pvr 1 wp2252-95 IN THE HIGH COURT JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2252 OF 1995 Shirin Fakhruddin Jasdanwalla. ...Petitioner vs. 1.Hindustan Petroleum Corporation & Anr. ...Respondents --- Mr.Y.H.Muchhala, Sr.Advocate with Javed Patel and Vaibhav Nagvekar i/b. Sagheer A.Khan, for Petitioner. Mr.Siodia with Ms.Raina Bangutwala i/b. Mr.A.S.Karawande, for Respondent no.1. Mr.D.A.Athavale, for Respondent no.2. --- CORAM: D.K.DESHMUKH & N.D.DESHPANDE,JJ. DATED: 21st October, 2010 P.C.: 1. The facts which are relevant and material for deciding this petition are that a plot of land admeasuring 2982.20 square yards situated at Bombay district was given on lease by the owner pvr 2 wp2252-95 Fidaally M. Ptia to M/s.Standard Vaccum Oil Company which was a company incorporated under the laws of the State of Delaware, United States of America by an agreement dated 30.6.1955 for the term of 20 years from 1.9.1954 to 31.8.1974. Some portions from the land were acquired by the Government and the Corporation for public purpose during the currency of the lease. Ultimately the land admeasuring 2111.76 square yards remained with the lessee. In April,1963 the Standard Vaccum Oil Company was taken over by the Esso Eastern Incorporation and therefore, Esso Eastern Incorporation became lessee of the land and started paying leasement. On 1.2.1974, on behalf of Esso Eastern Inc. a request was made to the lessor for renewal of the lease. Clause 3(c) of the lease deed provides for renewal of the lease on the same terms and conditions for a further term of 20 years. The Parliament enacted Esso (Acquisition of undertaking in India) Act,1974 and that Act came into force on 13.3.1974. The preamble of the Act shows that the purpose of the pvr 3 wp2252-95 Act was to provide for the acquisition and transfer of the right, title and interest of Esso Eastern Inc. in relation to its undertakings in India. In terms of sub-section (1) of Section 5 of the Act the property held by Esso in India under any lease or tenancy stood automatically transferred to the Central Government on the commencement of the Act, and by virtue of sub- section 2 of Section 5 of the Act, the Central Government got right to seek renewal of the lease on the same terms on which the lease was given, on expiry of the lease. Section 7 of the Act permitted the Central Government to transfer the property to a Government Company and Section 7 further provides that all the rights which are vested in the Central Government in relation to such property can be exercised by the Government Company referred to in sub-section (1) of Section 7 of the Act. It is common ground before us that the notification under sub-section (1) of Section 7 of the Act was issued on 14.3.1974 transferring the lease in question in favour of the Respondent pvr 4 wp2252-95 no.1-Company. Thus, on 13.3.1974 the lease stood transferred in favour of the Central Government and on 14.3.1974 that lease stood transferred to the Respondent no.1. The lease was to expire on 30.8.1974. We have already mentioned above that on behalf of Esso a request was made for renewal of the lease by letter dated 1.2.1974. It appears that on behalf of the petitioner-lessor, the request for renewal was accepted which contemplates execution of lease deed between the parties. There is another letter written on 15.7.1974 wherein detail terms on which the lease was to be renewed were mentioned. It was also stated that the stamp duty will be paid by the lessee whereas the expenses will not be incurred by the lessee for execution of lease deed. It is common ground before us that though this correspondence was exchanged, the actual deed for renewal of lease was never executed between the parties. The original lease came to an end on 30.8.1974. No renewal lease deed was executed between the parties. Therefore, by operation of pvr 5 wp2252-95 law viz. Sub-section (2) of Section 5 of the Act the lease stood renewed for a period of 20 years i.e. from 1.9.1974 to 30.8.1994. As the period of lease came to an end on 30.8.1994, the lessor demanded possession of the property and as the possession was not handed over by the lessee, the present petition came to be filed seeking direction to the Respondents to hand over possession of the property. 2. The submission on behalf of the petitioner is that though it was agreed between the parties in the year 1974 that the lease would be renewed, no actual renewal deed was executed between the parties, and therefore, the lease stood statutorily renewed by operation of sub- section (2) of Section 5 of the Act and that statutory renewal of lease came to an end on 30.8.1994, and therefore, the petitioner is entitled to the possession of the property. On behalf of the Respondents, it was stated that though no actual lease deed was executed for pvr 6 wp2252-95 renewal of the lease in the year 1974, there was an agreement between the parties for renewing the lease, and therefore, in terms of clause 3(c) of the lease deed there was renewal of lease for 20 years from 1.9.1974 to 30.8.1994, and therefore, now there is an option available to the Respondent no.1 given by Sub-section (2) of Section 5 of the Act, which the Respondent no.1 has exercised and therefore, the lease now stands renewed for a period of 40 years from 1994. It is further submitted that in any case, the respondent no.1 is a lessee and if it is assumed that the lease came to an end in the year 1974 because the Respondent no.1 continued in possession it became the tenant of the property in view of the provisions of the Bombay Rent Act now though because of the provisions of Maharashtra Rent Act the leasee is not entitled to the protection of the Bombay Rent Act, nevertheless it is tenant of the premises and therefore, this Court should not exercise its extraordinary jurisdiction and direct it to hand pvr 7 wp2252-95 over possession of the property to the petitioner. It is also submitted that in the locality there is need of petrol pump and there would be inconvenience to the public if the direction sought by the petitioner is issued. 3. Now if in the light of these rival submission the record is perused, it becomes clear that there is definitely a renewal clause in the lease deed. That renewal clause reads as under:- 3(c) That the landlord will on the written request of the tenant made 2 calender months before the expiry of the term hereby created and if there shall not at the time of such request be any existing breach or non-observance of any of the covenants on the part of the tenant herein before contained grant to it a lease of the demised premises for the further term of twenty years from the expiration of the said term at the same rent and containing the like pvr 8 wp2252-95 convenants and provisions as are herein contained. Thus, by agreement of parties the lease can be renewed for a period of twenty years. Perusal of the correspondence exchanged between the parties shows that a request pursuant to clause 3(c) is made on behalf of the lessee for renewal of lease and the lessor agreed to grant renewal. The following portion from the letter dated 21.6.1974, in our opinion, is relevant, which reads as under:- The Lease dated 30 th June 1955 has came to an end and we will retain deposit amount of Rs.6,711/- as a deposit amount for the new lease. The new lease which may be executed between you and our client will not be renewed for any further term. ... ... ... ... ... ... ... You have to bear and pay the expenses of the Agreement for Lease to be executed by you and our client. The stamp-duty and registration charges payable in pvr 9 wp2252-95 respect of the Agreement and duplicate thereof shall be borne by you. It is, thus, clear that though the lesser agreed to renew the lease, the renewal was to take place by executing the deed of renewal. It is an admitted position that such a deed of renewal was not ever executed between the parties. Thus, it can be safely said that there was no contractual renewal of the lease. Before the lease would come to an end on 30.8.1974, on 13.3.1974 the above referred Act regarding acquisition of undertaking of Esso Eastern Inc. came into force. Section 5 of that Act is relevant which reads as under:- 5. Central Government to be lessee or tenant under certain circumstances:- (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 pvr 10 wp2252-95 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. Perusal of the above quoted provision makes it clear that on commencement of the Act the property of Esso Eastern Inc. in India stood vested in the Central Government and an option was also given to the Central Government to renew the lease on the same terms and conditions. Thus, the Central Government became the lessee with an option to get lease renewed for a period of 20 pvr 11 wp2252-95 years. Section 7 of the Act is also relevant which reads as under:- 7. Power of Central Government to direct vesting of the undertakings of Esso 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 Esso in relation to any undertaking 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 Esso in relation to the undertakings in pvr 12 wp2252-95 India vest in a Government company under sub-section (1) the Government 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 right 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. By Section 7, the Central Government is permitted to transfer the property which is vested in it because of operation of Section 5, in a Government company and because of operation of pvr 13 wp2252-95 sub-section (3) of Section 7 an option which becomes available to the Central Government under sub-section (2) of Section 5, becomes available to the Government Company. The notification contemplated by sub-section (1) of Section 7 was issued on 14.3.1974 Therefore, from that date the Respondent no.1 became the lessee with the statutory option to renew the lease for 20 years on expiry of the lease. The lease expired on 31.8.1974 and because of operation of sub-section (2) of Section 5 of the Act, the lease stood renewed for a period of 20 years. The submission of the learned Counsel appearing for Respondent no.1 that renewal of the lease from 1974 to 1994 was by an agreement of parties and therefore, now an option of getting renewal conferred by sub- section (2) of Section 5 was still available to the Respondent no.1 in the year 1994 when the lease expired second time on 31.8.1994, is incapable of being accepted simply because for contractual renewal of the lease to occur, execution of actual lease deed was contemplated pvr 14 wp2252-95 and admittedly, there is no lease deed actually executed. In our opinion, therefore, the lease came to an end in the year 1994 and the Respondent no.1 will have no option of getting statutory renewal of the lease and therefore, the Respondent no.1 would be liable to hand over possession of the property to the petitioner. So far as the submission of the learned Counsel appearing for Respondents that we should not issue directions to hand over possession of the property in our extraordinary jurisdiction under Article 226 of the Constitution of India and that we should permit the petitioner to institute a suit for decree of possession is concerned, in our opinion, we cannot relegate the petitioner to the remedy of filing civil suit for the reason that the respondent no.1 is admittedly an instrumentality of the State and therefore, is bound by the guarantee of Article 14 of the Constitution of India. One of the basic requirement of Article 14 and Rule of law guaranteed by it, is that the State and its pvr 15 wp2252-95 instrumentalities have to be reasonable in their conduct towards citizens. In our opinion, therefore, when clearly now the Respondent no.1 has no legal authority to be in possession of the property, it cannot now seek to rely on the delays of law to retain possession of the property. We also do not find that there is any disputed question of facts that is to be decided in the present case. The Supreme Court has time and again laid down that after keeping the petition pending for so many years when there are no disputed questions of facts involved, the petitioner should not be relegated to the alternate remedy. In these circumstances, therefore, in our opinion, we cannot decline the reliefs claimed by the petitioner for that reason also. 4. In the result, therefore, the petition succeeds and is allowed. The Respondent is directed to hand over possession of the premises which are subject matter of this petition to the pvr 16 wp2252-95 petitioner. No order as to costs. We asked the learned Counsel appearing for Respondent whether the Respondent needs time to vacate the premises . The learned Counsel stated that without taking instructions from his client he cannot specify the time which the Respondent may require to hand over the premises. Therefore, though the petition is disposed of today, we grant liberty to the Respondent to mention the matter on 28.10.2010 with notice to the petitioner for that purpose. If such a request is made, it will be considered in accordance with law. (D.K.DESHMUKH,J.) (N.D.DESHPANDE,J.)