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IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE JURISDICTION  

CIVIL     APPEAL     NO.     4504      OF      2007   

 SOUTHERN RAILWAY, CHENNAI & ANR.                Appellant(s)

                     VERSUS

 DELIGHT MANUFACTURING COMPANY                   Respondent(s)

O     R     D     E     R   

1. Heard the learned counsel for the parties.  

2. This appeal is directed against the judgment  

and order dated 29th September, 2004 passed by a  

Division Bench of the High Court of Judicature at  

Madras in Writ Appeal No.303 of 2004, whereby the  

High Court has upheld the view taken by the learned  

Single Judge and dismissed the appeal of the  

appellants herein.  

3. The respondent Delight Manufacturing Company  

took a vacant plot of land on lease belonging to the  

Southern Railway in 1948 and is in occupation  

thereof since then. The respondent has been  

operating a restaurant by bringing up a

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superstructure thereon. When the rent was revised to  

Rs.3,000/-, the respondent challenged this by filing  

a writ petition before the Madras High Court. The  

learned Single Judge of the High Court allowed the  

writ petition and held that what had been leased to  

the respondent was not a shop but a vacant plot of  

land. Hence, licence fee would be payable under  

Clause 3.1(b) of the Guidelines for commercial  

licensing of Railway lands as revised by Railway  

Board's letters dated 17.9.1985 and 8.10.1987.    

4. Aggrieved by the aforesaid order passed by  

the learned Single Judge, the appellants filed an  

appeal before the Division Bench of the High Court.  

The Division Bench dismissed the appeal holding that  

the leased property would fall under Clause 3.1(b)  

of the said Guidelines. The appellants are thus  

before this Court.  

5. This Court on 9th February, 2011 referred this  

matter for mediation for resolving the disputes  

between the parties. A report has been received from  

the learned Mediator. We have perused the same.  

6. It has been suggested to the parties by the

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learned Mediator that, as a special case, the rent  

of the premises could be fixed at Rs.8,000/- per  

month. This suggestion was accepted by the  

respondent Company but the Railway Authorities have  

some difficulty in accepting the same as there are  

several other tenants occupying such railway land on  

lease.  

7. In our considered view, the suggestion made  

by the learned Mediator seems to be reasonable.  

Consequently, we direct that the appellant Southern  

Railway, Chennai shall be paid a rent of Rs.8,000/-  

per month from 1st March, 2012. This may not be  

treated as a precedent for other cases.

8. With these observations and direction this  

appeal is disposed of, leaving the parties to bear  

their respective costs.

.....................J (DALVEER BHANDARI)

.....................J (DIPAK MISRA)

New Delhi; February 28, 2012.