Madras High Court
Sundara Konar - Died vs Bharath Petroleum Corporation Limited on 12 September, 2007
Author: P.R.Shivakumar
Bench: P.R.Shivakumar
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 12/09/2007 CORAM: THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR S.A.(MD).No.1393 of 1996 and C.M.P.(MD).No.14021 of 1997 1.Sundara Konar - died 2.Shanmugam 3.Bagavathi Ammal 4.Arumugam 5.Lakshmi 6.Velu 7.Namalwar 8.Krishna Konar (died) 9.Muthammal 10.Nambi Nachiar 11.E.Selvalakshmi 12.S.Seetha 13.Sivaramakrishnan 14.P.Nambi Nachiar 15.S.Padma 16.R.Sivakami 17.P.Muthulakshmi 18.P.Sundari (Appellants 9 to 18 were brought on record as legal representatives of the deceased 1 st appellant as per the order of this Court dated 25.01.2005 made in C.M.P.Nos.15163 and 15164 of 2003) 19.Sivathanu 20.Sundaram 21.Ganesan 22.Selvam 23.Navaneetham 24.Shanmugam 25.Sivakamasundari (Appellants 19 to 25 were brought on record as legal representatives of the deceased 8 th appellant as per the order of this Court dated 17.01.2005 made in C.M.P.o.487 of 2004) ... Appellants Vs. Bharath Petroleum Corporation Limited, Indian Bank Buildings, 17, North Beach Road, Madras - 600 001. ... Respondent Prayer Second Appeal filed under Section 100 of the Code of Civil Procedure against the judgment and decree of the learned Principal Subordinate Judge, Tirunelveli dated 31.03.1993 made in A.S.No.93 of 1992, reversing the judgment and decree of the learned District Munsif, Valliyur dated 25.06.1992 made in O.S.No.1099 of 1988. !For Appellants ... Mr.T.M.Hariharan ^For Respondent ... Mr.S.Nateshraja :JUDGMENT
This Second Appeal is directed against the judgment of the lower appellate Court (Court of learned Principal Subordinate Judge, Tirunelveli) dated 31.03.1993 made in A.S.No.93 of 1992, whereby the judgment and decree of the trial Court was set aside and the Original Suit No.1099 of 1988 was dismissed.
2. The facts leading to the filing of the present second appeal can be briefly stated thus:
(i) The suit property comprised in Survey No.1459 part measuring an extent of 13,794 square feet situated in Valliyur Village, Tirunelveli District was leased out for running a Petroleum Retailed Outlet to the erstwhile Burmah Shell Oil Storage and Distributing Company of India Limited under a registered lease deed dated 27.12.1956. The initial period of lease was 20 years from 01.07.1956.
A specific clause (Clause 3 Sub Clause III) was also incorporated in the lease deed to the effect that the lessee could have an option to renew the lease for a further period of 20 years. The monthly rent fixed under the lease was Rs.40/-. While so, the properties of the erstwhile Burmah Shell Oil Storage and Distributing Company of India Limited including the properties held by the said Company on lease were taken over by the Government of India by virtue of the Burmah Shell (Acquisition of undertakings in India) Act, 1976. The assets of the erstwhile Burmah Shell Oil Storage and Distributing Company of India Limited thus taken over by the Government under the above said Act were transferred to the Bharath Petroleum Corporation Limited, a Central Government undertaking, which is the present respondent/defendant in this case. Under Section 5(2) of the Central Act, similar option was given to the Bharath Petroleum Corporation Limited to have the lease renewed for a further period on same terms and conditions, if the Government Company exercises its option. Under the said circumstances, the plaintiffs informed the defendant on 13.05.1976 and 22.09.1977 that they were not willing to renew the lease either as per the renewal clause found in the original lease deed or as per the provisions contained in Section 5(2) of the Central Act. Hence, no renewal lease deed could be executed and registered. Under these circumstances, the plaintiffs contending that after the expiry of the original lease period, the defendant had become a tenant at will or at best a tenant holding over and that the tenancy would be from month to month, issued a notice to quit and then instituted the original suit for the recovery of vacant possession, for the recovery of a sum of Rs.5,040/-, being the arrears of rent from 01.07.1976 to 31.12.1986 and for mesne profits from the date of plaint.
(ii) The suit was resisted by the respondent/defendant contending that the defendant had a right for the automatic renewal of the lease for a further period of 20 years; that the said option was promptly exercised by the defendant and the same was informed by the defendant to the plaintiffs and that hence, the plaintiffs were not entitled to seek recovery of possession. Regarding arrears of rent and mesne profits, the contention of the defendant before the Courts below was that since the amount was tendered by the defendant and the plaintiffs refused to accept the same, the plaintiffs were not entitled to a decree for recovery of the amount claimed as arrears of rent.
(iii) The trial Court framed as many as five issues and conducted trial, in which one witness was examined and 9 documents Exs.A-1 to A-9 were marked on the side of the plaintiffs. No witness was examined and no document was marked on the side of the defendant.
(iv) On an appreciation of evidence adduced on either side, the trial Court decreed the suit in part and granted the relief of possession. So far as the recovery of arrears of rent was concerned, the prayer was negatived on the finding that the rent due for the period from 01.07.1976 to 31.12.1986 was subsequently paid. The question of mesne profits from the date of suit till recovery of possession has been relegated to a separate enquiry. As against the said judgment and decree of the trial Court, the respondent/defendant filed an appeal in A.S.No.93 of 1992 on the file of the Principal Subordinate Judge, Tirunelveli, which Court after hearing, allowed the appeal, set aside the judgment and decree of the trial Court and dismissed the suit in its entirety. Hence, the appellants are before this Court in this second appeal.
3. This Court heard the arguments advanced by Mr.T.M.Hariharan, learned counsel appearing for the appellants and also by Mr.S.Nateshraja, learned counsel appearing for the respondent and perused the records including the judgments of the lower Courts.
4. "Whether under Section 5(2) of Central Act 2 of 1976 the mere desire of the Central Government will create a legally valid renewed lease in favour of the respondent, notwithstanding the provisions of Section 107 of Transfer of Property Act?" - was the lone substantial question of law on which the second appeal was admitted at the time of admission.
5. The original lease expired on 30.06.1976. Even as per the claim of the respondent/defendant, the statutory renewal of the lease as per Section 5(2) of the Central Act would have come to an end by 30.06.1996. It is not the case of the respondent/defendant that the respondent/defendant was entitled to a second renewal and the exercise of option for the second renewal was also intimated to the appellants/plaintiffs. In view of the above said supervening circumstances, the further substantial question that has arisen in this appeal is - "whether the subsequent developments, namely the expiry of the renewal period of lease could be taken into consideration for granting the relief of possession sought for by the appellants/plaintiffs?".
6. The learned counsel for the appellants would contend that though there was a renewal clause in the original lease deed and Section 5(2) of the Central Act also provides for the renewal of lease in respect of lands held on lease by the erstwhile Burmah Shell Oil Storage and Distributing Company of India Limited for running the Petroleum Retailed Outlets, such a renewed lease could not have been validly created unless and until a registered lease deed was brought into existence and that till then the right conferred on the Bharath petroleum Corporation Limited would have remained only a personal right against the owners of the land to seek execution of a renewal lease deed. For the above said proposition, the learned counsel for the appellants relied on the judgment of the Madras High Court made in Bharat Petroleum Corporation Limited, Chennai vs. Church of South India Trust Association, Coimbatore reported in 2003(4) CTC 408. Of course, it was held therein that unless the formalities required under Section 107 of the Transfer of Property Act were complied with by execution and due registration of the lease deed, the lessee would not secure leasehold interest, since the words employed in Section 5(2) were "shall be renewed" and not "that the lease shall stand renewed or shall automatically get renewed".
7. As an answer to the above said contention of the learned counsel for the appellants, the learned counsel for the respondent cited the judgment of the Supreme Court in Bharath Petroleum Corporation Limited vs. P.Kesavan and another reported in 2004(2) CTC 736. In the said case, under similar circumstances, the Honourable Supreme Court has held that Burmah Shell (Acquisition of Undertakings in India) Act, 1976, being a special enactment would prevail over the provisions of the general enactment, namely Transfer of Property Act and that the requirement of Section 107 of the Transfer of Property Act and requirement of registration of the lease deed would be confined to leases created by acts of parties and not to leases created by operation of law. Therefore, the argument that renewal of the lease was not automatic and that all provisions of Transfer of Property Act as well as Registration Act had to be complied with for the creation of a valid lease for the renewal period has got to be discountenanced.
8. The lower appellate Court has come to a correct conclusion that the respondent/defendant, namely Bharath Petroleum Corporation Limited had a statutory right to get the lease renewed for a further period of 20 years from 01.07.1976 and that the expression of intention by the Bharath Petroleum Corporation Limited to have the lease renewed for a further period of 20 years from 01.07.1976 was enough to create a valid lease for the renewed period. The said observation made by the learned lower appellate Judge is in consonance with the proposition of law laid down by the Apex Court in Bharath Petroleum Corporation Limited vs. P.Kesavan and another reported in 2004(2) CTC 736. Therefore, the first substantial question of law has to be answered accordingly against the appellant. There is no scope for interference with the judgment of the learned lower appellate Judge on the above said ground.
9. But, at the same time, it is not in dispute that this Court, while dealing with the second appeal, cannot shut its eyes to the supervening events and the subsequent developments during the pendency of the case. In the instant case, the respondent/defendant claims to have got a right for the automatic renewal of the lease for once and not more than once. The first period of renewal has come to an end by 30.06.1976. It is not the case of the respondent/defendant that the respondent/defendant was either entitled to a second renewal or intimated its intention to get the lease renewed for a second time. The learned counsel for the respondent/defendant also admitted, across the bar, that the respondent/defendant did not claim any right of second renewal and that hence, the expiry of the renewed lease period by 30.06.1996 could be taken into consideration to decide whether the appellants/plaintiffs were entitled to seek delivery of vacant possession of the suit land. After giving due considerations to the submissions made on either side, this Court is of the considered view that the said supervening circumstance, namely, the expiry of the renewed lease period by 30.06.1996, also has to be taken into consideration and on that basis, the plaintiffs should be granted the relief of recovery of vacant possession from the defendant.
10. The learned counsel for the respondent/defendant, across the bar, admitted that the respondent/defendant was prepared to surrender vacant possession of the suit land, but needed only time for doing so. Under the above said facts and circumstances of the case, this Court is of the considered view that time can be granted to the respondent/defendant for delivery of vacant possession of the suit land, provided the respondent/defendant files necessary undertaking affidavit.
11. In order to render complete justice to the parties, this Court is of the considered view that while granting the relief of recovery of possession, based on the termination of the lease on the expiry of the renewed period of lease by 30.06.1996, instead of relegating the parties to a separate enquiry for determination of arrears of rent and mesne profits (damages for use and occupation), the matter can be given a quietus in this second appeal itself by fixing the amount of rent and mesne profits. As it is admitted by P.W.1 that the rent for part of the period of renewed lease i.e. from 01.07.1976 to 31.12.1986 was paid at the original rate, namely Rs.40/- per month, this Court feels that awarding arrears of rent till the expiry of the renewed lease at the very same rate shall be quite reasonable. At the same time, the mesne profits for use and occupation after the expiry of the renewed lease could be fixed at the higher rate. The views expressed on both sides have been taken into consideration and this Court feels it appropriate to fix the mesne profits at the rate of Rs.200/- per month from 01.07.1996 till vacant possession is delivered.
12. In the result, this Second Appeal is partly allowed. The judgment and decree of the lower appellate Court is set aside. The appellants/plaintiffs shall be entitled to a decree for the following reliefs:
"(i) The respondent/defendant is directed to vacate the suit land and deliver vacant possession of the same to the appellants/plaintiffs;
(ii) The appellants/plaintiffs are entitled to recover a sum of Rs.4,560/- as arrears of rent for the period from 01.01.1987 to 30.06.1996;
(iii) The appellants/plaintiffs are entitled to recover mesne profits at the rate of Rs.200/- per month from 01.07.1996 till vacant possession is delivered;
(iv) The respondent/defendant shall have six months time from today to vacate and deliver the possession, subject to a condition that the respondent/defendant files an affidavit of undertaking, within two weeks from today failing which the decree shall become executable forthwith".
However, there shall be no order as to payment of costs. Consequently, the connected miscellaneous petition is closed.
SML To
1.The Principal Subordinate Judge, Tirunelveli.
2.The District Munsif, Valliyur.