WP(C)NO.3682/2008 Page 1 of 37 * IN THE HIGH COURT OF DELHI AT NEW DELHI + WP(C)No.3682/2008 Date of Pronouncement: July 01, 2009 # M/S.EXCLUSIVE MOTORS PVT. LTD .... Petitioner Through : Mr.Ravi Gupta and Mr. Ankit Jain, Advocates Versus ITDC & ORS. .... Respondent Through : Mr. Shanti Bhushan, Sr. Adv. with Mr.Sushant Kumar, Adv. CORAM: HON'BLE MR. JUSTICE G.S.SISTANI 1. Whether reporters of local papers may be allowed to see the judgment? YES 2. To be referred to the Reporter or not? YES 3. Whether the judgment should be reported in the Digest? YES G.S. SISTANI, J: 1. Brief facts which have given rise to filing of the present petition are that respondent owns and runs a hotel under the name and style of Ashok. In the year 2003 petitioner was in need of a premises, for carrying on its business for retailing of luxury Cars and other related goods. Pursuant to negotiations between the parties, petitioner accepted the offer of the respondents vide letter dated 27.1.2004. Peaceful possession of an area measuring 3013.49 sq. ft. located adjacent to out gate, forming part of Ashok Hotel, was handed over to the petitioner for running the office/show-room on 8.4.2003. 2. A licence deed was executed between the parties on 8.4.2003 initially for a period of three years commencing from 8.4.2003 WP(C)NO.3682/2008 Page 2 of 37 and expiring on 7.4.2006. The document provided that the licence was renewable with the enhanced licence fee @11% of the last paid fee. It is the case of the petitioner that although the documents were styled as licence deed, however, the nature of transaction entered into between the parties was in fact a lease created by the respondent in favour of the petitioner. The petitioner was in independent occupation of the premises and also had free and uninterrupted use. It is stated that the premises are not in the shopping arcade of the hotel, but an independent show-room near the parking at the convention hall entrance of the hotel and only a bare structure without any paint or fixtures were handed over to the petitioner, who carried out substantial renovations, including flooring, false ceiling, air conditioning, erection of walls, development, greening and landscaping of the common area, erection of toilet and a pantry etc. The petitioner is stated to be running his show-room since the year 2003 onwards. 3. It is contended that in order to make the premises usable and more presentable the petitioner had incurred expenses of several lacks on taking over the possession. As the licence of the premises was to expire in April 2006, the petitioner had written a letter on 5.12.2005 to respondent inter alia requesting them to renew the licence for a further period of three years ending on 7.4.2009. Petitioner also sent letters dated 7.1.2006, 15.2.2006 and 31.3.2006 to respondent as reminders to consider the request of the petitioner for fresh execution of the licence deed for the renewed period. In response to the letter WP(C)NO.3682/2008 Page 3 of 37 of request, a meeting was attended by the petitioner with the licensing committee on 29.3.2006 and the licence was extended for a further period of two years w.e.f. 8.4.2006 to 7.4.2008. Vide letter dated 31.3.2006 two sets of licence deeds were also delivered and the petitioner was requested to sign the same and return it for necessary action. Petitioner is stated to have signed the licence deed dated 1.4.2006 and thereafter sent it back to the respondents. The licence was for a period of two years commencing from 8.4.2006 and expiring on 7.4.2008. This licence deed also contained a renewal clause on the enhanced licence fee @ 11% over and above the existing licence fee. Petitioner also considered it necessary to carry out some additions and alterations. A request was made on 7.3.2006 which is stated to have been considered by respondents and petitioner was permitted by a letter dated 17.5.2006 to carry out the same. Petitioner is stated to have incurred an expenditure of 20-22 lacs on the renovation. 4. Petitioner was thereafter served with a letter dated 14.9.2006. Vide this letter respondents not only proposed to terminate the licence agreement executed by them in favour of the petitioner in regard to the premises in question, but also required the petitioner to hand over peaceful and vacant possession of the same to respondents. It is submitted that the action on the part of the respondent was absolutely arbitrary, mala fide, illegal and highhanded. It is contended that there was no occasion for the respondent to issue the letter after having entered into an agreement with the petitioner for a period of two years starting WP(C)NO.3682/2008 Page 4 of 37 w.e.f. 8.4.2006 ending on 7.4.2008. The respondents could not have cancelled the licence deed after giving three months notice, as the clause of three months notice could not have been exercised unreasonably and without any cause. It is contended that the licence was for a fixed period of two years and could not have been terminated before the stipulated time besides the petitioner was permitted to carry out additions and alterations in the premises in the month of May, 2006 which renovation could only be completed by the month of August, 2006 and the petitioner spent a huge amount on renovation besides paying licence fee. Thus the action of the respondent of issuing the letter was mala fide. It is also stated that the respondents being a State owned agency was required to act reasonably while dealing with the public at large. It is submitted that once after having taken a considered decision to renew the licence in its meeting held on 29.3.2006, there was no reason to terminate the said licence in the month of September, 2006 as there was no change in the circumstances neither there was any breach of any terms of the agreement. Counsel further submits that the intention of the respondent was to increase the licence fee and black-mail and pressurize the petitioner to agree to their illegal demands. Such notices were issued to other shop keepers and business being run in the premises of the same hotel. Reply to the letter was sent on 6.11.2006 stating that the impugned action of termination of licence on the part of the respondent was totally unjustified, unfair and illegal. It was also brought to the notice of the WP(C)NO.3682/2008 Page 5 of 37 respondent that there was no violation of any of the terms of the agreement and thus the respondent should withdraw the impugned termination. In order to protect the possession, the petitioner was constrained to challenge the letter and communication dated 14.9.2006 by filing a civil suit being CS(OS)No.2308/2006 titled M/s. Exclusive Motors Pvt. Ltd. Vs. ITDC and Anr.. The matter came up for hearing before the High Court on 14.12.2006. While issuing summons, this Court had directed that till the next date of hearing, letter dated 14.9.2006 issued by defendant be not given effect. The petitioner thereafter withdrew the aforesaid suit on 7.4.2008. Relevant portion of the order reads as under: “Counsel for the defendant states that in view of the fact that the agreement itself has run out its course during the pendency of the present proceedings and stands exhausted by efflux of time, the defendant does not rely on the letter dated 14.9.2006 issued to the plaintiff and it does not wish to act on the same. He further submits that the suit is rendered infructuous. In view of the aforesaid submission made by the counsel for the defendant, counsel for the plaintiff seeks permission to withdraw the present suit while reserving its rights to seek its remedies against the defendant as may be available to it in law, in terms of the Agreement dated 1.4.2006. The suit and the pending application are disposed of. The interim order stands vacated. The date of 28.7.2008 is cancelled.” 5. On 7.4.2008 learned counsel for the respondent had made a statement to the effect that during the pendency of the suit even the subsequent agreement dated 1.4.2006 had exhausted WP(C)NO.3682/2008 Page 6 of 37 as the same was effective from 8.4.2006 to 7.4.2008 which time has also run out, therefore, the defendant did not wish to rely upon letter of 14.9.2006 and the suit thus became infructuous. Based on the statement of counsel for the defendant, learned counsel for the plaintiff sought permission to withdraw the suit while reserving its rights to seek its remedies against the defendant as may be available to it in law in terms of the agreement dated 1.4.2006. 6. It is submitted by counsel for the petitioner that suddenly on 10.5.2008 Mr.A.K.Nigam, Mr.Rajindra Nigam, Mr.Chopra, Mr.Singh, Mr.Pankaj Mittal, Mr.Vats, Mr.Kishore and their associates at about 4:00 p.m. barged into the show room premises of the petitioner. They trespassed into the premises with 2-3 trolleys and took forcible entry in the premises. The goods of the petitioner were sought to be shifted, the director of the company was manhandled and signboard was damaged. The entry to the showroom was blocked and they interrupted the ingress and egress to the showroom. Local police was called, who did not render any help to the petitioner. Many people gathered outside the showroom premises, however, belongings like furniture, fixtures, cars are still lying in the premises while various goods have been taken away by the officers of the respondents. Two cars Bentley (blue colour) and another Lamboghini (blue colour) were still lying stationed / parked in the showroom at the time of filing of the present petition which have since been removed by the petitioner in terms of order dated 30.5.2008. The normal working of the WP(C)NO.3682/2008 Page 7 of 37 petitioner from the premises has been disturbed. It has also been urged before this court that the licence executed in favour of the petitioner is irrevocable in nature as the petitioner has been permitted to carry out structural changes in the premises and permission on the part of the respondent for carrying out such changes by the petitioner makes the licence in question, irrevocable. It is contended that petitioner had executed the work of permanent nature and had incurred huge expenses in execution thereof. The aforesaid works have been carried out with the consent/approval and permission of respondents. 7. It is contended that the impugned action of respondent – Corporation and its officers is wholly unauthorized and illegal. They acted like local goondas and hooligans and took law in their own hands. It is submitted that the action of the respondent is mala fide, arbitrary, dishonest and the petitioner cannot be forceably dispossessed without due process of law. As per the petitioner the respondents were obliged to take action for eviction of the petitioner under the provisions of Public Premises (Eviction of Unauthorized Occupants) Act and not in an illegal manner. In the above circumstances, the petitioner seeks the following prayers: “Issue a writ of mandamus, directing the respondents to execute a license deed in favour of the petitioner company by way of renewal of the licence, concerning and in regard to the property and premises admeasuring 3013.49 sq. ft. (located adjacent to out gate of the perimeter wall of Annexe and beneath the Samrat Parking lot at Ashok/Samrat gate) forming part of Ashok Hotel situated at 50-B, Chanakya Puri, New Delhi WP(C)NO.3682/2008 Page 8 of 37 FURTHER FOR A WRIT, ORDER AND /OR DIRECTION IN THE NATURE OF: Mandamus, directing the respondents to remove their goods which have illegally and unauthorisedly being stuffed by the respondents in their suit premises on 10.5.2008 after 7:00 p.m. in the evening and also to restore back the goods and belongings of the petitioner, which have illegally been taken away by the offices of the respondent corporation without any rights in the suit premises. AND FURTHER FOR A WRIT, ORDER AND /OR DIRECTION IN THE NATURE OF: PROHIBITION interalia directing and restraining the respondents, their officers, employees, servants, agents, contractors etc. etc. from causing any interference in the peaceful use and enjoyment of the petitioner and running of its business of world class luxury premier cars from the suit premises admeasuring 3013.48 sq. ft. (located adjacent to out gate of the perimeter wall of Annexe and beneath the Samrat Parking lot at Ashok/Samrat gate) forming part of Ashok Hotel situated at 50-B, Chanakya Puri, New Delhi.” 8. To buttress his argument that even a trespasser can only be removed by due process of law, learned counsel for the petitioner has relied upon Bishan Das Vs. State of Punjab, AIR 1961 SC 570. In the case of Bishan Das (Supra) the petitioners had approached the Supreme Court under Article 34, 14, 19 and 31 of the Constitution of India on the ground that interference with their fundamental rights to property by the executive action without any authority or specific rule of law, is illegal. The petitioners were occupying the dharamsala in an adjoining temple and some appurtenant shops standing on a piece of land near the railway station at Barnala, distict Sangrur, State of Punjab. The officials and the Municipal Committee Basnara by force and without any authority of law WP(C)NO.3682/2008 Page 9 of 37 had dispossessed them from the Dharamsala. The respondents were restrained from interfering with the possession of the petitioners by the Court. 9. Petitioner has also relied upon Ram Rattan Vs. State of U.P. 1977 SC 619 and more particularly para 4, which reads as under: “it is well settled that a true owner has every right to dispossess or throw out a trespasser, while the trespasser is in the act or process of trespassing, and has not accomplished his possession, but this right is not available to the true owner if the trespasser has been successful in accomplishing his possession to the knowledge of the true owner. In such circumstances the law requires that the true owner should dispossess the trespasser by taking recourse to the remedies available under the law.” 10. Reliance has also been placed upon Krishna Ram Vs. Mrs. Shobha Venkat JT 1989 (3) SC 489, State of U.P. Vs. Maharaja Dharmander 1989 (2) SCC 505, wherein it has been held that a lessor, with the best of title, has no right to resume possession extra-judicially by use of force, from a lessee, even after the expiry or earlier termination of the lease by forfeiture or otherwise. The use of the expression „re-entry‟ in the lease deed pertains to a lease does not authorize extra judicial methods to resume possession. Under law the possession of a lessee, even after the expiry of its earlier termination is in juridical possession and forcible dispossession is prohibited; a lessee cannot be dispossessed otherwise than in due course of law. It has also been held that the “Government authorities should have a „legal pedigree‟ and do not have an extra judicial WP(C)NO.3682/2008 Page 10 of 37 right of re-entry. The possession can be resumed by Government only in a manner known to or recognized by law. 11. Counsel for the petitioner has also placed reliance on R.C.Patuck Vs. Fatima A. Kindasa 1997 5 SCC 334 and more particularly paragraphs 7 and 12. “7. The learned Senior Counsel for the petitioner, Mr Soli J. Sorabjee, contended that the orders passed by the Chief Metropolitan Magistrate dated 26-4-1996 and the further orders passed by the High Court on 9-7-1996 were liable to be set aside as the possession of the respondents was a continuing wrong. He also contended that this was a hard case in which an old lady aged about 75 years was being victimised by the respondents who were in the habit of illegally occupying various premises in Bombay and that in exercise of the powers of this Court under Article 142 of the Constitution of India, this Court could grant relief in spite of the fact that the dispossession was more than 2 months next before the preliminary order under Section 145(1). 12. Relying upon the aforesaid passage, learned Senior Counsel contended that the limitation of two months in the proviso to sub-clause (4) of Section 145 would not come in the way of this Court while exercising powers under Article 142 for granting possession to the petitioner even though the dispossession of the petitioner was for a period in excess of two months next before the date of the preliminary order passed under Section 145(1). It will be seen that even according to the petitioner, she permitted the first respondent in November 1991 to temporarily occupy 2500 sq. ft. on the ground floor of the premises. Subsequently the first respondent did not vacate and on the other hand, the first respondent allowed the second respondent to occupy the property claiming that he was her husband and thereafter they constructed a wall dividing the said portion from the other portion occupied by the petitioner. On these facts we do not find any special circumstances which are different from ordinary cases where a person permits a licensee or a tenant to occupy the premises and upon termination of the licence or the lease, the licensee or the tenant, as the case may be, does not vacate the premises or makes some construction on the property. No doubt the petitioner is an old lady of 75 years and there is some material to show that Respondents 1 and 2 have been indulging in similar WP(C)NO.3682/2008 Page 11 of 37 litigations in Bombay. But that in our opinion is not sufficient to persuade us to exercise powers under Article 142 of the Constitution of India. The petitioner has adequate remedies under the law for recovery of possession. For the aforesaid reasons this special leave petition is dismissed.” 12. Reliance has also been placed on State of Haryana Vs. Mohinder Pal AIR 2000 SC 3580, wherein the Apex Court has held that government cannot take law on its own hand while dispossessing the petitioner but should have followed the due process of law. Learned counsel has also relied upon State of West Bengal Vs. Vishnunarayan and Associates (P) LTd & Anr. AIR 2002 SC 1493 wherein the Apex Court has held that State Government could not have taken steps for securing possession by use of force. Learned counsel has also relied upon Jafar Saddiqui & Ors. Vs. DDA 2003 V AD Delhi 149, a decision of Single Judge of this Court wherein it has been held that if a person is a tenant, licencee or occupier of a property in any legal capacity and if rights are terminated, proceedings must be taken in accordance with law and it is not open to the parties to forcibly dispossess such a person. In the same vein, learned counsel has relied upon Krishna Ram Mahale Vs. Mrs.Shobha Venkat Rao JT 1989(3) SC 489, wherein it has been held that where a person is in settled possession of property, even on the assumption that he has no right to remain on the property, he cannot be dispossessed by the owner except by recourse to law. Learned counsel has also relied upon Chandu Lal Vs. MCD AIR 1978 Delhi 174 and East India Hotels Vs. Syndicate Bank 1(1992) BC 1 (SC) as well WP(C)NO.3682/2008 Page 12 of 37 as on R.V. Bhupal PD. Vs. State of A.P. (1995) 5 SCC 698 and Rattan Lal Vs. MCD, 100 (2002) DLT 213 a decision of Single Judge decision of this court. 13. Per contra, learned senior counsel for the respondent submits that a person who invokes the extra ordinary jurisdiction of this Court under Article 226 of the Constitution of India, has to approach this court with clean hands and in case the person approaches the Court with unclean hands, he is not entitled to any relief whatsoever. It is submitted that the petitioner is an illegal occupant of the licensed premises, as the licence has already come to an end on 7.4.2008 by efflux of time and as such has no right to continue with the possession over the licensed premises beyond the period. It is next contended that the petitioner cannot be allowed to perpetuate its illegality and in order to continue its illegal possession over the licence premises. It is also contended that the court should not interfere in the contractual relations entered into between the parties and no arbitrary action or discriminatory practice has been followed by the respondent. 14. It is strongly argued before this Court that the respondents have entered into a contractual relationship with the petitioner by means of a licence deed dated 7.4.2003, which was further renewed on 1.4.2006. The relationship between the parties is purely governed by law of contract and therefore, the appropriate remedy available to the petitioner would be to claim damages against eviction. It has also been contended that invoking jurisdiction of this Court under Article 226 is not WP(C)NO.3682/2008 Page 13 of 37 an appropriate remedy. It is also submitted that even assuming that the respondent had failed to follow the due process of law, still the respondents have taken possession on 10.5.2008 and after taking possession they have started using the same as F&B function area/Salad Bar from 10.5.2008, photographs in support of this plea have been placed on record. It has also been contended that no force was used to dispossess the petitioner and the goods inventory lying within the licensed premises have been removed within the parameters of law and with the active support of cooperation of the employees agents of the petitioner. 15. Learned counsel for the respondent submits that admittedly, the licence of the petitioner has expired, thus the Court cannot be asked to interfere in such circumstances. Learned counsel for the respondent has relied upon various clauses of the licence deed to show that initially the licence deed was signed between the parties on 8.4.2003 for a period of three years, which was subsequently renewed for a period of two years which period has since come to an end. The licence was to be renewed at the option of the licensor on the expiry of the stipulated period under clause 3, and on such terms and conditions as the licensor may impose in its own discretion. It would be necessary and useful to reproduce the relevant terms of this licence deed. “3. This licence is granted for a period of 3 years commencing from 8th April, 2003 and shall expire on 7th Apri, 2006 subject to the provisions for earlier termination hereinafter contained. WP(C)NO.3682/2008 Page 14 of 37 4. The licence may be renewable at the option of the Licensor on the expiry of the period stipulated under clause 3, and on such terms and conditions as the Licensor may impose in his own discretion. The duration of the extended period shall be determined by the Licensor but will not be for more than 3 years for each such extension. At the time of each such renewal or extension, the parties, hereto, shall execute a fresh Licence Deed in respect of the premises given on license on the same terms and conditions with an enhancd Licence Fee @ 11% of the Licence Fee as mentioned in Clause 39 of this Deed. The Licensee will apply for the renewal of his licence 3 (three) calendar months before expiry of the licence and on failure to do so, the Licensor will be free to negotiate with any other party to allot the space. It is also clearly understood by and between the parties that the licensor will exercise the sole discretion with regard to the renewal of the licence and also the terms and conditions of the renewed licence and the Licensor‟s decision in this regard shall be final and binding on the licensee. 6. The right conferred upon these presents is only that of a Licensee. It is expressly stated that the possession of the premises lies with the Licensor, and, the licensee can have only a right to use and occupation of