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2000 DIGILAW 299 (BOM)

Florence Gabriel Sequeira and another v. Hindustan Petroleum Corporation Ltd. and another

2000-04-27

A.B.PALKAR

body2000
JUDGMENT - A.B. PALKAR, J.:---This is a suit for specific performance of a clause in the lease deed for renewal of lease dated 9-9-1969 from plaintiffs to defendants coupled with a prayer calling upon defendant No. 2 (the superior lessor) to enter into a lease or renew the lease in favour of defendant No. 1 as per their inter se contract. There is an alternate prayer for damages of Rs. 1,00,00,000/- if the specific performance cannot be granted. The case of the plaintiffs in briefly is as below. 2.Plaintiff No. 2 is a private limited company of which plaintiff No. 1 is the Managing Director. Defendant No. 1 Hindustan Petroleum has taken over the assets and liabilities of M/s. Caltex Oil Refining (India) Ltd. ('Caltex India' for short) and for all practical purposes stands substituted for the said company. Defendant No. 2 the Board of Trustees of the Port of Bombay are owners of the suit property described particularly in the plaint. 3.Defendant No. 2 by lease deed dated 22-11-1938 demised a piece of land (suit property) to Caltex India for a period of 20 years on 1-11-1937 on the terms and conditions contained in the lease deed. Plaintiff's are at present sub-lessees of the demised property from defendant No. 1 and defendant No. 2 is the superior lessor of defendant No. 1. Plaintiff No. 1 has built up a petrol service station and shop of accessories and garages on the suit property. Defendants have allowed plaintiff No. 1 to carry on business in the name of plaintiff No. 2 in the suit property. 4.Caltex India have granted sub lease together with the buildings and structures standing thereon. Defendant No. 1 renewed the lease in respect of the demised property for further period of 30 years from 1-11-1960 to 31-10-1990 as per terms and conditions contained in the lease deed dated 9-9-1969. As per clause 2 of the said lease, it was agreed between Caltex India and plaintiff that Caltex India (i.e. now defendant No. 1) defendant No. 1 will at the request of the tenant made 7 (seven) calendar months before expiry of the term grant him lease of the demised premises for such further period and upon said terms as defendant No. 1 shall obtain from their superior lessor by exercising the renewal clause in a lease deed. The sub-lease expires on 30-10-1990 and the lease in favour of Caltex India (defendant No. 1) also expires on 31-10-1990. Therefore, plaintiff No. 1 by his letter dated 26-3-1990 addressed to defendant No. 1 had exercises his right for renewal of the sub lease in his favour and requested defendant No. 1 to renew the lease and to request the superior lessor to renew the lease in favour of defendant No. 1. By another letter dated of 21-4-1990 defendant No. 1 was reminded to take steps in these directions. However, no replies were given by defendant No. 1. Plaintiff therefore wrote letter to defendant No. 2 on 30-4-1990 intimating them about the request made to defendant No. 1 for renewal. However, defendant No. 2 informed the plaintiff that no such application for renewal of lease has been received from defendant No. 1. Further more it is not also practice of defendant No. 2 to enter into correspondence with sub lessee. Plaintiffs have not committed breach of any condition of the sub lease and are entitled to exercise the option of renewal and as the defendants have failed to comply with the request of the plaintiff, present suit is filed regarding the reliefs indicated in the earlier paras. 5.Contesting the suit, defendant No. 1 contended in his written statement that plaintiff No. 2 signed dealership agreement with Caltex India in the year 1940. Caltex India were predecessor in title of defendant No. 1. After taking over business of Caltex India, no agreement has been entered into between defendant No. 1 and plaintiffs. Certain norms and practice have undergone change after said take over by defendant No. 1. Defendant No. 1 has a specific dealership form which is required to be signed by the dealer and despite repeated requests made to plaintiff to enter into such agreement with defendant No. 1, plaintiffs have not only failed but have refused and neglected to do so. Letter dated 26-3-1990 has not been received by defendant No. 1. They have also not received a letter dated 21-4-1990 and as such they have not received any such request for renewal of the sub lease. Since defendant No. 1 did not receive the above referred letters of plaintiff, there was no reason for them to make any request for renewal to defendant No. 2. They have also not received a letter dated 21-4-1990 and as such they have not received any such request for renewal of the sub lease. Since defendant No. 1 did not receive the above referred letters of plaintiff, there was no reason for them to make any request for renewal to defendant No. 2. Even otherwise the plaintiff has committed several breaches of the sub lease, namely, plaintiffs have created encumbrance of mortgage on the property in violation of the conditions of the lease. The property was mortgaged to Avertona Corteira Fernandes, Joseph Manuel Dias and Joseph Noronha Fuido without obtaining any permission of defendant No. 1 as required by the sub lease. Plaintiff cannot compel defendant No. 2 to execute lease in favour of defendant No. 1 as he is not a party to the agreement between defendants inter se. Plaintiffs have also inducted tenants on the property and violated the terms and conditions of the sub lease and are not entitled to any reliefs. 6.Defendant No. 2 filed a separate written statement. The contentions are similar. According to defendant No. 2, there is no privity of contract between defendant No. 2 and plaintiffs and defendant No. 2 cannot be called upon at the behest of the plaintiff to execute the lease in favour of defendant No. 1. The suit is not maintainable in the absence of notice as required by section 120 of Major Port Trusts Act, 1963. The claim, if any as against defendant No. 2 is barred by limitation. Lease dated 22-11-1938 expired by efflux of time on 1-11-1957. Sub lease in respect of the suit premises in favour of plaintiff is contrary to the lease deed executed by defendant No. 1 in favour of defendant No. 2 and therefore the sub lease in favour of plaintiff itself is in breach of the terms and conditions of the lease. The lease in favour of defendant No. 1 has not been renewed. The suit against defendant No. 2 is without any cause of action in the absence of any privity of contract between plaintiffs and is misconceived. In any case defendant No. 2 cannot be called upon to execute any lease in favour of defendant No. 1. 7.On the above pleadings issues were framed on 10-12-1999 and on request of the defendants additional issues were framed on 11-2-2000. In any case defendant No. 2 cannot be called upon to execute any lease in favour of defendant No. 1. 7.On the above pleadings issues were framed on 10-12-1999 and on request of the defendants additional issues were framed on 11-2-2000. The issues are reproduced below with my findings thereon recorded against each of them and the reasons for the same are stated in the paragraphs that follows : ISSUESFINDINGS 1) Whether the suit is bad for misjoinder of parties and/or causes of action as alleged in paragraph 1 of the written statement ?Yes. 2) Whether the suit as against the second defendant is misconceived and for want of statutory notice under section 120 of the Major Port Trusts Act, 1963 as alleged in paragraph 3 of the written statement ?Yes. 3) Whether the alleged claim, if any, is barred by limitation under section 120 of the Major Port Trusts Act, 1963 as against the second defendants as alleged in paragraph 5 of the written statement ?No. 4) Whether the alleged agreement for renewal of the sub-lease dated 9th September, 1969 is binding upon the second defendant ?No. 5) Whether the second defendants are bound or liable to execute lease in respect of the suit property either in favour of the first Defendant and/or the plaintiffs ?No. 6) To what relief, if any, are the plaintiffs entitled to as againstAs per the the second defendant ?final order. ADDITIONAL ISSUES : 1) Does plaintiff No. 1 prove that he is shareholder and Managing Director of the plaintiff No. 2 ?Yes. 2) Does plaintiff No. 1 prove that plaintiff No. 2 is registered under the Companies Act ?Yes. 3) Do the plaintiffs prove that defendant No. 1 had given consent to construct on the demised land a petrol service station including bleaching service which is shop of motor accessories and garage for housing cars ?No. 4) Do defendant No. 1 prove that plaintiff No. 2 has signed dealership agreement in the year 1940 with the Caltex India Ltd., who were their predecessor in title ?Not proved. 5) Does defendants prove that plaintiffs have committed breach of the terms and conditions of the said sub-lease or the licence to carry on the business ?Yes. 5) Does defendants prove that plaintiffs have committed breach of the terms and conditions of the said sub-lease or the licence to carry on the business ?Yes. 6) Do plaintiffs prove that they have right to mortgage the said property to third parties ?No. 7) Does defendant No. 2 proves that plaintiffs are not the party of lease agreement, therefore they cannot seek reliefs from defendant No. 2 directly ?Yes. 8) Does plaintiff No. 1 prove that plaintiffs are entitled to claim damages of Rs. one crore ?No. R E A S O N S 8.ISSUE NO. 1 AND 7: It is clear from the pleadings of the plaintiffs that first lease was executed by defendant No. 2 in favour of defendant No. 1 (Caltex India) from 1-11-1937 to 21-12-1957. Thereafter, on 7-2-1939 Caltex India entered into sub lease in favour of plaintiffs for 30 years. At no point of time there was any contract between plaintiffs and defendant No. 2. In the lease deed between defendant Nos. 1 and 2 there is a specific clause that the lessee shall not during the demise assign the said premises or any part thereof without consent in writing of the trustees to such assignment. Admittedly, it is nobody's case that any such written consent was obtained even by defendant No. 1 while granting sub lease to plaintiff. Thus, the very basis of plaintiffs' claim i.e. the lease in his favour granted by defendant No. 1 is in violation of the superior lease between his lessor and the superior lessor. 9.Another aspect of the matter is that admittedly there is no contract whatsoever between the plaintiffs and defendant No. 2. Whatever terms of lease have been entered into between plaintiffs and defendant No. 1 do not bind defendant No. 2 and as such plaintiffs cannot claim any relief either directly or indirectly against defendant No. 2. Plaintiffs cannot claim a relief of specific performance by which he can compel defendant No. 2 to renew the lease in favour of defendant No. 1. Defendant No. 2 not having entered into any contract between defendant No. 2, (sic defendant No. 1) no suit for specific performance can be filed against defendant No. 2. Defendant No. 2 has been joined in suit by plaintiff knowing fully well that there is no privity of contract between him and defendant No. 2. Defendant No. 2 not having entered into any contract between defendant No. 2, (sic defendant No. 1) no suit for specific performance can be filed against defendant No. 2. Defendant No. 2 has been joined in suit by plaintiff knowing fully well that there is no privity of contract between him and defendant No. 2. The superior lease between defendant No. 2 and defendant No. 1 has expired long back by efflux of time. It has not been renewed and even assuming that defendant No. 1 could grant a sub lease under the deed, it could not be so granted after the expiry of lease in favour of defendant No. 1. Suit against defendant No. 2 is misconceived. The suit suffers from misjoinder of parties and causes of action as the defendant No. 2 is not in any way liable to the plaintiff and there is no cause of action as against defendant No. 2. Issue No. 2 and 7 are answered accordingly. 10.ISSUE NO. 2 AND 3: A reference to section 120 of Major Port Trusts Act, will show that it has no application to the facts of the present case and probably for this reason, no arguments were advanced by learned Counsel for defendant No. 2 on these issues. The said issues are answered accordingly. 11.ISSUE NO. 4, 5 ADDITIONAL ISSUE NO. 1 AND 2 : These issues are formal and it was not even disputed before me by the defendants that plaintiff No. 1 is not Managing Director as he claims and the company plaintiff No. 2 is not registered. The said issues are answered accordingly. 12.ADDITIONAL ISSUE NO. 3: There is no direct evidence of plaintiff having been permitted to built up a petrol service station. However, considering the fact that the business of defendant No. 1 as well as of Caltex India was of dealing in petrol through their agents, I do not find any reason not to accept the case of the plaintiff that the land was demised for the purpose of erecting a petrol service station and in the absence of any prohibition a shop of accessories and garage would naturally be allowed to be constructed and garage on such premises. 13.ADDITIONAL ISSUE NO. 4: Plaintiff has admittedly not signed dealership agreement. These issues are not pressed and as such issue is answered in favour of plaintiffs. 13.ADDITIONAL ISSUE NO. 4: Plaintiff has admittedly not signed dealership agreement. These issues are not pressed and as such issue is answered in favour of plaintiffs. Even otherwise for the reasons stated while deciding Issue No. 3 no other view can be taken as regards this issue. 14.ADDITIONAL ISSUE NO. 5 AND 6 ISSUE NO. 4, 5 6: These issues can be considered together conveniently. In the agreement of sub lease entered into by plaintiffs with defendant No. 1 there is specific provision in clause "Not to assign, sell, mortgage or charge the said premises and garages or any part thereof without the consent in writing of the company which consent shall not be reasonably withheld. Clause 2 sub clause (b) is to the effect : "That the company will on the written request of the tenant made seven calendar months before the expiry of the term hereby created and if there shall not at the time of such request be any existing breach or non-observance of any of the covenants on the part of the tenant and conditions herein contained grant to him a tenancy of the demised premises for such further period of years and upon such terms and conditions ....." 15.The plaintiffs alone has entered the witness box and defendants have not led any oral evidence. However, evidence of plaintiff himself is sufficient to prove that plaintiff has committed breach of the conditions contained in the lease deed. In his evidence the plaintiff states that in the year 1944 he granted 1/3rd portion leased to him on rent to Ardeshir .... He did state that he had write to Caltex India for permission. However, it is not his case that any such written permission was given. It is his further evidence that by letter Exhibit 'J' he was permitted to grant sub lease to Ardeshir for running hotel. He did state that he had write to Caltex India for permission. However, it is not his case that any such written permission was given. It is his further evidence that by letter Exhibit 'J' he was permitted to grant sub lease to Ardeshir for running hotel. A reference to letter Exhibit 'J' dated 12-4-1940 shows that Caltex India wrote to the plaintiff that they had no objection for assignment of lease on which the service station is situate to Karfule Pvt. Ltd. i.e. plaintiff No. 2 and it was specifically stated further that they have no objection to the said assignment provided always that the terms and conditions contained in the sub lease agreement with plaintiffs dated 7-2-1939 remain in full force and that consent in writing from the Trustees of the Port of Bombay as required by the superior lease dated 22-11-1938 are not withheld. However, as observed earlier, the plaintiffs lessor's never sought consent to renewal of their own lease. These appears to be misapprehension of plaintiff that Exhibit 'J' permits him to grant further sub lease to Ardeshir. He further stated that according to him the lease in his favour permitted him to sub let premises for running a hotel and therefore he had given premises to Ardeshir. It is obvious that plaintiff is working under misconception regarding the clause of lease or the contents of the correspondence. Plaintiff has no doubt written letters dated 26-3-1990 and 21-4-1990 requesting defendant No. 1 to renew the sub lease. However, defendants have denied receipt of letters. There is nothing on record except the interested word of the plaintiff that the letters were in fact posted. Plaintiffs claim that letter dated 26-3-1990 was sent by registered post. However, neither the postal receipt nor the acknowledgment are produced. In the same breath plaintiffs contended he had mortgaged property in favour of Avertino Fernandes. It is his further statement that it was done with knowledge of the Port Trust and therefore was not violation of the lease deed. Plaintiffs is a sub lessee from Hindustan Petroleum and he has to show that either by sub lessee he was permitted to assign or mortgage the property or that it was done in compliance with the conditions contained in the sub lease. There being no written permission to mortgage or to assign the property for running a restaurant in favour of Mr. There being no written permission to mortgage or to assign the property for running a restaurant in favour of Mr. Ardeshir, plaintiffs has violated the conditions of sub lease in his favour and therefore even if it is found that he had written letters for renewal, he was not entitled to renewal of the sub lease as he had violated the conditions of the lease. He admitted in cross examination that in the lease deed, Exhibit 'C' there is no clause by virtue of which he could grant lease or licence to Ardeshir for running a restaurant. He mortgaged the property in favour of Avertino Fernandes with permission of the Port Trust. I already pointed out that there is no privity of contract between the plaintiffs and the Port Trust and there was no question of permission from Port Trust. He admitted that he did not take permission from defendant No. 1 or Caltex India and that at present he is in possession of part of the premises and part of which is in possessions of tenant and part of it is in possession of restaurant owner. He has given premises to tenants and also to restaurant and has not taken permission from defendant No. 1 because he is not required to take such permission. This further fortifies the conclusion that plaintiff is working under some misapprehension. He has also admitted not to have entered dealership agreement with Hindustan Petroleum. However, if that is the case and the Hindustan Petroleum i.e. defendant No. 1 for that purpose desires to take any action, it was for them to consider the same. Plaintiff has continued his dealership, ever after as defendant No. 1 has replaced earlier company Caltex India. 16.When plaintiffs wrote to defendant No. 2 for renewal of the lease in favour of defendant No. 1, he was informed by defendant No. 2 that his agreement was with defendant No. 1 and not with defendant No. 2. It is obvious that plaintiff was aware that he had never entered into any agreement with defendant No. 2 and that is the reason that even after filing of the suit he did not get in touch with defendant No. 2 which fact he has admitted nor did he give any notice of suit to defendant No. 2. It is obvious that plaintiff was aware that he had never entered into any agreement with defendant No. 2 and that is the reason that even after filing of the suit he did not get in touch with defendant No. 2 which fact he has admitted nor did he give any notice of suit to defendant No. 2. 17.Even otherwise as pointed out earlier, plaintiff cannot seek a relief of compelling defendant No. 2 to renew the lease in favour of defendant No. 1 that also after lease in favour of defendant No. 1 has expired by efflux of time. When defendant No. 1 is not making any such claim, at the instance of plaintiffs or for enabling plaintiff to claim renewal of his sub lease with defendant No. 2, the superior lessor of the defendant No. 1 cannot be compelled at the instance of plaintiff either to renew the lease or execute fresh lease in favour of defendant No. 1. The suit claiming such relief is totally misconceived. These issues are answered accordingly. 18.ISSUE NO. 8: Although plaintiff has made a huge claim of Rs. 1,00,00,000/- he has not adduced any evidence. There is no foundation for such claim in the pleadings. Moreover plaintiff admitted that he is recovering rent as he has inducted sub tenant and he is therefore earning profit by further sub letting portion of premises to third parties in breach of the conditions of lease and there is no question of plaintiffs suffering any loss and claiming any amount from any of the defendants by way of damages much less from defendant No. 2. The entire suit of the plaintiffs is misconceived. Plaintiff was not assisted by any advocate and personally conducted the trial and considering the age of plaintiff No. 1 and the fact that he is not assisted by any lawyer, I am not inclined to saddle any costs on the plaintiffs. However, at the same time the suit is totally misconceived and no claim for specific performance or damages can be granted. 19.In the result, suit is dismissed. No order as to costs. Certified copy expedited. An ordinary copy of this order be supplied to the parties. Suit dismissed.