An 11-month lessee has no vested right to renewal; authorities may re-auction the premises.

The appellant became a lessee of a 25-metric-ton-capacity godown in the Virudhachalam Warehousing Complex under a lease deed dated 4 December 2014. The original lease was for 11 months, but it was subsequently extended periodically up to 14 September 2022

After the expiry of the extended period, the respondent authorities issued a public auction notice dated 6 October 2022 for granting a fresh lease of the premises, stating that the property had been in the appellant’s possession for a considerable period and that re-auction would augment departmental revenue

The appellant challenged the auction notice in W.P. No. 27852 of 2022, contending, inter alia, that under Section 78 of the Tamil Nadu Urban Local Bodies Act, 1998, read with Rule 316 of the Tamil Nadu Urban Local Bodies Rules, 2023, he was entitled to remain in possession for up to 12 years.

The learned Single Judge rejected the challenge but permitted the appellant to remove his machinery from the godown within four weeks from receipt of the order dated 8 October 2025

The appellant thereafter preferred the intra-Court appeal and sought further time to vacate the premises

Whether the appellant was entitled to claim continued possession or renewal of the lease for 12 years under Section 78 of the Tamil Nadu Urban Local Bodies Act, 1998, read with Rule 316 of the Tamil Nadu Urban Local Bodies Rules, 2023?

Whether the respondent authorities were justified in issuing the auction notice for granting a fresh lease after the expiry of the appellant’s extended lease period?

Whether the appellant was entitled to further time to remove his machinery and vacate the godown after the four-week period granted by the learned Single Judge had expired?

The Court held that Section 78 of the Tamil Nadu Urban Local Bodies Act, 1998, and Rule 316 of the Tamil Nadu Urban Local Bodies Rules, 2023, were not strictly applicable because the respondent department was not a local body; nevertheless, the parties were primarily governed by the terms of their lease agreement

The governing lease provided for an initial term of only 11 months, and any further continuation depended on the discretion of the respondent authorities.

The Court also accepted the principle that a lessee cannot claim an indefinite or perpetual right of renewal or possession merely because the lease had previously been extended

Upon expiry of the lease and in the absence of a further renewal, the authorities were entitled to conduct a fresh auction and grant a new lease.

The Court found that the appellant’s reliance on the alleged 12-year entitlement under the Urban Local Bodies legislation was misplaced because those provisions did not strictly govern the respondent department.

In any event, the express terms of the lease fixed the original tenure at 11 months, and the subsequent extensions only continued until 14 September 2022

Since the authorities had discretionally extended the lease and thereafter decided to re-auction the premises, the auction notice was not legally defective.

The appellant’s continued possession did not create a vested or perpetual right to renewal, and he remained free to participate in the fresh auction if eligible

Further, because the learned Single Judge had already granted four weeks for removal of the machinery and the appellant approached the appellate court nearly a year later, the Court declined to grant additional time or permit him to continue occupying the property

It held that the respondent authorities were entitled to issue the auction notice after expiry of the extended lease and that the appellant had no enforceable right to continued possession or automatic renewal.

The request for further time to vacate was rejected, though the appellant remained at liberty to participate in the fresh auction, if interested and otherwise eligible

No order was made as to costs, and the connected miscellaneous petition was closed