Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Bom) 1317

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Ujjal Bhuyan, Madhav J. Jamdar, JJ.
Modern India Limited - Appellant
Versus
Union Of India & Ors. - Respondents
Writ Petition No. 1584 of 2007, Interim Application (L) No. 9613 of 2020, Interim Application (ST.) No. 99618 of 2020 and Interim Application (ST.) No. 99620 of 2020 in Civil Revision Application No. 148 of 2011
Decided On : 08-10-2021

Advocates appeared:
Milind Sathe, Senior Advocate, Gaurav Shrivastava, Nikita Vardhan and Harsh Shah i/b Kanga and Company, for the Appellant / Atul Damle, Senior Advocate, S.R. Page, Ashok R. Varma, Uma Palsuledesai, Dushyant Kumar, AGP and Musharaf Shaikh i/b Kiran Bhagalia, for the Respondents

The court upheld the constitutionality of the Burmah Shell Act and refused to interfere with BPCL's decision to renew the lease and retain possession of the premises, as well as the lower appellate court's decision.

Headnote:
Burmah Shell Act - Lease Renewal - Sections 5 and 7 - The judgment discusses the challenge to the constitutional validity of sections 5(2) and 7(3) of the Burmah Shell Act, 1976, and the refusal to interfere with the decision of BPCL to renew the lease and for handing over possession of the premises. The court also declines to interfere with the lower appellate court's decision. The petitioner is entitled to withdraw compensation deposited by Mumbai Metro Rail Corporation Limited and receive further compensation directly from them. BPCL is directed to enhance the rent for the renewed lease period in line with the periodic enhancements in the original lease deed.
Fact of the Case:

The case involves a dispute over the renewal of a lease agreement for a plot of land owned by the petitioner, Modern India Limited, and the refusal of BPCL to vacate the premises. The lower courts dismissed the petitioner's suit for eviction, and the appellate court affirmed BPCL's statutory right to renew the lease for a further 35 years under the Burmah Shell Act, 1976.
Finding of the Court:

The court rejected the challenge to the constitutional validity of the Burmah Shell Act and declined to interfere with BPCL's decision to renew the lease and retain possession of the premises. The court also declined to interfere with the lower appellate court's decision.
Issues: The main issues involved the challenge to the constitutional validity of the Burmah Shell Act, the refusal to interfere with BPCL's decision to renew the lease and retain possession of the premises, and the refusal to interfere with the lower appellate court's decision.
Ratio Decidendi: The court upheld the constitutionality of the Burmah Shell Act and refused to interfere with BPCL's decision to renew the lease and retain possession of the premises, as well as the lower appellate court's decision.
Final Decision: The court disposed of the writ petition and the civil revision application, directing the petitioner to withdraw compensation deposited by Mumbai Metro Rail Corporation Limited and receive further compensation directly from them. BPCL was directed to enhance the rent for the renewed lease period in line with the periodic enhancements in the original lease deed.

JUDGMENT

Ujjal Bhuyan, J. - Subject matter of Writ Petition No. 1584 of 2007 and Civil Revision Application No. 148 of 2011 being interrelated, both were heard together and are being disposed of by this common judgment and order.

1.1. The writ petition and the civil revision application came to be tagged together after the order dated 16.03.2011 was passed in the civil revision application.

2. We have heard Dr. Milind Sathe, learned senior counsel for the petitioner in both the writ petition and the civil revision application; Mr. Atul Damle, learned senior counsel for respondent No. 3 in the writ petition and respondent No. 1 in the civil revision application; and Mr. A.R. Verma, learned counsel for respondent Nos. 1 and 2 in the writ petition.

3. In Writ Petition No. 1584 of 2007, petitioner has prayed for the following reliefs:-

a. for a declaration that provisions of sections 5 and 7 of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 are ultra vires and unconstitutional;

b. to set aside and quash decision of respondent No. 3 contained in letter dated 25.03.2004; and

c. to handover vacant and peaceful possession of the plot of land admeasuring 1800 square yard being Cadastral Survey No. 1895 of Byculla Division situated at K. Khadye Marg (formerly Arthur Road), Mahalaxmi, Mumbai.

4. In Civil Revision Application No. 148 of 2011, the prayer made is for setting aside the judgment and order dated 03.12.2010 passed by the Court of Small Causes at Mumbai in Appeal No. 165 of 2007 (Modern India Limited Vs. Bharat Petroleum Corporation Limited).

5. Relevant facts leading to filing of the two petitions and also post filing of the two petitions as brought on record may be briefly highlighted.

6. Subject matter of both the proceedings is a plot of land owned by the petitioner Modern India Limited admeasuring 1800 square yards equivalent to 1505 square meters situated at Mahalaxmi, Mumbai bearing Cadastral Survey No. 1895 of Byculla Division.

6.1. A lease deed was executed between Modern India Limited (earlier known as 'Modern Mills Limited') and Burmah Shell Oil Storage and Distributing Company of India Limited (for short 'Burmah Shell' hereinafter) on 29.10.1969, thereby granting on lease the aforesaid plot of land (referred to as 'the premises' hereinafter) to Burmah Shell for a period of 35 years from 01.11.1969 to 31.10.2004. Lease rent was fixed at Rs. 66,000.00 per annum from 01.11.1969 to 31.10.1984; Rs. 72,000.00 per annum from 01.11.1984 to 31.10.1994; and Rs. 80,000.00 per annum from 01.11.1994 to 31.10.2004. In the said lease deed there was no clause for renewal of lease. In fact as per clause 2(b), at the expiration of the term of lease or a sooner determination, as the case may be, Burmah Shell shall surrender and deliver to Modern India Limited the premises.

7. The Burmah Shell (Acquisition of Undertakings in India) Act, 1976 was enacted and came into effect from 24.01.1976. Under the said Act, the undertaking of Burmah Shell in India came to be vested in the central government. Section 5 provided for central government to be the lessor or tenant under certain circumstances. Sub-section (2) thereof provided that on the expiry of the term of any lease or tenancy, 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 Burmah Shell immediately before the appointed day.

7.1. Another relevant provision of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 is section 7 empowering the central government to direct vesting of the undertakings of Burmah Shell in a government company. While sub-section (1) provided that the central government may, if it is satisfied that a government company is willing to comply or has complied with such terms and conditions as the government may think fit to impose, direct that the right, title and interest and the liabilities of Burmah Shell in relation to any of its undertaking

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2021 Supreme(Bom) 1317

The court upheld the constitutionality of the Burmah Shell Act and refused to interfere with BPCL's decision to renew the lease and retain possession of the premises, as well as the lower appellate court's decision.

Cases Referred (1)