1. Lease of land for petrol retail outlet expired — lessor sought possession after expiry and failure to renew. (Para 4 , 5 , 6 )
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2025 Supreme(Telangana) 2302
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
N.V. SHRAVAN KUMAR, J.
P. Geetha Lakshmi and others - Petitioners
Versus
M/s. Indian Oil Corporation Ltd. - Respondent
Writ Petition Nos.16735 and 29399 of 2023
Decided On : 11-07-2025
Advocates Appeared:
For the Petitioner: Mr. A.Venkatesh, Sr. Counsel (in both the WPs).
For the Respondents: Mr. Dominic Fernandes Standing counsel in both WPs.
For the Petitioner: Mr. A.Venkatesh, Sr. Counsel (in both the WPs).
For the Respondents: Mr. Dominic Fernandes Standing counsel in both WPs.
A state instrumentality cannot occupy premises after a lease expires without a valid renewal. Under Rule 152(1)(i) of the Petroleum Rules 2002, any license for storing petroleum must be cancelled if the licensee ceases to have the legal right to the site.
Headnote:(A) Petroleum Rules, 2002 - Rule 152(1)(i) - Constitution of India - Article 226 - Expiry of lease - Right to site for storing petroleum - Cancellation of license - A license granted under the rules shall stand cancelled if the licensee ceases to have any right to the site for storing petroleum (Para 19).
(B) Writ Jurisdiction - Maintainability - Occupation of premises by state instrumentality after expiry of lease - Writ Court is justified in directing a state instrumentality to vacate premises and handover possession to the lessor when occupation is unlawful and lacks probity, even if the matter involves some disputed questions of fact or contractual obligations (Paras 21, 22).
Facts of the case:
The petitioners leased a property to a petroleum company for a period of 15 years. Following the expiration of the lease, negotiations for renewal were held regarding rent escalation, but no new lease agreement was executed. Despite an eviction notice issued by the petitioners, the company continued to occupy the premises. Additionally, the licensing authority renewed the explosives license for the retail outlet on the subject property despite the expiry of the lease, which is a prerequisite for the license.
Findings of Court:
The court found that the respondent company had no subsisting valid lease and therefore no legal right to continue occupying the land. The renewal of the license by the authority was in contravention of the rules because the licensee had ceased to have the right to the site at the time of renewal.
Issues: I. Whether a writ petition is maintainable to seek the eviction of a state instrumentality from premises after the expiry of a lease period. II. Whether a license for storing petroleum is sustainable if the lease for the premises has expired.
Ratio Decidendi: Occupation of land by a statutory corporation after the expiry of a lease without a valid renewal agreement is unlawful and lacks probity. Under Rule 152(1)(i) of the Petroleum Rules, 2002, the cessation of the right to the site necessitates the cancellation of the license. The High Court is empowered under Article 226 to direct a state instrumentality to vacate private premises and pay arrears of rent when the occupation is unlawful (Paras 21, 23).
Result: Writ Petitions allowed. Respondent No. 1 directed to vacate premises and handover possession within three months and pay rent arrears. Respondent No. 2 directed to take immediate steps to cancel the license.
Legal Category Hierarchy
- property law
- administrative law
- practice and procedure
- petroleum law
Table of Contents
2. Lessor sought eviction and licence cancellation; lessee claimed renewal negotiations were ongoing and disputed facts required civil suit. (Para 13 , 14 , 16 , 17 )
3. No subsisting lease exists — lessee illegally retained possession; licence renewal without valid lease violated Petroleum Rules. (Para 19 , 21 , 23 )
4. A statutory corporation continuing occupation after lease expiry without renewal has no right to squat on the property. (Para 21 , 22 )
5. Writ petitions allowed — respondent oil corporation directed to vacate and hand over possession within three months; licence to be cancelled. (Para 22 , 23 , 24 )
6. Is a writ petition maintainable for eviction against a 'State' oil company after lease expiry?
Yes, a writ petition under Article 226 is maintainable; occupier's conduct as a statutory corporation makes relegation to civil suit unjust. (Para 14 , 21 , 22 )
7. Does a lessee have any right to continue occupation after lease expiry without a renewed agreement?
No, without a renewed lease agreement, the lessee has no right to occupy; continued squatting is unlawful and causes monetary loss. (Para 19 , 21 )
8. Can a licence under the Petroleum Rules be renewed without verifying a subsisting lease?
No, licence renewal without verifying a subsisting lease contravenes Rule 152(1)(i) of the Petroleum Rules, 2002. (Para 19 , 23 )
9. What is the effect of Rule 152(1)(i) of the Petroleum Rules on a licence when the lessee's right to the site ceases?
The licence stands cancelled if the licensee ceases to have any right to the site for storing petroleum. (Para 19 )
ORDER :
N.V. SHRAVAN KUMAR, J.
Since the issues involved in both the writ petitions are one and the same, both the writ petitions are disposed of by way of this common order.
2. Writ Petition No.16375 of 2023 is filed praying to issue a Writ of Mandamus directing the Respondent No.1 to vacate the Schedule Property belonging to the petitioners herein i.e., the land admeasuring 1501 Sq. yards forming part of total extent of 37.5 gts., of land in Survey No.20, Nagarjuna Sagar, Hyderabad road, Lingojiguda, Saroornagar, Ranga Reddy District, Telangana.
3. Writ Petition No.29399 of 2023 is filed questioning the inaction of Respondent No.2 in cancelling the license granted to the Respondent No.1 vide No.P/SC/TG/4/2624(P21180) in pursuance to show cause notice dated 10.07.2023 with a consequential direction to respondent No.2 to cancel the license granted to respondent No.1 vide No.13/SC/TG/14/2624(P21180) in pursuance to show cause notice dated 10.07.2023 as per Rule 152(1)(i) of Petroleum Rules, 2002.
4. The brief facts in W.P.No.16735 of 2023 are that petitioners claims to be owners of the land admeasuring 1501 sq.yds., forming part of total extent of 37.5 gts., of land in Sy.No.20, Nagarjuna Sagar Road, Lingojiguda, Saroornagar, Ranga Reddy District, Telangana (subject property) having taken on lease for 30 years from one Mr.M.Kishan Rao vide registered lease deed bearing Doc.No.3 of 2003 dated 31.12.2002 registered at the Sub-Registrar, Saroornagar. That as per the registered Will Deed of Sri M. Kishan Rao, vide Document No.160/111/2018 registered at the Sub-Registrar, Chikkadpally, the said property stood transferred to the name of the petitioners herein after the death of said M.Kishan Rao.
5. Respondent No.1 is a company dealing with the business of petroleum products and were looking to set up it MS and HSD retail outlets at Lingojiguda village, Saroornagar Mandal and approached the Petitioner with an offer to obtain the subject property on lease. Accordingly, the Petitioner Nos.1 to 3 jointly executed a lease dead in favour of M/s.Indian Corporation Ltd. (i.e., the 1st Respondent herein) vide registered lease deed No.2756/2003 dated 18.06.2003 registered at Sub-Registrar, Saroornagar. As per the lease deed, the lease period was for 15 years to commence from 27.05.2003 with monthly lease rent of Rs.19,993/- with 10% increase after every 5 years and as per clause 12 of the lease deed, if the 1st respondent was desirous of renewing the lease deed, they were to give a notice not less than 3 months prior to the expiration of the lease deed and upon receiving such notice, the petitioners may renew lease of the said premises on mutual terms. Admittedly, the said lease deed had expired on 17.06.2018 and there was no communication from the respondent authorities for the renewal of the lease.
6. It is further submitted that after expiration of the lease deed dated 18.06.2003, the petitioner informed the respondent No.1 of the same and held discussions for revision of the lease amounts with extension for a further period of 15 years. Though Respondent No.1 agreed for monthly rental of Rs.3,30,000 with escalation of 10% every 3 years and further lease period of 15 years, the same was not reverted and no new lease deed was executed. As such the Petitioners herein issued letter dated 01.06.2021 requesting respondent No.1 to vacate the subject property within one month from date of receipt of the said notice and to pay the differential new rent from the date of previous lease expiry. Despite, the Petitioners' repeated requests, neither there was any response from the respondent No.1 as to the extension of the lease nor the premises was vacated and no rents have been received since then.
7. It is further submitted that respondent No.1 applied for renewal of the explosives license which is mandatory for the purchase/sale/storage of petrol and other related products by making online application to Respondent No.2 i.e., Petroleum and Explosives Safety
