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Issues Involved:
1. Enhancement of Rent 2. Jurisdiction to Enhance Rent 3. Fairness and Reasonableness of Government Actions 4. Awarding of Interest Summary: 1. Enhancement of Rent: The appellants, shopkeepers in Sector 17, Chandigarh, contested the enhancement of their rent from Rs. 2,671/- to Rs. 14,000/- per month, deeming it "irrational, unwarranted by law and arbitrary." Initially leased at Rs. 525/- per month from May 1968, the rent was increased to Rs. 2,671/- in 1982. The High Court dismissed their writ petitions, finding the enhanced rent reasonable and not arbitrary. The appellants argued their cases were different from a similar case (Sahib Singh's matter), but the Division Bench dismissed their petitions, allowing lease renewal subject to terms and conditions, including arrears and interest payments. 2. Jurisdiction to Enhance Rent: The appellants contended that the respondent Administration lacked jurisdiction to enhance the rent without framing rules u/s 3 and 22 of the Capital of Punjab (Development & Regulation) Act, 1952. However, the court held that Section 3 itself authorized the Central Government to lease property on terms it deemed fit, and failure to make rules did not render the lease terms illegal. The court urged the Central Government to frame rules to ensure fairness and reasonableness in actions. 3. Fairness and Reasonableness of Government Actions: The court emphasized that governmental actions must be fair, reasonable, and non-arbitrary. Referencing Ramana Dayaram Shetty vs. The International Airport Authority of India, the court stated that the government cannot act like a private individual solely to extract profits. The court found the respondents' process for enhancing rent to be fair and reasonable, supported by detailed assessments and justifications. The court dismissed the appellants' claim of discrimination, noting the respondents' assurance to address similar complaints. 4. Awarding of Interest: The High Court awarded interest at 18% per annum on arrears for the period when stay orders were in effect. The Supreme Court reduced this rate to 15%, considering it more just and proper. The court reiterated that obtaining a stay is at the party's risk, and they must compensate for any delay caused by the stay. In the case of M/s. New Rajan Watch Company, the court held that rent enhancement was unjustified during the initial three-year lease term but valid from April 9, 1993, onwards. The appeals were disposed of, upholding the High Court's judgments with modifications regarding the interest rate and specific lease terms for M/s. New Rajan Watch Company. The court mandated that no further rent enhancements occur without framing rules as required by the Act.
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