Case: Hindustan Petroleum Corporation Ltd. &amp; Anr Vs. Shyam Co Operative Housing Society &amp; Ors

2. Put very briefly, the essential facts are these. The Esso Eastern Inc., a company organised and existing under the laws of the State of Delaware, USA, was carrying on, in India the business of distributing and marketing petroleum products manufactured by Esso Standard Refining Company of India Ltd., and Lube India Ltd., and had, for that purpose, established places of business in India. The company had taken several flats in the Metropolitan City of Greater Bombay and elsewhere for accommodating their employees including Flat No. 35 in Block No 8 in the housing colony known as Shyam Niwas situate at Warden Road, now called Bhulabhai Desai Road, Bombay on leave and licence basis for a period of one year in terms of an agreement in writing dated November 26, 1968 from Smt. Nanki M. Malkani, respondent 2 herein. On December 4, 1968 respondent 1 ShyamHousing Society Ltd. passed a resolution admitting petitioner 2 T. J. Mansukhani, an employee of the company, as a nominal member of the society though he was not the licensee. The company on January 16, 1970 exercised the option of renewal of the licence for another year i. e. till November 30, 1970. On November 29, 1971, respondent 2 Smt. Nanki M. Malkani addressed a letter to the company intimating that the agreement for leave and licence was due to expire on that date and accordingly the period of the said licence was renewed, yearly, from time to time for three years on the expiry of each term of licence i.e. on November 30, 1971, November 30, 1972 and November 30, 1973. In the meanwhile, the State legislature of Maharashtra enacted Act 17 of 1973. The Amendment Act also made consequential changes to which we shall presently refer. Undoubtedly, the Esso Standard Inc was in occupation of the flat in question as on February 1, 1973 and thus acquired the status of a tenant under Section>3. On March 13, 1974, the Esso (Acquisition of Undertakings in India) Act, 1974 was brought into force. As from that date, the Central Government by virtue of(1) of Section 5 of the Act was deemed to be the tenant of the flat in question. On April 9, 1975, respondent 2, Smt. Nanki M. Malkani sent a communication to the petitioner affirming the terms and conditions of the licence. Again, on March 24, 1976, she addressed a letter confirming that she had given the aforesaid flat to Esso Eastern Inc. in December 1968 on leave and licence basis and the petitioner being theof that company had been occupying the flat as licensee on the same terms and conditions. On September 11, 1980, the society passed a resolution calling upon the petitionerCorporation to vacate the said premises and directing that respondent 2 Smt. Nanki M. Malkani should herself occupy the flat. upon failure of the Corporation to vacate the premises the society on September 15, 1980 filed an application under Section 91 (1) of the MaharashtraSocieties Act. 1960 before the 3rdCourt, Bombay for eviction of the petitioner and its employee. On January 7, 1981, petitioner 1 permitted another employee to occupy the flat. The 3rdCourt. Bombay after consideration of the evidence adduced by the parties by its well reasoned judgment dated June 6, 1983 dismissed the claims of the society holding inter alia that Esso Eastern Inc. was in occupation of the flat in dispute under a subsisting licence as on February 1, 1973 and thus got the protection available to a licensee under Sectionof the Bombay Rent Act and the said protection could not be taken away merely by the society making a claim for eviction under Section 91 (1) of the At. Aggrieved, the Society wen up in appeal to the Maharashtra StateAppellate Court which by its judgment dated March 17, 1984 allowed the appeal and decreed the claim of the society requiring petitioner 1 Hindustan Petroleum Corporation Ltd. to vacate Flat No. 35 in Block No. 8 of the society building with a further direction that respondent 2 Smt. Nanki M. Malkani should occupy the flat in question herself. Thereupon, the petitioner moved the High Court under Article 226 of the Constitution for an appropriate writ, direction or order for quashing the impugned judgment and order passed by the Maharashtra State

Reasoning: the findings of the appellate court are clearly erroneous. On the other hand, it stands proved that Esso Eastern Inc. had acquired the status of deemed tenant or protected license under Sectionof the Bombay Rent Act as on February 1, 1973. The findings of the appellate court to the contrary are therefore clearly erroneous. We are unable to sustain the view taken by the appellate court in not giving effect to(1) of Section 5 which vested the tenancy rights in relation to the flat in question on the Central Government as from appointed day. While it is true that a licence being personal is not capable of being transferred; there was no warrant for the assumption by the appellate court that the licence stood extinguished with the acquisition of the right, title and interest of Esso Eastern Inc. under Section 3 of the Acquisition Act. That Act came into force on March 15, 1974 and in the meanwhile, the licensee Esso Eastern Inc. had already acquired the status of deemed tenant under Sectionof the Bombay Rent Act as admittedly, there was a subsisting licence as on February 1, 1973. The appellate court has also failed to appreciate that the name of Esso Eastern Inc. was changed to Esso Eastern Inc. (sic) by a Certificate of Amendment dated December 22, 1970 vide a resolution passed by the Board of Directors of the corporation on December 15, 1970. In view of all this, the finding of the appellate court that the Hindustan Petroleum Corporation Ltd. was (sic not) entitled to the protection of Sectionof the Bombay Rent Act clearly borders on travesty and can hardly beThe appellate court was clearly in error in not appreciating that by Section 3 of the Acquisition Act, the right, title and interest of Esso Eastern Inc. in relation to its undertakings in India, shall stand transferred to, and shall vest in, the Central Government as from the appointed day i.e. as from March 13, 1974. Under(1) of Section 5 thereof, the Central Government became the lessee or tenant, as the case may be. By(2) thereof, on the expiry of the term of any lease or tenancy referred to in(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. By a notification issued on the next date, the right, title and interest of the Central Government became vested in Esso Standard Refining Company of India Ltd., a government company, w.e.f. March 15, 1974. Furthermore, by reason of Lube India and Esso Standard Refining Company of India Ltd. Amalgamation Order, 1974 made by the Company Law Board under Section 396(1) and (2) of the Companies Act, 1956 the undertaking of Lube India Ltd. vested in Esso Standard Refining Company of India Ltd. and immediately upon such transfer the name of Esso Standard Refining Company of India Ltd. Stood change to Hindustan Petroleum CorporationIn the premises, petitioner 1 Hindustan Petroleum Corporation Ltd. is clearly protected under Sectionof the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. In that view of the matter, we do not think it necessary to deal with the contention as regards the applicability of Section 91 of the MaharashtraSocieties Act, 1960. All aspects arising out of the submissions as to the jurisdiction of the Registrar under Section 91(1) of the Act have already been considered by this Court on O. N. Bhatnagar case and we reiterate the principles laid down therein