National Textile Corporation Limited vs. The Commissioner

Facts

The National Textile Corporation Limited (Petitioner) filed multiple writ petitions challenging orders passed by various authorities of the Tamil Nadu Hindu Religious and Charitable Endowment Department (Respondents) concerning the enhancement of rent for a property leased from Arulmigu Menakshi Sundareswarar Temple. The Petitioner, a Central Government undertaking, has been a tenant since 1980. The core dispute revolves around the retrospective enhancement of rent by the Respondents, commencing from 2001, which the Petitioner contested. The Respondents, citing G.O.Ms.No.456 and other government orders, fixed fair rent based on market value. The Petitioner argued that the retrospective rent increases were illegal and violated natural justice. The Respondents contended that the Petitioner failed to file proper appeals against the Fair Rent Committee's orders. The litigation has been ongoing for several years, with various interim orders and representations.

Held

The Court held that the Respondents do not have the power to fix rent retrospectively. This finding is based on the principle that lease rent cannot be enhanced retrospectively, a position that the Respondents themselves had fairly admitted in a previous judgment. The Court also noted that the Act was amended in 2003, and a policy decision was taken to reduce the rent hike percentage. Therefore, any revision of rent ought to have been fixed from the date of passing G.O.Ms.No.456 dated 09.11.2007. Regarding the procedural lapses, the Court observed that there were lapses on both sides: the Petitioner should have demanded the Fair Rent Committee's order to file an appeal, and the Respondents should have issued the order copy with the lawyer's notice or directed the Petitioner to file an appeal after receiving the reply. However, to put an end to the prolonged litigation between a Central Government entity and a temple, the Court decided to pass directions without relegating the case. The Court directed that the revision of rent should be fixed from 14.08.2009, the date the Respondents issued a communication stating it as "Fair Rent Fixation order." The Respondents were ordered to revise the rent from Rs.4000/- and re-calculate it from 01.07.2009 to 30.06.2012, and thereafter increase it by 15% every three years. The Petitioner was allowed to continue in the premises, and a rental agreement was to be executed based on these directions. Any amounts already paid were to be adjusted, and the Petitioner was directed to pay the revised rent without default. These directions were to be completed within six weeks.

Key Issues

1. Whether the Respondents have the power to fix rent retrospectively under the Tamil Nadu Hindu Religious and Charitable Endowment Act, 1959, and relevant Government Orders, specifically G.O.Ms.No.456 dated 09.11.2007? (Question of law). 2. Whether the Petitioner's objections and representations, particularly the reply dated 07.05.2012, constitute a valid challenge to the Fair Rent Committee's order, even if not filed in the prescribed appeal format? (Question of mixed law and fact). Petitioner's arguments: The Petitioner argued that the Respondents' action of increasing rent retrospectively from 2001 onwards is illegal and impermissible under law, citing previous judgments of the High Court. They contended that the policy decision to reduce rent hike percentages should apply from the date of G.O.Ms.No.456. They also argued that their objections were validly raised and should have been considered. They relied on a previous judgment of the High Court in W.P.(MD) No.10167 of 2014. Respondents' arguments: The Respondents argued that the Petitioner did not file a proper appeal under Section 34-A(3) of the Act and that the reply dated 07.05.2012 cannot be considered an appeal as it was not in the prescribed format under the "Application and Appeals Rules" framed under Section 116(2)(ii) of the Act. They stated that the Petitioner had accepted the revision of rent on 22.04.2013 and did not comply with interim orders to pay arrears.