Kerala High Court
Deepa Narayan vs Hindustan Petroleum Corporation Ltd on 22 May, 2024
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN
WEDNESDAY, THE 22nd DAY OF MAY 2024 / 1ST JYAISHTA, 1946
OP(C) NO. 1968 OF 2023
AGAINST THE ORDER DATED 04.04.2023 IN I.A NO.1538/2018 IN
CS NO.45 OF 2020 OF SUB COURT, ERNAKULAM
PETITIONERS/ADDL.PLAINTIFFS 2 TO 4
1 DEEPA NARAYAN,AGED 52 YEARS,W/O LATE T.V.NARAYANAN,
D/O. J.L. BHATIA BUSINESS FROM SANKARALAYAM,
THOTTEKKATT ROAD, ERNAKULAM, PIN - 682011 AND ALSO
HAVING ADDRESS AT NO.10 GALAXY APARTMENTS B.J.ROAD,
BANDRA WEST, MUMBAI, PIN - 400050.
2 SUDHA KUMAR,AGED 58 YEARS,D/O LATE T.N.VIJAYARAGHAVAN
AND W/O T.N.KUMAR FROM SANKARALAYAM, THOTTEKKATT ROAD,
ERNAKULAM, PIN - 682011 ALSO HAVING ADDRESS AT 004,
LIBERO APARTMENTS, SEENAPA LAYOUT, R.M.V.LAYOUT 2ND
STAGE, NEW BEL ROAD, BANGALORE, PIN - 560094.
3 ROOPA SRINIVAS,AGED 50 YEARS,D/O LATE
T.N.VIJAYARAGHAVAN AND W/O SRINIVAS CHIDAMBARAM, FROM
SANKARALAYAM, THOTTEKKATT ROAD, ERNAKULAM, PIN - 682011
ALSO HAVING ADDRESS AT S-283, UPPER GROUND FLOOR,
GREATER KAILASH-2, NEW DELHI - 110 048.
BY ADVS.
M.P.RAMNATH
P.B.KRISHNAN
BEPIN PAUL
RESPONDENTS/DEFENDANTS:
1 HINDUSTAN PETROLEUM CORPORATION LTD.,PETROLEUM HOUSE,
NO.17 JAMSHEDJI TATA ROAD, MUMBAI, PIN-400 020, ALSO
HAVING REGIONAL OFFICE AT TATAPURAM P.O. ERNAKULAM,
ERNAKULAM VILLAGE, KANAYANNUR TALUK, PIN - 682014
REPRESENTED BY ITS MANAGING DIRECTOR.
2 THE SENIOR REGIONAL MANAGER,HINDUSTAN PETROLEUM
CORPORATION LTD., TATAPURAM P.O. ERNAKULAM, ERNAKULAM
VILLAGE, KANAYANNUR TALUK, PIN - 682014
OP(C) NO. 1968 OF 2023
-: 2 :-
3 KUNNATHU PARAMBIL SALES AND SERVICES,REPRESENTED BY
K.S.AUGUSTINE & K.S. BENEDICT SERAPHINE, {EXP. LIC
NO: P/ SC/ KL/14/ 1036 ( P-18 2978), OPP.
MAHARAJAS COLLEGE GROUND (NORTH OF KRISHNA HOSPITAL
BUILDING), M.G.ROAD, ERNAKULAM, ERNAKULAM VILLAGE,
KANAYANNUR TALUK, PIN- 682011.
BY ADVS.
GOPIKRISHNAN NAMBIAR M
K.JOHN MATHAI(K/413/1984)
JOSON MANAVALAN(J-526)
KURYAN THOMAS(K/131/2003)
PAULOSE C. ABRAHAM(MAH/58/2006)
RAJA KANNAN(K/356/2008)
THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON
04.04.2024, THE COURT ON 22.05.2024 DELIVERED THE
FOLLOWING:
'C.R.'
C.JAYACHANDRAN, J.
==============================
O.P.(C) No.1968 of 2023
==========================
Dated this the 22nd day of May, 2024
JUDGMENT
Interesting is the issue involved in this Original
Petition under Article 227 of the Constitution,
which stems from rejection of an application for
reference under Section 113, read with Order 46 of
the Code of Civil Procedure. The plaintiffs in the
suit, C.S No.45/2020 (originally instituted as O.S
No.78/2015) of the Sub Court, Ernakulam are the
petitioners herein. The suit was for eviction of
the lessee and for recovery of the property, as
also, for recovery of a sum of Rs.2 Crores towards
rent/damages for use and occupation. The essential
facts are as follows:
2. The plaint schedule property having an extent
of 21.850 cents was originally taken on lease by
the Standard Vaccum Oil Company, a corporation
registered as per laws of the State of Denver of
the United State of America. The lease was for a
period of ten years commencing from 24.06.1960, as
per registered document No.2360/1960 of the S.R.O,
Ernakulam and the rent fixed was Rs.185/- per
month. The successor of the leasehold rights was
the ESSO Standard Eastern Inc. By virtue of ESSO
(Acquisition of Undertakings in India)Act, 1974
(the 'ESSO Act', for short), the first defendant,
Hindustan Petroleum Corporation Limited, became
the lessee of the plaint schedule property.
In an application preferred by the
predecessor-in-interest of the plaintiff under
Section 106 of the Kerala Land Reforms Act, 1960
(the 'KLR Act', for short), the rent was fixed at
Rs.1420.25 per month. However, the Appellate
Authority(Land Reforms, Alappuzha), by its Order
in L.R.A. No. 476 of 1979, modified the Order of
Land Tribunal, only as regards the date from which
enhanced rent is to be paid. Dehors the expiry of
the lease and the extended period, as envisaged in
the ESSO Act, defendants 1 and 2 are continuing in
the plaint schedule property for a meagre rent of
Rs.65/- per month. It is averred in the plaint
that the provisions of the KLR Act is not
applicable to the lease arrangement between the
plaintiffs and the defendants. The plaint also
refers to the reply issued by the defendants to
the lawyer's notice issued by the plaintiffs,
wherein the defendants claim benefit under Section
106 of the KLR Act, to contend that they are not
liable to be evicted from the plaint schedule
premises. It is further contended that, pursuant
to the promulgation of the ESSO Act, the first
defendant opted to enjoy the benefits of renewal
under the same and that statutory renewal of lease
resulted in implied surrender of the rights under
the lease deed bearing No.2360/1960 afore-
referred. The plaintiffs also contended that the
ESSO Act will prevail over Section 106 of the KLR
Act, inasmuch as, the former is a central
enactment, which will override the provisions of
the State enactment, in case of conflict. The
ESSO Act provides only for renewal of lease,
whereas Section 106 of the KLR Act entitles the
tenant to remain in the property without any
threat of dispossession. Under the ESSO Act, the
rent cannot be enhanced, whereas the KLR Act
provides for enhancement. The KLR Act bars lease
of land, whereas the ESSO Act provides for one
renewal. Thus, according to the plaintiffs, the
two statutory schemes are mutually conflicting,
that no harmonious interpretation is possible and
therefore, the KLR Act, especially Section 106
thereof, cannot apply to the premises governed by
the ESSO Act. The specific contention urged in
the plaint is that, Section 106 of the KLR Act is
void by operation of Article 254 of the
Constitution in the light of the provisions of the
ESSO Act.
3. The defendants filed written statement denying
the above claims of the plaintiffs. They
re-iterated their right under Section 106 of the
KLR Act to resist the eviction sought for by the
plaintiffs. It was contended that there was no
implied surrender of the lease and that the first
defendant stepped into the shoes of the original
lessee by virtue of the provisions of the ESSO Act
and is accordingly, entitled to all benefits
conferred on the original lessee. The provisions
of the KLR Act and the ESSO Act are not
contradictory to each other. Inasmuch as all the
factual requirements to claim the benefit of
Section 106 of the KLR Act are satisfied, the
defendants are not liable to be evicted, is the
contention urged.
4. The plaintiffs filed Ext. P3 application (I.A
No.1538/2018) seeking reference under Section 113,
read with Order 46 Rule 1 of the Code of Civil
Procedure, in the context of the following
additional issue nos.5,6 and 7 raised by the Sub
Court:
1) Do the provisions of the ESSO
(Acquisition of undertakings in India)
Act, 1974 prevail over Section 106 of the
Kerala Land Reforms Act, 1963?
2) Do the provisions of the Kerala Land
Reforms Act and specifically Section 106
thereof apply to property governed by the ESSO
Act, 1974?
3) Is Section 106 of the Kerala Land Reforms
Act void by operation of Article 254 of the
Constitution of India by virtue of provisions
of the ESSO Act?
5. It is urged that the above questions of law
arise for consideration in the facts and pleadings
of the case. On such premise, reference is sought
for. As against Ext. P3, Ext. P4 counter
affidavit was filed by defendants 1 and 2, inter
alia contending that there exists no reason/ground
to refer the additional issues for the opinion of
the High Court and that there is no contradiction
between the provisions of the ESSO Act and Section
106 of the KLR Act.
6. By the impugned Ext.P6 order, the learned Sub
Judge refused consideration of Ext.P3 application;
and deferred the same, holding that no
circumstances exist at that stage of the suit to
invoke Section 113, read with Order 46 of the Code
of Civil Procedure. The question of reference was
left open for consideration at the relevant stage,
vide Ext.P6 order. The learned Sub Judge arrived
at such a conclusion on the premise that the first
defendant will be deprived of the protection under
Section 106 of the KLR Act, only if the option
under Section 5(2) of the ESSO Act to renew the
lease has been exercised by the first defendant.
To ascertain the same, evidence, both oral and
documentary, to be let in by the parties are to be
examined. The learned Sub Judge found that in
such circumstances, "Additional Issue No.5 need
not be considered and disposed of as a preliminary
issue at this stage of the suit and it can be
decided after recording of the evidence to be
adduced by the parties."
7. Having heard Adv.P.B.Krishnan on behalf of the
petitioners/plaintiffs and Advocate Sri.Joson
Manavalan, M/s Menon & Pai on behalf of the
respondents, this Court finds that Ext P6 order
impugned in this Original Petition cannot be
sustained for the reasons expatiated hereunder.
1) The question which is sought to be
referred for opinion of the High Court is one
touching the validity of the KLR Act,
especially of the provision contained in
Section 106 thereof, on the strength of the
contention that the said Act/provision is
repugnant to the central enactment, the ESSO
Act, and is, therefore, void to the extent of
such repugnancy. This is not an issue which
is liable to be considered in the light of
evidence adduced by the parties, especially
when additional issue nos. 5, 6 and 7
afore-referred have been raised by the learned
Sub Judge. Therefore, deferring the
application for reference for being considered
at an appropriate stage later, after
permitting the parties to adduce evidence,
does not appear to be a proper and legal
course.
2) It appears that the learned Sub Judge has
misconceived Ext.P3 application as one for
consideration of additional issue No.5 as a
preliminary issue. The scope of Ext.P3 is
completely different, inasmuch as it seeks a
reference under Section 113, read with Order
46 of the Code of Civil Procedure. This Court
is persuaded to observe that the point, which
has been formulated for consideration in
paragraph no.4 of Ext.P6 order, itself is
wrong.
3) Finally, confining the question to
additional issue No.5 alone also does not
appear to be proper, when the three additional
issues, especially the 7th one - which pertains
to the validity of the KLR Act by operation of
Article 254 of the Constitution - have been
framed and taken stock of by the learned Sub
Judge. It would appear that additional issue
No. 7, which deals with the validity of
Section 106 of the KLR Act in the light of the
alleged repugnancy with the provisions of the
ESSO Act, in the context of Article 254 of the
Constitution is a specific question, which
squarely falls within the ambit of the proviso
to Section 113 of the Code of Civil Procedure.
8. In the circumstances, Ext.P6 order cannot be
sustained and the same is hereby set aside.
9. However, the discussion cannot be wound up with
the above findings, since it is incumbent on the
part of this Court to direct the learned Sub Judge
as regards the course to be adopted, once the
matter is remitted for consideration afresh. The
requirements of a reference under Section 113,
read with Order 46 of the Code of Civil Procedure
has been succinctly laid down by a Division Bench
of the Calcutta High Court in Ranadeb Choudhuri v.
Land Acquisition Judge and Others [AIR 1971
Calcutta 368]. The relevant findings are
extracted hereunder:
"Scrutinizing this provision of the
Civil Procedure Code, the following
features should be emphasised. In the
first place, ordinarily this power of
reference belongs to the subordinate court.
Secondly, such power of reference is
discretionary in the sense that in such a
case the court may state a case and refer
the same for the opinion of the High Court.
Thirdly, the subordinate court has to be
satisfied that a case pending before it
involves a question of the validity of any
Act. Fourthly, the subordinate court has
to be satisfied that the determination of
that question of the validity of the Act is
necessary for the disposal of the case.
Fifthly, the subordinate court has to be of
the opinion that such Act is invalid or
inoperative. Sixthly, the subordinate
court has to be of the opinion that such
invalidity or inoperativeness has not been
declared either by the High Court to which
the court is subordinate or by the Supreme
Court. If these conditions are satisfied,
then the subordinate Court's power to refer
is no longer discretionary but mandatory
and the subordinate court shall state a
case setting out its opinion and the
reasons therefor. In this event the
subordinate court will have to express its
opinion whether the Act is invalid or
inoperative. Unless he comes to that
conclusion, the subordinate court is not
bound to make a reference to the High
Court."
10. In A1 Parry Sanny Wares v. Federal Bank
[2006(2) KLT SN 6(C.No.7)], a Division Bench of
this Court held that a doubt under Order 46, Rule
1 is to be entertained by the Court, which
proposition would equally apply to a question as
to the validity of an Act contemplated in the
proviso to Section 113 as well. This Court has
already dealt with the distinction between a
reference under the main part of Section 113 read
with Order 46 Rule 1 of the Code of Civil
Procedure and a reference under the proviso to
Section 113 in Sherly Mathai and Another v.
Susamma Mathai (O.P(C) No.2266/2017).
11. Having referred to the broad parameters of the
scheme of reference under Section 113, read with
Order 46, I would now address the specific issue
raised by the petitioners/plaintiffs in Ext.P3
application, as also, in this Original Petition.
The KLR Act received the assent of the President
on 31.12.1963 and Section 106 thereon came into
force on 01.04.1964. Section 106 was thereafter
amended by Act 35 of 1969. The lease in question
between the predecessor of the plaintiff and the
predecessor of first defendant was executed on
21.08.1960. The ESSO Act was promulgated in the
year 1974 (Act 4 of 1974). The lease agreement
dated 21.08.1960 specifically recite that the
lease is to carry on trade in petrol, petroleum
products etc. The recitals in page no.2 of the
lease deed specifically permit the lessee to
install, erect and maintain inter alia a building
for the purpose of storing, selling or otherwise
carrying on trade in petrol etc. The ESSO Act
provides for acquisition and transfer of right,
title and interest of ESSO Eastern INC in relation
to its undertakings in India, with a view to
ensuring co-ordinated distribution and utilisation
of petroleum products distributed and marketed in
India by ESSO Eastern INC and for matters
connected therewith or incidental thereto.
Section 3 of the ESSO Act contemplates transfer
and vesting in the Central Government all rights,
title and interest of ESSO in relation to its
undertakings in India. Section 4(1) explains the
undertakings referred to in Section 3 to include
all assets, rights, powers, authorities and
privileges and all other rights and interests in,
or arising out of, such property, as also, all
borrowings, liabilities, obligations of the ESSO
in relation to its undertakings in India. Section
4(3) speaks of deeds, bonds, agreements etc. to
which ESSO is a party or which are in favour of
ESSO to operate in full force and effect, against
or in favour of the Central Government, as if the
Central Government had been a party to such bond,
deed, agreement etc. The issue of tenancy is
specifically referred to in Section 5, which is
extracted hereunder.
"5.(1) Where any property is held in India
by Esso 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 Esso
immediately before the appointed day."
12. Now, placing reliance upon the interpretation
of Clause 5(2), it is the contention of the
plaintiffs that defendants 1 and 2 are continuing
in the lease hold premises on the strength of
statutory renewal envisaged in Section 5(2); that
there is an implied surrender of the original
lease of the year 1960 by virtue of such renewal;
that the ESSO Act will prevail over Section 106 of
the KLR Act; that the two statutory schemes are
mutually conflicting, which permits of no
harmonious interpretation; and that Section 106 of
the KLR Act is void by operation of Article 254 of
the Constitution in the light of the provisions of
the ESSO Act. It could thus be seen that
inconsistency/repugnancy is essentially alleged in
the context of Section 5(2) of the ESSO Act, which
according to the plaintiffs contemplates a
mandatory renewal, as is decipherable from the
term employed 'shall'; and upon such renewal, the
original lease, as also, the benefit under Section
106 of the KLR Act cease to exist. Learned counsel
for the petitioners/plaintiffs would contend that
the ESSO Act is traceable to entry 6, read with
entry 42 of List III, the concurrent list, whereas
Section 106 of the KLR Act is traceable to entry 6
of the same list. Since both the enactments spring
from the legislative competence of the State as
well as the Centre envisaged in List III, the
state enactment is void to the extent of the
repugnancy afore-pointed out, is the argument
raised.
13. As already indicated and held in A1 Parry
Sanny Wares (supra), the existence of the question
pertaining to the validity of an Act or a
provision therein is a matter to be satisfied by
the referring court, failing which, there cannot
be any reference under Section 113 of the Code.
Therefore, the first issue to be addressed by the
learned Sub Judge should be as to whether there
exists any repugnancy between Section 106 of the
KLR Act and the provisions of the ESSO Act. While
addressing this issue, special focus and emphasis
has to be made to Section 5(2), as also, to the
interpretation thereof. For a correct exercise of
that function, the purpose of Section 5(2) has to
be borne in mind. Section 5(2) is an enabling
provision in favour of the lessee, enabling
renewal of the lease on the same terms and
conditions on which the lease or tenancy was held
by ESSO immediately before the appointed day, on
the event of expiry of the term of such
lease/tenancy. If it is an enabling provision in
favour of the lessee, what is the true scope of
the expression 'shall'? Whether 'shall' operates
as against the lessor, in the sense that the
discretion/choice of the lessor in the matter of
renewal of lease has been done away with? Or
whether 'shall' operates against the lessee, so as
to make renewal of the lease compulsory, as
contended for by the learned counsel for
the plaintiffs/petitioners? Simultaneous with
considering the above questions, the true scope
and expression of the terms 'if so decided by the
Central Government' as employed in Section 5(2)
also has to be ascertained. Does it mean that the
Central Government, the lessee, which has stepped
into the shoes of the ESSO, is not required to
seek renewal, if the circumstances/privileges
which vest with ESSO does not mandate such a
renewal? To be more precise, if by virtue of
Section 106 of the KLR Act, a right is vested upon
the ESSO to continue in the leased premises
without the threat of dispossession, whether the
lessee is still bound to seek renewal or whether
the lessee can enjoy the benefit of Section 106,
especially when the statute employs the terms 'if
so decided by the Central Government' etc. are
points to ponder to arrive at a correct
conclusion, as to whether there exists any
repugnancy between the Central Act(the ESSO Act)
and the State Act(the KLR Act). As already
indicated, only if such repugnancy exists, the
question of reference arises under Section 113,
read with Section 46 of the Code of Civil
Procedure.
14. Needless to say that the binding precedents on
what amounts to repugnancy between a State Law and
a Central Law, as enunciated by a Constitution
Bench of the Honourable Supreme Court in
1. M. Karuna Nidhi v. Union of India [AIR 1979 SC
898], 2. Rajiv Sarin and Another v. State of
Uttarakhand and others [2011(8) SCC 708], 3. State
of Kerala v. Mar Appraem Kuri Co.Ltd. [2012(2) KLT
639 SC] etc. shall be borne in mind by the learned
Sub Judge, to find out whether the provisions of
the Central Act and the State Act are fully
inconsistent and absolutely irreconcilable.
15. In the light of the above discussion, the
impugned Ext.P6 order is set aside and Ext.P3
application is remitted back to the Sub Court,
Ernakulam for consideration afresh, in the light
of the binding precedents on the point, as also,
the observations contained in this judgment.
The Original Petition is allowed accordingly.
Sd/-
C.JAYACHANDRAN, JUDGE
vdv
APPENDIX OF OP(C) 1968/2023
PETITIONER EXHIBITS
Exhibit P1 TRUE PHOTOCOPY OF THE PLAINT
DT.16.03.2015 IN C.S NO. 45/2020
(EARLIER O.S NO. 78/2015 BEFORE THE
HON'BLE PRINCIPAL SUB COURT ERNAKULAM
Exhibit P2 TRUE PHOTOCOPY OF THE WRITTEN STATEMENT
DT. 05.04.2016 IN O.S NO. 78/2015 NOW
C.S.NO.45/2020 BEFORE THE PRINCIPAL SUB
COURT ERNAKULAM
Exhibit P3 TRUE PHOTOSTAT COPY OF THE APPLICATION
DATED 06.04.2018 FILED AS I.A
NO.1538/2018 IN O.S NO. 78/2015 BEFORE
THE HON'BLE PRINCIPAL SUB COURT
ERNAKULAM
Exhibit P4 TRUE PHOTOSTAT COPY OF THE COUNTER
AFFIDAVIT DT.05.06.2018 FILED BY THE
RESPONDENTS 1 & 2 HEREIN IN I.A NO.
1538/2018 (EXT P3)
Exhibit P5 TRUE PHOTO COPY OF THE JUDGMENT DT
13.03.2023 IN OP(C) NO.573/2023 OF THE
HON'BLE HIGH COURT OF KERALA
Exhibit P 6 TRUE PHOTO COPY OF THE ORDER DT
04.04.2023 IN IA NO.1538/2018 IN C.S
NO.45/2020 OF THE HON'BLE PRINCIPAL SUB
COURT, ERNAKULAM
