Pradeepta Mohanty v. Rourkela Development Authority
2020-02-13
KUMARI SANJU PANDA, S.K.SAHOO
body2020
DigiLaw.ai
JUDGMENT : By the Bench The appellants have filed this writ appeal challenging the impugned common order dated 11.04.2018 passed by the learned Single Judge in O.J.C. Nos. 4859 of 2000 and 4860 of 2000 as well as to quash the letters of cancellation of allotment of shop rooms dated 15.02.2019 vide Annexure-6 series issued by the Secretary, Rourkela Development Authority (Respondent no.2). 2. The respondent no.3 Santanu Hota filed O.J.C. No. 4859 of 2000 and the respondent no.4 Binod Kumar Sharma filed O.J.C. No. 4860 of 2000 praying for a direction to Rourkela Development Authority (hereafter ‘RDA’) to take urgent and immediate steps against the owners of the shop rooms situated in the ground floor of the bus terminal building at Gandhi Road, Rourkela, who were using those shop rooms as restaurants/hotels in gross violation of the terms and conditions of the licence agreement and to ensure that none of the shop owners in the ground floor of the bus terminal building use their shops for any other purpose except for which the same have been allotted. The grievance of the writ petitioners is that RDA without enforcing the terms and conditions with regard to the nature of use of the shop rooms situated at bus terminal building, Rourkela as specified in its brochure, permitted illegal establishment and operation of hotel/restaurant in the ground floor of the building, thereby causing financial loss and hardship to them. Pursuant to an advertisement, the writ petitioners applied for allotment of commercial space in the first floor of the bus terminal building, Rourkela for running a restaurant/hotel as per the terms and conditions mentioned in the brochure, wherein it was specifically mentioned that all the rooms or space in the ground floor of the bus terminal building at Rourkela would be given for use as shops and the first floor of such building to be used for commercial space and for running of two restaurants, one vegetarian and the other non-vegetarian. It is the further case of the writ petitioners that RDA issued letters of allotment in their favour intimating them regarding the provisional allotment of restaurant at Gandhi Road in the said bus terminal building.
It is the further case of the writ petitioners that RDA issued letters of allotment in their favour intimating them regarding the provisional allotment of restaurant at Gandhi Road in the said bus terminal building. The writ petitioners were asked to make a security deposit of Rs.1,00,000/-(rupees one lakh) out of which they had already deposited Rs.25,000/-(rupees twenty five thousand) as EMD and was required to pay the balance Rs.75,000/-(rupees seventy five thousand) in favour of RDA. The rent for the floor space allotted to the writ petitioners were fixed at Rs.2.75 per square feet. This allotment letters were issued in favour of the writ petitioners in the month of May 1994. The writ petitioners were required to enter into an agreement of tenancy with RDA and accordingly, the writ petitioners executed agreements of tenancy for the tenanted premises measuring 850 sq. ft. in size including dining hall, pantry and store room and the writ petitioners were required to pay a monthly rent of Rs.2,338/-only to RDA and were also required to pay Rs.14,082/-only, being the equivalent rent for six months at the time of taking delivery of possession which amount was to be retained by the RDA as additional security deposit and necessary tenancy agreement was entered into between the parties. The writ petitioners entered into possession of the tenanted premises measuring 850 sq. ft., including dining hall, pantry and store room situated in the first floor of the terminal building for running a specialized vegetarian food -cum-catering centre. The writ petitioners continued to occupy the tenanted premises and used the same as a vegetarian/ non-vegetarian restaurant in the first floor of the said building as per the master plan of the building and in terms of usage as given in the brochure issued by the RDA. The grievance of the writ petitioners is that some of the owners of the shop rooms situated in the ground floor of the building, though had been allotted the said shop rooms for specific purposes of running of different types of shops, viz. grocery, stationary etc.
The grievance of the writ petitioners is that some of the owners of the shop rooms situated in the ground floor of the building, though had been allotted the said shop rooms for specific purposes of running of different types of shops, viz. grocery, stationary etc. but they had illegally converted the said shop rooms to restaurants and started running such restaurants in the shop rooms allotted to them in the ground floor of the building causing unhealthy competition with the restaurants of the writ petitioners and putting them to serious financial loss as the writ petitioners had been specifically allotted the tenanted premises and the rent had been fixed for such premises at a higher rate of Rs.2.75 per sq. ft. and also a higher security deposit and advance rent had been made and further the writ petitioners were required to make huge investment towards furnishing and interior decoration for making it habitable restaurants. The writ petitioners raised complaints before RDA against such illegal running of restaurants in the shop rooms situated in the ground floor of the building in gross violation of the nature of use for which such shop rooms had been allotted to the shop owners and/or tenants and after repeated complaints and requests by the writ petitioners and the other restaurant owners, the Secretary, RDA (respondent no.2) ultimately issued notices to such shop owners regarding cancellation of their allotments for having used the shop rooms as restaurants, in gross violation of the terms and conditions of the agreement and against the master plan and out-lay of the terminal building as detailed in the brochure. The shop owners were directed to handover physical occupation of the shop rooms to the officers of RDA within a specified time. Against such aforesaid cancellation of the shop rooms, the shop owners who had been using such shop rooms in violation of the terms of the agreement moved this Court. The shop owner namely Smt. Manjula Nayak was granted an interim order against such cancellation of allotment in O.J.C. No.7412 of 1997 but thereafter since the said shop owner agreed to stop using her shop room as restaurant and further agreed to use the shop room according to the terms and conditions of the agreement and prayed for withdrawal of the writ application, the said writ application was disposed of as withdrawn as per order dated 05.08.1997.
After withdrawal of the writ application, the Secretary, RDA (respondent no.2) directed the shop owners to give an undertaking by way of an affidavit that they shall abide by the terms and conditions of the agreement. Accordingly, all the shop owners filed undertakings by way of affidavits before the respondent no.2. In pursuance of such undertakings, the respondent no.2 issued a letter of revocation of cancellation of allotment in favour of the said shop owners indicating therein that the shop owners were required to deposit Rs.100/-towards revocation fee and Rs.3,000/-towards legal expenses and to execute fresh agreements in respect of their shop rooms to carry on business or trade according to the terms and conditions and were also required to deposit up-to-date licence fees. Pursuant to the undertakings filed by the shop owners by way of affidavits and after the deposit of renewal fees and expenses, RDA entered into fresh licence agreement with the shop owners with specific undertaking that the shops situated in the ground floor shall not be used as restaurant/hotel and on the basis of such undertaking, the shop owners were allowed to operate and run their business and after such revocation of cancellation letter, four shop rooms bearing nos.BT/29 to BT/32 were closed but even after submitting such undertaking by way of affidavit, the other shop rooms including three new shop rooms continued to use the said shop rooms as restaurant in gross violation of the terms and conditions of the agreement. Though the agreement of the tenancy/licence agreement was entered into between RDA and the owners of shop rooms situated in the ground floor of the bus terminal building that the shop rooms are to be used for which they are meant and not for use for running restaurant/hotel, in spite of such undertakings given by the shop owners, nine numbers of shop rooms continued to use the same as restaurants in gross violation of the terms and conditions of the agreement of licence entered into between them with RDA. As the said shop rooms were not suitable for running of restaurants, the adjacent areas of such shop rooms were being made dirty on account of throwing of food packets and other residue and in spite of general complaints by the other shop owners and commercial complex, no action was taken by RDA against the shop owners.
As the said shop rooms were not suitable for running of restaurants, the adjacent areas of such shop rooms were being made dirty on account of throwing of food packets and other residue and in spite of general complaints by the other shop owners and commercial complex, no action was taken by RDA against the shop owners. After such violation by the nine shop owners, the writ petitioners again filed complaint/representation before the respondent no.2 against such violation of terms and conditions and against the loss suffered by them due to such illegal competition caused by unauthorized running of restaurant by the shop owners. In the said complaint/representation, the writ petitioners also expressed their financial inability to pay the monthly rent for their tenanted premises as their restaurants have been adversely affected because of running of cheap restaurants in the ground floor causing them irreparable financial loss and hardship. The writ petitioners requested the respondent no.2 to take immediate action to ensure that the said shop rooms are not put to unauthorized use of illegal running of restaurants and to ensure that no restaurant should run in any of the shop rooms in the ground floor of the building. Subsequently the writ petitioners repeatedly reminded and requested RDA to take immediate steps against those nine shop rooms which were causing irreparable financial loss to them but after repeated request and reminders, RDA did not take any effective steps or action against such illegal running of restaurants. The writ petitioners were served with show cause notices to give reply within seven days for alleged nonpayment of arrear licence fee amounting to Rs.44,422/-which was for the period from 4/98 to 10/99. Pursuant to the aforesaid notice, the writ petitioners submitted their show cause before the respondent no.2 stating the reasons of their inability to deposit the monthly licence fee and that they have no intention of violating the terms and conditions and are ready and willing to pay the entire fee in installments and abide by all conditions subject to the condition that their grievances and complaints which are being made consistently since 1997 are to be looked into and to take urgent steps to stop such illegal running of restaurants by the shop owners in the ground floor and also to ensure that no restaurant is run or operated in such shop rooms in the ground floor of the building. 3.
3. The learned Single Judge considering the submissions made by the respective sides, disposed of both the writ petitions as per the impugned common order observing, inter alia, that the authority had no occasion to change the mode of business involving the shop rooms allotted by virtue of advertisement Annexure-7 and having been done so at the cost of the public exchequer, the Court interfered with the action of RDA and further observed that the agreement involving the shop owners particularly the shops involved in changing the run of business would all stand invalid. It is further held that Rourkela Regional Improvement Trust or RDA in charge of the property has changed the type of business involving the shops during the pendency of the writ petition. Accordingly, interfering with the action of the Rourkela Regional Improvement Trust or RDA, the Court directed to seek applications from the allottees intending to continue in the terms and conditions as per the advertisement vide Annexure-7 within fifteen days of receipt of the copy of order. It is further observed that in the event, there is no interest shown by the shop owners to run in the manner involving the advertisement, it would be open to RDA to cancel the allotment of the shop rooms involved therein and to go for fresh advertisement in respect of the shop rooms falling vacant in the process. It is further observed that there is no necessity of giving opportunity to the persons likely to be affected pursuant to the said order. 4. Mr. Asok Mohanty, learned Senior Advocate for the appellants challenging the impugned common order dated 11.04.2018 contended that the appellants were not parties in O.J.C. Nos.4859 of 2000 and 4860 of 2000 and therefore, they had no knowledge about the pendency of those writ petitions and the learned Single Judge passed the impugned order without hearing them. The respondent no.2 vide its letter no.1703(7) dated 08.05.2018 directed the appellants to file applications as per the order of this Court to continue their business in the shop rooms as per the terms and condition pursuant to the initial advertisement. It is further submitted by Mr. Mohanty that the appellants had been allotted with some shop rooms as per the terms and conditions pursuant to the initial advertisement.
It is further submitted by Mr. Mohanty that the appellants had been allotted with some shop rooms as per the terms and conditions pursuant to the initial advertisement. He further submitted that the appellants ascertained about the order of this Court and found that the same has been passed on the basis of the submission made by the writ petitioners as well as the opposite parties therein to the effect that the allottees had changed their nature of business in violation of the terms and conditions of the advertisement without referring to the permission letter granted by the authority. Therefore, the order of the learned Single Judge is liable to be set aside as the same has been passed without following the principles of nature justice. He argued that the appellants had not changed the nature of business on their own but it was done only after the written permission of the competent authority in the year 2004. He further submitted that pursuant to the letter dated 08.05.2018, they submitted their respective replies stating therein that till date they have been doing their business smoothly and therefore, RDA should have considered this aspect. He further submitted that the respondent no.2 did not communicate anything on their replies for which the appellants remained under the impression that their replies have been accepted. It is argued that the respondent no.2 did not consider the fact that the appellants were running their respective business as per the permission granted in their favour. He brought to the notice of this Court that just before the order of cancellation, the respondent no.2 had executed an agreement with the appellant no.1. He further submitted that in the advertisement, it was specifically mentioned that in the ground floor, there will be a restaurant and other commercial space and there are eighteen numbers of shop rooms with a specification that shop rooms shall be used for the purpose of selling of variety of goods, coal drinks, snacks etc. He brought to the notice of this Court that the space specified for restaurant in the ground floor having an area of 2440 sq. ft. was partitioned by pucca wall by making fourteen shop rooms. Out of fourteen shop rooms, thirteen of shop rooms were allotted in favour of different allottees and one room was kept for the office purpose.
He brought to the notice of this Court that the space specified for restaurant in the ground floor having an area of 2440 sq. ft. was partitioned by pucca wall by making fourteen shop rooms. Out of fourteen shop rooms, thirteen of shop rooms were allotted in favour of different allottees and one room was kept for the office purpose. He further submitted that the nature of business of the allottees has been changed with due permission of the authority and the said fact was not brought to the kind notice of the learned Single Judge during hearing of the writ petitions which amount to suppression of facts. He further submitted that in consequence of the impugned order dated 11.04.2018, the respondent no.2 has acted illegally and has passed the order of cancellation of the allotment of the shop rooms without even asking for a show cause reply as directed by the learned Single Judge and therefore, the orders of cancellation of the shop rooms are also liable to be set aside. Mr. Pravakar Behera, learned counsel for the respondent No.4 supported the impugned order and contended that it is a reasonable one. He placed reliance in the case of M.S. Jayaraj -Vrs.-Commissioner of Excise, Kerala reported in A.I.R. 2000 S.C. 3266 and contended that writ petitioners have got locus standi as the authority by permitting to change the nature of business in the shop rooms of the appellants allotted by virtue of advertisement Annexure-7 caused financial loss to the writ petitioners and their business activities were hampered. Mr. D.K. Mohapatra, learned Counsel for RDA on the other hand submitted that the writ petitioners were defaulters and they were also utilizing their shops otherwise. It is further submitted that appellants changed their business after due permission and allotment of shop rooms in their favour was cancelled as per the impugned order. 5. It appears that the appellants have moved an application vide I.A. No.108 of 2020 for deletion of the name of respondent no.3 Santanu Hota from the cause list as the shop room of the said respondent was closed by RDA and this Court vide order dated 07.02.2020 disposed of the aforesaid I.A. and directed to delete the name of respondent no.3 at their risks. 6.
6. Adverting to the contentions raised by the learned counsel for the respective parties, the vital points which arise for consideration in this writ appeal are as follows:- (i) Whether the writ petitioners have got locus standi to challenge the change of nature of business activities of the appellants? (ii) When the impugned common order affected the business activities of the appellants including their livelihood, whether they were necessary parties to the writ petitions or not? 7. Coming to the first point for consideration, in the case of Jasbhai Motibhai Desai -Vrs.-Roshan Kumar reported in A.I.R. 1976 S.C. 578, it is held as follows:- “38. To distinguish such applicants from 'strangers', among them, some broad tests may be deduced from the conspectus made above. These tests are not absolute and ultimate. Their efficacy varies according to the circumstances of the case, including the statutory context in which the matter falls to be considered. These are: Whether the applicant is a person whose legal right has been infringed? Has he suffered a legal wrong or injury, in the sense, that his interest, recognised by law, has been prejudicially and directly affected by the act or omission of the authority, complained of? Is he a person who has suffered a legal grievance, a person "against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something? Has he a special and substantial grievance of his own beyond some grievance or inconvenience suffered by him in common with the rest of the public? Was he entitled to object and be heard by the authority before it took the impugned action? If so, was he prejudicially affected in the exercise of that right by the act of usurpation of jurisdiction on the part of the authority? Is the statute, in the context of which the scope of the words "person aggrieved" is being considered, a social welfare measure designed to lay down ethical or professional standards of conduct for the community? Or is it a statute dealing with private rights of particular Individuals? xxx xxx xxx xxx 46. Thus, in substance, the appellant's stand is that the setting up of a rival cinema house in the town will adversely affect his, monopolistic commercial interest, causing pecuniary harm and loss of business from competition.
Or is it a statute dealing with private rights of particular Individuals? xxx xxx xxx xxx 46. Thus, in substance, the appellant's stand is that the setting up of a rival cinema house in the town will adversely affect his, monopolistic commercial interest, causing pecuniary harm and loss of business from competition. Such harm or loss is not wrongful in the eye of law, because it does not result in injury to a legal right or a legally protected interest, the business competition causing it being a lawful activity. Juridically, harm of this description is called damnum sine injuries, the term injuria being here used in its true sense of an act contrary to law. The reason why the law suffers a person knowingly to inflict harm of this description on another, without holding him accountable for it, is that such harm done to an individual is a gain to society at large. 47. In the light of the above discussion, it is demonstrably clear that the appellant has not been denied or deprived of a legal right. He has not sustained injury to any legally protected interest. In fact, the impugned order does not operate as a decision against him, much less does it wrongfully affect his title to something. He has not been subjected to a legal wrong. He has suffered no legal grievance. He has no legal peg for a justiciable claim to hang on. Therefore he is not a 'person aggrieved' and has no locus standi to challenge the grant of the No Objection Certificate.” In the case of The Nagar Rice & Flour Mills -Vrs.-N. Teekappa Gowda reported in A.I.R. 1971 S.C. 246, it is held as follows:- “10. Section 8(3)(c) is merely regulatory: if it is not complied with the appellants may probably be exposed to a penalty, but a competitor in the business cannot seek to prevent the appellants from exercising their right to carry on business, because of the default, nor can the rice mill of the appellants be regard as a new rice mill.
Section 8(3)(c) is merely regulatory: if it is not complied with the appellants may probably be exposed to a penalty, but a competitor in the business cannot seek to prevent the appellants from exercising their right to carry on business, because of the default, nor can the rice mill of the appellants be regard as a new rice mill. Competition in the trade or business may be subject to such restrictions as are permissible and are imposed by the State by a law enacted in the interests of the general public under Article 19(6), but a person cannot claim independently of such restriction that another person shall not carry on business or trade so as to affect his trade or business adversely. The appellants complied with the statutory requirements for carrying on rice milling operations in the building on the new site. Even assuming that no previous permission was obtained, the respondents would have no locus standi for challenging the grant of the permission, because no right vested in the respondents was infringed.” In the case of M.S. Jayaraj (supra) on which reliance was placed by the learned counsel for the respondent no.4, it is held as follows:- “13. In the light of the expanded concept of the locus standi and also in view of the finding of the Division Bench of the High Court that the order of the Excise Commissioner was passed in violation of law, we do not wish to nip the motion out solely on the ground of locus standi. If the Excise Commissioner has no authority to permit a liquor shop owner to move out of the range (for which auction was held) and have his business in another range it would be improper to allow such an order to remain alive and operative on the sole ground that the person who filed the writ petition has strictly no locus standi. So we proceed to consider the contentions on merits.” The decision placed by the learned counsel for the respondent no.4 is no way helpful to him inasmuch as it is not the case of the writ petitioners that the authority lacks power to allow the change in the nature of business activities of the shop allottees like the appellants.
So we proceed to consider the contentions on merits.” The decision placed by the learned counsel for the respondent no.4 is no way helpful to him inasmuch as it is not the case of the writ petitioners that the authority lacks power to allow the change in the nature of business activities of the shop allottees like the appellants. It is a case where the appellants suffered heavy financial loss in their business for which looking into the market condition of the locality, they sought permission of the authority to change the nature of business and the authority being satisfied that permission had been sought for on genuine grounds, accorded permission and therefore, it cannot be said that any legal wrong has been committed by the authority in granting such permission. The world is changing every day, the population is changing, the customer trends are changing, the technology is changing and the economy is changing. Businesses that fail to meet the ever changing needs of the customers and fail to embrace change would lose their competitive edge and can easily wind up being unable to compete under current trading conditions. If there is business crisis, one cannot be prevented to change the nature of business and try his luck in some other business. The choice of doing a particular business which is legally permissible cannot be curtailed by any authority if one is ready and willing to comply all the legal necessities for carrying on such business. The law does not compel a person to carry on a business against his will or to deprive him of his freedom to carry on a particular business. The writ petitioners are mere business competitors and except bald assertions that they suffered financial loss due to grant of permission to the appellants to carry on similar business activities in the bus terminal building, there is nothing on record to show that they have been denied or deprived of any legal right or sustained injury to any legally protected interest or subjected to any legal wrong. Therefore, we are of the view that the writ petitioners have no locus standi to challenge the grant of permission by the authority to the appellants to change the nature of business. 8.
Therefore, we are of the view that the writ petitioners have no locus standi to challenge the grant of permission by the authority to the appellants to change the nature of business. 8. Coming to the second point, it is held in the case of Swedeshi Cotton Mills -Vrs.-Union of India reported in (1981) 1 Supreme Court Cases 664 that rules of natural justice are not embodied rules. Being means to an end and not an end in themselves, it is not possible to make an exhaustive catalogue of such rules. But there are two fundamental maxims of natural justice viz. (i) audi alteram partem and (ii) nemo judex in re sua. The audi alteram partemrule has many facets, two of them being (a) notice of the case to be met; and (b) opportunity to explain. This rule cannot be sacrificed at the altar of administrative convenience or celerity. The general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not, in terms, exclude this rule of prior hearing but contemplates a post-decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre-decisional stage. Conversely, if the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, courts will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing, shorn of all its formal trappings and dilatory features at the pre-decisional stage, unless, viewed pragmatically, it would paralyze the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. The Court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.
The Court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. There is no dispute that by passing of the impugned common order dated 11.04.2018, the appellants were affected and the authority issued letters dated 15.02.2019 cancelling the allotment of shop rooms in their favour vide Annexure-6 series and therefore, we are of the humble view that the appellants were necessary parties to the writ petitions. Neither they were made parties nor was any opportunity of hearing provided to them either during the hearing of the writ petitions or at the time of issuance of letters of cancellation of allotment of shop rooms which is per se illegal. 9. In view of the foregoing discussions, we are of the humble view that the impugned common order dated 11.04.2018 passed by the learned Single Judge in O.J.C. Nos.4859 of 2000 and O.J.C. No.4860 of 2000 is not sustainable in the eye of law and accordingly, we quash the same as well as the consequential letters issued to the appellants cancelling the allotment of shop rooms vide Annexure-6 series. In the result, the writ appeal is allowed.