IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 01.11.2010 Coram: THE HONOURABLE MR. JUSTICE R.SUBBIAH Second Appeal No.2274 of 2004 and C.M.P.No.646 of 2007 M/s.Hindustan Petroleum Corporation Ltd., 861, Anna Salai, Chennai-600 002. ..Appellant/Defendant ..vs.. 1. M/s.Gem Paper Company, rep.by its partner S.Sundaram, 43, Malayaperumal Street, Chennai-600 001. 2. S.Sundaram 3. S.Jagannathan 4. A.Uppili 5. A.Sridhar 6. M/s.Kerala Hotels Pvt.Ltd., No.2, Lynwood Avenue, Mahalingapuram, Chennai-34. (R6 impleaded as party Respondent vide order of Court dt.15.11.2006 made in CMP No. 10220/2006). ..Respondents/Plaintiffs Second Appeal under section 100 of Civil Procedure Code, filed against the judgment and decree dated 05.10.2004 in A.S.No.140 of 2004 on the file of VII Additional Judge, City Civil Court, Chennai, confirming the judgment and decree dated 07.01.2004 in O.S.No.9433 of 1981 on the file of VI Assistant Judge, City Civil Court, Chennai. For Appellant : Mr.O.R.Santhanakrishnan For Respondents : Mrs.Chitra Sampath JUDGMENT The defendant is the appellant, who filed this Second Appeal aggrieved over the decree and judgment dated 05.10.2004 passed by the learned VII Additional Judge, City Civil Court, Chennai, in A.S.No.140 of 2004, whereby the decree and judgment dated 07.01.2004 passed by the learned District VI Assistant Judge, City Civil Court, Chennai, in O.S.No.9433 of 1981 were confirmed. https://hcservices.ecourts.gov.in/hcservices/ 2. The facts of the case, in brief, are as follows: The 1st respondent herein as the plaintiff filed the suit in O.S.No.9433 of 1981 for a direction to the defendant (appellant) to vacate and deliver vacant possession of the property situated at Bazullah Road, T.Nagar, Madras-17 and also for a direction to pay a sum of Rs.35/- per day towards damages from 15.12.1981, stating that the plaintiff company is the owner of the suit property, namely, the vacant piece of land to an extent of 120 feet east to west on Bazullah Road and 80 feet north to south on Usman Road comprised in Paimash No.430/431 in Old Mambalam Zamin and situated at the junction of Usman Road and Bazullah Road, T.Nagar, Maras-17. The defendant took the said land on lease under a lease deed dated 30.04.1973 registered as Document No.726/1973 for the purpose of installing a petrol pump, for storing and selling or carrying on trade in petroleum products, oil and kindred motor accessories. Therefore, the purpose was only to carry on trade in petroleum products and not for any other purpose and the lease was for a period of ten years commencing from 01.12.1971, which was coming to expire on 30.11.1981. Just few months prior to the expiry of lease, the plaintiff came to know that the film shooting activities had taken place in the said site for more than two days, and more so, with the consent of the defendant's officials. Immediately, on 21.08.1981, the plaintiff issued a legal notice to the defendant reminding them the obligations undertaken under the lease deed and also making it clear that the lease was going to expire on 30.11.1981. In the said notice, the plaintiff company had expressed their unwillingness to renew the lease and called upon the defendant to deliver vacant possession of the site on 01.12.1981. After getting reply from the defendant, the plaintiff sent a rejoinder on 30.08.1981. Even after the exchange of notice, the plaintiff came to know that frequent violations of the lease continued to take place and on one occasion, the plaintiff's personnel had happened to see a lorry loading huge pipes weighing several tonnes from the suit site on 02.11.1981 and when it was brought to the notice of the defendant, he simply denied the said incident. Since the defendant had violated the terms and conditions stipulated in the lease deed, the plaintiff filed the suit for the reliefs mentioned supra. 3. Resisting the case of the plaintiff, the defendant filed a written statement stating that the allegations made by the plaintiff against them at the fag end of the lease period would show that the intention of the plaintiff was only to avoid further renewal of the lease in their favour. The defendant Corporation came into existence as a Central Government Enterprise by virtue of the Caltex Acquisition of Shares of Caltex Oil Refining (India) Limited and of the undertakings in India of Caltex (India) Limited Act, 1977 (17 of 1977), by which all the rights and interests of Caltex Oil Refining India Limited vested in the newly formed Hindustan Petroleum Corporation Limited. Under the provisions of the Caltex Act, the defendant is entitled for the statutory renewal for a further similar period on the same rental. Hence, the defendant Corporation issued a notice to the plaintiff on 27.08.1981 that in terms of section 7(3) https://hcservices.ecourts.gov.in/hcservices/ of Act 17 of 1977, the defendant Corporation is entitled to renewal/continuation of the lease for a period of ten years commencing from 01.12.1981 to 30.11.1991 on the same rental and with similar terms and conditions as was contained in the lease deed due to expire on 30.11.1981. Only after receipt of the notice, the plaintiff attempted to find out imaginary lapses on the part of the defendant in the terms of the lease deed. As per the Act 17 of 1977, their possession in the suit property cannot be disturbed for a further period of ten years from 01.12.1981. Hence, they prayed for the dismissal of the suit. 4. Originally the suit was filed by M/s.Gem Paper Company, represented by its Partner S.Sundaram. Pending suit, the plaintiff company was dissolved by a Deed of Dissolution dated 20.03.1987 and pursuant to the same, the suit property fell to the share of the other partners and as such, the plaintiff filed an application in March, 1988, to implead the other partners viz., S.Aravamudhan, S.Sundaram and S.Jagannathan, as parties to the suit. For which, the defendant filed a counter stating that the newly added parties have no locus standi to maintain the suit since when the partnership firm had been dissolved, the right to prosecute the suit had also been ceased and hence, the newly added parties cannot claim to be the legal successors. However, the said application was allowed by the trial court and the other partners were impleaded as plaintiffs 2 to 4. Subsequently, the defendant filed another additional written statement stating that the suit was bad for want of notice under section 11 of the Tamil Nadu City Tenants' Protection Act and the non-compliance of section 11 of the said Act would result in the dismissal of the suit and apart from that, no damages would be awarded against the defendant since the defendant Corporation is a statutory tenant entitled to the protection under the provisions of the Tamil Nadu City Tenants' Protection Act. Pending suit, the 2nd plaintiff Aravamudhan died in 1995 and his legal heirs were brought on record as plaintiffs 5 and 6 (respondents 4 and 5 herein). 5. On the said pleadings, the trial court framed four issues and four additional issues and on the side of the plaintiffs, the 5th plaintiff was examined as P.W.1 and Exs.A-1 to A-22 were marked and on the side of the defendant, one Indersen, the Area Sales Manager of the defendant Corporation was examined as D.W.1 and Exs.B-1 and B-2 were marked. The trial court, after analysing the evidence, both oral and documentary, dismissed the suit with a direction to the defendant to surrender vacant possession of the suit property to the plaintiffs within two months and to pay a sum of Rs.35/- per day from 15.12.1981 till the date of handing over possession of the suit property towards damages. Aggrieved over the same, the defendant filed A.S.No.140 of 2004 before the VII Additional Judge, City Civil Court, Chennai, and the appellate court also dismissed the appeal confirming the judgment and decree of the trial court. Against the said judgment, the defendant has filed the present second appeal. 6. At the time of admission of the second appeal, this Court framed the following substantial questions of law for consideration: https://hcservices.ecourts.gov.in/hcservices/ (a) Whether the lower Appellate Court was right in holding that no notice under Section 11 of the Tamil Nadu City Tenants' Protection Act will have to be given to the defendant when it is clear from the evidence that the defendant is not in actual physical possession of the suit property ? (b) Whether the lower Appellate Court was right in holding that the defendant is not in actual physical possession of the suit property when the same was not pleaded in the plaint ? (c) Whether the lower Appellate Court was right in holding that the defendant is not in actual physical possession of the suit property by placing reliance on judgments which are not applicable to the facts of the case on hand ? (d) Whether the lower Appellate Court was right in holding that even after a firm is dissolved on the death of a partner, the partners can continue the suit and there is no legal bar under Order 30 Rule 1 C.P.C.? (e) Whether the lower Appellate Court was right in construing the provisions of Section 43(2) of the partnership Act in the proper perspective ? (f) Whether the lower Appellate Court was right in holding that the defendant has not taken steps to renew the lease when it is well settled law, a mere exercise of option ipso facto renews the lease ? (g) Whether the lower Appellate Court was right in relying on decisions which were subsequently overruled by the Apex Court ? (h) Whether the lower Appellate Court was right in confirming the amount of damages awarded by the trial Court especially when the defendant was under statutory protection at least for the period from 1.12.1981 to 30.11.1991 ? (i) Whether the lower Appellate Court was right in describing the defendant as a rank trespasser ? 7. Mr.O.R.Santhanakrishnan, the learned counsel for the appellant/defendant Corporation submitted that originally the suit was filed in the name of the partnership firm represented by one of its partners Sundaram and subsequently, the partnership firm was dissolved by a deed of dissolution dated 20.03.1987. Thereafter, by filing I.A.22866 of 1987, the other partners were added as plaintiffs 2 to 4. Subsequently, the 2nd plaintiff Aravamudhan died and respondents 4 and 5 herein were added as plaintiffs 5 and 6. The learned counsel further submitted that on the death of one of the partners, the partnership firm got dissolved and as such, the right to sue by the partnership firm had also been ceased and hence, the newly added respondents cannot claim to be the legal successors. In https://hcservices.ecourts.gov.in/hcservices/ this regard, the learned counsel for the appellant, by inviting the attention of this Court to section 42(c) of the Partnership Act, submitted that the firm is deemed to be dissolved unless the respondents were able to prove that there was a contract to the contrary and under such circumstances, the suit filed by the partnership firm has no legs to stand. In this regard, the learned counsel relied upon the judgments reported in the case of COMMISSIONER OF INCOME TAX, BOMBAY ..vs.. EMPIRE ESTATE, BOMBAY ((1996)2 SCC 345), PEERAN SAHIB ..vs.. PEDDA JAMALUDDIN SAHIB (AIR 1958 AP 48) and MOHD.LAIQUIDDIN ..vs.. KAMALA DEVI MISRA ((2010)2 MLJ 820 (SC). Therefore, on this short ground, the appeal has to be allowed by setting aside the judgment and decree of the courts below. 8. The learned counsel for the appellant further submitted that the property which was leased out to the appellant was only the land and the superstructure thereon was put up by the appellant for the purpose of carrying on petrol business and under such circumstance, the appellant had a protection under the provisions of the Madras City Tenants' Protection Act. But, no notice under section 11 of the City Tenants' Protection Act was given by the respondents and since the issuance of notice under section 11 is a mandatory requirement, offering compensation to the appellant for the superstructure erected by them in the suit property, the suit is not legally sustainable for non-issuance of notice under section 11 of City Tenants' Protection Act. The illegality goes to the root of the institution of the suit and hence the plaint is non-est in the eye of law. But the courts below have not properly appreciated the defence put forth by the appellant that the suit is liable to be dismissed for want of notice. In this regard, the learned counsel for the appellant submitted that the courts below have come to the erroneous conclusion that since the appellant is not in actual physical possession of the land, notice under section 11 is not necessary. Attacking the said finding, the learned counsel further submitted that it is not the case of the respondents that the appellant is not in actual physical possession. When the respondents did not raise any plea with regard to the actual physical possession of the appellant, the courts below ought to have come to the conclusion that there is no need to issue notice under section 11 of City Tenants' Protection Act. suit is bad for non- issuance of notice under section 11. In support of his contention, the learned counsel relied upon a judgment in the case of RAJAGOPAL ..vs.. KISHAN GOPAL reported in (2003)10 SCC 653 to substantiate the principle that in the absence of any specific pleading in the plaint, no lis existed thereon and the courts are precluded from taking cognizance on mere evidence. Moreover, in the instant case, P.W.1 had admitted in his cross examination that they did not offer any compensation for the superstructure and they did not call upon the appellant to remove the superstructure, which is mandatory as required under section 11 of the Act. Therefore, now, it is not open to the respondents to contend that there is no need to issue notice under section 11 of City Protection Act. With regard to the issuance of notice under section 11 by the landlord to the tenant, the learned counsel for the appellant relied upon the decisions reported in the case of MOHD.HUSSAIN ROWTHER ..vs.. https://hcservices.ecourts.gov.in/hcservices/ TIRUPATHI CHETTIAR (1966(1) MLJ 206), S.A.RAMACHANDRAN ..vs.. S.NEELAVATHY (AIR 1997 SC 1735) and VALLIAMMAL ..vs.. S.ARUMUGHA GOUNDER (2001 (1) CTC 708). 9. The learned counsel for the appellant further submitted that the question as to whether the appellant is in actual physical possession, would arise only in a case where the appellant wants to file an application under section 9 of the Tamil Nadu City Tenants' Protection Act for a direction to the landlord to sell the land. Therefore, the question of deciding the actual physical possession does not arise in the instant case. In support of this contention, the learned counsel relied on the decision reported in RAJAMMAL (DIED) ..vs.. THE IDOL OF SRI THANTHONNEESWARASWAMI (1993(1) MLJ 387). 10. Further, by relying upon an unreported judgment of the Apex Court passed in C.A.No.708/2008 (BPCL ..vs.. RAVIKRISHNAN), the learned counsel for the appellant submitted that in the said matter, the Hon'ble Supreme Court had set aside the decree and judgment of the High Court and remanded the matter to record a finding on the question 'whether the appellant is entitled to the benefit of section 2(4)(i)(a) and section 2(4)(ii)(a) of the Act'. Section 2(4) defines the term 'tenant' within the purview of the City Tenants' Protection Act and 2(4)(i)(a) says that 'Tenant' includes any such person, who continues to be in possession of the land after the determination of tenancy agreement. But the said provisions do not speak about the actual physical possession. Referring to these provisions, the Hon'ble Apex Court remanded the matter to the High Court to record a finding, without expressing any opinion, with regard to the question of actual physical possession. Therefore, by relying upon the said unreported judgment, the learned counsel submitted that by virtue of this judgment, it could be presumed that even if a person is not in actual physical possession, he had a protection under the provisions of the City Tenants' Protection Act and under such circumstances, issuance of notice under section 11 is mandatory. 11. By relying upon the provisions of the Act 17 of 1977, the learned counsel for the appellant further submitted that the appellant Corporation is entitled for a statutory renewal and protection under the Madras City Tenants' Protection Act. Therefore, issuance of a notice by the landlord to the tenant to remove the superstructure by offering compensation is a must. With regard to the use and occupation of the suit property, the learned counsel for the appellant submitted that when the appellant had a protection under the said Act, the claim for damages for use and occupation is not legally sustainable. But, without properly looking into these legal aspects, the courts below had directed the appellant to pay a sum of Rs.35/- per day as damages to the respondents. That apart, the learned counsel has also made his submission by relying upon a number of judgments that the option for renewal could be exercised by the Government company itself and there is no legal requirement that that option should be exercised by the Government only. Further, the learned counsel submitted that though there are divergent opinions https://hcservices.ecourts.gov.in/hcservices/ that option should be exercised only by way of filing a separate suit for specific performance, by way of subsequent judgments, the position was settled that by written request by the Government, the option for renewal could be exercised by a Government company itself. 12. Assailing the said submissions made on behalf of the appellant, Mrs.Chitra Sampath, the learned counsel for the respondents submitted that it is incorrect to state that since the firm had been dissolved on the death of one of the partners, the suit was not maintainable and she further submitted that under Order 30 C.P.C. the suit can be continued by the dissolved firm and the dissolution had not taken place due to the death of any one of the partners. In this regard, she relied upon the judgments reported in the case of J.PRASANNA CHANDRASEKARAN ..vs.. M/s.MOHAN STEEL CORPORATION BY ITS PARTNER AND OTHERS (1987 TLNJ 74), S.V.S.DAVEY SONS ..vs.. LIBERTY DRY CLEANERS (1994(1) MLJ 545 and RAMASWAMY .. vs.. M/s.P.M.AGENCIES (1994(2) MLJ 328). 13. Learned counsel for the respondents further submitted that after filing the suit, the partnership firm was dissolved by a deed of dissolution dated 20.03.1987 and in pursuance of the same, the suit property fell to the share of plaintiffs 2 to 4. Therefore, by filing an application in I.A.No.22866 of 1987 before the trial court, all the three partners were impleaded as parties to the suit, but the said application was not opposed by the appellant. Subsequently, pending suit, the 2nd plaintiff Aravamudhan died and his legal heirs were impleaded as respondents 4 and 5. Therefore, it is incorrect to state that on the death of one of the partners, the suit, which was filed during his lifetime, was not maintainable. Though the suit was filed in the year 1981, only in the year 2000, the appellant had filed an additional written statement that the suit was barred for want of notice under section 11 of the City Tenants' Protection Act. Till 2000, the appellant had not raised any such plea with regard to the entitlement of the benefits under the provisions of the Madras City Tenants' Protection Act. But, both the courts below have come to the conclusion that since the appellant Corporation is not in actual physical possession, they are not entitled to a notice under section 11 of the said Act. Moreover, D.W.1, the Area Sales Manager of the appellant Corporation has categorically stated in his evidence that the appellant Corporation was running a petrol bunk in the suit property only on dealership basis. Therefore, in view of the several judgments of the Apex Court as well as this court, the courts below gave a finding that since the actual physical possession is sine qua non, the plea of non-maintainability of the suit for want of notice under section 11 is not open to the appellant. In this regard, the learned counsel has relied upon the following decisions; HPC ..vs.. K.M.YAKUB (DIED) & OTHERS (1996-2-L.W.817), HPC ..vs.. KEYARAM HOTELS (P) LTD., (2002(2) CTC 21), RADHAKRISHNAN, S.R. ..vs..NEELAMEGAM (2003(3) CTC 488), HPC ..vs.. SPENCER & CO., (2003-4-L.W.432), M.RAJA v. MANAKCHAND JAMATH (DECEASED) & OTHERS (2006-3-L.W.223), https://hcservices.ecourts.gov.in/hcservices/ MALINI PARTHASARATHY .vs.. HPC (2007 (1) CTC 67), ALBERT MORRIS ..vs.. CHANDRASEKARAN ((2006)1 SCC 228), ESTATE OF T.P.RAMASWAMI PILLAI .vs.. MOHD.YOUSUF(1983(II)MLJ 318) and T.R.P.RAJA SEKARA BHOOPATHY ..VS.. NAVANEETHAMMAL (92 L.W.259). 14. Learned counsel for the respondents further submitted that the suit property was misused by the appellant/lessee, who was in possession, by allowing the persons in the suit property for film shooting activities. Therefore, the appellant had no right to claim to be in possession saying that the lease had not been determined by efflux of time. But in this case, the appellant has abdicated their right as a lessee by committing violation of the terms and conditions of the lease and hence, they are liable to be evicted. In support of her contention, she relied on the decision reported in THOMAS, P.A. . vs..MOHAMMED TAJUDDIN (1997(1) CTC 36). The learned counsel further invited the attention of this Court to section 7(3) of Caltex Act, 17 of 1977, which reads as follows: "On the expiry of the term of any lease, tenancy or arrangement referred to in sub-section(1) or sub-section (2), such lease or tenancy or arrangement shall, if so desired by the Central Government, be renewed or continued, so far as may be, on the same terms and conditions on which the lease or tenancy or arrangement was originally granted or entered into". By relying upon the words used "such lease or tenancy or arrangement shall, if so desired by the Central Government, be renewed or continued" in the said section, the learned counsel submitted that the option for renewal should be exercised only by the Central Government and not by the appellant company and on the expiry of the period of renewal, the tenant had no right to continue in the suit property and even assuming for a moment that the appellant is entitled for the statutory renewal, the lease period came to an end in 1981 and thereafter, they have no right to continue in the suit property. In support of this contention, the learned counsel relied on the decisions reported in HPC .v. UMA RANI (1996 (II) CTC 543), V.RAVICHANDRAN ..vs.. R.RAMESH JAYARAM (1998-3-L.W.822), NATH T.B. vs.HPC., (1999 (II) CTC 145) and BPC LTD., ..vs.. CHURCH OF SOUTH INDIA (2003-4-L.W.625). 15. Heard the learned counsel for both sides and perused the materials available on record. 16. In view of the submissions made by the learned counsel on either side, the following questions that arise for my consideration are, (1) Since the respondents' partnership firm got dissolved on account of the death of one of the partners, whether the suit is legally sustainable ? https://hcservices.ecourts.gov.in/hcservices/ (2) Whether the suit is bad for want of notice under section 11 of the Madras City Tenants' Protection Act ? (3) Whether the appellant is entitled to the protection under the City Tenants' Protection Act ? and if so, whether any direction can be given by the courts below to pay damages for use and occupation is legally sustainable ? (4) Whether the tenant has committed any breach of the terms of lease, resulting in forfeiture of his right to claim protection under the City Tenants' Protection Act, especially in the circumstances when the appellant is entitled for statutory renewal ? 17. With regard to the first question, it is the submission of the learned counsel for the appellant that on account of the death of one of the partners, the partnership firm got dissolved and as such, the suit itself is not legally sustainable. It is also the submission of the learned counsel for the appellant that when the firm itself got dissolved on the death of one of the