C.V.Karthikeyan, J.-+Rent Laws – Notice increasing rent – Issuing a prior notice would be of no avail and would only be an empty formality since the provision of law is clear on this aspect. Since the arrears of rent is writ large on the face of the records, then prior notice is not at all required.

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V.Duraisamy v. Kodaikanal Municipality, (Madras)(Madurai Bench) : Law Finder Doc Id # 1729257
MADRAS HIGH COURT
(Madurai Bench)

Before:- C.V.Karthikeyan, J.

W.P(MD)No.24821 of 2019 and W.M.P(MD)No.21406 of 2019. D/d. 02.03.2020.

V.Duraisamy – Appellant

Versus

The Kodaikanal Municipality, Rep. by its Commissioner, Kodaikanal, Dindigul District. and ors. – Respondents

For the Petitioner:- Mr.T.Lajapathi Roy, Advocate.

For the Respondents:- Mr.Lourdh Paul Maurya, Standing Counsel.

IMPORTANT

Rent Laws – Notice increasing rent – Issuing a prior notice would be of no avail and would only be an empty formality since the provision of law is clear on this aspect. Since the arrears of rent is writ large on the face of the records, then prior notice is not at all required.

Rent Laws – Challenge to issuance of notice for increase in monthly rent and demanding arrears owing to increase in monthly rent – Petitioner already knew about claim for increased rent and demand for payment of arrears – Since arrears of rent was writ large on face of records, prior notice was not at all required – Petitioner was licensee and had not stated when he became licensee – There would naturally be increase in rent – Out of arrears stated in notice, Petitioner had paid part sum – Once Petitioner had made part payment, he could not turn around and question demand – Choice was with Petitioner, to either pay or not to pay – If he did not pay, naturally consequences of order would have to follow – Petition dismissed.

[Paras 8, 13 and 14]

Cases Referred :

Aligarh Muslim University v. Mansoor Ali Khan, (2000) 7 SCC 529

Dr.C.Chendroyaperumal v. National Institute of Port Management, 2006 4 LLN 358

Gadde Venkateswara Rao v. Government of Andhra Pradesh, 1966 (2) SCR 172 : AIR 1966 SC 828

K.L. Tripathi v. State Bank of India, 1984(1) SCC 43

M.C. Mehta v. Union of India (1999 (6) SCC 237)

Rajendra Singh v. State of M.P., 1996(5) SCC 460

Ridge v. Baldwin, 1964 AC 40.

S.L. Kapoor v. Jagmohan (1980 (4) SCC 379)

State Bank of Patiala v. S.K. Sharma (1996(3) SCC 364)

ORDER
C.V.Karthikeyan, J. – This writ petition has been filed in the nature of Certiorari, with respect to Impugned Notice in Na.Ka.No.3166/2004/A3, dated 09.04.2019 on the file of the first respondent namely, the Kodaikanal Municipality, which is represented by its Commissioner, Kodaikanal, Dindigul District, with particular reference to the shop of the petitioner, V.Duraisamy, S/o.Vellaisamy, Grocery Shop No.15, Tax Assessment No.10012, Anna Salai, Kodaikanal and to quash the same as illegal.

2. In the affidavit filed in support of the writ petition, the petitioner has stated that he is running the said shop and is selling grocery articles in Shop No.15, Anna Salai, Kodaikanal. He has not mentioned the period from which he has been running the shop. It is claimed that the first respondent had issued a notice, dated 09.04.2019, increasing the monthly rent from Rs.815/- to Rs.9,293/- and a demand was also made for a sum of Rs.14,00,265/- as arrears owing to the increase in monthly rent from the year 2003. This amount was directed to be paid within a period of 15 days from the date of receipt of the notice, dated 09.04.2019. This writ petition has been filed questioning the said notice.

3. There are a few background facts. Originally, the Kodaikanal Varthagarhal Sangam, represented by its Secretary Mr.M.S.Murugesan, had filed a writ petition in W.P.No.23156 of 2004 questioning a notice, dated 09.02.2004. The same was dismissed for non-prosecution on 15.09.2017. Thereafter, Writ Appeal in W.A.No.347 of 2011 was filed by the Kodaikanal Varthagarhal Sangam and a Division Bench of this Court, examining the averments made in the said Writ Appeal called upon the said Sangam to give a list of it members and accordingly, the list was furnished and in Serial No.2, the petitioner’s name, V.Duraisamy, S/o.Vellaisamy is found. The learned Counsel appearing for the petitioner, however, stated that in the Writ Appeal no direction were issued. According to the learned Counsel, the Writ Appeal was with respect to an order to demolish the shops, since they were in a dilapidated condition, whereas, the present writ petition was for payment of arrears of rent, and the grievance is being that no reasons or basis have been given for increase in the rent. However, in the Writ Appeal, the following observation was made in Paragraph No.10 :

“10.The affidavit of the second respondent, dated 03.03.2018, contains a Tabular Column and a perusal of the same, paints a very very sorry picture for the reason that the licensees of the shops in question have not only sub-leased the same, but also they are in arrears of licence amount to the tune of lakhs and lakhs of rupees and the total arrears is to the tune of Rs.1,36,15,012/-.”
4. This extracts shows that the members of the Sangam have sub-leased the shops and are in arrears of licence amount to the tune of Rs.1,36,15,012/-. That was the position as on the date of the order of the Writ Appeal, which was on 16.03.2018, nearly two years back.

5. It was also be observed in the Writ Appeal, in paragraph No.13 that the licensees have let out the shops in favour of third parties and though they are earning huge sum by way of revenue, did not pay the arrears of licence amount in time. These observations of the Division Bench are directly binding on this Court. The licensees have let out the shops and are earning huge revenue only through sub-leasing the shops. They have not paid the arrears of licence amount. The issue in this writ petition is non-payment of licence fees. The Writ Appeal was dismissed on 16.03.2018. Thereafter, the Sangam filed a Special Leave Petition before the Hon’ble Supreme Court, which was also dismissed on 18.05.2018. The learned Counsel stated that the Hon’ble Supreme Court has dismissed on the ground that the Sangam cannot maintain the Special Leave Petition. However, the order does not reflect the same. In the order, it is specifically stated that the Special Leave Petition is dismissed. It is not specifically stated that it was dismissed on the ground that the Sangam cannot maintain the Special Leave Petition.

6. The second ground taken is a very strange ground. Even at the outset, I should reject the ground pleaded by the petitioner. It is stated that in the Impugned Notice it has been mentioned about annexures and it is claimed that they have not been served. In the affidavit filed by the petitioner, V.Duraisamy, to the extent it can be examined, there is no complaint that the annexures mentioned in the Impugned Notice were not served. On the other hand, in paragraph No.4, there is a very specific reference to increase in the monthly rent from Rs.815/- to Rs.9,293/- and also to the total amount of Rs.14,00,265/- as arrears of increased monthly rent from the year 2003. These are the amounts which are mentioned in the annexures. However, on the basis of an oral representation made by the learned Counsel for the petitioner, whether on instructions or not, my learned Predecessor appears to have given a direction to produce the records, specifically regarding service of the annexures to the Impugned Notice. The learned Counsel appearing for the respondents has produced the records and it is seen that the annexures have also been served. The original records have also been perused by this Court. It is seen that the Impugned Notice has been served on R.Kiranshankar. The enclosures also form part of the Impugned Notice. Therefore, I am not able to accept the contention that the annexures were not served.

7. The learned Counsel appearing for the petitioner, thereafter stated that no notice was been issued prior to the impugned order. I do not agree with that contention of the petitioner since reference to the earlier orders of the Writ Petition and the Writ Appeal and the Special Leave Petition, finally dismissing the Special Leave Petition of the Sangam have been made.

8. The principle of natural justice cannot be stretched to extreme limits when issue of notice would be an empty formality. The law is clear. The petitioner herein already knew about the claim for increased rent and the demand for payment of the arrears.

9. In (2000) 7 SCC 529 { Aligarh Muslim University and Others v. Mansoor Ali Khan}, the Hon’ble Supreme Court had an occasion to consider the effect of a ” useless formality” – a theory, which is an exemption to the principles of natural justice.

“21.As pointed recently in M.C. Mehta v. Union of India (1999 (6) SCC 237), there can be certain situations in which an order passed in violation of natural justice need not be set aside under Article 226 of the Constitution of India. For example where no prejudice is caused to the person concerned, interference under Article 226 is not necessary. Similarly, if the quashing of the order which is in breach of natural justice is likely to result in revival of another order which is in itself illegal as in Gadde Venkateswara Rao v. Government of Andhra Pradesh [1966 (2) SCR 172 = AIR 1966 SC 828], it is not necessary to quash the order merely because of violation of principles of natural justice.
22. In M.C.Mehta {1999} 6 SCC 237 it was pointed out that at one time, it was held in Ridge v. Baldwin ( 1964 AC 40) that breach of principles of natural justice was in itself treated as prejudice and that no other ‘defacto’ prejudice needed to be proved. But, since then the rigour of the rule has been relaxed not only in England but also in our country. In S.L. Kapoor v. Jagmohan (1980 (4) SCC 379), Chinnappa Reddy, J. followed Ridge v. Baldwin and set aside the order of supersession of the New Delhi Metropolitan Committee rejecting the argument that there was no prejudice though notice was not given. The proceedings were quashed on the ground of violation of principles of natural justice. But even in that case certain exceptions were laid down to which we shall presently refer.
23. Chinnappa Reddy, J. in S.L.Kapoor’s case [(1980) 4 SCC 379], laid two exceptions (at p.395) namely, ” if upon admitted or indisputable facts only one conclusion was possible”, then in such a case, the principle that breach of natural justice was in itself prejudice, would not apply. In other words if no other conclusion was possible on admitted or indisputable facts, it is not necessary to quash the order which was passed in violation of natural justice. Of course, this being an exception, great care must be taken in applying this exception.
24. The principle that in addition to breach of natural justice, prejudice must also be proved has been developed in several cases. In K.L. Tripathi v. State Bank of India ( 1984(1) SCC 43), Sabyasachi Mukherji, J. ( as he then was) also laid down the principle that not mere violation of natural justice but de facto prejudice (other than non-issue of notice) had to be proved. It was observed: quoting Wade Administrative Law, (5th Ed.PP. 472-475) as follows: ( para 31)
“….it is not possible to lay down rigid rules as to when principles of natural justice are to apply, nor as their scope and extent ….There must have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice must depend on the facts and circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter to be dealt with and so forth”. Since then, this Court has consistently applied the principle of prejudice in several cases. The above ruling and various other rulings taking the same view have been exhaustively referred to in State Bank of Patiala v. S.K. Sharma ( 1996(3) SCC 364). In that case, the principle of ‘prejudice’ has been further elaborated. The same principle has been reiterated again in Rajendra Singh v. State of M.P. ( 1996(5) SCC 460).
25. The ‘useless formality’ theory, it must be noted, is an exception. Apart from the class of cases of “admitted or indisputable facts leading only to one conclusion” referred to above,- there has been considerable debate of the application of that theory in other cases. The divergent views expressed in regard to this theory have been elaborately considered by this Court in M.C. Mehta referred to above. This Court surveyed the views expressed in various judgments in England by Lord Reid, Lord Wilberforce, Lord Woolf, Lord Bingham, Megarry, J. and Straughton L.J. etc. in various cases and also views expressed by leading writers like Profs. Garner, Craig, De. Smith, Wade, D.H. Clark etc. Some of them have said that orders passed in violation must always be quashed for otherwise the Court will be prejudging the issue. Some others have said, that there is no such absolute rule and prejudice must be shown. Yet, some others have applied viamedia rules. We do not think it necessary, in this case to go deeper into these issues. In the ultimate analysis, it may depend on the facts of a particular case.”
10. The same position had been reiterated in 2006 (8) SCC 647 [Punjab National Bank and Others]:

“In an industrial dispute referred to by the Central Government which has an all- India implication, individual workman cannot be made parties to a reference. All of them are not expected to be heard. The Unions representing them were impleaded as parties. They were heard. Not only the said Unions were heard before the High Court, as noticed hereinbefore from a part of the judgment of the High Court, they had preferred appeals before this Court, Their contentions had been noticed by this Court. As the award was made in presence of the Unions, in our opinion, the contention of Respondents that the award was not binding on them cannot be accepted. The principles of natural justice were also not required to be complied with as the same would have been an empty formality. The court will not insist on compliance of the principles of natural justice in view of the binding nature of the award. Their application would be limited to a situation where the factual position or legal implication arising thereunder is disputed and not where it is not in dispute or cannot be disputed. If only one conclusion is possible, a writ would not issue only because there was a violation of the principles of natural justice.”
11. A Division Bench of this Court in a Judgement reported in 2006 4 LLN 358 [Dr.C.Chendroyaperumal v. National Institute of Port Management] had also expressed their views on this aspect.

“9. Coming to the legal aspects canvassed by the learned counsel for the appellant, it is seen that they revolve around violation of the principles of natural justice. Even at the outset, we are not impressed with the said argument, since in our opinion, “Principles of natural justice is for thoroughbred horses and not wild horses.” Wild horses understand only the language of the whip and hence there is no use trying to tame them with persuasion. The principles of natural justice themselves have traversed a long way from the stage at which they were treated as a “tharaka manthra” or panacea for all diseases, to the present stage where the Courts have started looking at the credentials of the person using them as a shield or sword and accepting the fact that they are not indispensable.”
12. The march of law expanding the interpretation of the principles of natural justice and examining exceptions to the same shows that when the issuance of notice is a futile exercise since only one conclusion can be reached, then the petitioners cannot turn around and seek relief on the ground that notice was not issued. The petitioners cannot plead ignorance of law or innocence of fact and seek indulgence of the Court.

13. Issuing a prior notice would be of no avail and would only be an empty formality since the provision of law is clear on this aspect. Since the arrears of rent is writ large on the face of the records, then prior notice is not at all required.

14. The learned Counsel appearing for the petitioner also raised a ground stating that the petitioner was not made aware of the basis on which the monthly rent was increased from Rs.815/- to Rs.9,293/-. Again, I am not able to accept the contention of the learned Counsel for the petitioner. The petitioner is the licensee. He has not stated when he became a licensee. There will naturally be an increase in the rent. It is to be brought to the notice of this Court that out of the arrears of a sum of Rs.1,05,050/- which has been stated in the notice, the petitioner has also paid a sum of Rs.85,000/-. Once the petitioner has made part payment, he cannot turn around and question the demand. The choice is with the petitioner, to either pay or not to pay. If he does not pay, naturally the consequences of the order will have to follow.

15. Consequently, I am of the considered view that there are no merits in the Writ Petition. The Writ Petition will have to be dismissed.

16. Accordingly, the writ petition is dismissed. No costs. Consequently, connected Miscellaneous Petition is closed.

Petition dismissed.

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