IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD WEDNESDAY, THE EIGHTH (8TH) DAY OF JUNE, TWO THOUSAND AND ELEVEN Present: HON’BLE SRI JUSTICE G.V.SEETHAPATHY Second Appeal No.1135 of 2003 Between: Bharat Petrolelum Corporation Limited, Secunderabad … Appellant And: T Ajit Singh … Respondent HON’BLE SRI JUSTICE G.V.SEETHAPATHY Second Appeal No.1135 of 2003 JUDGMENT: This appeal is directed against the judgment and decree dated 23.07.2003 in AS No.190 of 1997 on the file of the I Additional Chief Judge, City Civil Court, Secunderabad, wherein the said appeal filed by the respondent herein was allowed in part, confirming the judgment and decree dated 28.10.1997 in OS No.1154 of 1993 on the file of the I Assistant Judge, City Civil Court, Secunderabad, insofar as the renewal of lease under Ex.A.1 for further period of 20 years with effect from 15.09.1990 was confirmed and fixing the rent for the first five years at Rs.20,000/- per month and directing proportionate enhancement for the subsequent period. 2. Heard the learned counsel for the appellant-corporation and the learned counsel for the respondent. Perused the record. 3 . The appellant herein filed suit for specific performance seeking a direction to the respondent/defendant to execute a registered lease deed in renewal for a period of 20 years from 15.09.1990 on the same terms and conditions as those contained in the original lease deed of 07.11.1970. Dr. Alice Isbal Shaw, Mrs. Olive Constance Heywood and Mrs. Marcia Muriel Bedel, who are all daughters of Robert Shaw, are the owners of land 3500 sq. ft. bearing D.No.8-2-237, situated in St. Mary’s road, Secunderabad. They executed lease deed dated 07.11.1970 in favour of M/s Burmah Shell Oil Storage and Distributing Company of India Ltd., for a period of 20 years, commencing from 15.09.1970 on a quarterly rent of Rs.420/- for first five years, Rs.480/- for the second five years, Rs.540/- for third five years and Rs.600/- for the last five years. The said Burmah Shell Oil Storage and Distributing Company made several constructions, including underground tanks in the said site. The Parliament enacted the Burmah Shell (Acquisition of undertaking in India) Act 1976 (for short ‘the Act’), which came in to force on 24.01.1976. Under Section 3 of the said Act, the right, title and interest of the said Burmah Shell in the undertaking, stood transferred to and vested in Central Government. Section 5(i) of the said Act stipulates that where any property is held in India by Burmah Shell under any lease, the Central Government shall on and from 24.01.1976 be deemed to have become the lessee in respect of the said property and all the rights under such lease shall be deemed to have been transferred and vested in the Central Government. Section 7(1) of the said Act contemplates that the right, title and interest and liabilities of Burmah Shell shall vest under the Government Company. The Central Government issued notification dated 24.01.1996 accordingly. Thereafter, the name of the Burmah Shell Refineries Ltd., was changed as Bharat Refinery Limited with effect from 12.02.1076 and the same was again changed as Bharat Petroleum Corporation Ltd with effect from 01.08.1977. As per Section 5(2), 7(3) of the Act, the plaintiff became entitled for renewal of the lease for further period of 20 years on the same terms and conditions. Hence, the suit seeking a direction to the defendant to execute a lease deed. 4. The respondent/defendant filed written statement contending that the defendant having stepped in to the shoes of M/s Bedal is entitled to receive the vacant possession of the property from the plaintiff after expiry of the original lease period. The defendant is not bound to execute any renewal lease deed for further period of 20 years. There is no whisper in the lease deed regarding renewal for another further term. The Act cannot create any rights in favour of the plaintiff. Considering the present rents prevailing in the locality, the suit property would fetch a sum of Rs.20,000/- per month. 5. The trail court framed the following issues for trial. 1. Whether the plaintiff is entitled to the relief of specific performance to get renewal of the lease deed? 2. To what relief? 6. During trial, Mr. J Mahendra Reddy, Senior Sales Officer of the plaintiff company was examined as PW.1 and marked Exs.A.1 to A.3. The defendant examined himself as DW.1, but no documents were marked on his side. On a consideration of the evidence available on record, the trial Court held that the plaintiff is entitled for renewal of Ex.A.1 lease deed for another period of 20 years with effect from 15.09.1990. Accordingly, the suit was decreed directing the defendant to execute renewal lease deed for further period of 20 years with effect from 15.09.1990. Aggrieved by the same, the defendant preferred an appeal in AS No.190 of 1990. 7. The learned I Additional Chief Judge, City Civil Court, Secunderabad, in the impugned judgment dated 23.07.2003 framed the following points for consideration. 1) Whether the respondent/plaintiff is entitled for a renewal of the lease invoking the provisions of Sections 3, 5 and 7 of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976? 2) Whether the impugned judgment and decree are liable to be set aside, if so, on what grounds? 3) To what relief? 8. On re-appraisal of the evidence available on record, the learned appellate Judge held on point No.1 that in view of the provisions of Section 5 of the Act, the term of 20 years lease period under Ex.A.1 is liable to be renewed by another 20 years from the date of completion of the original lease period. The appellate Court further held that the rent was being enhanced from time to time for every five years and in spite of changed circumstances, the defendant cannot be forced to accept the same old rent fixed in 1978 at a lesser rate. The appellate Court, therefore, while exercising its discretion and taking into consideration of the prevailing market value of the rent in the locality, directed that payment of rent at Rs.20,000/- per month, which comes to Rs.60,000/- per quarter for the first five years, with further direction that the rents for the subsequent period shall be enhanced proportionately as per the terms of the original lease deed. Aggrieved by the same, Bharat Petrol Corporation Limited, field the present second appeal. 9 . In ‘Bharat Petroleum Corporation Ltd. Vs. P Kesavan & another[1]’, the apex Court held as follows: “The said Act is a special statute vis-à-vis the Transfer of Property Act which is a general statute. By reason of the provisions of the said Act, the right, title and interest of Burmah Shell vested in the Central government and consequently upon the appellant company. A lease of immovable property is also an asset and/or right in an immovable property. The lease-hold right, thus, held by Burmah Shell vested in the appellant. By reason of sub-section (2) of section 5 of the Act, a right of renewal was created in the appellant in terms whereof in the event of exercise of its option, the existing lease was renewed for a further term on the same terms and conditions. As noticed hereinbefore, section 11 of the Act provides for a non-obstante clause.” It was further held as follows: “The said Act is a special statute. Subsection (2) of section 5 thereof mandates that in the event the appellant desires to renew the lease or tenancy, the same would be renewed on the same terms and conditions on which the lease or tenancy was held by Burmah Shell immediately prior to the appointed day. We, therefore, are of the opinion that the legislative scheme contained in the said Act leads to only one conclusion that if Government Company expresses its desire to renew the lease, the same would stand renewed on the same terms and conditions.” 10. In view of the above decision, the concurrent findings recorded by the Courts below that the appellant/plaintiff was entitled for renewal of lease for a further period of 20 years from the date of expiry of original lease does not call for any interference. 11. The original lease Ex.A.1 was executed on 07.11.1970 and the lease period of 20 years commenced from 15.09.1970 and the said period of 20 years expired on 14.09.1990. It is to be noted that even the further period of 20 years for which the Courts below up-held the appellant’s claim of renewal has also since expired in September 2010. Admittedly, the appellant/plaintiff has not sought any further renewal. Sub section (2) of section 5 of the Act contemplates that on the expiry of the term of any lease referred to in sub-section (1), such lease, if so desired by the Central Government, be renewed on the same terms and conditions on which the lease was held by Burmah Shell immediately before the appointed date. The above provision contained in sub-section (2) of Section 5 contemplates only renewal of the original lease on the same terms and conditions and does not specifically stipulate that it shall be renewed from time to time. In the present case, as per the original terms and conditions, the period stipulated was 20 years and the same has expired in September 1990. Seeking renewal of the same for another 20 years, the present suit is filed for specific performance. During the pendency of the proceedings, further period of 20 years for which renewal was directed by the Courts below has also expired in September 2010. The relief of specific performance sought for by the appellant/plaintiff has therefore since become infructuous due to efflux of time. 12. The main contention of the learned counsel for the appellant is that Section 5(2) of the Act contemplates renewal on the same terms and conditions as stipulated in the original lease deed and rent being an essential term, the renewal shall be for the same rent as stipulated under the original lease. Ex.A.1 stipulates that the rent for the first five years was Rs.420/- per quarter, Rs.480/- for the second five years, Rs.540/- for the 3rd quarter and Rs.600/- for the last five years i.e., with an enhancement of Rs.60/- per quarter for every five years. He would therefore contend that the rent for the renewal period shall be fixed accordingly in continuation of the last paid rent under the original deed, which comes to Rs.660/- per quarter for the first five years of the renewal period and Rs.720/- for the second five years, Rs.780/- for the third five years and Rs.840/- for the last five years of the renewal period. The appellant would therefore contend that unilateral fixation of the rent by the appellate Court at Rs.20,000/- per month, which comes to Rs.60,000/- per quarter is not sustainable. 13. Learned counsel for the respondent, on the other hand would contend that having regard to the fact that the suit property is situated in a prime locality, abutting main road in Secunderabad, payment of rent starting with Rs.660/- per quarter for first five years for an extent of 3500 sq. ft. is ridiculous and taking into consideration the evidence on record regarding prevailing rents in the locality, the appellate court has rightly fixed the rent at Rs.20,000/- per month. 14. He would further contend that under the guise of expression ‘same terms and conditions occurring in Section 5(2) of the Act’, the appellant cannot resort to undue enrichment. In that connection, he invited attention to the decision in ‘Sahakari Khand Udyog Mandal Ltd., vs. Commissioner of Central Excise & Customs[2]’, wherein the apex Court held as follows: “Stated simply, 'unjust enrichment' means retention of a benefit by a person that is unjust or inequitable.’Unjust enrichment' occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. The doctrine of 'unjust enrichment', therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of 'unjust enrichment' arises where retention of a benefit is considered contrary to justice or against equity. The juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasi- contract or the doctrine of restitution.” 15. He also relied upon a decision in ‘Bharat Petroleum Corpn. Ltd. Vs Maddula Ratnavalli & others[3]’, wherein, it was held as follows: “An executive action must be informed by reason. An unfair executive action can only survive for a potent reason. An action which is simply unfair or unreasonable would not be sustained. Objective satisfaction must be the basis for an executive action. Even subjective satisfaction on the part of a State is liable to judicial review. The 'State' acting whether as a 'landlord' or a 'tenant' is required to act bona fide and not arbitrarily, when the same is likely to affect prejudicially the right of others.” 16. It cannot for a moment be disputed that for a property of an extent of 3500 sq. ft. situated in a prime locality, abutting the main road in Secunderabad, payment of rent at such a low rate of Rs.660/- per quarter, is ridiculous. While exercising its statutory right of renewal of the lease for a further period, the appellant is required to act fairly, reasonably and bona fide, but not arbitrarily. The rent stipulated under Ex.A.1 which was executed in the year 1970, in the light of the then prevailing circumstances and market rate of rent in the locality, cannot be said to be fair and reasonable even 20 years thereafter ignoring the substantial change of circumstances that has come about over such a long period of 20 years in the matter of escalation of rents prevailing in the locality for the properties similarly situated. The demand of the respondent/defendant for a substantial enhancement in rent in the light of the prevailing rents in the locality is certainly just and reasonable. 17. The suit is filed for specific performance seeking a direction to the defendant to execute a registered lease deed in renewal of the original lease deed dated 7-11-1970 for a further period of 20 years from 15-9-1990 and the suit was decreed. In the appeal filed by the defendant, the judgment of the trial Court insofar as the granting relief of specific performance is concerned, was confirmed. The concurrent findings recorded by the Courts below while granting the relief of specific performance do not call for any interference, particularly so, in view of the said relief having become infructuous due to efflux of time as the further period of 20 years for which the renewal was sought for also expired during the pendency of the proceedings. The appellate Court however fixed the rent at Rs.20,000/- per month for the first five years with a further direction for proportionate enhancement from time to time in accordance with the terms of the original lease. Though the demand for substantial enhancement of rent in the light of prevailing rents in the locality for properties similarly situated is found to be just and reasonable, the quantum of such rent has to be necessarily determined in appropriate proceedings. The respondent is at liberty to initiate appropriate proceedings for determination of the quantum of rent for the subject premises and for recovery of the arrears of rent from the appellant in accordance with law. Insofar as the second appeal is concerned, no substantial question of law arises for consideration and the concurrent findings recorded by the Courts below regarding the relief of specific performance do not call for any interference. As the further period of 20 years for which renewal was sought has also expired, the respondent is at liberty to initiate proceedings for eviction of the appellant from the schedule premises and also for recovery of the arrears of rent or damages for use and occupation as the case may be in accordance with law. The portion of the impugned decree and judgment directing payment of arrears of rent at Rs.20,000/- per month is accordingly set aside. 18. The second appeal is accordingly disposed of. ___________________ G.V.SEETHAPATHY, J Bss/rkk Dated: 8-6-2011 [1] (2004) 9 SCC 772 [2] (2005) 3 SCC 738 [3] (2007) 6 SCC 81