HPCL ordered to vacate Guindy petrol pump after decades-old lease expired; licence cancellation directed within three months

The petitioners claimed ownership of land at No. 87, Anna Salai, Guindy, Chennai, purchased through sale deeds registered in 1995.

Hindustan Petroleum Corporation Ltd. (HPCL) operated a petrol outlet on the property under a lease said to have been granted in 1974 for 15 years.

The petitioners alleged that rent had not been paid and sought arrears and vacant possession; in a connected petition, they sought cancellation of HPCL’s licence and consequential possession.

HPCL disputed the petitioners’ claims as to the property and the amount of rent, and relied on a pending interpleader suit in which it sought to deposit rent.

It also referred to earlier writ petitions concerning possession, which had been dismissed with liberty to pursue civil remedies.

In that suit, HPCL sought permission to deposit rent for February 2021 to January 2024 and future rent at a monthly rate.

1. Whether the Court could direct HPCL to pay admitted or undisputed rent, despite the parties’ dispute over the petitioners’ higher calculation and the pendency of a civil suit.

2. Whether the licensing authorities could be directed to cancel HPCL’s licence, and HPCL to deliver vacant possession, given that the lease had expired and the petitioners did not consent to continued occupation.

Under Article 226 of the Constitution, the Court declined to determine a disputed rental quantum in writ proceedings, but considered it appropriate to direct payment of the rent HPCL itself had sought to deposit in its suit.

Relying on C. Albert Morris v. K. Chandrasekaran, (2006) 1 SCC 228, the Court held that where a lease has expired, the High Court may direct the licensing authorities to consider and cancel the licence.

The Court also recognised that an earlier inter-partes dismissal directing parties to pursue civil remedies would not prevent possession relief where the subsequent grant of licence-cancellation relief had altered the situation.

HPCL disputed the petitioners’ claimed rent, so the Court did not determine the enhanced amount under Article 226.

It instead relied on the rent HPCL had itself sought to deposit in the pending suit, ordering payment of Rs. 26,05,140 for February 2021 to January 2024 and Rs. 72,365 per month thereafter until the property was vacated.

As the lease had expired decades earlier and the petitioners opposed continued use of the premises, the Court found no defence to directing cancellation of the operating licence.

It further held that the earlier dismissal of possession proceedings did not bar possession relief in the changed circumstances created by cancellation of the licence.

It directed HPCL to pay the petitioners jointly Rs. 26,05,140, together with rent at Rs. 72,365 per month from February 2024 until vacating; the petitioners were to provide a joint account, and payment was to commence within three weeks of that intimation.

The Union of India and the Commissioner of Police were directed to cancel HPCL’s licence, and HPCL was granted three months from receipt of the web copy of the order to hand over vacant possession.

The petitioners were left to pursue claims for enhanced rent and other past arrears before the appropriate forum.