The Allahabad High Court has held that an authority which itself holds a government order inapplicable to a party cannot then fix rent on the strength of justification certificates founded on the very clause of that order. It held that what cannot be done directly cannot be permitted to be done indirectly.

Clause 14 of the Government Order dated 02.05.2018 caps enhancement of rent at 20% of the previously sanctioned rent or the amount recommended in the justification certificate, whichever is less. In an earlier round of litigation in the petitioner's own case, a coordinate Bench had read the clause as applying to godowns taken on rent with effect from 14.07.2015.

The bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary held,

“An authority cannot, on the one hand, hold a provision inapplicable to a party and, on the other, achieve the very result that provision would have produced, through a different door. The respondent authority, in substance, has done indirectly what it has expressly declared it cannot do directly, and the impugned order cannot survive this internal contradiction”

Petitioner owns two godowns at Ranjitpur, Chilbila in District Pratapgarh, on the Allahabad-Faizabad main road, taken on rent by the Department of Food and Civil Supplies in 2003 and 2006 for storage of food grains under the Public Distribution System. Rent stood at Rs. 300 per 100 bags for the period ending 31.03.2017, over which there was no dispute.

After the agreements expired, the S.D.M., by report dated 29.11.2017, recorded that circle rates had risen up to 4.75 times and recommended enhancement up to four times. The District Magistrate issued a justification certificate on 27.12.2017 recommending Rs. 1,200 per 100 bags for 01.04.2017 to 31.03.2022. No fresh agreement was executed and rent continued at the old rate.

Petitioner's representation for the enhanced rate was rejected on 31.12.2022 relying on the 20% ceiling. In Writ-C No. 2917 of 2023, a coordinate Bench quashed that order on 13.04.2023 and directed the Regional Food Controller, Prayagraj to first decide whether Clause 14 applied at all. On 26.06.2023, the District Magistrate recalled the 2017 certificate, and on 03.07.2023 the Regional Food Controller fixed the rent of both godowns at Rs. 350 per 100 bags with effect from 01.04.2017.

Challenging those orders and seeking rent at Rs. 1,200 per 100 bags with arrears, GST and interest, petitioner pleaded that the exercise was colourable, that the respondents could not recall the 2017 certificate, and that godowns at Babaganj, Belkharnath, Sangipur and Kalakankar had been granted enhancements beyond 20%. Possession was handed back to her during the pendency of the petition, with effect from 31.03.2024.

Counsel for the State submitted that the 2017 certificate had been issued beyond jurisdiction and was far in excess of the rent prevailing for comparable godowns in the locality.

The Court observed that the impugned order itself recorded that Clauses 14 and 15 of the 2018 Government Order did not apply to the petitioner, the tenancies being of 2003 and 2006. On a closer scrutiny of the fresh certificates on which that order rested, however, the deciding factor for their issuance was found to be the very restriction in Clause 14.

The Court also held that the 2017 certificate, being the product of a structured administrative exercise and acted upon over the years, generated a legitimate expectation that it would not be displaced except for demonstrated cause and after a fair hearing.

“there is not a whisper in the impugned order of any infirmity in the Tehsildar's inquiry or the S.D.M.'s report, beyond the circular observation that the resulting figure exceeded a ceiling that has itself been held inapplicable. That, without more, cannot justify the recall.”

The sequence of the judgment of 13.04.2023, the recall on 26.06.2023 and the fixation of rent days later, the Court held, lent force to the plea that the exercise was aimed at reinstating the ceiling rather than at an honest re-appraisal, rendering it colourable.

Holding further that the impugned order, along with the accompanying letters,

“sets out no comparative data, current market or rental analysis, or reasoning explaining why ₹350/-, a figure barely above the 2013 rate of ₹300/- fixed nearly a decade earlier, represents fair rent in 2023 for commercial godowns on a State highway, particularly when the respondents' own Tehsildar/S.D.M. inquiry in 2017 had found circle rates to have risen nearly five-fold.”

The Court held that it was unsustainable as a non-speaking order. It also found force in the plea of discriminatory treatment as against the other godowns, that claim having been asserted with particularity and not specifically controverted, and held that such disparity called for scrutiny under Article 14 of the Constitution of India.

Observing that fixation of fair rent is essentially an administrative function, the Court declined to fix the rent itself. It quashed Office Order No. 671 and the consequential Order No. 669, both dated 03.07.2023, along with Letters No. 756 and 757 dated 26.06.2023, and remitted the matter to the Regional Food Controller to determine the rent afresh within twelve weeks by a reasoned order, without adverting to Clause 14 and having due regard to the 2017 certificate and the S.D.M.'s report.

The questions of GST and interest on arrears were left open and the writ petition was allowed to the extent indicated.