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PETITIONER: M/S.STYLE (DRESS LAND)

       Vs.

RESPONDENT: UNION TERRITORY CHANDIGARH & ANR

DATE OF JUDGMENT:       01/08/1999

BENCH: R.P.Shthi

JUDGMENT:

     SETHI, J.

     Delay condoned in SLP(C)..../99 (CC 902/99).

     Leave  granted.   Sector 17 is a commercial centre  in Chandigarh,  the  city beautiful of India which is also  the capital  of  Punjab  and Haryana, the  two  most  prosperous States  of  the  country.  Shopkeepers  of  this  commercial centre are aggrieved of the enhancement of the rent of their leased  premises  from Rs.2,671/- to Rs.14,000/-  per  month which,  according to them, is irrational, unwarranted by law and  arbitrary being 600 per cent increase.  The shops under their  occupation  are stated to have been initially  leased out  to  them at a paltry rent of Rs.525/- with effect  from 10th May, 1968.  Whereas the respondent Union Territory have steadily enhanced the rent from time to time, the appellants herein   have  unsuccessfully  put   all  types  of  hurdles conceivable under the present legal system.  Almost admitted facts  leading to the filing of the present appeals are that the  appellants were leased commercial premises in Sector 17 of  Chandigarh  in  or about the  years  1963-64.   However, formal  lease deeds were executed between the Lessor and the Lessees  in May, 1968 on payment of monthly rent of Rs.525/- per mensem in advance by the 19th day of the month for which it  fell due.  The lease was initially for a period of  five years  from the date of the grant which could be  terminated by  the  Lessor  by  giving one month’s  advance  notice  in writing  to the Lessees.  The lease was renewable only  once for another term of five years with 20% increase in the rent reserved under the deed.  In the event of non payment of the rent  on  the  due date or breach or non observance  by  the Lessee  of  any of the conditions of the lease deed, it  was lawful  for  the Lessor, notwithstanding the waiver  of  any previous cause or right for re-entry, to terminate the lease and enter into and upon the building or any part thereof and to  re-possess, retain and enjoy the same and in that  event the  Lessee was not entitled to the refund of lease money or any  part  thereof  or  to any  compensation  whatsoever  on account of such resumption.  After the expiry of the initial period  of  10  years, the rent of the leased  premises  was increased to Rs.2,671/- per month with effect from 1.3.1982. Being  aggrieved by the increase of rent, the Lessees  filed writ  petitions  in  the High Court of Punjab &  Haryana  in which  their  plea was not accepted and a Division Bench  of the High Court vide its judgment dated 4th August, 1988 held that  there  was no evidence to show that the enhanced  rent

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was,  in  any  way, unreasonable or  arbitrary.   The  Court further  observed,  "in fact we had a feeling that  this  is much  lower  than the fair payable rent in respect  of  such premises".   However,  as by then the Lessees had agreed  to pay  the enhanced rent with effect from 1st March, 1982 till the end of February, 1991, the Court set aside the orders of termination  of their leases which had been passed on  their failure  to  pay  the  enhanced rent.   The  petitions  were disposed of holding:

     "The  result  would  be  that he shall  be  deemed  to continue  to be lessee under the Estate Administration.   We shall  now  execute  a lease deed agreeing to  pay  rent  as aforesaid.   The rent shall be revisable for the period from March  1,  1991  as  per the existing rules  of  the  Estate Administration.  The arrears for the period of March 1, 1982 till July 31, 1988, shall be paid on or before September 30, 1988  and  the rent for the month of August, 1988  shall  be paid  on  or before the 10th of September, 1988 and for  the month  of September 1988, it shall be paid on or before  the 10th  October,  1988  and for every subsequent month  on  or before the 10th of each subsequent month."

     After  the expiry of the period prescribed by the High Court,  the Lessees were allowed to remain in possession but were  slapped with a notice on 19th August, 1992  intimating them  to renew the lease subject to enhancement of rent from Rs.2,671/-  to Rs.14,000/- with effect from 1.3.1992 pending decision   of   the  Chandigarh   Administration   for   the intervening  period  i.e.   1.3.1991 to  29.2.1992  for  the increase of rent at enhanced rates which was intimated to be binding upon the Lessees as and when increased.  The Lessees were called upon to renew fresh lease deeds in favour of the respondents  containing  the terms and  conditions  detailed therein.   Feeling  that  the  enhanced  rent  was  illegal, unfair, arbitrary and uncalled for, the Lessees of the shops in  Sector 17 filed various writ petitions in the High Court of  Punjab  &  Haryana  at  Chandigarh.   One  set  of  such petitions  Nos.10520-21  of 1996 entitled Dr.Sahib  Singh  & Sons  vs.   Chandigarh Administration were disposed of  vide judgment  Annexure  P-4  upholding the right  of  the  Union Territory  Chandigarh  to enhance the rent with  appropriate directions needed in the peculiar facts and circumstances of the  case.  Contending that their cases were different  than Sahib  Singh’s  matter, the appellant herein insisted for  a fresh  hearing  and  a separate judgment.   The  prayer  was accepted  and the Division Bench vide its detailed  judgment dated 19th December, 1997 dismissed the petitions but in the circumstances  directed that if the appellants convey  their consent  to  the  terms and conditions incorporated  in  the impugned  notices  within three months, the respondents  may renew the lease granted to such of the appellants subject to their  paying  the arrears of rent within six  months.   The respondents  were entitled to charge appropriate interest on the  amount of arrears of rent between 1.3.1992 to the  date of  the  stay orders obtained by them from the  High  Court. For  the period during which the payment of the rent at  the rates  specified in the impugned notices remained stayed  by the  Court,  the appellants were directed to pay interest  @ 18%  per  annum.  The amount of interest was required to  be paid  by  the appellants within six months from the date  of the  judgment.  Thus, all such appellants who failed to give their  consent  in terms of the direction or failed  to  pay arrears along with interest within the time specified in the

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judgment were to forfeit their right to remain in possession of  the properties leased out to them and the respondents in that  event  were declared to be absolutely free to  recover possession  thereof  in  accordance  with  law.   The  Court directed the respondents to take urgent steps to enhance the rent  of  other  similar properties situated  in  Sector  17 regarding  which the complaints were made by the  appellants on  the  plea of discrimination.  It may be noticed that  by the  time the High Court delivered the judgment in the  case of  the  appellants,  this Court had dismissed the  SLP  (C) No.18466  of  1997 which was filed against the  judgment  in Sahib Singh’s case, by order dated 29th September, 1997.  To protract the litigation further, the appellants filed Review Petitions   before  the  High   Court  praying  therein   to reconsider  the matter or atleast absolve the appellants  of their  liability to pay the interest as awarded by the  main judgment.   The Review Petitions were also dismissed on 17th July,  1998.   Immediately  after the pronouncement  of  the orders  in  review petitions, the counsel for the  appellant made  a statement that his clients were prepared to pay  the amount  of  interest  for  which he wanted  some  time.   He requested  for the grant of six months time for the  purpose but  the Court allowed three months time in the interests of justice.   These  appeals  are  directed  against  the  main judgment of the High Court dated 19th December, 1997 and the orders  in  Review Petitions dated 17th July, 1998.   It  is contended  that  the impugned judgment and order is  against law,  without  jurisdiction  and  the  result  of  arbitrary exercise  of  powers.  Learned counsel who appeared for  the appellants  have  vehemently argued that admittedly  in  the absence  of  the  rules,  required to be  framed  under  the Capital  of Punjab (Development & Regulation) Act, 1952, the respondent Administration had no jurisdiction to enhance the rent.   Alternatively,  conceding that such  power  existed, they  have argued that the exercise of power has been unfair and  arbitrary.   It is submitted that the respondent  being the regulator and dispenser of special services and provider of large number of benefits including the granting of leases are  required to act fairly and reasonably.  The  discretion of the respondents even if assumed is not unlimited and that the  respondents  cannot  give  or withhold  leases  in  its arbitrary  discretion  or at its sweet will.  It is  further submitted  that the High Court was not justified in awarding the  interest  for the period of stay granted by it  in  the cases  filed  by the appellants.  There is no  dispute  that Capital  of  Punjab  (Development &  Regulation)  Act,  1952 (hereinafter  referred  to  as ‘the Act’) being  Punjab  Act No.27  of 1952, is applicable to the city of Chandigarh with effect  from  1968.  The Act was enacted at a time when  the construction  of  a  new  capital  of  the  then  Punjab  at Chandigarh  was in progress.  It was considered necessary to vest the State Government with a legal authority to regulate the  sale of building sites and to promulgate building rules on  the  lines of municipal bye-laws so long as  a  properly constituted  local body did not take over the administration of the city.  Section 3 of the Act provides:

     3.   "Power  of  Central   Government  in  respect  of transfer  of land and buildings in Chandigarh.- (1)  Subject to  the  provisions of this section, the Central  Government may  sell, lease or otherwise transfer, whether by  auction, allotment  or  otherwise, any land or building belonging  to the Government in Chandigarh on such terms and conditions as it  may,  subject to any rules that may be made  under  this Act, think fit to impose.

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     (2)  The  consideration money for any  transfer  under sub-section  (1) shall be paid to the Central Government  in such  manner  and  in such instalments and at such  rate  of interest as may be prescribed.

     (3)  Notwithstanding  anything contained in any  other law   for  the  time  being  in  force,  until  the   entire consideration  money  together  with interest or  any  other amount,  if any, due to the Central Government on account of the  transfer  of  any  site or  building,  or  both,  under sub-section  (1) is paid, such site or building, or both, as the  case  may be, shall continue to belong to  the  Central Government."

     Sub-Section  (1)  of Section 3 itself  authorises  the Central  Government to sell, lease or otherwise transfer any land or building belonging to it in Chandigarh on such terms and  conditions  as it may think fit to impose.   Conditions for sale, lease and transfer can be regulated by rules which may be made under the Act.  Section 22 of the Act authorises the  Central  Government to make rules for carrying out  the purposes of the Act which include:

     "(a)  the  terms and conditions on which any  land  or building  may be transferred by the Central Government under this Act.

     (b)  the  manner in which consideration money for  any transfer may be paid;

     (c)  the  rate of interest payable, and the  procedure for  payment of instalments, interest, fees, rents or  other dues payable under this Act;

     (d)  the terms and conditions under which the transfer of any right in any site or building may be permitted;

     (e) erection of any building or the use of any site;

     (f) levy of fees or taxes under section 7;

     (g)  the terms and conditions for the breach of  which any site or building may be resumed;

     (h)  the conditions with regard to the buildings to be erected on sites transferred under this Act;

     (i) the form of notice and the manner in which notices may be served;

     (j)  the  form  and  manner   in  which  appeals   and applications  under this Act may be filed and the court fees leviable on such appeals and applications;

     (k)  the  matters  referred to in sub-section  (2)  of section 5;

     (l)  any  other  matter  which has to  be  or  may  be prescribed."

     The  combined reading of Sections 3 and 22 of the  Act

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would indicate the existence of an obligation on the Central Government  to make rules for the purposes of regulating the terms  and  conditions relating to the transfer of  property including  leasing  it  out.  However, failure to  make  the rules  would  not render the transfer of the  property  made under   the  terms  of  the   lease  as  illegal,  void   or inoperative.   Learned counsel appearing for the appellants, after some arguments, also conceded the vesting of powers in the  respondents  to sell, lease or otherwise  transfer  the property  in  the Union Territory of Chandigarh  subject  to such conditions as it thought fit.  They did not insist that the  lease  could  not be made or the  terms  including  the enhancement of rent could not be imposed without framing the rules.   We  are also of the opinion that power to  transfer the  property  including  leasing it out  is  authorised  by Section  3  itself and its terms and conditions left to  the satisfaction of the Central Government.  Though, not legally obliged  to  make  the  rules, the  Central  Government  was obliged  to  take steps in making the rules  regulating  the transfer  of properties contemplating transfer of properties by  the  modes  envisaged under the  Section,  for  allaying apprehensions  of the citizens regarding discrimination  and arbitrariness.   It would have been in the interests of  the Central  Government  itself to frame the rules for  infusing confidence  and rationality, reasonableness and fairness  in their  actions.   We  trust  and   hope  that  the   Central Government  would  not loose any further time in making  the rules as mandated by the Section and embark upon enhancement of  rent, if deemed necessary, only under such rules, as and when made for the purposes of carrying on the objects of the Act  to  their logical conclusions.  In the absence  of  the rules, the action of the respondents regarding imposition of terms  and conditions of the lease including the enhancement of  rent  is  required  to be fair and  reasonable  and  not actuated   by  considerations  which   could  be  termed  as arbitrary or discriminatory.  The government cannot act like a  private individual in imposing the conditions solely with the  object  of  extracting   profits  from  their  lessees. Governmental  actions are required to be based on  standards which  are  not  arbitrary or unauthorised.  This  Court  in Ramana  Dayaram  Shetty  vs.    The  International   Airport Authority  of India & Ors.  (AIR 1979 1629=1979 (3) SCC 489) while agreeing with the observations of Mathew,J.  held:

     "We  agree with the observations of Mathew, J., in  v. Punnan Thomas v.  State of Kerala AIR 1969 Ker 81 (FB) that: "The  Government,  is  not and should not be as free  as  an individual  in  selecting  the recipients for  its  largess. Whatever   its  activity,  the   Government  is  still   the Government  and  will be subject to restraints, inherent  in its   position  in  a   democratic  society.   A  democratic Government   cannot  lay  down   arbitrary  and   capricious standards  for the choice of persons with whom alone it will deal"  The  same  point was made by this  Court  in  Erusian Equipment  and  Chemicals  Ltd.  Vs.  State of  West  bengal (1975)  2 SCR 674;  (AIR 1975 SC 266) where the question was whether  black-listing  of  a person without giving  him  an opportunity  to  be heard was bad?  Ray, C.J.,  speaking  on behalf  of  himself and his colleagues on the Bench  pointed out  that  black-listing  of a person not only  affects  his reputation  which  is in Poundian terms as interest both  of personality  and substance, but also denies him equality  in the matter of entering into contract with the Government and it cannot, therefore, be supported without fair hearing.  It was  argued for the Government that no person has a right to

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enter  into contractal relationship with the Government  and the  Government, like any other private individual, has  the absolute  right  to  enter  into contract with  any  one  it pleases.   But the court, speaking through the learned Chief Justice, responded that the Government is not like a private individual  who can pick and choose the person with whom  it will  deal, but the Government is still a Government when it enters into contract or when it is administering largess and it  cannot, without adequate reason, exclude any person from dealing  with  it  or take away  largess  arbitrarily.   The learned  Chief  Justice  said that when  the  Government  is trading  with the public, "the democratic form of Government demands   equality  and   absence  of   arbitrariness....The activities  of  the  Government have a public  element  and, therefore, there should be fairness and equality.  The State need not enter into any contract with anyone, but if it does so,  it must do so fairly without discrimination and without unfair  procedure." This proposition would hold good in  all cases  of  dealing by the Government with the public,  where the  interest  sought  to be protected is a  privilege.   It must,  therefore,  be  taken to be the law  that  where  the Government  is  dealing with the public, whether by  way  of giving  jobs or entering into contracts or issuing quotas or licences  or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual,  deal with any person it pleases, but its action must  be  in conformity with standard or norm which  is  not arbitrary,   irrational  or  irrelevant.    The   power   or discretion  of  the  Government in the matter  of  grant  of largess  including award of jobs, contracts quotas, licences etc.,  must be confined and structured by rational, relevant and  non-  discriminatory  standard  or   norm  and  if  the government  departs  from  such  standard  or  norm  in  any particular case or cases, the action of the Government would be  liable to be struck down, unless it can be shown by  the Government  that  the departure was not arbitrary,  but  was based  on  some  valid  principle which in  itself  was  not irrational, unreasonable or discriminatory."

     Even  the administrative orders and not quasi judicial are  required  to  be made in a manner consonance  with  the rules of natural justice, when they affect the rights of the citizens  to the property or the attributes of the property. While exercising the powers of judicial review the Court can look  into the reasons given by the Government in support of its action but cannot substitute its own reasons.  The Court can  strike down an executive order, if it finds the reasons assigned  were  irrelevant and extraneous.  The  courts  are more  concerned  with the decision making process  than  the decision itself.  This Court in Kumari Shrilekhs Vidyarthi & Ors.   Vs.   State of U.P.  & Ors.  [1991 (1) SCC 212]  held that  every  State action, in order to survive, must not  be susceptible  to the vice of arbitrariness which is the  crux of  Article  14  and basic to the rules of law,  the  system which  governs  us, arbitrariness being the negation of  the rule   of  law.   Non-arbitrariness,   being   a   necessary concomitant  of  the rule of law, it is imperative that  all actions  of every public functionary in whatever sphere must be  guided  by  reason  and not  humour,  whim,  caprice  or personal  predilections  of the persons entrusted  with  the task  on behalf of the State and exercise of all powers must be  for public good instead of being an abuse of the  power. Action of renewability should be gauged not on the nature of function  but  public  nature of the  body  exercising  that function  and  such action shall be open to judicial  review

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even  if it pertains to contractual field.  The State action which  is  not informed by reason cannot be protected as  it would  be  easy for the citizens to question such an  action being  arbitrary.   In  the  instant  case,  the  respondent Administration  relied  upon Memo No.317 dated 16.3.1992  of the  Executive  Engineer  CP   Division  No.3  Chandigarh  , Government  of  Punjab  circular dated 15th  May,  1996  and affidavit  of Shri Krishanjeet Singh, Executive Engineer, CP Division  No.5,  Union Territory, Chandigarh filed in  Civil Writ  No.10521/96 to justify their action of enhancement  of rent  being  fair  and  reasonable.   Memo  dated  16.3.1992 referred to earlier Memo No.122 dated 3.2.87 and the meeting held  in the office of the Chief Engineer, U.T.   Chandigarh on 4.3.1992.  It was mentioned in the memo that the rates of rent  earlier  recommended had become obsolete and that  the accommodation  was  not available to the Government on  hire basis  at those rates keeping in view the plinth area  which had been revised for the purposes of calculating the rent of private  buildings hired by the Government with effect  from 1.3.1992.  It was further stated in the memo that:

     "The  land rates already conveyed in Memo No.122 dated 3.2.87  shall  be applicable,, but the rental value will  be calculated @ 9% per annum.

     S.No.  Description Rates proposed for adoption Remarks 1 .  Ground Floor Rs.2450.00 Sqa.  The plaint area rates.  2 .  First Floor Rs.2250.00 P.So

     3 .  Second floor and so on Rs.2250.00 P.So

     4 .  Extra for terrace tiles/terrace flooring in rooms verandha except toilets Rs.  65.00

     5  .  Extra for glazed/spartik or equivalent tiles  in flooring and dado in toilets and kitchen Rs.  350.00

     6 .  Extra for marble flooring Rs.  900.00

     7  .  Extra for teek wood joinery only alongwith brass fittings  Rs.   440.00  For  door  and  window  only.   8  . Concrete  paving  beyond  plint  area of  the  building  Rs. 100.00

     9  .   Land  scaping of grassed  Rs.1000.00  Kanal  of grassed area.

     Note:

     1.  The amount so evolved for the building portion may be  reduced  by  20%  and thereafter rental  volume  may  be calculated  @  9%  PA.  2.  Since the rates have  been  made applicable  w.e.f.   1.3.1992 depreciation @ 1% per year  of the  age of the building should be taken (only for  building portion except cost of land).

     II.   Cost  of Land a) Upto Ist Kanal (upto  Rs.453.00 (Four  hundred  500  sq.yards) and fifty three  only)  P.Sq. yds.)

     b)  II  Kanal (501 to 1000 sq.yds)  Rs.356.00  (Rupees three hundred and fifty six only per sq.yds.

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     c)  For  remaining area (above Rs.227.00  (Rupees  two 1000 sq.yds) hundred and twenty seven only per Sq.Yds.)

     d) Extra for preferential plots 10%

     III)  Rental value for cost of land so evolved will be calculated @ 9% per annum.

     B)  For  commercial  purposes rent so evolved  on  the above  rates  shall  be increased five  times."  (underlying supplied)

     Government of Punjab circular dated 15th May, 1996 was also  on  the  subject  of periodical revision  of  rent  of private   buildings.   While  justifying   the   action   of enhancement  of  rent  and showing it to be  reasonably  and fairly  fixed,  Shri  Krishanjeet  Singh  in  his  affidavit (Annexure  P-5) had stated:  "The assessment at monthly rent of  Rs.14,000/- in respect of the aforesaid SCO was assessed as follows:

     Covered  area of SCO is 2066.62 sq.ft.  which comes to 192.06  sq.meters.  The cost of construction per Sq.Meter at ground  floor  in  the  year 1992  was  Rs.2450/-  for  such buildings.  This figure of Rs.2450/- is based on actual cost of  construction  of  similar  other type  of  buildings  in Chandigarh.   Thus, the total cost of construction of ground floor comes to Rs.4,70,547/- (192.06 sq.mtrs.  x 2450/-).

     SCO  51  being an old construction, the total cost  of construction  was  reduced by 20%.  After that 1% per  annum depreciation  was  also  permitted for 29 years as  per  the norms.  The details are given hereunder:

     Total   cost   of  construction    Of   ground   floor Rs.470547.00

     2450  x  192.06  less 20% Rs.   94109.00  ____________ Rs.376438.00

     Less   1%   depreciation  per   Annum  for  29   years Rs.109167.00 ____________ Rs.267271.00

     3.   That  for  the determination of the  annual  rent value,  9% of net cost of construction is to be taken  which comes  to Rs.24054/- (9% of Rs.267271/- = Rs.24054/-).  This figure  of Rs.24054/- represents rental value per annum,  on the  total cost of construction which may be marked as  "A". For  calculating the cost of land on which aforesaid SCO has been  built which has an area of 2066 sq.ft.  which is equal to  229.62 sq.yards.  As per letter Annexure R/A Rs.453/- is the  cost of per sq.yard which amounts to total cost of land as  Rs.104018/-.   This  figure  has   been  arrived  at  by multiplying 229.62 sq.  yards by Rs.453/- (229.62 sq.yards x Rs.453/-).   For determing the annual rental value again  we have to deduct 9% of cost of land i.e.  Rs.104018/- which is rental value per annual as Rs.9362/-.  This may be marked as "B".   Thus  the  annual rental value of the  aforesaid  SCO comes  to Rs.33416/- by adding "A" and "B".  For determining the rental value per month Rs.33416/- is to be divided by 12 and  we  would  get  the rent per month which  is  equal  to Rs.2785/-.  The aforesaid SCO being commercial this is to be

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multiplied  by  5  times  which   comes  to  Rs.13925/-  say Rs.14000/-."

     In the written statement filed in the petitions of the appellants, the respondent had stated:

     "13.   That the admitted portion of the para 13 of the writ  petition calls for no comments.  It is submitted  that Competent  Authority granted approval vide Annexure R/2  for charging  the  rent  w.e.f.  1.3.1992 on the  basis  of  the reassessment  of  rent made by the  Engineering  Department, Chandigarh  Administration.  During the year 1970 Govt.   of India  through  Finance  Secretary   Memo  dated   25.5.1970 informed  that the market rent or the rent calculated  under FR  45  with  Departmental charges, whichever is  higher  is recoverable  in  respect  of Govt.  accommodation  used  for commercial purpose.  The Finance Secretary vide letter dated 12.6.1975  approved  the  charging of rent at  the  rate  of Rs.1.10  per  sq.foot in respect of shops/booths  in  Sector 17-E.   Accordingly  the lessees in Sector 17 were  informed that  from  1.3.1982 rent of Rs.2671/- per month for a  shop and  Rs.1090/-  for  a booth will be  charged.   Three  writ petitions  as already submitted (CWP No.3581, 3582, 3583  of 1983) were filed.  This Hon’ble High Court disposed of these writ petitions vide judgment annexed with this writ petition as  Annexure P/3.  A perusal of this judgment shows that the approval  was granted for charging of the rent in respect of SCO/Booths  in Sector 17-E, Chandigarh w.e.f.  1.3.92 at the rate  as  contained  in this letter.  Thus,  the  figure  of Rs.14000/-  per month is based on the re-assessment of  rent by  the Engineering Department of Chandigarh Administration. The petitioner is, thus, liable to pay this market rent.

     14.   That  in reply to the averments as contained  in para  14 of the writ petition it is submitted that the shops mentioned  by the petitioner in this para are not rented out by  the  Chandigarh Administration to the  various  parties. The  said shops are owned by the private individuals and are further  rented  out to the parties mentioned in  the  para. But  the  present  shop in occupation of the  petitioner  is rented  by  the  Government.  The market rent  calculated  @ Rs.14,000/-  per month in respect of ground floor of the SCO in  question and in occupation of the petitioner is based on the  assessment  made  by   the  Engineering  Department  of Chandigarh   Administration  and  the   same  is   justified reasonable,  constitutional  and  as  such  deserves  to  be upheld."

     The  High  Court  examined  the matter  in  depth  and rightly  concluded  that the procedure adopted and made  the basis  for  enhancing  the rent could not be  termed  to  be either  arbitrary, discriminatory or unreasonable.  We agree with  the conclusions arrived at by the High Court and  find no infirmity in the action of the respondents in raising the rate  of  rent  on the basis of the grounds  noticed  by  us hereinabove.   Such  an  action  is   stated  to  have  been uniformly  applied  with  respect  to  all  the  shopkeepers similarly  situated and placed.  Mere inaction in respect of certain  tenants  could  not be made the basis  for  setting aside  the  action  initiated  against  the  appellants  and others.   The respondents assured and the High Court rightly issued appropriate directions for initiating similar actions against  those  who  are  left out.   Dealing  with  such  a

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situation  this  Court in Chandigarh Administration  &  Anr. Vs.  Jagjit Singh & Anr.  [1995 (1) SCC 745]has held:

     "Generally   speaking,   the  mere   fact   that   the respondent-authority  has  passed a particular order in  the case  of another person similarly situated can never be  the ground for issuing a writ in favour of the petitioner on the plea  of  discrimination.  The order in favour of the  other person  might  be legal and valid or it might not be.   That has to be investigated first before it can be directed to be followed  in  the case of the petitioner.  If the  order  in favour of the other person is found to be contrary to law or not warranted in the facts and circumstances of his case, it is  obvious that such illegal or unwarranted order cannot be made   the   basis  of  issuing   a  writ   compelling   the respondent-authority  to  repeat the illegality or  to  pass another   unwarranted   order.     The   extraordinary   and discretionary  power  of the High Court cannot be  exercised for such a purpose.  Merely because the respondent-authority has  passed  one  illegal/unwarranted  order,  it  does  not entitle  the  High Court to compel the authority  to  repeat that   illegality  over  again   and  again.   The  illegal/ unwarranted  action  must  be corrected, if it can  be  done according  to  law  - indeed, wherever it is  possible,  the Court  should  direct the appropriate authority  to  correct such  wrong  orders in accordance with law - but even if  it cannot  be  corrected, it is difficult to see how it can  be made  a basis for its repetition.  By refusing to direct the respondent-authority  to repeat the illegality, the Court is not  condoning  the earlier illegal act/order nor  can  such illegal   order  constitute  the   basis  for  a  legitimate complaint  of  discrimination.  Giving effect to such  pleas would  be  prejudicial to the interests of law and  will  do incalculable  mischief  to  public interest.  It will  be  a negation  of law and the rule of law.  Of course, if in case the  order  in favour of the other person is found to  be  a lawful  and  justified one it can be followed and a  similar relief  can  be given to the petitioner if it is found  that the petitioners’ case is similar to the other persons’ case. But  then  why examine another person’s case in his  absence rather  than  examining  the case of the petitioner  who  is present  before the Court and seeking the relief.  Is it not more  appropriate and convenient to examine the  entitlement of  the petitioner before the Court to the relief asked  for in  the facts and circumstances of his case than to  enquire into  the  correctness of the order made or action taken  in another  person’s case, which other person is not before the case  nor  is his case.  In our considered opinion,  such  a course  -barring  exceptional situations - would neither  by advisable  nor  desirable.  In other words, the  High  Court cannot  ignore the law and the well-accepted norms governing the  writ  jurisdiction and say that because in one  case  a particular  order has been passed or a particular action has been  taken,  the same must be repeated irrespective of  the fact  whether such an order or action is contrary to law  or otherwise.   Each  case must be decided on its  own  merits, factual  and  legal,  in   accordance  with  relevant  legal principles.   The  orders  and actions  of  the  authorities cannot  be equated to the judgments of the Supreme Court and High  Courts  nor can they be elevated to the level  of  the precedents, as understood in the judicial world."

     It  is not the case of the appellants that the  favour done  to those whose rent has not been enhanced is legal  or

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valid.  Such an omission is also not referable to any lawful action  of the respondents.  The question of  discrimination would  arise only if it is found that the order in favour of the  left over was legal and valid and that the case of  the writ  petitioners  was similar in material respects  to  the case  of such persons.  No such allegation has been made  or arguments  addressed.  There is, therefore, no basis for the appellants  to  urge  the violation of Article  14  alleging discrimination  against  them.   Regarding awarding  of  the interest  by  the  High Court for the period of stay  it  is argued  that as in Sahib Singh’s case no such direction  was issued,  the  appellants  could  not be  burdened  with  the liability of paying the interest and that at the rate of 18% per  annum  was  excessive and exorbitant.   It  is  settled principle  of  law  that  as and when a  party  applies  and obtains  a  stay from the Court of law, it is always at  the risk and responsibility of the party applying.  Mere passing of  an order of stay cannot be presumed to be the conferment of  any  additional right upon the litigating  party.   This Court  in  Shree Chamundi Mopeds Ltd.  Vs.  Church of  South India  Trust  Assn.   [1992(3)  SCC 1] held  that  the  said portion  of  order  by the court mean only that  such  order would  not  be operative from the date of its passing.   The order  would  not mean that the order stayed had been  wiped out  from  existence.   The order of  stay  granted  pending disposal  of  a case comes to an end with the  dismissal  of substantive  proceeding  and it is the duty of the Court  in such  cases  to  put the parties in the same  position  they would  have  been but for the interim orders of  the  Court. Again  in Kanoria Chemicals and Industries Ltd.  & Ors.  Vs. U.P.  State Electricity Board & Ors.  [1997 (5) SCC 772] the Court  held  that  the grant of stay had not the  effect  of relieving  the  litigants  of their obligation to  pay  late payment  with  interest on the amount withheld by them  when the  writ  petition  was   dismissed  ultimately.    Holding otherwise  would be against public policy and the  interests of  justice.  In case law Kashyap Zip Industries vs.   Union of  India  [1993  (64)  ELT 161], interest  was  awarded  to Revenue  for the duration of stay under court’s order, since the  petitioners  therein were found to have the benefit  of keeping  back the payment of duty under orders of the Court. The  High  Court was, therefore, not wrong in directing  the payment of interest on the amount of arrears of rent for the period  when the stay order was obtained till the period the writ  petitions  were  dismissed.  We,  however,  feel  that awarding  of  interest  @ 18% per annum from  the  aforesaid period  was on the excessive side.  The respondent-authority could  not  be equated with private commercial  institutions and  conferred with an amount of compensation in the form of interest  which,  in  the judicial parlance, may  amount  to penalty,  despite  the fact that the persons found  to  have jeopardised  the process of law were rightly held liable  to compensate the respondent- authority by way of interest.  In our  opinion 15% per annum interest for the aforesaid period would  have  been just and proper.  We, however, agree  with the findings of the High Court that the respondents are free to  charge appropriate interest on the amount of arrears  of rent  between 1.3.1992 to the date when the stay orders were passed  by the High Court.  We are sure that in  determining such  rate  of interest the respondent-authority  would  act fairly  and  justly.  In C.A.  No._______of 1999 (@ SLP  (C) Nos.   17894-95) filed by M/s.New Rajan Watch Company it was admitted  that  the lease in their case was executed on  9th April,  1990  on a monthly rent of Rs.1090/- to be  paid  in advance  by  10th day of every month for which it fell  due.

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One of the terms of the lease deed was:

     "The lease shall be for period of three years from the date  of  the grant of the lease and shall be terminable  at any time by the lessor by giving one month advance notice in writing to the lessee and it shall be terminable immediately without  notice  by the lessor under clause 9  hereof.   The lease  hereby  granted shall be renewable once  for  another term  of  three  years  on the rent  as  determined  by  the government."

     The  appellants  in these appeals have urged that  the respondents  had no jurisdiction to enhance the rent  during the  subsistence  of  the lease deed for a period  of  three years  from the date of its execution.  There appears to  be substance in the submission which has not been taken note of by the High Court.  These appellants, however, not justified to  urge  that even for the period of next three years  they were  entitled to the renewal of lease deed on the same rent or  the  rent  enhanced  at the rate of  20%  at  the  most. Condition   No.4   reproduced    hereinabove   clearly   and unambiguously  authorised the respondent-authority to  renew the lease for another term of three years on the rent as may be  determined by the Government.  It is, therefore, evident that for the first period of three years commencing from 9th April,  1990  the respondent-authority was not justified  in enhancing  the rent of the shop leased out to M/s.New  Rajan Watch  Company.   The  enhancement of rent  shall,  however, deemed  to  be legal, proper and valid with effect from  9th April, 1993.  In the circumstances, the appeals are disposed of  by upholding the judgments and orders impugned except to the  extent  indicated hereinabove.  The impugned  judgments and  orders shall stand modified to the extent that  instead of paying 18% interest for the period of stay the appellants shall  be liable to pay the interest at the rate of 15%  per annum.   In case of M/s.New Rajan Watch Company the enhanced rent  shall  be deemed to be effective with effect from  9th April,  1993  and  the  appellants in those  cases  be  held entitled to the payment of contractual rate of rent only for the  period of three years.  It is made clear that the  rent of  the appellants and other lessees similarly situated  and placed  shall not be further enhanced without the framing of rules  as mandated by Section 3 read with Section 22 of  the Act.  Costs made easy. The  Tamil  Nadu Minor Inams (Abolition and Conversion  into