IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI THURSDAY, THE 3RD JANUARY 2008 / 13TH POUSHA 1929 WP(C).No. 34494 of 2006(F) -------------------------- PETITIONER: ------------ UNIVERSITY WOMEN'S ASSOCIATION JAWAHAR NAGAR, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY, K. PONNAMMA. BY ADV. SRI.P.RAVINDRAN SRI.NAGARAJ NARAYANAN RESPONDENTS: ------------- 1. GOVERNMENT OF KERALA, REPRESENTED BY SPECIAL SECRETARY, DEPARTMENT OF REVENUE COLLECTORATE, THIRUVANANTHAPURAM. 2. DISTRICT COLLECTOR, THIRUVANANTHAPURAM. 3. TAHSILDAR, TALUK OFFICE, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI.MATHEW GEORGE VADAKKEL. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO. 34494/2006 APPENDIX PETITIONER'S EXHIBITS:- P1: True copy of the registration certificate P2: True copy of the Government Order dated 3-3-1967 P3: True copy of the order dated 16-10-1989 P4: True copy of the show cause notice P5: True copy of the reply dated 22-6-1999 P6: True copy of the notice P7: True copy of the letter dated 10-12-2001 P8: True copy of the notice dated 16-1-2004 P9: True copy of the Government Order dated 20-7-2004 P10: Photo copy of the Government Order G.O.(P) 126/04/RD dated 14-5- 2004 P11: True copy of the demand notice dated 3-3-2006 P12: True copy of the calculation sheet P13: True copy of the representation dated 2-12-2006 P14: True copy of the notice dated 2-12-2006 P15: True copy of the annual report of the association for the past 4 years. V. GIRI, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No. 34494 of 2006 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 3rd day of January,2008 JUDGMENT Petitioner claims to be an association engaged in cultural activities. It is registered under the Travancore-Cochin Literary Scientific and Charitable Societies Registration Act. It is averred in the writ petition that the association was established for the purpose of providing education to women, encourage their participation in social development and also for upliftment of women. 2. An extent of 26 cents of land within the limits of Trivandrum Corporation was allotted to the petitioner on kuthakapattam initially for a period of 20 years, which was later extended by another period of 20 years. As per Ext.P3 order, rent was enhanced to Rs.1,000/- per annum. According to the petitioner, this was paid regularly. But, in the year 1996-97 when the petitioner attempted to remit the rent, the Village Officer declined to receive the same stating that the permission of the Government is required in this regard. WPC 34494/06 2 3. While so, Ext.P4 show cause notice was issued on 11-5-1999 alleging that the petitioner has violated the following lease conditions :- i. the lease holder has not remitted lease rent arrears, ii.the lessee has not filed application in form 5 for renewal of lease within the stipulated time as specified in the rules for assignment of land within Municipal and Corporation areas 1995.” Ext.P5 objection was submitted on 22-5-1996 denying the allegation of non-payment of lease rent. Apparently, no enquiry was conducted pursuant to Ext.P4. Petitioner was served Ext.P6 demand notice issued under orders of the District Collector demanding an amount of R.67,83,887/- stated to be the arrears of rent. In Ext.P6 the market value of the land is shown as Rs.50,000/- per cent in 1985 and 1,50,000/- in 1995. The annual rent is shown as Rs.1,95,000/- from 1985 and Rs.7,80,000/- from 1995. Against Ext.P6 demand notice, Ext.P7 objection was filed by the petitioner. Ext.P8 demand notice was again issued by the Tahsildar. By Ext.P9 the petitioner was requested to clear the lease rent arrears as per the rates stipulated in Ext.P10 Government Order. Ext.P10 is a statutory order issued under the Land Assignment Act revising the lease rent in respect of the land in WPC 34494/06 3 Municipal and Corporation areas. As per Ext.P10, annual lease rent in respect of the land leased out to institutions for promotion of cultural activities or tourism and club of all types was fixed at 2.5% of the market value and the lease rent in respect of land leased out to individuals or institutions purely of commercial nature was fixed as 10%. Ext.P11 demand notice was issued by the District Collector requiring the petitioner to pay an amount of Rs.38,30,411/-. There is a lease rent calculation schedule attached to Ext.P11 demand notice, which is marked as Ext.P12. Apparently a detailed objection was filed by th petitioner vide Ext.P13 in the form of a representation before the Honourable Minister. Ext.P14 order attaching the business was served on the petitioner. Hence, they approached this Court for quashing Exts.P11, P12 and P14. 4. This Court while admitting the writ petition granted a stay for a period of three months on condition that the petitioner shall remit an amount of Rs.2,00,000/- within a period of one month. It is admitted that the petitioner did not remit the said amount. WPC 34494/06 4 5. Pursuant to a direction issued by this Court the District Collector filed a report on 10-8-2007 stating that there were 49 members in the petitioner organization and there was a building and a hall in the land leased out to them. It is also stated that it was used for private functions on rental basis and no other useful or charitable service to the society was rendered by the organization to justify the continuous enjoyment of valuable Government land. It is further stated that as the petitioner organization had continuously violated the conditions of lease including the non-remittance of lease rent, the building and the land in question has been taken into Government custody after strictly observing all other legal formalities. There is an objection submitted by the petitioner to the report of the District Collector inter alia contending that the petitioner had been carrying on activities in accordance with the bye-laws of the petitioner and that the hall was not leased out for any private function. 6. Heard Sri.P.Ravindran, Senior Advocate and Sri.Nagraj Narayanan learned counsel for the petitioner and the learned Government Pleader, Sri.Mathew George Vadakkel. WPC 34494/06 5 7. The learned counsel for the petitioner contends that the lease of the property in question was extended for a period of 20 years under Ext.P3. Rent was not revised by a separate order issued by a competent authority and consequently the petitioner is liable to pay lease rent at the rate of Rs.1,000/-. In the alternative the petitioner contends that even after the revision of the lease rent by Ext.P10 the rate of rent should not exceed to 2.5 % in the case of the petitioner. Referring to Ext.P12 it is contended that the rent has been calculated at 20% of the market value and the same is without any basis. 8. The learned Government Pleader contends that the building was being used for commercial purpose and therefore the District Collector was justified in adopting commercial rate calculating the lease rent payable by the petitioner association. 9. Though lease as such is a bilateral relationship between the lessor and lessee and revision of rent is also a matter of consensus between the parties. the present case is one where the lease itself was regulated by statutory provisions and the revision of the rent is also governed by the rules. I also note that there is no challenge against the WPC 34494/06 6 validity of the rules which governs fixation of rent in respect of land in the Municipal and Corporation area. Consequently, the revision of rent brought about by Ext.P10 would apply to the land in question. The petitioner is therefore bound by the revised rent as provided under the rules namely the Rules for Assignment of Land Municipal Corporation areas 1995 as amended by Ext.P10 notification. 10. The second aspect is whether the rent has actually been fixed in accordance with law. My view is that it was not done properly. Rent for the purpose of the rules in question is dependent on two aspects. Firstly, market value of the land will have to be fixed. Where rent is fixed on the basis of the market value, the fixation of the market value is a matter for enquiry with notice to the lessee. Secondly, the nature of the activities is relevant for the determination of the assessment of the rent. Actual determination must be preceded by an enquiry with notice to the lessee. There was no enquiry with notice to the petitioner prior to the determination of the market value and fixation of the rent under Ext.P11. WPC 34494/06 7 11. In the result, the writ petition is allowed. Exts.P11, P12 and P14 are set aside. The 2nd respondent District Collector shall issue a fresh notice to the petitioner intimating the proposal to fix the lease rent payable by the petitioner. The petitioner shall be given an opportunity for filing objection to the said notice and produce materials in support of its claim both as regards the market value and that it is a club engaged in educational and cultural activities. Thereupon the District Collector shall conduct an enquiry and pass an order fixing the market value of the land and determine the actual lease rent payable by the petitioner depending upon Ext.P10. Once such amount is determined, consequential demand notice will be issued to the petitioner. Further, consequential steps shall also be taken by the District Collector. The entire procedure shall be completed within a period of six months from the date of receipt of copy of this judgment. 12. The learned counsel for the petitioner submits that the petitioner may be permitted to continue in possession of the land and building until further orders are passed by the District Collector in the matter. I note that the petitioner has failed to comply with the interim WPC 34494/06 8 order passed by this Court on 26-12-2006. The learned Government Pleader submits that the Government has taken into custody the land and building and entrusted it to the District Collector. I find it difficult to accept the submission because no material has been placed to show valid termination of lease or dispossession after notice. I consider it appropriate that the petitioner may be permitted to resume possession of the land and building and remain in possession until further orders are passed by the District Collector in the manner above mentioned, provided that the petitioner pays an amount of Rs.3.5 lakhs within six weeks from today. If such payment is effected, the petitioner shall be permitted to resume possession of the land and building scheduled to Ext.P14 and remain there till fresh orders are passed by the District Collector. The writ petition is disposed of as above. V. GIRI, JUDGE. mn.