IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 25TH JULY 2011 / 3RD SRAVANA 1933 WP(C).No. 19086 of 2011(I) ----------------------- PETITIONER : --------------------- JACOB GEORGE MUTHALALY, AGED 47 YEARS, S/O.M.G. GEORGE MUTHALALY, MALAYIL HOUSE, PERUNGALAM.P.O, ARINALLOOR, KOLLAM - 690 588. BY ADVS. SRI.SHAJI P.CHALY SRI.R.SANJITH RESPONDENT(S): -------------------------- 1. STATE OF KERALA, DEPARTMENT OF HOUSING AND FOREST, REPRESENTED BY ITS SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. 2. KERALA STATE HOUSING BOARD, SHANTHI NAGAR, THIRUVANANTHAPURAM- 695 001, REPRESENTED BY ITS SECRETARY. R1 BY GOVT. PLEADER SMT. RAJASREE R2 BY ADV. POOVAPPALLY M.RAMACHANDRAN NAIR, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 19086 of 2011(I) APPENDIX PETITIONER'S EXHIBITS: EXT.P1 : COPY OF THE LEASE DEED DATED 14/12/2004. EXT.P2 : COPY OF THE SALES TAX REGISTRATION. EXT.P3 : COPY OF THE NOTICE DATED 4/1/2008. EXT.P4 : COPY OF THE REPLY ISSUED BY THE PETITIONER. EXT.P5 : COPY OF THE RECEIPT FOR THE MONTH OF JULY 2008. EXT.P6 : COPY OF THE NOTICE DATED 29/2/2008. EXT.P7 : COPY OF THE REPLY DATED 28/4/2008. EXT.P8 : COPY OF THE LETTER DATED 4/8/2008. EXT.P9 : COPY OF THE NOTICE DATED 30/8/2008. EXT.P10 : COPY OF THE MINUTES OF THE MEETING CONDUCTED BY THE RESPONDENTS. EXT.P11 : COPY OF THE NOTICE DATED 11/1/2011. EXT.P12 : COPY OF THE EXPLANATION SUBMITTED BY THE PETITIONER. EXT.P13 : COPY OF THE LETTER DATED 03/02/2011 ISSUED BY THE 2ND RESPONDENT. EXT.P14 : COPY OF THE NOTICE DATED 10/2/2011. EXT.P15 : COPY OF THE NOTICE DATED 23/2/2011. EXT.P16 : COPY OF THE REPLY DATED 04.03.2011. EXT.P17(a) : COPY OF THE APPEAL PREFERRED BY THE PETITIONER. EXT.P17(b) : COPY OF THE STAY APPLICATION PREFERRED BY THE PETITIONER. (Contd...) WP(C).No. 19086 of 2011(I) EXT.P18 : COPY OF THE JUDGMENT IN WP(C) 7100/11 DATED 08/03/11. EXT.P19 : COPIES OF THE SAID ORDER BEARING NO. GO(RT) NO. 37/11/HSG DATED 19/5/11. EXT.P20 : COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT DATED 24/6/2011. EXT.P21 : COPY OF THE OBJECTION ISSUED BY THE PETITIONER DATED 11/07/2011. RESPONDENT'S EXHIBITS - NIL //TRUE COPY// P.A. TO JUDGE Mn ANTONY DOMINIC, J .............................................. W.P.(C).19086/2011 .............................................. Dated this the 25th day of July, 2011 JUDGMENT Ext.P1 is a lease deed executed between the petitioner and the second respondent, on the basis of which, a room having an area of 640.65 Sq.Ft was leased out to the petitioner. The rental agreed is Rs.2,250/- per month and the lease is for a period three years from 3.12.2004 to 2.12.2007. 2. Clause 4 of the lease deed being relevant, reads as under:- “That the period of the lease may be renewed at the option of the Lessor after the expiry of the term of lease hereby granted on a specific request from the Lessee with an enhancement of 20% rent in subsequent years, the rent will be enhanced at 20% in every three years on such other condition as may be agreed upon between the Lessor and the Lessee if needed a fresh lease agreement will be executed or renew the lease period for further period (not more than three years) on the same terms and conditions except W.P.(C).19086/11 2 rent contained in this lease deed.” 3. Though an upper limit of 20% enhancement was incorporated in clause 4 of the lease deed, by Ext.P3 dated 4.1.2008, the Board informed the petitioner that the rent was revised to Rs.10,250/-. Petitioner objected to the revision as opposed to the lease conditions. Thereafter, Ext.P6 was issued to him stating that the rent is revised to Rs.4,500/- per month with effect from 1.1.2008. That was also objected by the petitioner relying on clause 4 of the lease deed. According to the petitioner, the aforesaid dispute led to a meeting between the parties and Ext.P10 is the minutes of the said meeting. It is stated for the period subsequent to 3.12.2007, petitioner continued to pay rent enhancing the same by 20% for every three years. 4. Despite such payments, he was issued Ext.P11 notice alleging of default in paying the rent due and calling upon him to submit his explanation. Denying the allegation, ExtP12 explanation was submitted, but however, Exts.P13 and P14 were issued asking him to clear the dues or to vacate the premises. When he was again W.P.(C).19086/11 3 issued Ext.P15 notice requiring payment, after filing Ext.P16 reply, petitioner filed Ext.P17(a) appeal before the Government under Section 87 of the Kerala State Housing Board Act, 1971, along with Ext.P17(b) stay petition. 5. The appeal was disposed of by Ext.P19 order upholding the petitioner's contention that rent can be revised only at the rate of 20% for every three years. But however it has been found that if the Housing Board is not willing to renew the lease, the Board is free to do so. The relevant portion of Ext.P19 order reads as under:- Government after examining all aspects of the case are pleased to order as follows - “The Kerala State Housing Board has to necessarily go by the conditions stipulated in the agreement entered into with the tenant, if the tenant is allowed to occupy the godown beyond the period contemplated in the agreement. In such circumstances they can claim only 20% of enhancement every three years as shown in the agreement. In paragraph 4 of the additional conditions made in the agreement there is W.P.(C).19086/11 4 provision to renew the lease agreement on the same terms and conditions or with some additional term and conditions, including the condition as to periodical enhancement of the rent by the lessor. As rightly argued by the Board, any extension of the lease period can be at the discretion of the lessor only as per the agreement and the Board is therefore free to terminate the lease and put the godown for auction for fresh lease. In the instant case the Board issued notice of increase of rent beyond 20% only after the expiry of the agreement and the retrospective enhancement cannot be upheld in view of the condition stipulated in the agreement. If the Board decides to increase the rent beyond 20% appropriate notice of the same shall be served on the tenant well before the expiry of the original agreement period. The petitioner Sri.Jacob George Muthalali has therefore the option to pay enhanced rate of rent as decided by the Housing Board and continue in occupation of godown No.6. If he is not ready to pay the revised rent, the Kerala State Housing Board is free to issue three months notice to the tenant from the date of this order to terminate the agreement and resume the godown. W.P.(C).19086/11 5 While doing so no arrears beyond 20% enhancement every three years can be collected from the tenant. The Court direction contained in the judgment dated 8.3.2011 in W.P.(C). 7100/2011 is thus complied with.” It is challenging Exts.P19 order and P20 consequential notice, this writ petition has been filed. 6. The contention raised by Sri.Shaji.P.Chaly, the learned counsel for the petitioner is that so long as the petitioner pays rent as provided in clause 4 of Ext.P1 lease deed, the Board has no option, but to renew the lease and he is entitled to continue to occupy the room. It is stated that such a tenant can be evicted only for the grounds specified in Section 85 of the Kerala State housing Board Act, 1971, and by following the procedure laid down therein. 7. Having considered the submissions made by the learned counsel for the petitioner, I should confess my inability to accept the contentions. A reading of clause 4 of Ext.P1 shows that the lease is liable to be renewed only “at the option of the lesser”, and W.P.(C).19086/11 6 “on a specific request made by the lessee”, and with an “enhancement of 20%”. All these conditions are to be satisfied and only in such an event, the period of the lease need be renewed. Therefore, in spite of a specific request made by the lessee and his willingness to pay enhanced rent, if the lesser opts not to renew the lease, nobody can compel him to renew the lease against his will. Being a statutory authority amenable Article 12 of the Constitution, such decision of the lessee should not be an arbitrary one. But for valid reasons, which will include even commercial considerations, such as possibility of getting higher rent if fresh auction is held, if a decision has been taken by the Board not to agree for renewal of lease, this Court will not sit in judgment over such a decision. 8. Similarly, if the lessee is unwilling to pay rent at the agreed enhanced rate and does not make a request for renewal of lease, that decision of the lessee is also binding on the lesser. In short, every three years, there has to be a consensus between the parties and then only, there can be renewal of the lease. Therefore, payments made by the lessee at the enhanced rate, are of no consequence and such payments can not be made use of to W.P.(C).19086/11 7 compel the lesser to renew the lease against their will. If the contention of the learned counsel for the petitioner that so long as the lessee pays 20% enhanced rent as provided in the lease deed, the Board is under compulsion to renew the lease is accepted, the provision in the lease deed, that renewal is “at the option of the lessor” will be rendered meaningless. Such an interpretation, is against the plain language of the lease deed and therefore, cannot be accepted. However, if renewal is agreed to, the lessor cannot demand enhancement of rent at a rate higher than 20%. This is because, the rate of enhancement is already agreed between the parties and hence, the requirement of agreement between the parties “on such other conditions” as provided in clause 4 of the lease deed can not apply to the revised rent payable by the lessee. 9. Learned counsel for the petitioner mainly relied on Section 85 of the Kerala State Housing Board Act, 1971; which is extracted below for easy reference. Power to evict persons from Board premises- (1).If the competent authority is satisfied- W.P.(C).19086/11 8 (a). that the person authorized to occupy any Board premised has- (i). not paid rent lawfully due from him in respect of such premises for a period of more than two months; or (ii). sub-let, without the permission of the Board, the whole or any part of such premises; or (iii). otherwise acted in contravention of any of the terms, express or implied, under which he is authorized to occupy such premises, or (b). that any person is in unauthorized occupation of the Board premises the competent authority may, notwithstanding anything contained in any law for the time being in force, by notice served (i). by registered post, or (ii). by affixing a copy of it on the outer door or some other conspicuous part of such premises, or (iii). in such other manner as may be prescribed, order that the person authorized to occupy as well as any other person who may be in occupation of the whole or any part of the premises shall vacate them within one month of the date of the service of W.P.(C).19086/11 9 the notice. (2). Before an order under sub-section (1) is made against any person the competent authority shall inform the person, by notice in writing and served in the manner provided service of notice under sub- section (1) of the grounds on which the proposed order is to be made and give him a reasonable opportunity to offer an explanation and to produce evidence, if at any, and to show cause why such order should not be made within a period to be specified in such notice. (3). The competent authority may, on application, grant extension of the period specified in such notice on such terms as to payment and recovery of the amount claimed in the notice as he deems fit. (4). Any written statement put in by such person and document produced in pursuance of such notice shall be filed with the records of the case, and such person shall be entitled to appear in the proceeding either in person or by pleader. (5). If any person refuses or falls to comply with an order made under sub-section (1), the competent W.P.(C).19086/11 10 authority may evict that person from, and take possession of the premises and may for that purpose use, such force as may be necessary. (6). If a person who has been ordered to vacate any premises under sub-clause(i) or (ii) of clause (a) of sub-section (1) within one month of the date of service of the notice or such longer time as the competent authority may allow, pays to the Board the rent in arrears or carries out or otherwise complies with the terms contravened by him to the satisfaction of the competent authority, as the case may be, the competent authority shall, in lieu of evicting such person under sub-section (5) cancel its order made under sub-section (1) and thereupon such person shall hold the premises on the same terms on which he held them, immediately before such notice was served on him. Explanation.- For the purposes of this Section and Section 86, the expression “unauthorised occupation” in relation to any person, authorised to occupy any Board premises, includes the continuance in occupation by him or by any person claiming through or under him of the premises after the authority under which he was allowed to occupy W.P.(C).19086/11 11 the premises has been duly determined. 10. A reading of this provision shows that Section 85(1)(a) applies only to cases where a valid and current lease is in existence and the lessee has committed breach of the terms of the lease. In view of the position as clarified in the explanation to the Section, it is clear that Section 85 (1)(b) will apply to cases, where tenants continue in occupation beyond the lease period. Such unauthorized occupants can be got evicted in the manner as provided in this Section. 11. In spite of this enabling provision, in Ext.P19 order what has been ordered is that the Board can issue three months notice to the petitioner and resume possession of the premises. It is in pursuance to this direction that Ext.P20 has been issued by the Board. Admittedly, the lease in favour of the petitioner has not been renewed after the three year period of Ext.P1 expired in 2007. Therefore, in view of Section 85(1)(b) and the explanation to the Section, petitioner is an unauthorized occupant. In such a case, the Board is entitled to invoke its statutory right of eviction as provided in Section 85. Thus all that the appellate authority has ordered in W.P.(C).19086/11 12 Ext.P20 is that it has recognized the Board's right to terminate the lease and to evict the petitioner in accordance with law, after giving him a notice of three months. The view so taken by the appellate authority cannot be said to be against Section 85 of the Act or any other provisions of the Kerala State Housing Board Act, 1971. 12. For the aforesaid reasons, I do not find any illegality in Ext.P19, warranting interference of this Court. Writ petition is accordingly dismissed. ANTONY DOMINIC, Judge mrcs