IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) FRIDAY, THE TWENTY FOURTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 1422 OF 2025 Between: Modem Infrastructures, Rep. by Its Managing partner Ch Mahesh, D.No. 24- 22, Gandhipet, Chilakaluripet, Palnadu district. ...PETITIONER AND 1. The State of Andhra Pradesh, Rep. by its Secretary, Transport Department, Secretariat, Velagapudi, Guntur District Andhra Pradesh 2. Andhra Pradesh State Road Transport Corporation, Rep. by its Managing DIrectorA/C, Vijayawada, NTR District 3. The Regional Manager, APSRTC, Guntur, Guntur district 4. The District Public Transport Officer, APSRTC, Narasaraopet, Palnadu district 5. The Depot Manager, APSRTC, Chilakaluripet, Palnadu district ...RESPONDENTS Petition under Article 226 of the Constitution of India is filed praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or direction more particularly one in the nature of Writ of Mandamus declaring the termination order dated 06-01-2025 issued by the 2nd respondent without furnishing of computational statement and not referring the dispute under Article 24 of Agreement dated 23-02-2007 and further claiming penal interest on delayed payments including GST, penal interest on GST amount as illegal, arbitrary. unjust and violative of principles of natural justice and consequently set alside the termination order dated 06-01-2025 by referring the dispute as per agre^ent. lA NO: 1 OF 2025 Petition under Section 151 CPC is filed praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend termination order dated 06-01-2025 issued by the 2nd respondent including stay of ail further proceedings against commercial site building of 3273 square meters of the petitioner M/s. Modern Infrastructures situated at old Bus Station, Chilakaluripet, Palnadu district under the enjoyment of the petitioner. Counsel for the Petitioner: SRI THOTA RAMAKOTESWARA RAO Counsel for the Respondent No.1: GP FOR TRANSPORT Counsel for the Respondent Nos. 2 to 5: SRI ARAVALA RAMA RAO (SC FOR APSRTC) The Court made the following: ORDER 1 APHC010026682025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3329] FRIDAY, THE TWENTY FOURTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 1422/2025 Between: ...PETITIONER Modern Infrastructures AND ...RESPONDENT(S) The State Of Andhra Pradesh and Others Counsel for the Petitioner: 1 .THOTA RAMAKOTESWARA RAO Counsel for the Respondent(S): 1.GP FOR TRANSPORT The Court made the following : 2 THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 1422/2025 ORDER: This writ petition is filed under Article 226 of the Constitution of the India seeking the following reliefs:- pleased to issue a writ or direction more particularly one in the nature of writ of mandamus declaring the termination order dated 06.01.2025 issued by the 2”'^ respondent without furnishing of computational statement and not referring the dispute under Article 24 of Agreement dated 23.02.2007 and further claiming penal interest on delayed payments including GST, penal interest on GST amount as illegal, arbitrary, unjust and violative of principles of natural justice and consequently set aside the termination order dated 06.01.2025 by referring the dispute as per agreement and pass...” Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents. 2. The petitioner herein is challenging the termination orders dated 06.01.2025, issued by the 2"'^ respondent for non-payment of annual rent to be payable by the petitioner as per the terms of license agreement. 3. The learned counsel for the petitioner submits that the petitioner’s firm was registered on 20.02.2007, under the name and style of M/s. Modern Infrastructures, wherein the petitioner entered into agreement with the 2"'^ respondent-corporation for a period of thirty (30) years vide license agreement dated 23.02.2007, for development of vacant site under BOT Scheme and later the petitioner/respondent extended the license period by one year six months i.e., 311/2 years. The petitioner has been paid the rental amounts till 2019 without any default. But, due to the Covid-19 pandemic, the petitioner is unable to pay the annual rent as per the terms of the agreement. In view of the default of payment on part of the petitioner, the respondents issued show-cause notices one after the other without considering the petitioner’s regupst for a detailed statement. Finally on 06.01.2025, under the guise of non-payment of rental amount, the agreement dated 23.02.2007, was 4. 3 terminated by the 2"^ respondent-corporation, even though the petitioner during negotiations, has agreed to pay the default amount of Rs.51,43,578/- as on date. But the respondents are demanding the petitioner to pay an amount of Rs.2,04,91,130/- in an exorbitant manner. It is further submitted that the respondents are not entitled to receive such amount other than what was actually due, but the respondents are demanding total amount along with an interest @ 36% per annum as per the Article 7.5 of the license agreement. He further submitted that, even as per the show-cause notice dated 26.09.2022, the respondents issued demand for an amount of Rs.34,61,093/-, but contrary to the other show-cause notice dated 14.10.2024, now they are demanding Rs.2,04,91,130/- which is on the higher side even if it is calculated along with an interest @ 36% per annum upon the annual rent. Therefore, the said calculation of the respondents is contrary to the terms of the agreement and certainly liable to be set aside. 5. On the other hand, the learned Standing Counsel appearing for the respondent-corporation submitted that the petitioner is an intentional defaulter and is not paying the annual rental amounts since 2019. As per the Article 7.5 of the agreement, the respondents are entitled to impose/levy penal interest @ 36% per annum with the fresh demand on 14.10.2024 and that the show- cause notice which includes arrears of annual rent, penal interest and also GST to be payable by the petitioner as per the terms of the agreement. He further submitted that it is not the case of the petitioner that the petitioner was not provided with an opportunity of personal hearing or respondents are not adhered to the principles of natural justice. The respondents are issuing notices after notices since 2022, reminding the petitioner for payment of arrears of annual rental amount. As the petitioner failed to pay the rental amount, the impugned termination proceedings was issued. 6. 4 He further submitted that the impugned termination proceedings dated 06.01.2025 is also in accordance with the Article 7.7 of the terms of the DCOMT agreement. Therefore, the impugned order does not warrant any interference from this Court. 7. Considering the submissions made by the learned Senior Counsel and learned Standing Counsel for the respondents, it is observed that as per the show-cause notice dated 26.09.2022, the demand of respondents is only Once the show-cause notice of demand is 8. an amount of Rs.34,61,093/-. issued, it is to be presumed that demand includes everything as on that date which the demand was raised. Admittedly, the demand was raised by the respondents is up to 16.12.2021 and even if such demanded amount is calculated along with penal interest @ 36% per annum from 2022, the amount mentioned in the show-cause notice dated 14.10.2024, certainly is higher side ‘ and the amount which was demanded in the final show-cause notice dated . ji 14.10.2024 is contrary to the terms of show-cause notices as well as terms of i on agreement. It is further observed that while deciding the due amount vide show- dated 14.10.2024, they neither provided any opportunity of personal hearing to the petitioner nor called for explanation before determining the liability at rate of Rs.2,04,91,000/-. Therefore, the calculation made by the respondents appears to be on the higher side, which is contrary to the terms of the agreement, more particularly Article 7.7 of the agreement. It is further observed that Article 7.5, where under the respondents are authorized to impose an interest @ 36% per annum by public authorities is unknown to law and contrary to ratio held by this Court, interest being a public authority cannot be inserted in its agreements. Therefore, in view of the reasons stated above, this Court is inclined to pass order that there shall be an interim suspension of the termination order dated 06.01.2025, subject to payment of Rs.75,00,000/- as interim measure within a period of two monthly months in two installments. Whereas, the 9. cause 10. Such a rate of an V 5 St month installment is Rs.30,00,000/- and in the second month, the remaining amount should be paid. Further, both parties are directed to come to an understanding for finalization of amount or the respondents shall determine the final amount after providing method of calculation in terms of agreement and provide opportunity of objections or the method of determination in similar circumstances as prevailed with the Government of Andhra Pradesh, when its properties were leased out in favour of firms/ companies/ individuals. 1 11. With the above direction, the writ petition is disposed of. No order as to costs. Miscellaneous petitions pending, if any, shall stand closed. Sd/- K. SRINIVASA RAJU ASSISTANT REGISTRAR /i //TRUE COPY// ' SECTION OFFICER To. 1. The Secretary, Transport Department, Secretariat, Velagapudi, Guntur District Andhra Pradesh 2. The Managing DIrector/VC, Andhra Pradesh State Road Transport Corporation, Vijayawada, NTR District 3. The Regional Manager, APSRTC, Guntur, Guntur district 4. The District Public Transport Officer, APSRTC, Narasaraopet, Palnadu district 5. The Depot Manager, APSRTC, Chilakaluripet, Palnadu district 6. One CC to Sri Thota Ramakoteswara Rao Advocate [OPUC] 7. One CC to Sri Aravala Rama RAo, SC for APSRTC, Advocate [OPUC] 8. Two CCs to GP for Transport, High Court of Andhra Pradesh. [OUT] 9. Three CD Copies TF HIGH COURT DATED:24/01/2025 ORDER WP.No.1422 of 2025 of * U MAK 2025 ^ . Current Section .y, o Co DISPOSING OF THE W.P., WITHOUT COSTS