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2021 DIGILAW 33 (JK)

Abdul Salam Nath v. Union of India

2021-02-24

SANJAY DHAR

body2021
Judgment Sanjay Dhar, J.—Petitioners have challenged tender notice dated 30th of October, 2016, whereby respondent No.3 has invited tenders from contractors to run shops/services at Air Force Station, Srinagar. The petitioners have also challenged the policy dated 12.08.1988 framed by respondents for retendering of these shops/services. A further direction has been sought by the petitioners upon respondents to permit them to conduct the business in their respective shops without any interference with a direction that the respondents be restrained from charging any enhanced rent and that no further tender notice in respect of those shops should be issued. 2. The case of the petitioner is that they have been allotted various shops at Air Force Station by the respondents after they had participated in the tendering process. According to the petitioners, they are running their business from these shops for years together and some of them even since 1980’s and that they are regularly paying rent to the respondents in terms of conditions of agreement. The petitioners have placed on record copies of some of the agreements executed by them with the respondents as also some rent receipts. According to the petitioners, although they happen to be the tenants of the respondents, yet the respondents issue tender notices after every four years but in terms of the policy in vogue, the petitioners, as tenants, are given preference and they are being permitted to continue their tenancy in respect of these shops on payment of higher rent. 3. It is averred that in the year 2016, respondents issued a tender notice that was published in Daily Greater Kashmir on 29.08.2016, whereby tenders were invited for running 41 shops/services as mentioned in the said tender notice for one year i.e. from 1st of October, 2016 to 30th of September, 2017. The tenders were to be opened on 08.09.2016. The petitioners are stated to have responded to this tender notice. According to the petitioners, when the tenders were opened on 08.09.2016, they were found successful as per the terms and conditions of the policy in vogue and they were informed that after opening of the tenders, they will continue to remain in possession of the shops. Thus, the petitioners invested more money in their business on the representation of the respondents. 4. Thus, the petitioners invested more money in their business on the representation of the respondents. 4. It is averred by the petitioners that they were given to understand that their rent will be hiked by 10% to which the petitioners agreed but when they approached the respondents for deposition of the rent, the same was refused by the respondents on the ground that the matter is under consideration of the higher authorities. 5. It is the case of the petitioners that the respondents, with a mala fide intention and in order to favour some blue eyed persons, have issued the impugned tender notice thereby inviting tenders for the shops/services that they are under the occupation of the petitioners. 6. The petitioners have challenged the action of the respondents on the ground that they have a relationship of tenant and landlord with the respondents, as such, the respondents cannot invite tenders for these shops/ services without terminating tenancy of the petitioners in accordance with law; that the action of the respondents is arbitrary and discriminatory, inasmuch as no such practice of periodical tendering is being resorted to by other similar departments like Army; that the respondents are estopped from issuing tender notice after extending promise to the petitioners that their contracts will be extended subject to hike of 10% rent; that the impugned policy of the respondents where under periodical re-tendering of the shops and services is being undertaken by them is violative of doctrine of promissory estoppel and legitimate expectation; that the impugned tender notice is a result of mala fides so as to evict the petitioners and to adjust blue eyed persons of the respondents. 7. The respondents have resisted the petition by filing reply thereto. In their reply, it has been claimed by the respondents that the shops in question were allotted to the petitioners for a specific period of time on licence basis and after expiry of period of licence, they have no right to retain these shops. 7. The respondents have resisted the petition by filing reply thereto. In their reply, it has been claimed by the respondents that the shops in question were allotted to the petitioners for a specific period of time on licence basis and after expiry of period of licence, they have no right to retain these shops. It is submitted by respondents that the agreement of petitioners expired on 30th of September, 2016 and, accordingly, tenders were invited from general public after expiry of 4½ years in terms of policy on the subject and the same was published in a local newspaper on 29th of August, 2016, inviting sealed tenders for various shops/services for a period of one year from 1st of October, 2016 to 30th of September, 2017. The last date for submission of tenders was fixed as 8th of September, 2016, and at the time of opening of tenders on 08.09.2016 certain irregularities were observed by the Board of Officers. Keeping in view the law and order situation prevailing at the relevant time, which, according to the respondents, prevented wide publicity of the tender notice coupled with the irregularities observed in the tendering process, the competent authority was prompted to go for fresh tendering and till that time, the petitioners were allowed to continue to run their business from the said shops up to 30th of November, 2016. Accordingly, the impugned tender notice came to be published on 30th of October, 2016, inviting tenders for these shops/services for a period of one year from 1st of October, 2016, to 30th of September, 2017. 8. It is averred that as soon as the tender notice was issued, the petitioners approached this Court by way of instant writ petition and an interim order came to be passed in their favour on 8th of November, 2016. It is contended by the respondents that because of this interim order, the tendering process could not be finalized and the petitioners continue to enjoy the possession of the shops in question on the strength of interim order passed by this Court, even beyond the period of agreement executed in their favour. The respondents have further contended that as per the policy governing the allotment of shops, under no circumstances a contract can be renewed after the expiry of five years of contract without calling for fresh tenders. The respondents have further contended that as per the policy governing the allotment of shops, under no circumstances a contract can be renewed after the expiry of five years of contract without calling for fresh tenders. It is claimed that even this period of five years after the execution of last agreement by the petitioners with the respondents has come to an end long time back. 9. In short, the contention of respondents is that the status of the petitioners was that of a licencee and after the expiry of their agreements, their position has been rendered as that of an unauthorized occupant and, as such, they have no right to continue in the occupation of the shops in question nor can they challenge the action of the respondents with regard to invitation of fresh tenders in accordance with the policy guiding the allotment of shops in question. 10. I have heard learned counsel for the parties and I have also gone through the written arguments and the pleadings of the parties. 11. The petitioners have based their case on the contention that their relationship with the respondents is that of a tenant whereas respondents on the other hand claim that the petitioners are only licensees in respect of the shops/properties in question. In order to determine as to whether relationship between the petitioners and the respondents is that of a tenant and landlord or that of a licencee and licensor, we need to go to the covenants of the agreement which governs the relationship between the parties. The conduct of the parties before and after the creation of this relationship is also an important factor which needs to be considered. 12. The Supreme Court in the case of C. M. Beena and another v. P. N. Ramachandra Rao, (2004) 3 SCC 595 , while drawing a distinction between “lease” and “licence” has laid down tests for determination as to whether there is a “lease” or “licence” existing between the parties. Para 8 and 9 of the judgment are relevant to the context and the same are reproduced as under: “8. The crucial issue for determination is as to whether there is a lease or licence existing between the parties. Para 8 and 9 of the judgment are relevant to the context and the same are reproduced as under: “8. The crucial issue for determination is as to whether there is a lease or licence existing between the parties. Though a deed of licence may have been executed it is open for the parties to the document to show that the relationship which was agreed upon by the parties and was really intended to be brought into existence was that of a landlord and tenant though it was outwardly styled as a deed of licence to act as a camouflage on the Rent Control Legislation. ‘Lease’ is defined in Section 105 of the Transfer of Property Act 1882 while ‘licence’ is defined in Section 52 of the Indian Easements Act 1882. Generally speaking the difference between a ‘lease’ and ‘licence’ is to be determined by finding out the real intention of the parties as decipherable from a complete reading of the document, if any, executed between the parties and the surrounding circumstances. Only a right to use the property in a particular way or under certain terms given to the occupant while the owner retains the control or possession over the premises results in a licence being created; for the owner retains legal possession while all that the licensee gets is a permission to use the premisee for a particular purpose or in a particular manner and but for the permission so given the occupation would have been unlawful (See Associated Hotels of India Ltd. v. R.N. Kapoor). The decided cases on the point are ligion. For our purpose it would suffice to refer to a recent decision of this court in Corporation of Calicut v; K Sreenivasan. 9. A few principles are well settled. User of the terms like ‘lease or ‘licence’, ‘lessor’, ‘rent’ or ‘licence fee’ are not by themselves decisive of the nature of the right created by the document. An effort should be made to find out whether the deed confers a right to possess exclusively coupled with transfer of a right to enjoy the property or what has been parted with is merely a right to use the property while the possession is retained by the owner. The conduct of the parties before and after the creation of relationship is of relevance for finding out their intention.” 13. The conduct of the parties before and after the creation of relationship is of relevance for finding out their intention.” 13. From the above ratio laid down by the Supreme Court, it is clear that for coming to a conclusion as regards the nature of relationship between the petitioners and the respondents, we need to not only go to the covenants of the agreement executed between the parties but we have also to examine the conduct of the parties. 14. The original agreements executed in favour of the petitioners have been produced by the respondents before the Court for their examination. These agreements reveal that the same are valid from 15th of November, 2012 to 30th of September, 2013, with a renewal clause for further one year or more unless terminated earlier. These agreements provide in each case, the type of business which the licencee has to conduct from the premises in question and permits the licencee to deal with only that trade and not with any other trade. The covenants further provide that the licencee has to keep sufficient stock and variety of items in the shop to cater to the requirements of the Air Force Personnel and the licencee as per the covenants of the agreement is debarred from keeping or selling any goods of the like description to those which feature in the Canteen Store Department Price List. Importantly, the agreement debars the legal representatives of the licencee from taking up the demised premises after the death of the licencee and such legal representative has only a right to remove the belongings of his predecessor-in-interest. The agreement contains a covenant whereby respondents have reserved a right to restrict the entry to the demised shops. 15. From the aforesaid covenants of the agreement, execution whereof is not disputed by the petitioners, it becomes clear that the petitioners have been given only right to use the properties in question in a particular manner and for a particular purpose. Their occupation of the shops is not heritable and their activities and business run from these shops is governed by the guidelines and the restriction imposed by the respondents in terms of the covenants of the agreement. 16. Their occupation of the shops is not heritable and their activities and business run from these shops is governed by the guidelines and the restriction imposed by the respondents in terms of the covenants of the agreement. 16. So far as conduct of the parties qua their relationship is concerned, it is not in dispute that the respondents have been inviting periodical tenders from interested persons for running business/services from these shops. Although it is the case of the petitioners that there was an understanding that after the issuance of tenders and upon participation of the petitioners therein, the respondents would renew their license subject to hike of licence fee but then the fact of the matter remains that these shops were being put to tender by the respondents from time to time and the petitioners used to participate in tendering process. 17. From the covenants of the agreements executed between the parties as well as from the conduct of the parties qua their relationship, as discussed hereinbefore, one comes to an irresistible conclusion that the relationship between the parties was that of a licensee and licensor and not that of a landlord and tenant. 18. Having held as above, it is an admitted case of the parties that the licence agreement between the petitioners and respondents has since expired and the petitioners are enjoying the possession of the premises only on the basis of interim order passed by this Court. Once the period of licence in favour of a licensee comes to an end, the possession of the licensee becomes that of an unauthorized occupant and the same cannot be protected by any court of law. 19. So far as the contention of the petitioners that after the issuance of tender notice in September, 2016, they emerged as successful tenderers and they were given to understand that their agreements will be renewed subject to hike of 10% in rent, is concerned, the same has been categorically denied by the respondents in their reply. The respondents have taken a stand that there were some irregularities in the tendering process and that due to unfavourable law and order situation prevailing in Srinagar at that point of time, wide publicity could not be given to the tender notice, as such, they decided to resort to retendering and the petitioners were permitted to continue their business till November, 2016. 20. 20. Since the petitioners have not placed anything on record to even remotely suggest that they had succeeded in the tendering process undertaken in the September 2016 and that they were promised by the respondents with regard to renewal of their agreement(s). The respondents have vehemently denied this assertion, thereby giving rise to a disputed question of fact, which the Court cannot decide in these proceedings. Thus, without proof of foundational facts for attraction of doctrine of promissory estoppel, the same cannot be invoked in favour of the petitioners in the facts and circumstances of the case. 21. So far as the challenge to the policy under which the respondents have allotted shops to the petitioners, particularly with regard to the covenants of the policy which made, it is obligatory upon the respondents to retender the allotment of shops after every five years, is concerned, the same is without any basis. The petitioners cannot challenge a policy under which they have been allotted the shops. The property, which has been allotted to the petitioners, belongs to the respondents and they are well within their right to adopt any lawful process of allotment of these shops which leads to earning maximum commercial benefits for themselves or in a manner beneficial to the welfare of the Air Force Personnel, for whose benefit the respondents are supposed to utilize the usufruct of these shops. The only restriction or guideline which the respondents are required to follow, being a public authority, is that they have to resort to fair and reasonable process while making allotment of these shops. The fact that the respondents are resorting to periodical tendering of these shops shows that they have been adhering to the principles of fair play and reasonableness. 22. Although the petitioners have leveled allegations of mala fides against the respondents’ action of retendering of shops yet no specific instances have been spelled out by the petitioners to show that such action of the respondents has resulted in any favouritism. In fact, as per the petitioners’ own case, they have been participating in the tendering process from time to time and upon their emergence as successful tenderers, agreements have been renewed in their favour from time to time. Even under the impugned tender notice, the petitioners have not been barred from participation and they were free to participate in the said tendering process. Even under the impugned tender notice, the petitioners have not been barred from participation and they were free to participate in the said tendering process. Thus the petitioners have not been discriminated in any manner by issuance of the impugned tender notice. 23. For the foregoing reasons, I do not find any merit in this writ petition and the same is, accordingly, dismissed. Interim order, if any, shall cease to be in operation. 24. The record be returned to the learned counsel for respondents.