THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION No.4160 of 2007 ORDER: Zahirabad Municipality, the respondent herein, constructed shops abutting National Highway No.9. Shop No.4 was leased to A.P. State Handloom Society Limited (for short ‘the Society’) in the year 2002. Shortly thereafter, the Society appointed the petitioner herein as its franchise and addressed a letter, dated 05.07.2002, to the respondent stating that the petitioner shall henceforth be its franchise and would run the shop. The petitioner was continued as a lessee by paying the rent from time to time. The respondent issued notice, dated 08.02.2007, requiring the petitioner to vacate the shop within three days. It was alleged that the original lessee i.e. the Society had vacated the premises and that the petitioner occupied the shop without any permission. The same is challenged in this writ petition. No counter-affidavit is filed by the respondent. Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondent. It is, no doubt, true that there is no specific order in favour of the petitioner recognising it as the lessee of the respondent. The fact, however, remains that the original lessee i.e. the Society informed the respondent through letter, dated 05.07.2002, that the petitioner shall continue the business on its behalf. If the respondent has any objection for this, it ought to have replied to the said letter. Further, it has been receiving the rents from the petitioner duly for the past several years. There cannot be any justification to require the petitioner to vacate the premises at once. The Municipality is empowered to continue the leases by enhancing the rent by 33.3% for every three years. The petitioner can be continued by enhancing the rent unless the respondent proposes to terminate all the existing leases and conduct auction of leasehold rights. No steps were taken by the respondent even to enhance the rent to be collected on the petitioner. This Court is of the view that having regard to the period during which the petitioner was continued as lessee, the enhancement by 50% would meet the interest of both. Hence, the writ petition is allowed and the impugned notice is set aside subject to the condition that: (a) the respondent shall continue the petitioner as lessee by collecting the rent, enhancing it by 50% over and above what is being paid, with effect from April, 2011; and (b) it shall be open to the respondent to conduct the auction of leasehold rights in respect of the premises in question, if similar approach being adopted in respect of other shops. There shall be no order as to costs. _____________________ L.NARASIMHA REDDY,J Dt:31.03.2011 kdl