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Monday, January 28, 2013

licences - shops in dispute admeasuring 4.22 sq. yards upto 100 sq. yards situated at Qutub Road, Sadar Bazar, Delhi = the High Court dismissed the said writ petitions challenging the notice dated 25.5.1987, issued by the Divisional Railway Manager, Northern Railway, calling upon the appellants to pay the licence fee for the railway property in their use, at the enhanced rate, and also letter dated 29.7.1987, terminating licences to operate the shops in question and to vacate the premises for failing to deposit outstanding dues on account of non-payment of licence fee. = We are of the considered opinion that no fault can be found with the aforesaid observations and no interference is required. The enhanced license fee cannot be held to be unreasonable or arbitrary, and as warranting any interference by a court of equity. 8. Undoubtedly, the enhanced license fee being 13 times, the earlier license fee amount seems excessive, and such an observation was also made by the Hon’ble Railway Minister in order dated 11.4.1981, but the enhanced license fee would be illusory if the same is compared with the prevailing license fee in the said market as applicable to private shops. A welfare state must serve larger public interest. “Salus Populi Suprema lex”, means that the welfare of the people is the supreme law. A state instrumentality must serve the society as a whole, and must not grant unwarranted favour(s) to a particular class of people without any justification, at the cost of others. However, in order to serve larger public interest, the State instrumentality must be able to generate its own resources, as it cannot serve such higher purpose while in deficit. Merely because the appellants have been occupying the suit premises for a prolonged period of time, they cannot claim any special privilege. In the absence of any proof of violation of their rights, such concession cannot be granted to them.- The High Court has observed that the letter/notice dated 7.8.1980, enhancing the rate of license fee remains unchallenged, and therefore, the application of notice dated 25.5.1987, with retrospective effect is justified. This finding is not factually correct. Notice dated 7.8.1980, enhancing the license fee was received by the appellants, and representations were filed by them through their Association, raising all their grievances to the effect that during a period of 30 years, the license fee paid by them had been enhanced about 15 to 20 times, without any justification and hence, they demanded justice. The same were considered by the then Railway Minister, and orders dated 26.9.1980 and 11.4.1981 were passed by him, observing that the license fee may be revised after every 5 years on the basis of justice and equity. Certain interim relief was also granted. Thus, in view of the above, we are of the opinion that the aforesaid demands should not have been made to apply with retrospective effect from the year 7-8-1980. In view of the above, the appeals succeed and are allowed partly, to the extent that notice dated 25.5.1987 must not be applied retrospectively, i.e., w.e.f. 7-8-1980. However, the enhanced license fee may be recovered from the appellants from the said date in accordance with law. With these observations, the appeals stand disposed of. Interim order passed earlier stands vacated. CA Nos.268-279, 263-266 & 248-262 of 2003 The abovesaid Civil Appeals stand disposed of in terms of the judgment passed in Civil Appeal Nos.243-247 of 2003.


                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION


                     CIVIL APPEAL NOs. 243-247  OF 2003




      Lala Ram (D) by L.R. & Ors.                           …Appellants

                                   Versus

       Union of India & Anr.
      …Respondents




                                    With

            Civil Appeal Nos. 268-279, 263-266 & 248-262 of 2003




                               J U D G M E N T




      Dr. B. S. CHAUHAN, J.




      1.       These  appeals  have  been  preferred  against  the  impugned
      judgment and order dated 13.8.2001, passed by the High Court of  Delhi
      at New Delhi in Writ Petition Nos.349, 2812-2814 and 2822 of  1989  by
      way of which,  the  High  Court  dismissed  the  said  writ  petitions
      challenging the notice  dated  25.5.1987,  issued  by  the  Divisional
      Railway Manager, Northern Railway, calling upon the appellants to  pay
      the licence fee for the railway property in their use, at the enhanced
      rate, and also letter dated 29.7.1987, terminating licences to operate
      the shops in question and  to  vacate  the  premises  for  failing  to
      deposit outstanding dues on account of non-payment of  licence fee.

      2.    Facts and circumstances giving rise to these appeals are that:

           Each of the appellants is a licensee of  the  shops  in  dispute
      admeasuring 4.22 sq. yards upto 100 sq. yards situated at Qutub  Road,
      Sadar Bazar, Delhi which have been  in  their  occupation  since  pre-
      independence.   
As  per  the  appellants,  there  has  been   previous
      litigation in respect of this very land and the  same  became  evacuee
      property under the Administration of Evacuee Property  Act,  1950  and
      was taken over by the Custodian.
The appellants, being licensees   of
      the shops, have regularly been paying the license fee to the Railways,
      at rates which were mutually agreed upon and have also been  increased
      in the past.  In 1977, the said licence fee was increased to Rs.21 per
      sq. yards per annum, while earlier, it was fixed at only Rs.18 per sq.
      yards per annum.
The appellants received a notice dated 7.8.1980 from
      the respondents-Railways Authorities, about increase  in  the  licence
      fee from Rs.21 per sq. yards  to  Rs.270  per  sq.  yards  per  annum.
      Representations made by the appellants’ association were considered by
      the Hon’ble Railway Minister and order  dated  26.9.1980  was  passed,
      staying the auction thereof, with a further direction to examine their
      grievances.
The  Hon’ble  Railway  Minister  further  considered  the
      representation of the appellants’ Association and  observed  that  the
      auction of the said shops was not reasonable.  He also stated that the
      revision in license fee was excessive and expressed his  opinion  with
      respect to reconsidering the whole case and increasing the license fee
      by 5% to 10%.
The Railway Administration, after considering the  case
      of the appellants, again passed an order dated  25.5.1987  to  enhance
      the license fee @ Rs.270 per sq. yards with retrospective effect  from
      1.11.1980.  
The   appellants’   Association    had    been    making
      representations  since  receiving  the   aforementioned   notice   for
      enhancement dated  25.5.1987,  and  ultimately  filed  writ  petitions
      before the  High  Court  which  have  been  dismissed.   Hence,  these
      appeals.

      3.    Shri Altaf Ahmed,  learned  Senior  counsel  appearing  for  the
      appellants has submitted that once the enhanced license fee  had  been
      disapproved by  the  Hon’ble  Railway  Minister  and  the  matter  was
      reconsidered in light of the observation made by the Hon’ble  Minister
      stating that the said enhancement was excessive and that  the  license
      fee  could  be  enhanced  by  5%  to  10%,  the  notice  impugned  was
      unreasonable and arbitrary.

            The  Ministry  of  Urban  Development  issued  guidelines  dated
      14.1.1992 as how  the  license  fee  could  periodically  be  revised.
      Therein, it was provided that  the  standard  license  fee  should  be
      determined as per the provisions of the Rent Control Act applicable to
       a State.  In  the  instant  case,  the  Delhi  Rent  Control  Act  is
      applicable, and therefore,  the   standard  license  fee  as  provided
      therein ought to have been calculated.  The Delhi Rent Control Act was
       amended in 1963, making it applicable to the  premises  belonging  to
      the Government as well.

            The respondents have filed an affidavit  before  this  Court  on
      5.9.2002, giving a particular mode of calculation and even if the same
      is applied, the enhanced license fee would not be  enhanced  to   this
      extent, and the High Court has erred in not deciding any issue  raised
      by the appellants and in dismissing the writ petitions  in  a  cursory
      manner.   Thus, the said  appeals  deserve  to  be  allowed.  Being  a
      welfare state, it is the duty of the State to provide shops at nominal
      license fee.

      4.     Per  contra,  Shri  Chandra  Bhushan  Prasad,  learned  counsel
      appearing for the respondents, has submitted that the appellants  have
      been enjoying the said property at nominal license fee.  The  property
      is situated in a very busy market of old Delhi.  The area of the shops
       varies from 4.22 sq. yards to 100 sq. yards.  Therefore,  considering
      the  geographical  situation  of  the  shops,  alongwith   the   other
      facilities provided to the appellants, such enhanced license  fee  is,
      in fact, nominal.  The High Court has  rightly  dismissed  their  writ
      petitions and no interference is called for.

      5.    We have considered the rival submissions made by learned counsel
      for the parties and perused the record.

      6.    The High Court has  taken  judicial  notice  of  the  facts  and
      surrounding circumstances, considered the  geographical  situation  of
      the suit properties and held as under:

               “For a similarly situated shop if it was owned by a  private
               persons, the rental/licence fee would have been  much  more.
               The mere fact that the Railway is a  State  Enterprise  does
               not mean that  …………. on the  premises in occupation  of  the
               petitioner and other persons.   State  enterprise  must  not
               look elsewhere for funds.  It must  generate  funds  through
               the activities which are  undertaken  by  it  for  providing
               services to the public at large.  It cannot be  expected  to
               run in deficit……  Since the action of the  first  respondent
               is reasonable, we decline to interfere  with  the  aforesaid
               enhancement.”




      7.    We are of the considered opinion that no fault can be found with
      the aforesaid observations  and  no  interference  is  required.   The
      enhanced license fee cannot be held to be unreasonable  or  arbitrary,
      and as warranting any interference by a court of equity.

      8.    Undoubtedly, the  enhanced  license  fee  being  13  times,  the
      earlier license fee amount seems excessive, and  such  an  observation
      was also  made  by  the  Hon’ble  Railway  Minister  in   order  dated
      11.4.1981, but the enhanced license fee would be illusory if the  same
      is compared with the prevailing license fee  in  the  said  market  as
      applicable to private shops. 
 A  welfare  state  must    serve  larger
      public interest. “Salus Populi Suprema lex”, means that the welfare of
      the people is the supreme law. 
A state instrumentality must serve  the
      society as a whole, and must not  grant  unwarranted  favour(s)  to  a
      particular class of people without any justification, at the  cost  of
      others. 
However, in order to serve larger public interest,  the  State
      instrumentality must be able to generate  its  own  resources,  as  it
      cannot serve such higher purpose while in deficit.
 Merely because  the
      appellants have been occupying  the  suit  premises  for  a  prolonged
      period of time, they  cannot  claim  any  special  privilege.  
In  the
      absence of any proof of violation of  their  rights,  such  concession
      cannot be granted to them.

      Welfare State means:

      9.    A welfare state denotes a concept of government,  in  which  the
      State plays a key role in the protection and promotion of the economic
      and social well-being of  all  of  its  citizens,  which  may  include
      equitable distribution of wealth and equal  opportunities  and  public
      responsibilities  for  all  those,  who  are  unable  to   avail   for
      themselves, minimal  provisions  for  a  decent  life.
It  refers  to
      “Greatest good of greatest number and  the  benefit  of  all  and  the
      happiness of all”.
It is important that public weal be the  commitment
      of the State, where the state is a welfare state.  A welfare state  is
      under an obligation to prepare plans and devise beneficial schemes for
      the good of the common people.
Thus,  the  fundamental  feature  of  a
      Welfare state is  social  insurance.  Anti-poverty  programmes  and  a
      system of personal taxation are  examples  of  certain  aspects  of  a
      Welfare state.
A  Welfare  state  provides  State  sponsored  aid  for
      individuals from the cradle to the grave.  However,  a  welfare  state
      faces basic problems as regards what should be the desirable level  of
      provision of such welfare services by the state, for the  reason  that
      equitable provision of resources to finance services  over  and  above
      the contributions of direct beneficiaries would cause difficulties.
A
      welfare state is one, which  seeks  to  ensure  maximum  happiness  of
      maximum number of people living within its territory. A welfare  state
      must attempt to provide all facilities for decent living, particularly
      to the poor, the weak, the old and the disabled i.e. to all those, who
      admittedly belong to the weaker sections of society.
Articles  38  and
      39 of the Constitution of India provide that the State must strive  to
      promote the welfare of the people of the state by protecting all their
      economic, social and political rights.
These rights may cover,   means
      of livelihood, health and the general well-being of  all  sections  of
      people in society, specially those of the young, the  old,  the  women
      and the relatively  weaker  sections  of  the  society.
These  groups
      generally require special protection measures in almost every set  up.
      The happiness of the people is the ultimate aim of  a  welfare  state,
      and a welfare state would not qualify as one,  unless  it  strives  to
      achieve the same.  (See also: Dantuluri Ram Raja & Ors.  v.  State  of
      Andhra Pradesh & Anr., AIR 1972 SC 828; N. Nagendra Rao &  Company  v.
      State of Andhra Pradesh, AIR 1994 SC 2663; and N.D. Jayal & Anr. Union
      of India & Ors., AIR 2004 SC 867).

      10.   The  High  Court  has  observed  that  the  letter/notice  dated
      7.8.1980, enhancing the rate of license fee remains unchallenged,  and
      therefore,  the  application   of   notice   dated   25.5.1987,   with
      retrospective effect is justified.   This  finding  is  not  factually
      correct.

            Notice dated 7.8.1980, enhancing the license fee was received by the appellants, and representations were filed by them  through  their  Association, raising all their grievances to the effect that during  a   period of 30 years, the license fee paid by  them  had  been  enhanced  about 15 to 20  times,  without  any  justification  and 
 hence,  they demanded justice. 
 The  same  were  considered  by  the  then  Railway Minister, and orders dated 26.9.1980 and 11.4.1981 were passed by him,
      observing 
that the license fee may be revised after every 5  years  on
the basis of justice and equity.   
Certain  interim  relief  was  also granted.  
Thus, in view of the above, we are of the opinion  that  the
aforesaid  demands  should  not  have  been   made   to   apply   with retrospective effect from the year 7-8-1980.

           In view of the  above,  the  appeals  succeed  and  are  allowed
      partly, to the extent that notice dated 25.5.1987 must not be  applied
      retrospectively, i.e., w.e.f. 7-8-1980.  However, the enhanced license
      fee may be recovered  from  the  appellants  from  the  said  date  in
      accordance with law.

            With these observations, the appeals stand disposed of.  
Interim order passed earlier stands vacated.

      CA Nos.268-279, 263-266 & 248-262 of 2003

            The abovesaid Civil Appeals stand disposed of in  terms  of  the
      judgment passed in Civil Appeal Nos.243-247 of 2003.






                                                            ..………………………….J.

                                       (Dr. B.S. CHAUHAN)




                                                            .…………………………..J.
                 (V. GOPALA GOWDA)

      New Delhi,

      January 24, 2013







      -----------------------
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