2011 Supreme(SC) 244

2011 (4) Supreme 383
SUPREME COURT OF INDIA
R V Raveendran, J.
Bharat Petroleum Corporation Ltd. — Appellant
versus
Chembur Service Station — Respondent
Civil Appeal No. 2276 of 2011
[Arising out of SLP [C] No.9134/2009]
Decided on : 2-3-2011

IMPORTANT POINT
A licencee is not a tenant, therefore there is no need to file injunction or eviction suit.

Headnote:(a) Indian Easements Act, 1882 – Section 52 – A licence granted by the owner enables a licensee a right to do or continue to do certain specified things in or upon an immovable property – In between lease and licence there can be licences of different hues and degrees – All licences can not be treated on the same footing. (Paras 18 and 20)

        AIR 1959 SC 1262; (2004) 3 SCC 595 – Relied upon

        (b) Indian Easements Act, 1882 – Section 52 – When the employment or agency is terminated, the licence granted to such employee/agent to enter the retail outlet stands revoked and the ex-employee/ex-agent ceases to have any right to enter the premises – In such cases, there is no need for the licensor to file a suit for eviction or injunction – The licensor can protect or defend its possession and physically prevent the licensee (employee/agent) from entering the outlet. (Para 21)

        (1989) 4 SCC 603 – Relied upon

        (c) Indian Easements Act, 1882 – Section 52 – Licence granted by the appellant enabled the licensee to enter upon the retail outlet premises only for the limited purpose of using the facilities for purposes of sale of appellant’s products as a licensee of the appellant at the prices specified by the appellant – Respondent could not sell any other goods or the products of any one else – It could not charge a price different from what was stipulated by the appellant – Therefore the respondent could not enter the outlet premises if the licence was terminated – Thus the respondent-licensee had no licence to enter the petrol pump premises or use the ‘facilities’, if it could not sell the products of the appellant. (Para 23)

        (d) Code of Civil Procedure, 1908 – Order XXXIX, rule 2 – Licence to use the premises or use the facilities not independent of the licence to sell the goods of the appellant – Agreement not creating any tenancy rights in the premises – Licence terminable by 90 days notice on either side and by the appellant even without notice in the event of breach – Therefore there cannot be an injunction restraining the appellant from entering upon its outlet premises or using the outlet for its business or inducting any new dealer or agent. (Para 25)

        (e) Commercial contract – In regard to a licence governed by a commercial contract, it may be inappropriate to apply the principles of Administrative Law, even if the licensor is a ‘State’ under Article 12 of the Constitution of India. (Para 26)

        (f) Commercial contract – If the licensee is himself the owner/lessee of the premises where the petroleum products outlet is situated or where the exclusive right to use the premises is given to the licensee for carrying on any business or dealing with any goods unconnected with the licensor (unlike CCRO - Company Controlled Retail Outlets), it may be necessary for the licensor to go for a mandatory injunction to give up the premises, or for ‘eviction’ as the case may be, depending upon the nature of licence and the status and relationship of the parties. (Para 27)

        (g) Commercial contract – Licensee does not have any right to use the premises nor any right to enter upon the premises after termination of the agency. (Para 28)

        (h) MRC Act – Section 7(15)(a) r/w section 15A, old Bombay Rent Act – Respondent was not in ‘occupation’ of the outlet in its own right for its own proposes, but was using the outlet and facilities in the possession and occupation of the appellant, to sell the appellant’s products in the manner provided in the DPSL Agreement – In such a situation, the agent who is called as the licensee does not become a deemed tenant – Such licensee cannot claim protection of Rent laws. (Paras 32 and 34)

       Facts of the case:

        1. The undertaking of Burmah Shell was taken over by the Central Government and subsequently vested in Bharat Petroleum Corporation Ltd.

        2. Dealership agreement described as ‘Dispensing Pump and Selling Licence’ was executed between the appellant and respondent on 1.12.1995.

        3. During a surprise inspection on 9.3.2007 carried out by the Quality Control Cell of the appellant in the presence of the Manager of the respondent, it was noticed that one of the dispensing units (No.OIC 3633) was giving a short delivery of 20 ml. of HSD.

        4. The appellant issued a show cause notice to the respondent on12.6.2007 alleging that the respondent had manipulated/altered the original chip with a view to making illegal gain by cheating the customers of the company, thereby causing breach of trust, and calling upon the respondent to show cause within 15 days, as to why action should not be taken including termination of the dealership.

        5. The respondent filed a suit in the Court of Small Causes, Bombay. The Court of Small Causes by interim order directed the appellant to maintain status quo till the preliminary issue regarding jurisdiction to entertain the suit was framed and a decision was rendered thereon.

        6. The appellant filed an appeal which was partly allowed. A Division Bench of the Small Causes Court set aside the order of the trial court in so far as it directed the appellant to continue the supply of petrol and petroleum products in the suit premises to respondent. The direction that the appellant shall maintain status quo by permitting the respondent to continue with the possession of the suit premises was not disturbed.

        7. The respondent’s writ petition was dismissed. The writ petition filed by the appellant was disposed of.

        8. The appellant terminated the dealership agreement and informed the respondent that it shall have no right to use the retail outlet premises for any purpose whatsoever and the facilities

       Findings of the Court:

        Licensee does not have any right to use the premises nor any right to enter upon the premises after termination of the agency.

       Result : Appeal allowed.