EXCLUSIVE MOTORS PVT. LTD. Vs. ITDC AND ORS.

JUDGEMENT

(1.) BRIEF facts which have given rise to filing of the present petition are that respondent owns and runs a hotel under the name and style of Ashok. In the year 2003 petitioner was in need of a premises, for carrying on its business for retailing of luxury Cars and other related goods. Pursuant to negotiations between the parties, petitioner accepted the offer of the respondents vide letter dated 27.1.2004. Peaceful possession of an area measuring 3013.49 sq. ft. located adjacent to out gate, forming part of Ashok Hotel, was handed over to the petitioner for running the office/show -room on 8.4.2003.

(2.) A licence deed was executed between the parties on 8.4.2003 initially for a period of three years commencing from 8.4.2003 and expiring on 7.4.2006. The document provided that the licence was renewable with the enhanced licence fee @11% of the last paid fee. It is the case of the petitioner that although the documents were styled as licence deed, however, the nature of transaction entered into between the parties was in fact a lease created by the respondent in favour of the petitioner. The petitioner was in independent occupation of the premises and also had free and uninterrupted use. It is stated that the premises are not in the shopping arcade of the hotel, but an independent show -room near the parking at the convention hall entrance of the hotel and only a bare structure without any paint or fixtures were handed over to the petitioner, who carried out substantial renovations, including flooring, false ceiling, air conditioning, erection of walls, development, greening and landscaping of the common area, erection of toilet and a pantry etc. The petitioner is stated to be running his show -room since the year 2003 onwards.

(3.) PETITIONER was thereafter served with a letter dated 14.9.2006. Vide this letter respondents not only proposed to terminate the licence agreement executed by them in favour of the petitioner in regard to the premises in question, but also required the petitioner to hand over peaceful and vacant possession of the same to respondents. It is submitted that the action on the part of the respondent was absolutely arbitrary, mala fide, illegal and highhanded. It is contended that there was no occasion for the respondent to issue the letter after having entered into an agreement with the petitioner for a period of two years starting w.e.f. 8.4.2006 ending on 7.4.2008. The respondents could not have cancelled the licence deed after giving three months notice, as the clause of three months notice could not have been exercised unreasonably and without any cause. It is contended that the licence was for a fixed period of two years and could not have been terminated before the stipulated time besides the petitioner was permitted to carry out additions and alterations in the premises in the month of May, 2006 which renovation could only be completed by the month of August, 2006 and the petitioner spent a huge amount on renovation besides paying licence fee. Thus the action of the respondent of issuing the letter was mala fide. It is also stated that the respondents being a State owned agency was required to act reasonably while dealing with the public at large. It is submitted that once after having taken a considered decision to renew the licence in its meeting held on 29.3.2006, there was no reason to terminate the said licence in the month of September, 2006 as there was no change in the circumstances neither there was any breach of any terms of the agreement. Counsel further submits that the intention of the respondent was to increase the licence fee and black -mail and pressurize the petitioner to agree to their illegal demands. Such notices were issued to other shop keepers and business being run in the premises of the same hotel. Reply to the letter was sent on 6.11.2006 stating that the impugned action of termination of licence on the part of the respondent was totally unjustified, unfair and illegal. It was also brought to the notice of the respondent that there was no violation of any of the terms of the agreement and thus the respondent should withdraw the impugned termination. In order to protect the possession, the petitioner was constrained to challenge the letter and communication dated 14.9.2006 by filing a civil suit being CS(OS)No.2308/2006 titled Exclusive Motors Pvt. Ltd. v. ITDC and Anr. The matter came up for hearing before the High Court on 14.12.2006. While issuing summons, this Court had directed that till the next date of hearing, letter dated 14.9.2006 issued by defendant be not given effect. The petitioner thereafter withdrew the aforesaid suit on 7.4.2008. Relevant portion of the order reads as under: