Bombay High Court
Modern India Ltd vs Bharat Petroleum Corporation ... on 8 October, 2021
Bench: Ujjal Bhuyan, Madhav J. Jamdar
Digitally signed
by MINAL
MINAL SANDIP
PARAB
SANDIP Date:
PARAB 2021.10.08
14:02:34
+0530
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.1584 OF 2007
WITH
INTERIM APPLICATION (L) NO.9613 OF 2020
Modern India Limited ... Petitioner / Applicant
Vs.
Union of India and others ... Respondents
AND
CIVIL APPELLATE JURISDICTION
INTERIM APPLICATION (ST.) NO.99618 OF 2020
WITH
INTERIM APPLICATION (ST.) NO.99620 OF 2020
IN
CIVIL REVISION APPLICATION NO.148 OF 2011
Modern India Limited ... Applicant
Vs.
Bharat Petroleum Corporation Ltd. and others ... Respondents
Dr. Milind Sathe, Senior Advocate a/w. Mr. Gaurav Shrivastava a/w.
Ms.Nikita Vardhan and Mr. Harsh Shah i/b. M/s. Kanga and Company for
Petitioner / Applicant in W.P.No.1584 of 2007, IAL No.9613 of 2020 as
also for Applicant in IAST Nos.99618 of 2020, 99620 of 2020 and
C.R.A.No.148 of 2011.
Mr. Atul Damle, Senior Advocate a/w. Mr. S. R. Page for Respondent No.3
in W.P.No.1584 of 2007 and Respondent No.1 in C.R.A.No.148 of 2011.
(BPCL)
Mr. Musharaf Shaikh i/b. Mr. Kiran Bhagalia for Respondent-MMRCL in
IAL No.99618 of 2020 and IAL No.99620 of 2020 in C.R.A.No.148 of
2011.
Mr. Ashok R. Varma for Respondent - Union of India.
Ms. Uma Palsuledesai a/w. Mr. Dushyant Kumar, AGP for Respondent-State.
CORAM : UJJAL BHUYAN &
MADHAV J. JAMDAR, JJ.
Reserved on : SEPTEMBER 15, 2021
Pronounced on : OCTOBER 08, 2021
JUDGMENT AND ORDER : (Per Ujjal Bhuyan, J.)
Subject matter of Writ Petition No.1584 of 2007 and Civil
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Revision Application No.148 of 2011 being interrelated, both were heard
together and are being disposed of by this common judgment and order.
1.1. The writ petition and the civil revision application came to be
tagged together after the order dated 16.03.2011 was passed in the civil
revision application.
2. We have heard Dr. Milind Sathe, learned senior counsel for the
petitioner in both the writ petition and the civil revision application;
Mr.Atul Damle, learned senior counsel for respondent No.3 in the writ
petition and respondent No.1 in the civil revision application; and Mr. A.
R. Verma, learned counsel for respondent Nos.1 and 2 in the writ
petition.
3. In Writ Petition No.1584 of 2007, petitioner has prayed for the
following reliefs:-
a. for a declaration that provisions of sections 5 and 7 of the
Burmah Shell (Acquisition of Undertakings in India) Act,
1976 are ultra vires and unconstitutional;
b. to set aside and quash decision of respondent No.3 contained
in letter dated 25.03.2004; and
c. to handover vacant and peaceful possession of the plot of
land admeasuring 1800 square yard being Cadastral Survey
No.1895 of Byculla Division situated at K. Khadye Marg
(formerly Arthur Road), Mahalaxmi, Mumbai.
4. In Civil Revision Application No.148 of 2011, the prayer made is
for setting aside the judgment and order dated 03.12.2010 passed by the
Court of Small Causes at Mumbai in Appeal No.165 of 2007 (Modern
India Limited Vs. Bharat Petroleum Corporation Limited).
5. Relevant facts leading to filing of the two petitions and also post
filing of the two petitions as brought on record may be briefly
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highlighted.
6. Subject matter of both the proceedings is a plot of land owned by
the petitioner Modern India Limited admeasuring 1800 square yards
equivalent to 1505 square meters situated at Mahalaxmi, Mumbai
bearing Cadastral Survey No.1895 of Byculla Division.
6.1. A lease deed was executed between Modern India Limited (earlier
known as 'Modern Mills Limited') and Burmah Shell Oil Storage and
Distributing Company of India Limited (for short 'Burmah Shell'
hereinafter) on 29.10.1969, thereby granting on lease the aforesaid plot
of land (referred to as 'the premises' hereinafter) to Burmah Shell for a
period of 35 years from 01.11.1969 to 31.10.2004. Lease rent was fixed
at Rs.66,000.00 per annum from 01.11.1969 to 31.10.1984;
Rs.72,000.00 per annum from 01.11.1984 to 31.10.1994; and
Rs.80,000.00 per annum from 01.11.1994 to 31.10.2004. In the said
lease deed there was no clause for renewal of lease. In fact as per clause
2(b), at the expiration of the term of lease or a sooner determination, as
the case may be, Burmah Shell shall surrender and deliver to Modern
India Limited the premises.
7. The Burmah Shell (Acquisition of Undertakings in India) Act,
1976 was enacted and came into effect from 24.01.1976. Under the said
Act, the undertaking of Burmah Shell in India came to be vested in the
central government. Section 5 provided for central government to be the
lessor or tenant under certain circumstances. Sub-section (2) thereof
provided that on the expiry of the term of any lease or tenancy, such
lease or tenancy shall if so desired by the central government be
renewed on the same terms and conditions on which the lease or tenancy
was held by Burmah Shell immediately before the appointed day.
7.1. Another relevant provision of the Burmah Shell (Acquisition of
Undertakings in India) Act, 1976 is section 7 empowering the central
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government to direct vesting of the undertakings of Burmah Shell in a
government company. While sub-section (1) provided that the central
government may, if it is satisfied that a government company is willing
to comply or has complied with such terms and conditions as the
government may think fit to impose, direct that the right, title and
interest and the liabilities of Burmah Shell in relation to any of its
undertakings in India shall instead of continuing to vest in the central
government, vest in the government company. As per sub-section (2),
where the right, title and interest and liabilities of Burmah Shell in
relation to its undertakings in India vest in a government company under
sub-section (1), such government company shall on and from the date of
vesting be deemed to have become the owner, tenant or lessee, as the
case may be, in relation to such undertakings; and all the rights and
liabilities of the central government in relation to such undertakings
shall on and from the date of such vesting be deemed to have become
the rights and liabilities of the government company.
7.2. Sub-section (3) made it clear that provisions of sub-section (2) of
section 5 shall apply to a lease or a tenancy which vests in a government
company as they apply to a lease or tenancy vested in the central
government. Reference to the central government therein shall be
construed as reference to the government company.
8. It may be mentioned that Bharat Petroleum Corporation Limited
(for short 'BPCL' hereinafter) is a government company to whom central
government had transferred the assets of Burmah Shell under the
Burmah Shell (Acquisition of Undertakings in India) Act, 1976.
8.1. Thus BPCL became the lessee of the premises.
9. Before expiry of the lease deed dated 29.10.1969, Modern India
Limited wrote a letter to BPCL on 15.06.2002 stating that the lease deed
would expire on 31.10.2004. Therefore, BPCL was requested to inform
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the petitioner whether it would like to renew the lease for further tenure
after expiry of the lease deed and if so, the terms and conditions of
renewal.
10. On 25.03.2004, BPCL addressed a letter to the petitioner stating
that in terms of sections 5 and 7 of the Burmah Shell (Acquisition of
Undertakings in India) Act, 1976, it had a statutory right to renew the
lease for a further period of 35 years with effect from 01.11.2004 on the
same terms and conditions contained in the lease deed. Therefore, it
exercised the right of renewal.
11. Petitioner disputed the claim made by BPCL. In this connection,
notice was issued by the petitioner to BPCL calling upon BPCL to
vacate the premises and to pay mesne profits.
12. Thereafter petitioner filed a suit in the Small Causes Court,
Mumbai on 01.11.2004 seeking a decree of eviction against BPCL and
for mesne profits and damages. Amongst other grounds taken, it was the
case of the petitioner that BPCL had no statutory protection under the
Maharashtra Rent Control Act, 1999. The suit was registered as
T.E.R.Suit No.125/142 of 2004. The suit was contested by BPCL by
filing written statement. Evidence, both oral as well as documentary,
were tendered by both the parties. However, vide the judgment and order
dated 15.01.2007 the suit was dismissed.
13. Aggrieved by the aforesaid dismissal of the suit, petitioner
preferred appeal before the Appellate Bench of the Small Causes Court,
Mumbai which was registered as Appeal No.165 of 2007. In the
meanwhile, petitioner also filed the related writ petition i.e., Writ
Petition No.1584 of 2007 before this court seeking the reliefs as
mentioned above.
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Court Orders
14. In the proceedings held on 14.10.2008 this court observed that in
so far constitutionality of the provisions of the Burmah Shell
(Acquisition of Undertakings in India) Act, 1976 was concerned, the
same stood covered by a judgment of this court in Trade Centre
Developers and Builders Private Limited Vs. Union of India, AIR 1985
Bombay 4. Therefore, the court ordered that the only reliefs which
survived for adjudication were prayer clauses (b) and (c) i.e., challenge
to the letter dated 25.03.2004 and for handing over vacant and peaceful
possession of the premises.
14.1. The writ petition was admitted for hearing vide order dated
09.02.2009 and as an interim measure, it was directed that without
prejudice to the rights of the parties, respondent (BPCL) should pay to
the petitioner the agreed rent due and payable from the year 2004
pending the dispute between the parties. It was made clear that the said
direction was subject to the final decision of the court. It was further
made clear that the right of the petitioner to claim increased lease rent
was also one of the issues under consideration.
Developments subsequent to filing of the writ petition
15. Appellate Bench of Small Causes Court dismissed the appeal filed
by the petitioner vide judgment and order dated 03.12.2010 holding that
BPCL had statutory right for renewal of lease deed for further 35 years
under section 5(2) of the Burmah Shell (Acquisition of Undertakings in
India) Act, 1976. Therefore, petitioner cannot seek eviction of BPCL.
16. Taking exception to the aforesaid judgment and order dated
03.12.2010 of the Appellate Bench of the Small Causes Court affirming
the judgment and order dated 15.01.2007 of the trial court, petitioner
preferred the related civil revision application i.e., Civil Revision
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Application No.148 of 2011.
17. This court by order dated 16.03.2011 admitted the civil revision
application and passed an order that it would be appropriate if the civil
revision application was heard along with the writ petition. That is how
both the writ petition and the civil revision application came to be
tagged together.
18. By the Repealing and Amending Act No.23 of 2016, the Burmah
Shell (Acquisition of Undertakings in India) Act, 1976 was repealed by
the Parliament alongwith other acts.
19. It may be mentioned that Mumbai Metro Rail Corporation
Limited (MMRCL) filed Civil Application No.481 of 2017 seeking
intervention in the civil revision proceedings and also seeking leave of
the court for taking over possession of 518 sq.mtrs. of land from within
the premises to facilitate work of underground Mahalaxmi Station,
payment of compensation etc. Vide order dated 16.10.2019, this court
directed that adequate compensation for temporary possession be
deposited in the court every six months while granting liberty to
MMRCL to determine compensation for permanent acquisition.
20. Interim Application (L) No.99618 of 2020 was filed by the
petitioner in the civil revision application seeking directions against
BPCL to furnish details of compensation received by it from MMRCL
and also seeking direction to BPCL to deposit the compensation received
by it from MMRCL in the High Court so as to enable the petitioner to
withdraw the same, with further direction to MMRCL to pay complete
compensation to the petitioner.
21. Petitioner filed another Interim Application (L) No.99620 of 2020
in the civil revision application seeking a direction to BPCL to vacate
the premises for committing breach of the lease deed.
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22. When Government of India invited expression of interest on
07.03.2020 for strategic disinvestment of BPCL, petitioner filed Interim
Application (L) No.9613 of 2020 in the writ petition seeking a restraint
order against BPCL from selling, transferring, alienating or creating
third party rights in respect of the premises.
23. Though detailed submissions were made by learned counsel for
the parties, it may not be necessary to elaborately deal with the same as
the subject matter of the lis has now come down to a narrow compass.
Nonetheless we may mention that Dr. Sathe, learned senior counsel for
the petitioner strenuously argued that renewal of the lease deed by BPCL
vide letter dated 25.03.2004 was not in accordance with law as no
reasons were furnished and there was no elaboration as to why BPCL
sought renewal of lease deed; Mr. Damle, learned senior counsel for
BPCL on the other hand submits that in so far the writ petition is
concerned, there is no live issue left for adjudication after dismissal of
the appeal of the petitioner by the Appellate Bench of the Small Causes
Court. He submits that in so far the civil revision application is
concerned, there is concurrent finding by two courts below and there is
no good reason as to why such finding should be disturbed.
23.1. Responding to this, Dr. Sathe submits that the lower appellate
court while dismissing the appeal of the petitioner committed grave error
of fact as well as of law which is required to be corrected in the revision
application.
Discussion
24. Submissions made by learned counsel for the parties have
received the due consideration of the court.
25. The Burmah Shell (Acquisition of Undertakings in India) Act,
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1976 (briefly 'the Burmah Shell Act') was enacted to provide for the
acquisition and transfer of the right, title and interest of Burmah Shell
Oil Storage and Distributing Company of India Limited (already referred
to as 'Burmah Shell') in relation to its undertakings in India with a view
to ensuring co-ordinated distribution and utilization of petroleum
products distributed and marketed in India by the said company and for
matters connected therewith or incidental thereto. The preamble says
that Burmah Shell, a foreign company, was carrying on in India the
business of distributing and marketing petroleum products and for that
purpose had established places of business at Bombay and other places
in India. It was further mentioned that it was expedient in the public
interest that the undertakings in India of Burmah Shell should be
acquired in order to ensure that the ownership and control of the
petroleum products distributed and marketed in India by Burmah Shell
were vested in the State and thereby so distributed as best to subserve
the common good.
25.1. Section 2(a) defined the 'appointed day' to mean the date of
commencement of the Burmah Shell Act. As per section 3, on the
appointed day, the right, title and interest of Burmah Shell in relation to
its undertakings in India shall stand transferred to and shall vest in the
central government.
25.2. Section 5 is relevant for the present discourse. The heading is,
central government to be lessee or tenant under certain circumstances.
As per sub-section (1), in respect of any property held by Burmah Shell
in India under any lease or under any right of tenancy, the central
government shall be deemed to have become the lessee or tenant, as the
case may be, in respect of such property on and from the appointed day.
Sub-section (2) says that on expiry of the term of any lease or tenancy
referred to in sub-section (1), such lease or tenancy shall be renewed if
so desired by the central government. Section 5 is quoted hereunder:-
"5. Central Government to be lessee or tenant under
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certain circumstances.- (1) Where any property is held in
India by Burmah Shell 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 as if the lease or
tenancy in relation to such property had been granted to the
Central Government, and thereupon all the rights under such
lease or tenancy shall be deemed to have been transferred to,
and vested in, the Central Government.
(2) On the expiry of the term of any lease or tenancy
referred to in sub-section (1), such lease or tenancy shall, if so
desired by the Central Government, be renewed on the same
terms and conditions on which the lease or tenancy was held
by Burmah Shell immediately before the appointed day."
25.3. From the above, we find that in terms of sub-section (2), on
expiry of the term of any lease or any tenancy which came to be vested
in the central government by virtue of sub-section (1), the same shall be
renewed on the same terms and conditions on which the lease or tenancy
was held by Burmah Shell immediately before the appointed day, if so
desired by the central government.
25.4. Section 7 deals with power of central government to direct vesting
of the undertakings of Burmah Shell in a government company. The said
provision also has relevance in the present proceeding and is, therefore,
extracted hereunder:-
"7. Power of Central Government to direct vesting of the
undertakings of the Burmah Shell in a Government
company.- (1) Notwithstanding anything contained in sections
3, 4 and 5, the Central Government may, if it is satisfied that a
Government company is willing to comply, or has complied,
with such terms and conditions as that Government may think
fit to impose, direct by notification, that the right, title and
interest and the liabilities of Burmah Shell in relation to any of
its undertakings in India shall, instead of continuing to vest in
the Central Government, vest in the Government company
either on the date of the notification or on such earlier or later
date (not being a date earlier than the appointed day) as may be
specified in the notification.
(2) Where the right, title and interest and the liabilities of
Burmah Shell in relation to its undertakings in India vest in a
Government company under sub- section (1), the Government
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company shall, on and from the date of such vesting, be
deemed to have become the owner, tenant or lessee, as the case
may be, in relation to such undertakings, and all the rights and
liabilities of the Central Government in relation to such
undertakings shall, on and from the date of such vesting, be
deemed to have become the rights and liabilities, respectively,
of the Government company.
(3) The provisions of sub- section (2) of section 5 shall
apply to a lease or tenancy, which vests in a Government
company, as they apply to a lease or tenancy vested in the
Central Government, and reference therein to the" Central
Government" shall be construed as a reference to the
Government company."
25.5. Sub-section (1) of section 7 says that the central government may
if it is satisfied that a government company is willing to comply or has
complied with such terms and conditions as the government may think
fit to impose, direct by notification that the right, title and interest and
the liabilities of Burmah Shell in relation to any of its undertakings in
India shall instead of continuing to vest in the central government, vest
in the government company. Sub-section (2) clarifies that upon such
vesting, the right, title and interest and liabilities of Burmah Shell shall
be deemed to have become the right, title and interest and liabilities of
the government company. In terms of sub-section (3), provisions of sub-
section (2) of section 5 shall apply to a lease or tenancy which vests in a
government company as they apply to a lease or tenancy vested in the
central government and any reference to the central government shall be
construed to be a reference to the government company.
26. As already noted in the earlier part of this judgment, BPCL is a
government company to whom the central government had transferred
the assets of Burmah Shell in exercise of powers under section 7 of the
Burmah Shell Act. By virtue of sub-section (3) of section 7, BPCL
stepped into the shoes of the central government in so far the lease deed
dated 29.10.1969 is concerned and became the lessee.
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27. Constitutionality of section 5(2) and section 7(3) of the ESSO
(Acquisition of Undertakings in India) Act, 1974 was questioned before
a Division Bench of this court in Trade Centre Developers and
Builders Private Limited (supra). It may be mentioned that those two
provisions were para materia to the provisions of section 5(2) and
section 7(3) of the Burmah Shell Act. In fact both the enactments in
object and substance were identical. By the said judgment this court held
that the said provisions could not be termed as unconstitutional and
accordingly upheld constitutionality of the said provisions.
28. This court in the order dated 14.10.2008 referred to the above
decision in Trade Centre Developers and Builders Private Limited
(supra) and took the view that out of the three reliefs claimed by the
petitioner, the first one i.e., declaration of sections 5 and 7 of Burmah
Shell Act as ultra vires and unconstitutional stood covered by the said
judgment. Therefore, it was ordered that only the other two questions
remained for consideration.
29. At this stage, we may mention that by the Repealing and
Amending Act, 2016, the whole of the Burmah Shell Act was repealed
along with several other enactments. However, section 4 of the
Repealing Act clarified that despite repealing of the Burmah Shell Act,
the same would not affect the validity, invalidity, effect or consequences
of anything already done or suffered or any right, title, obligation or
liability already acquired, accrued or incurred under the Burmah Shell
Act; nor would it affect any pending proceeding in relation to the
Burmah Shell Act.
30. That being the position, we are not inclined to entertain the
challenge to constitutional validity of section 5(2) and section 7(3) of the
Burmah Shell Act. Prayer No.1 is accordingly rejected.
31. This brings us to prayer Nos.2 and 3 i.e., quashing of letter dated
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25.03.2004 and for a direction to BPCL to handover vacant and peaceful
possession of the premises.
32. From the pleaded facts we find that a lease deed was executed
between the petitioner Modern India Limited and Burmah Shell in
respect of the premises on 29.10.1969. By the lease deed, the premises
were granted on lease to Burmah Shell for a period of 35 years
commencing from 01.11.1969 to 31.10.2004. Lease rent was fixed at
Rs.66,000.00 per annum from 01.11.1969 to 31.10.1984; Rs.72,000.00
per annum from 01.11.1984 to 31.10.1994; and Rs.80,000.00 per annum
from 01.11.1994 to 31.10.2004.
32.1. By virtue of the Burmah Shell Act, Burmah Shell came to be
replaced by BPCL as the lessee.
33. As the term of the lease deed was on the verge of expiry petitioner
wrote to BPCL on 15.06.2002 stating that the lease deed would expire
on 31.10.2004. BPCL was requested to inform the petitioner as to
whether it would like to renew the lease for further tenure and if so on
what terms and conditions. BPCL vide letter dated 25.03.2004 informed
the petitioner that in terms of sections 5 and 7 of the Burmah Shell Act it
had a statutory right to renew the lease for a further period of 35 years
with effect from 01.11.2004 on the same terms and conditions as
contained in the registered lease deed which BPCL was exercising for
getting the renewal for a further period of 35 years with effect from
01.11.2004.
34. Petitioner had objected to the said exercise of extension of lease
by BPCL and in this connection had issued a pleader's notice dated
10.06.2004 to BPCL. BPCL was thereby called upon to vacate the
premises and to handover peaceful possession thereof to the petitioner.
Ultimately, petitioner filed a suit in the Small Causes Court at Mumbai
which was registered as T.E.&R. Suit No.125/142 of 2004. The suit was
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for recovery of possession of the premises and for mesne profits from
the date of filing of the suit till recovery of actual physical possession.
However by the judgment and order dated 15.01.2007, the suit was
dismissed. While dismissing the suit, the trial court held that defendant
No.1 (BPCL) had admittedly issued a letter dated 25.03.2004 exercising
the right to renew the lease on the same terms for a further period of 35
years with effect from 01.11.2004.
34.1. When the petitioner preferred appeal being Appeal No.165 of
2007, the Appellate Bench in the Court of Small Causes at Mumbai
dismissed the appeal vide judgment and order dated 03.12.2010.
Referring to sections 5 and 7 of the Burmah Shell Act, the lower
appellate court held that transfer of property had taken place by
operation of law. Therefore, such transfer of property need not meet the
requirements of the provisions of the Transfer of Property Act, 1882 or
of the Indian Registration Act, 1908. Referring to the letter dated
25.03.2004 of BPCL it was held that the said letter disclosed the
intention of BPCL to renew the lease for a further period of 35 years as
per section 5(2) of the Burmah Shell Act. The same cannot be refused
either by the petitioner or by the court. It is a statutory right given to
BPCL by section 5(2) of the Burmah Shell Act. In this connection, the
lower appellate court further held as follows:-
"12. ... When the defendants claim the renewal of the lease
then, they have got statutory right under special law i.e.,
Burmah Shell Act, then Transfer of Property Act will not come
into operation. As per the case law mentioned above, Transfer
of Property Act is applicable to the transaction or transfer by
acts of parties and not by operation of law. In the present case,
when the plaintiffs once entered into transaction of transfer with
the defendants, then it will be governed by the Burmah Shell
Act and it will prevail over the Transfer of Property Act. In the
present case, the defendants have got the right to renew the said
agreement of tenancy for further 35 years. In the present case,
the plaintiffs cannot claim possession of the suit premises
unless and until expiration of further period which is liable to
be renewed by operation of the law for further 35 years. Thus,
the plaintiffs have got right to claim possession only after
second term i.e., further extended period of 35 years only, and
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not prior to that. After second term of extension there is no any
provision for further extension in the time by statute itself, then,
plaintiffs have got right straightway to issue notice claiming
possession of the suit premises. Till this date plaintiffs are not
permitted to claim the possession and suit of the plaintiffs is
liable to be dismissed."
34.2. Thus from the above, we find that the lower appellate court held
that plaintiffs (petitioner) cannot claim possession of the suit premises
until and unless the expiration of the further period liable to be renewed
by operation of law which is 35 years. Though not necessary and
somewhat unwarranted the lower appellate court went on to hold that the
plaintiffs (petitioner) have got the right to claim possession only after the
second term i.e., after the extended period of 35 years and not prior to
that; after such extension, there is no provision for further extension in
terms of the statute. Therefore, plaintiffs (petitioner) have got right to
straightaway issue notice claiming possession of the suit premises at that
stage; but prior thereto plaintiffs (petitioner) cannot claim possession.
34.3. Upholding the decision of the trial court, the lower appellate court
dismissed the appeal of the petitioner by holding that plaintiffs
(petitioner) are not entitled to get possession of the suit premises from
the defendants (BPCL).
35. The above is a concurrent finding rendered by two courts of law.
In the face of such finding returned by the civil courts, it is not possible
to accede to prayer Nos.2 and 3 raised by the petitioner in the writ
petition i.e., quashing of letter dated 25.03.2004 and for a direction to
BPCL to handover vacant and peaceful possession of the premises to the
petitioner.
36. However, at this stage we may mention that Dr. Sathe, learned
senior counsel for the petitioner laid great emphasis on the expression 'if
so desired by the central government' as appearing in sub-section (2) of
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section 5. To appreciate his submission, we may once again extract sub-
section (2) of section 5. As noticed, under sub-section (1) of section 5
where any property is held in India by Burmah Shell under any lease or
under any right of tenancy, central government shall be deemed to have
become the lessee or the tenant as the case may be in respect of such
property on and from the appointed day. Under sub-section (2), such
lease or tenancy shall be renewed on the same terms and conditions, 'if
so desired by the central government'. Sub-section (2) of section 5 is
extracted once again and reads as under:-
"5. Central Government to be lessee or tenant under
certain circumstances.-
(1) ...
(2) On the expiry of the term of any lease or tenancy
referred to in sub-section (1), such lease or tenancy shall, if so
desired by the Central Government, be renewed on the same
terms and conditions on which the lease or tenancy was held
by Burmah Shell immediately before the appointed day."
36.1. It is his contention that BPCL is a 'state' within the meaning of
Article 12 of the Constitution of India. Therefore, it has to act fairly and
reasonably. The desire of the central government as expressed in sub-
section (2) of section 5 cannot be based on subjective satisfaction; it
must be based on objective criteria. Therefore, reasons must be given by
BPCL which had stepped into the shoes of the central government and
Burmah Shell as to why it desired to renew the lease agreement. In this
connection, reliance has been placed on the decision of the Supreme
Court in BPCL Vs. Maddula Ratnavalli, (2007) 6 SCC 81.
37. We have carefully examined the decision of the Supreme Court in
Maddula Ratnavalli (supra). That was also a case where sub-section
(2) of section 5 of the Burmah Shell Act, more particularly the
expression 'if so desired by the central government' came up for
consideration. Supreme Court held that when the statute uses the words
'if so desired by the central government', such a desire cannot be based
upon a subjective satisfaction. It must be based on objective criteria. It
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was in that context that Supreme Court held that an executive action
must be informed by reason. The 'state' acting whether as a landlord or
as a tenant is required to act bonafide and not arbitrarily when the same
is likely to affect prejudicially the rights of others.
38. Having noticed the above, we may revert back to the letter dated
25.03.2004 issued by BPCL to the petitioner informing the petitioner
about its decision for renewal of the lease for a further period of 35 years
with effect from 01.11.2004. BPCL stated that in terms of sections 5 and
7 of the Burmah Shell Act it had a statutory right to renew the lease for a
further period of 35 years with effect from 01.11.2004 on the same terms
and conditions as contained in the lease deed and, therefore, it exercised
the said right. Though the letter could have been a little more elaborate
but that does not in our view in any manner impeach the decision of
BPCL which was expressed in a clear and unambiguous manner. This
letter was in response to the letter of the petitioner dated 15.06.2002
whereby it wanted to know from BPCL as to whether it would like to
renew the lease after expiry and if so on what terms and conditions. The
response of BPCL as contained in the letter dated 25.03.2004 has to be
read in the context of petitioner's letter dated 15.06.2002.
39. Thus in the light of the above, we do not find any good ground to
interfere with the decision of BPCL as contained in the letter dated
25.03.2004. That apart, in the light of the clear finding of the civil court,
the third prayer cannot also be acceded to.
40. We therefore proceed to the civil revision application but before
that we may take note of the stand taken by BPCL in its reply affidavit to
the writ petition.
40.1. In paragraph 3 of the reply affidavit it is stated that even before
filing of the writ petition BPCL had approached the petitioner for
increase in rental but petitioner did not give a proper response. Though
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during the pendency of the writ petition there had been negotiations
between the parties, however, no conclusion could be reached as the
final terms could not be agreed upon. It is stated that respondent BPCL
had always been fair and reasonable in its dealing with the petitioner and
'is even now willing to negotiate for increase in the rent'.
41. We appreciate the stand taken by BPCL. We may note that in
respect of the lease deed dated 29.10.1969, lease rent was fixed at
Rs.66,000.00 per annum from 01.11.1969 to 31.10.1984; Rs.72,000.00
per annum from 01.11.1984 to 31.10.1994; and Rs.80,000.00 per annum
from 01.11.1994 to 31.10.2004. Therefore, it is evident that there was
not one uniform annual rent throughout the entire tenure of the lease
period of 35 years. There was a slab for the first fifteen years which was
enhanced for the next ten years and further enhanced for the last ten
years. We are of the view that since BPCL had exercised its statutory
right of renewal of the lease agreement on the same terms and
conditions, the periodical rental enhancements in the previous lease
period should also be made applicable to the renewed lease period
keeping in mind various other economic factors. As held by the Supreme
Court in Maddula Ratnavalli (supra), BPCL being a 'state', while
acting as a tenant is required to act in a fair, reasonable and bona fide
manner. We are also fortified in taking the above view by the order dated
09.02.2009 passed by this court in the writ petition. This court while
admitting the writ petition had directed BPCL to pay to the petitioner the
agreed rent due and payable from the year 2004 during pendency of the
writ petition, clarifying that the same would be subject to the final
decision of the writ petition. It was also clarified that right of the
petitioner to claim increased lease rent is also one of the issues under
consideration.
42. In so far the civil revision application is concerned, we have
already extracted the relevant portion of the judgment and order dated
03.12.2010 passed by the lower appellate court. In addition to what we
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had extracted above, we may further extract the following portion from
the judgment and order dated 03.12.2010:-
"9. As per the ratio laid down in the above case law, the crux
is that the transfer of property takes place by operation of law.
The Transfer of Property Act is applicable to the transfer by act
of the parties. A transfer by operation of law is not validated or
invalidated by anything contained in the Act. The transfer takes
place by operation of law, therefore, need not meet the
requirements of the provisions of the Transfer of Property Act or
Indian Registration Act.
10. So far as the above case law is concerned, after issuing
notice by the Plaintiffs the defendants received a letter
disclosing the desire of defendants to renew the said agreement
of lease for further 35 years with effect from 1.11.2004 by letter
dated 25.3.2004 vide Exh.14. The said letter clearly shows the
intention of the defendant to renew the contract of lease for
further 35 years as per Section 5(2) of Burmah Shell Act. The
lease deed is also filed on record. It also gives right to the
defendants to renew the same. As per para 7 of the lease deed,
the lease is renewable at the desire of the lessee. In this case,
when there is a written demand of renewal, it gives statutory
rights to the defendants to renew the lease deed for further 35
years as per section 5(2) of Burmah Shell Act. In this case, it is
an admitted position that by written letter mentioned above, the
defendant has put their desire to renew the said lease for further
35 years. It will clearly show that the defendants wanted to
renew the same terms and conditions and it cannot be refused
either by the plaintiffs or by this Court. It is a statutory right
given to the defendants by section 5(2) of the said Act.
11. When we hold that the defendants have right to get the
lease deed renewed as of a statutory right, then the Transfer of
Property Act and MRC Act has no application and the
appellants/plaintiffs have no right to deny the same. The
plaintiffs cannot avail the relief of eviction of the suit premises
on the grounds mentioned by him in the plaint, because there is
non-obstante clause in section 11 of the Burmah Shell Act.
Section 11 speaks like this,
"The provisions of this Act shall have effect
notwithstanding anything inconsistent therewith
contained in any other law for the time being in force
or in any instrument having effect by virtue of any law
other than this Act or in any decree or order of any
Court, tribunal or other authority."
As per section 11, any other law for time being in force or in
any instrument having effect by virtue of law other than the
Burmah Shell Act or in any decree or order of any Court,
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Tribunal or other authority. This Act will make effect on the
order. As per this non-obstante clause the other Acts like
Transfer of Property Act, MRC Act become ineffective and
plaintiffs will not get any right to evict the defendants."
43. Not only there is a concurrent finding by the two lower courts
below, we are also of the view that the findings reached are in
accordance with law and do not in any manner contravene any legal
provision. It is not a case of the courts below exercising jurisdiction not
vested by law or had failed to exercise the jurisdiction so vested or
having acted in the exercise of the jurisdiction illegally or with material
irregularity. We, therefore, do not find it to be a fit case for interference
in exercise of our revisional jurisdiction.
Interim Applications
44. However, following our discussion made in paragraph 41 above,
we may briefly refer to the various interim applications filed in the writ
petition as well as in the civil revision application.
45. Civil Application No.481 of 2017 was filed by Mumbai Metro
Rail Corporation Limited for intervention in the civil revision
application. It stated that for construction of the underground Mahalaxmi
Station it required about 518 sq.mtrs. of land which was part of the suit
land covered by the civil revision application. It was stated that 518
square meters of the land was required for temporary possession for
facilitating the work out of which an area of 316 sq.mtrs. was required
for permanent underground rights for Mahalaxmi Station. This court
vide order dated 16.10.2019 permitted the applicant / intervenor -
Mumbai Metro Rail Corporation Limited to deposit in court to the
account of the civil revision applicant an appropriate sum to be decided
by the compensation committee appointed by the applicant / intervenor
every six months as advance six monthly payment towards
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compensation for temporary possession of 518 sq.mtrs. of the land till
completion of underground Mahalaxmi Station with liberty to the
applicant / intervenor for determining the amount of compensation for
permanent underground rights in respect of 316 sq.mtrs. of land. The
civil application was accordingly disposed of. Order dated 16.10.2019 is
extracted hereunder:-
". This civil application has been taken out by the
Applicant, who intervenes in the matter. The Applicant is
Mumbai Metro Rail Corporation. Its case is that for
construction of underground Mahalaxmi Station, it requires
about 518 sq. mtrs. of suit land, which is the subject matter of
the present civil revision application, for temporary possession
for facilitating the work, out of which an area of 316 sq. mtrs.
is required for permanent underground rights for Mahalaxmi
Station. Total area of 518 sq. mtrs. required by it has been
shown delineated in a map annexed to the civil application. So
also is delineated on the map the area of 316 sq. mtrs. required
for underground permanent construction. The area of 518 sq.
mtrs. is said to be admittedly in occupation of the Respondent -
Bharat Petroleum Corporation Limited, who were defendants
in the revision applicant's suit for eviction, which has since
been dismissed by the trial court, and the decree of the trial
court has since been affirmed by the appeal court. The present
CRA has been filed from these decrees. It is submitted that 518
sq. mtrs. land has been already taken possession of by the
Applicant/intervenor and, to that extent, prayer clause (a) of the
civil application has been rendered practically infructuous.
Learned Counsel for the Respondent/original applicant accepts
that possession has been taken over by the Applicant /
Intervenor. The question now is only of deposit of
compensation, for which the Applicant/Intervenor has made a
specific prayer in prayer clause (b) of its civil application.
Since possession has already been taken over by the Applicant/
Intervenor, there is no difficulty in allowing this prayer.
Accordingly, the Applicant/Intervener is permitted to deposit in
Court to the account of the CRA herein an appropriate sum as
may be decided by the compensation committee appointed by
the Applicant/Intervenor every six months as advance six
monthly payment towards compensation for temporary
possession of 518 sq.mtrs. land till completion of underground
Mahalaxmi Station and allied construction with liberty to the
Applicant/Intervenor for determining the amount of
compensation for permanent underground rights in respect of
316 sq.ft. suit land at such rate as may be decided by the
compensation committee appointed by the Applicant/Intervenor
for determining compensation for permanent underground
rights. The civil application is disposed of accordingly."
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46. While on the civil revision application we find that petitioner has
filed Interim Application (L) No.99618 of 2020 in the civil revision
application. Prayer made in the said interim application is for a direction
- (i) to BPCL to provide the details of compensation received from
Mumbai Metro Rail Corporation Limited; (ii) to grant leave to the
petitioner to withdraw the amounts deposited by BPCL in court; and (iii)
to direct Mumbai Metro Rail Corporation Limited to pay compensation
in respect of the land to the petitioner.
46.1. No effective order has been passed in this interim application.
Rather, vide order dated 13.07.2021 this court directed that the interim
application would be heard along with the writ petition and the civil
revision application.
47. Petitioner has filed another interim application being Interim
Application (L) No.99620 of 2020 in the civil revision application.
Prayer made in this interim application is for a declaration that BPCL
had committed a breach of the terms of the lease deed dated 29.10.1969
and, therefore, the said lease deed as renewed stood terminated.
Consequential prayer made is that BPCL be directed to be evicted from
the premises.
47.1. Here also no effective order was passed by this court save and
except the order dated 13.07.2021 directing hearing of the interim
application along with the related writ petition and civil revision
application.
48. That brings us to the last interim application which is Interim
Application (L) No.9613 of 2020 filed by the petitioner in the writ
petition. The said interim application came to be filed when petitioner
came to know from an expression of interest floated by the central
government on 07.03.2020 that central government was planning to
sell / transfer / alienate its ownership / shareholding / stake in the BPCL.
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It was in that context that prayer was made to maintain status-quo in
respect of the premises till disposal of the writ petition.
49. This interim application, in our view, is misconceived as the
matter relates to disinvestment by the central government in BPCL
which is a policy matter. Unless the same is put to challenge in an
appropriate proceeding, the same cannot be gone into collaterally. That
apart, we are of the view that disinvestment or restructuring of BPCL
may not have any impact on the ownership of the premises. In such
circumstances, no order in this interim application is called for.
50. In so far Interim Application (L) No.99618 of 2020 is
concerned, petitioner continues to remain the owner of the premises. As
the owner, petitioner entered into the lease deed dated 29.10.1969 as the
lessor. This status continues till date and remains intact. When
possession of a portion of the premises is taken over by the Mumbai
Metro Rail Corporation Limited, petitioner's right to receive
compensation cannot be denied. Therefore, this court in the order dated
16.10.2019 passed in Civil Application No.481 of 2017 permitted
Mumbai Metro Rail Corporation Limited to deposit in court to the
account of the civil revision applicant (petitioner) an appropriate sum
as may be decided by the compensation committee of Mumbai Metro
Rail Corporation Limited every six months as advance six monthly
payment towards compensation for temporary possession of 518 sq.
mtrs. of the land till completion of the underground Mahalaxmi Station
and allied construction. Further liberty was granted to Mumbai Metro
Rail Corporation Limited to determine the amount of compensation for
permanent underground rights in respect of 316 sq.ft. of the land at
such rate as may be decided by the compensation committee. Therefore,
in the light of such direction of this court, petitioner would be entitled to
receive the compensation for temporary possession deposited in court
by the Mumbai Metro Rail Corporation Limited as well as the
compensation for permanent underground rights directly from the
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Mumbai Metro Rail Corporation Limited.
51. However, as regards Interim Application (L) No.99260 of 2020 is
concerned, we are of the view that the said application is misconceived.
No such declaration as sought for by the petitioner that BPCL had
breached terms of the lease deed dated 29.10.1969 and therefore the
said lease deed as renewed stood terminated, can be made by the writ
court or by the revisional court at the first instance. Similarly, the
consequential prayer made that BPCL be evicted from the premises
cannot also be acceded to.
52. Therefore, having regard to our discussions made above, we may
summarize our conclusions in the following manner:-
1. Challenge to constitutional validity of section 5(2) and section
7(3) of the Burmah Shell (Acquisition of Undertakings in
India) Act, 1976 is rejected. Further, we decline to interfere
with the decision of BPCL as contained in the letter dated
25.03.2004 and for handing over of possession of the
premises;
2. We also decline to interfere with the judgment and order dated
03.12.2010 of the lower appellate court affirming the
judgment and order dated 15.01.2007 passed by the trial court
in exercise of our revisional jurisdiction;
3. Petitioner would be entitled to withdraw the compensation
amount deposited in court by Mumbai Metro Rail
Corporation Limited pursuant to order of this court dated
16.10.2019 passed in Civil Application No.481 of 2017, along
with accrued interest;
4. BPCL shall handover whatever compensation it has received
from Mumbai Metro Rail Corporation Limited in connection
with temporary possession of 518 sq.mtrs. of land including
compensation for permanent underground rights in respect of
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316 sq.mtrs. of land to the petitioner;
5. Any compensation or further compensation payable as per
conclusion No.4 above shall henceforth be paid by Mumbai
Metro Rail Corporation Limited directly to the petitioner; and,
6. BPCL shall enhance the rent for the renewed lease period in
the manner the lease rental was enhanced periodically in
terms of the lease deed dated 29.10.1969. BPCL shall hold
discussions in this regard with the petitioner whereafter
appropriate decision shall be taken for payment of enhanced
rent periodically including arrear payment. This exercise shall
be completed within a period of six weeks from the date of
receipt of a copy of this judgment.
53. Accordingly both the writ petition and the civil revision
application are disposed of in the above terms. All civil and interim
applications are also disposed of. However, there shall be no order as to
costs.
(MADHAV J. JAMDAR, J.) (UJJAL BHUYAN, J.)
Minal Parab
