LALA RAM (D) BY L.R.. & ORS.versusUNION OF INDIA & ANR.

                     [2013] 1 S.C.R. 577


               LALA RAM (D) BY L.R.. & ORS.                          A
                           v.
                    UNION OF INDIA & ANR.
             (Civil Appeal Nos. 243-247 of 2003)
                      JANUARY 24, 2013
                                                                     B
  [DR. B.S. CHAUHAN AND V. GOPALA GOWDA, JJ.]

      Fee - Licence fee - Shops situated in a busy market of
 Old Delhi - Notice dated 7-8-1980 issued by the Railways
 Authorities enhancing licence fee in respect of the said shops      c
 from Rs.21 per sq yards to Rs.270 per sq yards per annum -
 Representations thereagainst by the shop licencees
 (appellants) - Railway Administration, after considering the
 case of the appellants, passed order dated 25-5-1987
 enhancing the license fee @ Rs.270 per sq. yards with
                                                                     0
 retrospective effect from 1-11-1980 - Writ petitions filed by the
 appellants - Dismissed by the High Court - On appeal, held:
 The enhanced license fee being 13 times, seems excessive,
 and though such observation was a/so made by the Railway
 Minister, but the enhanced license fee would be illusory when
 compared with the prevailing license fee in the said market         E
 as applicable to private shops - A State instrumentality must
 serve the society as a whole, and must not grant unwarranted
 favour(s} to a particular class of people without any
justification, at the cost of others - Merely because the
 appellants (shop licencees) have been occupying the shops           F
in question for a prolonged period of time, they cannot claim
 any special privilege - The enhanced license fee cannot be
held to be unreasonable or arbitrary, and as warranting any
interference by a court of equity- However, finding bf the High
Court that the notice dated 7-8"1980 remained unchallenged           G
and therefore, application of order dated 25-5-1987 with
retrospective effect was justified, not factually correct
inasmuch as after receipt of notice dated 7-8-1980, appellants
had made representations before the respondents-authorities
                               577                                   H
    578     SUPREME COURT REPORTS                 [2013] 1 S.C.R.


A raising all their grievances and certain interim relief was also
  granted pursuant to certain observations made by the Railway
  Minister - Thus, order dated 25-5-1987 should not be applied
  retrospectively - Enhanced license fee may be recovered
  from the appellants from the said date in accordance with law
B - Interim order passed earlier vacated.
         Constitution of India, 1950 - Articles 38 and 39 - Welfare
    state - Meaning, features and obligations of - Discussed -
    Maxims - "Salus Populi Suprema lex".

C      The appellants were licensee of shops situated in a
  busy market of Old Delhi which were in their occupation
  since pre-independence. They were regularly paying
  license fee to the Railways. In 1977, the said licence fee
  was increased to Rs.21 per sq. yards per annum. The
D appellants received a notice dated 7.8.1980 from the
  respondents-Railways Authorities, about increase in the
  licence fee from Rs.21 per sq. yards to Rs.270 per sq.
  yards per annum. Representations made by the
  appellants' association were considered by the Railway
E Minister who observed that the auction of the said shops
  was not reasonable and also stated that the revision in
  license fee was excessive and expressed his opinion
  with respect to reconsidering the whole case and
  increasing the license fee by 5% to 10%. The Railway
F Administration, after considering the case of the
  appellants, passed order dated 25.5.1987 to enhance the
  license fee @ Rs.270 per sq. yards with retrospective
  effect from 1.11.1980. Aggrieved with the notice dated
  25.5.1987 and also the letter dated 29.7.1987, terminating
G licences to operate the shops in question and to vacate
  the premises for failing to deposit outstanding dues on
  account of non-payment of licence fee, the appellants
  filed writ petitions before the High Court. The High Court
  dismissed the writ petitions and therefore the instant
H appeals.
LALA RAM (D) BY LR. & ORS. v. UNION OF INDIA & 579
                    ANR.
     The appellants submitted that once the enhanced A
license fee had been disapproved by the Railway Minister
and the matter was reconsidered in light of the
observation made by the said Minister stating that the
said enhancement was excessive and that the license fee
could be enhanced by 5% to 10%, the notice impugned B
was unreasonable and arbitrary. It was further submitted
that being a welfare state, it is the duty of the State to
provide shops at nominal license fee.

    Disposing of the appeals, the Court
                                                            c
     HELD: 1. In the case at hand, the enhanced license
fee cannot be held to be unreasonable or arbitrary, and
as warranting any interference by a court of equity.
Undoubtedly, the enhanced license fee being 13 times,
seems excessive, and such an observation was alsQ D
made by the Hon'ble Railway Minister in order dated
11.4.1981, but the enhanced license fee would be illusory
if the same is compared with the prevailing license fee in
the said market as applicable to private shops. [Para 7,
8] [585-E-G]                                               E
     2.1. A welfare state denotes a con.cept of government,
in which the State plays a key role in the protection and
promotion of the economic and social well-being of all of
its citizens, which may include equitable distribution of F
wealth and equal opportunities and public
responsibilities for all those, who are unable to avail for
themselves, minimal provisions for a decent life. It refers
to "Greatest good of greatest number and the benefit of
all and the happiness of all". It is important that public
weal be the commitment of the State, where the state is G
a welfare state. A welfare state is under an obligation to
prepare plans and devise beneficial schemes for the
good of the common people. Thus, the fundamental
feature of a Welfare state is social insurance. Anti-poverty
                                                             H
   580     SUPREME COURT REPORTS               [2013] 1 S.C.R.


A programmes and a system of personal ta>tation are
  examples of certain aspects of a Welfare state. A Welfare
  state provides State sponsored aid for individuals from
  the cradle to the grave. However, a welfare state faces
  basic problems as regards what should be the desirable
B level of provision of such welfare services by the state,
  for the reason that equitable provision of resources to
  finance services over and above the contributions of
  direct beneficiaries would cause difficulties. A welfare
  state is one, which seeks to ensure maximum happiness
c of maximum number of people living within its territory.
  A welfare state must attempt to provide all facilities for
  decent living, particularly to the poor, the weak, the old
  and the disabled i.e. to all those, who admittedly belong
  to the weaker sections of society. Articles 38 and 39 of
0 th~ Constitution of India provide that the State must strive
  to promote the welfare of the people of the State by
  protecting all their economic, social and political
  rights.These rights may cover, means of livelihood, health
  and the general well-being of all sections of people in
E society, specially those of the young, the old, the women
  and the relatively weaker sections of the society. These
  groups generally require special protection measures in
  almost every set up. The happiness of the people is the
  ultimate aim of a welfare state, and a welfare state would
  not qualify as one, unless it strives to achieve the same.
F [Para 9) [586-C-H; 587-A-B]

      2.2. A welfare state must serve larger public interest.
  "Salus Populi Suprema lex", means that the welfare of the
  people is the supreme law. A State instrumentality must
G serve the society as a whole, and must not grant
  unwarranted favour(s) to a particular class of people
  without any justification, at the cost of others. However,
  in order to serve larger public interest, the State
  instrumentality must be able to generate its own
H resources, as it cannot serve such higher purpose while
LALA RAM (D) BY L.R. & ORS. v. UNION OF INDIA & 581
                     ANR.
 in deficit. Merely because the appellants have been         A
 occupying the suit premises for a prolonged period of
 time, they cannot claim any special privilege. In the
 absence of any proof of violation of their rights, such
 concession cannot.be granted to them. [Para 8] [585-G-
-,~; 586-A-B]                                                B

     Dantuluri Ram Raja & Ors. v. State of Andhra Pradesh
& Anr. AIR 1972 SC 828: 1972 (2) SCR 900; N. Nagendra
Rao & Company v. State of Andhra Pradesh AIR 1994 SC
2663: 1994 (3) Suppl. SCR 144 and N.D. Jayal & Anr. Union    C
of India & Ors. AIR 2004 SC 867: 2003 (3) Suppl. SCR 152
- relied on.

     3. The High Court observed that the letter/notice
dated 7.8.1980, enhancing the rate of license fee remains
unchallenged, and therefore, the application o~ notice D
dated 25.5.1987, with retrospective effect is justified. This
finding is not factually correct. Notice dated 7 .8.1980,
enhancing the license fee was received by the appellants,
and representations were filed by them through their
Association, raising all their grievances to the effect that E
during a period of 30 years, the license fee paid by them
had been enhanced about 15 to 20 times, without any
justification and hence, they demanded justice. The same
were considered by the then Railway Minister, and orders
dated 26.9.19.80 and 11.4.1981 were passed by him, F
observing that the license fee may be revised after every
5 years on the basis of justice and equity. Certain interim
relief was also granted. Thus; the aforesaid demands
should not have been made to apply with retrospective
effect from the year 7-8-1980. The notice dated 25.5.1987 G
must not be applied retrospectively, i.e., w.e.f. 7-8-1980.
However, the enhanced license fee may be recovered
from the appellants from the said date in accordance with
law. The interim order passed earlier stands vacated.
[Para 10] [587-D-H; 588-A]
                                                              H.
    582      SUPREME COURT REPORTS                  [2013] 1 S.C.R.


A                         Case Law Reference:

      1972 (2) SCR 900                 relied on          Para 9

      1994 (3) Suppl. SCR 144          relied on          Para 9

      2003 (3) Suppl. SCR 152          relied on          Para 9
B
        CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
    243-247 of 2003.

        From the Judgment & Order dated 13.08.2001 of the High
c   Court of Delhi at New Delhi in Civil Writ Petition No. 349, 2812-
    2814 and 2822 of 1989.

                                 WITH

    C.A. Nos. 268-279, 263-266 & 248-262 of 2003.
D
         Altaf Ahmad, P.H. Parekh, Anil Makhija, Lalit Chauhan
    Pallavi Sharma, Faisal Sherwani (for Parekh & Co.) for the
    Appellants.

        Chandra Bhusan Prasad, Vikas Bansal, Shreekant N.
E   Terdal, Anil Katiyar for the Respondents.

          The Judgment of the Court was delivered by

       DR. B. S. CHAUHAN, J. 1. These appeals have been
F preferred against the impugned judgment and order dated
  13.8.2001, passed by the High Court of Delhi at New Delhi in
  Writ Petition Nos.349, 2812-2814 and 2822 of 1989 by way
  of which, the High Court dismissed the said writ petitions
  challenging the notice dated 25.5.1987, issued by the Divisional
G Railway Manager, Northern Railway, calling upon the appellants
  to pay the licence fee for the railway property in their use, at
  the enhanced rate, and also letter dated 29.7.1987 t<:irminating
  licences to operate the shops in question and to .tacate the
  premises for failing to deposit outstanding dues on account of
  non-payment of licence fee.
H
LALA RAM (D) BY L.R. & ORS. v. UNION OF INDIA & 583
         ANR. [DR. B.S. CHAUHAN, J.]
     2. Facts and circumstances giving rise to these appeals     A
are that:

       Each of the appellants is a licensee of the shops in dispute
 admeasuring 4.22 sq. yards upto 100 sq. yards situated at
 Qutub Road, Sadar Bazar, Delhi which have been in their B
 occupation since pre-independence. As per the appellants,
 there has been previous litigation in respect of this very land
 and the same became evacuee property under the
 Administration of Evacuee Property Act, 1950 and was taken
 over by the Custodian. The appellants, being licensees of the C
 shops, have regularly been paying the license fee to the
 Railways, at rates which were mutually agreed upon and have
 also been increased in the past. In 1977, the said licence fee
 was increased to Rs.21 per sq. yards per annum, while earlier,
  it was fixed at only Rs.18 per sq. yards per annum. The
 appellants received a notice dated 7 .8.1980 from the D
 respondents-Railways Authorities, about increase in the licence
 fee from Rs.21 per sq. yards to Rs.270 per sq. yards per
 annum. Representations made by the appellants' association
 were considered by the Hon'ble Railway Minister and order
 dated 26.9.1980 was passed, staying the auction thereof, with E
 a further direction to examine their grievances. The Hon'ble
 Railway Minister further considered the representation of the
 appellants' Association and observed that the auction of the
 said shops was not reasonable. He also stated that the revision
'in license fee was excessive and expressed his opinion with F
 respect to reconsidering the whole case and increasing the
 license fee by 5% to 10%. The Railway Administration, after
 considering the case of the appellants, again passed an order
 dated 25.5.1987 to enhance the license fee @ Rs.270 per sq.
 yards with retrospective effect frcim 1.11.1980. The appellants' G
 Association had been making representations since receiving
 the aforementioned notice for enhancement dated 25.5.1987,
 ahd ultimately filed writ petitions before the High Court which
 have been dismissed. Hence, these appeals.
                                                                 H
    584      SUPREME COURT REPORTS                 [2013) 1 S.C.R.


A        3. Shri Altaf Ahmed, learned Senior counsel appearing for
    the appellants has submitted that once the enhanced license
    fee had been disapproved by the Hon'ble Railway Minister and
    the matter was reconsidered in light of the observation made
    by the Hon'ble Minister stating that the said enhancement was
B   excessive and that the license fee could be enhanced by 5%
    to 10%, the notice impugned was unreasonable and arbitrary.

        The Ministry of Urban Development issued guidelines
  dated 14.1.1992 as how the license fee could periodically be
C revised. Therein, it was provided that the standard license fee
  should be determined as per the provisions of the Rent Control
  Act applicable to a State. In the instant case, the Delhi Rent
  Control Act is applicable, and therefore, the standard license
  fee as provided therein ought to have been calculated. The
  Delhi Rent Control Act was amended in 1963, making it
D applicable to the premises belonging to the Government as
  well.

        The respondents have filed an affidavit before this Court
  on 5.9.2002, giving a particular mode of calculation and even
E if the same is applied, the enhanced license fee would not be
  enhanced to this extent, and the High Court has erred in not
  deciding any issue raised by the appellants and in dismissing
  the writ petitions in a cursory manner. Thus, the said appeals
  deserve to be allowed. Being a welfare state, it is the duty of
F the State to provide shops at nominal license fee.

       4. Per contra, Shri Chandra Bhushan Prasad, learned
  counsel appearing for ~he respondents, has submitted that the
  appellants have been enjoying the said property at nominal
  license fee. The property is situated in a very busy market of
G old Delhi. The area of the shops varies from 4.22 sq. yards to
  100 sq. yards. Therefore, considering the geographical
  situation of the shops, alongwith the other facilities provided to
  the appellants, such enhanced license fee is, in fact, nominal.
  The High Court has rightly dismissed their writ petitions and no
H interference is called for.
LAL.4 RAM (D) BY L.R. & ORS. v. UNION OF INDIA & 585
          ANR. [DR. B.S. CHAUHAN, J.]
     5. We have considered the rival submissions made by              A
learned counsel for the parties and perused the record.

     6. The High Court has taken judicial notice of the facts and
surrounding circumstances, considered the geographical
situation of the suit properties and held as under:
                                                                      B
     "For a similarly situated shop if it was owned by a private
     persons, the rental/licence fee would have been much
     more. The mere fact that the Railway is a State Enterprise
     does not mean that ............. on the premises in
     occupation of the petitioner and other persons. State            C
     enterprise must not look elsewhere for funds. It must
     generate funds through the activities which are undertaken
     by it for providing services to the public at large. It cannot
 - - be expected to run in deficit.. .... Since the action of the
     first respondent is reasonable, we decline to interfere with     D
     the aforesaid enhancement."

     7. We are of the considered opinion that no fault can be
found with the aforesaid observations and no interference is
required. The enhanced license fee cannot be held to be               E
unreasonable or arbitrary, and as warranting any interference
by a court of equity.

      8. Undoubtedly, the enhanced license fee being 13 times,
the earlier license fee amount seems excessive, and such an
observation was also made by the Hon'ble Railway Minister in          F
order dated 11.4.1981, but the enhanced license fee would be
illusory if the same is compared with the prevailing license fee
in the said market as applicable to private shops. A welfare
state must serve larger public interest. "Salus Populi Suprema
lex': means that the welfare of the people is the supreme law.        G
A state instrumentality must serve the society as a whole, and
must not grant unwarranted favour(s) to a particular class of
people without any justification, at the cost of others. However,
in order to serve larger public interest, the State instrumentality
must be able to generate its own resources, as it cannot serve        H
     586     SUPREME COURT REPORTS                   [2013] 1 S.C.R.

A such higher purpose while in deficit. Merely because the
  appellants have been occupying the suit premises for a
  prolonged period of time, they cannot claim any special
  privilege. In the absence of any proof of violation of their rights,
  such concession cannot be granted to them.
B
  Welfare State means:
         9. A welfare state denotes a concept of government, in
  which the State plays a key role in the protection and promotion
  of the economic and social well-being of all of its citizens, which·
C may include equitable distribution of wealth and equal
   opportunities and public responsibilities for all those, who are
   unable to avail for themselves, minimal provisions for a decent
   life. It refers to "Greatest good of greatest number and the
  benefit of all and the happiness of all". It is important that public
D weal be the commitment of the State, where the state is a
  welfare state. A welfare state is under an obligation to prepare
  plans and devise beneficial schemes for the good of the
  common people. Thus, the fundamental feature of a Welfare
  state is social insurance. Anti-poverty programmes and a
E system of personal taxation are examples of certain aspects
  of a Welfare state. A Welfare state provides State sponsored
  aid for individuals from the cradle to the grave. However, a
  welfare state faces basic problems as regards what should be
  the desirable level of provision of such welfare services by the
F state, for the reason that equitable provision of resources to
  finance services over and above the contributions of direct·
  beneficiaries would cause difficulties. A welfare state is one,
  which seeks to ensure maximum happiness of maximum
  number of people livinl:I within its territory. A welfare state must
G attempt to provide all facilities for decent living, particularly to
  the poor, the weak, the old and the disabled i.e. to all those,
  who admittedly belong to the weaker sections of society.
  Articles 38 and 39 of the Constitution of India provide that the
  State must strive to promote the welfare of the people of the
  state by protecting all their economic, social and political rights.
H
LALA RAM (D) BY L.R. & ORS. v. UNION OF INDIA & 587
         ANR. [DR. B.S. CHAUHAN, J.]
These rights may cover, means of livelihood, health and the          A
general well-being of all sections of people in society, specially
those of the young, the old, the women and the relatively weaker
sections of the society. These groups generally require special
protection measures in almost every set up. The happiness of
the people is the ultimate aim of a welfare state, and a welfare     B
state would not qualify as one, unless it strives to achieve the
same. (See also: Dantuluri Ram Raja & Ors. v. State of
Andhra Pradesh & Anr., AIR 1972 SC 828; N. Nagendra Rao
& Company v. State of Andhra Pradesh, AIR 1994 SC 2663;
and N.D. Jayal & Anr. Union of India & Ors., AIR 2004 SC             c
867).

     10. The High Court has observed that the letter/notice
dated 7.8.1980, enhancing the rate of license fee remains
unchallenged, and therefore, the application of notice dated
25.5.1987, with retrospective effect is justified. This finding is. D
not factually correct.

       Notice dated 7.8.1980, enhancing the license fee was
 received by the appellants, an~ representations were filed by
them through their Association, raising all their grievances to      E
the effect that during a period of 30 years, the license fee paid
by them had been enhanced about 15 to 20 times, without any
justification and hence, they demanded justice. The sarr1e were
considered by the then Railway Minister, and orders dated
26.9.1980 and 11.4.1981 were passed by him, observing that           F
the license fee may be revised after every 5 years on the basis
of justice and equity. Certain interim relief was also granted.
Thus, in view of the above, we are of the opinion that the
aforesaid demands should not have been made to apply with
retrospective effect from the year 7-8-1980.
                                                                     G
      In view of the above, ·the appeals succeed and are allowed
partly, to the extent that notice dated 25.5.1987 must not be
applied retrospectively, i.e., w.e.f. 7-8-1980. However, the
enhanced license fee may be recovered from the appellants
from the said date in accordance with law.                           H
    588      SUPREME COURT REPORTS              [2013) 1 S.C.R.


A        With these observations, the appeals stand disposed of.
    Interim order passed earlier stands vacated.

    CA Nos.268-279, 263-266 & 248-262 of 2003

         The abovesaid Civil Appeals staod disposed of in terms
8   of the judgment passed in Civil Appeal Nos.243-247 of 2003.

    8.8.8.                                Appeals disposed of.