Case: Bharat Petroleum Corpn.Ltd Vs. P. Kesavan

A deed of lease was executed on or about 22.11.1967 by one Smt. Angammal wife of Shri Angappa Chettiar in favour of Burmah Shell Oil Storage & Distributing Company Limited (Burmah Shell) in respect of 23 acres and 16 cents of property/ land situated in the town of Bhavani for a period of twenty years on a quarterly rent of Rs. 300/- for the purpose of erecting an installation and/ or one or more pumps service/ filling stations together with overhead/underground tanks and other fittings for storage of petroleum products and such other facilities and buildings as the lessee may require and for carrying business is such products through such facilities and other kindered motor accessories or any other trade or business that can conveniently be carried on in the demised premises. The original lessor allegedly executed a will bequeathing the said site to her grandson Meenashisundaram, who expired on 3.11.171 whereafter rent used to be paid to the guardian and mother of the said Meenashisundaram, Smt. G. Chellammal.4. The appellant herein claimed itself to be a tenant in respect of the said premise relying on or on the basis of the provisions of the said Act. It is not in dispute that the lessor by a notice dated 4.2.1987 purported to terminate the tenancy calling upon the appellant herein to quit and deliver the peaceful and vacant possession as per terms of the lease dead. In reply to the said notice, the appellant herein in terms of letter dated 26.2.1987 addressed to its advocate invoked the provisions of Sections 5(2) and 7(3) of the Act stating that it had no intention to vacate the site on the expiry of the existing lease on 30.6.1987 and wish to continue occupying the same for a period of twenty years from 1.7.1987 by paying the existing rental of Rs. 500/- per quarter. By reason of letter dated 19.5.1987, the appellant herein exercised its option to renew the lease for a further period of twenty years commencing from 1.7.1989 on the same terms and conditions on which the Burmah Shell held the lease immediately prior to the appointed day. It waswe therefore request you to let us know when it will be convenient for you to have the lease registered on terms similar to those existing in the current lease. On receipt of your advice in this matter, we shall take further action.Despite the said letter, the tenancy was purported to have been terminated and as the appellant did not quit and deliver possession unto the lessor on expiry of the said period of lease, a suit was filed in the Court of the District Munsif, Bhawani. It appears that the appellant herein had also filed a suit for specific performance of contract which was notlearned Munsif decreed the suit holding, inter alia, that although in terms of Section 5 of the Act, the lease may be renewed for the same period but as per Section 107 of the Transfer of Property Act, necessary documents had to be executed by the company. An appeal there against by the appellant herein was dismissed by the District Judge, Erode. The appellant herein filed a second appeal before the High Court of Madras which was also dismissedis clear that the suit filed for renewal of the lease was only subsequent to expiry of the lease and as such it cannot be said that the affidavit he has taken steps for the renewal of the lease, especially when he kept quiet for nearly 3 years without taking any steps, in spite of the filing of the suit by the appellant. It cannot be said that the filing of the suit was be construed as step being taken for the renewal. When the suit for recovery of possession is pending, as soon as filing of suit for renewal of the lease, the appellant ought to have taken steps for joint trial. He has allowed two suits to be proceed with, independently. That means, he wanted to take a chance before both the courts below. This conduct of the appellant cannot be appreciated. Hence, I do not find any error in the findings of the Courts below that the appellant has not taken any steps to get the lease renewed prior to the expiry of the lease. Hence, the second appeal is dismissed. Consequently, CMP 8085 of 1998 is also

Court's reasoning:
18. 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 and5(2) and Section 7(3) of the Act are required to be given its 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 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 retails 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 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 of the Government company is a state within the meaning of Article 12 of the Constitution of India. There 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(32) of the Act as not laying down a law not contemplating automatic renewal of the lease.20. The provisions of the Transfer of Property Act have no application in a case where a transfer of property takes place by operation ofthe reasons aforementioned, the impugned judgments cannot be sustained and are set aside accordingly.23. Before parting with this case, we may, however, place on records the statements made by Mr. M.A. Krishna Moorthy to the effect that the appellant is not interested in having the second renewal and the possession of leasehold shall be handed over the respondent herein on the expiry of the tenure of the renewed lease i.e. tenure of the lease. With a view to do complete justice between the parties, in exercise of our jurisdiction under Article 142 of the Constitution of India, we direct that the appellant herein shall pay a sum of equivalent to 10 times of the original rental with effect from the date on which the original deed of lease expired. This order shall, however, not be treated as a precedent.