A municipality may deduct losses incurred under licence terms from a licensee’s refund.

The first respondent held a licence to collect fees at the Manapparai Municipality Weekly Cattle Market for 2024–2025.

Following complaints that he had collected excess fees, the Municipality cancelled his licence by order dated 15 July 2026.

He challenged the cancellation in a writ petition.

The Single Judge upheld the cancellation but directed a refund of ₹1,73,94,538 and directed the Municipality to collect market fees through its own officials until alternative lawful arrangements were made.

The Municipality appealed only against the amount of the refund, contending that ₹39,16,493 representing its loss should be deducted.

Whether the Municipality was entitled, under the licence conditions, to deduct ₹39,16,493 from the amount otherwise refundable to the first respondent.

Whether the refund amount fixed by the Single Judge should be modified accordingly.

The Court identified no specific statute or precedent as the basis for its decision.

It applied the conditions stipulated in the licence, holding that those conditions entitled the Municipality to deduct ₹39,16,493 towards the loss it had incurred.

The judgment does not set out the relevant licence clause or further explain the legal basis for the deduction.

The appeal concerned only the quantum of the refund; the first respondent had not challenged the Single Judge’s order upholding cancellation of the licence.

The Municipality relied on its calculation memo and claimed a loss of ₹39,16,493 following cancellation.

Accepting that the licence conditions permitted the deduction, the Court reduced the refund from ₹1,73,94,538 by ₹39,16,493, resulting in ₹1,34,78,045.

The appeal was allowed to that extent, with no order as to costs; the connected miscellaneous petition was closed.