Full Judgment Text
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CASE NO.:
Appeal (civil) 1383 of 1999
PETITIONER:
Bharat Petroleum Corporation Ltd.
RESPONDENT:
P. Kesavan & Anr.
DATE OF JUDGMENT: 05/04/2004
BENCH:
CJI, S.B. Sinha & S.H. Kapadia.
JUDGMENT:
J U D G M E N T
With
CIVIL APPEAL NOS.1875-1876 OF 1999
S.B. SINHA, J:
INTRODUCTION:
Whether in view of the provisions of the Burmah Shell
(Acquisition of Undertakings in India), Act, 1976
(hereinafter referred to as ’the Act’) the appellant was
entitled to a renewal of lease is the short question
involved in these appeals.
FACTUAL BACKGROUND:
The factual matrix of the matter is being noticed from
Civil Appeal No. 1383 of 1999.
A deed of lease was executed on or about 22.11.1967 by
one Smt. Angammal wife of Shri Angappa Chettiar in favour of
Burmah Shell Oil Storage & Distributing Company Limited
(Burmah Shell) in respect of 23 acres and 16 cents of
property/land situated in the town of Bhavani for a period
of twenty years on a quarterly rent of Rs.300/- for the
purpose of "erecting an installation and/or one or more
pumps service/ filling stations together with
overhead/underground tanks and other fittings for storage of
petroleum products and such other facilities and buildings
as the lessee may require and for carrying business is such
products through such facilities and other kindered motor
accessories or any other trade or business that can
conveniently be carried on in the demised premises". The
original lessor allegedly executed a will bequeathing the
said site to her grandson Meenashisundaram, who expired on
3.11.1971 whereafter rent used to be paid to the guardian
and mother of the said Meenashisundaram, Smt. G. Chellammal.
The appellant herein claimed itself to be a tenant in
respect of the said premise relying on or on the basis of
the provisions of the said Act. It is not in dispute that
the lessor by a notice dated 4.2.1987 purported to terminate
the tenancy calling upon the appellant herein to quit and
deliver the peaceful and vacant possession as per terms of
the lease dead. In reply to the said notice , the appellant
herein in terms of letter dated 26.2.1987 addressed to its
advocate invoked the provisions of Sections 5(2) and 7(3)
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of the Act stating that it had no intention to vacate the
site on the expiry of the existing lease on 30.6.1987 and
wish to continue occupying the same for a period of twenty
years from 1.7.1987 by paying the existing rental of
Rs.500/- per quarter. By reason of letter dated 19.5.1987,
the appellant herein exercised its option to renew the lease
for a further period of twenty years commencing from
1.7.1989 on the same terms and conditions on which the
Burmah Shell held the lease immediately prior to the
appointed day. It was requested :
"May we therefore request you to
let us know when it will be convenient
for you to have the lease registered on
terms similar to those existing in the
current lease. On receipt of your
advice in this matter, we shall take
further action."
Despite the said letter, the tenancy was purported to
have been terminated and as the appellant did not quit and
deliver possession unto the lessor on expiry of the said
period of lease, a suit was filed in the Court of the
District Munsif, Bhawani. It appears that the appellant
herein had also filed a suit for specific performance of
contract which was not pressed.
The learned Munsif decreed the suit holding, inter
alia, that although in terms of Section 5 of the Act, the
lease may be renewed for the same period but as per Section
107 of the Transfer of Property Act, necessary documents had
to be executed by the company. An appeal thereagainst by
the appellant herein was dismissed by the District Judge,
Erode. The appellant herein filed a second appeal before
the High Court of Madras which was also dismissed stating :
"It is clear that the suit filed
for renewal of the lease was only
subsequent to expiry of the lease and as
such it cannot be said that the
affidavit he has taken steps for the
renewal of the lease, especially when he
kept quiet for nearly 3 years without
taking any steps, in spite of the filing
of the suit by the appellant. It cannot
be said that the filing of the suit can
be construed as step being taken for the
renewal. When the suit for recovery of
possession is pending, as soon as filing
of suit for renewal of the lease, the
appellant ought to have taken steps for
joint trial. He has allowed two suits
to be proceeded with, independently.
That means, he wanted to take a chance
before both the courts below. This
conduct of the appellant cannot be
appreciated. Hence, I do not find any
error in the findings of the Courts
below that the appellant has not taken
any steps to get the lease renewed prior
to the expiry of the lease. Hence, the
second appeal is dismissed.
Consequently, CMP 8085 of 1998 is also
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dismissed."
Hence this appeal.
SUBMISSIONS :
Mr. K. Ramamoorthy, learned Senior Counsel, appearing
on behalf of the appellant would submit that the High Court
went wrong in passing the impugned judgment holding that
Section 107 of the Transfer of Property Act was attracted in
the instant case. The learned counsel would urge that the
provisions of the said Act, having regard to Section 11
thereof, shall prevail over the Transfer of Property Act.
The learned counsel appearing on behalf of the
respondents, on the other hand, would submit that the
provisions of Section 107 of the Transfer of Property Act
and Section 5(2) of the said Act should be read together so
as to come to the conclusion that a registered instrument is
required to be executed even if the appellant exercised its
option to renew the said lease. In any event, the learned
counsel would contend that keeping in view the fact that a
paltry sum had been paid by way of rent for a long time,
this Court with a view to do complete justice between the
parties, may not interfere with the impugned judgment.
STATUTORY PROVISIONS:
The Parliament enacted the Act which came into force on
or about 24.1.1976, in terms whereof the right, title and
interest of Burmah Shell in relation to its undertakings in
India stood transferred to and vested in the Central
Government. The effect of such vesting is stated in Section
4 of the Act whereby and whereunder, inter alia, all assets,
rights, powers, authorities and privileges and all property,
movable and immovable vested in the Central Government. By
reason of sub-section (1) of Section 5 of the Act where any
property was held in India by Burmah Shell under any lease
or under any right of tenancy, the Central Government became
the lessee and tenant, as the case may be, in respect
thereof as if the lease or tenancy in relation to such
property had been granted to it and thereupon all the rights
under such lease or tenancy was to be deemed to have been
transferred to, and vested in the Central Government.
Sub-section (2) of Section 5 of the Act provides that on the
expiry of the term of any lease or tenancy referred to in
sub-section (1), such lease or tenancy was, if so desired by
the Central Government, to be renewed on the same terms and
condition on which the lease and tenancy was held by Burmah
Shell immediately before the appointed day. ’Appointed day’
has been defined to mean the date of commencement of the
said Act which, as noticed hereinbefore, has been specified
on 24.1.1976. Section 7 of the said Act provides for the
Central Government to direct vesting of the undertakings of
the Burmah Shell in a Government company. It is not in
dispute that an appropriate notification in terms of sub-
section (1) of Section 7 has been issued in favour of the
appellant herein. Sub-section (3) of Section 7 provides
that the provisions of sub-section (2) of Section 5 shall
apply to a lease or tenancy which vests in a Government
company as tenancy in the Central Government and reference
therein to the Central Government shall be construed as the
reference to the Government company. Section 11 of the Act
provides for a non-obstante clause stating that the
provisions thereof shall have effect notwithstanding
anything inconsistent therewith contained in any other law
for the time being in force or in any instrument having
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effect by virtue of any law other than the said Act.
FINDINGS :
The said Act is a special statute vis-‘-vis the
Transfer of Property Act which is a general statute. By
reason of the provisions of the said Act, the right, title
and interest of Burmah Shell vested in the Central
Government and consequently upon the appellant Company. A
lease of immovable property is also an asset and/or right in
an immovable property. The lease-hold right, thus, held by
Burmah Shell vested in the appellant. By reason of sub-
section (2) of Section 5 of the Act, a right of renewal was
created in the appellant in terms whereof in the event of
exercise of its option, the existing lease was renewed for a
further term on the same terms and conditions. As noticed
hereinbefore, Section 11 of the Act provides for a non-
obstante clause.
As would appear from the preamble of the Transfer of
Property Act, the same applies only to transfer by act of
parties. A transfer by operation of law is not validated or
invalidated by anything contained in the Act. A transfer
which takes place by operation of law, therefore, need not
meet the requirement of the provisions of the Transfer of
Property Act or Indian Registration Act.
The said Act is a special statute. Sub-section (2) of
Section 5 thereof mandates that in the event the appellant
desires to renew the lease or tenancy, the same would be
renewed on the same terms and conditions on which the lease
or tenancy was held by Burmah Shell immediately prior to the
appointed day.
Sub-section (1) of Section 5 of the Act provides for a
legal fiction in terms whereof the appellant herein became a
lessee in respect of the leasehold. A legal fiction, as is
well-known, must be given its full effect [See Bhavnagar
University vs. Palitana Sugar Mill (P) Ltd. And Others,
(2003) 2 SCC 111]]. Sub-section (2) of Section 5 of the
Act is imperative in character and must be construed as
such.
The maxim ’generalia specialibus non derogant’ meaning
thereby that general things do not derogate special things
shall, thus, apply in the instant case and in that view of
the matter as admittedly the appellant herein has expressed
its desire to renew the lease, sub-section (2) of Section 5
read with sub-section (3) of Section 7 thereof shall be
attracted. [See Indian Handicrafts Emporium and Others vs.
Union of India and Others [(2003) 7 SCC 589], D.R. Yadav and
Another vs. R.K. Singh and Another [(2003) 7 SCC 110], Union
of India and Others vs. B.N. Jha [(2003) 4 SCC 531], Ashok
Leyland Ltd. Vs. State of Tamil Nadu & Anr. [2004 (1) SCALE
224] and M.P. Vidyut Karamchari Sangh vs. M.P. Electricity
Board (Civil Appeal No.2510 of 2002) disposed of on
18.3.2004.
Furthermore, Section 11 of the Act provides for a non-
obstante clause. An overriding effect, therefore, has been
given thereby over all other laws for the time being in
force.
In Aswini Kumar Ghose and Another vs. Arabinda Bose and
Another [AIR 1952 SC 369], it was observed :
"...The enacting part of a statute
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must, where it is clear, be taken to
control the non obstante clause where
both cannot be read harmoniously; for,
even apart from such clause, a later law
abrogates earlier laws clearly
inconsistent with it. Posteriores leges
priores contrarias abrogant (Broome’s
Legal Maxims, Edn. 10 p. 347). Here, s.
2 entitles every Advocate of the Supreme
Court as of right to practise in any
High Court in India."
We, therefore, are of the opinion that the legislative
scheme contained in the said Act leads to only one
conclusion that if Government company expresses its
desire to renew the lease, the same would stand renewed on
the same terms and conditions.
Section 5(2) and Section 7(3) of the Act are required
to be given its purposive meaning, having regard to the
object and purport the statute seeks to achieve. The
Central Government by reason of the provisions of the said
Act acquired running business undertakings dealing in
distribution and marketing of petroleum products. The
leases or tenancy for outlets are, therefore, continued to
be kept with the Central Government or the Government
company, as the case may be, so that no let or hindrance is
placed in the matter of distribution of the products from
established retails outlets, unless alternate arrangements
are made. Having regard to the object of the Act, as
noticed hereinbefore, it is difficult to agree with the
submission of the learned counsel for the respondents to the
effect that the expression mere desire by the Central
Government or the appellant was not enough and they were
required to show something more, as for example existence of
need for renewal of the lease. The central Government or
the Government company is a state within the meaning of
Article 12 of the Constitution of India. There are required
to act fairly. It is not the case of the respondents herein
that desire to get the lease renewed was actuated by any
malice or ill-will or the same was otherwise unfair and
unreasonable. In that view of the matter, it is difficult
to construe Section 5(32) of the Act as not laying down a
law not contemplating automatic renewal of the lease.
The provisions of the Transfer of Property Act have no
application in a case where a transfer of property takes
place by operation of law.
In Harishchandra Hegde vs. State of Karnataka and Ors.
2004 (1) SCALE 48, it was held:
"By reason of an order passed under
Section 4 of the Act, the lands are
directed to be restored in the event the
illegalities specified therein are
discovered. The consequences contained
in Section 5 of the Act applies
automatically in the event an order
under Section 4 of the Act is passed.
Section 4 of the Act contains a non
obstante clause. The said provision
would, thus, apply notwithstanding
anything contained in any agreement or
any other Act for the time being in
force. The Act is a special Act whereas
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the Transfer of Property Act is a
general Act and in that view of the
matter also Section 51 of the Transfer
of Property Act will have no application
and the consequences contained in
Section 5 would prevail.
Section 51 of the Transfer of Property
Act applies to inter vivos transfers.
It , as noticed hereinbefore, does not
apply to a trasfer made by operation of
law. If a judicial order is passed
restoring the land back to a member of
Scheduled Tribes in terms of the purport
and object of the statute, the
provisions of the Transfer of Property
Act cannot be applied in such a case.
The matter is governed by a special
statute. Unless there exists a
provision therein, an order passed
thereunder cannot be supplanted or
supplemented with reference to another
statute."
CONCLUSION:
For the reasons aforementioned, the impugned judgments
cannot be sustained and are set aside accordingly.
Before parting with this case, we may, however, place
on records the statements made by Mr. M.A. Krishna Moorthy
to the effect that the appellant is not interested in having
the second renewal and the possession of leasehold shall be
handed over the respondent herein on the expiry of the
tenure of the renewed lease i.e. tenure of the lease. With
a view to do complete justice between the parties, in
exercise of our jurisdiction under Article 142 of the
Constitution of India, we direct that the appellant herein
shall pay a sum of equivalent to 10 times of the original
rental with effect from the date on which the original deed
of lease expired. This order shall, however, not be
treated as a precedent.
These appeals are allowed on the aforementioned terms.
There shall be no order as to costs.