Research › Search › Judgment

Rajasthan High Court · body

2015 DIGILAW 478 (RAJ)

Hindustan Petroleum Corporation Ltd. v. State of Rajasthan

2015-02-23

ALOK SHARMA

body2015
JUDGMENT 1. - This petition under Article 227 of the Constitution of India impugns the judgment dated 8.10.2013 passed by the Appellate Rent Tribunal, Ajmer affirming the judgment dated 21.12.2011 passed by the Rent Tribunal, Ajmer allowing the respondent applicant's (hereinafter 'the applicant') application under section 9 of the Rajasthan Rent Control Act, 2001 (hereinafter 'the Act of 2001') and directing the petitioner non-applicant's (hereinafter 'the non-applicant') eviction from the leased premises six months following the judgment. Consequences of not handing over possession to the applicant thereafter have also been set out in the Rent Tribunal's Judgment. 2. An application was filed under section 9 of the Act of 2001 for eviction of the non-applicant from the leased premises described in para No.2 thereof. It was stated that the premises in issue were leased to the predecessor in interest of the non-applicant the Caltex (India) Limited under a registered lease deed dated 15.10.1967 effective 1.2.1968 for a period of 20 years and could be renewed at the option of the lessee exercised prior to the expiry of the lease for two periods of ten years each under Clause 3(g) of the said lease deed which read as under: "The lessee may by giving ninety days' notice in writing upto the Lessor and causing the same to be delivered either by registered post or leaving the same at the last known place of residence of the Lessor determine this lease before the expiry of the term hereby granted. Upon expiry of the period of notice the lease shall determine without prejudice however to any claim by either of the parties against the other in respect of any antecedent breach of a covenant or a condition herein contained." 3. It was submitted that thereafter the Caltex (Acquisition of shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Ltd.) Act, 1977 (hereinafter 'the Act of 1977') was enacted resulting in the non-applicant succeeding to the lease hold rights under the lease deed dated 15.10.1967. The lease after expiry of 20 years was not renewed as per contract by way of an appropriate renewal deed drawn and registered. The lease after expiry of 20 years was not renewed as per contract by way of an appropriate renewal deed drawn and registered. But the Act of 1977 provided for a statutory renewal of the lease deed under section 7(3) thereof which provided that "on the expiry of the term of any lease, tenancy or arrangement referred to in sub-section (1) or subsection (2), such lease or tenancy or arrangement shall, if so desired by the Central Government, be renewed or continued, so far as may be, on the same terms and conditions on which the lease or tenancy or arrangement was originally granted or entered into." The nonapplicant- leasee continued in possession and use of the leased premises even after the original lease period on 31.1.1988. It was stated that the possession of the non-applicant over the leased property subsequent to 1.2.1988 was thus relatable to the statutory renewal under section 7 (3) of the Act of 1977 for a period of 20 years i.e till 31.1.2008 as the original lease period under the lease deed dated 15.10.1967 was also 20 years. In the circumstances vide notice dated 7.9.2007 the applicant informed the non-applicant that the term of its lease was ending 1.2.2008 consequent to which the vacant possession of the leased property be handed over failing which the non-applicant alone would be liable for the consequences and costs of any legal proceedings taken for obtaining vacant possession of the leased premises. 4. It was stated that the letter dated 22.9.2007 then addressed by the non-applicant to the applicant sought to invoke section 7(3) of the Act of 1977 claiming a statutory right to a renewal of lease effective 1.2.2008 for a period of 20 years till 31.1.2028. But this was wholly without legal foundation, mala fide and actuated by oblique purposes. It was stated that the purpose of section 7 of the Act of 1977 was to safeguard the immediate commercial interests of the Government which had acquired the company and provide stability to the operation of the company taken over. In the circumstances invoking of the said provision decades after the acquisition of the shares of Caltex (India) Limited was clearly against the objective and purpose of aforesaid section tantamounting to its blatant misuse. In the circumstances invoking of the said provision decades after the acquisition of the shares of Caltex (India) Limited was clearly against the objective and purpose of aforesaid section tantamounting to its blatant misuse. It was stated that the lease deed could not be renewed under section 7(3) of the Act of 1977 for a further period of 20 years as the said period had expired in the enjoyment of the leased property between 1.2.1988 till 31.1.2008. Mesne profits effective 1.2.2008 @ Rs. 36 lacs per annum was claimed for possession, use and occupation of the premises (plot No. 468/10) admeasuring 1401 sq. yards situated on Jaipur Road, Ajmer. In the circumstances it was prayed that the non-applicant be evicted from the premises in dispute and the applicant be put in possession thereof. 5. Reply to the eviction petition was filed by the non-applicant. It was stated that even though two contractual renewals of 10 years each as visualised under section 3(g) of the lease deed dated 15.10.1967 were not formally obtained by way of execution of lease deeds afresh and registration thereof, yet the continuation of the non-applicant in the leased premises was based on the consent of the applicant on payment of enhanced rent as per the lease and was contractual in nature. It was stated that the statutory right of the leasee under section 7(3) of the Act of 1977 equivalent to the original lease period of 20 years became operative only on 1.2.2008 after the expiry of the contractual period and would be determinable on 31.1.2028. In these circumstances the notice dated 7.9.2007 emanating from the applicant to the non-applicant determining the lease and seeking possession was wholly without legal sanction and unsustainable. Claims of mesne profits @ Rs. 36 lacs per annum or at all were denied. A renegotiated rent more in line with the market rent for the leased premises was however offered. 6. On the pleadings of the contesting parties the Rent Tribunal, Ajmer framed three issues which loosely translated are as under: (i) Whether the period for the premises leased to the non-applicant having expired, the applicant's notice dated 7.9.2007 determined the lease effective 1.2.2008 consequent to which he was entitled to vacant possession of the premises in dispute; (ii) Whether the applicant was entitled to recover mesne profits / damages from the non-applicant; and (iii) Relief. 7. 7. On consideration of the matter the Rent Tribunal, Ajmer held that the contractual renewal under clause 3(g) of the lease deed dated 15.10.1967 not having been effected by way of execution and registration of renewal lease deeds afresh, in terms of section 7(3) of the Act of 1977 the possession of the non-applicant effective 1.2.1988 was relatable to the statutory renewal of lease for a period of 20 years which expired on 31.1.2008. Consequently it was held that the applicant was entitled to vacant possession of the premises in dispute. Issue No.2 was found against the applicant. In conclusion on the point of relief (issue No.3) the Rent Tribunal, Ajmer held that the applicant was entitled to have the non-applicant evicted from the tenanted premises. It was consequently directed that the applicant would be entitled to vacant possession of the tenanted premises six months following the date of Rent Tribunal's judgment with caveats on amount of rent / mesne profits payable during the period. A certificate of possession was accordingly issued in favour of the applicant. 8. Aggrieved of the Judgment of Rent Tribunal, Ajmer the non-applicant filed a statutory appeal under the Act of 2001 before the Appellate Rent Tribunal, Ajmer. On consideration of the matter the Appellate Rent Tribunal, Ajmer affirmed the judgment dated 21.12.2011 passed by the Rent Tribual, Ajmer vide its judgment dated 8.10.2013 and dismissed the appeal. Hence this petition under Article 227 of the Constitution of India. 9. Mr. S. Kasliwal Sr. Advocate with Ms. Suruchi Kasliwal counsel for the non-applicant (now the petitioner before this Court) submitted that clause 3(g) of the lease-deed wholistically construed with clause 2(g) and 4(f) of the lease deed dated 15.10.1967 indicates that the parties to the agreement had irrevocably contracted that the lease in issue was to subsist, one way or another for a period of 40 years from the effective date i.e 1.2.1968. It was submitted that it was for this reason that the rental of the tenanted premises for 40 years was detailed in the lease deed dated 15.10.1967. It was submitted that the intention of the parties to the lease deed must thus be given effect to despite formal renewed deed/s being absent. The exercise of the option to renew the lease deed by itself sufficed. Sr. It was submitted that the intention of the parties to the lease deed must thus be given effect to despite formal renewed deed/s being absent. The exercise of the option to renew the lease deed by itself sufficed. Sr. Counsel further submitted that on the principle of contemporanea exposito the applicant's notice dated 7.9.2007 clinches the dispute and establishes that till 1.2.2008 the non-applicant was admittedly in possession, occupation and use of the premises under a contractual lease. For this purpose, reference has been made to para 2 of the applicant's letter / notice dated 7.9.2007 to the non-applicant which records in para 2 that "the initial term of tenancy which began from 1.2.1968 for 20 years expired on 1.2.1988 and the last of the two elective terms of ten years each will also expire on 01.02.2008 hence your tenancy will stand terminated by efflux of time." It was further submitted that the aforesaid state of affairs of a deemed renewal was further fortified by the conduct of the applicant accepting enhanced rent for the periods subsequent to 1.2.1988 as per table set out in the lease deed dated 15.10.1967. The contractual lease therefore continued till 31.1.2008. Thereafter the non-applicant is entitled as of right for a statutory renewal of the lease beginning 1.2.1988 for a further period of 20 years. Sr. Counsel then submitted that albeit the case of the applicant may appear to be seemingly covered by the decision of the Hon'ble Apex Court in the case of BPCL v. Rama Chandrashekhar Vaidya & Anr., (2014) 1 SCC 657 , yet a closer look at the provision under consideration therein i.e section 5 of the Burma Shell (Acquisition of Undertakings in India) Act, 1976 (hereinafter 'the Act of 1976') would indicate that it is not pari-meteria with section 7(1) of the Act of 1977 as the words "any right under any arrangement to secure any premises for the purpose" in section 7(1) of the Act of 1977 are absent in section 5(2) of the Act of 1976. It was submitted that section 7(1) of the Act of 1977 is thus far wider and takes into contemplation a situation of month to month tenancy under the provisions of the Transfer of Property Act, 1882 (hereinafter 'the Act of 1882') resulting from the absence of a formal duly executed and registered renewal deed/s despite the exercise of option for renewal by the nonapplicant- leasee. He submitted that this was not an aspect under consideration before the Hon'ble Apex Court in the case of BPCL v. Rama Chandrashekhar Vaidya & Anr. (supra). Sr. Counsel submitted that the period 1.2.1988 till 31.3.2008 would thus liable to be construed as an "arrangement" between the applicant and the non-applicant, contractual in nature embedded in the lease deed dated 15.10.1967 prior whereto vide letter dated 22.9.2007 the non-applicant had expressed its intention to invoke the statutory extension under section 7(3) of the Act of 1977. It was submitted that therefore this Court should hold that the non-applicant was entitled to continue as a leasee in the premises in dispute till 31.1.2028. It was empathetically submitted that the Rent Tribunal as also the Appellate Rent Tribunal have failed to appreciate the factual and legal position and erred in directing the eviction of the non-applicant under their concurrent judgments dated 21.12.2011 and 8.10.2013. 10. Contra, Mr. Ajeet Bhandari appearing for the applicant (now the respondent) submitted that the differentiation between extension of lease and renewal of lease is too well settled to be restated. Reference has been made to the Judgment of the Hon'ble Apex Court in the case of Hardesh Ores (P) Ltd. v. Hede and Company (2007) 5 SCC 614 where holding that there could be no automatic renewal of lease, the Hon'ble Apex Court stated that in order to give effect to the renewal of the lease, a document has to be necessarily executed evidencing the aforesaid fact as there is no concept of automatic renewal of the lease by mere exercise of an option under the contract by the lessee. In the circumstances the Hon'ble Apex Court was pleased to negate the argument urged on behalf of the petitioner before it that by mere exercise of option claiming renewal, the lease deed stood automatically renewed or that there was no need for executing a document evidencing the aforesaid fact. In the circumstances the Hon'ble Apex Court was pleased to negate the argument urged on behalf of the petitioner before it that by mere exercise of option claiming renewal, the lease deed stood automatically renewed or that there was no need for executing a document evidencing the aforesaid fact. Counsel further submitted that even in terms of section 107 of the Act of 1882 a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument. Counsel submitted that thus renewal of the lease deed for a period of ten years both in 1988 and 1999 as provided, could have been only by way of execution and registration afresh and absent such execution and registration, no renewal in the eye of law can be found and the petitioner should not be permitted to fudge the clear difference between extension of a lease deed and its renewal. Counsel submitted that the argument with regard to the deemed renewal of the lease deed is thus legally untenable, with no legs to stand and also in the face of section 107 of the Act of 1882. 11. Counsel submitted that the stark question before this Court is as to whether the period of the non-applicant enjoying occupation, use and enjoyment the leased premises between the end of the original leased period on 31.1.1988, commending 1.2.2008 was relatable to the contractual renewal under clause 3(g) of the lease agreement dated 15.10.1967 or the statutory renewal under section 7(3) of the Act of 1977. It was submitted that in the context of the admitted fact that there were no renewals as contemplated under clause 3(g) of the lease deed dated 15.10.1967 by way of execution and registration afresh, the enjoyment by the non-applicant would of necessity relate to the statutory renewal under section 7(3) of the Act of 1977. Hence the applicant vide notice dated 7.9.2007 determined the tenancy effective 1.2.2008 and sought reentry / vacant possession. It was submitted that only at that stage vide letter dated 22.9.2007 the non-applicant first invoked section 5 read with section 7(3) of the Act of 1977 claiming a purported right to a statutory renewal of 20 years commencing 1.2.2008. Hence the applicant vide notice dated 7.9.2007 determined the tenancy effective 1.2.2008 and sought reentry / vacant possession. It was submitted that only at that stage vide letter dated 22.9.2007 the non-applicant first invoked section 5 read with section 7(3) of the Act of 1977 claiming a purported right to a statutory renewal of 20 years commencing 1.2.2008. It was submitted that vide letter dated 29.12.2007 / 4.1.2008 the counsel for the applicant negated the non-claimant's purported right as the statutory renewal of the lease deed under section 7(3) of the Act of 1977 expired on 31.1.2008. 12. It was then submitted that the case under consideration is fully covered by the Judgment of Hon'ble Apex Court in the case of BPCL v. Rama Chandrashekhar Vaidya & Anr. (supra) which was based on interpretation of pari materia provisions of the Act of 1976. Referring to the facts of the aforesaid case it was submitted that the lessor therein had required the lessee-BPCL to pay the increased rent from Rs. 400/- to Rs. 500/- as per the registered lease deed after expiry of the original period of lease. Yet without a formal renewal by way of execution and registration of a lease afresh, the Hon'ble Apex Court held that continuance in possession after the expiry of the original contractual lease could not be construed to be one under a contractually renewed lease for reasons of no fresh execution and registration having been set up and proved. In the aforesaid judgment the Hon'ble Apex Court held that the occupation, use and enjoyment of the lessee-BPCL subsequent to expiry of the original lease period in such a fact situation could only relate to the leasee's right of a statutory renewal under section 5(2) of the Act of 1976 and such right having been availed on mere exercise of option (express or implied), there could be no question of subsequent second statutory renewal. Counsel pointed out that though a contractual renewal requires execution and registration afresh, a statutory renewal does not. Counsel emphasised the following paragraphs of the judgment of the Hon'ble Apex Court in BPCL v. Rama Chandrashekhar Vaidya & Anr. (supra) : "10. Now, let us examine that what would be the position in the absence of a fresh deed being executed and registered between the parties. Counsel emphasised the following paragraphs of the judgment of the Hon'ble Apex Court in BPCL v. Rama Chandrashekhar Vaidya & Anr. (supra) : "10. Now, let us examine that 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. 11. In case the renewal was claimed in terms of the stipulation in the lease deed (described as "the contractual right" by Mr. Sundaram), in the absence of a fresh deed of renewal, the appellant's status became that of a month-to-month tenant and after twenty five years, in that relationship it would be ludicrous for the appellant to turn around and claim renewal of lease under section 5 (2) of the Act. 12. Mr. Sundaram made an attempt to argue that it was not a case of renewal of lease but a case of extension of the term of the lease and in that case no fresh deed was required to be executed and registered between the parties. In support of the submission, he relied upon two decisions of the Calcutta High Court, one by a Division Bench in Syed Ali Kaiser v. Ayesha Begum and the other by a learned Single Judge of the same Court in Ranjit Kumar Dutta v. Tapan Kumar Shaw . We need not go into the question whether an extension of lease is permissible in the absence of any fresh deed for the simple reason that this is unquestionably a case of renewal of lease and not of extension of lease. Thus, in case renewal was claimed under a clause of the previous lease, the appellant has no case and the lessor cannot be faulted for terminating the tenancy by a notice under the Transfer of Property Act, 1882. 13. The other possibility is that though in the renewal notice dated 17.10.1987 there is no reference to Section 5(2) of the Act, the renewal must be deemed to have taken place under the provision because the Act had come into force on 24.1.1976 and by virtue of Section 5(2) of the Act, the renewal clause of the existing lease stood superseded. If the "renewal", 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. 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." 13. Counsel submitted that the effort of the non-applicant to distinguish the judgment of BPCL v. Rama Chandrashekhar Vaidya & Anr. (supra) with reference to the words "any right under any arrangement to secure premises for any purpose" in section 7(1) of the Act of 1977 is disingenuous as the aforesaid words being general in nature have to be construed restrictively on the principle of noscitur-a-sociis and cannot be allowed independent limitless construction. In support of this submission reference was made to the decision of the Hon'ble Apex Court in Maharashtra University of Health Sciences and others v. Satchikitsa Prasarak Mandal and others, 2010(3) SCC 786 wherein it was reiterated that when general words follow specific words they cannot be read in isolation and their color and content is to be derived from their context. It is thus apparent, it was submitted that the general words in section 7(1) of the Act of 1977 i.e "any right under any arrangement to secure any premises for any purpose" would have to be construed as a contractual right inhering in a party under the lease deed dated 15.10.1967, just as a lease and a tenancy are, at the time of coming into force of the Act of 1977. Such a "right under any arrangement" could illustratively be a right as one of licence under the Indian Easement Act, 1882 (hereinafter 'the Act of 1882') also contractual in nature. Counsel further submitted that no contract between the applicant and the non-applicant relating to the future event flowing from a potential non-execution and arrangement of a renewed lease deed can be attributed to the parties to the lease deed dated 15.10.1967. Counsel further submitted that no contract between the applicant and the non-applicant relating to the future event flowing from a potential non-execution and arrangement of a renewed lease deed can be attributed to the parties to the lease deed dated 15.10.1967. A month to month tenancy under the Act of 1882 following the non-execution of the renewal lease deed afresh for a period of ten years and its registration cannot be an event in the contemplation of the parties when the registered lease deed dated 15.10.1967 was executed and registered. A month to month lease under section 106 of the Act of 1882 is a statutory provision not a contractual creation and hence cannot even remotely be construed as an "arrangement" within the meaning of section 7(1) of the Act of 1977, submitted counsel. It was submitted that therefore there is no force in the contention of the counsel for the non-applicant to relate the period 1.2.1988 to 31.1.2008 to any right under the lease deed dated 15.10.1967 and as a contractual lease. There is thus no good ground to deviate from the clear principles enunciated by the Hon'ble Apex Court in the case of BPCL v. Rama Chandrashekhar Vaidya & Anr. (supra) in a similar situation and the case under consideration is in the circumstances is fully covered by the said Judgment. 14. Heard. Considered. 15. It is not in dispute that subsequent to the expiry of the original period of lease for 20 years on 31.7.1988 no fresh lease deed was executed or registered between the parties. There was no renewal. As held by the Hon'ble Apex Court in the case of Hardesh Ores (P) Ltd. v. Hede and Company (supra) there can be no automatic renewal of the lease deed. It is also equally well settled that extension of lease deed cannot be confused with a renewal of a lease deed. Clause 3(g) of the lease deed dated 15.10.1967 contemplated renewal not extension of lease. And there was no renewal of the lease deed as held here-in-above. I do not find any merit in the contention of the Sr. It is also equally well settled that extension of lease deed cannot be confused with a renewal of a lease deed. Clause 3(g) of the lease deed dated 15.10.1967 contemplated renewal not extension of lease. And there was no renewal of the lease deed as held here-in-above. I do not find any merit in the contention of the Sr. Counsel for the non-applicant that this Court should over-look the requirement of renewal by a formal deed, in-stead draw on the purported intention of the parties to the lease deed dated 15.10.1967 and hold that the period 1.2.1988 to 31.1.2008 was yet relatable to the rights under lease deed dated 15.10.1967. The Judgments relied upon by Sr. Counsel in support of his contentions are in apposite to dispute/issue at hand and hence not relevant. 16. The question that therefore arises for consideration is as to what was the nature of the occupation, use and enjoyment of the leased premises by the non-applicant subsequent to 31.1.1988 when the original twenty year period of the lease deed dated 15.10.1967 effective 1.2.1968 expired. Absent contractual renewal in the facts of the case, the possession, use and enjoyment thereafter can only relate to the statutory renewal under section 7(3) of the Act of 1977. The Hon'ble Apex Court has held in a similar fact situation that after having enjoyed the occupation, use and enjoyment of the leased premises without a contractual renewal, it was not open for the lessee to resort / invoke a statutory renewal of the lease deed for the same period after a hiatus of several years. The provisions of section 5(2) of the Act of 1976 are pari materia to the provisions of section 7(3) of the Act of 1977 notwithstanding an insignificant variation in the language, which does not take away from the substance and heart of the question in issue and its determination in BPCL v. Rama Chandrashekhar Vaidya & Anr. (supra). Therein the Hon'ble Apex Court held that renewal of a lease deed when not relatable to a contractual renewal- must relate to a statutory renewal were an operating law so provided. (supra). Therein the Hon'ble Apex Court held that renewal of a lease deed when not relatable to a contractual renewal- must relate to a statutory renewal were an operating law so provided. To my mind similar would be the situation in the instant case where the non-applicant in the absence of a contractual renewal of the lease deed continued in possession, use and occupation of the leased premises while the right to statutory renewal under section 7(3) of the Act of 1977 obtained. I do not find any force in the submissions of the counsel for the non-applicant that the words "any right under any arrangement to secure any premises for any purpose" in section 7(1) of the Act of 1977 take into consideration a post lease deed execution uncertain event such as a statutory holding over under section 106 of the Act of 1882. A "holding over" cannot be held to be, and is not contractual. What was safeguarded under section 7(1) of the Act of 1977 was only the contractual rights expressly agreed and conferred on the parties under the lease deed dated 15.10.1967. In the circumstances the period, subsequent to the expiry on 31.1.1988 of the 20 year lease originally contemplated, in the absence of a contractual renewal from 1.2.1988 to 31.1.2008 would necessarily relate to the statutory renewal under section 7(3) of the Act of 1977. Therefore the lease would stand determined as on 31.1.2008 under section 111 of the Act of 1882 and the notice dated 7.9.2007 issued by the applicant landlord. 17. Consequently, there is no force in this petition. Accordingly dismissed with costs of Rs. 1 lac to be paid by the non-applicant (petitioner) to the applicant (respondent) within a period of three months from today. Non payment shall entitle the respondent applicant to invoke the contempt jurisdiction of this Court.Petition dismissed. *******