Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(SC) 83

SUPREME COURT OF INDIA
N.V. Ramana, Sanjiv Khanna, Krishna Murari, JJ.
BHARAT PETROLEUM CORPORATION LIMITED – APPELLANT(S)
VERSUS
R. CHANDRAMOULEESWARAN AND OTHERS – RESPONDENT(S)
Civil Appeal No. 2870 of 2007 with Civil Appeal No. 761 of 2020 (Arising Out of SLP(Civil) No. 2645 of 2010); Civil Appeal No. 763 of 2020 (Arising Out of SLP(Civil) No. 19246 of 2010); Civil Appeal No. 765 of 2020 (Arising Out of SLP(Civil) No. 34955 of 2011); Civil Appeal No. 766 of 2020 (Arising Out of SLP(Civil) No. 34945 of 2011); Civil Appeal No. 767 of 2020 (Arising Out of SLP(Civil) No. 34839 of 2011); Civil Appeal No. 768 of 2020 (Arising Out of SLP(Civil) No. 16686 of 2012); Civil Appeal No. 769 of 2020 (Arising Out of SLP(Civil) No. 17435 of 2012); Civil Appeal Nos. 770-771 of 2020 (Arising Out of SLP(Civil) Nos. 29712-713 of 2013); Civil Appeal No. 772 of 2020 (Arising Out of SLP(Civil) No. 7165 of 2016); Civil Appeal No. 773 of 2020 (Arising Out of SLP(Civil) No. 3842 of 2017); Civil Appeal No. 774 of 2020 (Arising Out of SLP(Civil) No. 32286 of 2017) and Civil Appeal No. 775-776 of 2020 (Arising Out of SLP(Civil) Nos. 18342-343 of 2018)
Decided on : 28-01-2020

Advocates Appeared:
For the Appellant :Rahul Narayan, Parijat Sinha, Advocates
For the Respondent:Awanish Sinha, Chandra Shekhar Yadav, Pankaj Kumar, Vikas Mehta, Apoorv K., Anushree Menon, K. K. Mohan, V. Balaji, Asaithambi MSM, C. Kannan, Neha Singh, Rakesh K. Sharma, Narendra Kumar, Shiv Prakash Pandey, M. Yogesh Kanna, Prabha Swami, Divya Swami, Nikhil Swami, N. L. Ganapathi, Chandra Bhushan Prasad, E. C. Agrawala, Rishi Agrawala, Madhavi Agrawal, Abha Saigal, Prashi Tyagi, R. Balasubramanian, M. A. Chinnasamy, C.Rubavathi, V. Senthil Kumar, K. Ethiraj, Advocate, P. Raja Ram, R. Balasubramaniam, S. Ramesh, R. Venkataraman, M. Thangathuari, Kumar Dushyant Singh, M. A. Krishna Moorthy, S. Nagamuthu, T. R. B. Sivakumar, M.P. Parthiban, A.S. Vairavan, R. Sudhakaran, Advocate, Hardik Gautam, Shalini Mishra, Kamakshi S. Mehlwal, Vijay Kumar, Advocates.

IMPORTANT POINTS
Tenants entering into agreements without any stipulation with regard to 'erection of buildings' for taking land on lease, and subsequently constructing buildings would be entitled to protection of the Act.
In case the appellants have let out or sub-let the building or given it to third parties, including dealers or licensees, they would not be entitled to protection and benefit under the Act.

Headnote:
(a) Madras City Tenants' Protection Act, 1921 - Section 2(4)(ii)(b) - 'Actual physical possession of land and building' - Would mean and require the tenant and the heirs to be in actual possession - Sub-clause(b) would not apply if the tenant has sub-let the building or has given the premises on leave and licence basis. (Para 12)
(b) Madras City Tenants' Protection Act, 1921 - Section 2(4) - Sub-clause (ii)(a) would apply to tenants who had taken land on lease without any written registered instrument relating to the 'erection of buildings' - On the other hand, sub-clause (ii)(b) would apply to tenants who were covered by the deleted proviso to Section 12. (Para 15)
(c) Madras City Tenants' Protection Act, 1921 - Section 2(4) - A lessee constructing structure on leased land - Can demolish the same while he is in possession of the property - Not afterwards - he can however, contract to hand over the building without compensation. (Para 17)
(d) Madras City Tenants' Protection Act, 1921 - Section 9 - Court on a finding that tenant may not require any portion of the land, decree the suit for ejectment and direct the landlord to pay compensation to the tenant - Section 9 confers a privilege on the tenant and not a vested right - The privilege granted by the statute is equitable in nature - will be available only on continued possession. (Para 18, 19)
Facts of the case:
The appellant had under different written registered lease deeds with the landlords taken land on long-term lease and had thereupon constructed petrol pumps that were given to and operated by the dealers appointed by the appellant under the dealership agreements. In some cases the leases were renewed on nationalisation of companies in terms of Burmah Shell (Acquisition of Undertakings in India) Act, 1976, Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977, and Esso (Acquisition of Undertakings in India) Act, 1974. However, even where leases were renewed, has expired in all cases.
The landlords, who are the contesting respondents had or have filed suits for ejectment and for recovery of possession of the land. The appellant had filed applications purportedly in exercise of their right under Section 9 of the Act for transfer/sale of the leasehold land in whole or in part at the price fixed by the court. By different impugned judgments, some of which have arisen from the remand order passed by the Division Bench of Supreme Court, the Madras High Court has rejected the applications filed by the appellant, either affirming or reversing the findings of the trial court or the lower appellate court.
Finding of the Court:
Appellant tenants would not be entitled to the benefit and rights under the Act unless they are in actual physical possession of the building constructed by them. In case the appellants have let out or sub-let the building or given it to third parties, including dealers or licensees, they would not be entitled to protection and benefit under the Act.
Result: Appeals dismissed.

JUDGMENT

Sanjiv Khanna. J.

Leave granted in the special leave petitions.

2. The above-captioned appeals filed by the three oil companies, namely, Bharat Petroleum Corporation Limited, Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited (hereinafter referred to as 'the appellant'), raise an identical question of law relating to the right of a tenant, in terms of Section 9 of the Madras City Tenants' Protection Act, 1921 (hereinafter referred to as the 'Act'), to an order whereby the landlords could be directed to sell the leasehold land in whole or in part at the price fixed by the court.

3. Briefly, the appellant had under different written registered lease deeds with the landlords taken land on long-term lease and had thereupon constructed petrol pumps that were given to and operated by the dealers appointed by the appellant under the dealership agreements. In some cases the leases were renewed on nationalisation of companies in terms of Burmah Shell (Acquisition of Undertakings in India) Act, 1976, Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977, and Esso (Acquisition of Undertakings in India) Act, 1974. However, it is an accepted position that the term or duration of the leases, even where leases were renewed, has expired in all cases.

4. The landlords, who are the contesting respondents before us, had or have filed suits for ejectment for recovery of possession of the land. The appellant had filed applications purportedly in exercise of their right under Section 9 of the Act for transfer/sale of the leasehold land in whole or in part at the price fixed by the court. By different impugned judgments, some of which have arisen from the remand order dated 3rd December 2009 passed by the Division Bench of this Court, the Madras High Court has rejected the applications filed by the appellant, either affirming or reversing the findings of the trial court or the lower appellate court.

5. Preamble of the Act as originally enacted in 1921 had stated:

"An Act to give protection to certain classes of tenants in the City of Madras. WHEREAS it is necessary to give protection to tenants who in many parts of the City of Madras have constructed buildings on others' lands in the hope that they would not be evicted so long as they pay a fair rent for the land and

WHEREAS the sanction of the Governor-General has been obtained under section 80-A (3) of the Government of India Act"

The Objects and Reasons of the Act read as under:

"In many parts of the City of Madras, dwelling houses and other buildings have, from time to time, been erected by tenants on lands belonging to others, in the full expectation that subject to payment of a fair ground rent, they would be left in undisturbed possession, notwithstanding the absence of any specific contract as to the duration of the lease or the terms on which the buildings were to be leased. Recently, attempts made on steps taken to evict a large number of such tenants have shown that such expectations are likely to be defeated. The tenants, if they are evicted, can at the best remove the superstructure, which can only be done by pulling down the buildings. As a result of such wholesale destruction, congested parts of the City will become more congested to the serious detriment of public health. In these circumstances, it is just and reasonable that the landlords when they evict the tenants should pay for and take the buildings. There may, however, be cases where the landlord is unwilling to eject a tenant if he can get a fair rent for the land. The Act provides for the payment of compensation to the tenant in case of ejectment for the value of any building which may have been erected by him or his predecessors-in-interest. It also provides for the settlement of fair rent at the instance of the landlord or tenant. Provision is also made to enable the tenant to purchase the land in his occupation su

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2020 Supreme(SC) 83

Cases Referred (7)