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Union of India v. M/s Bharat Oil Co. & another - WRIT - A No. 726 of 1998 [2005] RD-AH 7722 (16 December 2005)


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Union of India Vs. M/s Bharat Oil Co. & another

Connected With


Union of India Vs. M/s Dharam Pal & Co. & another


Hon'ble D.P. Singh, J.

Heard learned counsel for the parties.

The petitioner, Railway Administration had given on licence its land measuring 5625 square feet to the respondent Firm on the basis of an agreement dated 27.9.1966 on a licence fee of Rs. 750/- per annum. This licence fee was enhanced from time to time and in spite of demand it was not paid, forcing the respondent to terminate the licence in April, 1988. In spite of termination of the licence, the respondent Firm did not vacate the property thus the petitioner had to initiate proceedings for eviction and realization of the balance licence money under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971. The Firm contested the case but the Estate Officer allowed the claim of the petitioner vide order dated 30.7.1993 directing the Firm to vacate the premises within 15 days and further directed it to pay the balance licence fee together with damages. Aggrieved the respondent preferred an appeal, which was heard by Shri M.A. Khan, the then Special Judge, Muzaffarnagar, who partly allowed the appeal with a direction to the appellant to pay licence fee at Rs. 1875/- per annum plus 10% increase and further directed vacation of the premises within three months vide the impugned order dated 19.9.1997.

Learned counsel for the petitioner has urged that the appellate court erred in law in holding that the increase in licence fee was not fair or based on any rational criteria, in spite of the fact that the criteria was fixed by the Railway Administration through its policy decisions dated 21.5.1982, 23.9.1985 and 21.10.1985, which were based on nature of the land, its market value etc. All these documents were on record and the appellate court did not at all advert itself to it. He has also urged that the respondent himself never opposed the increase in the licence fee.

A copy of the agreement has been filed along with this petition. Clause 10, which has also been noted by the appellate court  reads as under:-

"The monthly occupation fee for any such land or accommodation shall be computed from the date of handing over the plot to the Licensees and shall be at the rate prevailing at the time of allotment thereof, together with a further fee calculated at the rate of ten percent per annum on the cost of any of the Government's buildings or works that may have been made over with land licensed to the Licensees under Clause 1 and 2. The Licensees shall further pay all rates, cesses and taxes leviable on the land licensed to them and on all works and buildings situated thereon whether originally on the land licensed or subsequently erected thereon for or by the Licensees. That the occupation fee mentioned herein shall be liable to be enhanced by the Railway Administration from time to time at their sole and absolute discretion and the licensee shall be bound to pay the fee at the enhanced rates on receipt of a notice of 15 days."

From a perusal of the aforesaid condition, it is apparent that the Railway Administration from time to time was at liberty to enhance the licence fee, which is payable within 15 days of receipt of the notice. It is not denied that when the premises were let to the respondent in 1966 the licence fee was fixed Rs. 750/- per annum. This fee was increased in 1970 on the basis of market value to Rs. 1875/- per annum and subsequently after about 13 years it was enhanced to Rs. 10,460/- per annum. The specific case of the petitioner before the Estate Officer and the appellate court was that the increase in licence fee was on the basis of the guidelines issued by the Railway Administration, which had been filed and were marked as Ex. AW-1/2A, AW-1/2B and AW-1/2C these policy decisions and guidelines have also been annexed with this petition. The increase in licence fee was not special to the respondent but it was decided as a matter of policy applicable to all licencees of the railways. Instructions were issued on 21.5.1982 by the Headquarters for classifying different stations under 8 categories depending upon their commercial importance and market value. This was redefined and subsequently the enhancement of the fee for ordinary plots like Booking Offices was fixed at 10%, Commercial Establishment like coal dumps, oil installations was fixed at 15% but for retail oil depot, like the petitioner, was fixed at 20% of the current market value. On the aforesaid fixation, the licence fee was revised. The Estate Officer had considered the objection with regard to exorbitant increase in fee and even though there was no specific objection filed by the respondent at the time of its enhancement, it justified the increase relying upon the policy decisions as mentioned in the three documents. The appellate court, merely on the basis that the increase in rent was allegedly exorbitant and without justification has allowed the appeal and fixed the lease rent of Rs. 1875/-, which was fixed in 1970. It is not denied that the Firm kept on utilizing the land at least uptill December 1997 and has not paid the enhanced rent. In the opinion of the court, the order of the appellate court cannot be sustained as it proceeds on a non existant ground.

For the reasons given above, this petition succeeds and is allowed and the impugned order dated 19.9.1997 is hereby quashed and the order of the Estate Officer is restored. However, no order as to costs.

D/- December        , 2005



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