Delhi District Court
Hindustan Petroleum Corporation Ltd vs Defence Estate Officer on 19 February, 2021
IN THE COURT OF SH. DINESH KUMAR SHARMA
PRINCIPAL DISTRICT & SESSIONS JUDGE /
APPELLATE AUTHORITY: NEW DELHI
In the matter of :
PPA No. 133/2016
Hindustan Petroleum Corporation Ltd.
67th Floor, North Tower
Scope Minar, District Centre
Laxmi Nagar, Delhi110 092. ..... Appellant
Versus
1. Defence Estate Officer
Office of the Defence Estate Officer
Delhi Circle, Maneskshaw Marg
Delhi Cantonment, Delhi.
2. Union of India
Through Secretary
Ministry of Defence, 101A, South Block
New Delhi110 001. .....Respondents
Date of filing : 11.03.2015
Date of arguments : 05.02.2021
Date of judgment : 19.02.2021
JUDGMENT
1. M/s Hindustan Petroleum Corporation Ltd. (hereinafter referred as to Appellant) invoked the jurisdiction of this Court under Section 9 of the Public Premises (Eviction of Unauthorized PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 1 of 48 Occupants) Act, 1971 (in short "PP Act"), challenging the impugned order dated 03.03.2015 passed by the Defence Estate Officer, Delhi Cantonment, Delhi.
2. Briefly stated, the facts of the case are that in 1955, a piece of land admeasuring 5525 sq.ft. out of defence land in Sy. No. 211/1, Dhaula Kuan, Delhi, was alloted to M/s Standard Vacuum Oil Company Ltd., the predecessorininterest of the appellant, by the Ministry of Defence, by way of lease deed dated 30.04.1956 for the purpose of establishing a petrol pump with effect from 05.09.1955 for a period of ten years at an annual rent of Rs.552.80. Subsequently, the name of M/s Standard Vacuum Oil Company Ltd. was changed to ESSO Standard Eastern Inc. in whose favour the said lease was renewed for a period of five years with effect from 05.09.1965 at an annual rent of Rs.7,072/ and a premium of Rs.35,360/. The name of the said ESSO Standard Eastern Inc. was thereafter changed to ESSO Eastern Inc. and subsequently by way of an Parliament Act i.e. The ESSO (Acquisition of Undertakings in India) Act of 1974, the Central Government acquired the said company. Thereafter, by virtue of subsequent notification including the "Lube India Ltd. and ESSO Standard Refining Company of India Ltd. Amalgamation Order, 1974", the appellant came into being as a government company PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 2 of 48 and thus, became a lessee of the said plot of land admeasuring 5525 sq.ft. The said plot of the land was leased to the appellant company for a period of one year with effect from 05.09.1975 on an annual rent of Rs.7,072/ and a premium of the same amount and a further extension was granted with effect from 05.09.1976 for a period of one year at the same annual rent of Rs.7,072/. The Ministry of Defence, Government of India, vide communication dated 29.10.1979, renewed the lease of the said plot of land admeasuring 5525 sq.ft. in favour of the appellant in perpetuity i.e. up to the date of vacation by the appellant of the said plot of land, at the same annual rent and premium of Rs.7,072/, which was to remain unchanged till such time that the appellant decided to vacate the said land. The Ministry of Defence, Government of India, also accorded sanction for leasing out a piece of land admeasuring 12,000 sq.ft. out of the same Sy. No. 211/1, Dhaula Kuan, Delhi Cantonment, to the appellant for the purpose of petrol pumpcumservice station for a period of five years at an annual rent of Rs.16,728.75 and a premium of Rs.83,643.75 and the possession of the land admeasuing 12,000 sq.ft. was allotted to the appellant on 01.02.1980, which included an area admeasuring 1785 sq.ft. from the piece of land admeasuring 5525 sq.ft., in respect of which a perpetual lease PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 3 of 48 was granted to the appellant. Since October 1979, the appellant is in possession of the said plot of land admeasuring 5525/12000 sq.ft. in Sy 211/1, Dhaula Kuan, Delhi Cantonment, and is running a petrol pump and service station under the name and style of Best Fuel Station. The lease in respect of 12,000 sq.ft. (hereinafter referred to as the "premises") expired on 31.01.1985, however, no sanction for renewal of the lease was received from the respondent No. 2. The appellant continued to be in possession of the premises by virtue of the sanction dated 29.10.1979 and there was no demand from respondent No. 1 to vacate the premises or change the rent in any manner. The appellant continued paying the annual rent as prescribed in the sanction dated 29.10.1979. The lease was extended by a letter dated 21.12.1994, which was communicated to the appellant vide letter dated 06.02.1995. The lease was extended for a period from 01.02.1985 till 31.01.1990 at the annual rent of Rs.98,102/ and a premium of Rs.4,90,512/ and then, for a period from 01.02.1990 till 31.01.1995 at an annual rent of Rs.3,84,829/ and a premium of Rs.19,24,145/. In view of the astronomical increase in the rent, the appellant sought rationalization of the same as it was not economically viable for it to pay the new rates of rent and in this regard, some communications were also PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 4 of 48 exchanged at the ministerial level between the Ministry of Petroleum and Natural Gas, the controlling Ministry of the appellant, and respondent No. 2. Vide letter dated 03.09.1997, Sh. Devi Dayal, the then Joint Secretary, Ministry of Petroleum and Natural Gas, pointed out that the issue of increase in rentals to the government landowning agencies is receiving their attention and is under active consideration of the Government. Vide this letter, Sh. P.M. Nair, Additional Secretary was also requested that Defence Estate Officer, Delhi Circle, may kindly be advised to withhold any action against the retail outlet site of M/s Dhaula Kuan Service Station and renewal of the lease may be permitted, once this issue is decided at the ministerial level and till then, a request was made to maintain the status quo. The same position continued till 2006 and a statement of outstanding rent up to 31.01.2006 was handed over to the appellant in which the rates of rent for the period 01.02.1995 till 31.01.2000 and from 01.02.2000 till 31.01.2005 and from 01.02.2005 till 31.01.2006 were claimed to be Rs.5,85,270/pa, Rs.9,45,350/pa and Rs.22,61,929/pa respectively. The plea of the appellant is that this increase of rent is unilateral, exorbitant and astronomical and was effected retrospectively by the Defence Estate Officer without obtaining any sanction from the Government of India.
PPA No. 133/2016Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 5 of 48 Aggrieved by this, the appellant wrote a letter dated 07.03.2006, inviting the attention towards the exorbitant increase and also apprised it of comparative rentals being charged by other government owing agencies for commercial sites. The appellant did not receive any response of the letter dated 07.03.2006 and again, therefore, wrote a letter dated 28.03.2006, bringing into the knowledge the rentals being charged by the other land owing agencies of the comparable sites. However, the appellant in view to settle the due rentals, in July 2008, made a payment of Rs.66,25,805/ as arrears of rental for the period from 01.02.1990 up to 31.01.2008 at the last sanctioned rent of Rs.3,84,829/pa. The appellant also paid the rent for the period 01.02.2008 to 31.01.2009 at the rate of Rs.3,84,829/pa, which was duly acknowledged by the Defence Estate Officer. In the communication dated 18.09.2008, the appellant clarified that the payments made by it were subject to adjustment after final decision and sanction of the Government of India. The said letter was also followed by another representation dated 16.11.2009 seeking a rationalization of rentals. The appellant has submitted that since 2008, it has been continuously paying rent at the rate of Rs.3,84,829/pa, which is the last sanctioned rate by the MoD and currently the rent stands paid up to 31.01.2015.
PPA No. 133/2016Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 6 of 48
3. The appellant stated to have shocked to receive a letter dated 16.03.2011 purporting to claim rent/damages for unauthorized occupation of the subject site assessed at Rs.6,78,77,310/, which was duly responded by the appellant vide its letter dated 28.03.2011. The appellant sought to know from the respondent whether for increase of the rent, the orders of the competent authority had been taken or not. The appellant thereafter sent the communication dated 20.12.2011 and 15.09.2014, predominantly stating that in absence of government sanction from the approved/competent authority, the basis of the calculation by the Defence Estate Officer could not be established. The appellant also stated that the demand raised by the respondent vide their communication dated 16.03.2011 was not only astronomical increase in the rents on an annual basis but also differ to huge extent by the demand earlier raised by them. It was stated that no justification has been given for increase in demand of rent by the respondent.
4. While the matter rested thus, the appellant received a show cause notice dated 03.04.2014 under Section 4(2) of the PP Act, alleging that appellant had been in unauthorized occupation of the premises since 01.02.1995 and called upon him to show cause as to why an order of eviction from the premises should not PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 7 of 48 be made against it. The plea of the appellant is that show cause notice is not only factually incorrect but also erroneous. The show cause notice was issued in respect of 12,000 sq.ft. of land, whereas it consisted of a portion of the land, which was leased out to the appellant in perpetuity. The appellant filed the reply before the Estate Officer dated 17.01.2015. Besides referring to the notice, the appellant invited the attention of the Estate Officer to the "Guidelines to Prevent Arbitrary Use of Powers to Evict Genuine Tenants From Public Premises Under the Control of Public Sector Undertakings/Financial Institutions". Respondent no.1 submitted its rejoinder dated 27.01.2015 to the reply submitted by the appellant, however, the Estate Officer passed the impugned order dated 03.03.2015.
5. The impugned order has been assailed on the ground that it is perverse, illegal, mechanical in nature and passed without due application of mind. It has been submitted that appellant could not have been declared unauthorized occupant and the impugned order is in violation of the objectives of the Act and and guidelines issued by the Central Government to prevent arbitrary use of powers to evict genuine tenants from public premises. The appellant has submitted that its occupation is founded upon a lease executed in its favour by the President of PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 8 of 48 India, which has been extended/renewed from time to time and the real dispute relates to the rates of rent applicable to the premises, post 31.01.1995 and not the occupation of the premises by the appellant. It has further been submitted that the proceedings were initiated by respondent no. 1 with a view to coerce and pressurize the appellant into accepting the arbitrary, exorbitant and astronomical retrospective increase in rates of rent. It has further been submitted that rent has not been increased in accordance with the principles of the Delhi Rent Control Act and the aforesaid guidelines. The appellant has stated that it was never asked to give the consent for increase in rentals of the lease. The appellant has submitted that in fact the proceedings before the Estate Officer were initiated owing to proceedings of the Comptroller & Auditor General of India and the matter allegedly being before the Public Accounts Committee as admitted by the respondent in the rejoinder dated 27.01.2015. The appellant has stated that it has been paying rent at the last sanctioned rate by the Government of India and there was expectation of the extension of the lease, as has been done earlier retrospectively. The appellant has stated that the guidelines are applicable to all public authorities and not relating to Public Sector Undertakings and Financial Institutes. It has further been PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 9 of 48 submitted that though, the Delhi Rent Control Act may not be applicable, the respondent was bound to follow the principles enshrined in the DRC Act while dealing with the issue of enhancement of rent and eviction concerning the public premises. It has been submitted that the Estate Officer has wrongly relied upon the order dated 04.02.2013 passed by the Hon'ble High Court of Delhi in LPA No. 1010/2007 whereby the facts were totally distinguishable. The appellant has also stated that it was the responsibility of respondent no. 1 to provide the appellant with a lease deed for execution and thus, the respondent No. 1 has never approached the appellant with any lease deed but, on the other hand, has thwarted all the attempts of the appellant to rationalize the rents and have a lease deed executed. It has been submitted that the impugned order may be set aside.
6. Upon filing of the appeal, the notice was issued to the respondent and in the meanwhile, the operation of the impugned order dated 03.03.2015 was stayed. Further, the interim order was continued from time to time.
7. It is also pertinent to note that an application under Order 1 Rule 10 read with Section 141 & 151 CPC was filed on behalf of Ms. Sudhir Kaura on 11.01.2016, which was dismissed as withdrawn vide order dated 05.02.2021.
PPA No. 133/2016Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 10 of 48
8. The record of the Estate Officer was called.
9. Perusal of the Estate Officer record indicates that pursuant to the service of Show Cause Notice, the HPCL filed a detailed reply dated 17.01.2015. In the said reply, HPCL took a plea that after 1995, there was no sanction from the competent authority, revising the rent from time to time, has been received. The HPCL also took a plea that initially the lease was granted on 1955 for 5525 sq.ft. of a land and thereafter, the lease for an area admeasuring 12000 sq.ft. of land was executed in 1979 and thereafter, it extended from time to time till 1995. In the year 1995, the lease was granted retrospectively with effect from 1985. The appellant also took a plea that the Defence Estate Officer has not followed the guidelines. It was stated that since the matter regarding the increase of rent is still under consideration of the competent authority, therefore, there was no cause of action to issue show cause notice. The notice was also challenged on the ground that notice includes a portion of land, which has been given to the appellant in perpetuity. The appellant also took other grounds, which have been taken in appeal and are not being reproduced herein for the sake of brevity.
10. The Defence Estate Officer filed a detailed reply dated PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 11 of 48 27.01.2015. In the said reply, it was stated that no sanction was given by the MoD after 1995 onwards, as HPCL remained adamant in not paying the rentals as fixed in the sanction given from 1985 to 1990 and 1990 to 1995. The HPCL also did not give their willingness to pay rentals, to be decided by the MoD as per the existing policy. It was further stated that since the lease expired on 31.01.1995, the HPCL became unauthorized occupant. It was stated that guidelines are applicable on public sector undertakings, whereas in the present case, the landlord is a Ministry of Defence. The Defence Estate Officer also took a plea that since the HPCL remained adamant in not paying the rentals and never tried to resolve the issue, therefore, the present proceedings under the PP Act were initiated. The Defence Estate Officer denied that the lease rent in the subject site is still under the consideration of Ministry of Defence and no order has been passed by them. It was stated that the lease rent is decided as per the existing policies on allotment of defence lands to petrol stations. The Defence Estate Officer has stated that in the year 2011, the Defence Estate Officer assessed the dues at Rs.6,78,77,310/, which includes arrears of rentals up till 31.03.1995 and damages thereafter (as there was no government sanction) along with interest @ 15%. It was further stated that PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 12 of 48 request of HPCL for regularization of rents entails policy change, which is within the purview of the government and till the time policy is not changed, HPCL was bound to abide by the instructions of the existing policy. It was further stated that the existing policy is applicable to all the petrol stations situated on Defence lands all over the country and the rentals are high because the land value are high in Delhi. It was further stated that HPCL has no authority to pay the rent at the rates sanctioned for the period 1990 to 1995, which has expired on 31.01.1995. The Defence Estate Officer took a plea that the damages projected are based on the Standard Table of Rents as per the policy.
11. The appellant filed the detailed reply to the sub rejoinder of the Defence Estate Officer denying all the averments made in the said subrejoinder and reiterated the plea taken in its reply.
12. The Estate Officer passed the eviction order on the following grounds:
"1. When the GoI MoD vide their letter No.716/57/L/L&C/78, dated 21.12.1994 accorded sanction for extension of the lease, first up to 31.01.1990 and again for 05 years upto 31.01.1995 on payment of annual rent of Rs.98,102 per annum and premium of Rs.4,90,512/- and Rs.3,84,829/- per annum and PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 13 of 48 premium of Rs.19,24,145/-, respectively, the HPCL denied to accept the enhanced rentals & premium, thus, became the defaulter.
2. The lease sanctioned by the GoI MoD as mentioned in Point 1 above, has expired on 31.01.1995. There is no grant of lease/sanction for renewal for the period thereafter. The HPCL has not produced any authority/document, under which they are in authorized occupation of the premises in question.
3. The HPCL has not produced any document to show that the issue of lease rents rested at Ministerial level or there was any status-quo order from the Ministry, in support of their contention. The only document they submitted, is a copy of letter dated 03.09.1997 of Joint Secretary, MoP&NG to Addl.Secretary, Ministry of Defence, which is only a request for issuing instructions for maintaining the status-quo. The HPCL has not obtained any decision of the Govt. till date i.e. which is about 20 years.
4. As far as factual inaccuracies are concerned, no inaccuracy has been observed, which will have a bearing on the decision in the instant proceedings. The corrigendum issued vide letter dated 22.01.2015 is only for the Schedule, where there was a typographical error in respect of the Sy number and for the boundary on the west side. In fact the submission of HPCL that they made payments upto date is incorrect, as it is observed from the record that from 2010 onwards, the DEO office has not encashed the cheques/payments made by HPCL.
5. As regards Guidelines to prevent arbitrary use of powers to evict genuine tenants from public premises under the control of Public Sector Undertakings (PSU) and financial institutions, it is seen that they are specific to Public Sector PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 14 of 48 Undertakings (PSR)/ financial institutions only. If they are applicable to all, the Govt would have issued general guidelines for all. Therefore, the contention of HPCL is untenable.
6. Similarly, regarding applicability of Rent Control Act, the DEO has clearly quoted Section 3 Sub-Section 1(a) of Delhi Rent Act, 1995 which is reproduced below:
Nothing in the Act shall apply to any premises belonging to the Govt or local authority.
The provision is self-explanatory and does not need further substantiation. The premises in question is a Defence land belonging to Ministry of Defence, Govt. of India.
7. The HPCL has compared with rentals of DDA and the IGL. In the instant case, the land owner is MoD, which is not a development authority. Secondly, the HPCL cannot compare themselves with IGL, as IGL is dealing with clean energy.
Therefore, HPCL and IGL are not on equal footing.
8. The HPCL has challenged that there are discrepancies in the demands made by the DEO in 2006 and 2011. The DEO has clearly stated in 2006 the rent & premium was projected for the period after 31.01.1995, whereas in 2011 letter, DEO has claimed damages on yearly basis from 01.02.1995 and also added interest claimed damages on yearly basis from 01.02.1995 and also added interest component. The HPCL is trying to take cover of differences in amounts in 2006 & 2011, which is untenable. As such, they made no payments as demanded by DEO.
9. The HPCL has also challenged the authority of DEO in accepting the payments made by HPCL as damages. They have not produced any authority under which the DEO has to accept the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 15 of 48 payment made by them as rentals, after the expiry of the sanctioned period on 31.01.1995.
In a similar case between the DEO Delhi Circle and the IOC, the Hon'ble High Court New Delhi vide their Order dated 04.02.2013 in LPA 1010/2017 categorically observed that:
'It was submitted by the Ld. Counsel for the respondent no.1 (IOC) that if the appeal is allowed and writ petition is dismissed, they would have no option but to close the petrol pump, since their policy is not to revise the lease rent. If that is so and respondent No.1 does not want to recover the increased lease rent and premium from the dealer to whom the petrol pump has been allotted, either it will have either to bear the enhancement in lease rent and premium or change its policy and recovery the enhanced rent & premium from the dealer. Bus respondent No.1 has no legal right to insist upon extension of lease/ grant of new lease that too on those very terms & conditions, which were stipulated at the time of grant of initial lease.' The observation of Hon'ble High Court is very relevant in the instant case also.
10. The HPCL made untenable/ self-contradictory statements both in the written submissions and during the hearing. In 1995, they did not accept the rentals & premia fixed by the MoD/ Govt., stating them to be exorbitant. Now they are questioning the authority of the DEO stating that the demands projected by him are without Govt sanction. In the written reply dated 17.01.2015, they have stated that as soon as the DEO provides a valid lease for renewal, the respondent will execute the same, subject to the responsibility of its terms & conditions.(Para 7, PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 16 of 48 under reply on merits to grounds). In the re-rejoinder dated 05.02.2015, they have submitted that they will abide by the decision of MoD in respect of the rentals and reiterated their commitment to accept and pay rentals as and when sanctioned by the MoD.
It is very clear that there is no consistency in the pleadings of HPCL. Their submissions regarding acceptance of rentals as and when sanctioned by MoD should have been made to the DEO Delhi Circle as the Court of Estate Officer is not the forum for such submissions. Keeping in view the amount of time they had taken in filing the written reply, it also appears that all these submissions are nothing but delay tactics.
Further, regarding the HPCL's contention of making genuine efforts in resolving the issue, it is seen from the correspondence submitted by HPCL along with their written reply dated 17.01.2015, that the HPCL has argued for rationalization of rentals and never gave their willingness, as requested by the DEO. Therefore, they cannot blame the DEO.
During the hearing on 05.02.2015, when asked whether the rentals fixed by Ministry upto the period 31.01.1995 as arbitrary without following laid down procedure and policy of the Govt? Shri Pradyuman Dubey, Advocate stated that the rental fixed by Govt uptil 31.01.1995 are not challenged as arbitrary. They also admitted that the sanctioning authority in respect of rentals in Ministry of Defence.
11. The HPCL has never questioned the Govt rights over the public premises in question and during the hearing on 05.02.2015, when asked whether they have any document to show that they are in authorized occupation of the premises in question PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 17 of 48 after 31.01.1995, they stated that there is no document for the same, but they are relying on the sanction dated 21.12.1994. However, the sanction accorded vide letter dated 21.12.1994 has expired on 31.01.1995. As per the sanction, the lease was supposed to be executed in Schedule IX of the CLAR,1937. However, this lease document was not executed by the HPCL."
13. Sh. Sukumar Pattjoshi, Ld. Sr. Advocate with Sh. Naveen Raheja, Ld. Counsel, have submitted that order passed by the Estate Officer is totally erroneous and liable to be set aside. Ld. Sr. Advocate has submitted that the appellant/HPCL is in possession of the leased premises by virtue of a lease in a part of the premises since 1955. Ld. Sr. Advocate has further submitted that initially the predecessorininterest was granted the lease in 1955 for 5525 sq.ft. and in the year 1979 further 12,000 sq.ft. of land was leased out to the appellant and, therefore, the appellants could not have been declared unauthorized occupants merely on the ground of dispute as to the rate of rentals. It has further been submitted that the department has been extending the lease retrospectively and the appellants were having legitimate expectation that lease will be extended after the issue of rentals is resolved. The attention of the court has been invited to the communication dated 29.10.1979, 14.11.1979 and the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 18 of 48 handing/taking over certificate dated 01.02.1980, vide which, the possession of the land of 12,000 sq.ft. was taken over by the HPCL. It has further been submitted that the vide letter dated 06.02.1995, the lease from the period of 01.02.1985 to 31.01.1995 was extended. Ld. Sr. Advocate has further submitted that there was exorbitant rise in the rent, which was not economically viable and the matter was taken to Ministerial level. Sh. Devi Dayal, the then Joint Secretary, Ministry of Petroleum and Natural Gas, raised the issue with the Ministry of Defence and specifically informed that the issue of increase in rental is under active consideration of the government and a request was made to maintain the status quo. Ld. Sr. Advocate has further submitted that even as per document (A7), whereby the demand was raised up 31.01.2006, respondent no. 1 has admitted that the demand from 01.02.1995 to 31.01.2006 was subject to the government sanction. It was stated that the sanction of the increase of rent was only till 31.01.1995. Ld. Sr. Advocate has further submitted that appellant have been agitating this matter with the respondent vide repeated communications dated 07.03.2006 (A8) and 28.03.2006 (A9). It was further stated that the appellant in order to settle the matter, paid Rs.66,25,805/ to the respondent on account of rent for the period ending on PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 19 of 48 31.01.2006, which was duly acknowledged by the respondent vide communication dated 06.08.2008 (A10). Ld. Sr. Advocate has further submitted that further vide communication dated 18.09.2008 (A11), appellant raised the issue of exorbitant enhancement of rent and requested the Defence Estate Officer to take a reasonable view in the matter. In this letter, it was also clarified that the payment of Rs.66,25,805/ was calculated as balance of rental for the period from 01.02.1990 to 31.01.2008 @ Rs.3,68,100.25 (Rs.3,84,829 less Rs.16,728.75 payment already paid on this account) per annum which was last sanction by the Ministry of Defence.
14. Ld. Sr. Advocate further invited the attention of the court towards the letter dated 16.11.2009 regarding rationalization of rental of petrol pump site at Dhaula Kuan Crossing, Delhi Cantonment and submitted that in this letter, the attention of the respondent was invited to the fact that such escalation in the rental liability cannot be sustained by oil marketing companies, which function under heavy government subsidy. Ld. Sr. Advocate has also invited the attention of the Court to the rentals of comparable premises.
15. Sh. Sukumar Pattjoshi, Ld. Sr. Advocate has further submitted that despite all the communications, the Defence Estate PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 20 of 48 Officer vide letter dated 16.03.2011, raised the liability of Rs.6,78,77,310/. In the said communication, it was stated that the appellant had become unauthorized occupant and liable to pay damages at the rates applicable to them, particularly, in accordance with the prevailing rates for each year, as provided under the STR with effect from 01.02.1995 till date along with interest.
16. Ld. Sr. Advocate has further submitted that the appellant vide communication dated 28.03.2011 responded to the communication dated 16.03.2011 and requested the Defence Estate Officer to consider their earlier letter dated 16.11.2009 (A
12). The HPCL again wrote a letter dated 20.12.2011 (A16) and requested for fixing the reasonable rent. This letter was followed up by another communication dated 15.09.2014 (A17). In this communication, the appellant stated that in the absence of government sanction from the competent authority, the basis of this calculation could not be established.
17. Sh. Sukumar Pattjoshi, Ld. Sr. Advocate has also invited the attention of the court towards the "Guidelines" to Prevent Arbitrary Use of Powers to Evict Genuine Tenants From Public Premises Under the Control of Public Sector Undertakings/Financial Institutions. Ld. Sr. Advocate has further PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 21 of 48 submitted that initiation of PP proceedings by the Defence Estate Officer is in total violation of the said guidelines.
18. During the course of the arguments, Ld. Sr. Advocate has submitted that subsequent to the passing of the impugned order, the Government of India has come out with a policy dated 03.02.2016, issued to the Ministry of Defence, directing them to renew all the expired leases of the oil companies for petrol pumps. Ld. Sr. Advocate submitted that in view of this policy, the matter is required to be remanded back to the Estate Officer for renewal of the lease in accordance with the latest policy.
19. Sh. Sukumar Pattjoshi, Ld. Sr. Advocate also relied upon decision in Writ Petition (C) No. 8877/2017 & CM Application No. 36297/2017 titled M/s Bharat Petroleum Corporation Ltd. Vs. Delhi Cantonment Board & Anr., in which the issue regarding the application of the policy dated 03.02.2016 was considered before the Hon'ble High Court of Delhi. Ld. Sr. Advocate submitted that in this case also, a lease was granted to M/s Burmah Shell Oil Storage & Distribution Company of India, predecessorininterest of M/s Bharat Petroleum Company Ltd. In the cantonment area in the year 1930, which was extended from time to time till 1992. Further, the request of the renewal of the lease by M/s Bharat Petroleum Company Ltd. was declined and PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 22 of 48 thereafter a notice under Section 4 of the PP Act was issued on 31.03.2014 and the Estate Officer passed an eviction order dated 19.09.2016. An appeal under Section 9 of the PP Act was dismissed by the Ld. District Judge on 27.09.2017. In this case, the NOC was declined to M/s Bharat Petroleum Company Ltd. by the Cantonment Board on the ground of administrative security and fire hazard to neighbouring military institutions/HQ. The Hon'ble High Court after taking into account the material on record, constituted a committee to examine the issue that if the petrol pump in a thick civil population is not found to be a security hazard to the neighbouring military installations, whether the petitioner is entitled to the renewal of lease in terms of the policy of the government contained in letter dated 03.02.2016. Ld. Sr. Advocate has submitted that subsequently the Hon'ble Court was informed that the Cantonment Board has agreed to renew the lease deed of the petitioner. Ld. Sr. Advocate submitted that the lease deed was renewed by the virtue of the policy dated 03.02.2016. Ld. Sr. Advocate submitted that the order passed in WP (C) No. 8877/2017, the Hon'ble High Court of Delhi has taken a holistic view of an admission by the Government of India that leases of 35 fuel outlets, situated on the defence land could not be renewed on account of lack of a policy.
PPA No. 133/2016Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 23 of 48 This means that after enunciation of this policy by the Government of India, Ministry of Defence, the lessees could not be denied its benefit. It has further been submitted that the petrol pump of the appellant is figured in those outlets which are due for lease as on 14.02.2019, as replied by the respondent in reply to the RTI dated 03.05.2019. Ld. Sr. Advocate has submitted that in fact renewal of lease could not take place due to lack of policy which inter alia led to audit objections. It has been submitted that the policy paralysis remained for almost 20 years i.e. between 1995 to 2015 and it is also evident from the said letter that it was solely due to a lack of policy on the matter that no renewal of leases could be offered to the occupant under expired leases, which were to be granted subject to the fulfillment of certain conditions. Ld. Sr. Advocate has submitted that the Defence Estate Officer does not have the jurisdiction to unilaterally impose a Standard Table of Rates of Rent beyond the purview of the lease agreement and without the sanction of the competent authority. Ld. Sr. Advocate submitted that the rent has been paid for the period ending 31.01.2021 at the rate of Rs.3,84,829/ and there is no intention on the part of the HPCL to make any default in the payment of rent. Ld. Sr. Advocate further submitted that the rent could not be paid by the HPCL in absence of any order PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 24 of 48 having been issued by the competent authority. Ld. Sr. Advocate further submitted that the HPCL is also a government undertaking and subject to other rules and regulations and will make the payment only if there are specific order of the competent authority. It has further been submitted that the impugned order may be set aside and the matter may be remanded back to the Estate Officer for renewal of the lease in accordance with policy dated 03.02.2016.
20. Per contra, Ms. Jasmeet Kaur, Ld. Counsel for the respondent has submitted that the Estate Officer has passed a very detailed and reasoned order taking into account all the averments and contentions raised by the appellant. Ms. Jasmeet Kaur, Ld. Counsel for respondent submitted that the last sanction was accorded by the government of India for the period till 31.01.1985 and there has been no further extension of lease thereafter. Ms. Jasmeet Kaur, Ld. Counsel for respondent further submitted that despite sanction, the appellant continued to make the payment @ Rs.16,728.75, which is the sanctioned amount for the period 198085 till 2007. The appellant failed to clear the dues despite repeated efforts by the respondent. The HPCL only in the year 2008 started paying lease rent of Rs.3,84,829/, which was the sanctioned amount for the period 199095. The PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 25 of 48 respondent accepted the payment only under protest as part payment of damages. It has further been submitted that even in the year 2020, the appellant has been paying the lease rent @ Rs.3,84,829/, which was the sanctioned amount for the period 199095. Ld. Counsel further submitted that eviction proceedings were initiated due to noncompliance of procedure and policy by the appellant and the unauthorized occupation of defence land by the appellant after the expiry of the lease. Ld. Counsel further submitted that even as per the policy dated 03.02.2016, the renewal of the lease can be done only when there are otherwise no adverse report. Ld. Counsel submitted that in continuation to the previous directions of Government of India, Ministry of Defence, vide letter no.
748/01/L/DE/05/Policy/Petrol Pumps dated 09.02.2016, issued fresh directions for renewal of expired leases of oil companies. Ld. Counsel has further submitted that as per clause 2(v) of the police dated 09.02.2016, it was directed as under :
"in case the lessee/dealer/beneficiary, fails to pay the due rent within the prescribed time lime (say within 90 days), the DEO/CEO shall forthwith initiate action under PP Act, 1971, against the defaulter, by treating the occupation bearing unauthorized. After following laid down procedure under PP Act, 1971, orders for eviction of unauthorized occupants and recovery of damages shall be issued."PPA No. 133/2016
Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 26 of 48
21. Ld. Counsel for the respondent further submitted that since the appellant has not complied with government's procedure and policies issued from time to time, nor has paid the outstanding government dues amounting to approximately Rs.21 Crores, therefore, the eviction proceedings were initiated and eviction order was passed on 03.03.2015, after following the due procedure. It was submitted that no further fresh sanction can be accorded nor the unauthorized occupation can be regularised until the appellant clears the entire dues as per the Standard Tabel of Rent (in short "STR") and follows the norms of the government of India. Ld. Counsel further submitted that rent and damages have been assessed as per the STR. Chapter 10 of Cantonment Laws Volume II, defines the concept of STR. It has further been submitted that notice under Section 7 of the PP Act dated 17.10.2016 has also been served upon the appellant for recovery of outstanding dues for the period 01.02.1985 to 30.09.2016. It has further been submitted that HPCL is in unauthorized occupation and they have failed to pay the outstanding dues.
22. Ms. Jasmeet Kaur, Ld. Counsel has also invited the attention of the court to the 'Statement of Objects and Reasons' of the PP Act. It was stated that the purpose of the objects of the PP PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 27 of 48 Act is to provide for a speedy machinery for the eviction of unauthorized occupants of public premises. Ld. Counsel further submitted that as per Section 3 of the DRC Act, DRC Act does not apply to any premises belonging to the government.
23. Ms. Jasmeet Kaur, Ld. Counsel has further invited the attention of the court to the communication No. 10/52/L/L&C/ 64/3290/D(Lands) dated 12.04.1972, which was the first policy for lease of defence land to Petrol Pumps. This letter was followed by another policy dated 24.04.1980 bearing No. 18/152/L/L&C/64. Subsequent thereto, the Government of India came with a policy dated 03.02.2016 for renewal of expired leases of oil companies for setting up the retail outlets. The attention was also invited to the communication dated 09.01.2017 wherein the Government of India, directed the Director General, Defence Estate, for renewal of expired leases of oil companies for setting up retail outlets up to 30.09.2018 on the terms and conditions mentioned in para 2(l) to (iv) of letters under reference dated 03.02.2016 and 24.04.1980. Ld. Counsel submitted that this letter was followed by another communication dated 23.01.2018, whereby it was stated that if the lessee fails to pay the due rent within the prescribed period, the proceedings under the PP Act may be initiated. Similarly, in the communication PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 28 of 48 dated 01.02.2019, the leases were permitted to be renewed up to 30.09.2019 or till finalization of policy for leasing out defence land for petrol pumps and gas retail outlet on the terms and conditions as mentioned in letter dated 03.02.2016. This communication was followed by another letter dated 11.02.2019, whereby the Defence Estate Officers were directed to take necessary action for renewal of leases, issuance of demand notices and collection of rentals/premiums.
24. Ms. Jasmeet Kaur, Ld. Counsel for the respondent has also invited the attention of the court towards the order passed in LPA no. 1010/2007, wherein the Hon'ble High Court, inter alia held that unless a fresh lease in respect of the land in question was granted, respondent no. 1 was required, on determination of the lease, to clear the site by removing petrol pump and other erections and filling up all excavations, within one month of determination of the lease. Admittedly, no fresh lease deed has been executed by the appellant in favour of respondent no. 1, after expiry of the initial lease by efflux of time. It was further inter alia held by the Hon'ble High Court that respondent no. 1 has no legal right to insist upon extension of lease/agreement of new lease and that too, on this very terms and conditions which were stipulated at the time of grant of initial lease. Ms. Jasmeet PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 29 of 48 Kaur, Ld. Counsel also relied upon the judgment in Union of India Vs. S.M. Aggarwal & Ors., 1995 SCC OnLine Del 307, in which, it was inter alia held as under:
"9. ...What section 4 of the Act required was that if the Estate Officer was of the opinion that any person was in authorized occupation of any public premises he is to give him a notice to show cause as to why an order of eviction should not be made. It is, therefore, for occupant to show that he is not in unauthorized occupation of public premises.....
...It is not for the Central Government to lead evidence and to subject its witness to crossexamination, and that too without the shopkeepers having shown any cause as to why the order of eviction should not be made against them......"
25. The sum and substance of the case of the appellant is that Defence Estate Officer has passed the impugned order erroneously and without any application of mind. The lease was extended in the year 1994 retrospectively w.e.f. 1985. The lease was extended subject to exorbitant increase in rent, which was agitated by the appellant at the higher level and while this matter was under consideration, the Defence Estate Officer kept on raising exorbitant demand without any sanction from the competent authority and without any basis. The Defence Estate Officer did not respond to the various communications sent by the appellant for the rationalization of rent and rather raised an exorbitant demand of rent in the year 2006. Even post 2006, the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 30 of 48 exorbitant demand was agitated and several communications were sent for the rationalization of rent on the basis of the comparable rentals of the properties leased out by the government of India to the oil companies, however, the Defence Estate Officer further projected the rent and damages in an astronomical manner and raised a huge demand and since, it was again protested by the appellant, the Defence Estate Officer initiated the proceedings under PP Act and thereafter, without following the due procedure of law, passed the eviction order. The case of the appellant is that in order to settle the matter, the appellant started paying the rentals at the last sanctioned rate in the year 2008 and this rental was last paid up to January 2020. The plea of the appellant is that after the passing of the impugned order, there was a fresh policy of the government of India dated 03.02.2016, which was followed by several administrative directions to the effect that leases of the oil companies are to be renewed in accordance with the fresh policy.
26. In brief, the case of the respondent is that the appellant failed to pay the rentals even as per the sanctioned rate of the year 1995 and that it continued to pay the rent at the rate of Rs.16,728/, in utter violation of the policy and directions of the department. The further plea of the respondent is that the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 31 of 48 appellant did not come forward for the extension of lease and rather, persisted at the unreasonable demand of reduction of the rent. The appellant started paying the rent at the rate sanctioned for the year 1995 in 2008 and even thereafter, did not take any steps for regularization of the lease. The plea of the respondent is that the several communications for the extension of the lease and demand raised by the department for the payment of the leased amount were not adhered to by the appellant. The further plea of the respondent is that the guidelines are not applicable to the respondent being not a Public Sector Undertaking or Financial Institute. It has also been submitted that appellant cannot take the benefit of the policy dated 03.02.2016 and subsequent administrative directions as they have failed to pay the leased rent amount and therefore, the proceeding under PP Act was rightly instituted and the Estate Officer has passed the eviction order in accordance with the law.
27. Before proceeding further, it is necessary to bear in mind that the owner of a land has every right to deal with its property in a way profitable to him. Similarly, the government or public authorities are also equally entitled to use the public property to the best advantage as a commercial venture. The concept of welfare government is now changing and now, the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 32 of 48 government is also taking steps for privatisation, possibly with a view to ensure that public properties are also being used in a profitable manner.
28. It is a settled proposition that lessor has an absolute right to terminate the lease or cancel the allotment. Lessor cannot be forced to extend the lease except in exceptional circumstances, whether there is an agreement between the parties for the automatic renewal of the licence or not.
29. Before proceeding further, it is also necessary to bear in mind that Estate Officer cannot sit in judgment over the sufficiency of administrative reasons for cancellation of allotment. Reference can be made to Dr. K.R.K. Tawlar vs. Union of India 1977 (13) DLT 310. In the present petition, an issue has also been raised as to the applicability of the DRC Act or the applicability of the principles laid down in the DRC Act regarding the enhancement of rent. The Hon'ble Supreme Court in the case of Ashoka Marketing Ltd. and Anr. vs. Punjab National Bank and Ors. AIR 1999 SC855, examined the ambit and scope of two statutes i.e. DRC Act and PP Act in respect to the premises which falls within the ambit of both the statutes. It was inter alia held that the provisions contained in the Public Premises Act cannot be applied to the premises which fall within PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 33 of 48 the ambit of the Rent Control Act. It was further inter alia held that the provisions of Public Premises Act, to the extent that they cover premises which are falling within the ambit of Rent Control Act, override the provisions of the Rent Control Act and a person in unauthorized occupation of the Public Premises as defined under Section 2(3) of the PP Act cannot invoke the provisions of the Rent Control Act.
30. The plea of the Ld. Sr. Counsel for the appellant is that though, it is an admitted position that Public Premises falls out of the purview of the Delhi Rent Control Act, but the principles for enhancement of rent should be in accordance with the principles for enhancement of rent as provided under the DRC Act.
31. I consider that this argument cannot be accepted in totality. The method as provided in the DRC Act cannot be perse made applicable as the rent of the Public Premises and particularly, being used for the commercial purposes have to be decided in accordance with the policy and mechanism decided by the government from time to time.
32. Ld. Sr. Advocate for the appellant has also relied upon the Guidelines to prevent arbitrary use of powers to evict genuine tenants from Public Premises under the control of Public Sector PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 34 of 48 Undertakings/Financial Institutions and stated that the same have not been followed up by the Estate Officer. The applicability of the guidelines has been the subject to the discussion in various cases. The said guidelines for the purpose of clarity are being reproduced as under : "Guidelines to Prevent Arbitrary Use of Powers to Evict Genuine Tenants From Public Premises Under the Control of Public Sector Undertakings/Financial Institutions1
1. The question of notification of guidelines to prevent arbitrary use of powers to evict genuine tenants from public premises under the control of Public Sector Undertakings/financial institutions has been under consideration of the Government for some time past.
2. To prevent arbitrary use of powers to evict genuine tenants from public premises and to limit the use of powers by the Estate Officers appointed under section 3 of the PP(E) Act, 1971, it has been decided by Government to lay down the following guidelines;
(i) The provisions of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 [P.P. (E) Act, 1971], should be used primarily to evict totally unauthorized occupants of the premises of public authorities or subletees, or employees who have ceased to be in their service and thus ineligible for occupation of the premises.
(ii) The provisions of the P.P.(E) Act, 1971 should not be resorted to either with a commercial motive or to secure vacant possession of the premises in order to accommodate their own employees, where the premises were in occupation of the original tenants to whom the premises were let either by the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 35 of 48 public authorities or the persons from whom the premises were acquired.
(iii) A person in occupation of any premises should not be treated or declared to be an unauthorized occupant merely on service of notice of termination of tenancy, but the fact of unauthorized occupation shall be decided by following the due procedure of law. Further, the contractual agreement shall not be wound up by taking advantage of the provisions of the P.P. (E) Act, 1971. At the same time, it will be open to the public authority to secure periodic revision of rent in terms of the provisions of the Rent Control Act in each State or to move under genuine grounds under the Rent Control Act or resuming possession. In other words, the public authorities would have rights similar to private landlords under the Rent Control Act in dealing with genuine legal tenants.
(iv) It is necessary to give no room for allegations that evictions were selectively resorted to for the purpose of securing an unwarranted increase in rent, or that a change in tenancy was permitted in order to benefit particular individuals or institutions. In order to avoid such imputations or abuse of discretionary powers, the release of premises or change of tenancy should be decided at the level of Board of Directors of Public Sector Undertakings.
(v) All the Public Undertakings should immediately review all pending cases before the Estate Officer or Courts with reference to these guidelines, and withdraw eviction proceedings against genuine tenants on grounds otherwise than as provided under these guidelines. The provisions under the P.P. (E) Act, 1971 should be used henceforth only in accordance with these PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 36 of 48 guidelines.
3. These orders take immediate effect."
(1. Vide Resolution No. 21013/I/2000Pol, dated 30th May, 2002, published in the Gazette of India, Part I, Sec.1, dated 08th June, 2002).
33. In Dayamanti Verma (deceased) vs. LIC Anr. WP (C ) No. 4342/2007 decided on 25.07.2011, the Hon'ble High Court of Delhi, on the question of enforceability of the guidelines after having placed reliance upon Nusli Nevile Wadia vs. New Delhi Assurance Co. Ltd. 2006(3) MH.L.J. and Kamla Bhargava Anr. vs. LIC of India WP (C) No. 12718/2009 decided on 20.01.2011, Syndicate Bank vs. Ramachandran & Ors. 2011 (1) Scale 368, inter alia held as under :
"30. The respondentLife Insurance Corporation of India is an instrumentality of the State and there cannot be any dispute that the actions taken by the respondentLife Insurance Corporation against any of its lessee/sublessee or its employees must not be unreasonable, whimsical, unfair, unjust or tainted with arbitrariness or capriciousness. The Life Insurance Corporation cannot be heard to say that the guidelines of 2002 issued by the Ministry of Urban Development are not of any binding force, as through the said guidelines the Government has sought to achieve a special objective i.e to protect the original and genuine tenants. The said guidelines did not come in the way of these Government bodies to seek eviction of totally unauthorized occupants or subletees or PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 37 of 48 those employees who have ceased to be in their service. The guidelines further mandate that the provision of P.P. Act may not be resorted to by these Government instrumentalities with a commercial motive or to secure vacant possession of the premises in order to accommodate their own employees where such premises were in occupation of the original tenants. It further states that a person in occupation of any premises should not be treated or declared to be unauthorized merely on service of notice of termination of tenancy. So far the revision of rent is concerned, these public authorities have been permitted to secure periodic revision in terms of the provisions of the Rent Control Act applicable in each State and no reasons have been advanced by counsel for the respondent as to why these guidelines should be ignored when actions are contemplated against the original and genuine tenants."
34. I consider that the plea of the respondent that these guidelines are not applicable to them being the government of India, cannot be accepted as the Government of India has issued such guidelines and it cannot seek its exclusion.
35. Now coming to the question that whether the appellant has rightly been declared unauthorized occupant by serving the Show Cause Notice under Section 4 of PP Act and passing an eviction order under Section 5 of PP Act. Perusal of the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 38 of 48 aforesaid guidelines specifically provided that the person in occupation of any premises should not be treated or declared to be an unauthorized occupant merely on service of notice of termination of tenancy. The fact of unauthorized occupation shall be decided by following the due procedure of law. In Ashoka Marketing (supra), while interpreting the explanation of the unauthorized occupation contained in section 2(g) of PP Act, the Hon'ble Apex Court took a view that the definition of section 2(g) is in two parts i.e. first part deals with the occupation of those who entered the public premises without any lawful authority as well as occupation which was permissive at the inception but then later ceased to be so, while the second part of the definition is inclusive and it covers occupation by those who entered into the occupation legally under some valid authority but their such authority either expired or has been determined in accordance with law.
36. Perusal of this judgment indicates that the Hon'ble Supreme court has made a distinction between these two statutes. It has been inter alia held that so far occupation of those persons not backed by any legal authority or their permissive possession coming to an end due to the expiry of their employment or on account of lapse or expiry of the period of such permissive user is PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 39 of 48 concerned, there can be no difficulty as in all such cases the onus is on the occupant to show as to how his occupation is authorized even after the cessation of the employment or on the lapse or expiry of the period of licence or permissive user or in a case where the initial occupation itself was unauthorized. The Hon'ble Apex Court further inter alia held that in all other cases where a person had entered into occupation legally and under a valid authority by a creation of tenancy or by any other mode of transfer and where such like possession would have been otherwise protected under the State Rent Acts, the State or any other instrumentality of the State like Public Sector Undertakings, Financial Institutions etc. would be required to prove fairness and reasonableness on its part in initiating proceedings under the Public Premises Act and as per the law laid down by the Supreme Court in the case of New India Assurance Company (supra), the Hon'ble Supreme Court held that it would be for these authorities to show as to how they meet the constitutional requirement of Article 14 of the Constitution of India. It is also advantageous to refer to New India Assurance Company (supra), wherein it was inter alia held that when an application for eviction is based on such grounds, which require production of positive evidence on part of the landlord, in our PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 40 of 48 opinion, it would be for it to adduce evidence first.
37. In the present case, though the Estate Officer has stated in the impugned order that the appellants were given several opportunities to lead evidence, but the record is silent on the same.
38. Perusal of the Estate Officer's record indicates that notice under Section 4 of PP Act was issued on 03.04.2014 for 16.09.2014. On 16.09.2014, M/s HPCL was directed to file their reply and the matter was adjourned for 08.10.2014. M/s. HPCL after taking six opportunities filed the reply on 17.01.2015. On 19.01.2015, the Ld. Defence Estate Officer mentioned that on the basis of reply filed by M/s HPCL and evidence produced by them, if any, the detailed order in the case will be passed in the matter. However, the matter was taken on 28.01.2015 when the Defence Estate Officer filed their response and the matter was adjourned to 05.02.2015. On 05.02.2015 certain queries were put to the representative of the appellant and thereafter, the matter was adjourned for 02.03.2015 wherein it was observed by the Estate Officer that appellants were given adequate opportunities.
39. I consider that in the present case, the Defence Estate Officer did not give any specific opportunity for leading the PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 41 of 48 evidence. However, even if it is considered that it was for the M/s HPCL to produce the evidence, even then it has to be seen that whether the respondent were fair and justified for increasing the rent from time to time in an exorbitant manner without disclosing the basis of it. It seems that in absence of any policy, there was no sanction for the increase in rentals by the competent authority. It is also a matter of record that the policy for lease of defence land and retail outlets/service station came out on 03.02.2016 after 24.04.1980. Even subsequent communications indicated that there is no specific policy for the grant of lease. The demands have been raised by the department provisionally without any sanction from the competent authority. Even the communication dated 01.02.2019 bearing No. 18/58/L/L C/65/PC, reads as under :
" No. 18/58/L/LC/65/PC
Government of India
Ministry of Defence
New Delhi, the 01st February, 2019
To,
1. The Chief of Army Staff, New Delhi.
2. The Director General Defence Estates, New Delhi.
Subject : Renewal of expired leases of Oil Companies for setting up retail outlets.
PPA No. 133/2016Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 42 of 48 Refer MoD letter no. 18/58/L/LC/65/PC dated 03.02.2016 and 09.01.2018 on the above mentioned subject.
2. I am directed to convey that renewal of expired leases of oil companies for setting up retail outlets may further be renewed up to 30.09.2019 or till finalisation of policy for leasing out defence land for petrol pumps and gas retail outlet, whichever is earlier on the terms and conditions mentioned in para 2(i) to (iv) of letter dated 03.02.2016 under reference read with GoI, MoD (DG, DL&C) letter No. 18/152/L/L&C/64/Review dated 24.04.1980.
3. This issues with concurrence of Ministry of Defence (Finance Division), vide their U.O. No. 27/F/WorksI/2019 dated 31.01.2019.
Yours faithfully, sd (Ashok Kumar) Dy. Director (Lands)"
40. The bare perusal of this letter indicates that the finalization of policy for leasing out defence land for petrol pumps and gas retail outlet is still to take place and the authorities are continuing on an adhoc arrangement on the basis of policy dated 24.04.1980 and 03.02.2016.PPA No. 133/2016
Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 43 of 48
41. The issue of exorbitant increase in rent came before Hon'ble Supreme Court in Jamshed Hormusji Wadia vs Board of Trustees, Port of Mumbai and Anr. (2004) 3 SCC 214, while testing the decision of exorbitant increase in rent of the Bombay Board Trust whether such a decision is violative of Article 14 of the Constitution of India being capricious and unfair. The Hon'ble Supreme Court held in the following paras as under : "14. The Bombay Port Trust is an instrumentality of State and hence an " authority within the meaning of Article 12 of the Constitution. It is amenable to writ jurisdiction of the court. This position of law has not been disputed by either party. The consequence which follows is that in all its actions, it must be governed by Article 14 of the Constitution. It cannot afford to act with arbitrariness or capriciousness. It must act within the four corners of the statute which has created it and governs it. All its actions must be for the public good, achieving the objects for which it exists, and accompanied by reason and not whim or caprice.
........................
18. In our opinion, in the field of contracts the State and its instrumentalities ought to so design their activities as would ensure fair competition and nondiscrimination. They can augment their resources but the object should be to serve the public cause and to do public good by resorting to fair and reasonable methods. The State and its instrumentalities, as the landlords, have the liberty of PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 44 of 48 revising the rates of rent so as to compensate themselves against loss caused by inflationary tendencies. They can - and rather must also save themselves from negative balances caused by the cost of maintenance, payment of taxes and costs of administration. The State, as the landlord, need not necessarily be a benevolent and good charitable Samaritan. The felt need for expanding or stimulating its own activities or other activities in the public interest having once arisen, the State need not hold its hands from seeking eviction of its lessees. However, the State cannot be seen to be indulging in rackrenting, profiteering and indulging in whimsical or unreasonable evictions or bargains.
19. A balance has to be struck between the two extremes. Having been exempted from the operation of rent control legislation, the courts cannot hold them tied to the same shackles from which the State and its instrumentalities have been freed by the legislature in their wisdom and thereby requiring them to be ruled indirectly or by analogy by the same law from which they are exempt. Otherwise, it would tantamount to defeating the exemption clause consciously enacted by the legislature. At the same time the liberty given to the State and its instrumentalities by the statute enacted under the Constitution does not exempt them from honouring the Constitution itself. They continue to be ruled by Article 14. The validity of their actions in the field of landlord tenant relationship is available to be tested not under the rent control legislation but under the Constitution. The rent control legislations are temporary, if not seasonal; the Constitution is permanent and an alltime law."PPA No. 133/2016
Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 45 of 48
42. The appellant in the present case is a government company and incorporated under section 2(43) of the Companies Act, 2013, and is a wholly owned Public Sector Undertaking of the Government of India under the Ministry of Petroleum and Natural Gas. It is stated to be engaged in production, distribution and marketing of essential commodities, including Petroleum products, petrol, diesel, kerosene oil and Liquefied Petroleum Gas. The appellant is engaged in discharging essential public utility services under the control and supervision of the government of India and is not a private profit centric corporation. The primary objective of the appellant is not to make huge profits but to ensure that essential commodities dealt in by it are supplied to the general public without delay. The lease in favour of the appellant was extended from time to time till 1995. It is not the case that the appellant was in possession without being backed by any legal authority or permissive possession came to an end because of the expiry of their employment of public service. The appellant in the present case had entered into the occupation legally and under an authority followed by creation of lease deed. I consider that in the present case, it was for the Defence Estate Officer first to have asked the department PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 46 of 48 to lead the positive evidence on the basis of which, the appellant was declared as an unauthorized occupant. Had the evidence being led on behalf of respondent, the appellant would have got an opportunity to crossexamine their witnesses and bring on record the fact as to the sanction of the competent authority or the basis on which, the rent was being increased from time to time.
43. It is also pertinent to mention here that even respondent is ready and willing to extend the lease as mentioned in their reply dated 17.12.2020 to the application under Section 151 CPC, wherein it was stated as under :
"12. That therefore, in order to obtain fresh sanction for the period 2020 onwards, the HPCL/appellant has to take the following steps :
(i) Make payment as per the sanction dated 21.12.1994 for the period 19851995.
(ii) Regularization of unauthorized occupation will be done by obtaining the expost facto sanction for the entire period of unauthorized occupation/without sanction i.e. 1995 to 2020 (25 years) on payment as per the Standard Table of Rents (STR)."
44. It is a settled proposition that the Estate Officer is a quasijudicial authority and Estate Officer is not expected to PPA No. 133/2016 Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 47 of 48 function as mouthpiece of the department. The objective satisfaction of the Estate Officer is necessary while issuing notice under Section 4 of the PP Act. The Estate Officer in the present case also first should have satisfied himself as to the ground or the basis on which the appellant was sought to be declared unauthorized occupant.
45. I consider that in view of the discussions made hereinabove, the impugned order dated 03.03.2015 of the Defence Estate Officer cannot be sustained in the eyes of law and the matter is required to be remanded back to the Estate Officer for considering it afresh in view of the policy dated 03.02.2016.
46. The appeal is allowed accordingly. The matter is remanded back to the Estate Officer for considering it afresh in view of the policy dated 03.02.2016. Both the parties are directed to appear before the Estate Officer on 02.03.2021.
47. Record of the Estate Officer be sent back along with copy of the judgment.
48. Appeal file be consigned to Record Room.
DINESH KUMAR Digitally signed by DINESH
KUMAR SHARMA
SHARMA Date: 2021.02.19 16:58:30 +0530
Announced through (DINESH KUMAR SHARMA)
electronic mode Principal District & Sessions Judge/
on 19.02.2021. Appellate Authority : New Delhi
PPA No. 133/2016
Hindustan Petroleum Co. Ltd. Vs. Defence Estate Officer Anr Page No. 48 of 48