APHC010130072026 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3331] MONDAY, THE SIXTEENTH DAY OF MARCH TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI WRIT PETITION NO: 6894/2026 Between: 1. PRASANTHI FUELS, PARTNERSHIP FIRM KAVALI, NELLORE DISTRICT REPRESENTED BY ITS MANAGING PARTNER, CHALUVADI HANUMANTHARAO, S/O RANGANAYAKULU AGED ABOUT 58 YEARS, R/O D.NO.7-1-7/5F1, GUPTHAS TEMPLE VIEW, OPP SAIBABA TEMPLE, LAWYER PETA, ONGOLE, PRAKASAM DISTRICT. ...PETITIONER AND 1. THE STATE OF ANDHRA PRADESH, REP. BY THE PRINCIPAL SECRETARY, PANCHAYAT RAJ AND RURAL DEVELOPMENT DEPARTMENT SECRETARIAT BUILDINGS, VELAGAPUDI, AMARAVATHI, GUNTUR DISTRICT - 522237 2. THE CHIEF EXECUTIVE OFFICER, ZILLA PARISHAD, NELLORE, SPS NELLORE DISTRICT. ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Writ, Order or Direction more particularly one in the nature of Writ of MANDAMUS declaring the notice issued by the 2ND respondent in RC.No.D2/4461/1999 dated 14.02.2026 directing the Petitioner Firm to vacate from 4000 Sq.ft site in Sy.No. 1080/18, of Kavali Town, SPS Nellore District where the petitioner firm is running a Retail Petroleum Outlet pending disposal of the application for extension of lease before the 1ST respondent p. 2 as illegal, arbitrary, principles of natural Justice and unjust and set aside the same and consequently the direct the respondents not to dispossess the Petitioner firm from the above said site pending disposal of the application for extension of lease and pass IA NO: 1 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased Please to direct the respondents not dispossess the Petitioner firm from 4000 sq.ft, in Sy.No. 1080/1/B of Kavali Town, SPS Nellore district nor interfere with the Petitioner's operation of the Retail Petroleum Outlet therein by suspending the notice issued by the 2ND respondent in RC.No.D2/4461/1999 dated 14.02.2026 and pass Counsel for the Petitioner: 1. K NARSI REDDY Counsel for the Respondent(S): 1. GP FOR PANCHAYAT RAJ RURAL DEV 2. Mattegunta.Sudhir,Standing Counsel For Z.P.Ps,M.P.Ps,Gram Panchayats The Court made the following: ::ORDER :: Impugning the notice issued vide R.C.No.D2/4461/1999, dated 04.02.2026, by respondent No.2, directing the petitioner to vacate the premises, since the lease is going to expire on 31.03.2026, the above writ petition was filed. 2. Heard Sri K. Narsi Reddy, learned counsel for the petitioner, Sri Rajesh Kumar, learned Assistant Government Pleader for Panchayat Raj, appeared for respondent No.1, and Ms. Kavitha, learned counsel representing Sri M. Sudhir, learned Standing Counsel, appeared for respondent No.2. 3. Learned counsel for the petitioner would submit that respondent No.2 leased out the land admeasuring 4000 Square Feet in Sy.No.1080/18 of p. 3 Kavali Town, SPS Nellore District to M/s Burmahshell and Company Madras, to run the petrol outlet from 01.04.1951. The said company, in turn, appointed M/s P.T. Gopalachari & Sons as its agent. The Petroleum Retail Outlet continued under the Management till 1974. In the year 1974, as per the family arrangement, the petitioner firm was constituted. The lease was granted in favour of the petitioner, and the petitioner has been operating the outlet. The lease is being renewed from time to time. The lease was extended for 15 years with effect from 1991 on a lease amount of Rs.8,509/- + 5% commission on net profit of the firm vide G.O.Rt.No.1098, Panchayat Raj and Rural Development, dated 16.10.1993. Subsequently, the lease was extended from 01.04.2016 to 31.03.2026, on yearly rent of Rs.2,00,000/- and 10% increase every year. The lease period is going to expire on 31.03.2026. A representation dated 29.07.2025 was made by the petitioner seeking an extension of the lease period. Pending the said representation, the notice impugned was issued. 4. Learned counsel for the petitioner would also submit that the outlet has been run since long time and the petitioner has been paying the agreed rent without any default. The Managing Partner of the petitioner invested a huge amount. It is not possible to vacate the premises immediately since the underground tanks were installed to run the petrol bunk. The Government issued G.O.Ms.No.496 P.R, dated 11.06.1966, the Rules relating to receipts and expenditure of Gram Panchayats. As per Rule 12(2) of the Rules, the 2nd respondent is competent to extend the lease. 5. Ms. Kavitha, learned counsel appearing for respondent No.2 would submit that the Executive Engineer of Panchayat Raj, Kavali, requested to send the lease value @ Rs.12,44,480/- per year, to respondent No.2. When the respondent No.2 requested the authority to reconsider the lease value as per the report given by the Sub-Collector, Kavali, the Executive Engineer, Panchayat Raj Department sent the lease value on par with the rental values of the firms (beside to the said property land) as Rs.59,75,520/- per year. p. 4 6. Learned counsel would submit that the petitioner can also participate in the public auction. The petitioner can claim the renewal of the lease as a matter of right. 7. Thus, as seen from the material available on record, there is no dispute regarding the petitioner conducting the outlet business in the scheduled land from 1991 onward. As seen from Ex.P1-notice, the lease period is going to expire on 31.03.2026. 8. No doubt, the Government issued G.O.Ms.No.496, dated 11.06.1966. Rule 12(2) of the Rules, which is relevant is extracted herewith: “(2) lease of buildings and lands belonging to Gram Panchayat shall be effected by public auction which shall be conducted by the executive authority or by a person duly authorized by him, who shall give full publicity thereto in such manner as he considers suitable. The bids at the auction shall be placed by the executive authority before the Gram Panchayat which shall determine which of the bids should be accepted. Where the bid accepted is not the highest bid, the reasons for rejecting a bid or bids higher than the one accepted shall be recorded in writing.” 9. The first proviso to Rule 12 of the Rules makes it clear that a public auction may be dispensed with, with the previous sanction of the District Collector, if the renewal of the lease is advantageous to the authority. 10. As per the averments made in the affidavit, the petitioner has been paying Rs.4,71,589/- per year. The instructions would indicate that, as per the earlier report of the Executive Engineer of Panchayat Raj, the lease value is Rs.12,44,480/- per year, and as per the 2nd report, the lease value would be Rs.59,75,520/- per annum. 11. Given the facts and circumstances of the case, the Writ Petition is disposed of, directing the respondent No.2 to consider the request made by the petitioner, provided that the petitioner agrees to enhance the lease as per the representation submitted vide Ex.P2 strictly as per the Rules. If the p. 5 petitioner is not agreeable to the lease amount fixed by the 2nd respondent, in such a situation, respondent No.2 is at liberty to conduct an auction, and the petitioner can participate in the same. In case the petitioner has not emerged as the highest bidder, the respondent authorities shall consider granting some reasonable time to the petitioner to vacate the premises. In such an event, the petitioner shall pay the damages for use and occupation. No order as to costs. As a sequel, pending miscellaneous petitions, if any, shall stand closed. ___________________________ JUSTICE SUBBA REDDY SATTI Date: 16.03.2026 TVN p. 6 THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI WRIT PETITION NO: 6894 of 2026 Date: 16.03.2026 TVN