Kerala High Court
T.G. Alamelu Ammal vs Bharath Petroleum Corporation Ltd., ... on 21 January, 1992
Equivalent citations: AIR1992KER253, AIR 1992 KERALA 253, (1992) ILR(KER) 3 KER 319 (1992) 1 KER LT 344, (1992) 1 KER LT 344
ORDER K.P. Balanarayana Marar, J.
1. Petitioner is the landlady of the petition schedule property. A lease of this land was granted to Burmah Shell Company by one Achuthan Nair on 30-7-1964. A lease agreement was executed. An amount of Rs. 2,160/- was paid by the lessee and the period of lease was twenty years from 1-12-1963. The Burmah Shell Company was subsequently taken over by Government of India and is now known as Bharat Petroleum Corporation of India. The lease agreement stipulated for payment of quarterly rent of Rs. 270/- for the first 10 years and thereafter at the rate of Rs. 330/- per quarter.
2. The property had been outstanding on kanom demise in favour of Mangot Kalathil tarwad. In partition of that tarwad the property was allotted to the tavazhy of Kunhulakshmi Amma whose rights were purchased by petitioner on 13-5-1975. She had also obtained purchase certificate from the Land Tribunal. The lease by Achuthan Nair was granted while the property was in the possession of Mangotkalathil tarwad.
3. The petition schedule property has an area of 12292 sq. feet and is situated in the heart of Shoranur Town. Shoranur is a Municipality and the property where a filling station is run by respondent is situated on the side of the highway. The prevailing monthly rent would be more than Rs. 2/- per sq. feet. The present rent is quite inadequate. Petitioner therefore wanted revision of rent at the rate of fifty paise per sq. feet. With these allegations a petition was filed before Special Deputy Collector (Land Tribunal), Palghat as A.2/86.
4. First respondent resisted that petition and contended that the rent stipulated under the agreement is reasonable and that the company being fully owned by the Government of India the request for revision of rent under the Land, Reforms Act is not sustainable. They also claimed the protection under the provisions in the Burmah Shell (Acquisition of Undertakings in India) Act, Act 2 of 1976.
5. A Commissioner was appointed by the Tribunal to inspect the site and submit a report. A report was submitted by him after inspection. A witness was examined on the side of petitioner and one witness on the side of the respondent. Documents were also produced on the side of petitioner. On a consideration of the documents and evidence the Land Tribunal revised the rent and fixed the rent at ten paise per sq. feet per mensem. On appeal the Appellate Authority (Land Reforms) Trichur reversed that decision and dismissed the petition finding that the landlady is not entitled to file a petition for enhancement of rent by virtue of the provisions contained in the Burmah Shell (Acquisition of Undertaking in India) Act. Hence the revision.
6. The Appellate Authority denied the relief of revision of rent for the reason that the Central Government can get the tenancy renewed on the same terms and conditions on which the lease or tenancy held by Burmah Shell Company immediately before the appointed day. The previous land owner had entered into a lease agreement with Burmah Shell Company and by the Burmah Shell (Acquisition of Undertaking in India) Act 1976 by which that undertaking was nationalised and the assets and liabilities were taken over by the Central Government. Section 5(1) of the Act provides that where any property is held by Burmah Shell in India under any lease or under any right of tenancy the Central Government shall on and from the appointed day be deemed to have become the lessee or tenant as the case may be in respect of such property. All the rights under such lease or tenancy shall be deemed to have been transferred to and vested in the Central Government. It is stipulated in Sub-section (2) of Section 5 that if so desired by the Central Government the tenancy shall be renewed on the same terms and conditions on which the lease or tenancy held by Burmah Shell immediately before the appointed day. Relying on this provision it is strenuously contended by the learned counsel for the first respondent that the renewal can only be on the same terms and conditions on which the lease or tenancy was held by Burmah Shell. On the other hand it is the contention of revision petitioner that she is entitled to ask for enhancement of the rent as a condition for renewal of the lease.
7. The constitutional validity of the Act came up for consideration before a Division Bench of this Court in Sankaranarayanan Nambiar v. Union of India, 1989 (2) KLT 635 : (AIR 1990 Ker 5). This court held that Section 5(2) and Section 7(3) of the Act are part of the scheme of statutory acquisition and are ancillary and incidental provision to achieve the main purpose of the Act in question. These provisions are in effect requisitioning of the landlord's rights. It was held that the provisions are within the parliamentary field under Entry 42 in List III and Parliament was competent to enact these laws and insert Section 5(2) and Section 7(3) in the two enactments. Incidentally it was held that the expression "if so desired" in Section 5(2) has to be understood as "if so needed". It is thus not incumbent on the Government Company to compel renewal of the lease in all cases. It is observed that if there is need to renew the lease, Section 5(2) enables the Government Company to obtain renewal on the existing terms and conditions and the landlord was bound to grant renewal.
8. Relying on these observations it is contended on behalf of respondents that the renewal asked for by the first respondent should be on the same terms and conditions which include the term regarding quantum of rent also. But this aspect is not seen considered in that decision. But the question was considered by a Division Bench earlier in Mariamma Thomas v. Bharat Refineries Ltd., 1985 KLT 1081. The Bench did not express any view regarding the challenge against validity of the Act. But the question that the lessor is entitled to ask for enhancement of the rent as a condition for renewal of the lease was considered by the Bench and decided in favour of the lessor. Construing Section 5(2) and Section 7(3) of the Act the Bench observed that the lessee is competent to ask for a renewal of the lease only if it is prepared to honour the lease as it existed and understood and acted upon by the parties prior to the coming into force of the Act. The lease in that case did not confer any right on the lessee to insist upon a renewal without a revision of the rent. It is observed that the only difference that the Act has made to it is that unlike in the past, the authority under the Act is entitled to insist for a renewal even if the landlord is unwilling to renew it. But that right is subject to the condition that the terms and conditions as they existed in the past had to be honoured and complied with by the lessee. The Bench then observed that the totality of the terms and conditions entitled the lessor to insist upon a revision of the rent on a fair basis and such revision is a condition precedent to the exercise of the option that is postulated in terms of Section 5(2) read with Section 7(3). The Bench ultimately held that if the respondent is not willing to agree to a reasonable revision it will have no authority to insist upon renewal.
9. A Division Bench of this Court has thus held that the lessee can insist for a renewal only if he agrees to a reasonable revision. I am bound by that decision. Revision petitioner can therefore ask for a revision of rent in case the first respondent wants a renewal of the case.
10. The next question that falls for consideration is whether the lessor has a right to get the rent varied under Section 106 of the Land Reforms Act. The lease in this case is one for a commercial purpose and the lessee has constructed buildings for such purpose before 20th of May 1967. He is not therefore liable to be evicted but is liable to pay rent under the contract of tenancy and such rent shall be liable to be varied every 12 years. Under the lease a period of 20 years has been fixed. That term expired on 1-12-1983. It appears that request has been made for renewal on 7-10-83. That letter is not seen produced. Learned counsel for petitioner would contend that in case the lessor has refused to execute a fresh lease the lessee can, enforce the terms of the agreement by specific performance of the agreement. The contention is that the lessee not having done so within a reasonable period the right to get the lease renewed is lost. The lessee has a right to get the lease renewed if so desired by virtue of Section 5(2) of the Acquisition or the Undertaking Act. They had also expressed the intention to get a renewal before the expiration of the lease, according to them. The question whether the right to get a renewal is lost on account of the inaction of the lessee in not taking steps to get renewal of lease deed executed is not a matter to be considered in this proceeding since the only request of revision petitioner is to get the rent varied under Section 106 of the Land Reforms Act. The question whether lessee is entitled to get a renewal or not is therefore left open.
11. What has to be considered is whether a variation of the rent can be made under Section 106 of the Land Reforms Act. But for Section 5(2) of the Acquisition of Undertaking Act there cannot be any bar for invoking the aid of that Section. It has already been found that Section 5(2) of that Act does not enable the lessee to get a renewal without agreeing for a revised rent. Then the revised rent payable can only be the rent payable under Section 106 of the Land Reforms Act since the parties are governed by the provisions of that Act.
12. In this connection first respondent has a contention that the lessor was bound to grant a renewal for a further period of 20 years after the expiry of the term prescribed in the lease deed. During the extended period also no request can be made for revision of rent, argues counsel. But this is against the mandatory provision contained in Section 106, the object of which is to protect tenants who had constructed buildings for industrial or commercial purposes on lands specifically leased for that purpose. Such a tenant is not liable to be evicted but he is always liable to pay rent under the contract of tenancy and such rent "shall be liable to be varied every 12 years".
13. Which is the starting period of 12 years is the next question to be considered. There is indication in Rule 142 of the Kerala Land Reforms Rules to suggest that the period of 12 years commenced from the date of the contract of tenancy. Under that rule the lessor or the lessee may apply to the Land Tribunal for refixation of the rent at any time after the expiry of 12 years from the date of the contract of tenancy or the date of refixation of rent under that rule. Since no refixation had been done earlier the right to get the rent revised accrues to the lessor on the expiry of 12 years from the date of the contract of tenancy. That period admittedly expired on 30-7-1976. It is contended that the lease is for a period of 20 years and the tenant is liable to pay only the rent stipulated in the contract of tenancy during this period. But Section 106 is applicable notwithstanding anything contained in the Act or in any other law or in any contract or in any order or decree of Court. The non-obstante clause in that Section enables the lessor to get the rent revised once in every 12 years and the first time that such a request can be made is on the expiry of 12 years from the date of contract of tenancy. A right having been conferred on revision petitioner to get the rent revised once in 12 years it is open to her to move the Land Tribunal under Section 106 on the expiry of 12 years from the date of contract of tenancy. Even if the contract is for a stipulated term and that term has not expired Section 106 gives a right to landlord to initiate action for revision of rent if the conditions embodied therein are fulfilled. The petition was filed only in 1986 about 12 years after such a right accrued to her. The petition is therefore maintainable and the rent is liable to be revised.
14. The view that I have taken gets support from a Division Bench decision of the Karnataka High Court reported in AIR 1986 Karnataka 191, Bharat Petroleum Corporation Ltd. v. Mohd. Haneef. The non-obstante clause in Section 21(1) of Karnataka Rent Control Act came up for consideration. The Division Bench held that the clause has an overriding effect and that the Saw gives a right to the landlord to initiate action for eviction even if there is a contract for a stipulated term and if the conditions in Section 21 are fulfilled. It is observed that to hold otherwise, would be making the non-obstante clause redundant. The contractual rights of the parties are replaced by the rights created by statute. It is held that when the landlord seeks to enforce his right under the statute, the contract to the contrary cannot be set up as a defence, because to that extent the contract stands eclipsed by the Statute. In that case also the lease was in favour of Burmah Shell Company and the tenant was allowed to exercise the option for extension of the lease period and the lease has been so extended. The Division bench held that neither the provisions of Sections 5 and 6 of the Burmah Shell Acquisition of Undertakings in India Act 1976 nor other conditions in term lease can have any bearing on the right of the landlord to initiate eviction proceedings.
15. What is the revised rent payable is the next aspect to be considered. Relying on the report of the Commissioner the Land Tribunal fixed rent at the rate of 10 paise per sq. feet per month for an area of 12292 sq. feet. The lessor wanted refixation of rent at 50 paise per sq. feet. Such a claim was made on account of the location of the land and the advantages available. Shornur Town is only one furlong away from this place. The railway Station is situated half a furlong away. Two new theatres have come up in that area. The commissioner has reported about the development in that locality. It was taking note of these factors that the commissioner suggested 10 paise per sq. feet as reasonable rent. The Land Tribunal found the rent suggested by the Commissioner as proper and adopted the same. No error has been committed by the Tribunal in arriving at that conclusion. The rate suggested by the commissioner can therefore be adopted.
For the aforesaid reasons the revision is allowed and the judgment of the Appellate Authority is set aside and the order of the Land Tribunal is restored. Parties are directed to suffer their costs.