http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

CASE NO.: Appeal (civil)  1383 of 1999

PETITIONER: Bharat Petroleum Corporation Ltd.

RESPONDENT: P. Kesavan & Anr.

DATE OF JUDGMENT: 05/04/2004

BENCH: CJI, S.B. Sinha & S.H. Kapadia.

JUDGMENT: J U D G M E N T

With  

CIVIL APPEAL NOS.1875-1876 OF 1999

S.B. SINHA,  J:

INTRODUCTION:

       Whether in view of the provisions of the Burmah Shell  (Acquisition of Undertakings in India), Act, 1976  (hereinafter referred to as ’the Act’) the appellant was  entitled to a renewal of  lease is the short question  involved in these appeals.  

FACTUAL BACKGROUND:    The factual matrix of the matter is being noticed from  Civil Appeal No. 1383 of 1999.    

       A deed of lease was executed on or about 22.11.1967 by  one Smt. Angammal wife of Shri Angappa Chettiar in favour of  Burmah Shell Oil Storage & Distributing Company Limited  (Burmah Shell) in respect of 23 acres and 16 cents of  property/land situated in the town of Bhavani for a period  of twenty years on a quarterly rent of Rs.300/- for the  purpose of  "erecting an installation and/or one or more  pumps service/ filling stations together with  overhead/underground tanks and other fittings for storage of  petroleum products and such other facilities and buildings  as the lessee may require and for carrying business is such  products through such facilities and other kindered motor  accessories or any other trade or business that can  conveniently be carried on in the demised premises".  The  original lessor  allegedly executed a will bequeathing  the  said site to her grandson Meenashisundaram,  who expired on  3.11.1971 whereafter rent used to be paid to the guardian  and mother of the said Meenashisundaram, Smt. G. Chellammal.  

       The appellant herein claimed itself to be a tenant in  respect of the said premise relying on or on the basis of  the provisions of the said Act.         It is not in dispute that  the lessor by a notice dated 4.2.1987 purported to terminate  the tenancy calling upon the appellant herein to quit and  deliver the peaceful and vacant possession as per terms of  the lease dead.  In reply to the said notice , the appellant  herein in terms of letter dated 26.2.1987 addressed to its  advocate invoked the provisions of  Sections 5(2) and 7(3)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

of the Act stating that it had no intention to vacate the  site on the expiry of the existing lease on 30.6.1987 and  wish to continue occupying the same for a period of twenty  years from 1.7.1987 by paying the existing rental of  Rs.500/- per quarter.  By reason of letter dated 19.5.1987,  the appellant herein exercised its option to renew the lease  for a further period of twenty years commencing from  1.7.1989 on the same terms and conditions on which the  Burmah Shell held the lease immediately prior to the  appointed day.  It was requested :

       "May we therefore request you to  let us know when it will be convenient  for you to have the lease registered on  terms similar to those existing in the  current lease.  On receipt of your  advice in this matter, we shall take  further action."                 

       Despite the said letter, the tenancy was purported to  have been terminated and as the appellant did not quit and  deliver possession unto the lessor on expiry of the said  period of lease, a suit was filed in the Court of the  District  Munsif, Bhawani.  It appears that the appellant  herein had also filed a suit for specific performance of  contract which was not pressed.     

The learned Munsif decreed the suit holding, inter  alia,  that although in terms of Section 5 of the Act, the  lease may be renewed for the same period but as per Section  107 of the Transfer of Property Act, necessary documents had  to be executed by the company.  An appeal thereagainst by  the appellant herein was dismissed  by the District Judge,  Erode.  The appellant herein filed a second appeal before  the High Court of Madras which was also dismissed stating :

       "It is clear that the suit filed  for renewal of the lease was only  subsequent to expiry of the lease and as  such it cannot be said that the  affidavit he has taken steps for the  renewal of the lease, especially when he  kept quiet for nearly 3 years without  taking any steps, in spite of the filing  of the suit by the appellant.  It cannot  be said that the filing of the suit can  be construed as step being taken for the  renewal.  When the suit for recovery of  possession is pending, as soon as filing  of suit for renewal of the lease, the  appellant ought to have taken steps for  joint trial.  He has allowed two suits  to be proceeded with, independently.   That means, he wanted to take a chance  before both the courts below.  This  conduct of the appellant cannot be  appreciated.  Hence, I do not find any  error in the findings of the Courts  below that the appellant has not taken  any steps to get the lease renewed prior  to the expiry of the lease.  Hence, the  second appeal is dismissed.   Consequently, CMP 8085 of 1998 is also

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

dismissed."

       Hence this appeal.

SUBMISSIONS :         Mr. K. Ramamoorthy, learned Senior Counsel, appearing  on behalf of the appellant would submit that the High Court  went wrong in passing the impugned judgment holding that  Section 107 of the Transfer of Property Act was attracted in  the instant case.   The learned counsel would urge that the  provisions of the said Act, having regard to Section 11  thereof,  shall prevail over the Transfer of Property Act.   The learned counsel appearing on behalf of the  respondents, on the other hand, would submit that the  provisions of  Section 107 of the Transfer of Property Act  and Section 5(2) of the said Act should be read together so  as to come to the conclusion that a registered instrument is  required to be executed even if the appellant exercised its  option to renew the said lease.  In any event, the learned  counsel would contend that keeping in view the fact that a  paltry  sum had been paid by way of rent for a long time,  this Court with a view to do complete justice between the  parties, may not interfere with the impugned judgment.   

STATUTORY PROVISIONS:         The Parliament enacted the Act which came into force on  or about 24.1.1976, in terms whereof the right, title and  interest of Burmah Shell in relation to its undertakings in  India stood  transferred to and vested in the Central  Government.  The effect of such vesting is stated in Section  4 of the Act whereby and whereunder, inter alia, all assets,  rights, powers, authorities and privileges and all property,  movable and immovable vested in the Central Government.  By  reason of  sub-section (1) of Section 5 of the Act where any  property was held in India by Burmah Shell under any lease  or under any right of tenancy, the Central Government became  the lessee and tenant, as the case may be, in respect  thereof as if the lease or tenancy in relation to such  property had been granted to it and thereupon all the rights  under such lease or tenancy was to be deemed to have been  transferred to, and vested in the Central Government.    Sub-section (2) of Section 5 of the Act provides that on the  expiry of the term of any lease or tenancy referred to in  sub-section (1), such lease or tenancy was, if so desired by  the Central Government, to be renewed on the same terms and  condition on which the lease and tenancy was held by Burmah  Shell immediately before the appointed day.  ’Appointed day’  has been defined to mean the date of commencement of the  said Act which, as noticed hereinbefore, has been specified  on 24.1.1976.  Section 7 of the said Act provides for the  Central Government to direct vesting of the undertakings of  the Burmah Shell in a Government company.  It is not in  dispute that an appropriate notification in terms of sub- section (1) of Section 7 has been issued in favour of the  appellant herein.  Sub-section (3) of Section 7 provides  that the provisions of sub-section (2) of Section 5 shall  apply to a lease or tenancy which vests in a Government  company  as tenancy in the Central Government and reference  therein to the Central Government shall be construed as the  reference to the Government company.  Section 11 of the Act  provides for a non-obstante clause stating that the  provisions thereof shall have effect notwithstanding  anything inconsistent therewith contained in any other law  for the time being in force or in any instrument having

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

effect by virtue of any law other than the said Act.    

FINDINGS : The said Act is a special statute vis-‘-vis the  Transfer of Property Act which is a general statute.  By  reason of the provisions of the said Act, the right, title  and interest of Burmah Shell vested in the Central  Government and consequently upon the appellant Company.  A  lease of immovable property is also an asset and/or right in  an immovable property.  The lease-hold right, thus, held by  Burmah Shell vested in the appellant.  By reason of sub- section (2) of Section 5 of the Act, a right of renewal was  created in the appellant in terms whereof in the event of  exercise of its option, the existing lease was renewed for a  further term on the same terms and conditions.  As noticed  hereinbefore, Section 11 of the Act provides for a non- obstante clause.  

As would appear from the preamble of the Transfer of  Property Act, the same applies only to transfer by act of  parties.  A transfer by operation of law is not validated or  invalidated by anything contained in the Act. A transfer  which takes place by operation of law, therefore, need not  meet the requirement of the provisions of the Transfer of  Property Act or Indian Registration Act.   The said Act is a special statute.  Sub-section (2) of  Section 5 thereof mandates that in the event the appellant  desires to renew the lease or tenancy, the same would be  renewed on the same terms and conditions on which the lease  or tenancy was held by Burmah Shell immediately prior to the  appointed day.

Sub-section (1) of Section 5 of the Act provides for a  legal fiction in terms whereof the appellant herein became a  lessee in respect of the leasehold.  A legal fiction, as is  well-known, must be given its full effect [See  Bhavnagar  University vs. Palitana Sugar Mill (P) Ltd. And Others,  (2003) 2 SCC 111]].   Sub-section (2) of Section 5 of the  Act is imperative in character and must be construed as  such.

The maxim ’generalia specialibus non  derogant’ meaning  thereby that general things do not derogate special things  shall, thus, apply in the instant case and in that view of  the matter as admittedly the appellant herein has expressed  its desire to renew the lease, sub-section (2) of Section 5  read with sub-section (3) of  Section 7 thereof shall be  attracted. [See Indian Handicrafts Emporium and Others vs.  Union of India and Others [(2003) 7 SCC 589], D.R. Yadav and  Another vs. R.K. Singh and Another [(2003) 7 SCC 110], Union  of India and Others vs. B.N. Jha [(2003) 4 SCC 531], Ashok  Leyland Ltd. Vs. State of Tamil Nadu & Anr. [2004 (1) SCALE  224] and M.P. Vidyut Karamchari Sangh vs. M.P. Electricity  Board (Civil Appeal No.2510 of 2002) disposed of on  18.3.2004.  Furthermore, Section 11 of the Act provides for a non- obstante clause. An overriding effect, therefore, has been  given thereby over all other laws for the time being in  force.   

In Aswini Kumar Ghose and Another vs. Arabinda Bose and  Another [AIR 1952 SC 369], it was observed :

"...The enacting part of a statute

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

must, where it is clear, be taken to  control the non obstante clause where  both cannot be read harmoniously; for,  even apart from such clause, a later law  abrogates earlier laws clearly  inconsistent with it.  Posteriores leges  priores contrarias abrogant (Broome’s  Legal Maxims, Edn. 10 p. 347).  Here, s.  2 entitles every Advocate of the Supreme  Court as of right to practise in any  High Court in India."   

We, therefore, are of the opinion that the legislative  scheme contained in the said Act leads to only one  conclusion  that if  Government company expresses its   desire to renew the lease, the same would stand renewed on  the same terms and conditions.

Section 5(2) and Section 7(3) of the Act are required  to be given its purposive meaning, having regard to the  object and purport the statute seeks to achieve.  The  Central Government by reason of the provisions of the said  Act acquired running business undertakings dealing in  distribution and marketing of petroleum products.  The  leases or tenancy for outlets are, therefore, continued to  be kept with the Central Government or the Government  company, as the case may be, so that no let or hindrance is  placed in the matter of distribution of the products from  established retails outlets, unless alternate arrangements  are made.  Having regard to the object of the Act, as  noticed hereinbefore, it is difficult to agree with the  submission of the learned counsel for the respondents to the  effect that the expression mere desire by the Central  Government or the appellant was not enough and they were  required to show something more, as for example existence of  need for renewal of the lease.  The central Government or  the Government company is a state within the meaning of  Article 12 of the Constitution of India.  There are required  to act fairly.  It is not the case of the respondents herein  that desire to get the lease renewed was actuated by any  malice or ill-will or the same was otherwise unfair and  unreasonable.  In that view of the matter, it is difficult  to construe Section 5(32) of the Act as not laying down a  law not contemplating automatic renewal of the lease.     

The provisions of the Transfer of Property Act have no  application in a case where a transfer of property takes  place by operation of law.

In Harishchandra Hegde vs. State of Karnataka and Ors.  2004 (1) SCALE 48, it was held: "By reason of an order passed under  Section 4 of the Act, the lands are  directed to be restored in the event the  illegalities specified therein are  discovered.  The consequences contained  in Section 5 of the Act applies  automatically in the event an order  under Section 4 of the Act is passed.   Section 4 of the Act contains a non  obstante clause.  The said provision  would, thus, apply notwithstanding  anything contained in any agreement or  any other Act for the time being in  force.  The Act is a special Act whereas

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

the Transfer of Property Act is a  general Act and in that view of the  matter also Section 51 of the Transfer  of Property Act will have no application  and the consequences contained in  Section 5 would prevail.

Section 51 of the Transfer of Property  Act applies to inter vivos transfers.    It , as noticed hereinbefore, does not  apply to a trasfer made  by operation of  law.  If a judicial order is passed  restoring the land back to a member of  Scheduled Tribes in terms of the purport  and object of the statute, the  provisions of the Transfer of Property  Act cannot be applied in such a case.   The matter is governed by a special  statute.  Unless there exists a  provision therein, an order passed  thereunder cannot be supplanted or  supplemented with reference to another  statute."

CONCLUSION:         For the reasons aforementioned, the impugned judgments  cannot be sustained and are set aside accordingly.   

Before parting with this case, we may, however,  place  on records the statements made by Mr. M.A. Krishna Moorthy  to the effect that the appellant is not interested in having  the second renewal and the possession of leasehold shall be  handed over the respondent herein on the expiry of the  tenure of the renewed lease i.e. tenure of the lease.   With  a view to do complete justice between the parties, in  exercise of our jurisdiction under Article 142 of the  Constitution of India, we direct that the appellant herein  shall pay a sum of equivalent to 10 times of the original  rental with effect from the date on which the original deed  of lease expired.    This order shall, however, not be  treated as a precedent.

These appeals are allowed on the aforementioned terms.    There shall be no order as to costs.