K.A. Swami, J.
1. In this Petition under Article 226 of the Constitution, the petitioner has sought for quashing the notice bearing No. MSC/SR/424/84-85 dated 24-10-1984 issued by the 3rd respondent, produced as Annexure-A. He has also sought for quashing the order dated 31st May, 1984 bearing No. ANC. KGF. BEML/B 24/A 5/84/3627 (Annexure-H) passed by the first Respondent. Annexure G is a true copy of this order.
2. By the aforesaid impugned order dated 31-5-1984 (Annexure-H,) the petitioner has been directed to pay a sum of Rs. 20,142-50 p being the arrears of rent up to 23-1-1984 due in respect of the public premises bearing No. B 24, situated in the Ancilliary Industrial Estate for B.E.M.L. at K.G.F. By the impugned notice (Annexure-A), the 3rd respondent has informed the petitioner that if the sum of Rs. 20,142-50p is not paid within tea days from the date of service of the notice, compulsory proceedings will be taken according to law for the recovery of the whole of the revenue still due by the petitioner.
3. The undisputed facts of the case are as follows :
By the order dated 6-1-1981 bearing No. ANC. KGF. BEML. B-24/80 (Annexure-D), the petitioner was allotted the shed in question bearing No. B24 in the Ancilliary Industrial Estate for B.E.M.L. at K.G.F. for establishing Gear Shift lever and Fork Assembly subject to certain conditions mentioned in the letter of intent produced as Annexure-B. Pursuant to that, possession of the shed was delivered to the petitioner on 21-7-1981. At the time of delivering possession of the shed certain facilities were not provided. In spite of that the petitioner took possession of the shed and executed possession certificate and also gave in writing on 21-7-1981 as per Annexure-C, which is as follows :
'The Karnataka State Small Industries Development Corporation Ltd. (A Government of Karnataka concern).
1. Type of Shed and Shed No. B242. Name of the allottee Sri M. Mallikarjunappa3. Allotment reference ANC/KGF/BEML/B-24/80/6-1-804. Date of handing over possession of shed to the allottee 21-7-1981
The factory shed cited above at Industrial Estate has been taken over with the following fittings in good condition on 21-7-1981.
1. Office, Store, Factory portion, Rear Compound and Lavatory block.
I. Civil Works:-
1. Type of roofing A.C. Sheeting
2. Rolling shutters of size : 1.85 x 2.5 2 Nos.2.5 x 2.5 2 Nos. etc.3. Steel windows of size 1.8 x 1.5 Nos. 4 including handles 1.5 x 1.2-7 pegs, stays and glasses
(a) Ground floor --
(b) First floor --
4. Steel grills and ventilators of size 18 x 0.6 Nos. 41.2 x 0.6 Nos. 18including inspection ventilators.5. Monitor Glazing duly fixed with stays.--
6. M.S. Gates in two halves of size 1.5 x 1.8 each 2 Nos. II. Water Supply and Sanitary Fittings (to be provided)1 to 12 xx xx
III. Electrical fittings (to be provided)
1 to 14 xx xx
Handed over in good condition as above. Taken in good condition as above.
Sd. Manager (C & M) Sd. Branch Manager Sd. Allottee.'
Thus, the Petitioner took possession of the shed inspire of the fact that certain facilities were not provided. As per the terms of the allotment, the petitioner did not put up the Gear shift lever and fork assembly. Therefore, respondent-2 after issuing notice to the petitioner revoked the allotment by the communication dated 29-12-1984. Thereafter, took proceedings to evict the petitioner from the shed in question. Accordingly, took possession of the shed on 23-1-1984. The petitioner was also informed by the communication dated 23-1-1984 (Annexure-F) that he was liable to pay arrears of rent upto date amounting to Rs. 10,179.00 along with the cost of the missing articles within a week from the date of receipt of the communication. Thereafter, the impugned communication Annexure-H dated 31-5-1984 has been issued informing the petitioner that he is liable to pay a sum of Rs. 20,142-50p.
4.1) It is contended on behalf of the petitioner that a sum of Rs. 2,362-40p deposited as Earnest Money deposit with the 2nd respondent is required to be adjusted in the rent claimed by respondents 2 and 3, as the said amount is not adjusted the amount claimed by way of rent is not correct; that the amount claimed towards damages on the ground that certain articles are missing is beyond the jurisdiction of the Competent Officer of the 2nd respondent because the damages can only be determined by Civil Court and not by the Competent Officer.
4.2) On the contrary, it is contended on behalf of the respondents that as there was a dispute with regard to the rate of rent being Rs. 393-70p per month, the petitioner had not paid the amount towards the rent from the date he took possession of the shed; therefore, for a period of 30 months up to 23-1-1984 the date on which the possession was obtained, petitioner was liable to pay rent at the rate of Ps. 393-70p; that in the rental amount he was entitled to deduction at the rate of Rs. 60/- per month being the concession given on rent as per the understanding reached between the 2nd respondent and the Association of Industrial Estate Owners; that after deducting a sum of Rs. 60/-per month out of Rs. 11,812.50, the rent due will be Rs. 10,179-50; that the amount of damages as determined by the Manager will be Rs. 9,760-00 and cost of missing items will be Rs. 203-50p and the total amount comes to Rs. 20,142-50. With regard to the Earnest Money Deposit, it is contended that while revoking the allotment, the earnest money deposit is forfeited because as per terms of the allotment, in the event of default of payment of rent even for one month from the due date, the allotment is liable to be cancelled and earnest money deposit is liable to be forfeited; that it is in exercise of this power earnest money has been forfeited. It is also further submitted that Sub-section (2) of Section 7 of the Karnataka Public Premises (Eviction of Unauthorized Occupants) Act. 1974 (hereinafter referred to as the 'Act') read with the definition of the expression 'Premises' contained in the Act and the Rules, the Competent Officer is empowered to determine the damages for use and occupation of the shed including the value of the missing articles and any damage done to the fittings and the building. Therefore, it is submitted that an amount of Rs. 20,142-50 demanded by respondents 2 and 3 is justified, hence it is not a case in which interference is called for.
5. Having regard to the aforesaid contentions, the following points arise for consideration :--
(1) Whether the 2nd respondent is justified in forfeiting the earnest money deposit of Rs. 2,362-50 p ?
(2) Whether the 2nd Respondent is entitled to claim rent for the shed in question from 21-7-1981 to 23-1-1984 ?
(3) Whether the 2nd Respondent is entitled to recover damages regarding the missing articles and the value of the damage caused to the fixtures and building If so, whether it can be determined by the Competent Officer under Section 7(2) of the Act ?
6. POINT NO. 1: The order revoking the allotment and forfeiting the earnest money has not been challenged in this Writ Petition. Therefore, it is not at all necessary to decide whether the first respondent is justified in revoking the allotment and forfeiting the earnest money deposit. It may be noticed that Clause 10 of the Order of allotment letter of intent-provides that in the event of default of payment even for one month within the due date will entail cancellation of allotment of the shed and forfeiture of earnest money deposit made by the allottee. Thus, having regard to the fact that the order cancelling allotment and forfeiting the earnest money is not challenged, it is unnecessary to answer the 1st point.
7. POINT NO. 2 : It is not In dispute that the possession of the shed was delivered to the petitioner on 21-7-1981 and he took possession of it inspite of the fact that certain facilities were not provided, and agreed to pay the rent. Therefore, the contention of the petitioner that the facilities as per the letter of intent were not provided, therefore, he was and is not liable to pay the rent cannot at all be accepted. If certain facilities as mentioned in the aforementioned letter of allotment were not provided, it was open to the petitioner not to take possession until those facilities were provided. Therefore, it is now not open to the petitioner to contend that he is not liable to pay the rent from the date he took over possession of the shed because certain facilities were not provided to him. Accordingly, Point No. 2 is answered in the affirmative and against the petitioner.
8. POINT NO. 3: As per Section 2(f) of the Act, the rent in relation to any public promises means the consideration payable periodically for the authorized occupation of the premises and includes other things as stated therein, which are not necessary for our purpose. The expression 'authorized occupation'' is not defined in the Act. In view of the definition of the expression 'unauthorized occupation' the authorized occupation means the occupation of the public premises which is authorized or permitted by the authority having the power to permit such occupation of the premises. Section 2(g) of the Act defines the expression 'Unauthorized occupation' in relation to public premises as meaning the occupation by any person of the public premises without authority for such occupation, and includes the continuance la occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises, has expired or has been determined for any reason whatsoever. Therefore, the rent payable for the occupation of the public premises is only the period covered by the authorisation to occupy the public premises. For the subsequent period, it is damages that have to be paid. Subsection (1) of Section 7 of the Act, provides that where any person is in arrears of rent payable to the State Government or local authority or a corporate authority in respect of any public premises, the Competent Officer may by order, require that person to pay the same within such time and in such instalments as may be specified in the order. The expression 'rent' as defined in Clause (f) of Section 2 of the Act, in relation to any public premises, means the consideration payable periodically for the authorized occupation of the premises. Therefore, after the authority to occupy the premises ceases, it is not the rent that is payable by the occupant for the unauthorized use and occupation of the public premises, but he has to pay damages. Sub-section(2) of Section 7 of the Act, reads thus:
'(2) Where any person is, or has at any time been, in unauthorized occupation of any public premises, the competent officer may, having regard to each principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time end in such instalments as may be specified in the order.'
In relation to damages, it is contended that the jurisdiction to determine the damages is that of Civil Court; therefore the Competent Officer is not competent to determine the damages. Section 16 of the Act, takes away jurisdiction of Civil Court to entertain any suit or proceeding in respect of the eviction of any person who is in unauthorized occupation of any public premises or the recovery of the arrears of rent payable under Section 7(1) ; or the damages payable under Sub-section (2) of Section 7 or the costs awarded to the Stats Government or the local authority or the Corporate Authority under Sub-section (5) of Section 10 or any portion of such rent, damages or costs. Thus, the jurisdiction of Civil Court is excluded in respect of aforesaid matters which also include the damages payable under Sub-section (2) of Section 7 of the Act. Learned Counsel for the petitioner has placed reliance on a decision of the Supreme Court in Union of India v. Raman Iron Foundry. That was a case in which a claim for damages for breach of contract was considered. It was held that a claim for damages for breach of contract was not a claim for a sum presently due and payable and the purchaser was not entitled in exercise of the right conferred upon him under the terms of the contract to recover the amount of such claim by appropriating other sums due to the contractor. Therefore, it was held that the appellant therein had no right or authority : 3SCR556 under the terms of contract to appropriate amounts of other pending bills of the respondent therein, in or towards satisfaction of his claim for damages against the respondent. Therefore, this decision is of no assistance to the petitioner.
9. In the instant case, the scope and ambit of the jurisdiction of the Competent Officer to determine the damages depends upon the interpretation to be placed on the words 'to assess the damages on account of the use and occupation of such premises'. No doubt the words 'such premises' are referable to 'Public Premises'. The definition of the expression 'Public Premises' as provided in the Act, means any premises belonging to several authorities referred to in Section 2(e) of the Act. Therefore, we have to see the definition of the word 'premises', which is defined under Section 2(c) of the Act, as follows :
'(c) 'premises' means any land or any building or hut or part of a building or hut and includes
(i) the garden, grounds and out houses if any, appertaining to such building or hut or part of a building or hut, and
(ii) any fittings affixed to such building or hat or part of a building or hut for the more beneficial enjoyment thereof'.
Thus, the definition of the word 'premises' includes any fittings affixed to the premises for the more beneficial enjoyment thereof. In the instant case, the damages are claimed in respect of missing articles such as :
(b) Electrical light fittings - front and back. In addition to the above the following items were found to have been damaged :
(1) Iron gate.
(2) Window panes broken.
(3) Manhole covers - 3 in numbers.
The bulbs and electrical light fittings do fall within the category of fixtures; so also the iron gate and window panes and also the manhole covers, do form part of the building. Thus, these articles do fall within the definition of the word 'premises'. The claim for damages in respect of these articles is based on the ground that the same are missing. As per Sub-section (2) of Section 7 of the Act, damages can be assessed for the period of unauthorized occupation of the public premises by the Competent Officer, regard being had to such principles of assessment of damages as may be 'prescribed' as per Section 2(d) of the Act. Rule 7 of the Karnataka Public Premises (Eviction of Unauthorized Occupants) Rules, 1980 (for short, the 'Rules'), specifically provides thus :
'7. Assessment of damages:- In assessing damages for unauthorized use and occupation of any public premises, the competent officer shall take into consideration the following matters, namely :-
(a) the purpose and the period for which the public premises were in unauthorized occupation ;
(b) the nature, size and standards of the accommodation available in such premises ;
(c) the rent that would have been realised if the premises had been(sic) on rent for the period of unauthorized occupation to a private person ;
(d) the material damage done to the premises during the period of unauthorized occupation as ascertained from the Public Works Department;
(e) any other matter relevant for the purpose of assessing the damages.'
Thus, while assessing the damages, the Competent Officer can also take into consideration the material damage done to the premises during the period of unauthorized occupation as ascertained from the Public Works Department. The words 'material damage done to the premises' are wide enough to include missing of fittings and fixtures and manhole covers. Damages claimed can very well be assessed and determined by the Competent Officer. Therefore, there is no escape from the conclusion that the Competent Officer is endowed with the jurisdiction to determine the damages caused to the building on taking into consideration missing of fittings and fixtures and manhole covers during the period of unauthorized occupation, while determining damages for the period for which the public premise was in unauthorized use and occupation.
10. Before determining the damages, the Competent Officer has not issued notice in writing to the petitioner calling upon him to show cause within such time as may be specified in the notice as required by Sub-section (3) of Section 7 of the Act. Damages cannot be assessed without affording an opportunity to the concerned person to put forth his say in the matter and without affording an opportunity to adduce evidence and without hearing him. That being so, the Competent Officer ought to have issued notice, held an enquiry, recorded the evidence and determined the damages, on hearing the Petitioner. Further, the matters specified in Rule 7 of the Rules, are also not taken into consideration. Thus, the Competent Officer has acted in gross violation of Sub-section (3) of Section 7 of the Act, and Rule 7 of the Rules. Therefore, it is not possible to sustain notice Annexure-A, in so far it covers the damages and also the notice issued in Form No. D in so far it covers the damages.
11. The rent is claimed by respondents 2 and 3 for the period from 21-7-1982 to 23-1-1984. In fact, rent can be claimed from 21-7-1981 to 28-9-1983 only, because it was on 28-9-1983 the allotment of the public premises was cancelled. Thus, the rent for 26 months only can is claimed at the rate of Rs. 393-75 p. which comes to Rs. 10.334-30p. In that amount, a concession in the rent at the rate of Rs. 60/-per month is also required to be deducted which comes to Rs. 1576/-. Thus, after deducting the sum of Rs. 1576/-, the petitioner becomes liable to pay a sum of Rs. 8,758-30p. towards rent. Learned Counsel for the petitioner submits that he may be granted two months time to pay this sum. Sri Ramesh, learned Counsel for respondents 2 and 3 opposes the request. However, it is just and proper to permit the petitioner to pay a sum of Rs. 2,000/- on or before the end of this month and the remaining sum on or before the end of August, 1985.
12. For the reasons stated above, the Writ Petition is allowed in the following terms :
(a) Annexures 'A' and 'H' in so far they relate to the amount in excess of Rs. 8,758-30 p. are quashed.
(b) It is open to the competent officer to determine the damages for the unauthorized use and occupation of the public premises in question during the period from 29-9-1985 up to the date of taking possession i.e., 29-3-1984 and also the damages in respect of missing fixtures and fittings and manhole covers in accordance with Section 7 of the Act, and Rule 7 of the Rules, and in the light of the observations made in this order.
(e) Regarding arrears of rent of Rs. 8,578-30 p. the petitioner is permitted to pay a sum of Rs. 2,000/- on or before the end of this month and the remaining sum on or before the end of August, 1985.