IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY NINTH DAY OF JULY TWO THOUSAND AND NINE PRESENT HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No.1789 of 2004 Between : 1. Somishetti Venkateswar Rao, S/o. Venkatanarayana, C/o. Trivhnee Silks, 167-B, Vistralatha, Vijayawada-1, Krishna District. 2. J.V.R. Kishore Kumar, S/o. J. Venkateswara Rao, D.No. 27-18-14, J.D. Hospital Road, Governorpet,Vijayawada-2, Krishna District. 3. Smt. P. Nagamani, W/o. Kotireddy, D.No. 23-7-5, 3rd floor, Sai Charan Buildings, Giri Street, Near Old Post Office, Satyanaryanapuram, Vijayawada-3, Krishna District. 4. Chakka Venkata Chennkesava Rao, S/o. Chenna Subbaiah, D.No. 41-1-2/32, 3rd lane, Dwarakanagar, Krishnalanka, Vijayawada-13, Krishna District. 5. Naga Venkata Ramesh, S/o. Naga Subba Rao, D.No. 41-25-8, Byredduvari Street, Driverpet, Krishnalanka,Vijayawada-13, Krishna District. 6. S. Venkateswar Rao, S/o. Venkatanarayana, C/o. Trivhnee Silks, 167-B, Vistralatha, Vijayawada-1, Vijayawada-1, Krishna District. 7. A. Krishnakumar, S/o. Nageswara Rao, D.No. 40-1-1/4, Balaji bhavan, Lakshmi Nagar, Mogilarajpurajapuram Road, Vijayawada-10, Krishna District. 8. M.V. Sudhakar, Rao, S/o. Lakshman Rao, D.No. 32-5-4, Prajashakthinagar, Vijayawada, Krishna District. 9. K. Sudhakara Rao, S/o. Lakshman Rao, D.No. 27-23-215, Gopalreddy Road, Vijayawada-2, Krishna District. 10. P. Gopalkrishna Murthy, S/o. Subbaiah, D.No. 41-2-26, Bhajangarao Street, Krishnalanka, Vijayawada-13, Krishna District. ..... PETITIONERS AND 1 The Government of Andhra Pradesh, Rep. by its Secretary, Municipal Administration Department, Secretariat, Hyderabad. 2 The Commissioner of Municipal Corporation, Vijayawada, Krishna District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ, order or direction more in the nature of Writ of Mandamus declaring the action of the respondents in issuing the proceedings of the Commissioner of Vijayawada Municipal Corporation vide Rc. No. A3-12186/94 dated 20.12.2003 demanding the goodwill of Rs. 40, 000/- excluding Rs. 10, 000/- either paid and demanding a monthly rent of Rs. 5, 711/- for each shop and also proposing to conduct public auction vide paper publication in Eenadu District Edition dated 21.1.2004 vide Rc. A3-12186/94 for issuing the lease hold rights to the successful tenderers which is illegal, arbitrary, unjust, without jurisdiction, bad in the eye of law, violation of Articles 14 and 16 of the Constitution of India and also in violation of the judgment rendered by this Hon'ble Court in W.P. No.s. 12163/1996 and 29924/1995 and consequently direct the respondents not to cancel the shops of Petitioners. Counsel for the Petitioners : MR.E.V.S.S.ACHARYULU Counsel for the Respondents : SMT.G.JHANSI The Court made the following : ORDER : In this writ petition, the petitioners seek a declaration to declare the proceedings, dated 20th December 2003, issued by the Commissioner, Vijayawada Municipal Corporation, in Rc.No. A3-12186/94, as illegal and arbitrary, and also to set aside the tender-cum-auction notice, dated 21.01.2004, issued in Proceedings No.A3- 12186/94. 2. The Vijayawada Municipal Corporation has constructed a shopping complex in about 750 square yards of land at Besant Road, which is stated to be the locality known for its commercial activities. To encourage commercial activities further, it has constructed 56 shops in the underground cellar portion by obtaining loan from HUDCO on interest at the rate of 15.90 percent. When the applications are called for, for the purpose of reservation of shops, petitioners have applied for allotment of shops, by depositing an amount of Rs.10,000/-. When there was a further demand for payment of Rs.40,000/- by way of additional deposit before completion of construction, they approached this Court in writ petition Nos.29924 of 1995 and 12163 of 1996, and this Court, by a judgment dated 03.09.2002, has held that the demand for additional deposit, is not for any valid reason. Even thereafter, it appears that the petitioners have not approached the respondents to enter into agreements and to occupy the shops constructed by the Municipal Corporation. 3. Thereafter, in December 2003, as the shops are kept vacant, in order to avoid the revenue loss being caused to the Municipal Corporation, further steps are taken to assess the rental value of the shops, and the respondents, by an order dated 20th of December 2003, have demanded the petitioners to pay an amount of Rs.40,000/- towards goodwill for providing the facilities like air-conditioning, ventilation and lights, apart from the monthly rent of Rs.5,711/-, otherwise, the Corporation will go for public auction for allotting shops to the interested persons. When the petitioners failed to respond to the said notice, a tender notice was published in the newspapers on 21.01.2004, inviting tenders for issuing leasehold rights over the shops. Hence, the petitioners have filed this writ petition. 4. In this writ petition, it is the case of the petitioners that as much as the earlier demand was quashed by this Court, there is no reason or justification in demanding an amount of Rs.40,000/- from the petitioners for grant of lease. It is further submitted that the respondents have also got no right to fix the rent at the rate of Rs.5,711/- per shop per month, as fixed in the impugned proceedings, dated 20th of December 2003. 5. Counter affidavit is filed by the Commissioner, Municipal Corporation of Vijayawada. In the counter affidavit, it is categorically stated that after the judgment of this Court, dated 03.09.2002, passed in earlier writ petitions in W.P.Nos.29924 of 1995 and 12163 of 1996, petitioners have not come forward to take over the possession of the shops and execute the agreements. It is stated that the Corporation has been paying Rs.12 Crores towards interest to HUDCO, for the loan taken for construction of the shopping complex. To recover such interest, and also for providing certain facilities to the shopping complex, the respondents demanded Rs.40,000/- towards goodwill, and also fixed the rental value, based on the recommendations of the concerned Divisional Engineer. 6. Heard learned counsel for petitioners Sri E.V.S.S.Acharyulu, and Smt.G.Jhansi, learned counsel appearing for the 2nd respondent-Municipality. 7. In this case, it is to be seen that though the petitioners have initially deposited an amount of Rs.10,000/-, they did not enter into any agreement with the respondent- Corporation to lease the premises in their favour. When there was a demand from the respondent-Corporation for payment of Rs.40,000/- towards the cost of construction and also for providing certain amenities, and when the shops were proposed to be auctioned for allotting to the interested parties, the petitioners have approached this Court, questioning such demand notice. It is stated in the counter affidavit that although the earlier demand was quashed by this Court in the earlier writ petitions, the petitioners did not approach the respondents to enter into lease agreements, and to take possession of the shops. It is to be noted that the earlier writ petitions were disposed of on 03.09.2002, and till December 2003, as there was no response from the petitioners, and further, taking into account the interest being paid by the Corporation on the loan taken by it from the financing agency, the petitioners were asked to pay an amount of Rs.40,000/-, and to take possession of shops by entering into agreements. Inspite of giving such an opportunity to the petitioners, they did not respond to the orders passed by the Commissioner, which has resulted in issuing fresh tender-cum-auction notice for grant of leasehold rights. Merely because the demand notices issued at the stage of construction are quashed, by itself, is no reason to question the validity of the impugned order, on the ground that the Corporation has no power to demand any further amount for grant of lease. When it is the case of the 2nd respondent-Corporation that they have taken a loan of Rs.12 Crores from the financing agency on interest at the rate of 15.90% for construction of the shopping complex, and also made huge investment in providing certain facilities for the Complex, it is for the Corporation to fix reasonable terms for allotment of shops. In any event, as the rent is also fixed by taking into account the recommendations of the concerned Divisional Engineer, having regard to the location of the shops etc., it cannot be said that such fixation is illegal and arbitrary. Though the earlier writ petitions of the petitioners are allowed, as it is categorically stated in the counter affidavit that the petitioners have not approached the respondents so as to take possession of shops by entering into agreement, makes it clear that the petitioners are not interested to take possession of shops. In the absence of any agreement in favour of petitioners, there was no option for the respondents, but to issue tender-cum- auction notice for grant of leasehold rights. Therefore, I do not find any illegality in the order, dated 20th December 2003, passed by the Commissioner of the 2nd respondent- Municipality, or in the consequential notification issued, inviting tenders for grant of leasehold rights. It is also stated in the counter affidavit that the respondents made an attempt for refund of Rs.10,000/- along with interest by way of Bankers Cheques, but the same were not accepted by the petitioners. In that view of the matter, I do not find any illegality in issuing the impugned notification for allotment of shops on tender-cum-auction basis. 8. For the aforesaid reasons, the writ petition is devoid of merit and it is accordingly dismissed. No order as to costs. 9. But however, it is open for the petitioners to approach the respondents to collect the amounts, which they have initially deposited. The respondents shall refund the amount, which was collected from the petitioners at the time of submitting initial applications for allotment of shops, if not already refunded. _____________________ R.SUBHASH REDDY, J 29th July 2009 ajr