Sections 5(2) and 7(3) of the Burma Shell (Acquisition of Undertakings in India) Act, 1976 do not provide for automatic renewal of a lease upon the expiry of the original lease term. The Central Government, as the successor to Burmah Shell's tenancy, was required to take steps under Section 107 of the Transfer of Property Act to renew the lease, but it failed to do so.

By consent of both the counsel, the second appeal itself is taken up for final disposal, since both agreed that the issue involved in the second appeal is mainly covered by the Judgment reported in Bharat Petroleum Corporation Limited v. Ashwinraj, A.I.R. 1996 Mad. 285.

2. The unsuccessful defendant before the courts below is the appellant herein. The first respondent herein has filed the suit O.S. No.628 of 1985 on the file of the City Civil Court, Madras against the appellant herein for recovery of possession. The plaintiff’s case is that the suit property originally belonged to one G.Renganayaki Ammal who executed a Will on 30.9.1971, pursuant to which the plaintiff became the owner of the property. Originally one Burmah Shell Oil Storage and Distributing Company of India Limited, had taken the suit property on lease in the year 1938 from the said Renganayaki Ammal. Periodically the lease has been renewed, contemplating the increase in the rent from time to time. Lastly the lease was renewed with the said company on 15. 1966 which was to expire on 38. 1984. In the meanwhile, under the Burma Shell (Acquisition of Undertakings in India) Act, 1976 (Act 2 of 1976), the said company was taken over by the Government of India and from 21. 1976, it has been deemed to be the Government Company. The assets and liabilities of the said company vested with the Government of India in accordance with Sec.5 of the said Act. From 12. 1976 the name of the company is also changed as Burmah Shell Refineries and later as Bharat Refineries. Subsequently on 8. 1977 the Government has changed the name of the company as Bharat Petroleum Corporation Limited, the appellant herein. By virtue of the provisions of the said Act, the appellant herein became the tenant under the first respondent about which there is no dispute.

3. After the expiry of the period of lease, pursuant to the lease agreement, the plaintiff issued a notice on 11. 1984 to vacate the premises. Under the said notice, the defendant was given nine months time. The appellant herein issued a reply stating that as per the provisions of Secs.5 and 7 of the said Act, the appellant is entitled for renewal. Though the appellant is entitled for the renewal as per Secs.5 and 7 of the said act, the appellant did not take any steps to renew the lease and as such they have lost the right of renewal and liable to vacate the premises.

4. The appellant herein filed written statement disputing the claim of the plaintiff for recovery of possession. There is no denial with regard to the title of the plaintiff. It is further contended that even though the lease deed between the original owner Renganayaki Ammal and the original company do not contain any clause of renewal, still the appellant is entitled for renewal pursuant to Ss.5(2) and 7(3) of the said Act. Hence the plaintiffs contention that the lease cannot be renewed, cannot be countenanced. The appellant is a tenant holding over, since they continue to be the tenants, even though the lease period was over and as such they should be deemed to be the tenant under the plaintiff.

5. No oral evidence was let in by both the parties. On the basis of the documentary evidence produced by the parties, the trial court found that the plaintiff is entitled to get recovery of possession and on that basis decreed the suit by judgment and decree dated 10. 1991. As against this, the appellant herein filed an appeal in A.S. No.281 of 1992 on the file of the City Civil Court, Madras. The lower appellate court also concurred with the findings of the trial court and dismissed the appeal by its judgment and decree dated 13. 1993. Aggrieved by the same, the present second appeal has been filed by the appellant herein.

6. The learned counsel for the appellant contended that they are entitled for the renewal of lease, since the appellant had exercised their option to renew the lease under Ex.A-2, the reply sent by the appellant to the respondent’s notice