Very Important points
1. Mere acceptance of rent by the landlord from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer the erstwhile tenant the status of a tenant or a right to be in possession.
2. Where the tenant is not a statutory tenant or tenant holding over, his occupation of premises without consent is wrongful occupation.
3. When the lease expired and when the landlord declined to renew the same and also called upon the erstwhile tenant to surrender possession, the erstwhile lessee could no longer assert that he had any right to the site.
4. The act of holding over after the expiration of the term of lease does not create a tenancy of any kind.

Headnote:(i) Transfer of Property Act, 1882—Section 113—Waiver of notice—Receipt of rent by the landlord after cancellation of lease—It would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in possession.
       Held : The consensus of judicial opinion in this country is that a mere continuance in occupation of the demised premises after the expiry of the lease, notwithstanding the receipt of an amount by the quondam landlord would not create a tenancy so as to confer on the erstwhile tenant the status of tenant or a right to be in possession. In this context, we may refer to judgment of this Court in Raptakos Brett & Co. Ltd. Vs. Ganesh Property, (1998) 7 SCC 184. (Para 28)
       We are, therefore, of the opinion that mere acceptance of rent by the landlord-1st respondent herein from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer the erstwhile tenant the status of a tenant or a right to be in possession. We answer this issue accordingly. (Para 35)
       The act of holding over after the expiration of the term does not create a tenancy of any kind. A new tenancy is created only when the landlord assents to the continuance of the erstwhile tenant or the landlord agrees to accept rent for the continued possession of the land by the erstwhile tenant. (Para 49)
       (ii) Pondicherry Buildings (Lease and Rent Control) Act, 1969—Petroleum Rules, 1976—Rule 153—Nature of tenancy and statutory protection—Right to site—Lease of vacant land—Lessee was given a right to construct a compressor room, store room, a bath room and latrine together with a septic tank—Appellant, tenant vide a lease deed for ten years is dealer of Hindustan Petroleum—Dealership being carried on in leased site belonging to first respondent on grant of No Objection Certificate for the installation of retail outlet of petrol—Purpose of lease was for running a petrol bunk—On expiry of lease, landlord issued notice to appellant seeking vacant possession of the property—Consequently, landlord filed suit for eviction and possession—Whether appellant is a statutory tenant governed by the Rent Control Act—(No)—Whether right to site envisaged under the Petroleum Rules meant a ‘legal right to continue in occupation or possession without interruption’—(No).
       Held : From the above recital, it is crystal clear that what was leased out was a vacant land and that the lessee was given a right to construct a compressor room, store room, a bath room and latrine together with a septic tank. Therefore, in our opinion, the provisions of The Pondicherry Buildings (Lease and Rent Control) Act, 1969 cannot be invoked. The said Act was enacted on 7.6.1969 to regulate the letting of residential and non-residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the Union Territory of Pondicherry. (Para 39)
       It is also mentioned in the plaint that the appellant/tenant herein is not a statutory tenant or tenant holding over since he has been clearly apprised that no rent will be received from him subsequent to the determination of the tenancy and that any amount that might be paid by him will be adjusted towards compensation for illegally occupying the schedule mentioned property. It was also submitted that the first defendant was given possession of a vacant site only and no building was leased out by the plaintiff. (Para 42)
       The word “right” used in Rule 153(1) of the Petroleum Rules, 1976 only means a legal right to continue on the land. It is seen from the judgments referred to in this appeal by us clearly hold that the term “juridical possession” or “litigious possession” do not connote a valid legal right to continue in possession within the meaning of Rule 153 of the Petroleum Rules, 1976. We are, therefore, of the opinion that the occupation without consent is wrongful occupation. (Para 43)
       It is abundantly clear from the recitals in the plaint, the schedule to the notice and to the plaint and also of the lease deed that word “leased out” was only a vacant site to put up a petrol bunk with accessory constructions thereon. The mention of a small shed in the current lease is undoubtedly belonged to the tenant himself and, therefore, the building put up by the tenant situated in the vacant site belongs to the landlord cannot be said to be the building of the landlord in order to attract the statutory protection of the Rent Control Act. This issue is, therefore, answered against the tenant. (Para 46)
       Rule 153(1)(i) of the Petroleum Rules is “right to the site” for storing petroleum. It is not the right for storing petroleum on the site. That is so because that aspect is dealt with specifically in sub-clause (ii) of Rule 153(1) which refers to a no objection certificate, which the District authority or the State Government is required to give. No Objection Certificate which is granted under Rule 144 is the one given by the concerned authority stating that it has no objection for the storage of petroleum on the site after examining the site plan and other relevant factors. The words “right to the site” have, therefore, to be understood as referring to right to the site on which the petroleum is stored. A person can be said to have a right to something when it is possible to find a lawful origin for that right. A wrong cannot be a right of a person who trespasses on to another’s land cannot be said to have a right to the land vis-a-vis the owner because he happens to be in possession of that land. Mere presence on the land by itself does not result in a right to the land. Such presence on the premises may ripen into a right by reason of possession having become adverse to the true owner by reason of the passage of time and possession being open uninterrupted, continuous and in one’s own right. In our opinion, any right which the dealer has over his site was the right which he had acquired in terms of the lease. When that lease expired and when the landlord declined to renew the same and also called upon the erstwhile tenant to surrender possession, the erstwhile lessee could no longer assert that he had any right to the site. His continued occupation of something which he had no right to occupy cannot be regarded as source of a right to the land of which he himself was not in lawful possession. (Paras 48 and 49)
       The words “right to the site” in Rule 153(1)(i) must, therefore, in our opinion, be given their full meaning and the effect that unless the person seeking a licence is in a position to establish a right to the site, he would not be entitled to hold or have his licence renewed. We have already rejected the contention of Mr. L.N. Rao that the appellant-tenant is a statutory tenant for the reasons recorded earlier. The lease deed is very clear as to what was leased. The lease was of vacant land. That is evident from the recitals in the plaint, legal notice, lease deed etc. It is, therefore, not in dispute that the lease of land is not covered by the statute, The Pondicherry Buildings (Lease and Rent Control) Act, 1969 in force extending protection to tenants. (Para 49)
       (iii) Constitution of India—Article 226—Petroleum Rules, 1976—Rule 144—Writ petition—Expiry of lease—Purpose of lease was for running a petrol bunk—Suit for eviction filed by landlord—Landlord sought for a writ of mandamus directing that licence of appellant to carry on petrol bunk shall not be renewed—Allegations that appellant had lost his right to site and hence was liable to be cancelled under Rule 153(1) of the Rules—Whether High Court was justified in allowing the writ petition—(Yes).
       Held : We now come to the last contention of Mr. L.N. Rao that the first respondent is not entitled to maintain the writ petition as the proceedings initiated by him before the Collector for cancellation of the No Objection Certificate is pending. The said submission cannot be accepted. While granting NOC, the Collector is not concerned about the ownership of the land. He is concerned about the location of the land and its suitability as a place for storage of petroleum. Rule 144 deals with the grant of NOC does not contemplate an enquiry into the ownership of the land nor does it require the Collector to enquire into the nature of the right claimed by the person who has applied for the NOC. (Para 50)

Judgment

Dr. AR. Lakshmanan, J.—The above appeal is directed against the final judgment and order of the High Court of Judicature at Madras dated 7.10.2003 in Writ Appeal No. 1149 of 2002 thereby dismissing the same.

2. The short facts which are relevant for the disposal of this appeal are as under:

The appellant-C. Albert Morris is the tenant of the first respondent-K. Chandrasekaran (landlord) vide a lease deed for ten years culminating in the year 1966. The appellant is the dealer of the second respondent - The Hindustan Petroleum Corporation Ltd. The said dealership is being carried on in the leased site belonging to the first respondent. The Government of Pondicherry granted No Objection Certificate under Rule 144(1) of the Petroleum Rules, 1976 for the installation of retail outlet of petrol and HSD. The said No Objection Certificate mentioned the details and description of the location of the said outlet. As already noticed, the appellant entered into a lease deed with the first respondent-landlord for a period of ten years. The purpose of the lease was clearly mentioned as for running a petrol bunk. On 15.5.1992, the landlord issued notice to the appellant seeking vacant possession of the property. The appellant caused a reply notice to the same denying the various allegations. Consequently, the landlord filed O.S.No. 58 of 1994 on the file of the Principal sub-Judge, Pondicherry praying for a decree of eviction and possession. The said suit was dismissed for default and non-prosecution. The landlord, however, filed an application for restoration of the said suit. During the pendency of the application of the restoration, the landlord again issued a notice of termination of lease entered into between the appellant and the first respondent-landlord. The appellant caused a reply notice to the landlord. The appellant-tenant also raised the defence that during the renewal of the lease deed, there were super-structures on the same and hence the appellant is a statutory tenant governed by the Rent Control Act and hence the notice is wholly illegal. On 4.12.1996, the landlord then approached the 3rd respondent-the Joint Chief Controller of Explosives (South Circle), Shastri Bhawan, Chennai seeking to cancel the permission granted to the appellant for the storage of petroleum. The landlord also approached the authorities at Pondicherry to revoke the No Objection Certificate granted in the name of the appellant.

3. While so, the landlord sought for a writ of mandamus before the High Court directing that the licence of the appellant to carry on petrol bunk shall not be renewed. It was his contention that the appellant had lost his right to site and hence was liable to be cancelled under Rule 153(1) of the Petroleum Rules, 1976. In reply to the writ petition, the appellant put forth the following submissions:

1. That the right to site envisaged under the Petroleum Rules is synonymous to the right of mere possession as the licence to trade in petroleum and also the No Objection Certificate for storage were still valid and not cancelled under the law;

2. That the appellant was a tenant holding over and not a tenant at sufferance or a trespasser as put forth by the landlord;

3. That the tenant is also a statutory tenant and hence entitled to the protection of the Rent Acts.

4. The above submissions of the appellant did not find favour with the learned single Judge of the High Court who allowed the writ petition filed by the landlord purely relying upon the decisions based on the Cinematograph Act to conclude that a “right” only meant a “legal right to continue in occupation or possession without interruption” and that the possession of the site did not entitle him for renewal. However, the learned single Judge held that the appellant could be dispossessed only under the due process of law.

5. Aggrieved by the same, the appellant approached the Division Bench of the High Court by way of an appeal. The Division Bench upheld the order of the le

Click Here to Read the rest of this document

2005 Supreme(SC) 1402

Cases Referred (7)