M. Anantanarayanan, O.C.J.
1. The Writ Appeals before us are from the judgment of Srinivasan, J., W.P. Nos. 1220 and 1221 of 1965 in which the learned Judge upon the submissions in the petitions of one M.K. Mani Iyer, has directed the issue of writ of mandamus against the Executive Officer of Bhavani Panchayat (Coimbatore district), requiring the officer to renew a hotel licence for the year 1965-66 A great deal of the area covered by the learned Judge in his judgment, may not now be relevant for the short and clear ground on which, in our view, the writ appeals will have to be allowed. In order to maintain the focus clear, we purposely intend not to enter into several areas of the controversy, and we agree with the learned Judge in his view that the proceedings, before him did involve certain somewhat unusual features. But whatever may be said about that, or about the previous history of the case, or the particular manner in which the proceedings of the Bhavani Panchayat had been worded, we; think it is abundantly clear, that, in law, the situation did arise in which the Panchayat had justification to decline to renew the licence, on a ground relevant to public interest, and not merely a ground of personal interest, or ammonite against the writ petitioner. For the purpose of clarifying that situation, the following facts will be sufficient
2. We may take it that the application for licences was in respect of a piece of property in which the writ petitioner originally had a leasehold interest, the lesser being a certain Parasurama Pillai. But it is not in dispute before us that this property was validly acquired for the Panchayat, in exercie of the powers of Eminent Domain by the State, for a definitely public purpose connected with public interest. One point which is really not in dispute before us is that, when such acquisition, takes place, it puts an end to all prior encumbrances and private rights in. the property; even the rights of a mortgagee have to be relegated to the claim to the compensation amount which may be deposited into Court, and neither a mortgage nor lease can survive a valid acquisition. That being indisputably the case, after this acquisition, there was an order of the Collector which originally gave a term of two years to the occupiers of the property concerned, whether lessees or otherwise, to vacate the premises and to permit the Panchayat to use the property for public purpose, namely, formation of the Bhavani bus stand.
3. It is not in dispute that this period of two years came to an end on 19th August, 1961 and it is not also in dispute that, even after, this, the writ petitioner did not vacate the property, upon which he had erected or he intended to erect the hotel for the licence for which he had made the application. There is the order of the Collector declining to give any further extension of time and directing the Executive Officer of the Panchayat to take action to obtain possession of the premises. What happened subsequently, which has been dealt with at some length by the learned Judge in his order, really relates to the rights inter se the writ petitioner and the Panchayat, in the matter of the proposed eviction, namely, whether the writ petitioner was a mere trespasser as contended by the Panchayat, or whether the writ petitioner could claim that he was a statutory tenant, or a statutory, tenant holding over, which view seems to have found some acceptance with the learned Judge. This matter really does not touch the heart of the controversy now involved, for a very simple reason.
4. The situation at law is not disputed by learned Counsel for the writ petitioner (Sri Mohan) that, where a property is acquired for a public purpose by a public body, private leasehold rights will not survive the acquisition,. Thus, the panchayat had every justification and indeed had a duty after the expiry of the further period of two years given as a term of grace, to obtain possession of the property, if necessary by evicting the occupants thereof. The public purpose, namely formation of the bus stand, would have been frustrated, if this could not be done. It appears that subsequently, there was an order of interim stay by this Court in writ proceedings, and that finding such an order of stay existed as a bar to eviction the Panchayat proceeded to accept payments equivalent to rent made by the writ petitioner for occupation. This acceptance according to the learned Additional Government Pleader was an involuntary acceptance compelled by the situation in the writ proceeding and not at all of that character of voluntary acceptance which would create a statutory tenancy. However that might be, the point is not this, but the question is whether the Panchayat has a valid reason linked to public interest, for refusing the application of the writ petitioner for the grant of license for one year, that is, for the year ending 31st March, 1966. That is the only matter which is really involved in the proceedings, for, essentially, the writ of mandamus directs renewal of the licence for this particular year.
5. On this point, we are unable to see any room for doubt, whatever might be the equities of the case in other respects relating to eviction, or to the proposed eviction. The true situation at law, we think is that every citizen has a right to pursue the trade or avocation of a hotelier, and to conduct a hotel or restaurant business, in a property where he is in a position to erect the requisite building. In regranting or refusing a licence, for the conduct of such hotels or restaurants, the Panchayat is really regulating this trade or profession in the public interest, and imposing such restrictions and limitations as public interest may require. Admittedly, they may relate to the sanitation or the insanitary state of the concerned property, the nature of the structure, any hazard to health that might result from attendant circumstances, such as the ground specified in Abdul Kareem v. Corporation of Madras : (1940)2MLJ597 etc. Licence can be validly refused for one kind of property, but granted in respect of another plot with a different situation. Where the application specifies that the licence is required for a period of one year, under the Act, the Panchayat has also the right to consider whether the interest of the applicant over the property or his title to possess the same is clear enough to justify sanction for this period. That is a relevant consideration and a consideration in the public interest and we do not see how this inference can be doubted. That being the case, if the property or site had been acquired through process of Eminent Domain for a totally different purpose and there was the hazard or insecurity that, at any time within the year that concerned authority might succeed in occupying the area for that valid purpose, the Panchayat had every right to take into consideration this hazard or insecurity of possession, as a ground for declining to grant licence for the year.
6. Sri Mohan has drawn our attention to the relevant provision of the Act and the Rules, and we see that the application for licence may be for a year or for a lessor period. It would have been a different matter if the applicant had applied only for a short period claiming that, within the period, his possession could not be conceivably disturbed. In any event, now that the period is coming to an end with 31st March, 1966, the entire proceeding is really of academic interest. But we think that the writ appeal ought to be allowed if only to affirm the principle that, in declining to grant such a license for one year, the local body is entitled to take into consideration, as a reason for such refusal, the fact that the property had been acquired by Eminent Domain for a wholly different purpose, that the petitioner will presumably have no further legal right to continue in possession of that property, so as to exclude the implementation of that public purpose, and, consequently, that the situation as to his further right to stay on the property, even for a small part of that year, was hazardous in the extreme. We also hold that this is a consideration in the public interest, and not a consideration of mere animosity or hostility to a private party, the petitioner. Sri Mohan strenuously contends that the matter is not phrased in this form at all, in the order declining the renewal. It is a bald statement that the petitioner is a trespasser on the property, who is being treated as such. We cannot expect executive officers of local bodies, in drafting such orders, to bear in mind, and to carry into effect all the refinements which the legal situation may require. We must be satisfied if the ground for refusal is one that can find recognition in law, and on the legal principles involved. Accordingly, we allow the writ appeals, and vacate the writs in these two cases. These observations of ours are not intended to be any comment or reflection, in any way whatever, on the subsequent writ petition that we are informed had been filed by the writ petitioner, with regard to some subsequent order declining to grant the application for licence for the period April, 1966 to March 1967. Ordered accordingly. The parties will bear their own costs.