Writ Petition is filed praying to issue a Writ of Certiorari, calling for the records relating to the letter dated 7.9.2007 in Letter No.P&E 2(4)/5950/2007 and letter dated 17.12.2007 in Lr.Rc.No.P&E 2(4)5950/2007 of the first respondent and quash the same.
2. Petitioner is a hotel and beach resorts at Mamallapuram. On inception, the petitioner hotel and beach resorts was classified and awarded three star category for a period of three years with effect from 12.12.1997. According to the petitioner, the said three star classification expired on 12.12.2000 (i.e.) after three years and thereafter, it becomes a non-star category hotel and resorts as it was not renewed. When the petitioner hotel and beach resorts was under the three star category, FL.3 Licence was granted on payment of privilege fee of Rs.2,00,000/- per annum as applicable. There is no dispute that the petitioner has paid the privilege fee of Rs.2,00,000/- per annum for the three year period as above.
3. Beginning from 2001-2002 since the three star category was not renewed and was removed from the list of three star category by the Department of Tourism Development, petitioner sought for renewal of the FL3 licence under non-star category and paid the privilege fee of Rs.1,00,000/- per annum as is applicable to the said category. The first respondent appears to have renewed it for three years with effect from 2001-2002 onwards on payment of Rs.1,00,000/- per annum. Thereafter, based on audit objection, a show cause notice was issued on 26.10.2005 calling upon the petitioner as to why the FL.3 licence issued to the petitioner should not be cancelled on account of short collection of privilege fee applicable to three star category hotel and beach resorts. To this, petitioner submitted a reply on 5.11.2005 stating that the three star hotel category expired on 12.12.2000 and in support of the same, the letter of the India Tourism-Chennai, Government of India, Southern Regional Office, Chennai-2 was submitted. Thereafter, according to the petitioner, no action was taken by the authority. The first respondent, thereafter, by the impugned proceedings dated 7.9.2007, demanded differential privilege fee of Rs.1,00,000/- (Rupees one lakh only) over and above the sum of Rs.1,00,000/- p.a. already paid for the years 2001-2002 to 2007-2008. In all a sum of Rs.7,00,000/- was claimed as arrears. The first respondent reiterated the differential amount of Rs.7,00,000/- by letter dated 17.12.2007. Both the letters are challenged in the present writ petition.
4. Mr.AR.L.Sundaresan, learned senior counsel for the petitioner contended as follows:-
(i) The authority has granted the FL.3 licence from 2001-to 2002 onwards on payment of Rs.1,00,000/- per annum as privilege fee accepting the non-star category. The show cause notice issued has not been finalised and there is no quantification of demand. Therefore, the present demand claiming shortfall has no basis and is arbitrary. (ii) The Government of India, Tourism Development has already stated that they have not renewed the three star category from the year 2001-2002 onwards. Therefore, the question of claiming privilege fee at the rate of Rs.2,00,000/- per annum applicable to three star category does not arise. (iii) In any event, the payment now demanded under the impugned proceedings has no basis and is without reason, besides being arbitrary.
5. A counter-affidavit has been filed. The stand of the respondent has been reiterated in para 6 of the counter-affidavit which reads as follows:- "6. I submit that the petitioner is holder of FL.3 licence bearing No.5/91-92 have applied for the renewal of FL.3 licence for the year 2007-2008. Further I submit that on perusal of the records, it reveals that the Writ Petitioner's hotel was awarded 3 stars gradation for three years with effect from 12.12.1997. Subsequently, the petitioner/ licensee did not renew the above said classification in order to avoid payment of privilege fees due to Government for a three stars gradation hotel. I respectfully submit that since the petitioner got 3 Starts Gradation to their hotel and subsequently failed to renew such status of 3 stars gradation, the failure on the part of the petitioner would not absolve their liability or preclude them from paying the privilege amount lesser to the 3 Stars Gradation while seeking renewal of such licence saying their hotel is not 3 Stars Gradation at the time of renewal. The petitioner is liable to pay the privilege amount of the status of the licence for which they are seeking renewal and hence the writ petitioner has liable to pay the difference of privilege fee of Rs.7,00,000/- for the periods from year 2001-2002 to year 2007-2008. Therefore, the licensee has been directed to remit the above said amount and send the original Chelan. The petitioner aggrieved by the above notice issued to them has filed this writ petition."
6. As could be seen from the counter-affidavit and the document submitted by the petitioner, the classification of the petitioner hotel as three star category has not been renewed after 12.12.2000. This fact is supported by proceedings of the Tourism Development, Government of India and it is accepted by the respondent. It is the prerogative of the petitioner to seek classification under one or other category. The respondent cannot impose a condition that the petitioner once classified as three star category should always remains in the three star category. That classification has not been renewed by the Department of Tourism Development, Government of India in its letter dated 2.8.2005 stating that the petitioner has not shown any interest for renewal of the classification.
7. The power of the first respondent is to grant FL.3 licence based on the category of hotel or resorts. In an admitted case of non-star category hotel beyond certain period, the authority cannot take a stand alleging that the non-renewal is the deliberate act on the part of the petitioner. In fact the stand taken by the respondent in the counter-affidavit does not form part of the show cause notice dated 26.10.2005 and the impugned proceedings.
8. It is trite law that the case of the respondents cannot be improved on the basis of the counter-affidavit or the written submissions vide Mohinder Singh Gill and another v. - The Chief Election Commissioner, New Delhi and others AIR 1978 Supreme Court 851 and S.N.Mukherjee v. - Union of India (1990)4 SCC 594. In para 8 of the decision in AIR 1978 SC 851 reads as follows:- "8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J., in Gordhandas Bhani (AIR 1952 SC 16)(at p.18): "Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself". Orders are not like old wine becoming better as they grow older."
Para 36 in (1990)4 SCC 594 reads thus:-
"36. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi-judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision on judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage."
9. Since the petitioner in this case falls under non-star category on and from 2001-2002 onwards and that fact is not in dispute and since the show notice proceedings has not been fnialised in accordance with law, the impugned demand seeking differential amount for the periods 2001-2002 to 2007-2008 in a sum of Rs.7,00,000/- has no basis and accordingly, the same is set aside. The Writ Petition is allowed. Consequently, connected miscellaneous petitions are closed. No costs. 4.1.2011
