The Court rejected writ petitions by a club challenging demand notices for lease rent arrears, holding that the Tahsildar acted on Government authority and the lease agreement permitted rent enhancement. The club was directed to pay arrears of Rs.31,16,65,786/- within one month, failing which eviction was ordered.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
W.P.Nos.2192 of 2012, 33991 of 2018, 2636 & 28247 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 23.08.2023
PRONOUNCED ON : 08.09.2023
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.Nos.2192 of 2012, 33991 of 2018, 2636 & 28247 of 2019 and
M.P.No.1 of 2012, W.M.P.Nos.39469 of 2018, 2916, 2922 & 27920 of 2019
W.P.No.2192 of 2012:
Ootacamund Gymkhana Club, Represented by its Secretary,
Finger Post, Ootacamund, Nilgiris – 643 006. ...Petitioner
Vs.
1.State of Tamil Nadu, Represented by its Secretary and The Commissioner Department of Revenue, Fort St. George, Chennai – 600 009.
Chepauk,
Chennai – 600 005.
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3.The District Collector, Nilgiris District, Ootacamund.
4.The Tahsildar, Taluk Office, Udhagamanadalam.
..Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, calling for the records of the respondents in connection with the impugned order passed by the 4 th respondent in Na.Ka.A4 No.11697/2009 dated 12 th December, 2011, quash the same.
W.P.No.33991 of 2018:
The Ootacamund Gymkhana Club, Finger Post, Ootacamund, Nilgiris – 643 006. rep. by Mr.K.Krishnakumar. ...Petitioner
Vs.
1.Secretary to Government, Revenue and Disaster Management Department, Land Disposal Wing, Government of Tamil Nadu, Fort St. George, Chennai – 600 009.
2.Special Commissioner and Commissioner of Land Administration, Chepauk, Chennai – 600 005.
3.District Collector,
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Ootacamund, Nilgiris District.
4.Tahsildar, Ootacamund, Nilgiris District.
..Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Mandamus, di recting the 1st respondent to issue suitable instructions to the 4th respondent to recall 4th respondent's unjust and unauthorized demand notice dated 01.09.2017, demanding an arbitrary amount of Rs.14,17,53,721/- towards arrears of the lease amount / fasli amounts from the petitioner club and to direct the 4th respondent to disclose the source and the basis as to how the 4th respondent has arrived at such an arbitrary amount of Rs.14,17,53,721/- being the alleged arrears of lease amount if any, payable by the petitioner club, by considering the petitioner's representation dated 23.04.2018 in the manner known to law, after affording due opportunity to the petitioner-club by issuing requisite notice.
W.P.No.2636 of 2019:
Ootacamund Gymkhana Club, Finger Post, Ootacamund, Nilgiris – 643 006. rep. by Mr.K.Krishnakumar. ...Petitioner
Vs.
1.Secretary to Government, Revenue and Disaster Management Department,
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Land Disposal Wing, Government of Tamil Nadu, Fort St. George, Chennai – 600 009.
Prayer : Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, to ca ll for the records in R.C.No.U1, 7707/2005 dated 13.03.2018 from the file of the District Collector, Nilgiris District, and quash the same, as unconstitutional, ultra vires, against Rule of Law and against the principles of the natural justice and consequently direct the District Collector, Nilgiris as well as the Tahsildar, Ootacamund, Nilgiris District, to abide by the outcome of the enquiry and disposal of the petitioner's representation dated 23.04.2018 pending with the 1st respondent and abide by the final outcome of the writ petition in W.P.No.2192 of 2012 pending on the file of this Court, Madras, taking into account that it is only the Government, who is the owner of the land in S.No.5062, measuring 5.47 acres of land, Ootacamund, Nilgiris District, leased to the petitioner and it is only the Government, which alone
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can determine and fix the lease amount payable by the petitioner in respect of the land leased to the petitioner, as directed by the Government in G.O.Ms.No.721, Revenue Department dated 31.08.1988.
W.P.No.28247 of 2019:
The Ootacamund Gymkhana Club, Finger Post, Ootacamund, Nilgiris – 643 006. rep. by Mr.K.Krishnakumar. ...Petitioner
Vs.
1.Secretary to Government, Revenue and Disaster Management Department, Land Disposal Wing, Government of Tamil Nadu, Fort St. George, Chennai – 600 009.
..Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of India, to
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issue a Writ of Certiorarified Mandamus, to ca ll for the records in RC A4 No.11697/2004 dated 30.07.2019 (received by petitioner on 20.08.2019) on the file of the 4th respondent and quash the same as unjust, unlawful, without any authority and violation of principles of natural justice, when the Government of Tamil Nadu have granted lease for 30 years from 01.07.1997 to 30.06.2027 as per G.O.Ms.No.721, Revenue dated 31.08.1998, in favour of petitioner in respect of the law in S.No. 5062, New S.No. A/10/3, Udhagai Town, West, Udhagamandalam Taluk, Nilgiris District, measuring 5.47 acres of land, leased to petitioner, ignoring and suppressing the pendency of reproceedings in W.P.No.2192 of 2012, W.P.No.33991 of 2018 and W.P.No.2636 of 2019 and consequently to direct the 4th respondent and all the concerned officers to abide by the Government order in G.O.Ms.No.721, Revenue Department dated 31.08.1998, and to collect Rs.6,000/- per year as annual lease amount in respect of the land leased to the petitioner.
For Petitioner : Mr.R.Shanmugam For M/s.Shanmugha Associates (in 4WPs) For Respondents : Mr.S.Silambanan Additional Advocate General Assisted by Mr.G.Krishna Raja Additional Government Pleader (in 4WPs)
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COMMON ORDER
The writ petitioner has filed multiple writ petitions, questioning the
validity of the demand of lease rents periodically issued by respondents 3 and 4.
PETITIONER'S CASE:
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being maintained with scenic beauty and taking care to conserve the ecology. The Government has granted lease in respect of the land measuring 10.32 acres in S.No.5062, Udhagamandalam, Nilgiris, for Golf activities at various intervals by means of several Government Orders.
(a) 01.12.2011 for Rs.3,36,09,848/-
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a sum of Rs.10,06,42,689/-. Finally, for the period from 01.07.2021 to 30.06.2023, the demand notice was issued for a sum of Rs.6,70,95,126/-.
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issue the demand notice, since the lease was granted by the Government. As the land was leased to the petitioner-Club by the Government, the Government alone is competent to demand the lease amount and the Tahsildar, who is a subordinate authority has no authority to issue any such demand notice seeking arrears of lease rents. It is further contended that the respondent cannot make any demand for any time-barred arrears of lease beyond three years and therefore, the demand notices are liable to be set aside as lapsed.
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extended for 30 years and the lease rent was fixed as Rs.6,000/- per year. When the Government fixed Rs.6,000/- per year as lease rent in the Government order, the Tahsildar has no authority to issue demand notice claiming arrears of lease rent or enhancement of lease rent. Thus, the chain of demand notices issued by the 4th respondent are without authority and contrary to the Government order issued in G.O.Ms.No.721.
REPLY BY THE RESPONDENTS:
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Government in G.O.Ms.No.2909, Revenue dated 04.11.1981 has ordered enhancement of lease rent at Rs.6,000/- from 01.07.1982, subject to revision of lease rent after 5 years. The Government resumed an extent of 4.50 acres of land from the possession of the petitioner in G.O.Ms.No.169, Revenue dated 11.02.1987 and granted permission to the All India Radio to enter upon 4.50 acres of land for establishing the All India Radio. Another extent of 0.35 acres of land was also resumed for the purpose of use as pathway for the benefit of All India Radio (AIR). Thus, the petitioner has been in occupation of the land measuring to an extent of 5.47 acres since 06.03.1987.
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| Sl. | Period | Lease Rent |
|---|---|---|
| No. | ||
| 1. | 1.7.1982 to 30.6.1987 | Rs.500/-pre acreper annum |
| 2. | 1.7.1987 to 30.6.1992 | Rs.1000/-pre acreper annum |
| 3. | 1.7.1992 to 30.6.1997 | Rs.2000/-pre acreper annum |
detailed report regarding the fixation of lease rent based on the market value of the land for the lands leased out to the Ootacamund Gymkhana Club for the period from 01.07.1982, after taking into account of the recommendation by the Special Commissioner and Commissioner of Land Administration, vide letter dated 06.03.1997. Therefore, the lease rent was worked out considering the guideline value since there was no sale occurred within the radius of 1.60 k.m. in his vicinity during the relevant point of time. Based on the guideline value, the lease rent was arrived at Rs.46,65,119/- for the period from 01.07.1982 to 30.6.2004 and accordingly, the Government recommended to the Special Commissioner and Commissioner for Land Administration, Chennai, for fixing the lease rent and consequently the Collector, Nilgiri District, in letter dated
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12.02.2004 fixed the rent. Tentative demand of Rs.46,65,119/- had been sent to the Gymkhana Club towards the lease rent for the period from 1.7.1982 to 30.06.2004 and the petitioner-Club failed to pay the said amount. The Tahsildar served another demand notice to the petitioner-Club for a sum of Rs.1,48,48,178/-. Subsequently, yet another demand notice for Rs.3,36,09,848/- was issued to the petitioner for the period from 01.07.1982 to 30.06.2012 by giving three days time to pay the amount. However, the Gymkhana Club has failed to pay the said amount. The Tahsildar, based on the fixation of lease rent by the Government, which was communicated through the Commissioner of Land Administration and the District Collector, issued the subsequent demand notices to the petitioner club, asking them to pay the lease rent.
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Rs.5,02,775/- as full and final settlement of the lease amount, which has been worked out from their side.
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petitioner-Club and the Club is paying salary to these persons. Even in the year 2012 the Club had 40 members. Apart from these activities, the Club has no role in any charitable activities and thus, the petitionerClub could not claim itself as a non-profitable organisation. The claim of the petitioner is absolutely wrong.
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LEGAL POSITION:
Concept of Public interest in the matter of public policy:
Reddy vs State Of Jammu And Kashmir & another on 9 May, 1980, 1980 SCR (3) 1338 , made a detailed discussion on Government contracts, Limitations on the Government to grant contracts, Test of reasonableness, concept of public interest and Articles 14 & 19 of the Constitution and held :
“ While others have been given legal protection not only by forging procedural safeguards but also by confining, structuring and checking Government discretion in the matter of grant of such largess. The discretion of the government has been held to be not unlimited in that the Government cannot give largess in its arbitrary discretion or as its sweet will or on such terms as it chooses in its absolute discreti on.
(i) There are two limitations imposed by law which structure and control the discretion of the Government in this behalf. The first is in
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regard to the terms on which largess may be granted and the other. In regard to the persons who may be recipients of such largess.
(ii) So far as the first limitation is concerned, it flows directly from the thesis that, unlike a private individual, the State cannot act as it pleases in the matter of giving largess. Though ordinarily a private individual would be guided by economic considerations of self-gain in any action taken by him, it is always open to him under the law to act contrary to his self-interest or to oblige another in entering into a contract or. dealing with his property. But the Government is not free lo act as it likes in granting largess such as awarding a contract or selling or leasing out its property. Whatever be its activity, the Government is still the Government and is, subject to restraints inherent in its position in a democratic society. The constitutional power conferred on the Government cannot be exercised by it arbitrarily or capriciously or in and unprincipled manner; it has to be exercised for the public good. Every activity of the Government has a public element in it and it must therefore, be informed with reason and guided by
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public interest. Every action taken by the Government must be in public interest; the Government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated. If the Government awards a contract or leases out or otherwise deals with its property or grants any other largess, it would be Liable to be tested for its validity on the touch-stone of reasonableness and public interest and if it fails to satisfy either best, it would be unconstitutional and invalid.”
Concept of public interest:
(1)What according to the founding fathers constitutes the plainest requirement of public interest is set out in the Directive Principles and they embody par excellence the constitutional concept of public interest.
(2)If, therefore, any governmental action is calculated to implement or give effect to a Directive Principle, it would
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ordinarily, subject to any other overriding considerations, be informed with public interest.
(5) The Government, therefore, cannot, for example, give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest to do so. Such considerations may be that some Directive Principle is sought to be advanced or implemented or that the contract or the property is given
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not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or section of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property.
(6)Illustratively, there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action, that the Court would have to decide whether the action of the Government is reasonable and in public interest.
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discharged to the satisfaction of the Court by proper and adequate material.
(8)The Court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the Court would not strike down governmental action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest. But where it is so satisfied, it would be the plainest duty of the Court under the Constitution to invalidate the governmental action. This is one of the most important functions of the Court and also one of the most essential for preservation of the rule of law ’
(9) The second limitation on the discretion of the Government in grant of largess is in regard to the persons to whom such largess may be granted.
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DISCUSSION:
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said Government order states that the Collector recommended extension of lease for 30 years from 01.07.1997 and for fixation of lease rent by the Government. Accordingly, the Government fixed a lease amount of Rs.6000/- per year in that Government order. However, enhancement of lease rent and relevant conditions were agreed by the parties in the agreement entered between the petitioner and the respondent. Under Revenue Standing Order No.24A, form of order of grant of State land for temporary occupation for non-agricultural purposes was signed between the parties. In other words an agreement dated 26.10.1998 was entered between the petitioner-Ootacamund Gymkhana Club and the respondent.
W.P.Nos.2192 of 2012, 33991 of 2018, 2636 & 28247 of 2019
agreeable to pay the enhanced rent when so required”. Various other conditions are imposed stating that the land cannot be utilised for any other purposes other than the purpose of which it was leased out.
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on the basis of the guideline value, which was arrived at Rs.46,65,119/- for the period from 01.07.1982 to 30.06.2004 and the same was recommended to the Special Commissioner and the Commissioner of Land Administration, Chennai for fixing the lease rent.
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the Secretary of the petitioner-Club. If the petitioner claims that the Tahsildar has no authority to issue Demand Notice, then the very agreement signed by the District Revenue Officer is also to be held as infirm.
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the Government necessarily has to delegate its powers for the purpose of effective public administration. Therefore, such grounds raised by the petitioner are untenable and beyond the scope of judicial review.
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and they continue to possess the Government land by paying the meagre lease rent of Rs.6000/- per year, which was fixed several years back.
xv) A direct enquiry revealed that the enrollment fee for a member is very high which clearly shows that they do not serve the cause of any commoners. The land had been put to use for any purpose which goes to serve the enlistment of the poor and the downtrodden, probably their claim could be sustained. Even otherwise, for non commercial activities, the Government norms prescribes 7% of the land value as Lease rent instead of 14% of the land value prescribed for commercial activities and hence their claim
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deserves no consideration.
The Ootacamund Gymkhana Club is a purely recreation club meant for the affluent where the members indulge in leisure activities and thus it was recommend to reject their request for reconsideration of the leave vide this office letter 2nd read above.”
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Notices were based on the Government instructions and based on the recommendations of the Additional Chief Secretary and Commissioner of Land Administration, Chennai. Thus, the very ground raised by the petitioner in this regard is untenable.
CONCLUSION:
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paying the arrears of lease rent, the respondents are directed to immediately evict the petitioner from the Government land and take possession of the Government land and utilise the same for the benefit of the public at large, since the subject Government land is a high value property in Ootacamund Town.
Consequently, the connected Miscellaneous Petitions are closed. However, there shall be no order as to costs.
08.09.2023
Jeni/Sha Index: Yes Speaking Order Neutral Citation: Yes
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To
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S.M.SUBRAMANIAM, J.
Jeni/Sha
W.P.Nos.2192 of 2012, 33991 of 2018, 2636 & 28247 of 2019
08.09.2023
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3 issues framed by the court
Whether the Tahsildar had authority to issue demand notices for lease rent arrears when the lease was granted by the Government.
Whether the lease rent enhancement demanded by the authorities was valid under the terms of the lease agreement.
Whether the petitioner was entitled to relief against the demand for arrears of lease rent.
Colour shows how this judgement treated each authority
Kasturi Lal Lakshmi Reddy vs State Of Jammu And Kashmir & anotherReferred
Kasturi Lal Lakshmi Reddy vs State Of Jammu And Kashmir & another on 9 May, 1980, 1980 SCR (3) 1338 · Who else cites this
1 provisions across 1 enactments
Ootacamund Gymkhana Club
State of Tamil Nadu
The Special Commissioner and Commissioner of Land Administration
The District Collector, Nilgiris District
The Tahsildar, Taluk Office, Udhagamanadalam
S.M.Subramaniam
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
