IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:13-3-2008 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI W.P.Nos.34629 of 2004 & 4271 of 2005 D.Suresh Kumar ... Petitioner in both the WPs. vs. 1.The Chief Executive Officer Chennai Metropolitan Development Authority, No.1,Gandhi Irwin Road Chennai 600 008. 2.The Member Secretary Chennai Metropolitan Development Authority, No.1,Gandhi Irwin Road Chennai 600 008. ... Respondents in both the WPs. Writ petitions filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorarified Mandamus as stated therein. For petitioner : Mr. Satish Parasaran in both WPs. For respondents : Mr. C.Kathiravan in both WPs. COMMON ORDER The petitioner has filed W.P.No.34629 of 2004, challenging the order of the second respondent, Member Secretary, Chennai Metropolitan Development Authority (in short, "CMDA") dated 01.07.2004 and consequently to direct the respondents to make refund to the petitioner on account of surrendering the possession of the shop bearing No.T/A-138 in accordance with Clause 12 of the Deed of Lease cum Sale Agreement dated July,1998, entered between the petitioner's father and the respondents along with interest at the rate of 18% per annum. Under the impugned order, the second https://hcservices.ecourts.gov.in/hcservices/ respondent has ordered the refund of Rs.4,29,921/- in respect of surrender of shop No.T/A-138 on Phase-I Fruit Market. 2. W.P.No.4271 of 2005 is filed by the petitioner challenging the order of the CMDA dated 13.05.2004 in respect of Shop No.T/A-136. By the said impugned order, the second respondent, CMDA has ordered the refund of Rs.9,49,232/- in respect of shop No.T/A-136. 3. The wholesale market for perishable goods, etc., which was situated at Kothavalchavadi in George Town was shifted to Koyambedu by G.O.Ms.No.1487 dated 2.11.1978. The shifting was given effect to from 1996 due to various reasons. The petitioner and his father Late.Devarajulu Naidu, were doing fruit vending business and as per the terms of the application for shifting, the quantum of 32 quarterly instalments was fixed at the rate of Rs.2,500/- per sq.ft. in respect of shops at Kothavalchavadi. Even though the said quantum was challenged in W.P.No.17149 of 1998, ultimately, the said writ petition came to be dismissed on 04.11.1998. 3(a). In the new market at Koyambedu wholesale market complex, specific areas were allotted to the vendors of perishable commodities. The CMDA has given advertisement in the newspapers and the petitioner's father has applied and as per the terms of the application, the shops were to be sold at the rate of Rs.2,500/- per sq.ft. for G.T. category and Rs.2,750/- per sq.ft. for N.G.T. category traders. After initial deposit, the balance amounts were to be paid in 32 quarterly instalments over a period of eight years along with interest at the rate of 18% per annum. 3(b). As per the terms of application, if any allottee decides to surrender the shop allotted, it can be done only after intimating the same to the CMDA and thereafter, the CMDA shall take over the shop and pay the allottee the payments made till such date after deducting 10% of such amounts towards nominal depreciation along with estimated amount of actual damages to the shop allotted. 3(c). Petitioner's father made application on 26.05.1997 along with a sum of Rs.2,500/- towards cost of application and Rs.1,000/- for registration of allotment of shop measuring about 2400 sq.ft. and as a second preference, allotment of shop measuring 1200 sq.ft. Based on the above said application, the second respondent has allotted shop No.138 and 136 in Block No.A, Anna Fruit Market, Koyambedu, Chennai 92, under the allotment order. 3(d). As per the terms of the allotment order made on 23.12.1997, the petitioner's father paid a sum of Rs.15 lakhs in respect of each of the shops towards initial deposit and two shops measuring 2400 sq.ft. were allotted at a price of Rs.60 lakhs and the second respondent has worked out the payment at the rate of Rs.2500/- per sq.ft. for each of the shops and the petitioner's father was https://hcservices.ecourts.gov.in/hcservices/ required to pay the balance amount in 32 quarterly instalments along with interest at the rate of 18% per annum, amounting to Rs.2,79,930/- with effect from 01.04.1998. 3(e). As per the allotment, there was liability of 20.5% per annum to be paid towards penal interest in respect of belated payment. Pursuant to the allotment, a Deed of Lease cum Sale Agreement was executed in July, 1998 at Chennai between the Senior Estate Officer of the respondent CMDA and the petitioner's father. Under the Lease cum Sale Agreement, Clause 11 prescribes the Schedule of Payment, including the provisions for cancellation of allotment on default. 3(f). As per Clause 12 of the Lease cum Sale Agreement, in case of a lessee desiring to surrender shop, on intimation of the same to the respondent CMDA, the respondent shall take possession and pay the lessee the payments made till such date after deducting 5% towards nominal depreciation along with estimated amount of damages to the shops allotted. 3(g). Since there was some default in the payment of instalment amount, the Estate Officer of the respondent CMDA has cancelled the allotment by his proceedings dated 19.12.1998 in respect of shop No.138 and directed the petitioner that an outstanding amount of Rs.8,39,790/- is to be paid. As the possession was not surrendered, action under the Public Premises (Eviction of unauthorised occupants) Act,1975 was taken. In respect of shop No.136, the respondent CMDA sealed the premises for non-payment. In those circumstances, writ petitions in W.P.Nos.10294 and 10391 of 1999 respectively were filed by the petitioner and this Court by order dated 18.06.1999, in respect of shop No.138, permitted the petitioner to pay the demanded amount in 5 monthly instalments, which was complied with. In respect of shop No.136, similar direction was issued, by order dated 21.06.1999, directing for the removal of seal. Subsequently, the amounts have been paid. 3(h). According to the petitioner, from June and July,1999, his father has regularly made various payments to the extent of Rs.40 lakhs in respect of each of the shops. The respondents have been making various entries, which are not real and ultimately, the petitioner by letter dated 31.05.2003 has intimated his intention to surrender shop Nos.T/A.138 and 136 to the first respondent. Ultimately, the petitioner has handed over vacant possession of shop No.138 on 24.09.2003 and shop No.136 on 30.09.2004. 3(i). As per the terms of the Lease cum Sale Agreement, the petitioner has sought for refund of the amount which was due as per Clause 12 of the said agreement. The respondent CMDA has sent letters dated 17.12.2003 and 29.12.2003 respectively intimating the petitioner that after making necessary deductions, the petitioner https://hcservices.ecourts.gov.in/hcservices/ would be entitled to refund of a sum of Rs.4,29,921/- and Rs.9,49,232/- respectively in respect of shop Nos.138 and 136. According to the petitioner, he has received the said amounts under protest. 3(j). The petitioner challenges the impugned communications of the second respondent stating that apart from initial deposit of Rs.15 lakhs in respect of each of the shops, a sum of Rs.40 lakhs has been paid in instalments in respect of each shop and therefore, a total amount of Rs.60 lakhs, Rs.55 lakhs has been paid in respect of the shops and since the business was at loss, the petitioner had to surrender the shops. 3(k). The respondent has stated that sums of Rs.44,24,794/- and 44,33,235/- respectively were deducted from the payment made by the petitioner towards rent at the rate of 1% on the shop cost for 67 months. That apart, sums of Rs.5,43,950/- and 5,37,890/- respectively were appropriated towards administration charges in respect of the shops concerned. Further sums of Rs.39,405/- and 37,440/- have been appropriated towards other charges, like insurance premium, etc. The petitioner challenges the said deductions as unauthorised and not permissible as per the Lease cum Sale Agreement, which was entered on behalf of the Government and therefore, there is failure on the part of the State in refunding the amount as per the Lease cum Sale Agreement which is unreasonable and violative of the wednesbury's principle of unreasonableness. 4. The respondents in the counter affidavit while admitting the allotment, execution of Lease cum Sale Agreement, etc., have stated that the petitioner and his father have enjoyed the shop for a period of 63 months from 10.02.1998 to 31.05.2003. It is the further case of the respondents that in respect of both the shops the petitioner's father has defaulted in payment and therefore, show- cause notices were given, informing the petitioner's father about the amount due, based on the penal interest on belated payments. However, since the petitioner has sought for details regarding the surrender proposal of the shops, the deductions were made from the payments made by the petitioner and his father under the heads, viz., (i) Rent at the rate of 1% on the shop cost for 67 months; (ii) 10% administration charges; and (iii) other charges (Insurance) and after deducting the amounts under the said three heads, the balance amount of Rs.4,29,921/- and Rs.9,49,232/- were directed to be refunded and accordingly, the amounts have been refunded to the petitioner. 4(a). It is the further case of the respondents that 10% of nominal amount of administration charges include the nominal depreciation along with an estimated amount of actual damages to the shops allotted. According to the respondents they have the right to https://hcservices.ecourts.gov.in/hcservices/ deduct the amount at the said rate. The respondents also justify the deduction of 1% on the shops cost for 67 months and 25 days. It is also stated that in the Lease cum Sale Agreement, a mistake has crept in respect of deduction of administration charges and instead of 10%, it has been wrongly printed as 5% while in the conditions of application it is mentioned as 10%. 5. It is the contention of Mr.Sathish Parasaran, learned counsel appearing for the petitioner in both the cases that the respondents are bound by the terms of Lease cum Sale Agreement entered with the petitioner's father and it is not open to the respondents to deduct more amounts than what is permissible as per the Lease cum Sale Agreement. According to him, the purpose behind the entering of the Lease cum Sales Agreement and also incorporating Clauses 11 and 12 is the beneficial act shown by the Government, since the flourishing fruit vending business was conducted by the petitioner and his father in Kothaval market, in which the business was done in most satisfactory manner and when they were evacuated to Koyambedu, which is far away from the City, there was reduction in their business. As far as the deduction of 1% on the shop cost for 67 months made by the respondents in the impugned order is concerned, his submission is that the respondents have been acting in a commercial manner forgetting the beneficial act of the Government in evacuating the merchants from Kothaval market to Koyambedu. 5(a). It is also his submission that admittedly, the petitioner and his father have been paying substantial amounts as quarterly instalments for 5 years and in fact, penal interest have also been paid and those amounts have been in possession of the respondents and that is why, while granting surrender right to the allottees, Clause 12 of the Agreement contemplate only 5% of amount towards nominal depreciation along with the actual damages caused to the shops and therefore, it cannot be said as if the respondent CMDA has not earned any benefit and the petitioner/allottee who surrendered the shops is not liable to pay the said amount of 1%, which was never contemplated under the Agreement. It is his further submission that once the shops were surrendered even in the year 2003, it would have been open to the CMDA to allot the same to somebody else and therefore there is no question of loss caused to the CMDA by the conduct of the petitioner. 6. On the other hand, it is the contention of the learned counsel for the respondents Mr.C.Kathiravan that the petitioner has been enjoying the shops for nearly 5 years ever since the date of original allotment and till the date of surrender in May,2003, he has been running the shop and therefore, it cannot be said that he is not liable to pay any amount for the enjoyment of the shop and it is in that view of the matter, the amount was collected at the rate of 1% on the shop cost for 67 months. According to the learned counsel, even on equity, the petitioner is liable to pay the amount. He would https://hcservices.ecourts.gov.in/hcservices/ also submit that the administration charges are computed towards nominal depreciation along with the estimated damages caused to the shops and therefore, it is within the purview of the powers of the respondent CMDA. 7. I have heard the learned counsel for the petitioner and respondents and perused the entire records, including the file submitted by the learned counsel for the respondent CMDA. 8. It is not in dispute that the petitioner's father was allotted said two shops, viz., T/A.138 and 136 and the allotment was based on the public auction system as published by the respondent CMDA in the newspapers dated 24.11.1996 and the petitioner's father has applied for two shops by paying necessary charges including the registration charges and ultimately a Lease cum Sale Agreement was entered in July,1998. In the said Lease cum Sale Agreement, Clause 12 provides for cancellation of allotment, which is as follows: "12.Cancellation: (a) The Authority has the right to cancel the provisional allotment at any time, for example for the reason of a non payment of the Initial Deposit or instalments as prescribed under para 11 above for making false claims in application etc. (b) If any lessee desires to surrender the shop allotted, he may do so after intimating to MMDA. On such intimation, MMDA shall take over the shop surrendered and pay the lessee the payments made till such date, after deducting 5% of such amount towards nominal depreciation along with an estimated amount of the actual damages to the shop allotted." 9. In the present case, Clause 12(b) is applicable, since the petitioner has decided to surrender the shop and in fact it is admitted that both the shops have been surrendered in February,2003 and it is also not in dispute that the petitioner's father was the allottee and the petitioner was paying the instalments from 01.07.1999 and it is true that there has been some delay in payment of various instalments and writ petitions have been filed against the show-notice as well as sealing of the premises and the belated payment charges have also been paid. Even though it is stated in the counter affidavit by the respondents that on various occasions, i.e., in 2000 and 2002, the petitioner was liable to pay various amounts, the claim under the above said three heads was made by the respondents for the first time in the impugned orders, which are actually communications sent by way of reply by the respondent CMDA to the petitioner's proposal to surrender the shops. It is also seen on record that in fact the petitioner has received the amount of refund, which is mentioned in the impugned orders under protest. https://hcservices.ecourts.gov.in/hcservices/ 10. In respect of deduction of 10% towards administration charges claimed regarding both the shops, it is the specific case of the respondents in the counter affidavit that in the Lease cum Sale Agreement by mistake it has stated as 5% instead of 10%, whereas in the general terms and conditions of the application form, it was mentioned under para 5(b) as 10%. The general terms and conditions issued by the respondents along with the application, as filed by the petitioner in his typed set of papers, shows that Clause No.5 dealing with cancellation, which states as follows: "5.Cancellation: (a) The Authority has the right to cancel the provisional allotment at any time, for non-payment of the Initial Deposit or instalments or for making false claims stating that the applicant is a GT trader. (b) If any allottee desires to surrender the shop allotted, he/she may do so after intimating it to CMDA. On such intimation, CMDA shall take over the shop surrendered and pay the allottee the payments made till such date, after deducting 10% of such amount towards nominal depreciation along with an estimated amount of the actual damages to the shop allotted." 11. It is based on the said general terms and conditions, the petitioner's father has applied and ultimately the allotment order came to be issued and consequently the Lease cum Sale Agreement was also entered into as stated above. It is true that in the Lease cum Sale Agreement, the copy of which has been given to the petitioner, in Clause 12(b), the deduction is stated as 5%, and on the other hand, in the file produced by the learned counsel for the CMDA in the copy retained by the respondents in respect of the Lease cum Sale Agreement, the word 5% has been struck off and written as 10% in ink. In any event, as it is not in dispute that the petitioner's father himself has applied based on the general terms and conditions which stipulated 10%, the contention of the learned counsel for the respondent CMDA that a mistake crept has some basis and can be accepted. Therefore, by taking the same into consideration, in case of surrender of shops, the respondent CMDA is entitled to deduct 10% of the amount towards nominal depreciation plus the estimated amount of actual damages which might have been caused to the shops allotted. 12. As far as the deduction of Rs.39,405/- and 37,440/- respectively under the head of other charges, the same is not in much dispute since it covers the insurance amount. 13. The major dispute is relating to the recovery made by the respondent CMDA at the rate of 1% on the shop cost for 67 months 25 days. In that regard in respect of shop No.T/A138, which is the subject matter in W.P.No.34629 of 2004, the respondents have deducted Rs.44,29,794/- from the admitted total remittance amount of https://hcservices.ecourts.gov.in/hcservices/ Rs.54,39,500/- made by the petitioner. Again in respect of shop No.T/A136, out of the total admitted remittance of Rs.53,82,467/- the respondents have deducted 38,57,907/- towards rent at the rate of 1% on the shop cost for 67 months and 25 days. But, there is no such clause in the Lease cum Sale Agreement entered into by the respondents with the petitioner permitting the respondents to deduct such amount in case of surrender. In such circumstances, the contention raised by the learned counsel for the respondents and the averment made in the counter affidavit that the petitioner having enjoyed the shops for nearly 5 years by conducting the business therein, is liable to pay rent on equity basis is not acceptable. 14. The terms of Lease cum Sale Agreement has been entered in the full form of agreement and therefore, the question of payment on equity basis does not arise. In any event, such contention of the respondents made on the basis of equity has no legal basis to stand. It is not as if in all these 67 months, the petitioner has been enjoying the shops without paying any amount at all and as admitted by the respondents in the counter affidavit, the petitioner has remitted Rs.53,82,467/- in respect of one shop and Rs.54,39,500/- in respect of other shop and in fact it is not in dispute that both the shops have been surrendered in March,2003 and the amounts have been lying with the respondents. In such circumstances, it can only be inferred from Clause No.12 of the Lease cum Sale Agreement that the purpose of not charging any rent in cases of surrender should be due to the reason that the CMDA has been receiving sums in quarterly instalments from the allottees and the interest thereof should be appropriated towards rent for use and occupation of the portion allotted till the period of surrender. There can be no other inference possible on a bare reading of the Lease cum Sale Agreement, which is also not in dispute. 15. It is also not in dispute that the petitioner's father was one among the businessmen who were carrying on business in the market at Kothaval Chavadi, George Town and after construction of the new market complex at Koyambedu, the businessmen were allotted shops there and the case of the petitioner is that the business has come down since the place happens to be far away from the City. Be that it may, the respondent CMDA being the Public Authority, has to act only as per the Lease cum Sale Agreement and the claim made in the impugned orders especially relating to the rent charged at the rate of 1% on the shop cost is totally alien to the terms of the Lease cum Sale Agreement and certainly the respondents are not entitled to deduct the said amount. 16. In view of the same, the writ petitions stand partly allowed and the portion of the impugned orders of the second respondent in claiming the rent at the rate of 1% on the shop cost for 67 months and 25 days for each shop is set aside, however, the deduction made at the rate of 10% on administration charges and other charges https://hcservices.ecourts.gov.in/hcservices/ towards insurance are retained, holding that the respondents are entitled to claim the said amounts under the said heads. No costs. After pronouncement of the order in the open Court today, the learned counsel appearing for the petitioner would submit that the respondents may be directed to make refund within a time frame. In view of the same, if the petitioner is eligible for any refund by virtue of this order, the respondents shall workout the same and make payment within a period of eight weeks from the date of receipt of a copy of this order. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. kh To 1.The Chief Executive Officer Chennai Metropolitan Development Authority, No.1,Gandhi Irwin Road Chennai 600 008. 2.The Member Secretary Chennai Metropolitan Development Authority, No.1,Gandhi Irwin Road Chennai 600 008. + 2 CCs to Mr.Sathish Parasaran, Advocate SR Nos.13965, 13966 + 2 CC To Mr. C.Kathiravan, Advocate SR NO.13871, 13870 W.P.Nos.34629 of 2004 & 4271 of 2005 mdr[co] gp/20.3. https://hcservices.ecourts.gov.in/hcservices/