such plea is not available to the petitioner. For good reasons, the respondent-Municipality thought it fit and proper not to renew the lease in favour of the petitioner. The discretion exercised by the Municipality cannot be said to be unreasonable or unfair. The discretion, in fact, is exercised by the Municipality in the public interest. This Court in Penukollu Ramachandra Rao and others v. Government of Andhra Pradesh and others, 1997(6) ALD 166, had an occasion to consider more or less similar facts and held that lessees have no right to insist for automatic lease and observed as follows:

'In case of institutions, the procedure of holding auction may be dispensed with either by the Council with the sanction of the Government or by the Government, itself, subject to certain conditions. This is the scenario regulating the lease of shops by the Municipality. Rule 12 of the Rules prescribes both grant of lease, as well as renewal. It is clear from a bare reading of the Rule that the lessees have no right to insist for automatic renewal. The normal Rule for granting lease is by public auction and discretion is conferred upon theMunicipality to renew the lease for a period of three years at a time subject to the condition of the present lessee agreeing to such renewal in his favour at an amount which will be 33 1/3% above the earlier rent.'

It is thus not possible to accede to the submissions made by the learned Counsel for the petitioner that the respondent-Municipality had practised discrimination. The facts leading to grant or renewal in favour of the lessees in respect of shop No. 18 are not before the Court. It is not as if the petitioner had assailed the same. Thus the petitioner had no right to question the validity and correctness of the action of the respondent-Municipality in grant of renewal of the lease in favour of the lessee in respect of shop No. 18. Nothing can be presumed at this stage about the said decision. At any rate such decision itself cannot confer an enforceable right upon the petitioner herein. The petitioner cannot base his claim for the relief on such decision stated to have been taken by the respondent-Municipality.

10. For the aforesaid reasons, I do not find any merit in the writ petition. The writ petition fails and is accordingly dismissed. No costs.