Centre For Education And Rural Development (C.E.R.D) Rep. By Its Chairman Sriichakkraverthi vs. The Madurai Corporation Rep By Its Commissioner

Facts

The petitioner, Centre For Education and Rural Development (C.E.R.D), challenged communications dated 05.08.2025 and 06.10.2025 issued by the respondent, The Madurai Corporation. These communications revised the monthly rent for a community hall used by the petitioner for an educational institution from Rs. 54,469/- plus 18% GST to Rs. 1,94,411/- plus 18% GST, effective from 01.04.2025. The petitioner sought to quash these revised rent orders and restore the earlier license terms of Rs. 54,469/- plus 18% GST for the license period 01.04.2025 to 31.03.2028. The respondent's revision was based on an inspection allegedly finding the petitioner using 865 sq.mts for the institution and having made additional constructions. The petitioner contended the rent was revised unilaterally without notice.

Held

The Court held that the impugned orders revising the monthly rent were issued without providing an opportunity of hearing to the petitioner, which is a violation of the principles of natural justice. The respondent, through the learned Additional Advocate General, conceded this point and submitted that the impugned orders would be withdrawn and fresh proceedings would be initiated after providing an opportunity of hearing to the petitioner. Based on this submission, the Court set aside the impugned orders. The Court's reasoning was that a unilateral revision of rent without affording a hearing to the affected party is unsustainable. The ratio decidendi is that any revision of terms, especially financial ones like rent, by an authority against a licensee or lessee must be preceded by a fair hearing. The operative direction was to set aside the impugned orders and grant liberty to the respondent to initiate proceedings afresh in accordance with law. No issue was expressly left undecided.

Key Issues

1. Whether the respondent could unilaterally revise the monthly rent for the community hall without providing an opportunity of hearing to the petitioner, as per principles of natural justice? Petitioner's Contention: The petitioner argued that the respondent revised the monthly rent unilaterally and without issuing a notice or providing an opportunity of hearing. This action violated the principles of natural justice, as the petitioner was not given a chance to present their case before the rent was revised to a significantly higher amount. Respondent's Contention: The learned Additional Advocate General for the respondent submitted that the rent revision was necessitated by an inspection which revealed that the petitioner had constructed an additional building and was using it for running the educational institution. This usage, according to the respondent, warranted a revision of the rent. However, the respondent later conceded that the impugned orders were issued without providing an opportunity of hearing and agreed to withdraw them and initiate fresh proceedings.