HC allows closure of shops on payment of compensation

The Kerala High Court on Tuesday allowed the Greater Cochin Development Authority (GCDA) and the State government to close down business establishments at the commercial complex in the Jawaharlal Nehru International Stadium ahead of the FIFA Under-17 World Cup football matches upon depositing Rs. 25 lakh in the district treasury in a separate account to be paid as compensation to the shop owners.

Holding that the decision of the GCDA asking the tenants to close their shops for a month and a half was arbitrary, the court observed that there were no statutes restricting the commercial activities of the petitioners. The lease agreement signed between the petitioners and the GCDA did not have a clause allowing abrupt closure of their business establishments.

The court observed that having held the decision as arbitrary, the logical measure should have been to strike down the decision of the GCDA. However, the court was alive to the consequences of such an order. The court could not close its eyes to the fame and renown the successful holding of an event of this magnitude would bring to the State and the country at the international level and the funds generated that could be put to the promotion of sports and games within the State.

The court said that “the enduring loss” caused to the petitioners by no fault of theirs; by reason only of the administration having not acted with promptitude in notifying the lessees reasonably in advance, downing their shutters abruptly and thus depriving them of their livelihood, tilted the scales in favour of the petitioners being at least compensated immediately.

The court ordered the constitution of a committee consisting of the member secretary, Kerala State Legal Services Authority (KELSA); Director, Alternative Disputes Redressal Centre, High Court; and the District Collector to fix the quantum of compensation to be paid to the petitioners.

The court directed the State government to compensate 75 per cent of the loss computed by the committee. The Collector should immediately release the amount on completing the computation of the compensation amount. The GCDA should also waive the rent for the closure period as undertaken by it before the court.

The court also directed the petitioners to close their business establishments and hand over the keys at the Collector’s office.

The verdict was passed on a writ petition filed by 44 tenants at the commercial complex challenging the action of the GCDA.

Article source: Legal News

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