1 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 13-06-2011 CORAM: THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN A.No.7080 of 2010 in C.S.No.121 of 1998 1.M/s.Bharat Petroleum Corporation Ltd., Bharat Bhavan, 4 & 6, Currimboy Road, P.B.No.688, Ballard Estate, Mumbai-400 001 Represented by its Chairman and Managing Director 2.The General Manager, M/s.Bharat Petroleum Corporation Ltd., 1, Ranganathan Gardens, Off. 11th Main Road, Anna Nagar, Chennai-600 040. 3.The Chief Divisional Manager, M/s.Bharat Petroleum Corporation Ltd., 1, Ranganathan Gardens, Off. 11th Main Road, Anna Nagar, Chennai-600 040. .. Applicants/Defendants vs. 1.H.A.Mohd. Alumuddin 2.Mrs.Rasheeda Begum @ Rasheeda Alumuddin 3.Mr.Rajiv Sampat 4.Mrs.Jutika R.Sampat 5.Mrs.B.J.Sampat 6.Mrs.Nila B.Sampat 7.Mr.Punit Sampat 8.Mrs.Sweta P.Sampat 9.Mr.Hamir B.Sampat 10.Mrs.Jidnyasa Hamir Sampat .. Respondents/Plaintiffs 11.T.K.Koshi, Formerly General Manager, Bharat Petroleum Corporation Ltd. .. Respondent/4th Defendant For Applicants : Mr.O.R.Santhana Krishnan For Respondents: Mr.Satish Parasaran 2 O R D E R This is an application filed by the defendants under Order VII, Rule 11, CPC, seeking rejection of plaint. 2. Heard Mr.O.R.Santhana Krishnan, learned counsel for the applicants/defendants and Mr.Satish Parasaran, learned counsel for the respondents/plaintiffs. 3. The property described in Schedule I of the plaint originally belonged to one T.Ramachandra and M/s.T.Namberumal Chetty & Sons. The said property comprised in land of an extent of 11,897 sq.ft. The original owners had given the said property on lease to a company by name M/s. Burmah Shell Oil Storage & Distributing Co. (India) Ltd. The lease was for a period of 20 years with effect from 01.6.1969 under a lease deed dated 15.9.1969. The purpose of the lease was to enable the lessee to sell, deal or otherwise store or handle for distribution, petroleum or any of its products. The lease rent was fixed at Rs.500/- per month for the first ten years and Rs.750/- per month for the next ten years. The lease was to expire on 31.5.1989. 4. During the subsistence of the above lease, the respondents/ plaintiffs purchased the said property from the original owners under a registered sale deed dated 29.7.1981. After the purchase, the respondents/ plaintiffs started requesting the applicants/ defendants to surrender the property. It appears that the applicants/defendants insisted that unless they get a suitable alternative site for carrying on their commercial activities, they would not be able to comply with the request of the plaintiffs. 5. In the meantime, the Madras Metropolitan Development Authority, 3 (for brevity "MMDA"), appears to have offered vacant sites to the defendants at Manali, Koyambedu and Madhavaram, for setting up their distribution outlet. In response to a letter dated 16.7.1987 issued by the MMDA, the third defendant is learnt to have sent a reply dated 21.7.1987 evincing an interest in establishing retail outlets in the places indicated in the letter of offer of MMDA. But, the defendants were also in need of a site in Koyambedu for rehabilitating one of their dealers in Chennai. 6. While the attempts to locate an alternative site were in progress, the defendants also wanted a fresh deed of lease to be executed by the plaintiffs, in view of the fact that the first lease was to expire on 31.5.1989. Since the plaintiffs did not execute a fresh lease deed, the defendants filed a suit in O.S.No.35 of 1991 on the file of the City Civil Court, Chennai. Pending suit, the defendants moved an application in I.A.No.7 of 1991 and obtained an interim order of injunction restraining the plaintiffs from disturbing their possession. 7. In the year 1993, the defendants were allotted a land of an extent of 1908.5 sq. metres. by MMDA in Sathangadu, at a cost of Rs.1,250/- per sq. metre. The defendants made an offer to vacate the suit schedule property if the plaintiffs purchased the property offered by MMDA and leased it out to them. Accepting the said offer, the plaintiffs entered into a lease cum sale agreement with MMDA in May 1993 and paid an advance of Rs.6,96,875/- to MMDA. They also made further payments to MMDA, of Rs.6,14,334/-, Rs.6,47,508/- and Rs.6,14,334/-, in all, totalling to Rs.25,73,051/-. The plaintiffs also took possession of the land from MMDA and handed over the same to the defendants in 1994. 8. After taking possession of the alternative site, the 4 applicants/defendants also demanded cash compensation from the respondents/plaintiffs for an alleged loss suffered by them, for surrendering an extent of Rs.7,700 sq.ft. out of the total area of 11,897 sq.ft. Since the plaintiffs were pushed to a tight corner by purchasing another property and leasing it out to the defendants, in the hope of evicting them from the suit schedule property, the plaintiffs signed a letter dated 08.02.1995 agreeing to pay Rs.30.00 lacs to the defendants for the alleged loss suffered by them. Consequently, the defendants surrendered possession of an extent of 7,377 sq.ft. to the plaintiffs on 12.02.1997 and retained the remaining extent of 4,520 sq.ft. Thereafter, there was exchange of notices between the plaintiffs and the defendants. Since both parties stuck to their demands, the plaintiffs came up with the above suit praying for the following reliefs: (a)directing the defendants to hand over vacant possession of the Schedule II property, admeasuring 4520 sq.ft. (approx.) which forms part of the property situate at New Municipal Door No.403.L and Old No.34/I-DL, Pantheon Road, Egmore, Madras, more fully described in Schedule I; (b)directing the defendants to execute a deed reconveying the Schedule III property in favour of the plaintiffs; (c)consequently directing the defendants to enter into a fresh lease deed with the plaintiffs in respect of Schedule III property with effect from taking over possession of the said property; or alternative to prayers (b) and (c), directing the defendants to repay Rs.25,73,051/- paid by the plaintiffs towards the purchase of the Schedule III property in the defendant's name with interest at the rate of 24% per annum with effect from 28.2.1997 till the institution of the suit and subsequently till the date of realisation; (d) directing the defendants to return/refund to the 5 plaintiffs a sum of Rs.1,26,949/- (Rs.4,26,949/- less Rs.3,00,000/-) being the excess amount wrongfully collected by the defendants towards compensation for vacating and handing over 7,377 sq.ft. from and out of the Schedule I property; (e) directing the defendants to pay a sum of Rs.4,52,000/- towards past mesne profits from the use and occupation of the Schedule II property from 12.2.1997 to 11.1.1998 at the rate of Rs.10/- per sq.ft.; (f) directing the defendants to pay Rs.45,200/- per mensem or such other sum, as may be determined by this Court towards future mesne profits from the use and occupation of the Schedule II property; (g) directing the defendants to pay a sum of Rs.35,500/- towards past mesne profits from the use and occupation of the Schedule III property from 1.2.1995 to 15.1.1998; (h) directing the defendants to pay Rs.1,000/- per mensem or such sum, as may be determined by this Court towards future mesne profits from the use and occupation of the Schedule III property; and (i) directing the defendants to pay to the plaintiffs the cost of the suit. 9.The suit was instituted in February 1998 and the defendants filed their written statement in July 1999. Issues were framed in December 2007 and thereafter, the suit was posted for recording of evidence before the learned Master. Since the case was getting postponed from time to time before the learned Master, the suit was listed before Court on 29.3.2010. On the said date, PW1 was examined in chief. However, the cross examination was deferred in view of the representation made by the applicants/ defendants that a Special Leave Petition, arising out of the dismissal of their application under Section 9 of the Madras City Tenants Protection Act, was pending before the Supreme Court. 6 10. Subsequently, the applicants/defendants came up with an application in A.No.6204 of 2010 seeking leave to file an additional written statement. That application was allowed on 22.11.2010. In the meantime, the defendants have taken out the above application for rejection of plaint, at a stage when the trial has already commenced and the applicants are obliged to cross examine PW1. 11. The defendants 1 to 3 seek rejection of plaint on the simple ground that by virtue of the statutory provisions of Central Act No.2 of 1976, the period of lease that the defendants originally had, got automatically renewed upto 31.5.2009 and that therefore, there was no cause of action for the plaintiffs to file the above suit in 1998. In brief, the claim of the defendants 1 to 3 is that by virtue of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976, the right, title, interest and liabilities of Burmah Shell Oil Storage & Distributing Co. (India) Ltd. stood transferred to and vested in the Central Government on 24.01.1976. On the same date, the Government of India issued a notification under Section 7 of the said Act, in the Gazette of India, directing the right, title and interest of the said company in relation to its undertakings in India to vest in Burmah Shell Refineries Limited, which was a Government company. The name of the said company got subsequently changed to Bharat Refineries Limited, in terms of Section 23 of the Companies Act, 1956. A further change of name was effected on 01.8.1977, changing the name of the company to Bharat Petroleum Corporation Limited. The original lease was for a period of twenty years from 01.6.1969 to 31.5.1989. Even before the expiry of the period of lease, the defendant Corporation exercised the right of option for renewal by a letter dated 29.3.1989, invoking Sections 5 and 7(3) of the Burmah Shell 7 (Acquisition of Undertakings in India) Act, 1976. According to the defendants, the lease automatically stood renewed upto 31.5.2009, in view of the decision of the Apex Court in Bharat Petroleum Corporation Ltd. v. P.Kesavan [(2004) 9 SCC 772] and Hindustan Petroleum Corp. Ltd. v. C.S.Narendran [C.A.No.1001 of 2010 dated 29.01.2010]. Therefore, it is their contention that on the date on which the suit was instituted in 1998, the defendants have already had the benefit of statutory renewal of lease upto 31.5.2009 and that therefore, there was no cause of action for the plaintiffs to seek the reliefs prayed for in the suit. 12. Mr.O.R.Santhana Krishnan, learned counsel appearing for the applicants/ defendants invited my attention to the preamble and relevant provisions of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 and the following decisions of the Apex Court: (a) ITC Limited v. Debts Recovery Appellate Tribunal [(1998) 2 SCC 70]; (b) Saleem Bhai v. State of Maharashtra [(2003) 1 SCC 557]; (c) Bharat Petroleum Corporation Ltd. v. P.Kesavan [(2004) 9 SCC 772]; (d) Srinivasa Murthy, N.V. v. Mariyamma (Dead) by Proposed LRs. [2005 (3) CTC 545]; (e) Vithalbhai (P) Ltd. v. Union Bank of India [(2005) 4 SCC 315]; (f) M.Gnanasambandam v. M.Raja Appar [2009 (2) CTC 819]; --- (g) Vishnu Dutt Sharma v. Daya Sapra [(2009) 13 SCC 729]; and (h) Hindustan Petroleum Corp. Ltd. v. C.S.Narendran [C.A.No.1001 of 2010 dated 29.01.2010]. 13. The Burmah Shell (Acquisition of Undertakings in India) Act, 1976, was enacted with a view to provide for the acquisition and transfer of the right, title and interest of the Burmah Shell Oil Storage and Distributing 8 Company of India Limited, for the purpose of ensuring co-ordinated distribution and utilisation of petroleum products. The preamble to the Act mentions that the acquisition was made in public interest so as to ensure that the ownership and control of the petroleum products are vested in the State and are so distributed as best to subserve the common good. Under Section 5(1) of the Act, a deeming fiction was introduced to make the Central Government become the lessee or tenant in respect of any property held in India by Burmah Shell under any lease or under any right of tenancy. Subsection (2) of Section 5 stipulated that on the expiry of the term of any lease or tenancy, the same shall, if so desired by the Central Government, be renewed on the same terms and conditions on which it was held by Burmah Shell immediately before the appointed date. Under Section 7(1), the Central Government was vested with the power to direct that the right, title and interest and the liabilities of Burmah Shell in relation to any of its undertakings in India shall vest in any Government company, instead of continuing to vest in the Central Government. Subsection (3) of Section 7 makes it clear that the deeming fiction applicable to Central Government under Section 5(2) shall also apply to a lease or tenancy which vests in a Government company. 14. Therefore, there is no dispute about the fact that the Bharat Petroleum Corporation Ltd., which is the defendant herein, is a company on whom the right, title and interest of the erstwhile Burmah Shell Oil Storage and Distributing Company of India Ltd. had vested, in terms of a notification issued by the Central Government under Section 7(1). Consequently, the defendant had become entitled to the benefit of the deeming provision available under Section 5(2), by virtue of Section 7(3). The interpretation to 9 Sections 5(2) and 7(3) fell for the consideration of the Supreme Court in Bharat Petroleum Corporation Ltd. v. P.Kesavan [(2004) 9 SCC 772]. In the case decided by the Apex Court, the Burmah Shell became a tenant under a deed of lease dated 22.11.1967. Before the expiry of the period of twenty years, the lessor issued a notice dated 04.02.1987 requiring the Corporation to quit and deliver vacant possession. But, the Corporation invoked Sections 5(2) and 7(3) and expressed their intention to continue for another twenty years with effect from 01.7.1987. Therefore, the lessor filed a suit on the file of the District Munsif Court and the same was decreed on the ground that though in terms of Section 5 of the said enactment the lease may be renewed, the lessor had not executed a fresh lease deed in terms of Section 107 of the Transfer of Property Act. The decision was confirmed by the District Court and this Court and the unsuccessful defendant (Bharat Petroleum Corporation) went on appeal to the Supreme Court. 15. The Supreme Court addressed itself to two questions, viz., (i) the applicability of the provisions of the Transfer of Property Act; and (ii) the interpretation to be given to Sections 5(2) and 7(3). On the first issue, the Supreme Court held that Central Act No.2 of 1976 was a special enactment and that therefore, the provisions thereof would override the provisions of the Transfer of Property Act, especially in view of Section 11, which contains a non obstante clause. On the second question, the Supreme Court held in paragraph 19 as follows: "Section 5(2) and Section 7(3) of the Act are required to be given their purposive meaning, having regard to the object and purport the statute seeks to achieve. The Central Government by reason of the provisions of the said Act acquired running business 10 undertakings dealing in distribution and marketing of petroleum products. The leases or tenancy for outlets are therefore, continued to be kept with the Central Government or the government company, as the case may be, so that no let or hindrance is placed in the matter of distribution of the products from established retail outlets, unless alternate arrangements are made. Having regard to the object of the Act, as noticed hereinbefore, it is difficult to agree with the submission of the learned counsel for the respondents to the effect that the expression of mere desire by the Central Government or the appellant was not enough and they were required to show something more, as for example, existence of need for renewal of the lease. The Central Government or the government company is a State within the meaning of Article 12 of the Constitution of India. They are required to act fairly. It is not the case of the respondents herein that desire to get the lease renewed was actuated by any malice or ill will or the same was otherwise unfair and unreasonable. In that view of the matter, it is difficult to construe Section 5(2) of the Act as not laying down a law not contemplating automatic renewal of the lease." 16. The above view was followed by the Supreme Court in an unreported decision in Hindustan Petroleum Corporation Ltd. v. C.S.Narendran [decided on 29.01.2010]. In that case, a property had been leased out to Caltex. By an enactment called the Caltex {Acquisition of shares of Caltex Oil Refining (India) Limited and of the undertakings in India of Caltex (India) Limited} Ordinance, 1976, the right, title and interest of the said company were transferred to a public sector undertaking known as Caltex Oil Refining (India) Limited. The said company was merged with Hindustan Petroleum Corporation Limited in 1978. Before the period of lease 11 expired, the lessor demanded possession. Since the lessee demanded renewal of lease, a suit was filed for recovery of possession. The suit was decreed and the first appeal before the District Court and the second appeal before this Court were dismissed. The Hindustan Petroleum Corporation Ltd., took the matter on appeal to the Supreme Court, placing reliance upon Section 9(3) of the said Act, which is similar to the one on hand. It was contended therein that the benefit of the deeming provision under Section 7(3) would apply by virtue of Section 9(3) to the appellant Corporation. Section 7(3) of the Caltex Act is in pari materia with Section 5(2) of the Burmah Shell Act. Section 9(3) of the Caltex Act, though not in pari materia with Section 7(3) of the Burmah Shell Act, was similar to the latter. Therefore, the Supreme Court held that Hindustan Petroleum Corporation Ltd., was entitled to exercise the option for renewal of the lease, in terms of Section 9(3) read with Section 7(3) of the Caltex Act. 17. Out of the several decisions relied upon by the learned counsel for the applicants/defendants, the decisions in Bharat Petroleum Corporation Ltd. v. P.Kesavan and Hindustan Petroleum Corp. Ltd. v. C.S.Narendran are for the purpose of driving home his contention relating to the interpretation to the special enactment. All the other decisions relied upon by him are with reference to Order VII, Rule 11, CPC. Therefore, a quick appraisal of the other decisions relied upon by him may be sufficient to go for a full fledged discussion of the issues arising for consideration. 18. In ITC Limited [(1998) 2 SCC 70], the Supreme Court followed T.Arivandandam v.T.V.Satyapal, to point out that clever drafting creating an illusion of a cause of action is not permitted in law. 19. In Saleem Bhai [(2003) 1 SCC 557], the Supreme Court indicated 12 that the power under Order VII, Rule 11, CPC can be exercised at any time and that the relevant facts which need to be looked into for deciding an application under Order VII, Rule 11, are the averments contained in the plaint alone. 20. In N.V.Srinivasa Murthy [2005 (3) CTC 545], the Supreme Court again relied upon T.Arivandandam v.T.V.Satyapal and found on facts that the suit was barred apparently by the provisions of the Specific Relief Act, as also Order II, Rule 2, CPC. 21. In Vithalbhai (P) Ltd. [(2005) 4 SCC 315], a question arose as to what happens when the right to sue had not matured on the date of institution of the suit. The court examined various possibilities, such as (i) rejection of the plaint if it does not disclose a cause of action; (ii) dismissal of the suit with liberty to file a fresh suit on its maturity; and (iii) permitting the plaintiff to withdraw the suit with liberty to file a fresh suit on its maturity. Thereafter, in paragraph 21 of the judgment, the Supreme Court pointed that if the suit proceeds ahead and at a much later stage, the Court is called upon to decide the plea of maintainability on account of it is being pre- matured, the Court should not dismiss the suit. In paragraph 22, the Court also summed up the correct legal position insofar as the cases of such nature are concerned. The relevant portion of paragraph 21 and the entirety of paragraph 22 are extracted as follows: "... On the other hand, if the defendant by his inaction amounting to acquiescence or waiver allows the suit to proceed ahead then he cannot be permitted to belatedly urge such a plea as that would cause hardship, may be irreparable prejudice, to the plaintiff because of lapse of time. If the suit proceeds ahead and at a much 13 later stage the court is called upon to decide the plea as to non-maintainability of the suit on account of its being premature, then the court shall not necessarily dismiss the suit. The court would examine if any prejudice has been caused to the defendant or any manifest injustice would result to the defendant if the suit is to be decreed. The court would also examine if in the facts and circumstances of the case it is necessary to drive the plaintiff to the need of filing a fresh suit or grant a decree in the same suit inasmuch as it would not make any real difference at that stage if the suit would have to be filed again on its having matured for filing. 22. We may now briefly sum up the correct position of law which is as follows: A suit of a civil nature disclosing a cause of action even if filed before the date on which the plaintiff became actually entitled to sue and claim the relief founded on such cause of action is not to be necessarily dismissed for such reason. The question of suit being premature does not go to the root of jurisdiction of the court; the court entertaining such a suit and passing decree therein is not acting without jurisdiction but it is in the judicial discretion of the court to grant decree or not. The court would examine whether any irreparable prejudice was caused to the defendant on account of the suit having been filed a little before the date on which the plaintiff's entitlement to relief became due and whether by granting the relief in such suit a manifest injustice would be caused to the defendant. Taking into consideration the explanation offered by the plaintiff for filing the suit before the date of maturity of cause of action, the court may deny the plaintiff his costs or may make such other order adjusting equities and satisfying the ends of justice as it may deem fit in its discretion. The conduct of the 14 parties and umerited advantage to the plaintiff or disadvantage amounting to prejudice to the defendant, if any, would be relevant factors. A plea as to non- maintainability of the suit on the ground of its being premature should be promptly raised by the defendant and pressed for decision. It will equally be the responsibility of the court to examine and promptly dispose of such a plea. The plea may not be permitted to be raised at a belated stage of the suit. However, the court shall not exercise its discretion in favour of decreeing a premature suit in the following cases: (i) when there is a mandatory bar created by a statute which disables the plaintiff from filing the suit on or before a particular date or the occurrence of a particular event; (ii) when the institution of the suit before the lapse of a particular time or occurrence of a particular event would have the effect of defeating a public policy or public purpose; (iii) if such premature institution renders the presentation itself patently void and the invalidity is incurable such as when it goes to the root of the court's jurisdiction; and (iv) where the lis is not confined to parties alone and affects and involves persons other than those arrayed as parties, such as in