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1. The petitioner as the lessee in respect of the disputed plot was in possession of the leasehold property on the basis of the lease deed dated 10th of August, 1964, executed by the Governor of Orissa. The lease deed indicates that the land had been leased out for industrial and commercial purposes, mainly for automobile shop room and service station. The original lessee was M/s. Kalinga Automobiles, a partnership firm, and the present petitioner is now the sole lessee. M/s. Caltex (India) Limited entered into a lease agreement with the petitioner and became the sub-lessee in respect of the disputed premises by virtue of the lease deed dated 1-10-1969 and the period oflease was 10 years commencing from 1-10-1969. The lease deed contained a clause conferring an option of renewal with the lessee for a further term of ten years to be exercised before the expiry of the term created under the original lease and it was clearly indicated in the lease deed that upon exercise of the right of renewal, a fresh tease incorporating all the terms and conditions suitably modified shall be executed and registered by both parties to the agreement. While the original lease commencing from 1-10-1969 for a period of 10 years was continuing and M/s. Caltex (India) Limited was the lessee, the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex India) Limited) Ordinance, 1976, was promulgated. The Government of India in the Ministry of Petroleum issued a notification dated 30th of December, 1976, in exercise of powers conferred by Sub-section (1) of Section 9 of the Ordinance directing that the right, title and interest and liabilities of Caltex (India) in relation to its undertakings in India shall vest in Caltex Oil Refining (India) Limited with effect from 30th of December, 1976. The said notification has been annexed as Annexure-A/1 to the additional affidavit filed by the opposite parties. On 23-4-1977, the Parliament enacted the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977 (Central Act 17 of 1977) (hereinafter referred to as the "Act"). On 9-5-1978, the Company Law Board in exercise of powers conferred under Sub-sections (1) and (2) of Section 396 of the Companies Act, 1956, passed an amalgamation order amalgamating the Caltex Oil Refining (India) Limited and Hindustan Petroleum Corporation Limited, a copy of which order has been annexed as Annexure-A/2 to the Additional Affidavit filed by the opposite parties. The aforesaid order is referred to hereinafter as the "Amalgamation Order". Clause 3 of the said Amalgamation Order stipulated that on the appointed day, the Undertaking of Caltex Oil Refining (India) Limited (for short, CORIL) will stand transferred to, and vested in, the Hindustan Petroleum Corporation Limited (for short, HPCL) and HPCL shall be deemed to be the Company resulting from the amalgamation. Clause 5 of the Amalgamation Order protected the contracts et cetera entered into by CORIL. Clause 5 of the Amalgamation Order is extracted herein below in extenso :--

3. In course of hearing, we had called upon the petitioner's counsel to produce the original lease deed executed by the State of Orissa in favour of M/s. Kalinga Automobiles to find out the real purpose for which the lease had been granted and in accordance with the same, a copy of the lease deed has been produced before us by Mr. Patnaik for the petitioner.

4. From the averments made and materials produced, the following admitted facts emerge. The State of Orissa granted lease in favour of a partnership firm called M/s, Kalinga Automobiles in the year 1964 under the lease deed dated 10th of August, 1964 in respect of the disputed premises for industrial and commercial purposes, mainly for automobile shop room and service station. On a portion of the leasehold, the lessee M/s. Kalinga Automobiles had constructed a structure for running a pertol pump, but instead of itself running the pump had sublet the disputed premises on 1-9-1970 to Caltex (India) Limited for a period of ten years commencing from 1-10-1969 and executed and registered the lease deed for that purpose and said Caltex (India) Limited appointed an agent to run the petrol pump. The tenure of the lease expired on 30-9-1979. Prior to the said expiry, by virtue of the Ordinance promulgated in 1976, the Central Government issued notification under Section 9(1) of the Ordinance vesting the rights of the Caltex (India) Limited with Caltex Oil Refining (India) Limited. Under the notification issued by the Central Government under Section 9(1) of the Ordinance, the right, title and interest of Caltex (India) Limited, stood vested with a Government Company called Caltex Oil Refining (India) Limited. Thereafter by virtue of the Act, the shares of Caltex Oil Refining (India) Limited were acquired by the Government of India and with effect from the appointed day, i.e. 30th of December, 1976, the right, title and interest of Caltex (India) Limited in relation to its Undertakings stood transferred to and vested in the Government Company called the Caltex Oil Refining (India) Limited (CORIL). Subsequently, by virtue of the Amalgamation Order passed by the Company Law Board, the CORIL stood amalgamated with the HPCL and thus HPCL became the successor-in-interest of the original lessee, namely Caltex (India) Limited. Even though the lease expired since 30-9-1979, but there has been no execution of a fresh lease deed and yet HPCL continues to be in possession of the premises. The original partners of the partnership firm having relinquished their interest in favour of the petitioner who is the widow of one of the partners, the petitioner has been recognised as the lessee in respect of the leasehold by the grantor, the State of Orissa and she has been mutated accordingly.

(v) In any view of the matter, the petitioner herself being in automobile business and having offered herself to be appointed as an agent under the Corporation to run the petrol pump, the Corporation instead of acceding to the said request illegally appointed another as an agent and the said act must be held to be arbitrary and unjustified.

6. Mr. Das appearing for the Corporation, on the other hand, contends that by legislation the Corporation having acquired the rights and liabilities of the original lessee, namely Caltex (India) Limited, was entitled to exercise the option of renewal contained in the lease deed and, in fact, did exercise that option in 1979. Even though no lease of renewal has been executed, yet the Corporation having continued to possess the land and having paid rent for the same which the petitioner has accepted, in the eye of law, there has been a renewal of the lease and, therefore, in accordance with the original terms contained in the lease deed between M/s. Kalinga Automobiles and M/s. Caltex (India) Limited, the Corporation has a right for asking for a further renewal of 20 years and thus the letter under Annexure 5 cannot be said to be illegal or arbitrary. Mr. Das further contends that bearing in mind the object of enacting Central Act 17 of 1977 which Act was enacted in public interest and the Parliament having conferred the right of renewal under Sections 5 and 7 of the Act, the said right cannot be taken away unilaterally by the lessor. Mr. Das lastly urges that the Corporation is willing to enhance the rent bearing in mind the escalation of price subject to the condition that lessor agrees for renewing the lease for a period of 20 years.

7. In view of the rival submissions at the Bar, the first question that arises for consideration is whether the HPCL has any right of further renewal after expiry of the renewed period of 10 years by virtue of Sections 5 and 7 of the Act. It is in this context it must be borne in mind that even though HPCL became the successor-in-interest of Caltex (India) Limited, the original lessee, while the original lease was still subsisting and the said lease expired on 30-9-1979, but no renewal lease deed has been executed by the lessor. Before delving into an enquiry on the first question, it would be appropriate for us to notice the object with which the business in dealing with petroleum was nationalised. The Caltex Petroleum Corporation was a Company incorporated in the United States of America and as one of its subsidiaries, the Caltex Oil Refining (India) Limited, an Indian Company was carrying on the business of refining crude oil and producing petroleum products in India. Another subsidiary Company of the said Caltex Petroleum Corporatioin called Caltex (India) Limited which was also a foreign Company was carrying on the business of marketing and distributing the petroleum products. Apart from Caltex (India) Limited, two other foreign companies were also dealing with petroleum products in India, namely ESSO and Burmah Shell. In order to secure the ownership and control of the production of nation's petroleum resources and to secure ownership and control of the undertakings carrying on the business of distributing and marketing of petroleum products which would subserve the common good, the Parliament enacted three Acquisition Acts, namely ESSO (Acquisition of Undertakings in India) Act, 14 of 1974, Burmah Shell (Acquisition of Undertakings in India) Act, 2 of 1976 and Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited Act, 17 of 1977 and the provisions are in pari materia. We are, however, concerned in the present case with the last Act. The main object underlying the Act is to acquire the right, title and interest of the Oil Company in question carrying on the business of distributing and marketing petroleum products in India with a view to subserving the common good. After enacting the three legislations referred to earlier, the Undertakings of the three foreign Companies stood vested in the Central Government and then the Central Government created two Oil Corporations, called the Hindustan Petroleum Corporation and Bharat Petroleum Corporation. The Undertakings of the ESSO and Caltex (India) Limited merged into the Hindustan Petroleum Corporation whereas the Undertaking of Burmah Shell was transferred into Bharat Petroleum Corporation. After the enactment of the Act, the validity of Sections 5 and 7 of the Act was challenged in two or three High Courts, but each of the High Courts held the Act to be intra vires. We are not concerned in the present case with the vires of the Act since Mr. Patnaik for the petitioner never challenges the same. But it would be appropriate to notice some of these decisions wherein the vires has been upheld but some observations were made which may be relevant for adjudication of the present case.