Case: Bharat Petroleum Corp.Ltd Vs. Rama Chandrashkhar Vaidya

The predecessor of the appellant, namely, Burmah Shell Oil Storage and Distributing Company of India Limited came in occupation of a piece of land situated at Kurla, Taluka-South Salsette, District Bombay suburban, now included in Greater Bombay, admeasuring an area of 19,188 square feet, bearing Hissa No.1 (part) of Survey No.305 of Kurla (the suit premises) on the basis of a registered deed of lease dated September 22, 1955. The lease was for a period of 25 years beginning from March 1, 1955 and further gave to the lessee [vide. Clause 3 (d)] the unilateral right of renewal for an additional period of twenty five years by giving a notice in writing two months prior to the expiration of its term5. On January 24, 1976, the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 came into force and by virtue of section 3 of the Act, the right, title and interest of Burmah Shell in relation to its undertakings in India stood transferred to and vested in the Central Government. Later on, following a notification issued by the Central Government under section 7(1) of the Act, the right, title and interest and the liabilities of Burmah Shell in relation to any of its undertaking in India that had vested in the Central Government were transferred to and vested in the appellant Company6. A few months before the term of the lease was to come to end, the appellant, on October 17, 1979 gave a notice to the lessor invoking the renewal clause in the lease deed [Though the notice mentions clause 4(b) of the lease deed, it actually refers to clause 3(d) which is the renewal clause. Clause 4(b) relates to the determination of the lease on account of the failure of the lessor to obtain a licence or a renewal in respect of the pump outfit or outfits standing upon the suit premises at the time of execution of the deed or to be erected and maintained thereupon in future.] and asking for the renewal of the lease, at the same rent and upon the same terms and conditions as were contained in the lease, for a further period of 25 years with effect from March 1, 1980. In the notice it was also stated that a fresh engrossment of lease was being drawn up for execution and registration7. At this stage, it needs to be noted that though the appellant gave to the lessor the renewal notice and also continued to occupy the suit premises for the next twenty five years, no fresh lease deed was actually executed between the parties and registered in renewal of the previous lease. It also needs to be noted here that the lessor sent a letter to the appellant on April 24, 1980 stating that the monthly rent of the suit premises stood increased to Rs.500/- from March 1, 1980 [As per the stipulation in the 1955 lease.], but the appellant was remitting rent to the lessor at the old rate of Rs.400/- only. The appellant was requested by the letter to pay the differential amount for the past two months and to pay the future rent at the increased rate of Rs.500/- per month8. As the second twenty five year term was nearing expiry, another notice for renewal of the lease was given on behalf of the appellant to the lessor on October 7, 2004. This notice was, once again, with reference to the lease deed dated September 22, 1955. It was stated in the notice that the lease after its renewal would be expiring on February 28, 2005 and the appellant was desirous of continuing in occupation of the premises for another period of thirty years. This notice concluded by observing and claiming as under:9. This time the lessor responded by a notice of termination of tenancy dated March 3, 2005. In this notice, it was stated on behalf of the lessor that the 1955 lease expired on September 21, 1980 but the appellant neither sent any notice for renewal of the lease period nor the lease in respect of the suit premises, an open plot of land, was renewed. Hence, the appellant continued as a month to month tenant in respect of the open plot of land on payment of rent at the rate of Rs.500/- per month. The notice further stated that the lessor was not interested in continuing the monthly tenancy of the appellant and the tenancy was being terminated by that notice10. A reply to the termination notice was given, on behalf of the appellant, by letter dated March 10, 2005 in which the provisions of sections 5 and 7 of the Act were invoked for the first time and a claim was raised for the renewal of the lease for a further period of 30 years on the same terms and conditions as contained in the earlier lease11. At that stage the respondent – lessor filed a suit for eviction of the appellant which was registered as T.E. & R Suit No.72/86 of 2005 in the court of Small Causes at Mumbai. The appellant contested the suit by filing a written statement and the court of Small Causes by judgment and order dated January 18, 2007 dismissed the suit. The respondent filed an appeal (appeal No.163 of 2007) before the Appellate Bench of the Small Causes Court at Mumbai challenging the order dismissing the suit. The appeal was allowed by the Appellate Bench by its judgment and order dated March 5, 2009. Against the order of the Appellate Bench of the Small Causes Court, the appellant filed a revision (revision application no.535 of 2009) before the Bombay High Court. The revision application was dismissed by the High Court by order dated October 14, 2009 and the appellant then brought this matter to this Court in appeal by special leave.

Court's reasoning:
17. On a careful consideration of the matter, we find that though Mr. Sundaram has crafted his submissions very skilfully, the points raised by him do not really arise in the facts and circumstances of the case as noted above18. The original 1955 lease (which, as a matter of fact, is the only lease deed that came into existence between the parties) was for a period of 25 years and was due to expire on February 28, 1980. On October 17, 1979, the appellant gave the notice of renewal invoking the renewal clause in the lease deed. In the renewal notice, there is no reference at all to any provision, much less section 5(2) of the Act. After February 28, 1980, the appellant admittedly continued in occupation of the suit premises but it is undeniable that no fresh deed of lease was executed and registered renewing the terms of the previous lease20. In case the renewal was claimed in terms of the stipulation in the lease deed (described as theby Mr. Sundaram), in the absence of a fresh deed of renewal, thes status became that of a month to month tenant and after twenty five years, in that relationship it would be ludicrous for the appellant to turn around and claim renewal of lease under section 5(2) of the Act21. Mr. Sundaram made an attempt to argue that it was not a case of renewal of lease but a case of extension of the term of the lease and in that case no fresh deed was required to be executed and registered between the parties. In support of the submission, he relied upon two decisions of Calcutta High Court, one by a division bench in Syed Ali Kaiser v. Mstt. Ayesha Begum [AIR 1977 Calcutta 226] and the other by a learned single Judge of the same court in Ranjit Kumar Dutta v. Tapan Kumar Shaw [AIR 1997 Calcutta 278]. We need not go into the question whether an extension of lease is permissible in the absence of any fresh deed for the simple reason that this is unquestionably a case of renewal of lease and not of extension of lease22. Thus, in case, renewal was claimed under a clause of the previous lease, the appellant has no case and the lessor cannot be faulted for terminating the tenancy by a notice under the Transfer of Property Act, 188223. The other possibility is that though in the renewal notice dated October 17, 1979 there is no reference to section 5(2) of the Act, the renewal must be deemed to have taken place under that provision because the Act had come into force on January 24, 1976 and by virtue of section 5(2) of the Act, the renewal clause of the existing lease stood superseded. If the, beginning from March 1, 1980 is to be deemed under section 5(2) of the Act that would be a legally valid and correct renewal even in the absence of a fresh deed being executed between the parties, as was held in P. Kesavan. If that be the position, then the appellant has already exercised and exhausted its right under section 5(2) of the Act and there can be no question of a second renewal in terms of the statutory provision24. Thus, viewed from any angle, the appellant cannot claim any further renewal of lease beyond February 28, 2005.