P.Mohanraj vs. The Secretary

Facts

The petitioner, P. Mohanraj, was the successful bidder for the lease of a weekly market operated by the Nilakottai Selection Grade Town Panchayat (fourth respondent) for the period from March 21, 2020, to July 14, 2020. He paid a bid amount of Rs. 46,13,000/- plus 18% GST. Due to the COVID-19 lockdown, he was unable to collect entry fees for 17 weeks within this lease period. He made representations to the fourth respondent seeking a refund of the proportionate lease amount and GST for the uncollected period. However, before his representation was considered, the fourth respondent issued an auction notification dated November 16, 2020, for a fresh lease period from December 5, 2020, to December 4, 2021. The petitioner challenged this notification and sought an extension of his lease for the uncollected 17 weeks.

Held

The Court held that the petitioner's prayer to extend the lease period for the uncollected 17 weeks and to quash the fresh auction notification could not be granted. The Court reasoned that the petitioner's lease period had already expired on July 14, 2020, and he could not stall a fresh auction for a future period based on losses incurred during the existing lease. The Court found that the petitioner's own case was that the market was closed from March 21, 2020, to July 14, 2020, and he had sought a refund for this period. Following the precedent set in S. Paulraj Vs. The Commissioner / Special Officer, Kovilpatti Municipality, Thoothukudi District, the Court held that the only remedy available to the petitioner was to seek a refund of the proportionate lease amount and proportionate GST for the period he was unable to collect entry fees due to the lockdown. The Court directed the fourth respondent to consider the petitioner's representation dated July 13, 2020, seeking a refund of the proportionate lease amount and proportionate GST, and pass final orders on merits within eight weeks.

Key Issues

1. Whether the petitioner is entitled to an extension of the lease period for the weekly market for the 17 weeks during which he could not collect entry fees due to the COVID-19 lockdown, thereby challenging the auction notification issued by the fourth respondent for a fresh lease period? (Question of law and fact, turning on principles of contract, force majeure, and administrative action). Petitioner's arguments: The petitioner contended that he paid the bid amount and GST for the entire lease period and was prevented from collecting fees due to the lockdown. He argued that the fourth respondent should have considered his representation for a refund or extension before issuing a fresh auction notification. He relied on his inability to collect fees and the unconsidered representations. Respondents' arguments: The respondents argued that the petitioner's prayer to extend the lease for the uncollected period and quash the fresh auction notification could not be granted. They contended that the petitioner's only remedy was to seek a refund of the proportionate lease amount for the lockdown period, as he himself had sought in his representations. They cited a similar case, S. Paulraj Vs. The Commissioner / Special Officer, Kovilpatti Municipality, Thoothukudi District, where a similar prayer was rejected.