Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Mrs. S.C Nalini Chidamnbaram, Senior Advocate for Petitioners.
  • Mr. K.R Tamil Mani, Additional Government Pleader for Respondents.
Judges
  • C. Shivappa, J.
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Click here to upload
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Mrs. S.C Nalini Chidamnbaram, Senior Advocate for Petitioners.
  • Mr. K.R Tamil Mani, Additional Government Pleader for Respondents.
Judges
  • C. Shivappa, J.
See more information ...
Smart Summary

Structured Summary of the Opinion (W.P. Nos. 3021-3024 of 1998)

Factual and Procedural Background

Four writ petitions having similar grievances were heard together and disposed of by this common order. The petitions fall into two pairs with the same petitioners in each pair:

  • W.P. Nos. 3021 & 3022 of 1998: The petitioner challenged an auction notice published in Daily Thanthi dated 15.2.1998 insofar as it related to a licence to display advertisements via television sets at the Tirunelveli Municipal Corporation Central Bus Stand. In a companion petition he sought renewal of that licence on the condition of accepting a 15% enhanced rent for a block period of three years.
  • W.P. Nos. 3023 & 3024 of 1998: The petitioner challenged the same auction notice insofar as it related to the licence to install weighing machines on platforms 1 to 3 of the Central Bus Stand, Tirunelveli, and in a companion petition sought renewal of that licence subject to a 15% enhanced rent for three years.

Background facts specific to the petitioners as pleaded:

  • The petitioner in W.P. Nos. 3021 & 3022 was the successful bidder in auctions for the years 1993-94 and 1994-95 for the right to operate television-based advertisement display at the bus stand. He was allotted space (originally 16x16 sq.ft; later given 8x6 ft and then 15x11 ft) and claimed he requested renewal in February 1995 and again later, offering to accept a 15% enhanced rent, but no order was passed and an auction was notified by the Corporation.
  • The petitioner in W.P. Nos. 3023 & 3024 was the successful bidder for the right to install weighing machines for the period 1.4.1991 to 31.3.1992, claimed to have sought extension on payment of 15% enhanced rent, but the Municipality issued a notice for auction to be conducted on 26.2.1992 (and later an auction was held on 9.3.1998 as per respondents).

The respondents, by counter-affidavit, described the periodic nature of licences, the periods for which licences/ extensions were granted (including extensions up to 31.3.1998), alleged misuse of allotted spaces (for Xerox and STD), and maintained that the rights granted were licences to collect charges (and not leases) and that G.O.Ms No. 285 did not apply. They also stated auctions were held (noting highest bids) and where petitions affected bidding, re-auction was decided.

Legal Issues Presented

  1. Whether the rights granted to the petitioners (to collect advertisement charges via television sets and to collect weighment charges) are licences or leases.
  2. Whether petitioners are entitled to renewal of their licences by paying a 15% enhanced rent for a block period of three years, and whether they can prevent confirmation of the highest bid or a re-auction.
  3. Whether G.O.Ms No. 285 (dated 29.4.1985) applies to the transactions at hand.
  4. Whether non-statutory contracts or rights touching immovable property can be enforced under Article 226 of the Constitution.

Arguments of the Parties

Petitioners' Arguments

  • The petitioners asserted that they were successful bidders in prior auctions and had a right to continue: one sought declaration that the auction notice of 15.2.1998 was illegal insofar as it affected their licences.
  • They sought renewal of their licences on the condition of paying a 15% enhanced rent for a block period of three years, claiming prior renewals and representations seeking further renewal went unacted upon.
  • Specifically, they claimed they were entitled to continuation/renewal rather than being subjected to a fresh auction or confirmation of a highest bid.

Respondents' Arguments

  • The respondents contended that the petitioners were granted licences only for specified periods (with extensions up to 31.3.1998) and that such rights were licences to collect fees, not leases conferring any estate or interest in the property.
  • They alleged misuse of allocated space (e.g., running Xerox and STD businesses in violation of licence terms) in respect of the television-advertisement licence.
  • They argued G.O.Ms No. 285 does not apply because it concerns shops/stalls and leases of municipal buildings/lands and not licences or rights merely to collect fees; in any case the respondent is a Corporation and the Government Order does not apply.
  • The respondents explained auctions were conducted (noting highest bids for the weighing rights) and where the writ petition affected participation, or interim orders prevented confirmation, a re-auction was decided for items with no bidders.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
T. Sekaran v. Managing Director, Thiruvalluvar Transport Corporation, Madras-2, 1994 (1) L.W 463 Where a right is only to use the property in a particular manner, it amounts to a licence and not a lease. The Court relied on this decision to support the conclusion that the rights granted to the petitioners were licences (right to use/collect charges) and not leases conferring any estate or interest.
Associated Hotels Of India Ltd v. R.N. Kapoor, A.I.R. 1959 SC 1262 Legal principle distinguishing licence from lease where only permission to use property is granted. The T. Sekaran decision followed this Supreme Court authority; the Court referenced the chain of authority to reinforce the licence/lease distinction applied to the present facts.
V.S. Balakrishnan v. Pudukkottai Municipality, reported 1994 (1) L.W 571 Distinguished lease and licence; held that G.O.Ms No. 285 applies only to leases of municipal buildings/shops/lands and does not apply to rights to collect fees (licenses). The Court cited this case to support the proposition that G.O.Ms No. 285 does not apply to the licences in question and to reinforce that the rights were licences to collect fees rather than leases.
A.I.R. 1989 S.C. 1026 Authority (as cited) concerning enforceability of non-statutory contracts/rights touching immovable property under Art. 226. The Court relied on this Supreme Court authority to hold that non-statutory contracts and rights touching immovable property cannot be enforced under Article 226, supporting dismissal of the writ petitions.
State of Rajasthan v. Bhavani Singh and others, A.I.R. 1992 S.C. 1018 Held that non-statutory rights touching immovable property cannot be enforced under Article 226. The Court invoked this decision alongside A.I.R. 1989 S.C. 1026 to conclude that the petitioners could not rely on Article 226 to enforce their non-statutory licence rights.

Court's Reasoning and Analysis

The court's analysis proceeded along the following lines, strictly as stated in the opinion:

  1. Characterisation of the right: The court examined the nature of the rights granted and concluded they were licences rather than leases. The critical features relied on included that what was auctioned was only a right to collect charges (from advertisers or weighers), that possession and control remained with the owner, that the permission was for a specified period and subject to conditions, and that non-compliance allowed the licensor to take action. These factors were decisive in classifying the grants as licences.
  2. Legal explanation of licence vs. lease: The court summarized legal doctrine that where a document gives only a right to use property in a particular way while the owner retains possession and control, it is a licence; the licencee does not acquire any estate or interest and, but for permission, occupation would be unlawful.
  3. Reliance on precedent: The court relied on prior decisions (T. Sekaran following Associated Hotels of India; V.S. Balakrishnan) which held that such rights amount to licences and that G.O.Ms No. 285 applies to leases of municipal buildings/shops/lands and not to rights to collect fees. These precedents were used to reinforce both the licence characterization and the inapplicability of G.O.Ms No. 285.
  4. Application to the facts: The auction conditions under which the petitioners became highest bidders expressly indicated that the grant was for a specified term on specified conditions; petitioners had agreed to those conditions. Given that, the court found it impermissible for petitioners to contend they were entitled to renewal on payment of 15% enhanced rent as if they held a lease.
  5. Article 226 and enforceability: The court referred to Supreme Court authorities (A.I.R. 1989 S.C. 1026 and State of Rajasthan v. Bhavani Singh A.I.R. 1992 S.C. 1018) holding that non-statutory contracts and rights touching immovable property cannot be enforced under Article 226. Relying on those authorities, the court concluded the petitioners could not use writ jurisdiction to enforce their non-statutory licence rights.
  6. Rights of the owner/corporation: The court emphasized that the respondent's right to auction or to re-auction arises from its ownership of the property, and absent statutory prohibition, the Corporation may put the property to use that augments public income. Any direction restraining auction or directing renewal would impermissibly limit that right.

Holding and Implications

Holding:

The writ petitions are dismissed. Consequentially, the connected W.M.P.s are also dismissed.

Implications:

  • Direct effect on the parties: The petitioners (licence-holders) are not entitled to force renewal of their licences nor to prevent the Corporation from confirming the highest bid or conducting a re-auction. Their rights were held to be licences for specified periods and did not confer any proprietary estate entitling them to continued possession or renewal as of right.
  • Broader precedent: The court's conclusion was grounded on existing authorities cited in the opinion; the document does not purport to announce a new legal principle beyond applying established case law. (The opinion relied on prior decisions distinguishing licences and leases and on Supreme Court authority regarding non-statutory rights and Article 226.)

End of summary based exclusively on the provided opinion.

Show full summary ...

    V. Chellappa And Another Petitioners v. Commissioner, Tirunelveli Municipal Corp., Tirunelveli & Another S

    1. In these four writ petitions, the grievance being almost similar and a common counter has been filed by the respondents, they are heard together and disposed of by this common order.

    2. The petitioner in W.P Nos. 3021 & 3022 of 1998 being same, in one petition, he is seeking for declaring the auction notice published in Daily Thanthi, dated. 15.2.1998, insofar as it relates to the licence to display advertisements through television sets in Tirunelveli Municipal Corporation Central Bus Stand, as illegal and in another petition he is seeking for renewal of the licence, on accepting the enhanced rent of 15% for a block period of three years.

    3. The petitioner in W.P Nos. 3023 & 3024 of 1998 being same, has, in one petition, sought for declaring the auction notice published in Daily Thanthi on 15.2.1998 insofar as it relates to the licence to instal weighing machines in platforms 1 to 3 of the Central bus stand, Thirunelveli and in another petition he has sought for renewal of the said licence after accepting the enhanced rent of 15%.

    4. The petitioner in W.P Nos. 3021 and 3022 of 1998 was a successful bidder in the auction conducted by the Thirunelveli Municipal Corporation for the year 1993-94 and he was allotted a space measuring an extent of 16x16 sq.ft for the purpose of putting up a “room” from which the petitioner can operate the ‘television sets’ installed by him in the three platforms. He has been displaying advertisements through medium of television in accordance with the terms and conditions of the auction notice. During the year 1994-95, auction for the above said right was conducted by the respondent Corporation for the period upto March, 1995 in which the petitioner was the highest bidder by paying Rs. 2160 per month (Rs. 26,000 per year). According to the petitioner, during February, 1995, he requested the Respondent No. 1 for extension of his right for a further period of three years on payment of 15% enchanced rent. The Commissioner of respondent Corporation renewed the right of the petitioner, and, it is his case that he has been conducting the said business by paying the rental without fail and he made a representation during the end of January, for further renewal of licence for a period of three more years and agreed to pay 15% enhanced rent and no orders were passed on the said representation and on the other hand, Respondent No. 1 has notified the auction for the right of advertisement through media of television and therefore the petitioner is seeking for renewal of the licence.

    5. In W.P No. 3023 of 1998, it is the case of the petitioner that the respondent Municipality had been auctioning the right to instal weighing machines in the open space in the platforms of Central bus stand, Thirunelveli and collecting fees. The petitioner was the successful bidder in the auction conducted for the period from 1.4.1991 to 31.3.1992 and since the bid was confirmed, the petitioner was carrying on the business and before the expiry of the said period, he approached the Municipality for extension of the licence for a further period of three years on the payment of 15% enhanced rental fee. However, the Municipality issued a notice for an auction to be conducted on 26.2.1992

    6. In the counter affidavit, the respondents have stated that so far as the petitioner in W.P Nos. 3021 and 3022 of 1998 is concerned, he was given licence for a period from 15.2.93 to 14.2.94 as he had happened to be the highest bidder in the auction held for the same, and he was also the successful tenderer for the period from 1.4.94 to 31.3.95 He was given an extension for period 1995-1998. Thus, he was given the said licence to advertise on the television in the busstand till 31.3.1998, and he was given a space of 8x6 ft. for locating his office and he had put up an enclosure. Later he wanted a larger space viz. 15 x11 ft. and that was also given. But, instead of running the office he is running a business viz. Xerox and STD both in violation of the terms of licence. In so far as petitioner in W.P No. 3023 and 3024 of 1998 is concerned, it is stated that the petitioner was granted licence to keep weighing machines in the platforms of the busstand so that the passengers and public can use the machines on payment of specified charges. This petitioner got the said licence for the year 1991-92 as the highest bidder in the auction held for the same. Later he was granted an extension for 1992-95. He was again an extension for 1995-98. It is specifically contended that G.O.Ms No. 285 shall not apply to the cases on hand for more than one reason viz. the Government order applies only to shops and stalls. The respondent being a Corporation the said Government Order does not apply to the cases on hand. Similarly, the said G.O applies only to leases granted to shops and stalls and it does not apply to licences. It is the specific case of the respondent that the petitioners were granted a right to collect charges for advertisement on the television from the advertisers and the right to collect charges for weighment from the public and passengers and it was only a licence and there was no lease. Moreover the petitioners had enjoyed these rights continuously for 8 years and five years respectively. The auction was held on 9.3.1998 One Thiru Subramanian has offered a sum of Rs. 24,550 as the highest bid and Rs. 24,600 is the highest offer for the said rights to weigh and collect charges therefor. In respect of the right to advertise on the television sets in the busstand there were no bidders on account of the pendency of the writ petition and the interim order not to confirm the highest bid was sufficiently publicised. Thus, for the items, no bidders were there the Corporation has decided to go in for a re-auction.

    7. From these pleadings, the point for consideration is whether the petitioners are entitled to seek for renewal of their licence preventing the confirmation of the highest bid and a re-auction in respect of the subject matter in W.P No. 3021 and 3022 of 1998.

    8. The petitioners in these petitions were granted rights to collect the charges for the advertisement on the television from the advertisers and the right to collect charges for weighment from the public and passengers. What was auctioned was only a right to collect the charges and not that petitioners were given possession or right with an interest in the property. The possession was given as licences only for the purpose of exercising their right to collect fees from the advertisers and weighers who come to the busstand. On construction of the nature of the right it is clear that what was given to the petitioners was only a licence and not a lease. The very fact that such permission is subject to conditions that when licence is granted it shall expire at the end of a certain period and should be used only for a particular period and any non-compliance of which enables the licenser to take appropriate action shows the nature of right granted to the petitioners, which is decisive in deciding whether it is a lease or licence.

    9. If a document gives only a right to use a property in a particular way under certain terms while it remains in the possession and control of the owner thereof it will be a licence. The legal possession thereof continues to be in the owner of the property but the licencee is permitted to make use of the premises for the particular period. But for the permission his occupation would be unlawful, and does not create in his favour any estate or interest in the property.

    10. On this aspect what constitutes lease or licence, this Court has, in T. Sekaran v. Managing Director, Thiruvalluvar Transport Corporation, Madras-2, 1994 (1) L.W 463, following Associated Hotels Of India Ltd v. R.N Kapoor, A.I.R 1959 SC 1262, has held that where a right is only to use the property in a particular manner, it only amounts to a licence and not a lease.

    11. The same view has been reiterated in V.S. Balakrishnan v. Pudukkottai Municipality, reptd. by the Commissioner, 1994 (1) L.W 571. In addition to distinguishing the lease and licence at para 1 1, it is held in the said decision that G.O.Ms No. 285 dated 29.4.1985 applies only to lease of Municipal buildings, shop, lands, bunks etc. and does not apply to lease or licence to a right to collect fees.

    12. The conditions of the auction under which the petitioners became the highest bidders make it clear that it was only a licence for a specified period. They have agreed to those conditions and taken up the licence right in the auction and it is not open to the petitioners now to raise a contention that they are entitled for a renewal on payment of 15% enhanced rent for a block period of three years as though it is a lease.

    13. This Court, on an identical question regarding the applicability of G.O.Ms No. 285 and the power of this Court to renew the licence after the expiry of licence period has held that where the petitioners has only a right of licence and after expiry of the said period they have no right to continue.

    14. These petitions are liable to be dismissed in view of the decision of the Supreme Court in A.I.R 1989 S.C 1026 and State of Rajasthan v. Bhavani Singh and others, A.I.R 1992 S.C 1018, wherein it has been held that non-statutory contracts and right touching an immovable property cannot be enforced under Art. 226 of the Constitution.

    15. For these reasons, I hold that the petitioners are not entitled to resist the right of the respondent to auction, because, such right springs from the very right of ownership of the property so long as there is no statutory prohibition. It can hold the property and put it to better use to augment more income in public interest in the manner most advantageous to it. Any direction not to hold auction or to renew the licences is nothing but putting a limit on such right, which is impermissible in law.

    16. Therefore, the petitioners being licencees, where their right to collect fees is not affected during the subsistence of the licence period, they have no right to resist the action of the respondents either to bring the property to auction or confirmation of the auction already held or to refuse to renew any such licence.

    17. For reasons aforestated, the writ petitions are dismissed. Consequently, the connected W.M.P.s are also dismissed.

    ALS\RSN

    Use AI to get other relevant cases.
    Try AI Pro free for 7 days Upgrade to AI Pro

    Comments

    V. Chellappa And Ano... v. Commissioner, Tirune...
    (Mar 30, 1998)