WP/20928/2006 of Manepalli Ammaji W/o Peddi Raju Vs The Commissioner, Pithapuram Municipality, on 28 December 2006

Conclusion

ORDER:

Heard both the learned counsel.

2. The Writ Petition is filed for a Writ of Mandamus declaring theaction of the respondent in issuing the urgent notice dated 4.10.2006vide proceedings Roc.No.272/06/A1 demanding the petitioners to paythe 2[nd] and 3[rd] instalment amounts of the auction purchase within 7days by raising the rents of the shops from Rs.500/- to Rs.2,000/- permonth by violating the terms and conditions of the tender notificationdated 14.11.2003, as illegal, arbitrary, discriminative, mala fide andagainst the terms and conditions of the tender notice dated 14.11.2003and consequently set aside the urgent notice dated 4.10.2006 issuedby the respondent and pass such other suitable orders.

3. Sri A.K.Kishore Reddy, learned counsel representing the writpetitioner would submit that having fixed the amount at Rs.500/-, nowthe same cannot be enhanced by the Municipal Council to Rs.2,000/-. Learned counsel also made certain submissions relating to therepresentation made in this regard and non-consideration thereof.

4. Sri S.Nageswara Reddy, learned Standing Counsel has taken this Court through the averments made in the counter affidavit and alsoplaced before this Court GO RT No.535, dated 8.7.1998 and placedstrong reliance on clause 8 of the Annexure and would maintain that inthe light of the same, reasonable amount had been fixed by theMunicipal Council and the same need not be disturbed by this Court.5. It is stated in the affidavit filed in support of the Writ Petition thatthe respondent vide proceedings in Roc.No.272/B1.2001/E1, dated14.11.2003 called for public auction of the shops situated inPithapuram Municipality under goodwill auction and the conditions inthe goodwill auction are that the auction purchaser shall have todeposit 1/4[th] of the auction amount within 24 hours before the Treasuryof the Municipality or by way of demand draft taken in favour of theMunicipal Commissioner. The further conditions of the auction are thata further amount of 1/4[th] of the total value shall be paid when theconstruction is started and completed upto lintel level and further anamount of 1/4[th] of total value when construction raised upto the rooflevel and the remaining balance of 1/4[th] shall be paid after completionof the shops. The shops will be handed over to the auction purchaserwithin three months from the date of commencement of the contractand the lease is for a period of eight years from the date of handingover of the shops to the auction purchasers. It is also stated that theprice fixed for the shops is (I) (a) Rs.500/- per month for each shopsituated near to Municipal Market, ground floor (size 12’ x 10’); (b)Rs.2,500/- for the Municipal Restaurant situated on the first floor (size50’ x 12’); (II) (a) an amount of Rs.400/- each per month for 13 shopssituated near Municipal Guest House on the ground floor (b) anamount of Rs.300/- each per month for 13 shops situated nearMunicipal Guest House on the first floor. The further conditions of the

auction are that (1) the intending participant shall have to pay anamount of Rs.10,000/- towards EMD and shall produce a solvencycertificate for an amount of Rs.50,000/- otherwise he is not eligible toparticipate in the auction, for Restaurant an amount of Rs.50,000/-towards EMD and a solvency certificate for an amount of Rs.2,50,000/-shall be produced, otherwise he is also not entitled to participate in theauction. It is also stated that the petitioners and certain othersparticipated in the auction on 20.11.2003 and became successfulauction purchasers and they had paid an amount of Rs.70,250/-,Rs.66,250/-, Rs.63,750/-, Rs.58,750/- and Rs.58,000/- respectivelybefore the Treasury, Pithapuram Municipality. As per the tendernotification issued by the respondent, the shops, which are to beallotted to the petitioners, were not started as the construction hadbeen delayed. It is also stated that when the matter stood thus, therespondent in his proceedings vide Roc.No.272/2001-E1, dated3.4.2006 issued an urgent notice directing the petitioners to deposit the1/4[th] value of the 2[nd] and 3[rd] instalment amounts which they have todeposit as per the tender conditions and further informed them that theshop rents were increased from Rs.500/- to Rs.2,500/- by violating theterms and conditions of the tender notification. It is also stated thatafter receipt of the urgent notice dated 3.4.2006, the petitionersapproached the respondent and brought to his notice that as per thetender conditions, the shop rents were fixed with an amount ofRs.500/- per month in the year 2003 and the same was revealed in thetender notification and also demanding them by issuance of notice on3.4.2006 by increasing the rents of the shops as Rs.2,500/- instead ofRs.500/- as illegal and requested him to reduce the same and hencethey made a representation to that effect on 19.5.2006. It is also statedthat after receipt of the representation dated 19.5.2006, urgent notice dated 4.10.2006 had been issued fixing the rent of the shops atRs.2,000/- indicating that the Municipal Council had made aResolution to that effect and directed them to deposit the 2[nd] and 3[rd]instalment amounts which are to be deposited by them within 7 days. Several other factual details also had been narrated in the affidavitfiled in support of the Writ Petition.

6. In the counter affidavit filed by the respondent it is stated thatPithapuram Municipality had issued auction notice basing on GO RTNo.535, dated 8.7.1998 and as per the said G.O., the Municipality canraise goodwill amount by way of public auction for construction ofshopping complexes. The Government issued guidelines annexed toGO.RT No.535, dated 8.7.1998 and as per clause 8 of the guidelines,the Municipal Council can fix a reasonable monthly rent for theproposed shop rooms and the auction should relate to goodwillamount. The said clause 8 reads as hereunder:

“The Municipal Council can fix a reasonable monthly rentfor the proposed shop rooms and the auction shouldrelate to goodwill amount. The goodwill amount may becollected in four instalments i.e., 25% immediately afterapproval, 25% when the construction comes up to lintelstage, 25% after the roof is laid and the balance 25%when the shops are handed over”.

It is also stated that the Municipal Council by its Resolution No.468,dated 28.2.2004, accepted the goodwill auctions, but not rents, andeven prior to the notification or after the notification the rents had notbeen fixed by the Council till 31.3.2006. It is also stated that it is truethat the Municipal Office had issued public auction notice for auction ofthe said shops situated at Municipal Market under goodwill auctionand that minimum rent published in notification is Rs.500/-, but not theexact or final rent and it is true that the petitioners participated in theauction on 20.11.2003 and became successful auctioneers and also

paid 1/4[th] of the goodwill amount to Municipal treasury, and it is truethat the constructions work had been delayed due to technicalreasons. Further it is stated that Pithapuram Municipality had notissued any notice or proceedings to the petitioners regarding fixation ofRs.500/- as rent for the said shops. As per the norms of good willauction, the final rent to be fixed by the Municipal Council and as perthe said norms, the Municipal Council, vide their Resolution No.318,dated 31.3.2006, had fixed the monthly rent as Rs.2,500/- based onpresent market value and also taking the neighbouring municipal shoprents into consideration. As per the Council Resolution, urgent noticewas issued to the petitioners for depositing 1/4[th] value of the2nd and3[rd] instalments since the construction work was completed upto rooflevel and it is also informed in the said notice that the rent was fixed asRs.2,500/-. Further, the petitioners submitted a representation forreducing the rent from Rs.2,500/- to Rs.500/-. It is further stated that onreceipt of representation from the petitioners, the matter was placedbefore the Council and after deep discussions, the Municipal Councilin its Resolution No.130, dated 15.9.2006, resolved to reduce the rentfrom Rs.2,500/ to Rs.2,000/- with sympathetic view and also taking intoconsideration the fact that the petitioners had deposited 1/4[th] ofgoodwill amount in November, 2003, which is nearly three years. It isalso stated that in public auction notice, the size of the shop wasmentioned as 12’ x 10’, but at the time of technical sanction of the saidestimate, the size of the shops are increased to 20’ x 11’ based on thesite conditions. It is stated that these shops are situated adjacent andfacing K.N.F. Main road near Municipal Market, which is the maincommercial location of the town and therefore the rent fixed is alsovery low in comparison with neighbouring rents of Municipal shops and also private shops, which are above Rs.3,000/- for similar size ofshops. It is further stated that Kona Venkata Ramana and BollamRama Swamy, who are the lease holders of shop Nos.1 and 3, whichare situated besides the present shopping complex, are payingRs.3,163/- as rent for their respective shops. It is also stated inparagraph 8 of the counter affidavit that the Municipal Restaurantsituated at the 1[st] floor also fixed rent as Rs.9,000/- from minimumRs.2,500/- mentioned in notification and hence the notice issued bythe respondent in Roc.No.272/06-A1, dated 4.10.2006, is not illegaland arbitrary and the same was issued as per the guidelines in GO RTNo.535, dated 8.7.1998.

7. In the light of the respective stands taken by the parties, it may bethat initially Rs.500/- had been specified, but now as per conditionNo.8 of the Annexure to GO RT No.535, dated 8.7.1998 it is stated thatthe rent had been enhanced and duly fixed by the Municipal Council. In the light of the facts and circumstances inasmuch as it is stated thatthe petitioners had already made a representation to duly consider thegrievances raised by them, the respondent, in the light of the peculiarfacts and circumstances and also taking into consideration the delay ofconstruction being on the part of the respondent, to reconsider thewhole issue and take a decision afresh in the light of the tendernotification and also the guidelines referred to in the G.O. referred tosupra, within a period of two (02) weeks from the date of receipt of acopy of this order.

8. With the direction indicated above, the Writ Petition is disposedof. No costs.

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28.12.2006

SSR

Issue order copy in two days. (BO)