Annai Therasa Matriculation School vs. Madurai Corporation

Facts

The petitioner, Annai Therasa Matriculation School, represented by its Correspondent, filed a writ petition challenging an order dated 11.08.2025 from the Madurai Corporation. This order directed the petitioner to deposit arrears of rent and GST from 01.08.2019 to 01.08.2025, totaling Rs. 2,15,15,889/-. This was the second round of litigation; previously, the petitioner had challenged a rent enhancement from Rs. 8,034/- to Rs. 2,13,312/- per month. In the prior writ petition (W.P.(MD) No.9825 of 2024), the Court directed the petitioner to pay Rs. 50,00,000/- as partial rent and make a fresh representation regarding rent fixation. The current petition argues the rent increase is exorbitant for an educational institution and that a portion of the leased property is unused.

Held

The Court held that the principle of constructive res judicata applies to the petitioner's request for rent reduction, as their request for a 15% increase over the last rent paid was considered in the previous writ petition (W.P.(MD) No.9825 of 2024) without a specific direction for reconsideration. Regarding the applicability of G.O.Ms.No.92, the Court acknowledged that while the petitioner provides education, it collects fees, and the school is run by a trust. However, the Court found that any property tax exemption for the trust would be irrelevant as the property is leased, not owned by the trust. The Court emphasized that the respondent Corporation, as a local body, is obliged to generate revenue through leasing its properties. The Court found the petitioner's request for rent reduction at this stage untenable due to the significant delay in challenging the rent enhancement, which was decided in 2016 but challenged only in 2024. Consequently, the Writ Petition was dismissed. However, considering the ongoing academic year, the respondents were directed to consider the petitioner's request for concessional rent only until the end of the academic year 2025-2026.

Key Issues

1. Whether the principles applicable to commercial establishments for rent fixation under G.O.Ms.No.92 of the Municipal Administration and Water Supply Department, dated 03.07.2007, can be applied to an educational institution like the petitioner's school? 2. Whether the petitioner's challenge to the rent enhancement is barred by constructive res judicata, given the previous writ petition and the delay in challenging the enhancement? Petitioner's arguments: The petitioner contended that the rent enhancement from Rs. 6,075/- (fixed in 2007) to Rs. 2,13,312/- per month is exorbitant and threatens the school's existence, especially as it caters to only 203 students and 70 faculty. They argued that the principles for commercial establishments should not apply to educational institutions, and the rent should have been revised periodically with a 15% escalation. They also highlighted that 4,000 sq.ft. of the leased 10,000 sq.ft. property is unused. Respondents' arguments: The respondents argued that the property is in a prime location, the petitioner collects substantial fees and earns profits, and therefore, no interference is warranted. They further contended that the decision to enhance rent was made in 2016, but the petitioner challenged it belatedly in 2024, after significant arrears accumulated. The respondents also noted that the lease extension was granted based on the enhanced rent.