Deepak Kejriwal vs. The State Of West Bengal And Ors

Facts

The petitioner, Deepak Kejriwal, challenged a Circular dated August 18, 2022, and a communication dated January 31, 2023, issued by the respondent, West Bengal Small Industries Development Corporation Limited (WBSIDC). These communications fixed the rent for the first floor of Shilpa Bhawan at Rs. 72/- per Sq.ft. per month plus GST for a 15-year lease renewal. The petitioner had been a tenant since 2003, and his lease expired on September 28, 2018. He applied for renewal, and WBSIDC initially agreed in principle but failed to agree on terms. The petitioner continued to occupy the premises, paying rent at the previous rate, which WBSIDC accepted, and also granted rebates. The impugned communication proposed a significant rent increase and additional charges.

Held

The Court held that the petitioner's argument that the respondents had agreed to a renewal was not valid. While the respondent's letter dated May 17, 2018, indicated agreement to renew on a "long term" basis, it clearly stated that the rate and tenure would be finalized later. The petitioner's response on July 17, 2018, indicated agreement to "mutually agreed terms" and provided a rent calculation sheet, leaving the matter open for negotiation. The respondent's subsequent letter on July 23, 2018, rejected the petitioner's proposed break-up. The Court found that during the entire period the petitioner held over, negotiations continued, and the parties never reached consensus ad idem. Therefore, the respondent did not grant a renewal or accede to the petitioner's proposal. Merely accepting occupation charges at the previous rate did not amount to a renewal. The Court found no palpable absurdity or exorbitance in the proposed rates to warrant interference under Article 226, nor was the conduct of the respondents arbitrary or violative of Article 14. The Court disposed of the writ petition by holding that no renewal of the lease deed occurred, and the petitioner was holding over, leaving it open for the respondents to initiate eviction proceedings.

Key Issues

1. Whether the respondent's communication dated January 31, 2023, and the supporting Circular dated August 18, 2022, fixing the rent for renewal of the lease are arbitrary and violative of Article 14 of the Constitution of India, turning on the conduct of a public body in contractual dealings. Petitioner's arguments: The petitioner contended that Clause 5(vii) of the lease deed conferred an entitlement to renewal, which the respondent could not refuse. He argued that the respondent had vacillated on lease tenure but agreed to renewal, and by accepting rent and rebates after the lease expired, the petitioner was holding over. The petitioner cited precedents like M/s. Erusian Equipment & Chemicals Ltd. and Dwarkadas Marfatia and Sons to argue for fair and equal treatment and judicial review of public bodies' actions. He also argued that the rent assessment was based on sale price, not rent, and used premises with superior facilities. Respondent's arguments: The respondent argued that the West Bengal Government Premises (Tenancy Regulation) Act, 1976, was applicable as the petitioner had held over without a renewed lease. They contended that prolonged negotiations did not result in a consensus on rent, and the proposed rate was not demonstrably absurd, being substantiated by expert reports. They asserted no violation of natural justice occurred.