Panch Raghou Taank Ramnivas Sarda v. Hindustan Petroleum Corporation Ltd.
2014-07-11
SANJAY K.AGRAWAL
body2014
DigiLaw.ai
JUDGMENT Sanjay K. Agrawal, J. 1. The substantial question of law formulated and to be answered by this Court in this plaintiff's second appeal is as under: Whether both the Courts below are justified in dismissing the plaintiff's suit holding that there is an automatic renewal of lease in favour of defendant ignoring the fact that lease was never renewed under Section 5(2) read with Section 7(3) of the Esso (Acquisition of Undertakings in India) Act, 1974 (Act No. 4 of 1974) or by the agreement between the parties, by recording a perverse finding? For sake of convenience, the parties would be referred hereinafter as per their status shown in the suit before the trial Court. Sans unnecessary details, the facts which are essential to be stated for the purpose of disposal of the present second appeal are as under: 1.1 M/s. Pancha Raghou Taank Ramniwas Sarda & Co. (a partnership firm) instituted a suit against the defendant-Hindustan Petroleum Corporation Ltd. for eviction and possession of the plot (scheduled suit land) situated at Lalbagh Parisar, Rajnandgaon, admeasuring 200 ft. x 150 ft. = 30,000 sq. ft. part of Khasra No. 239 for the purpose of storing, selling or otherwise carrying on trade in petrol, petroleum products, oil and kindred motor accessories stating inter alia that the scheduled suit land was let out to the defendant on the monthly rent of Rs. 300/-. Tenancy in respect of the said land is monthly commencing from 1st day of each English calendar month and expiring on the last day of same calendar month, which is shown in map, attached with the plaint. 1.2 The description of the scheduled suit land shown in Exhibit-D/1 states as under: "THE SCHEDULE ABOVE REFERRED TO All that piece or parcel of land measuring 200' x 150' (partly Nazul land) situated at Rajnandgaon Tahsil in Durg District Khasra No. 239/Part, Patwari Circle No. 37 as described and delineated on the plan annexed hereto and abutted and bounded on the North - G.E. Road, (South-East Owners land and West) together with the Nazul land situate and lying in front of the service station measuring 200' x 50' more or less." 1.3 It is further case of the plaintiff that the said suit land was given on lease to the erstwhile M/s. Esso Standard Eastern Inc., which has merged into Hindustan Petroleum Corporation Limited (hereinafter called as HPCL).
It is further pleaded that no such agreement has been entered into after expiry of lease period, but the scheduled suit land has not been vacated, leading to issuance of notice on 21.05.1993, directing the defendant to hand over the peaceful and vacant possession of the scheduled suit land by 31.07.1993, as the suit land is bona fidely required to the plaintiff and further the defendant has let out a part of suit land to sub-tenant, and thus, the plaintiff is entitled for eviction and also damages till the recovery of possession. 1.4 The defendant filed his written statement stating inter alia that M/s. Esso Standard Eastern Inc. was acquired by Central Government and all its rights and liabilities are vested into defendant-Hindustan Petroleum Corporation Ltd. by Esso (Acquisition of Undertakings in India) Act, 1974 (Act No. 4 of 1974) (hereinafter called as Esso Act, 1974). It is further pleaded by the defendant that as per Clause 3(d) of the lease agreement, the lease is extendable at the written request of the defendant No. 1 for 10 years, which has been extended at the request of defendant No. 1, and thereafter, extended on 23.02.1985 for 10 years, and it has been extended up to 30.04.2005. Plaintiff is already, accepting rent from the defendant, and thus, he is not entitled for eviction of the defendant. 1.5 Replying the grounds raised for eviction, it was further pleaded by the defendant that the defendant being lessee, plaintiff is not entitled for eviction as no such ground is available to the plaintiff. 1.6 On the pleadings of the parties, eight issues were framed by the Trial Court and in support of his case plaintiff exhibited eight documents and examined two witnesses, namely PW-1- Atal Bihari Dubey and PW-2- Lekhram Sinha, whereas defendant has exhibited three documents, including original lease deed dated 13.12.1966 and examined three witnesses, namely, D.W. -1- Amit Tandon, D.W. -2- Shriniwas Gupta and D.W. -3- Laxman Singh Rajput. The findings of the Trial Court on all the issues are as under: 1.7 The Trial Court by its judgment and decree dated 01.07.2002 dismissed the suit of the plaintiff finding inter alia that: "(i) The defendant is a monthly tenant of the plaintiff. (ii) The plaintiff has failed to establish the bona fide need as enumerated under Section 12(1)(f) of the Chhattisgarh Accommodation Control Act, 1961 (hereinafter called as the Act, 1961).
(ii) The plaintiff has failed to establish the bona fide need as enumerated under Section 12(1)(f) of the Chhattisgarh Accommodation Control Act, 1961 (hereinafter called as the Act, 1961). (iii) The plaintiff has further failed to prove that the defendant has let out a part of scheduled suit land to the sub-tenant which is a ground for eviction under Section 12(1)(b) of the Act, 1961." 1.8 On appeal filed by the appellant/plaintiff, the First Appellate Court by its impugned judgment and decree dated 18.08.2003 dismissed the appeal of the appellant/plaintiff finding inter alia that: "(i) The plaintiff's suit on behalf of the partnership firm eviction and possession is not maintainable. (ii) The plaintiff having received the rent up to 31.07.1995, the lease stands impliedly renewed. (iii) The plaintiff is required to establish the grounds enumerated under Section 12 of the Act, 1961." 2. Questioning the legal acceptability and sustainability of the judgment and decree dated 18.08.2003 passed by First Additional District Judge, Rajnandgaon in Civil Appeal No. 15-A/2002, this second appeal has been filed by the appellant/plaintiff under Section 100 of the Code of Civil Procedure, 1908 (in short the CPC), which has been admitted on substantial question of law formulated and recorded in the opening paragraph of this judgment. 3. Mr. Sanjay S. Agrawal, learned counsel appearing for the appellant/plaintiff would submit that: "(i) The Esso Act, 1974 came into force during the subsistence of original term of the lease and by virtue of provisions contained therein, the entire rights and liabilities of the Esso Standard Eastern Inc. have vested into Central Government and by virtue of Sub-section (2) of Section 5, the Government lessee is entitled to one time renewal of the lease as per original terms of the lease deed and, for which, a notice has to be issued by the defendant-lessee two months prior to the determination of the original term of lease i.e. 13.12.1976, which had not been issued by the defendant-HPCL for the renewal of the lease.
(ii) Mere acceptance of the rent by the plaintiff after the determination of the lease granted to the defendant-HPCL would not amount to assent of the lessor and would not result in renewal of lease, as there is renewal clause in the contract prescribing a particular period and mode of renewal, which was an "agreement to the contrary" within the meaning of Section 116 of the Transfer of Property Act. (iii) The lease of the defendant has already expired on 13.12.1976 after completion of the initial period of 10 years, and thereafter, possession of the defendant is just as trespasser and on the determination of the tenancy plaintiff is entitled for decree of eviction, and therefore, the defendant/HPCL is not entitled for protection of the provisions contained in Chhattisgarh Accommodation Control Act, 1961?" 4. Opposing the submissions made on behalf of the appellant/plaintiff, Mr. Pradeep Saxena, learned counsel appearing for the respondent/defendant would support the judgment and decree of the trial Court, duly affirmed by the first appellate court would submit that: "(i) The issue with respect to renewal of the lease of scheduled suit laid in light of the Esso Act, 1974 was never raised by the appellant/plaintiff before the two Courts below and the suit was filed invoking the provisions of the Act, 1961. (ii) The plaintiff having accepted the rent even after filing of the suit, amounts to implied renewal of the lease, and as such, by virtue of provisions contained in Section 116 of the Transfer of Property Act, 1882 (hereinafter called as T.P. Act) the plaintiff is not entitled for eviction of the defendant from the scheduled suit land. (iii) The plaintiff has failed to establish the grounds enumerated under Sections 12(1)(b) & 12(1)(f) of the Act, 1961 as the defendant/HPCL is entitled for the protection available under the provisions of Chhattisgarh Accommodation Control Act, 1961?" 5. I have heard and considered the arguments advanced by learned counsel for the parties and have perused the record of both the Courts below with utmost circumspection. Answer to substantial question of law: 6. In order to answer the above-stated substantial question of law, following points are required to be considered in this second appeal: "(i) Whether there is a renewal of lease in favour of the defendant HPCL by virtue of Section 5(2) of the Esso Act, 1974?
Answer to substantial question of law: 6. In order to answer the above-stated substantial question of law, following points are required to be considered in this second appeal: "(i) Whether there is a renewal of lease in favour of the defendant HPCL by virtue of Section 5(2) of the Esso Act, 1974? (ii) Whether mere acceptance of rent by the plaintiff/landlord after the determination of the lease granted to the defendant would amount to assent of the lessor/plaintiff renewing the lease as provided in Section 116 of the Transfer of Property Act? (iii) Whether defendant/HPCL is entitled to the protection under the provisions of Chhattisgarh Accommodation Control Act, 1961? Answer to Point No. (i) 7. That the lease between plaintiff and erstwhile M/s. Esso Standard Eastern Inc. came to be executed on 13.12.1966 leasing out vacant plot admeasuring 200' x 150' = 30,000 sq. ft. as shown in map, annexed with the plaint in Schedule-A, situated at Lalbagh Parisar, Rajnandgaon for a period of 10 years at the monthly rent of Rs. 300/- payable in advance by 7th day of each month. 8. The Clause 3(d) of the lease agreement provides for renewal of lease in the following terms: "(d) That the landlord will on the written request of the tenant made, 2 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 hereinbefore contained grant to it a lease of the demised premises for the further term of 10 years from the expiration of the said term at the rent of Rs. 350 per month and containing the like covenants and provisos as are herein contained. And it is hereby expressly agreed and declared that the said renewed lease shall contain a similar proviso for a further renewal of 10 years after the said further term of 10 years upon similar notice prior to that date whereupon the landlord shall grant to the tenant a second renewed lease of the demised premises for the further term of 10 years from the date last aforesaid at the rent of Rs. 400/- per month and containing the like covenants and provisos as are herein contained excepting this covenant for renewal." 9.
400/- per month and containing the like covenants and provisos as are herein contained excepting this covenant for renewal." 9. During continuance of above-stated lease, the Esso Act, 1974 came into force on 13th March, 1974, which provides for the acquisition and transfer of the right, title and interest of Esso Eastern Inc. in relation to its undertakings in India with a view to ensuring co-ordinated distribution and utilization of petroleum products distributed and marketed in India by Esso Eastern Inc. and for matters connected therewith or incidental thereto." 10. It would be profitable to notice few relevant provision of the Esso Act, 1974. Section 3 of the Esso Act, 1974, provides as under: "3. Transfer and vesting in the Central Government of the undertakings of Esso in India. On the appointed day, the right, title and interest of Esso, in relation to its undertakings in India, shall stand transferred to, and shall vest in, the Central Government." 11. Section 5 of the Esso Act, 1974 provides as under: "5. Central Government to be lessee or tenant under certain circumstances - (1) Where any property is held in India by Esso under any lease or under any right of tenancy, the Central Government shall, on and from the appointed day, be defined to have become the lessee or tenant, as the case may be, in respect of such property as if, the lease or tenancy in relation to such property had been granted to the Central Government, and thereupon all the rights under such lease or tenancy shall be deemed to have been transferred to and vested in the Central Government. (2) On the expiry of the term 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 Esso immediately before the appointed day." Thus, upon coming into force of Esso Act, 1974 on 13th March, 1974 by virtue of provision contained in Section 3 read with Section 5(1) of the Esso Act, 1974, in respect of lease held by M/s. Esso Standard Eastern Inc., the Central Government became lessee in relation to scheduled suit land and all the rights under the lease in question deemed to have been transferred and vested in the Central Government. 12.
12. Section 7 of the Esso Act, 1974 provides as under: "7. Power of Central Government to direct vesting of the undertakings of Esso in a Government company - (1) Notwithstanding anything contained in sections 3, 4 and 5, the Central Government may, if it is satisfied that a Government company is willing to comply, or has complied, with such terms and conditions as that Government may think fit to impose, direct, by notification, that the right, title and interest and the liabilities of Esso in relation to any undertaking in India shall, instead of continuing to vest in the Central Government, vest in the Government company either on the date of the notification or on such earlier or later date (not being a date earlier than the appointed day) as may be specified in the notification. (2) Where the right, title and interest and the liabilities of Esso in relation to its undertakings in India vest in a Government company under sub-section (1), the Government company shall, on and from the date of such vesting, be deemed to have become the owner, tenant or lessee, as the case may be, in relation to such undertakings, and all the rights and liabilities of the Central Government in relation to such undertakings shall, on and from the date of such vesting, be deemed to have become the rights and liabilities, respectively, of the Government company. (3) 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." By virtue of provision contained in Section 5(2) read with Section 7(3) of the Esso Act, 1974, all the rights, title, interest and liabilities of the M/s. Esso Standard Eastern Inc. in relation to its undertakings in India have been vested into defendant-Government Company that is HPCL, which becomes lessee w.e.f. 13th March, 1974. 13. Section 5(2) of the Esso Act, 1974 provides as under: "5(2).
in relation to its undertakings in India have been vested into defendant-Government Company that is HPCL, which becomes lessee w.e.f. 13th March, 1974. 13. Section 5(2) of the Esso Act, 1974 provides as under: "5(2). On the expiry of the term 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 Esso immediately before the appointed day." 14. From the close reading of the provision to sub-section (2) of Section 5 of the Esso Act, 1974, it would clear that the defendant-HPCL was entitled to renew the term of the lease on its expiry, if so desired by the Central Government on the same terms and conditions, on which the lease or tenancy was held by erstwhile M/s. Esso Standard Eastern Inc. immediately before the appointed day. 15. As mentioned in preceding paragraph of Clause 3(d) of the lease agreement (Exhibit-D/1), it has been agreed between the parties, the defendant-HPCL was required to make written request, two calendar months before the expiry of the term of the lease originally granted and such a written request made by virtue of sub-section (2) of Section 5 of the Esso Act, 1974 the defendant-HPCL was entitled to have renewal by operation of the said provision contained in the Esso Act, 1974. 16. The question needs to be considered is whether in accordance with Section 5(2) of the Esso Act, 1974 read with Clause 3(d) of the lease agreement, a defendant-HPCL has made a written request, two calendar months before the expiry of the lease for the renewal of the lease in question? 17. In order to answer this, a quick survey of the plaint as well as the lease agreement (Exhibit-D/1) would be imperative. In a suit filed on 16.06.1994, plaintiff has stated that lease was executed for a initial period of 10 years on 13.12.1966, which expired on 13.12.1976, but thereafter, neither the lease has been renewed nor the scheduled suit land has been vacated by the defendant, and as such, tenancy has been terminated by serving the notice on 21.05.1993, directing the defendant to vacate the scheduled suit land up to 31.07.1993 (Exhibit-P/1). 18.
18. The defendant-HPCL, in his written statement filed before the Trial Court has pleaded that in accordance with Clause 3 (d) of the lease agreement, at the written request of defendant No. 1, the lease has been extended for a period of 10 years as per his letter dated 23.02.1985, which was likely to be expired on 30.04.1995, and thereafter, again on 14.04.1995, the written request has been sent to the plaintiff for the renewal of the lease for a further period of 10 years and the advance rent sent from the period of 01.08.1995 to 31.07.1996 was accepted by the plaintiff, and thus, the lease stands renewed in favour of defendant/HPCL up to 30.04.2005. 19. In order to substantiate the plea, so taken in the written statement, the defendant has filed Exhibit-D/2 dated 23.02.1985, which states as under: Dear Sirs, We refer to the Lease Agreement dated 13th December, 1966 in respect of the above premises. As provided in Clause 3 (d) thereof, we hereby exercise our option for the renewal of the lease for the further term of TEN years from the expiration of the present tenure of the lease. Yours very truly, For & On Behalf of Hindustan Petroleum Corporation Ltd. S.K. Kapoor SENIOR REGIONAL MANAGER DULY CONSTITUTED ATTORNEY. 20. Thereafter, again on 14.04.1995, a written request was made for renewal of the lease for 10 years, which states as under: Dear Sir, We refer to the lease agreement dated 13th December, 1966 between you and M/s. Esso Standard Eastern Inc. As you are aware M/s. Esso Standard Eastern Inc. was taken over by the Government and vested in M/s. HPCL in the year 1974 through a Parliament Act. The said lease is expiring on 30th April, 1995. We would like to continue the lease for a further period of 30 years and we are ready and willing to discuss the renewal of lease at the convenient time and place to arrive at mutually agreed terms and conditions to the satisfaction of both of us. Thanking you, Very truly yours, S.J. INAMDAR SR. REGIONAL MANAGER 21.
We would like to continue the lease for a further period of 30 years and we are ready and willing to discuss the renewal of lease at the convenient time and place to arrive at mutually agreed terms and conditions to the satisfaction of both of us. Thanking you, Very truly yours, S.J. INAMDAR SR. REGIONAL MANAGER 21. From the aforesaid narration of the facts coupled with two letters dated 23.02.1985 and 14.04.1995, it would be clear that the defendant has not pleaded and placed the document on record to demonstrate that as per clause 3(d) of the lease agreement (Exhibit-D/1) a written request, two calendar months before the expiry of term of the lease of original lease as contained in Clause 3(d) of the lease was ever made to the plaintiff-Company as agreed between the parties by virtue of sub-section (2) of Section 5 of the Esso Act, 1974 as the defendant-lessee was entitled for the renewal on the terms and conditions, on which lease was held by erstwhile M/s. Esso Standard Eastern Inc. 22. Apart from the documentary evidence, aforesaid oral evidence has been brought on record, Amit Tandon (DW-1), Executive Sales Officer examined on behalf of the defendant-HPCL did not speak or utter any word with regard to making of any written request as per clause 3(d) of the lease agreement, seeking renewal of the lease as per agreed condition, and therefore, the question of renewal of lease in favour of the defendant-HPCL does not arise that the defendant has got the right of renewal and it was not renewed upon expiry of term i.e. 13.12.1976 under Section 5(2) of the Esso Act, 1974. In this regard, a recent decision of Supreme Court in Bharat Petroleum Corporation Limited vs. Rama Chandrashekhar Vaidya and Another, (2014) 1 SCC 657 : 2013 AIR SCW 2998, in which their Lordships of the Supreme Court has considered Section 5(2) of the Burmah Shell (Acquisition of Undertaking in India) Act, 1976, which is pari materia provision to Section 5(2) of the Esso Act and held as under: "10. Now, let us examine what would be the position in the absence of a fresh deed being executed and registered between the parties. There are only two possibilities; one, that the renewal notice was in exercise of the renewal clause in the lease deed.
Now, let us examine what would be the position in the absence of a fresh deed being executed and registered between the parties. There are only two possibilities; one, that the renewal notice was in exercise of the renewal clause in the lease deed. If that be so, the execution and registration of a fresh deed of lease was essential for the renewal of lease to take place. (See – State of U.P. vs. Lalji Tandon, (2004) 1 SCC 1 : AIR 2004 SC 32 , Anthony vs. K.C. Ittoop & Sons, (2000) 6 SCC 39: AIR 2000 SC 3523 and Hardesh Ores Pvt. Ltd. vs. Hede and Co. (2007) 5 SCC 614 : 2007 AIR SCW 3456). "13. The other possibility is that though in the renewal notice dated October 17, 1979 there is no reference to section 5(2) of the Act, the renewal must be deemed to have taken place under that provision because the Act had come into force on January 24, 1976 and by virtue of section 5(2) of the Act, the renewal clause of the existing lease stood superseded. If the "renewal" beginning from 1-3-1980 is to be deemed under section 5(2) of the Act that would be a legally valid and correct renewal even in the absence of a fresh deed being executed between the parties, as was held in P. Kesavan (2004) 9 SCC 772 : AIR 2004 SC 2206 . If that be the position, then the appellant has already exercised and exhausted its right under section 5(2) of the Act and there can be no question of a second renewal in terms of the statutory provision. Thus, viewed from any angle, the appellant cannot claim any further renewal of lease beyond 28-2-2005." 23. The question would be whether by virtue of sub-section (2) of Section 5 of the Esso Act, 1974, the defendant-HPCL is entitled for renewal only once or he is entitled for repeated renewal time to time? 24. The aforesaid question with reference to Caltex (Acquisition of Shares of Caltex Oil Refining (India) Ltd. and of the Undertakings in India of Caltex (India) Ltd.) Act, 1977 (hereinafter called as Caltex Act, 1977) came up for consideration before the Supreme Court in case of Hindustan Petroleum Corporation Ltd. and Another vs. Dolly Das, (1999) 4 SCC 450 .
24. The aforesaid question with reference to Caltex (Acquisition of Shares of Caltex Oil Refining (India) Ltd. and of the Undertakings in India of Caltex (India) Ltd.) Act, 1977 (hereinafter called as Caltex Act, 1977) came up for consideration before the Supreme Court in case of Hindustan Petroleum Corporation Ltd. and Another vs. Dolly Das, (1999) 4 SCC 450 . Considering the Section 7 of the Caltex Act, 1977 and Section 5 of the Burmah Shell Act, 1976, it was held by the Supreme Court that the Government lessee would be entitled for only one time renewal of lease in order to provide breathing period to the new company. Para-12 of the report reads as under: "12. The lease had been granted with effect from October 1, 1969 in favour of M/s. Caltex (India) Ltd. and on the coming into force of the Act on April 23, 1977 the appellant has stepped into its shoes and from that day onwards the appellant has been in possession of the same till now. The crucial question whether option for renewal either in terms of the lease deed or in terms of the Act had been availed of or not is the controversy between the parties now. Litigation between the parties has been going on from 1993 onwards. On expiry of the term the deed provides for renewal for two terms of 10 years each on the same terms and conditions except for enhancement of rent and execution of fresh deed modifying the clause relating to renewal. The appellant gave notice of renewal in terms of the provisions of (i) the deed in letter dated May 23, 1979, and (ii) the Act in the letter dated September 13, 1979. Now it is not necessary to examine the effect of renewal for the earlier period as even on appellant's own showing it is invoking the statute in the latter notice and not the terms of the deed. If that is so, the appellant could seek for renewal only in terms of Section 7 of the Act which enabled it to renew the deed for a period of one term as originally granted. A covenant for renewal is not treated as part of terms prescribing the period of lease but only entitles a lessee to obtain a fresh lease.
A covenant for renewal is not treated as part of terms prescribing the period of lease but only entitles a lessee to obtain a fresh lease. Renewal of lease could only be for one term and no more, but nevertheless it could be contended that the covenant for renewal was also part of the lease and, therefore, stood incorporated in the renewed lease arising under the Act. However, in the peculiar facts of this case, we think that it is not necessary to enter upon the merits of the controversy regarding the effect of Clause 3(g) of the lease deed or the rights available under the Act for renewal of the lease period. We are of the opinion that ends of justice in this case will be met if we modify the order of the High Court in the following terms: (1) The appellant does not have power to claim exercise of option for any renewal of the lease beyond September 30, 1999. (2) The appellant seeks for and is granted time to hand over vacant possession of the premises in question to the respondent on or before March 31, 2000, however, subject to filing of the usual undertaking in this Court within a period of four weeks from today. (3) Rent payable is as per the terms of the lease deed, i.e. Rs. 1920/- per month which shall be paid till the date of handing over the vacant possession. (4) If any arrears of rent, as stated above, have not been paid, the same shall be paid within a period of three months from today. (5) The order made by the High Court to the extent it is inconsistent with our order shall stand set aside." 25. Thus, on the basis of aforesaid analysis, it is quite apparent that the defendant/HPCL had failed to make a written request to the plaintiff company for renewal of the lease under Section 5(2) of the Esso Act, 1974 read with 3(d) of lease deed and thus there is no renewal of lease in favour of the defendant/HPCL after the expiry of original period of lease on 13/12/1976.
Even if it is held that the defendant had a renewal of the lease in his favour as per Section 5(2) of the Esso Act, 1974, the period of ten years stood from the expiry of original period of lease (that is 13.12.1976) has already ended on 13.12.1986 and as held by the Supreme Court in Dolly Das case (supra), the defendant/HPCL is not entitled for second renewal of lease as claimed. Thus, it is held that lease has not been renewed in favour of the defendant/HPCL in accordance with Section 5(2) of the Esso Act, 1974 after the expiry of original period of the lease. Answer to Point No. (ii) 26. In order to answer this point, it would be profitable to take note of Section 116 of the T.P. Act, which provides as under:- "116. Effect of holding over-If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in Section 106." 27. Under Section 116 of the T.P. Act following two things are necessary: "(i) That, the lessee should be in possession after the termination of the lease. (ii) That, lesser or his representative should accept the rent or otherwise assent to continue his possession in absence of agreement to the contrary. 28. The defendant in his written statement has pleaded that plaintiff has accepted rent time to time even the advance rent from the period of 01.08.1995 to 31.07.1996 was accepted by plaintiff, after institution of the suit on 16.06.1994, and this acceptance of the rent by the landlord/plaintiff would be an act, by which, has assented to his continuing in possession as lessee and thereby lease stands renewed up to 30.04.2005. 29. In order to find out whether there is an "agreement to the contrary" as employed in Section 116 of the T.P. Act, the terms of the lease agreement specifically in Clause 3(d) would be necessary to be noticed.
29. In order to find out whether there is an "agreement to the contrary" as employed in Section 116 of the T.P. Act, the terms of the lease agreement specifically in Clause 3(d) would be necessary to be noticed. The terms of the renewal contained in Clause 3(d) of the lease agreement required fulfillment of condition exercising the option of renewal by lessee before the expiry of original period of lease, two months prior to the aforesaid renewal clause, as contained in Clause 3(d) in the agreement of lease would clearly falls within the meaning of expression "an agreement to the contrary" of Section 116 of the T.P. Act, by which, option to seek renewal was to be exercised before the expiry of the lease an specified condition and thus, there is renewal clause in the lease prescribing a particular period and mode of renewal, which was "an agreement to the contrary" within the meaning of Section 116 of the T.P. Act and in teeth of Clause 3(d) of the lease agreement seeking renewal, there could be no implied renewal by "holding over" on mere acceptance of the rent offered by the lessee. Therefore, in the afore-stated circumstances, defendant-HPCL could not claim that he was 'holding over' as a lessee within the meaning of Section 116 of the T.P. Act. Their Lordships' of the Supreme Court in case of Shanti Prasad Devi and Another vs. Shankar Mahto and Others, (2005) 5 SCC 543 : AIR 2005 SC 2905 , has considered the said question and held when there is a renewal clause in the contract prescribing a particular period and mode of renewal which was "an agreement to the contrary" within the meaning of Section 116 of the T.P. Act and held as under:- "18. We fully agree with the High Court and the first appellate court below that on expiry of period of lease, mere acceptance of rent for the subsequent months in which the lessee continued to occupy the lease premises cannot be said to be a conduct signifying 'assent' to the continuance of the lessee even after expiry of lease period. To the legal notice seeking renewal of lease, the lessor gave no reply.
To the legal notice seeking renewal of lease, the lessor gave no reply. The agreement of renewal contained in clause (7) read with clause (9) required fulfillment of two conditions; first the exercise of option of renewal by the lessee before the expiry of original period of lease and second, fixation of terms and conditions for the renewed period of lease by mutual consent and in absence thereof through the mediation of local Mukhia or Panchas of the village. The aforesaid renewal clauses (7) & (9) in the agreement of lease clearly fell within the expression 'agreement to the contrary' used in Section 116 of the Transfer of Property Act. Under the aforesaid clauses option to seek renewal was to be exercised before expiry of the lease and on specified conditions. 19. The lessor in the present case had neither expressly nor impliedly agreed for renewal. The renewal as provided in the original contract was required to be obtained by following a specified procedure i.e. on mutually agreed terms or in the alternative through the mediation of Mukhias and Panchas. In the instant case, there is a renewal clause in the contract prescribing a particular period and mode of renewal which was 'an agreement to the contrary' within the meaning of Section 116 of the Transfer of Property Act. In the face of specific clauses (7) & (9) for seeking renewal there could be no implied renewal by 'holding over' on mere acceptance of the rent offered by the lessee. In the instant case, option of renewal was exercised not in accordance with the terms of renewal clause that is before the expiry of lease. It was exercised after expiry of lease and the lessee continued to remain in use and occupation of the leased premises. The rent offered was accepted by the lessor for the period the lessee overstayed on the leased premises. The lessee, in the above circumstances, could not claim that he was 'holding over' as a lessee within the meaning of Section 116 of the Transfer of Property Act." 30.
The rent offered was accepted by the lessor for the period the lessee overstayed on the leased premises. The lessee, in the above circumstances, could not claim that he was 'holding over' as a lessee within the meaning of Section 116 of the Transfer of Property Act." 30. Thus, in the light of the provisions contained in Section 116 of the T.P. Act and in light of the provisions of Clause 3(d) of the lease agreement and following the decision of the Supreme Court in Shanti Prasad Devi (supra), it has held that lease agreement provides for renewal clause prescribing particular mode of renewal and particular period, which is an "agreement to the contrary" therefore, the mere acceptance of the rent by the appellant/plaintiff, it cannot be held that the defendant-HPCL was 'holding over' as a lessee within the meaning of Section 116 of the T.P. Act. Thus, this point is answered accordingly. Answer to Point No. 31. The next facet to be addressed is whether the defendant/HPCL is entitled for protection under the provisions of Chhattisgarh Accommodation Control Act, 1961? 32. In a suit filed by the plaintiff, plaintiff has pleaded that the defendant's lease has been terminated w.e.f. 31.07.1993 and despite that he has not vacated the suit land which led to filing of the instant suit for eviction and also pleaded that the suit land is required bona fidely to him and further the defendant has let out a part of suit land to subtenant, and thus, the plaintiff is entitled for eviction and also damages till the recovery of possession, whereas the defendant while filing the written statement has accepted the fact of lease but has further pleaded that the suit for eviction as filed claiming eviction on the grounds enumerated under Sections 12(1)(b) and 12(1)(f) of the Act, 1961 is not maintainable as the defendant-HPCL is licensee. 33. On appreciation, the trial Court dismissed the suit stating that the plaintiff has failed to establish the grounds enumerated under the provisions of Sections 12(1)(b) and 12(1)(f) of the Act, 1961 finding the suit maintainable and on the appeal, the First Appellate Court accepted the finding of the trial Court and held that the plaintiff has accepted rent up to 31.07.1995, after determination of the lease and therefore lease of the defendant is deemed to have been renewed. 34.
34. In the foregoing paragraphs, it has been recorded that the defendant has failed to exercise its option of renewal before the expiry of the original term of the lease that is 13.12.1976, thereby waived its right of renewal under the terms of lease. 35. In case of Ram Bharosey Lal Gupta (Dead) by L.Rs. vs. Hindustan Petroleum Corporation Limited and Another, (2013) 9 SCC 714 : 2013 AIR SCW 2477, their Lordships of Supreme Court has held that where the lessee has failed to renew the lease in accordance with the provisions of the Caltex Act, his possession would be just like a "trespasser" and not a "tenant" and it has been held as under: [Kindly see Paragraph 24] "24. Further, it has been held that the first respondent after termination of tenancy continued in possession of the property as a tenant of holding-over. Thus, in law, holding over of the suit schedule property by the first respondent after the termination of lease is that of a trespasser not a tenant and therefore, it becomes liable to pay mesne profits by way of damages to the appellants." It has been further held in para 28 as under: "28. In view of the undisputed facts referred to supra and the clause 3(d) of the lease deed regarding the renewal of lease for a period of 20 years after expiry of the initial period of renewal it has come to an end on 1.7.2000. Therefore, the first appellate court was right in holding that the possession of the demised property by, the first respondent Corporation is holding over month to month and therefore it is a trespasser of the said schedule property and therefore invoking Section 106 of the T.P. Act by the appellant and determining the tenancy by him and filing the suit for arrears of rent and also decree of ejectment of the first respondent from the demised premises is legally justified. Further, with reference to Section 7 of the Caltex Act the action of the first respondent is unfair as there is no fairness, reasonableness and non-arbitrariness on its part to avail the right under the above provision for continuing as a tenant in respect of the demised property." 36.
Further, with reference to Section 7 of the Caltex Act the action of the first respondent is unfair as there is no fairness, reasonableness and non-arbitrariness on its part to avail the right under the above provision for continuing as a tenant in respect of the demised property." 36. Thus, after having examined the legal position with regard to status of the defendant/ HPCL, turning back to the facts of the case it is apparent that the lease was not renewed in favour of defendant/HPCL after the expiry of original period of lease in accordance with Section 5(2) of the Esso Act, 1974 as such his position would be just like a trespasser and not tenant as held by Supreme Court in case Ram Bharosey Lal Gupta (Dead) by L.Rs. (supra) and the that plaintiff having filed a suit for eviction after determining the lease by serving legal notice vide Exhibit P/1 dated 31.05.1993 directing the defendant/HPCL vacate the scheduled suit land up to 31.07.1993, in the considered opinion of this Court the defendant/HPCL is not entitled for any further protection under the law and he is liable to be evicted from the scheduled suit land. 37. In view of aforesaid analysis, substantial question of law is answered accordingly in favour of the plaintiff and against the defendant/HPCL. 38. As a fallout and in consequence of aforesaid discussion, instant second appeal is allowed. The judgment and decree of both the Courts below are hereby set aside and the plaintiff's suit is decreed in the following terms: "(i) That the defendant/HPCL shall deliver the peaceful and vacant possession of the scheduled suit land situated at Lalbagh Parisar, Rajnandgaon admeasuring 200 ft. x 150 ft. = 30,000 sq. ft., part of Khasra No. 239 to the plaintiff. (ii) That the defendant/HPCL would pay Rs. 500/- towards damages for use an occupation from the date of institution of suit till the date of delivery of possession of scheduled suit land." A decree be drawn up accordingly. No order as to costs. Appeal allowed.