Partly allowed

Sri Lakshmi Gayatri Hotels Pvt. Ltd., v. The A.P. Tourism Development Corporation Ltd.

Telangana HC2 Nov 2009CRP/4272/2009

Case brief

AI extract

What is this about?

High Court modified a stay order pending appeal against under the Public Premises Eviction Act. It fixed monthly deposit at Rs.40 lakhs and bank guarantee at Rs.2 crores, adjusted for the petitioner's actual possession of 80,052.5 sq. ft. instead of agreed area.

What did the court decide?

Petitioner directed to furnish Rs.2 Crores bank guarantee and deposit Rs.40 lakhs monthly as rent by 10th of every month.

Sri Lakshmi Gayatri Hotels Pvt. Ltd., Vs… — Contract and Commercial Disputes | Telangana HC (2009)

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THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY

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Civil Revision Petition No.4272 of 2009

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Dated:02.11.2009

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Between:

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Sri Lakshmi Gayatri Hotels Private Ltd. rep. by its Managing Director.

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….Revision Petitioner

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and

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1) The Andhra Pradesh Tourism Development Corporation Ltd. rep. by its Managing Director and another.

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…Respondents

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THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Civil Revision Petition No.4272 of 2009

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ORDER:

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This Civil Revision Petition is directed against the order dated 26.08.2009 passed in I.A.No.2635 of 2009 in CMA No.108 of 2009 on the file of the Chief Judge, City Civil Courts, Hyderabad, whereby and whereunder the learned Chief Judge allowed the petition filed under Section 9(3) of the Andhra Pradesh Public Premises (Eviction of Unauthorised Occupants) Act, 1968, (for short, ‘the Act’) granting stay of the order dated 14.07.2009 passed by the Estate Officer, A.P. State Tourism Development Corporation Ltd., Hyderabad, in Case No.APTDC/EO/2/2009.

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2. On 11.09.2009 the CRP came to be admitted and also an interim order came to be granted vide CRPMP No.5842 of 2009. The interim order passed on 11.09.2009 reads as hereunder:

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“There shall be interim stay subject to the condition of the petitioner furnishing a Bank Guarantee of Rs.2 Crores (Rupees Two Crores), which should be kept alive from time to time, within a period of three weeks from today, and also continuing to pay Rs.15,00,000/(Rupees Fifteen Lakhs only) towards monthly rentals, on or before 15^th of every succeeding month, commencing from the month of

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October, 2009.

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Notice”

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3. 1^st respondent-The Andhra Pradesh Tourism Development Corporation Limited filed CMP No.6510 of 2009 with a prayer to vacate the interim order granted in CMP No.5842 of 2009, dated 11.09.2009. 4. When the vacate stay petition came up for consideration, with the consent of the learned counsel appearing for the parties, the CRP itself is taken up for final disposal.

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5. The background facts in a nutshell leading to filing of this Civil Revision Petition by M/s.Sri Lakshmi Gayatri Hotels Pvt. Ltd., a company incorporated under the Companies Act, 1956, are:- 1^st respondent-The A.P. Tourism Development Corporation Limited (hereinafter referred to as ‘APTDC’) invited tenders for operation and maintenance of its hotel at Balayogi Paryatak Bhavan (Tourism Plaza) at Begumpet, Hyderabad. The petitioner was the successful bidder in the bid. On 08.08.2007 the petitioner entered into an agreement with the APTDC. Under the said agreement, the petitioner is required to maintain and run the leased hotel premises on consideration of payment of Rs.7,19,10,000/- (Rupees Seven Crore, Nineteen Lakhs and ten thousand only) for the first lease Year, which amount shall be enhanced in every subsequent lease Year during the authorized lease period (authorization period is twenty five years as per Article 2 – Section 2.3) by five percent over the lease rental payable in the preceding lease Year. According to the petitioner, the built up area agreed to be leased was 1,38,647 sq. feet of hotel premises (apart from 5238 square feet food court area). Some disputes cropped up with regard to the terms of lease. Notices were exchanged between the parties. The petitioner filed Arbitration Application No.28 of 2009 under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of arbitrator for resolution of the disputes arising out of the agreement. Whileso, the APTDC terminated the agreement

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on 19.05.2009 and initiated proceedings under the provisions of the Act. The 2^nd respondent-Estate Officer issued a show-cause notice to the petitioner under Section 4(1) of the Act. The 2^nd respondent-Estate Officer, after considering the material brought on record and on hearing the counsel appearing for the parties, passed eviction order under Section 5(1) of the Act, under proceedings Case No.APTEC/EO/2/2009, dated 14.07.2009. The relevant portion of the

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order reads as hereunder:

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“Admittedly the premises in question is a public premises as defined under Section 2(d) of A.P. Public Premises (Eviction of Unauthorized Occupants) Act, 1968. Admittedly, there is an Agreement of Lease between Petitioner and Respondent to which both have signed the contract. The agreement was terminated by Petitioner on 19.05.2009.

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The Respondent has not produced any material to show that the Termination order passed by the Petitio0ner is questioned in any court of law and that there is stay. Similarly, pendency of Arbitration Case before the Hon’ble High Court of A.P., with regard to dispute raised by the Respondent before termination of contract by the Petitioner has nothing to do with the present case. Therefore, the contention of the Respondent that Arbitration Case is pending before Hon’ble High Court and that the matter is sub judice and hence I cannot proceed with the enquiry in the present case is not proper and I reject the said contention. In spite of giving opportunity to the Respondent, the Respondent has not produced any material to show or let in any evidence either oral or documentary to prove that he is not unauthorized occupant of the premises in question. In the absence of any material produced by the Respondent in response to my show cause notice dated 26.06.2009. I have no hesitation to hold that the Respondent is an unauthorized occupant of the property in question. Further, the Respondent has not produced any evidence to show that he is not in arrears of rent as claimed by petitioner. Therefore, I hold that the Respondent is also a defaulter in payment of rents to the Petitioner. As such having held by me that Respondent is an unauthorized Occupant of the premises in question, I hold that he is liable to be evicted.

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In view of the circumstances mentioned supra and in exercise of the powers conferred under sub-section (1) of Section 5 of the Andhra Pradesh Public Premises (Eviction of Unauthorized Occupants) Act,

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1968, I hereby order that the said public premises shall be vacated by the Respondent Company viz., i.e., M/s.Sri Lakshmi Gayatri Hotels Pvt. Ltd., and all persons who are or may be in occupation of the said public premises, or any part thereof and peaceful possession handed over to the Deputy General Manager & Divisional Manager, APTDCL, Hyderabad. If any person fails or refuses to comply with this order within thirty days of the date of publication of this order, the said M/s.Sri Lakshmi Gayatri Hotels Pvt. Ltd. and all other persons concerned are liable to be evicted from the said public premises if need be, by use of such Police force as may be necessary without giving further notice.”

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Assailing the order passed by the 2^nd respondent-Estate Officer, the petitioner filed CMA No.108 of 2009 on the file of the Chief Judge, City Civil Courts, Hyderabad and also moved I.A.No.2635 of 2009 under Section 9(3) of the Act, for stay of the order dated 14.07.2009 passed by the 2^nd respondent-Estate Officer. The learned Chief Judge, on considering the material brought on record and on hearing the counsel appearing for the parties, allowed the application granting stay of the order passed by the 2^nd respondent subject to deposit of half of the arrears of rent i.e., Rs.4,45,00,000/- within one month and continue to deposit the admitted lease amount every month till the disposal of the appeal, with a default clause, by order dated 26.08.2009. Hence, this CRP by the petitioner.

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6. Heard Sri D.Prakash Reddy, learned senior counsel appearing for the revision petitioner and Sri D.V.Seetharama Murthy, learned Advocate General, appearing for the respondents.

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7. Sri D.Prakash Reddy, learned senior counsel appearing for the revision petitioner submits that the area handed over to the petitioner by the 1^st respondent – APTDC itself is in dispute and in which case directing the petitioner to deposit the admitted lease amount causes much prejudice to the contention of the petitioner apart from being onerous. A further submission has been made that since arbitration

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petition has been filed and arbitrator is appointed, evicting the petitioner pending the arbitration proceedings amounts to prejudging the issue.

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8. Sri D.V.Seetharama Murthy, learned Advocate General appearing for the 1^st respondent-APTDC submits that the extent handed over to the petitioner is explicit from the agreement itself and there cannot be any dispute with regard to the extent of land. A further submission has been made that the total amount due is about Rs.11 crores and the order passed by the appellate court in directing the petitioner to deposit Rs.4,45,00,000/- to continue it to be in occupation of the premises in question is a reasonable order and it does not warrant interference of this Court in exercise of powers under Article 226 of the Constitution of India. A further submission has been made that the monthly rent comes to about Rs.65,00,000/- and the order passed by the appellate Court in directing the petitioner to pay the monthly rent is just and proper in the given facts and circumstances of the case and it does not warrant interference of this Court.

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9. As seen from the material brought on record, the petitioner has been agitating that it has not been put into possession of the total extent of the leased premises. According to the petitioner, it has been put into possession of 80,052.5 sq. ft. of built up area as against the agreed area of 1,43,885 sq. ft. It appears the appellate Court has not taken note of contention of the petitioner while directing it to pay monthly rents. The total rent for an extent of 1,43,885 sq. ft roughly comes to Rs.63,00,000/-. Admittedly, the petitioner has been in possession of 80,052.5 sq. ft. Keeping in view of this aspect, I deem it appropriate to direct the petitioner to deposit Rs.40,00,000/- per month besides furnishing bank guarantee for Rs.2 Crores.

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10. Learned senior counsel appearing for the petitioner stated across the bar that the petitioner has already executed a bank

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guarantee for Rs.2 Crores.

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11. In that view of the matter, the conditional order dated 26.08.2009 passed by the appellate Court in I.A.No.2635 of 2009 in CMA No.108of 2009 is hereby modified. The modified conditions are:

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1) The petitioner shall furnish a bank guarantee of Rs.2 Crores and keep the bank guarantee alive pending the appeal;

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2) The petitioner shall also deposit Rs.40,00,000/- per month from the month of August, 2009; and

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3) The monthly rent as indicated above shall be deposited by the petitioner by 10^th of every succeeding month. Arrears, if any as on this day, shall be deposited within four weeks.

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12. Accordingly, this Civil Revision Petition is partly allowed. No order as to costs.

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______________________ B.SESHASAYANA REDDY, J.

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Date:02^nd November, 2009 cs

Sri Lakshmi Gayatri Hotels Pvt. Ltd., v. The A.P. Tourism Development Corporation Ltd.

Case brief

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Sri Lakshmi Gayatri Hotels Pvt. Ltd., v. The A.P. Tourism Development Corporation Ltd.

Case brief

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