http://JUDIS.NIC.IN

SUPREME COURT OF INDIA

Page 1 of 7

CASE NO.:

Appeal (civil) 2202 of 2007

PETITIONER:

Bharat Petroleum Corpn. Ltd

RESPONDENT:

Maddula Ratnavalli & Ors

DATE OF JUDGMENT: 27/04/2007

BENCH:

S.B. Sinha & Markandey Katju

JUDGMENT:

J U D G M E N T

CIVIL APPEAL NO. 2202 OF 2007

[Arising out of SLP (C) No.10662 of 2006]

WITH

CIVIL APPEAL NO. OF 2007

[Arising out of SLP (C) No.18532 of 2006]

S.B. Sinha, J.

1. Leave granted.

2. Appellant is a Government company. The Parliament enacted

the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 (The said

Act), inter alia, to provide for acquisition and transfer of the title, right and

interest in the "Burmah Shell Oil Storage and Distributing Company of

India Ltd." to Bharat Petroleum Corporation Limited. The said Act came

into force on 24.01.1976 which was the ’appointed day’ fixed within the

meaning of Section 2A(c) of the Act. By reason of Section 3 of the said Act

the right, title and interest of Burmah Shell stood transferred to and vested

in the Central Government. Section 5 of 1976 Act provides that the Central

Government shall be deemed to be the lessee or tenant under the

circumstances specified therein. Sub-section (2) of Section 5 which is

relevant for our purpose reads thus :

"On the expiry of the terms of any lease or tenancy

referred to in sub-section (1) 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 the

appointed day."

3. It is not in dispute that the Central Government in exercise of

its power conferred upon it under section 7 of the said Act directed that the

undertaking of the Burmah-shell shall vest in the appellant herein which is a

Government company; the consequences, inter alia, wherefor is laid down

in sub-section (3) thereof which reads as under :

"The provisions of sub-section (2) of section 5 shall

apply to a lease or tenancy, which vests in a Government

company, as they apply to a lease or tenancy vested in

the Central Government and reference therein to the

"Central Government" shall be construed as a reference

to the Government company."

http://JUDIS.NIC.IN

SUPREME COURT OF INDIA

Page 2 of 7

4. Burmah-shell, the predecessor-in-interest of the appellant was a

lessee for a period of 30 years by virtue of a deed of lease which was

executed on or about 25.07.1959 by the respondent. The stipulated rent was

Rs.50/- per month. On expiry of the period of lease on 30.08.1985, the

appellant exercised its purported right of renewal by issuing a notice on or

about 24.05.1989 stating :

"On 1st August, 1977, another fresh certificate of

incorporation was issued under the same section of the

Companies Act, 1956, effecting the change in the name

of the Company from Bharat Refineries Ltd., to Bharat

Petroleum Corporation Ltd., which change as before does

not affect any rights or obligations of the Company.

This is to advise you that in terms of Section 5 and

Section 7(3) of the Burmah-Shell (Acquisition of

Undertaking in India) Act, 1976, extract of which is

enclosed for your reference, we desire to renew the lease

for a further period of 30 years commencing from

25.7.1989 on the same terms and conditions on which the

lessee abovementioned viz. Burmah-Shell Oil Storage &

Distributing Co. of India Ltd., held the lease immediately

before the appointed day viz. 24th January, 1976.

May we therefore, request you to let us know when it

will be convenient for you to have the lease registered on

terms similar to those existing in the current lease. On

receipt of your advice in this matter, we shall take further

action."

5. Respondents did not agree thereto. They, on the other hand, by

a letter dated 26.08.1990 stated that as the rent in respect of the s