1 2025:CGHC:52672 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 3476 of 2025 1 - Smt. Rashmi Agrawal W/o Girish Agrawal Aged About 47 Years R/o Motor Stand, Main Road, Bilaspur, Tahsil And District- Bilaspur C.G. --- Petitioner(s) versus 1 - State Of Chhattisgarh Through The Secretary, Urban Administration And Development Department, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, District Raipur C.G. 2 - Municipal Corporation, Bilaspur, Through Commissioner, Municipal Corporation, Bilaspur, District Bilaspur C.G. 3 - The Collector, Bilaspur, District Bilaspur C.G. 4 - The Estate Officer, Municipal Corporation, Bilaspur, Vikas Bhawan, Near Nehru Chowk, Bilaspur, District Bilaspur C.G. 5 - Mayor-In-Council, Through Its Chairperson, Municipal Corporation, Bilaspur, District Bilaspur C.G. 6 - Bilaspur Smart City Limited, Registered Office 3rd Floor, Integrated Command And Control Center, Tarbahar Chowk, Bilaspur C.G. Through Its Chairman. --- Respondent(s) 2 WPC No. 3505 of 2025 1 - Satish Agrawal S/o Dr. Narendra Agrawal Aged About 45 Years R/o Juna Bilaspur, Tahsil And District-Bilaspur (C.G.) ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through The Secretary, Urban Administration And Development Department, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, District - Raipur (C.G.) 2 - Municipal Corporation, Bilaspur Through Commissioner, Municipal Corporation, Bilaspur, District-Bilaspur (C.G.) 3 - The Collector Bilaspur, District- Bilaspur (C.G.) 4 - The Estate Officer Municipal Corporation, Bilaspur, Vikas Bhawan, Near Nehru Chowk, Bilaspur, District -Bilaspur (C.G.) 5 - Mayor-In-Council Through Its Chairperson, Municipal Corporation, Bilaspur, District -Bilaspur (C.G.) 6 - Bilaspur Smart City Limited Registered Office 3rd Floor, Integraed Command And Control Centre, Tarbahar Chowk, Bilaspur (C.G.), Through Its Chairman --- Respondent(s) WPC No. 3918 of 2025 1 - Arun Kumar Tulsyan S/o Shyamlal Tulsyan Aged About 49 Years R/o Motor Stand, Main Road, Bilaspur, Tahsil And District- Bilaspur, C.G. ---Petitioner(s) 3 Versus 1 - State Of Chhattisgarh Through The Secretary, Urban Administration And Development Department, Mahanadi Bhawan, Mantralaya, Nawa Raipur, Atal Nagar, District Raipur, C.G. 2 - Municipal Corporation, Bilaspur Through Commissioner, Municipal Corporation, Bilaspur, District- Bilaspur, C.G. 3 - The Collector Bilaspur, District- Bilaspur, C.G. 4 - The Estate Officer Municipal Corporation, Bilaspur, Vikas Bhawan, Near Nehru Chowk, Bilaspur, District- Bilaspur, C.G. 5 - Mayor-In-Council Through Its Chairperson, Municipal Corporation, Bilaspur, District- Bilaspur, C.G. 6 - Bilaspur Smart City Limited Registered Office 3rd Floor, Integraed Command And Control Center, Tarbahar Chowk, Bilaspur, C.G. Through Its Chairman. --- Respondent(s) WPC No. 4503 of 2025 1 - Sushil Samnani S/o Bhagwan Das Aged About 53 Years R/o Behind Guru Ghasidas School, Kasturba Nagar, Bilaspur, District - Bilaspur (C.G.) 2 - Smt. Rani Samnani W/o Sushil Samnani Aged About 50 Years R/o Behind Guru Ghasidas School, Kasturba Nagar, Bilaspur, District - Bilaspur (C.G.) ---Petitioner(s) Versus 4 1 - State Of Chhattisgarh Through The Secretary, Urban Administration And Development Department, Mantralaya, Mahanadi Bhawan, Nawa Raipur (C.G.) 2 - The Commissioner Municipal Corporation, Bilaspur, District - Bilaspur (C.G.) 3 - The Collector Bilaspur, District - Bilaspur (C.G.) 4 - The Estate Officer Municipal Corporation Bilaspur, Vikas Bhawan, Near Nehru Chowk, Bilaspur District - Bilaspur (C.G.) 5 - Mayor - In - Council, Through Its Chairperson Municipal Corporation Bilaspur, District - Bilaspur (C.G.) 6 - Bilaspur Smart City Limited Registered Office 3rd Floor, Integrated Command And Control Center, Tarbahar Chowk, Bilaspur (C.G.) Through Its Chairman --- Respondent(s) For Petitioner(s) : Shri Anurag Dayal Shrivastava and Shri Gautam Khetrapal, Advocates For Respondent(/State : Ms. Upasna Mehta, Dy.GA For Respondent No. 2,4 & 5 Shri A.S.Kachhawaha, Advocate (Hon’ble Shri Justice Arvind Kumar Verma) Order on Board 28/10/2025 As the issue involved in these petitioners is common in nature and arises out of the same set of facts relating to allotment of newly constructed shops at Imlipara Road, Old Bus Stand Road, Bilaspur, 5 they are being heard and disposed of by this common order. 2. The petitioners in WPC Nos. 3476/2025, 3505/2025 and 3918/2025, were occupants of shops situated at the Old Bus Stand, Bilaspur. Their shops were held on lease granted by the Municipal Corporation, Bilaspur for limited durations ending between the years 2006–2007 to 2012-13. Despite expiry of the lease periods, the petitioners continued to remain in possession and the Corporation continued to accept rent from them till September and October 2022, as evidenced by rent receipts placed on record. Subsequently, upon the demolition of the old structure, the petitioners approached this Court earlier in WP(C) No. 1859/2015, where in the Court stated : “9. Before parting with the matter, it is to be observed that a similar issue was involved in the matter of Sushil Samnani and Another Vs. Municipal Corporation Bilaspur and Others, registered as WPC NO. 2616/2020 wherein the Coordinate Bench of this Court vide order dated 3.11.2020 (Annexure R/F) has disposed of the same while considering the need of widening of the road at that particular area and that by directing the petitioners to make an appropriate representation before the Corporation for their alternative shops. Considering the same, coupled with the assurance given by the corporation to rehabilitate the affected shop owners in the complex by giving priority to them, as reflected from their return, the petitioners may, if so advised, approach the Corporation for their rehabilitation/alternative shops within a period of 15 days from today and the Corporation, in turn, shall consider the same sympathetically while giving a preferential right to them.” 3. It is on this strength of this direction that the present petitioners 6 have now approached this Court again as the Municipal Corporation has published a notice of auction scheduled on 17.11.2025 for the allotment of shops in the newly constructed Imlipara Commercial Complex (situated near Shyama Prasad Mukherjee Chowk, Bilaspur) without granting them the benefit of preferential allotment. SUBMISSIONS ON BEHALF OF THE PETITIONERS 4. Learned counsel for the petitioners in WPC Nos. 3476/2025,3505/2025 & 3918/2025 strenuously argued that : (i) The shops of the petitioners were demolished without providing any alternative arrangement thereby irreparably infringing upon the petitioner’s fundamental right to carry on business guaranteed under Article 19(1)(g) of the Constitution of India. Such deprivation without any interim rehabilitation is manifestly illegal and unjust. Prior to demolishing the shops of the petitioners, it was incumbent upon the respondent authorities to allot an alternative shop of equivalent value and location in the popular locality in strict compliance with this Court’s directions dated 10.05.2024 in WPC No. 1859 of 2015. Rehabilitation must be undertaken in its true spirit and object conforming to the said order. (ii) The petitioners, being long standing lessees and rent paying occupants, as their possession after expiry of lease was recognized by the Corporation itself, as it continued to accept rent regularly till October 2022 which is evident by rent receipts placed on record and are entitled to the protection of Section 116 of the Transfer of Property Act, 1882 7 as tenants holding over by renewing the tenancy from month to month or year to year as the case may be. Section 116 of the Act provides as under: “Effect of holding over. If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106. (iii) The assurance contained in paragraph 9 of the order in WP(C) No. 1859/2015 created a legitimate expectation that they would be given preferential rehabilitation and allotted shops in the new complex before any auction is conducted. (iv) the Corporation, however, has wrongly placed their names in classification of petitioners under “Category B” despite their leases having been renewed by conduct under Section 116 of the Transfer of Property Act, 1882 (holding over) and despite continuous rent acceptance by the Corporation. (v) the assurance furnished by the Corporation before this Court in WPC No. 1859/2015 specifically paragraph 9 constitutes a binding representation to rehabilitate and grant preferential allotment to the petitioners, forming legitimate expectation enforceable through writ jurisdiction. 8 (vi) The entire process leading to the exclusion of petitioners’ from Schedule “A” or relegation to Schedule “B” and the denial of rights under Section 116 of the TP Act is violative of the rights of the petitioners and is liable to be quashed. 5. It is therefore, the petitioners seek a direction that they may be placed in Category “A” treated as valid lessees and allotted shops on a preferential basis, before proceeding with the proposed auction scheduled for 17.11.2025. 6. They, therefore pray that the respondent-Municipal Corporation be directed to grant allotment of shops to the petitioners on a preferential basis, before proceeding with the public auction and further to forthwith allot shops commensurate in area, value and location for the unexpired balance term of their earlier leasehold and to communicate transparently the lease rent and terms thereof, prior to the scheduled auction on 17.11.2025. The petitioners have thus sought for the following reliefs: 10.1. The Hon’ble Court may be pleased to call the records of the case from the respondents for its kind consideration. 10.2. This Hon’ble Court may be pleased to issue an appropriate writ thereby setting aside/quashing the impugned decision (Annexure P/1) so far as it relates to deprivation of the petitioners from rehabilitation in Bilaspur Smart City Project. 10.3. This Hon’ble Court may be pleased to I direct the respondent authorities to rehabilitate 9 the petitioner in Bilaspur Smart City Project by extending the lease period of the shops of the petitioners in accordance with the applicable laws within stipulated period. 10.4. any other relief/order which may deem fit and just in the facts and circumstances of the case including award of the costs of the petition. 7. In WPC No.4503/2025, it has been argued by the counsel for the petitioner that the petitioner is the lawful lessee of the shop premises situated at the Old Bus Stand, Bilaspur under a valid lease agreement subsisting upto the year 2037-38. It is contended that the petitioner’s name has been duly placed in Schedule “A: of the verified list prepared by the respondent-Municipal Corporation, Bilaspur in compliance with the directions issued by this Court in WPC No. 3162/2024, wherein the Corporation was directed to identify and recognize valid leaseholders for rehabilitation in the newly construction Imlipara Commercial Complex. 8. He has further drawn the attention to the proceedings of the Municipal Corporation, as recorded in the minutes placed before the Mayor-in-Council which clearly mentions that : “……...mijksDrkuqlkj thfor ,oa oS/k yht/kkjh 05 O;olkf;;ksa dks fcykliqj LekVZ flVh fyfeVsM }kjk ¼izLrkfor Hkou ewY; ysdj ’ks”k yht vof/k ds fy, O;oLFkkiu ds rgr uofufeZr beyhikjk O;kolkf;d dkEIysDl essa nqdkj vkcafVr djus dh dk;Zokgh ckcr~½ izdj.k ,e-vkbZ-lh- dsle{k fopkjkFkZ izLrqrA” 10 9. It is therefore submitted that the petitioner being one of such valid and subsisting leaseholders, was entitled to be allotted a shop in the newly constructed complex for the remaining period of the existing lease ie. till the year 2037-38. 10. However, despite the above factual and legal position, the respondent-Municipal Corporation has proceeded to allot shops only for a period of three years, thereby curtailing the petitioner's legally vested leasehold right. It is further contended that the auction proceedings scheduled for 17.11.2025 is intended merely for three year term which is contrary to both the subsisting lease deed and the resolution of the Corporation recognizing the petitioner’s continuing lease rights. He therefore emphasized that the petitioner’s existing lease, having been duly executed and remain in force till 2037-38, cannot be unilaterally altered or reduced by the respondent authorities without due process of law. He therefore seeks for a direction to the respondent -Municipal Corporation Bilaspur to reschedule and finalize the allotment of shop in favor of the petitioner upto the year 2037-38 as per the terms of the existing lease agreement and to complete the process prior to 17.11.2025 before the proposed auction is held. SUBMISSIONS ON BEHALF OF RESPONDENTS NO. 2,4 & 5. 11. In response, Shri Kachhawaha, learned counsel for the respondents/ Corporation opposes the petitioners in WPC Nos. 3476/2025, 3505/2025 & 3918/2025, contending that : (i) the land in question forms part of Nazul property, managed by the 11 Corporation, but nor formally allotted nor conveyed in its favour by the State Government as such the Corporation lacks authority to issue long tenure leases over the property. Pursuant to a policy decision, the Corporation conducted a verification of 88 shopkeepers from the old bus stand and categorized them as follows: • Category “A” – 5 shopkeepers having live and valid leases; • Category “B” – 9 shopkeepers whose leases had expired; and • Category “C”- 74 shopkeepers without valid lease documents. (ii) A policy decision was taken to give preference in the allotment of shops to Category “A” shopkeepers alone, being those with subsisting lease deeds. Shopkeepers in Categories “B” and “C” were not entitled to preferential rights. (iii) The petitioners, whose leases have expired, are placed in a different category and cannot claim the same benefit. The petitioners being in Category “B” cannot claim the same status, especially when rent payments have been irregular since October 2022 with outstanding dues. Their lease periods expired in 2012-13 and they have rent arrears from October 2022 to May 2025, as follows: • Rashmi Agrawal - Rs. 44,441/- • Satish Agrawal - Rs. 39,829/- • Arun Kumar Tulsyan – Rs. 39,457/- Since rent was neither paid regularly nor accepted beyond 2022, Section 116 of the T.P. Act does not apply. 12 (iv) The actions of the respondents/corporation are consistent with the administrative prudence, statutory constrains and the larger public interest and do not warrant interference by this Court. The land belongs to the Municipal Corporation which has the authority under the Chhattisgarh Municipal Corporation (Transfer of Immovable Property) Rules, 1994 to dispose of such property strictly by public auction; no authorized allotment can be sanctioned. The commercial complex stands on Nazul Land (Khasra No. 488, Juna Bilaspur) which remains under the head Nazul Sadak and is placed with the Municipal Corporation merely for Vyavasthadin (management purposes). The Corporation has no authority to execute long term leases as ownership vests with the State Government. (v) Consequently, allotments are being made for three years only, which is the most appropriate and lawful arrangement given the circumstances. Thus, the Corporation has acted in compliance with the applicable laws, rules and court orders, including the order of this Court in WPC No. 1859/2015 dated 10.05.2024 which does not confer any right to the petitioners to continue occupying commercial property without renewal or rent payment. The claim of the petitioners that no alternative arrangement was made is denied; adequate alternatives and chance for rehabilitation has been made. 12. It is submitted by the counsel for the respondent/Municipal Corporation, so far as the case of the petitioners in WP (C) No. 13 4503/2025 is concerned, that after due deliberation policy decision has been taken that only those shopkeepers who possess valid lease deeds shall be given first preference to participate in the allotment proceedings of the newly constructed shops whereas the remaining shopkeepers whose leases have expired or are otherwise invalid, are not entitled to claim any preferential right or benefit under the said policy. 13. He further submits that the present petitioner falls under the same category. Vide communication dated 31.07.2025, the petitioner was invited to participate in the allotment proceedings to be conducted through a lottery system. However, instead of availing the said opportunity the petitioner deputed his son-in-law to represent him in the proceedings, who declined to participate in the lottery on the ground that the petitioner desired a permanent lease over the shop premises. It is contended that the petitioner, having voluntarily refused to participate in the transparent allotment process, cannot now be permitted to challenge the said process or seek a permanent lease as a matter of right. 14. It is therefore submitted that the Corporation does not possess the authority to execute long term or permanent leases in respect of such property. Consequently, entering into a three year management agreement with the eligible shopkeepers is considered most appropriate, lawful and uniform mechanism for handing over the shops for business purposes. On the above grounds, he submits that the 14 action of the Corporation is fair, transparent and strictly in accordance with the adopted policy and the petitioner's claim for a permanent lease or preferential allotment is wholly misconceived and untenable in law. 15. Heard learned counsels for the parties and perused the material on record with utmost circumspection. Upon perusing the pleadings, annexures, documents and rival submissions advanced by both the parties, this Court is called upon to determine: (a) Whether the petitioners are entitled to participatory and preferential rights in shop allotment based on previous leasehold and hold over and (b) whether the action of the respondent/Corporation in denying such rights is lawful and tenable. (c) whether the action of the respondent-Muniicipal Corporation , Bilaspur in restricting the allotment of newly constructed shops to a period of three years, despite the petitioner (in WPC No. 4503/2025) holding a valid and susbsiting lease upto the year 2037-38, can be sustained in law? 16. Firstly, this Court deals with the petitioners in WPC Nos. 3476/2025, 3505/2025 and 3918/2025. It is apparent from the record that the petitioners, despite expiry of the lease, continued in possession of the erstwhile shop premises and the Corporation as lessor, accepted rent till the year 2024. Section 116 of the TP Act squarely applies: where after lease expiry, the lessor accepts rent from the lessee, the 15 lease is absent contrary agreement deemed renewed for intervals appropriate to the purpose-month-to-month or year-to-year. Judicial precedents have consistently endorsed the principle that acquiescence through rent acceptance constitutes “holding over” granting the lessee continue possessory rights. 17. The petitioners were undisputedly lessees of the Municipal Corporation and continued in possession till demolition for redevelopment. Their possession was not unauthorized being tolerated and rent bearing upto October 2022. The direction of this Court in WPC No. 1859/2025 had already directed the Corporation to consider their cases sympathetically and the petitioners may be rehabilitated on a preferential basis. The Corporation, however, has proceeded with a general policy that, while in general terms, does not appear to have specifically considered the individual claims of these petitioners in the light of the earlier judicial observation. 18. The Corporation’s subsequent classification into categories “A”, “B” and “C” cannot override or nullify the judicial direction previously issued. At the very least, the Corporation ought to have considered the individual cases of the petitioners in light of that observation. Nevertheless, such constraint cannot override the obligation of the Corporation to extend preferential benefit to the displaced lesseees in the process of short term allotments. 19. The conduct of the Corporation in classifying shopkeepers and 16 denying the petitioners, who continued in possession post lease expiry and paid rent, their rightful entitlements is both contrary and statutory law and violative of the principles of equity and legitimate expectation. The record reveals no cogent reason for failing to communicate lease terms rent or effectively enabling petitioners to exercise their rights prior to the impending auction. 20. It is manifest from the record that despite the expiry of the original lease, the petitioners continued in settled position of the suit premises and regularly tendered rent, which was duly accepted by the Municipal Corporation. However, upon redevelopment, the Corporation has now chosen not to extend or confine the renewed shop allotments in favour of the petitioners. 21. The proposed auction scheduled on 17.11.2025, if proceeded without deciding the petitioners’ preferential claim would prejudice their statutory and equitable rights under the prior judicial order. In these circumstances, it is appropriate that the Corporation take a specific decision in their individual cases before proceeding with the proposed auction on 17.11.2025. 22. Accordingly, in WPC Nos. 3476/2025, 3505/2025 & 3918/2025, the respondent -Municipal Corporation, Bilaspur shall in compliance with paragraph 9 of the order dated 10.05.2024 passed in WPC No. 1859/2015 consider and take a reasoned decision on the petitioners’ claim for preferential allotment of shops in the newly constructed 17 Imlipara Commercial Complex. 23. In view of the foregoing discussion and having regard to the material placed on record, this Court finds that the impugned decision Annexure P/1 in so far as it deprives the petitioners of rehabilitation under the Bilaspur Smart City Project is set aside. The respondent- Municipal Corporation is directed to rehabilitate the petitioners in Bilaspur Smart City Project by extending the lease period of the shops of the petitioners strictly in accordance with law. 24. Such consideration shall be sympathetic and in accordance with the earlier assurance given by the Corporation to this Court. The decision shall be taken and communicated to the petitioners positively before the scheduled auction of 17.11.2025. 25. In WPC No. 4503/2025, the petitioners therein already figures in Schedule “A” having a valid lease up to the year 2037-2038. The Corporation has rightly invited him to participate in the allotment through lottery. However, as the land is of Nazul property, the Corporation cannot execute leases beyond the permissible period of three years and the petitioner shall be allotted a shop as per his entitled under the said schedule. 26. The respondent Municipal Corporation shall allot the developed shop to the petitioners (in WPC No. 4503/2025) on a preferential basis, consistent with the terms, duration and other conditions analogous to those prevailing under the original lease 18 and in accordance with the observations and undertakings placed before this Court in earlier proceedings. In other words, the allotment shall not be restricted to three years solely on account of administrative convenience but the period shall be fixed keeping in mind the original lease tenure, the interim arrangements and any approval/clarification sought and received from the State Government. The entire process of shop allotment to the eligible petitioners shall be concluded and possession handedover on or before 17.11.2025 ensuring that the impending auction does not prejudice petitioners’ rights. The respondent/Corporation shall ensure transparency in communication, equitable processing of the petitioners’ claims and strict adherence to statutory provisions and directions of this Court. 27. Accordingly, the respondent-Municipal Corporation is directed to alter the conditions imposed for allotment of shops at the newly constructed area at Imlipara Road, Old Bus Stand, Bilapsur and allot the shop to the petitioners (in WPC No. 4503/2025) as per the earlier agreement executed in favor of the petitioners, which is under existence till 2037-38. 28. With the aforesaid directions and observations, all the writ petitions stand disposed of. No order as to costs. Sd/- (Arvind Kumar Verma) Judge SUGUNA DUBEY Digitally signed by SUGUNA DUBEY Date: 2025.11.13 16:44:41 +0530 19