Bombay High Court
Mecloids Garage vs Sadoq A;O Abdulla Merchant And Ors on 12 October, 2017
Bench: M.S. Sonak
j-CRA-176-175-170-169-14
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO. 176 OF 2014
WITH
CIVIL REVISION APPLICATION NO. 175 OF 2014
Hindustan Petroleum Corporation Limited .. Applicant
vs.
Sadiq Ali Abdulla Merchant and ors. .. Respondents
WITH
CIVIL REVISION APPLICATION NO. 169 OF 2014
WITH
CIVIL REVISION APPLICATION NO. 170 OF 2014
Mecloids Garage .. Applicant
vs.
Sadiq Ali Abdulla Merchant and ors. .. Respondents
Mr. G.S. Godbole i/b Ms Pallavi Dabholkar for the Applicant
in CRA 176/14 and 175/14.
Ms Neha Bhide for the Applicant in CRA 169/14 and 170/14.
Mr. Y.V. Sanglikar for the Respondents in all the Civil Revision
Applications.
CORAM : M. S. SONAK, J.
Date of Reserving the Judgment : 10th October 2017.
Date of Pronouncing the Judgment : 12th October 2017.
COMMON JUDGEMENT:-
1] Heard Mr. G.S. Godbole, learned counsel instructed
by Ms Pallavi Dabholkar, learned counsel for the applicant
in Civil Revision Application Nos. 175 and 176 of 2014,
Dinesh Sherla page 1 of 19
j-CRA-176-175-170-169-14
Ms Neha Bhide, learned counsel for the applicant in Civil
Revision Application Nos. 169 and 170 of 2014 and Mr. Y.V.
Sanglikar, learned counsel for the respondents in each of the
revision applications.
2] Learned counsel for the parties agree that the issues
involved in each of these revision applications are identical
and therefore, the same may be disposed of by common order
by treating Civil Revision Application No. 176 of 2014 as the
lead matter.
3] Rule, in each of the civil revision applications. With the
consent of and at the request of learned counsel for the
parties, Rule in each of the civil revision applications is made
returnable forthwith.
4] The challenge in Civil Revision Application No. 176 of
2014 is to the judgment and decree dated 31 st August 2009
made by the Small Causes Court and the judgment and
decree dated 15th November 2013 made by the Division
Bench of the Small Causes Court (Appeal Court), concurrently
ordering the eviction of the applicant from the suit premises,
Dinesh Sherla page 2 of 19
j-CRA-176-175-170-169-14
i.e., an open plot of land ad-measuring about 660 sq. yard at
Ghodbunder Road, Khar (West), Mumbai.
5] The applicant- Hindustan Petroleum Corporation
Limited (HPCL) is the successor in title to Standard Oil
Company, which subsequently became CALTEX (India)
Limited.
6] By Indenture of Lease dated 25th September 1953, the
respondent-landlord, leased the suit premises to the Standard
Vaccum Oil Company for a term of ten years commencing
from 1st May 1953. After expiry of the term, the term of the
lease was not renewed or extended. However, the lessee -
Standard Vaccum Oil Company continued in possession of
the suit premises, possibly, as tenant holding over.
7] The Standard Vaccum Oil Company, subsequently
became CALTEX (India) Limited. The Caltex (Acquisition of
Shares of Caltex Oil Refining (India) Limited and of the
Undertakings in India of Caltex ((India) Limited), Act, 1977
(1977 Act), which was given retrospective effect from 30 th
December 1976 made provisions for vesting of undertaking in
Dinesh Sherla page 3 of 19
j-CRA-176-175-170-169-14
the Central Government and matters connected therewith.
Section 7(3) of 1977 Act inter alia provided that on the expiry
of any term of any lease, tenancy or arrangement referred to
in sub-section (1) or sub-section (2), such lease or tenancy or
arrangement shall, if so desired by the Central Government,
be renewed or continued, so far as may be, on the same terms
and conditions on which the lease or tenancy or arrangement
was originally granted or entered into.
8] Some time in May 1999 the respondents-landlord
instituted R.A.E. Suit No. 50/90 of 1999 against HPCL
seeking their eviction from the suit premises, on the basis that
lease in respect of suit premises had the protection of Bombay
Rent Control Act, 1947. However, the Bombay Rent Control
Act, 1947 was repealed with effect from 31 st March 2000 and
the Maharashtra Rent Control Act, 1999 came into force. For
reasons which are not disputed, the lease in-question, does
not enjoy the protection of Maharashtra Rent Control Act,
1999. Accordingly, the respondent-landlord issued notice
dated 27th May 2004 to HPCL terminating the lease by furnish
of notice. Since, the HPCL failed to hand over the possession
of the suit premises to the respondent-landlord, T.E.& R Suit
Dinesh Sherla page 4 of 19
j-CRA-176-175-170-169-14
No.48/62 of 2004 was instituted seeking eviction of HPCL
from the suit premises on 25th October 2004.
9] HPCL raised several defences, including the defence
that the notice of termination was improper, since, no six
months notice was issued as required under the provisions of
Transfer of Property Act, 1882. The issues were framed in the
suit and evidence was lead by both the parties. Ultimately, the
Trial Court, vide judgment and decree dated 31 st August
2009, decreed the suit and ordered enquiry into mesne profits.
10] HPCL, aggrieved by the impugned judgment and decree
dated 31st August 2009 made by the Trial Court instituted
Appeal No. 240 of 2009 before the Appeal Court. By
judgment and decree dated 15th November 2013, the Appeal
Court has dismissed the appeal. Hence, the present petition.
11] Mr. Godbole, learned counsel for HPCL made the
following submissions in support of its civil revision
applications:
(a) That the lease in present case was granted for
manufacturing purposes and therefore, in terms of
Dinesh Sherla page 5 of 19
j-CRA-176-175-170-169-14
Section 106 of the Transfer of Property Act, the notice
for determination of lease should have been of six
months. Since, in the present case, admittedly, the notice
for determination was less than six months, there is no
valid determination of the lease and the suit as
instituted was required to be dismissed;
(b) In terms of 1977 Act, the lease stood renewed in
perpetuity. This is because the clause providing for
renewal stands incorporated in the lease for the renewed
period. The effect is that the lease of this nature, which
has protection of 1977 Act, continues in perpetuity; and
(c) The term of the initial lease expired on 30 th April
1963. Thereafter, lessee continued as a lessee holding
over, since, admittedly, the lease was never terminated.
In 1963, the lease was protected under the Bombay Rent
Control Act, 1947. Such protection continued right up to
30th March 2000 when, the provision of Bombay Rent
Control Act, 1947 stood repealed and the Maharashtra
Rent Control Act, 1999 entered into force. Until the year
2000, therefore, there was no occasion for the Central
Dinesh Sherla page 6 of 19
j-CRA-176-175-170-169-14
Government, in whom, the undertaking of the lessee
stood vested, to exercise the options of renewal of the
lease for an additional term of ten years. In fact, there
was no necessity for the Central Government to exercise
such option, until 30th March 2000, since the lease, had
the protection of the Bombay Rent Control Act, 1947.
For the first time, the necessity to exercise such option
arose in the year 2004, when, the respondent-landlord,
served notice of termination of lease. In terms of Section
7(3) of 1977 Act, therefore, the lessee was entitled, as a
matter of right to renewal of the lease period for a
further term of ten years commencing from date of
receipt of notice of termination of lease dated 27 th May
2004. This means that the lease stood renewed up to at
least 27th May 2004 by virtue of provisions of Section
7(3) of 1977 Act. Since the right of renewal under
Section 7(3) of 1977 Act is a statutory right, the same,
prevails over any handicap in terms of the actual
covenants in the Deed of Lease dated 25 th September
1953 or for that matter even the provisions of Transfer
of Property Act, 1882. This is because 1977 Act is a
Special Act whereas, the Transfer of Property Act 1882 is
Dinesh Sherla page 7 of 19
j-CRA-176-175-170-169-14
only a general Act. As on date of institution of the suit,
i.e., 25th October 2004, the respondent-landlord, had no
cause of action to institute such suit. Since the impugned
decrees have been made in suits, which were pre-
mature, the same are nullities and therefore, warrant
interference in the exercise of revisional jurisdiction
under Section 115 of the Code of Civil Procedure, 1908
(CPC).
12] Ms Bhide, learned counsel for the applicants in Civil
Revision Application No(s). 169 of 2014 and 170 of 2014,
adopts the aforesaid submissions of Mr. Godbole, in support
of the civil revision applications in which she appears.
13] Mr. Y.V. Sanglikar, learned counsel for the respondents,
submits that there is absolutely no merit in the first and
second contentions raised by Mr. Godbole. He submits that
the two Courts, upon appreciation of the evidence on record
have held that the lease in the present case, was not for some
manufacturing purpose and therefore, there was no
requirement of issuing six months notice. He submits that the
argument that such lease is by virtue of Section 7(3) of 1977
Dinesh Sherla page 8 of 19
j-CRA-176-175-170-169-14
Act continues in perpetuity has been rejected by the Hon'ble
Supreme Court in virtually identical circumstances. He
submits that there is absolutely no merit in such pleas.
14] Mr. Sanglikar further points out that the third
contention now raised by Mr.Godbole was at no stage ever
raised by any of the applicants. Such contention was never
raised in the reply to the notice for termination of lease, in
the written statement, in the memo of appeal to question the
decree dated 31st August 2009 or for that matter in the
present civil revision applications. He submits that the
contention, apart from being untenable, involves mixed
question of law and fact. Therefore, Mr. Sanglikar submits
that the applicants may not be permitted to raise such
contention for the first time in the civil revision applications
that too, without setting out any ground to this effect in the
memo of civil revision applications.
15] Without prejudice, Mr. Sanglikar submits that the
contention now raised is entirely misconceived because, even
upon receipt of notice dated 27th May 2004 for determination
of the lease, HPCL, or the Central Government, chose not to
Dinesh Sherla page 9 of 19
j-CRA-176-175-170-169-14
exercise any option for renewal of the term of lease. This is
because both the Central Government as well as HPCL were
aware, that in law, the opportunity for such exercise of such
option had long expired. Mr. Sanglikar submits that in terms
of 1977 Act, at the highest, the term of the lease, stood
renewed for a further term of ten years with effect from 30 th
December 1976. This means that, at the highest, the term of
the lease stood renewed up to 30th December 1986.
Mr.Sanglikar submits that there are several rulings of the
Hon'ble Supreme Court which clarify the position that the
renewal in terms of Section 7(3) of 1977 Act or analogous
provisions, applies only for one time renewal and not for
renewal in perpetuity. Accordingly, Mr. Sanglikar submits that
the third contention now raised by Mr. Godbole, is entirely
misconceived and warrants summary rejection.
16] The rival contentions now fall for determination.
17] Insofar as the first contention is concerned, the Trial
Court as well as the Appeal Court, upon examining the Deed
of Lease as well as the evidence on record have rightly
concluded that this was not a case of lease of immovable
Dinesh Sherla page 10 of 19
j-CRA-176-175-170-169-14
property for manufacturing purposes. Accordingly, there was
no obligation for issuance of six months notice for valid
determination of lease. There is no error, much less, any
perversity demonstrated in the matter of record of such
concurrent findings of fact by the two Courts.
18] In this case, the Trial Court, upon appreciation of the
evidence on record including, in particular, the evidence on
behalf of defendant No.2, who is said to be a dealer/agent of
HPCL has held that there is absolutely no material on record
to suggest that the suit premises were leased out for
manufacturing purposes. The Trial Court has observed that
defendant No.2 has only deposed that he was carrying on
business of servicing, repairing of motor vehicles and selling
of petroleum products. The witness has nowhere even stated
that the suit premises were being used for manufacturing
purposes, much less is there any statement that the suit
premises were leased out for any manufacturing purposes.
The Appeal Court, has once again, evaluated the evidence and
confirmed this finding of fact. Accordingly, there is no case
made out to disturb such concurrent findings of fact, in the
absence of any perversity. The contention as raised is not
Dinesh Sherla page 11 of 19
j-CRA-176-175-170-169-14
backed either by documentary or oral evidence. Accordingly,
in the exercise of writ jurisdiction under Article 227 of the
Constitution of India, there is absolutely no case made out to
interfere with the impugned orders on the first ground urged.
19] The second contention as regards renewal in perpetuity
is also untenable, in the facts and circumstances of the
present case. In the present case, the contention, as raised,
cannot be sustained either on the perusal of the terms of Deed
of Lease dated 25th September 1953 or on the basis of
provisions of 1977 Act. There is neither any documentary nor
legal evidence to sustain such a contention. Such a
contention, in the facts and circumstances of the present case,
is not sustainable even in law. Accordingly, on the basis of
such a contention, it is not possible to upset, the concurrent
findings recorded by the two Courts.
20] In State of Uttar Pradesh and ors vs. Lalji Tandon
(dead) through Lrs. - (2004) 1 SCC 1, the Supreme Court
has ruled that where a covenant for renewal exists, its
exercise is, of course, a unilateral act of the lessee, and the
consent of the lessor is unnecessary. Where the principal lease
Dinesh Sherla page 12 of 19
j-CRA-176-175-170-169-14
executed between the parties containing a covenant for
renewal, is renewed in accordance with the said covenant,
whether the renewed lease shall also contain similar clause
for renewal would depend on the wordings of the covenant
for renewal contained in the principal lease, the intention of
the parties as reflected therein and is determinable in the
light of the surrounding relevant circumstances. The Supreme
Court whilst approving the principle in Sayed Jaleel Zane vs.
P. Venkata Murlidhar - AIR 1981 AP 328 has held that the
court always leans against a perpetual renewal and hence
where there is a clause for renewal subject to the same terms
and conditions, it would be construed as giving a right to
renewal for the same period as the period of original lease,
but not a right to second or third renewal and so on unless, of
course, the language is clear and unambiguous.
21] In the facts of the present case, in the lease Deed dated
25th September 1953, there was neither any clear clause for
renewal nor is it is the case of lessee that any option for
renewal was exercised in terms of Lease Deed dated 25 th
September 1953. Applying, therefore, the law in Lalji Tandon
(supra), the second contention cannot be accepted.
Dinesh Sherla page 13 of 19
j-CRA-176-175-170-169-14
22] The provisions of 1977 Act were also pressed into
service to claim this was a lease in perpetuity. The contention
is no longer res integra.
23] In series of decisions, the Supreme Court, in the context
of 1977 Act as also Acts, which are pari materia to 1977 Act,
have rejected the contention that the leases in favour of such
undertakings stand renewed in perpetuity by virtue of Section
7(3) of 1977 Act or analogous provisions. Accordingly, there
is no merit in the second contention raised by Mr. Godbole
that lease in the present case, stood renewed in perpetuity.
24] In Hindustan Petroleum Corporation Ltd. and anr.
vs. Dolly Das - (1999) 4 SCC 450, a some what identical
contention was rejected by the Supreme Court in the case of
HPCL itself. The relevant observations in paragraph 12 reads
as follows:
"12. The lease had been granted with effect from 1-10-
1969 in favour of M/s Caltex (India) Ltd. and on the
coming into force of the Act on 23-4-1977 the appellant
had stepped into its shoes and from that day onwards the
appellant has been in possession of the same till now. The
crucial question whether the option for renewal either in
terms of the lease deed or in terms of the Act had been
availed of or not is the controversy between the parties
Dinesh Sherla page 14 of 19
j-CRA-176-175-170-169-14
now. Litigation between the parties has been going on
from 1993 onwards. On the expiry of the term the deed
provides for renewal for two terms of 10 years each on
the same terms and conditions except for enhancement of
rent and execution of fresh deed modifying the clause
relating to renewal. The appellant gave notice of renewal
in terms of the provisions of (i) the deed in the letter
dated 23-5-1979, and (ii) the Act in the letter dated 13-
9-1989. Now it is not necessary to examine the effect of
renewal for the earlier period as even on the appellant's
own showing it is invoking the statute in the latter notice
and not the terms of the deed. If that is so, the appellant
could seek for renewal only in terms of Section 7 of the
Act which enabled it to renew the deed for a period of one
term as originally granted. A covenant for renewal is not
treated as a part of the terms prescribing the period of
lease but only entitles a lessee to obtain a fresh lease.
Renewal of lease could only be for one term and no more,
but nevertheless it could be contended that the covenant
for renewal was also part of the lease and, therefore,
stood incorporated in the renewed lease arising under the
Act. However, in the peculiar facts of this case, we think
that it is not necessary to enter upon the merits of the
controversy regarding the effect of clause 3(g) of the lease
deed or the rights available under the Act for renewal of
the lease period. We are of the opinion that the ends of
justice in this case will be met if we modify the order of
the High Court in the following terms:
(1) The appellant does not have power to claim
exercise of option for any renewal of the lease beyond
30-9-1999;
(2) The appellant seeks for and is granted time to
hand over vacant possession of the premises in
question to the respondent on or before 31-3-2000,
however, subject to filing of the usual undertaking in
this Court within a period of four weeks from today;
(3) Rent payable is as per the terms of the lease
deed, that is, Rs 1920 per month which shall be paid
till the date of handling over the vacant possession;
(4) If any arrears of rent, as stated above, have
not been paid, the same shall be paid within a period
of three months from today; and
Dinesh Sherla page 15 of 19
j-CRA-176-175-170-169-14
(5) The order made by the High Court to the
extent it is inconsistent with our order shall stand set
aside".
25] Insofar as third contention raised by Mr. Godbole is
concerned, Mr. Sanglikar is right in submitting that such a
contention finds no mention, even in the memos of civil
revision applications. The record indicates that such a
contention was never raised in response to the notice for
determination of lease. Such a contention was never raised in
the written statement filed in the suit. Such a contention was
never raised in the memo of appeal to question the Trial
Court's decree dated 31st August 2009 and such a contention
finds no mention even in the memo of civil revision
application. Mr. Godbole is not right in his submission that
this contention raises a pure question of law. At the highest,
the contention raises a mixed question of law and fact.
Therefore, it is impermissible to raise such a contention for
the first time in a civil revision application and that too in the
course of arguments.
26] Be that as it may, in this case, there is absolutely no
material on record to even suggest that the Central
Dinesh Sherla page 16 of 19
j-CRA-176-175-170-169-14
Government or for that matter the HPCL at any stage,
indicated any desire to seek renewal of the lease. In Depot
Superintendent, H.P. Corpn. Ltd. and anr. vs. Kolhapur
Agricultural Market Committee, Kolhapur - (2007) 6 SCC
159, the Hon'ble Supreme Court, in the precise context of the
provisions in Section 7(3) of 1977 Act has held that there is
no automatic renewal and there can be renewal if the Central
Government so desired. Since, there was no material placed
before the Courts below in that regard by the Central
Government, plea of renewal of lease, was entirely
misconceived and therefore, was rightly rejected by the High
Court.
27] There is no merit in the submission of Mr. Godbole that
the occasion for exercise of option of renewal accrued to the
Central Government only in the year 2004, when, the
respondent-landlord, served notice dated 27 th May 2004 to
HPCL determining the lease. The expression "desire to renew"
in Section 7(3) of 1977 Act, is subject matter of judicial
interpretation. In several cases including in Bharat
Dinesh Sherla page 17 of 19
j-CRA-176-175-170-169-14
Petroleum Corporation Ltd. vs. P. Kesavan and anr. -
(2004) 9 SCC 772.
28] The Central Government, at the highest, if it so desired,
could have opted for renewal in 1976, when 1977 Act came
into force, with effect from 1976. Had it opted for such
renewal, the lease, might have stood renewed up to 1986, but
not any further. The purpose for including the expression "if
so desired by the Central Government" in Section 7(3) of 1977
Act, was inter alia to avoid any foisting of lease, either upon
the Central Government or the undertaking which it had
taken over, i.e., HPCL. In the absence of such an expression, it
is possible that some landlord insists that the term of lease
stands renewed on the same terms, even though, the Central
Government or the HPCL, may not be desirous of such
renewal. The expression also indicates that renewal in such
matters is not automatic but subject to expression of desire. In
this case, at no stage, whether in 1977 or for that matter in
2000 was any such option ever exercised or desired, ever
expressed. There is, even otherwise therefore, no merit in the
third contention raised by Mr. Godbole.
29] Since, no other contentions were raised, this civil
revision application is liable to be dismissed and is hereby
dismissed.
30] For the aforesaid reasons, the other three civil revision
applications are also liable to be dismissed and are hereby
dismissed.
Dinesh Sherla page 18 of 19
j-CRA-176-175-170-169-14
31] Rule is accordingly, discharged in each of the civil
revision applications. There shall, however, be no order as to
costs.
32] The interim compensation amount deposited by the
applicants in pursuance of ad-interim/interim orders made by
this Court to be transmitted by the Registry to the Trial Court
where inquiry for determination of mense profit is pending.
The Trial Court, to make appropriate orders as regards such
deposited amount, in terms of the determination of mense
profit.
(M. S. SONAK, J.)
33] At this stage, Ms Neha Bhide, applies for extension of
interim order for a period of twelve weeks, on behalf of the
revision applicant for whom she appears and also on behalf of
HPCL. Subject to furnish of usual undertakings within a
period of four weeks from today and further, subject to
continuance of deposit of interim compensation amount
before the Trial Court, the eviction orders shall not be
executed for a period of eight weeks from today. Copies of
the undertakings to be furnished learned counsel appearing
for the respondent-landlord before the same are actually filed
before the Trial Court.
(M. S. SONAK, J.)
Dinesh Sherla page 19 of 19
