A Panchayat seeking a fresh lease or higher rent must evict the existing lessee in accordance with law.

The petitioner occupied a Panchayat Union building and operated a hotel there.

After earlier proceedings concerning cancellation of her lease, the second respondent issued the impugned order dated 21 June 2022 directing her to vacate, citing the building’s alleged dilapidated condition and rent arrears.

The petitioner challenged that order and sought renewal of the lease under G.O.Ms.No.92 dated 3 July 2007.

In an earlier appeal, the Division Bench remanded the matter for fresh adjudication, holding that the Government Order concerning municipalities did not apply to premises in a Panchayat Union.

At the hearing, the petitioner tendered a demand draft for Rs.74,340, while the second respondent stated that total arrears were Rs.95,750.

1. Whether the direction to vacate could be sustained on the stated ground that the building was dilapidated, when the petitioner disputed that condition and produced photographs.

2. Whether the petitioner was entitled to renewal of the lease under G.O.Ms.No.92 dated 3 July 2007.

3. Whether the petitioner should be permitted to remain in the premises subject to payment of the arrears claimed by the second respondent.

The petition was brought under Article 226 of the Constitution, seeking certiorarified mandamus.

The Division Bench’s prior ruling, as recounted by the Court, established that G.O.Ms.No.92—concerning municipalities—did not apply to the Panchayat Union premises in this case.

The Court also stated that if the Panchayat Union intended to increase the rent or conduct a fresh lease by auction, it must first secure the petitioner’s vacation of the premises in the manner known to law.

The respondents cited M. Murali v. The Block Development Officer & another and M. Periya Samy v. The Assistant Director of Town Panchayats, Madurai in support of their opposition to indefinite lease extensions; these were cited as the Government Advocate’s submissions.

The Court found that the petitioner’s occupation was not without an allotment order and that the impugned order was based on the alleged dilapidated condition of the building, rather than cancellation of the lease.

Having examined the photographs, the Court considered the building well-built and stable, and treated the petitioner’s tender of Rs.74,340 as evidence of bona fides.

However, the respondent’s counter-affidavit stated that the total arrears were Rs.95,750.

The Court therefore directed the respondent to receive the draft and required the petitioner to pay the remaining arrears by 7 October 2026.

It did not grant renewal under G.O.Ms.No.92, which the prior appellate ruling had held inapplicable.

If she failed to pay the balance by that date, the Court stated that its order would be automatically withdrawn.

The Court clarified that any future rent increase or fresh lease by auction must be pursued after securing the petitioner’s vacation of the premises in accordance with law.

No costs were awarded.