K. S. AMMINI Vs. KSRTC

JUDGEMENT

(1.) The petitioners in these two original petitions are in occupation of shop rooms at the premises of the Kerala State Road Transport Corporation in Kottarakkara. These shop rooms were given to the petitioners in 1970 for doing business and the petitioners have been conducting trade ever since that date. The petitioners have executed a deed of licence in favour of the first respondent Corporation. There had been periodical increase in the rate of licence fee. A provision also has been incorporated in the agreement to the effect that before the expiry of the term of licence, the licensee would be entitled to exercise option to extent the period of contract on condition laid down by the Corporation regarding the enhancement of rate of licence fee. These terms are incorporated in Clause.22 of the agreement. It is further stated in Clause.22 that if the contract is not renewed it will cease to exist and the licensee should stop the business on the expiry of the existing term. According to these petitioners, they exercised their option and exercised their willingness to continue to do business in the shop room. But the Corporation rejected those options and proceeded to give these shop rooms to others by inviting tender. Therefore, the petitioners seek to quash the proceedings leading to the calling of tenders. In the original petition No. 9786 of 1993 the petitioners have sought for quashing Ext. P11 order passed by the first respondent rejecting the option exercised by the petitioners. In O. P. No. 9791 of 1993, the petitioners have prayed for quashing the order rejecting the order rejecting the option and also to set aside the notification ordered under S.25(1) of Act 2 of 1965 whereby the buildings owned by K. S. R. T. C. are exempted from the provisions of the said Act. It is also prayed that the petitioners may be allowed to remain in possession for a further period of 3 years from 1-1-94.

(2.) I heard the petitioners' counsel in the original petitions and also the Standing Counsel for the Corporation. These petitioners filed two other original petitions on an earlier occasion. In those two original petitions, they contended that Clause.22 of the agreement was not being implemented by the first respondent Corporation and that the petitioners were not allowed to exercise option. The Corporation contended therein that Clause.22 of the agreement was deleted and therefore the petitioners were not entitled to exercise the option under the clause. This Court did not approve the unilateral deletion of Clause.22 of the agreement as legal and the Corporation was directed to consider the option exercised by these petitioners. As the last date for acceptance of tender was fixed as 24-7-93 the respondent corporation was directed to consider the option exercised by those petitioners before that date. Thereafter, the Managing Director of the Corporation passed orders and Exts. P5 and P11 are the orders passed in this regard. Exts. P11 and P5 are challenged in these original petitions.

(3.) The counsel for the petitioners urged several grounds against the order passed by the Managing Director of the Corporation. Shri T. R. Govinda Warriyar contended that the petitioners even though styled as licensees, are in fact lessees and they are entitled to continue in possession of these shop rooms for a further period of 3 years on the basis of Clause.22 of the agreement. It is further pointed out that Clause.22 gives a valuable right to the petitioners to exercise option and the Corporation was not entitled to reject that offer in an arbitrary manner violating the principles of natural justice. According to the learned counsel by the impugned order petitioners are allowed to be in possession only if they pay the rate of fees offered by the highest tenderer. This according to the petitioners' counsel is highly unreasonable and the petitioners would be subjected to the liability of payment of unconscionable rent. It is also contended that there may be false tenderers who may boost up the rate of licence fee without there being a liability on their part to defeat the claims of the petitioners. I am unable to accept this contention. The Corporation has invited sealed tenders and. the counsel for the Corporation contended that in some cases the rate of rent has increased 400 times when the shop rooms were given on the basis of inviting tenders. It is pointed out that a public Corporation like K. S. R. T. C. cannot afford to incur loss on that account, It may be noticed that the Supreme Court in R. D. Shetty v. International Airport Authority ( 1979 (3) SCC 489 ) held: