Judgment K. Mohan Ram, J. 1. While W.A.No.495 of 2005 has been filed by the petitioner in W.P.No.7959 of 1997, W.A.No.1413 of 2005 has been filed by the fourth respondent in W.P.No.7959 of 1997. 2. For the sake of convenience, the parties are referred to as per their ranking in the writ petition. 3. The brief facts that are necessary for the disposal of the above writ appeals are set out below:- a. The writ petitioner was a dealer of a petrol bunk under the fourth respondent-Indian Oil Corporation (hereinafter referred to as IOC). In 1974, a lease agreement was entered between the first respondent and the fourth respondent in respect of the site over which the petitioner was running a petrol bunk and the rent was fixed at Rs.694/- p.a. Initially, the land was leased to IOC., for a period of five years and thereafter, the lease period was extended for another five years and the lease period expired on 312. 1984. On the expiry of lease on 312. 1984, the fourth respondent sought for renewal of lease by making an application to the respondents 1 and 2. Though the second respondent had recommended the renewal of lease, the lease was not extended. In a letter dated 12. 1993, the second respondent informed the fourth respondent that from 1988 onwards the land over which the petrol bunk stands belongs to the Highways Department, who is the competent authority to grant renewal of lease. Accordingly, the fourth respondent sent an application seeking for renewal, but no order has been passed. b. While so, on 20.12.1994, the second respondent based on the audit report passed an order directing the fourth respondent-IOC., and the writ petitioner to pay a sum of Rs.1,36,579/- which was the rent for the period from 1. 1985 to 312. 1994. Objections were raised by the writ petitioner. But without considering the same, the first respondent passed an order, dated 5. 1997 directing the petitioner and the fourth respondent to pay a sum of Rs.1,65,289/- within a period of one week, failing which recovery proceedings will be initiated under the Revenue Recovery Act. Since the demand was not complied with, the second respondent passed the impugned order, dated 15. 1997, which was challenged in the writ petition. 4. 1997 directing the petitioner and the fourth respondent to pay a sum of Rs.1,65,289/- within a period of one week, failing which recovery proceedings will be initiated under the Revenue Recovery Act. Since the demand was not complied with, the second respondent passed the impugned order, dated 15. 1997, which was challenged in the writ petition. 4. The contention of the writ petitioner before the learned Single Judge was that the principles of natural justice have been violated because the rents have been unilaterally fixed by the respondents 1 and 2 without hearing the writ petitioner and the fourth respondent; the representations of the writ petitioner and the fourth respondent have not been considered at all; the respondents 1 and 2 have no jurisdiction to fix the rent since even according to the second respondent, from 1988 the power of giving lease has been delegated to the Highways Department. 5. It was further contended before the learned Single Judge that merely on the basis of the audit report, the respondents 1 and 2 cannot enhance the rent. Before the learned Single Judge, the writ petitioner also contended that they have shifted their premises in the year 1994 itself and therefore, the demand made by the second respondent for the subsequent period is not sustainable. The Contentions of the Writ Petitioner and the fourth respondent are identical. 6. On behalf of the respondents 1 to 3, it was contended before the learned Single Judge that upto September 2004, the arrears of rent accumulated to the tune of Rs.7,24,526/- since the petitioner had not handed over the vacant possession of the land to the respondents. It was contended that the Corporation was occupying an extent of 1608 sq.ft. more than the permitted extent of land. It was further contended that steps were taken to renew the lease after fixing the rent based on the market value of the land with reference to the sales took place within the vicinity. 7. It was contended before the learned Single Judge that the fourth respondent had not handed over the possession of the land and they still continued to be in possession. 7. It was contended before the learned Single Judge that the fourth respondent had not handed over the possession of the land and they still continued to be in possession. It was further contended that necessary information was furnished to the IOC., and since the IOC., alone is the lessee and there is no privity of contract between the writ petitioner and the respondents 1 to 3 and as the writ petitioner is a dealer only under the IOC., there is no legal obligation on the part of these respondents to give information to the writ petitioner. It was further contended that there is absolutely no violation of principles of natural justice as required opportunity was given to the fourth respondent. 8. On a consideration of the submissions made by the respective parties, the learned Single Judge did not accept the contentions put forth by the writ petitioner and the fourth respondent and held that IOC-fourth respondent had not surrendered possession of the leased land and they continued to be in possession of the same and as such they are liable to pay the arrears of lease rent upto date. 9. Heard both. 10. Mr. D. Krishna Kumar, learned counsel for the appellant/writ petitioner submitted that merely on the basis of the audit report lease amount cannot be enhanced without affording reasonable opportunity of hearing to the writ petitioner as well as the fourth respondent-IOC. The learned counsel drawing our attention to the letter dated 15. 1997 addressed by the IOC to the District Collector, Periyar District at Erode, pointed out that in the said letter it has been categorically informed that from January 1995 onwards, the Corporation was not utilizing the land and the Collector was requested to arrange to take possession of the site from them. 11. The learned counsel further submitted that when the corporation had volunteered to surrender possession and since the respondents 1 to 3 had failed to take possession, the fourth respondent cannot be faulted with. Having failed to take possession in 1995, it is not open to the respondents 1 to 3 to demand arrears of rent for the period after 1995. The learned counsel further submitted that when the corporation had volunteered to surrender possession and since the respondents 1 to 3 had failed to take possession, the fourth respondent cannot be faulted with. Having failed to take possession in 1995, it is not open to the respondents 1 to 3 to demand arrears of rent for the period after 1995. The learned counsel submitted that the learned Single Judge has failed to advert to the aforesaid communication of the IOC and had the learned Single Judge considered the offer of the IOC to surrender possession, direction given under Clause (iii) in the order passed in the said writ petition would not have been given. 12. The learned counsel further submitted that admittedly, on 12. 1985, the IOC paid a sum of Rs.40,000/- and after the disposal of the writ petition, i.e., on 3. 2005 a sum of Rs.1,65,289/- has been paid and as such the entire amount demanded had been paid. The learned counsel further submitted that while dismissing the writ petition the direction given by the learned Single Judge giving liberty to the respondents to collect the arrears of lease rent upto date from the petitioner and the fourth respondent is unsustainable. 13. The learned counsel further submitted that it is not open to the State to enhance the lease amount simply based on the rise in the market value of the land. In support of the said contention, the learned counsel based reliance on the decision of the Apex Court reported in (2004) 3 SCC 214 (Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai and Another). In the said decision, in paragraph 17, it has been observed that "the State Government in order to justify a steep increase in rent, cannot plead exploitative increases in prices of land." 14. The said contention of the writ petitioner was adopted by the learned counsel appearing for the IOC. 15. Countering the said submissions, the learned Special Govt. Pleader submitted that after the expiry of the lease by the end of 1984, the lease was not renewed, but yet the lessee, namely, IOC., continued to be in occupation of the land leased out to them and as such, they are liable to pay damages. 15. Countering the said submissions, the learned Special Govt. Pleader submitted that after the expiry of the lease by the end of 1984, the lease was not renewed, but yet the lessee, namely, IOC., continued to be in occupation of the land leased out to them and as such, they are liable to pay damages. For arriving at the amount payable by the IOC, the market value of the land was taken into consideration and on that basis, the rent was revised. Enough opportunity was afforded to the IOC and they made representations, which were considered but the same were not accepted by the respondents 1 to 3. Therefore, it cannot be said that no opportunity was given to the IOC. Since the lease agreement was entered between the IOC and the State, the writ petitioner cannot be heard to say that he was not given an opportunity and the liability to pay the rent rests with the IOC and not with the writ petitioner, who may be a dealer under the IOC and ultimately, he might have to pay the rent to the IOC and it does not mean that the petitioner should have been heard by the respondents 1 to 3. 16. The learned Special Govt. Pleader further submitted that if the lessee had no intention to continue to occupy the leasehold land, he ought to have voluntarily surrendered the possession of the land but in this case, the IOC had not surrendered possession and as such they are liable to pay the enhanced rent. The learned Special Govt. Pleader submitted that there is absolutely no violation of principles of natural justice. 17. We have carefully considered the submissions made on either side and perused the materials available on record. 18. As rightly contended by the learned Special Govt. Pleader the lease agreement was entered between the IOC and the first respondent and the writ petitioner is not a party to the lease agreement and as such the writ petitioner cannot be heard to say that he was not given an opportunity. Since there is no privity of contract between the writ petitioner and the respondents 1 to 3, it is not incumbent on the respondents 1 to 3 to put the writ petitioner on notice or provide an opportunity of hearing to him before enhancing the lease amount. Since there is no privity of contract between the writ petitioner and the respondents 1 to 3, it is not incumbent on the respondents 1 to 3 to put the writ petitioner on notice or provide an opportunity of hearing to him before enhancing the lease amount. Notices have been served on the IOC and in turn the IOC had made representations seeking for reduction in the enhanced rent, but such requests after being considered, were not accepted but rejected. 19. The learned Single Judge has also found that an opportunity of being heard was afforded to the IOC and there is no violation of principles of natural justice. The facts narrated above, makes it abundantly clear that the lease was renewed only upto the end of 1994 and thereafter, it was not renewed. So, from 1995, the possession of the land in question by the IOC could not be that of a leaseholder but only an unauthorized occupant and as such the Corporation is liable to pay the damages for use and occupation and while quantifying the damages to be paid, if we consider the method to be adopted for determining the quantum of damages, then we cannot find fault with the method adopted by the respondents 1 to 3. The market value of the land in the vicinity has been taken into consideration for arriving at the amount. Though it has not been stated by the respondents 1 to 3 in the counter that the possession of the IOC from 1995 is not that of a leaseholder, but in fact, it is an unauthorized occupation. If it is held so, then the method adopted by the respondents 1 to 3 for arriving at the aforesaid amount cannot be said to be either unreasonable or unjust. Therefore, we do not see any infirmity or illegality in the demand raised by the second respondent and therefore, we are unable to accept the contentions put forth by the learned counsel for the writ petitioner as well as the fourth respondent. However, as far as the question of handing over/surrender of possession of the leasehold land is concerned, the letter, dated 15. However, as far as the question of handing over/surrender of possession of the leasehold land is concerned, the letter, dated 15. 1997 addressed by the IOC to the District Collector, Periyar District, Erode, makes it abundantly clear that since January 1995 they have not been utilizing the site and they volunteered to surrender possession from 1995 onwards but in spite of the said offer to surrender, since the respondents 1 to 3 had not taken possession, they cannot be permitted, later, to turn around and say that the possession was not surrendered. Since the IOC was threatened with the eviction, they volunteered to surrender possession and the respondents ought to have taken possession and therefore, the finding of the learned Single Judge that the possession had not been handed over till date cannot be sustained. When the aforesaid letter was shown to the Special Govt. Pleader, he is unable to repel the contentions put forth by the learned counsel for the writ petitioner as well as fourth respondent based on this letter. 20. In view of the aforesaid offer to surrender possession made by the IOC even in 1997, they are not liable to pay any amount towards the damages/rent on and after 15. 1997 and in such view of the matter, direction under Clause (iii) of the order passed in W.P.No.7959 of 1997, namely, "the respondents 1 and 2 herein are at liberty to collect the arrears of lease rent up-to-date from the petitioner and the fourth respondent" alone is deleted and in other respects the order of the learned Single Judge is confirmed. Accordingly, the Writ Appeal is partly allowed. No costs. Connected W.A.M.P. is closed.