IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:26.02.2008 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI WRIT PETITION NO.3789 of 2006 and WPMP.No.4057 of 2006 and WVMP.No.1435 of 2006 .. Murray & Co., rep. by its Partner S.Sujan Gangadhar United India Buildings (Old) No.151 (Old No.101), Anna Salai Chennai 600 002. .. Petitioner vs. 1.Appellate Authority under Central Act 40 of 1971 Public Premises (Eviction of Unauthorised Occupants) Act V Addl.Judge, City Civil Court, Madras. 2.Life Insurance Corporation of India Southern Zonal Office, 102, Anna Salai Chennai 600 002. .. Respondents Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari as stated therein. For petitioner : Mr.K.C. Rajappa For respondents: Mr.R.Muthukumarasamy,Sr.Counsel for M/s.M.B.Gopalan for R.2 .. ORDER This writ petition is directed against the judgement and decree of the first respondent, the Appellate Authority, passed under Section 9 of Public Premises (Eviction of Unauthorised Occupants) Act (Central Act 40 of 1971) in CMA.No.72 of 2005 dated 25.01.2006, confirming the order of eviction passed by the Estate Officer, Life Insurance Corporation of India, South Zone, Chennai dated 10.05.2005, from the premises situate at No.149, 151, 151-A, Anna Salai, Chennai 600 002. 2. The petitioner, which is a Partnership Firm is carrying on Auctioneer profession. The petitioner has administrative office at https://hcservices.ecourts.gov.in/hcservices/ No.340, Thambu Chetty Street, Chennai 600 001 and its place of auction, show room and godown are situate at No.149 and 151, Anna Salai, Chennai 600 002, in an extent of 5005 sq.ft. and in No.151- A, Anna Salai in an extent of 583 sq.ft. The property originally belonged to M/s.Kushaldas & Sons, from whom the petitioner obtained lease on 01.03.1930 and put up superstructures in the form of Zinc sheet shed in the extent of 2800 sq.ft. out of the total extent of 5588 sq.ft. On 01.08.1953, M/s.Kushaldas & Sons have sold the leased land to the second respondent, Life Insurance Corporation of India (in short, LIC of India) and the petitioner's lease was attorned by the LIC of India. 2(a). On 01.01.1982, the second respondent, LIC of India has granted lease of the premises for a period of three years on a consolidated rent of Rs.1,000/- per month and subsequently, it was increased to Rs.2,000/- per month by renewal of lease on 01.09.1985. Further, the lease was renewed on a consolidated rent of Rs.2,715/- per month on 01.09.1990; Rs.3660/- per month from 01.09.1995; and to Rs.11,000/- by renewing the lease on 01.09.2000, out of which, Rs.10,000/- being the rent for the building and Rs.1,000/- being the rent for the land. Therefore, according to the petitioner, it was granted renewal from time to time on a revised enhanced rent and it has been paying the rent regularly to the second respondent, LIC of India. 2(b). According to the petitioner, the second respondent, LIC of India has sent letters dated 21.07.2003, 21.10.2003 and 14.11.2003, calling upon the petitioner for discussion at the LIC Office and in the meeting, where the Secretary (Estates) and the Assistant Secretary (Estates) have told the petitioner that the rent will be refixed and asked the petitioner to wait for finalisation of the renewal. However, on 18.03.2004, the second respondent has terminated the tenancy in respect of the leased premises. 2(c). The petitioner has sent a reply on 06.04.2004, stating that when discussion regarding the renewal of lease on a revised rent is pending, it is not open to the second respondent to unilaterally terminate the tenancy and that the petitioner is always willing to pay the enhanced rent. Even for the period when the discussions were going on for renewal during November, December, 2003 and January, 2004, the petitioner has been paying rent regularly and the same was accepted by the second respondent by passing receipts. 2(d). The Estate Officer of the second respondent, LIC of India has sent a notice to the petitioner on 22.06.2004 under Section 4(1) of the Public Premises (Eviction of Unauthorised Occupants) Act (Central Act 40 of 1971) (in short, "the Act"), treating the petitioner as an unauthorised occupant and called upon it to show-cause, why it should not be evicted from the leased premises on the basis that there was no subsisting lease agreement. The petitioner sent a reply on 09.07.2004, stating that under the facts and circumstances and taking into consideration that the petitioner has been in the premises for five decades and https://hcservices.ecourts.gov.in/hcservices/ negotiations were going on for renewal of lease as it has been done in the past, the petitioner cannot be treated as an unauthorised occupant. 2(e). The Estate Officer, who is the Enquiring Authority under the Act, conducted an enquiry by giving opportunity to both the parties and after completing the enquiry, reserved the matter for orders in September,2004. However, without passing orders, the Estate Officer has sent a notice on 03.02.2005, enclosing a letter dated 13.01.2005 of the second respondent, LIC of India, seeking to place certain new materials to show as if the demised premises are in dilapidated condition and are to be demolished. The petitioner came to know that after the enquiry before the Estate Officer is completed, the second respondent, LIC of India has approached the Corporation of Chennai and obtained a demolition plan sanctioned in respect of the property and wanted to place the said materials before the Estate Officer along with some photographs. 2(f). The petitioner has filed an objection on 03.03.2005 before the Estate Officer, opposing the said application by the second respondent, however, the Estate Officer has rejected the opposition by the petitioner, passed an order under Section 5(1) of the Act on 10.05.2005 in Petition No.19 of 2004, and directed the petitioner to vacate the leased premises within 15 days from the date of receipt of the order, since the Estate Officer has concluded on the basis that when the tenancy in respect of the public premises is terminated, the tenant loses its authority to be in occupation and therefore, the tenant will be treated as an unauthorised occupant. 2(g). The petitioner has filed an appeal under Section 9 of the Act before the Appellate Authority, first respondent herein, viz., The Principal Judge, City Civil Court, Madras and ultimately, the same was heard by the V Additional Judge, City Civil Court, Madras in CMA.No.72 of 2005. After arguments, the appellate authority, has dismissed the appeal by judgement dated 25.01.2006. 2(h). The said order of the appellate authority is challenged by the writ petitioner on various grounds, including that the said order is vitiated by error on the face of record, since it proceeded on wrong presumption that the petitioner has questioned the termination notice dated 18.03.2004, forgetting the fact that the petitioner has challenged the show-cause notice dated 22.06.2004, purporting to be a notice under Sections 4(1) and 4(2) of the Act, and therefore, the challenge is not in respect of the termination notice issued under Section 106 of the Transfer of Property Act. 2(i) That apart, it is the case of the petitioner that the impugned order of the first respondent is perverse. According to the petitioner, when the order of the Estate Officer shows that such a tenant cannot be treated as a trespasser, even though it may be regarded as an unauthorised occupant under Section 2(g) of the Act, it is not correct for the first respondent, appellate authority to decide as if the petitioner has become an unauthorised https://hcservices.ecourts.gov.in/hcservices/ occupant, by merely giving notice of termination, and the first respondent has failed to consider the Scheme of the very Act, particularly when the Act contemplates cogent procedure of hearing and also filing of appeal. 2(j). There is a distinction between a case where termination notice of lease is challenged before the Court and a case which arises under the Central Act 40 of 1971, based on issuance of show- cause notice and thereafter reply and then order passed on merits. It is the further case of the petitioner that the first respondent has failed to take into consideration that when the negotiation between the petitioner and the second respondent was going on in respect of renewal of lease and refixation of rent as it has been done earlier, the termination notice happened to be given and show- cause notice issued and therefore, on the factual situation also the petitioner cannot be treated as an unauthorised occupant. 2(k). It is the further case of the petitioner that the first respondent has exceeded its summary power arbitrarily passing the eviction order. The impugned order of the first respondent is challenged on the ground that the first respondent ought not have considered that the leased premises in occupation of the petitioner is dilapidated in nature, while the motivation of the second respondent is to get higher rent. According to the petitioner, the first respondent has failed to give purposive interpretation to the provisions of the Act. It is also the case of the petitioner that pending the appeal the petitioner has in fact filed CMP.No.2718 of 2005, for permission to effect repairs to the leased premises, which was directed to be posted along with the appeal and it does not mean that the petitioner has admitted that the building is in dilapidated condition. It is the further case of the petitioner that the first respondent has acted in excess of its jurisdiction. 3. The second respondent has filed counter affidavit. It is the case of the second respondent that the petitioner is a tenant under LIC of India and the premises being owned by LIC of India, is a public premises as per the Act and the extent of property, viz., 5588 sq.ft. is worth several crores and the same is situate in Anna Salai, Chennai. According to the second respondent, the building is very old, existing for more than 80 years. While the petitioner was paying Rs.11,000/- as rent per month, which is a very meager amount, the original lease granted to the petitioner came to an end in 1990, and thereafter, there was no fresh lease agreement entered into and since the petitioner was a tenant, its tenancy can be terminated by giving 15 days notice under Section 106 of the Transfer of Property Act. 3(a). It is also the case of the second respondent that merely because the petitioner was a tenant for several years, it does not give permanent right of occupancy to it. It is also the case of the second respondent that inasmuch as no rental agreement is in existence and therefore, the petitioner is governed by Section 106 of the Transfer of Property Act, for terminating the tenancy for which no reasons need be given. By the said notice of termination dated 18.03.2004, the tenancy right of the petitioner was https://hcservices.ecourts.gov.in/hcservices/ determined and on expiry of the said period given under the notice, the petitioner has to vacate and deliver possession. However, the petitioner gave a reply on 06.04.2004, refusing to vacate the public premises and as per the Act, the possession of the petitioner thereafter is unauthorised occupation, as it has been held in various cases. In those circumstances, the second respondent approached the Estate Officer, seeking eviction on various grounds. 3(b). It was, after due application of mind and finding that the petitioner is in occupation of a "public premises", the Estate Officer has concluded that the petitioner is an unauthorised occupant and issued a show-cause notice under Section 4 of the Act. It was after due opportunity given to both parties, the Estate Officer found that there is no agreed period of lease and the petitioner was occupying only on monthly rental basis and there has been a valid termination and in spite of the same, the petitioner failed to vacate the premises and therefore, the petitioner is an unauthorised occupant as per the Act. However, before the orders were pronounced by the Estate Officer, the demolition plan sanctioned by the Chennai Corporation has been produced and the Estate Officer has in fact given an opportunity to the petitioner and the petitioner has filed a counter and it was after a detailed enquiry, the Estate Officer came to the conclusion that the petitioner was liable to be evicted and accordingly, the eviction order was passed. 3(c). According to the second respondent, even pending appeal, the petitioner has filed an application admitting that the building requires repair in roof portion and that is sufficient to prove the poor condition of the building, which is more than 80 years old. It was, after elaborate arguments, the first respondent, appellate authority has confirmed the order of eviction, holding that there was no concluded contract for renewal of lease and the termination of lease was valid and the show-cause notice and eviction order passed by the Estate Officer were justified on facts and circumstances. 3(d). That apart, the second respondent denied all the legal grounds raised by the petitioner. It is the further case of the second respondent that the offer of the petitioner to pay higher rent itself cannot be the basis to contend that the second respondent has agreed to extend the lease and is willing to renew the lease in favour of the petitioner, because the petitioner has been paying a very meager amount as rent in respect of a property situate in prime locality. It is the case of the second respondent that the appellate authority has comprehensively dealt with the entire issue and hence, it does not require or warrant any interference. 4. Mr.K.C.Rajappa, learned counsel appearing for the petitioner has submitted that the notice issued by the Estate Officer under Section 4(1) of the Act itself is arbitrary. In this regard, his submission is that when the discussion between the petitioner and the second respondent was going on in respect of https://hcservices.ecourts.gov.in/hcservices/ extension of lease with increase in rent, there was no necessity for the Estate Officer to invoke the provisions of Section 4(1) of the Act. It is his further contention that issuance of said show- cause notice under Section 4(1) is not bona fide in the sense that the contract between the parties are about to be concluded, since discussion was going on and in the absence of any decision taken by the second respondent on the negotiation, Act 40 of 1971 cannot be enforced. 4(a). On the facts of the case, his further submission is that when the Estate Officer has reserved the matter for orders in September, 2004, it was not open to him to receive any additional documents and give further notice on 03.02.2005 on the basis that the second respondent has produced some other documents to show that the premises is in dilapidated condition. According to him, the Estate Officer has no power or jurisdiction to reopen the case at all. Therefore, he submits that the Estate Officer having reserved the orders in September,2004 and kept quite till February,2005, the second respondent filed application for additional documents. He would also submit that to receive additional documents, the second respondent in fact has filed no petition at all. Therefore, once show-cause notice was given under Section 4(1) of the Act and after enquiry, the matter was reserved for orders, there is no power vested in the Estate Officer to reopen the case and the Estate Officer is duty bound to pronounce orders on the basis of the materials available. According to the learned counsel for the petitioner, in the present case it appears that the Estate Officer has waited for some other materials from the second respondent and after receiving the materials, given notice to the petitioner as well as to the second respondent, to which he has no jurisdiction. 4(b). According to the learned counsel, in the absence of statutory powers to issue second show-cause notice, it should be treated as excess of jurisdiction. His further submission is that the conduct of the second respondent, LIC of India, in having discussion with the petitioner in respect of enhanced rent, taking into consideration its previous conduct by which every year the lease period has been extended after negotiation and rent has been increased, should be treated as an estoppel by conduct and in this regard, he would also rely upon the judgements, viz., Food Corporation of India vs. M/s.Babulal Agrawal [2004 (3) Law Weekly 12] and Vijay Jaiswal vs. State of Madhya Pradesh [AIR 2006 Madras 65]. 4(c). His basic contention is that the petitioner cannot be termed as an unauthorised occupant. He submits that when the purpose of the Act 40 of 1971 is to give speedy remedy of taking possession in respect of "public premises", in the absence of statutory protection to the tenants, the authorities under the Act are expected to act more cautiously. He would also rely upon the judgement of the Supreme Court in M/s.Crawford Bayley & Co. & Others vs. Union of India and others [AIR 2006 SC 2544]. The learned counsel for the petitioner has fairly submitted that he is not questioning the notice of termination issued by the second https://hcservices.ecourts.gov.in/hcservices/ respondent under Section 106 of the Transfer of Property Act. His submission is only based on the validity or otherwise of the show- cause notice issued by the Estate Officer under Section 4(1) of the Act. 4(d). He would also submit that the public authority like the Estate Officer is expected to act not like an ordinary landlord. He would also rely upon the judgement of the Supreme Court in Jamshed Hormusji Wadia vs. Board of Trustees, Port of Mumbai [AIR 2004 SC 1815]. He would submit that the decision of the public authorities must not be arbitrary and the conclusion should not be unjustified and relied upon the judgement of the Supreme Court in Bharat Petroleum Corporation Ltd., vs. Maddula Ratnavalli and others [2008 (1) Law Weekly 165]. Ultimately, he would submit that one of the reasons assigned by the Estate Officer as well as the appellate authority for passing orders viz., the premises is in dilapidated condition, is arbitrary and unjustified, since that point was never raised at any point of time by the second respondent before the Estate Officer as a ground, while issuing show-cause notice under Section 4(1) of the Act and therefore, according to him, the Estate Officer has no jurisdiction to take new materials for consideration. 4(e). According to the learned counsel for the petitioner, the petitioner is a leading auctioneer in the State and carrying on business for many long years and by virtue of various letters of the second respondent, the petitioner has been accepting the enhanced rent and extension of lease and in such circumstances, the second respondent ought to have chosen either of the courses before it approached the Estate Officer. According to him, Act 40 of 1971 confers valuable right on the tenant. In this regard, he would also reiterate the decision of the Bombay High Court in Minoo Framroze Balsara vs. Union of India [AIR 1992 Bombay 375]. He would also rely upon an Official Memorandum issued by the Government giving guidelines and directions to the public authorities to be followed while resorting to eviction of public premises. His further submission is that even after the notice issued under Section 106 of the Transfer of Property Act, the petitioner has got a right not to be dispossessed. He would also place reliance upon the judgement in Dr.Yash Paul Gupta vs. Dr.S.S.Anand and others [AIR 1980 Jammu & Kashmir 16]. 5. Per contra, Mr.R.Muthukumarasamy, learned senior counsel appearing for the second respondent, by referring to the definition of "public premises" and "unauthorised occupation", would submit that an unauthorised occupant is a person who is in occupation without authority or continue to occupy after the authority is concluded or a person who is allowed to occupy and who continues to be in occupation even after the termination of agreement/lease, which need not be for any reason. Therefore, according to the learned senior counsel, under the Act, which provides for summary procedure, there is no necessity to give any reason for termination of tenancy. He would also submit that when the petitioner has made it very clear that it is not questioning the termination notice issued by the second respondent, it has to be presumed that the https://hcservices.ecourts.gov.in/hcservices/ petitioner is no longer a tenant. 5(a). He would submit that the object of the Act must be taken into consideration as a whole and if the purpose of the present Act, which provides for summary procedure for the purpose of eviction, should be interpreted to give reason for eviction, then it will be worse than the Rent Control Act and that is not the purport of the Act dealing with "public premises". Therefore, according to the learned senior counsel, the premises under the Public Premises (Eviction of Unauthorised Occupants) Act, is different from the premises under the Rent Control Act or the common law. He would submit that even under the common law by giving a notice under Section 106 of the Transfer of Property Act, without assigning any reason, an Ejectment suit can be filed and the same analogy is applicable for eviction of a person who is in occupation of the public premises under the Act 40 of 1971. 5(b). To substantiate his contention that no reason need be given for the purpose of termination, he would rely upon the judgement in Jiwan Das vs. LIC of India and another [1994 (3) SCC (Suppl.) 394] apart from the judgements in M/s.Jain Ink Manufacturing Company vs. LIC of India and another [1980 (4) SCC 435]; and Commissioner, Jalandhar Division and others vs. Mohan Krishan Abrol and another [2004 (4) CTC 35]. On the other hand, in the present case, the second respondent has issued a termination notice on 18.03.2004, giving reason, which is not necessarily to be given. His submission is that the procedure followed by the Estate Officer is perfectly in order and valid in law. With regard to additional documents submitted by the second respondent before the Estate Officer, his contention is that the Estate Officer is authorised to see any further document and there is absolutely no bar on the part of the Estate Officer while conducting enquiry under Section 5 of Act 40 of 1971 to consider subsequent developments. In the present case, at the time of enquiry before the Estate Officer, the application for demolition was pending before the Chennai Corporation and after the matter was reserved by the Estate Officer, the demolition order was received from the Chennai Corporation and that was also placed before the Estate Officer. The Estate Officer, in conformity with the principles of natural justice, has, in fact given an opportunity to the petitioner and the petitioner having participated in the proceedings, is not at all entitled to question the conduct of the Estate Officer. 5(c). He would also submit that the appellate authority has given a correct reason, which does not require/warrant any interference. His submission is that the direction to be followed for eviction of public premises, which is relied upon by the learned counsel for the petitioner, has no statutory force and such direction cannot be treated as a bar to take any further proceedings under the Act. In this regard, he would also rely upon the judgement of the Supreme Court in Union of India vs. S.L.Abbas [AIR 1993 SC 2444]. He would also submit that any executive instructions cannot be issued when the field is occupied. https://hcservices.ecourts.gov.in/hcservices/ 5(d). His further submission is that when Act 40 of 1971 prescribes the entire procedure, there is no question of issuing any executive instruction. He would rely upon various judgements, viz., (i)B.Sundararajan vs. Government of Tamil Nadu [1997 WLR 391]; (ii)The Association of Management of Private Colleges, etc. & others vs. The State of Tamil Nadu, etc. & others [1997 WLR 647 (DB)]; (iii)Uttam Parkash Bansal vs. LIC of India [2002 Delhi Law Times 497 (DB)]; and (iv)Mirta Lina Private Ltd., vs. LIC of India [1999 (2) CLJ 457]. He