1993 Supreme(Ori) 82

High Court Of Orissa
G. B. Pattanaik , B. N. DASH
DOLLY DAS - Appellant
Versus
HINDUSTAN PETROLEUM CORPORATION LTD. - Respondent
ORIGINAL JURDN.  2162  Of  1993
Decided On : 08/11/1993

Sections 5 (2) and 7 (3) of the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977, contemplate a renewal of the lease for one term only, to give the Government a breathing space to manage its affairs.

Headnote:

CALTEX (ACQUISITION OF SHARES OF CALTEX OIL REFINING (INDIA) LIMITED AND OF THE UNDERTAKINGS IN INDIA OF CALTEX (INDIA) LIMITED) ACT, 1977 - SECTIONS 5 AND 7 - RENEWAL OF LEASE - INTERPRETATION - RIGHT OF RENEWAL - EXERCISE OF OPTION - CONDITIONS - POWER OF CENTRAL GOVERNMENT - HOLDING OVER - DAMAGES - APPOINTMENT OF AGENT - PUBLIC SECTOR UNDERTAKING - FORCIBLE OCCUPATION OF PROPERTY - COURT'S JURISDICTION.

Fact of the Case:

The petitioner, as the lessee of a disputed plot, was in possession of the leasehold property based on a lease deed executed in 1964. The lease was initially granted for industrial and commercial purposes, mainly for an automobile shop room and service station. The original lessee was M/s. Kalinga Automobiles, a partnership firm, and the petitioner was the sole lessee at the time of the dispute. M/s. Caltex (India) Limited entered into a lease agreement with the petitioner and became the sub-lessee in respect of the disputed premises. The lease deed contained a clause conferring an option of renewal with the lessee for a further term of ten years to be exercised before the expiry of the term created under the original lease. While the original lease was continuing, the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Ordinance, 1976, was promulgated, and the Government of India issued a notification vesting the right, title, and interest and liabilities of Caltex (India) in relation to its undertakings in India with Caltex Oil Refining (India) Limited. Subsequently, the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977, was enacted, and the Company Law Board passed an amalgamation order amalgamating Caltex Oil Refining (India) Limited and Hindustan Petroleum Corporation Limited. The HPCL expressed its desire to renew the lease for a further period of 10 years by requesting through a letter dated 23rd of May, 1979. The petitioner indicated that the monthly rental should be revised in view of the escalation of the Government rate for the land and also indicated that since the Corporation had appointed a dealer and M/s. Kalinga Automobiles was in business in automobiles, the Corporation may appoint them as a dealer. However, no lease deed was executed in accordance with Clause 3 (g) of the original lease agreement, nor was any such deed registered. The HPCL continued to occupy the premises, and the petitioner continued to receive the monthly rent. On 13th of September, 1989, HPCL intimated M/ s. Kalinga Automobiles Ltd. that they are exercising the further right to renew the lease for a period of 20 years commencing from 1-10-1989 in accordance with Ss. 5 and 7 (3) of the Act. The petitioner replied that there has been no execution and registration of any lease deed in favor of the Corporation in accordance with Clause 3 (g) of the agreement subsequent to the expiry of 10 years' period which expired on 30-9-1979 and, therefore, the question of exercising any further right of renewal under Ss. 5 and 7 (3) of the Act does not arise. The petitioner requested the Corporation to handover the premises. The petitioner approached the Court for the following reliefs: (A) to declare that opposite party No. 1 has no right under Ss. 5 and 7 of the Act to claim any renewal of the lease in respect of the premises in question; (B) to quash the letter of opposite party No. 1 dated 13-9-1989, annexed as Annexure-5; and (C) to grant such further relief as the court may deem fit and proper.

Finding of the Court:

The Court held that HPCL, as the successor-in-interest of the original lessee, Caltex (India) Limited, was not entitled to exercise any option for renewal for a further period after the renewed term of 10 years expired in 1989. The Court interpreted Sections 5 (2) and 7 (3) of the Act to mean that they contemplate a renewal of the lease for one term only, to give the Government a breathing space to manage its affairs. The Court also held that HPCL could exercise the power under Section 5 (2) or Section 7 (3) of the Act, as it had acquired all the rights, liabilities, and assets of the former Company and the rights that were with the Central Government had vested with HPCL. The Court further held that the impugned letter under Annexure-5 was without jurisdiction as such a power could not be conceived of under Section 5 (2) and Section 7 (3) of the Act. The Court also held that the Corporation was liable to pay the petitioner damages at the rate of Rs. 5,000/- per month until the Corporation vacates the premises in question and delivers possession of the same to the petitioner, as the Corporation's possession would be that of a trespasser after 1989. The Court observed that the Corporation should appoint the petitioner as its agent to run the petrol pump in question if the petitioner expresses a desire to continue the running of the petrol pump as an agent of the Corporation at the premises in question, since the petitioner is the owner of the premises.

Issues: 1. Whether HPCL had the right to exercise an option for renewal for a further period after the renewed term of 10 years expired in 1989? 2. Whether HPCL could exercise the power under Section 5 (2) or Section 7 (3) of the Act? 3. Whether the impugned letter under Annexure-5 was without jurisdiction? 4. Whether the Corporation was liable to pay the petitioner damages for holding over the premises after 1989? 5. Whether the Corporation should appoint the petitioner as its agent to run the petrol pump in question if the petitioner expresses a desire to continue the running of the petrol pump as an agent of the Corporation at the premises in question?

Ratio Decidendi: 1. The Court interpreted Sections 5 (2) and 7 (3) of the Act to mean that they contemplate a renewal of the lease for one term only, to give the Government a breathing space to manage its affairs. Therefore, HPCL, as the successor-in-interest of the original lessee, Caltex (India) Limited, was not entitled to exercise any option for renewal for a further period after the renewed term of 10 years expired in 1989. 2. The Court held that HPCL could exercise the power under Section 5 (2) or Section 7 (3) of the Act, as it had acquired all the rights, liabilities, and assets of the former Company and the rights that were with the Central Government had vested with HPCL. 3. The Court held that the impugned letter under Annexure-5 was without jurisdiction as such a power could not be conceived of under Section 5 (2) and Section 7 (3) of the Act. 4. The Court held that the Corporation was liable to pay the petitioner damages at the rate of Rs. 5,000/- per month until the Corporation vacates the premises in question and delivers possession of the same to the petitioner, as the Corporation's possession would be that of a trespasser after 1989. 5. The Court observed that the Corporation should appoint the petitioner as its agent to run the petrol pump in question if the petitioner expresses a desire to continue the running of the petrol pump as an agent of the Corporation at the premises in question, since the petitioner is the owner of the premises.

Final Decision: The Court allowed the writ application and issued the following directions: (I) The impugned letter of Hindustan Petroleum Corporation Limited under Annexure 5 is quashed as the Corporation does not have the power to exercise option for any further renewal after expiry of the renewed period in 1989; (II) The said HPCL should deliver the vacant possession of the premises in question to the petitioner; (III) Subsequent to 30-9-1989, the date on which the renewed period of ten years expired, the HPCL would be liable to pay the petitioner at the rate of Rs. 5,000/- (five thousand) per month till vacating the premises in question in favor of the petitioner: (IV) It would be open for the HPCL to negotiate with the petitioner and if the petitioner agrees, to appoint the petitioner as an agent of HPCL for continuing the petrol, pump in question.