C.Ganapathy vs. The Director Of Municipal Administration

Facts

The petitioners, shopkeepers in Bharat Ratna Dr.MGR Bus Stand, Tirunelveli, challenged an arbitrary increase in lease rent from Rs. 7050/- (fixed in 2003 for three-year leases with 15% enhancement every nine years) to Rs. 225/- per sq. ft. per month, along with a Rs. 1,00,000/- additional deposit. This increase was imposed upon the opening of 60 new shops. The petitioners were allegedly forced to execute bonds accepting this revised rent, and those who refused faced eviction orders dated 17.05.2022. Previous writ petitions and appeals challenging these evictions led to Supreme Court orders in SLP (C) Nos. 27248–27249 and 27739–27756 of 2023, which directed the respondents to refix the rent at Rs. 140/- per sq. ft., subject to the petitioners furnishing an undertaking, and prohibited dispossession. Despite this, the respondents allegedly continued to collect Rs. 225/- per sq. ft. The current petition seeks a writ of mandamus directing the first respondent to pass orders on a proposal from the second respondent dated 22.05.2025, to fix rent at Rs. 90/- per sq. ft. for old shops and Rs. 110/- per sq. ft. for new shops.

Held

The Court held that the respondents were in violation of the Supreme Court's order dated 13.12.2023 and 14.12.2023. The Supreme Court had fixed the rent at Rs. 140/- per sq. ft. based on the representation of the first respondent (Municipal Corporation). The continued demand and collection of Rs. 225/- per sq. ft. was therefore contrary to this binding order. The Court also noted that the proposal sent by the second respondent (Tirunelveli Corporation) to the first respondent (Director of Municipal Administration) recommended a reduction in rent to Rs. 90/- per sq. ft. for old shops and Rs. 110/- per sq. ft. for shops in terminal buildings and platforms. The Court allowed the writ petition, directing the respondents to refix the rent in light of the proposal dated 22.05.2025 and pass final orders within eight weeks. It was further directed that any excess rental amount collected from the petitioners between January 2022 and June 2024 should be adjusted towards future rent. The ratio decidendi is that any action by the respondents contrary to a Supreme Court order is illegal and must be rectified, and administrative proposals for rent reduction, when supported by previous judicial pronouncements, should be acted upon promptly.

Key Issues

1. Whether the respondents are in violation of the Supreme Court's order dated 13.12.2023 and 14.12.2023, which directed the rent to be refixed at Rs. 140/- per sq. ft., by continuing to demand and collect Rs. 225/- per sq. ft. from the petitioners? - Petitioner's contention: The respondents are forcibly collecting Rs. 225/- per sq. ft., contrary to the Supreme Court's order fixing the rent at Rs. 140/- per sq. ft. They rely on the Supreme Court's direction and a previous High Court judgment in W.P.(MD) No. 21972 of 2025, etc. (batch), dated 12.08.2025. - Revenue/State's contention: Not recorded. 2. Whether the proposal dated 22.05.2025 from the second respondent to the first respondent, recommending a reduction in lease rent to Rs. 90/- per sq. ft. for old shops and Rs. 110/- per sq. ft. for shops in terminal buildings and platforms, should be considered and acted upon by the first respondent? - Petitioner's contention: The first respondent has not considered the proposal, which is in violation of the Supreme Court's order. The proposal itself recommends a reduction. - Revenue/State's contention: Not recorded.