National Textile Corpn.LTD. vs. The State Of Tamil Nadu

Facts

The petitioner, National Textile Corporation Ltd., has been a tenant of shop premises (D, E & F) since 01.04.1998, with a total plinth area of 968 sq.ft. The rent was revised every three years. For the period 01.04.2015 to 31.03.2018, the monthly rent was Rs.6016/-. Subsequently, the 3rd respondent (Commissioner, Corporation Officer, Nagercoil) initially revised the rent to Rs.60,000/- per month effective 01.04.2018, demanding an additional sum of Rs.2,00,000/- and a 12-month advance of Rs.7,20,000/-. Following the petitioner's representation, the rent was further revised by the impugned order dated 28.12.2020 to Rs.39,500/- per month along with GST, and a deposit of Rs.2,00,000/- and a 12-month advance of Rs.4,74,000/-. The petitioner sought to quash this order and direct the respondents to extend the tenancy by formulating a committee for fair rent fixation as per G.O.Ms.No.92.

Held

The Court held that the petitioner's primary contention was that they were not heard before the rent was fixed. However, the Court noted that the petitioner had been in possession of the property for over 40 years, and the rent, which was Rs.6016/- until 31.03.2018, was initially revised to Rs.60,000/- on 01.04.2018, taking into account the market value. This revised rent was subsequently brought down to Rs.39,500/- by the impugned order, following the petitioner's request for a reduction. The Court observed that the petitioner had also been offered an alternative of vacating the ground floor and moving to the first floor. The Court found no reason to interfere with the impugned order passed by the 3rd respondent, finding that the petitioner's sole argument was that they had not been heard, and no other significant arguments were advanced. The Court dismissed the writ petition.

Key Issues

1. Whether the impugned order dated 28.12.2020, fixing the lease rental at Rs.39,500/- per month along with GST and demanding advance and security deposit, is arbitrary and illegal, warranting quashing, in light of the petitioner's contention that the principles of natural justice were violated as they were not heard before the fixation of rent, and that the procedure outlined in G.O.Ms.No.92 was not followed? Petitioner's arguments: The petitioner argued that the fixation of rent was arbitrary and illegal as they were not given an opportunity to be heard, violating the principles of natural justice, as supported by the Division Bench judgment in Arulmigu Angala Parameswari and Kasivishwanathaswami Temple Adimanaiveal House Owners Association vs. The State of Tamil Nadu. They also contended that the procedure stipulated in G.O.Ms.No.92, which mandates the formation of a committee for rent fixation and giving priority to existing tenants, was not followed. Revenue/State's arguments: The respondents contended that the writ petition is not maintainable. They argued that the rent fixation was based on the petitioner's own request for exemption from auction and their undertaking to accept the imposed conditions. They also noted that G.O.Ms.No.92 does not mandate notice to tenants and that the rent was revised considering market value and the petitioner's request for reduction.