http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: G. SRIDHARAMURTI

       Vs.

RESPONDENT: HINDUSTAN PETROLEUM CORPORATION LTD. & ANR.

DATE OF JUDGMENT13/09/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. JEEVAN REDDY, B.P. (J) HANSARIA B.L. (J)

CITATION:  1996 AIR  264            1995 SCC  (6) 605  1995 SCALE  (5)612

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.  We have  heard learned  counsel for the parties.      An open  space measuring  66.6 x  40 feet  comprised in Survey No.432/25  in Ward  No.XVII  situated  at  Bangalore- Bellary Trunk  Road in  the City  of  Bellary,  was  in  the possession of  Esso Company  pursuant to  a lease dated July 17, 1969  granted by  the appellant. Esso Company was merged into respondent-Corporation on March 14, 1974. The appellant filed eviction  petition under  Section 21  (1) (f)  of  the Karnataka Rent  Control  Act  [for  short,  ‘the  Act’]  for ejectment on  the ground  of  sub-letting,  impleading  Esso Company and thereafter, the respondent-Corporation. The Esso [Acquisition of Undertakings in India] Act, 1974 [for short, ‘the Esso  Act’] came  into force w.e.f. March 13, 1974. The courts below  dismissed the  application on  the ground that the Esso  Company had not sublet the demised premises but by virtue of  statutory  operation  under  the  Esso  Act,  the respondent-Corporation stood transposed as a tenant which is an involuntary  act pursuant  to Section  7 of  the Act; and notwithstanding the  specific embargo  created under Section 21 (1)  (f) of  the Act, it cannot be construed to be a sub- letting. The  High Court also reached the same conclusion on 25/26th June,  1990 in  CRP No.3628/82.  Thus this appeal by special leave.      Shri Kulkarni,  the learned  counsel appearing  for the appellant, contended  that Section  21 (1)  (f) of  the  Act clearly prohibits  assignment or transfer "in any manner" of the interest  of the  tenant deeming it to be a sub-letting. Therefore, in  view of  the non-obstante clause contained in sub-section (1) of Section 23 of the Act, the continuance of the respondent-Corporation in the premises must be deemed to be due  to sub-letting  within the meaning of Section 21 (1) (f) of  the Act.  In support  of his  contention, he  placed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

strong reliance  on a  ratio laid down by this Court in M/s. Parasram Harnand Rao vs. Shanti Prasad Narinder Kumar Jain & Anr. [(1980) 3 SCC 565].      To appreciate  the contentions, it is necessary to look at the provisions of the Esso Act.      Section 5 of that Act envisages:      "5. (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 deemed 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." Sub-sections (1)  and (2) of Section 7 of the Esso Act state :      "7. (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."      It  would  be  clear  from  above  provisions  that  by statutory operation, the pre-existing tenancy rights held by Esso Company  with the appellant initially stood transferred and vested  in the  Central Government,  and thereafter,  by operation of  Section 7  of the Esso Act, the said rights in turn stood  transposed and  vested in the Government company as if  the Government  company statutorily became the tenant of the  appellant-landlord. It  is true that sub-section (1) of Section  23 of  the  Act  employing  non-obstante  clause excluded operation  of any  other enactment.  But it must be remembered that there is no specific provision in List II of

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

the Seventh  Schedule to  the Constitution covering the Act. On the  other hand,  by virtue  of what  has been  stated in Entry 6 in List III of the Seventh Schedule, the legislature of the  State and  also Parliament can enact law in relation to immovable  property. Since  the Esso  Act  is  a  Central enactment,  and  latter  too,  the  non-obstante  clause  in Section 7  of Esso  Act excludes the operation of Section 23 of the  Act. Both the Act and the Esso Act occupy same field and both  cannot exist  harmoniously. So  to the  extent  of inconsistency, the  Act becomes void by operation of Article 254 of  the Constitution. On the Esso Act coming into force, by  operation   of  Sections  5  and  7  of  that  Act,  the respondent-Corporation became  statutory tenant  and thereby it cannot  be construed  to  be  an  assignment  of  tenancy rights, which  the appellant-landlord  had entered into with the Esso Company, by the Central Government in favour of the Government company.      The ratio  of M/s.  Parasram Harnand Rao’s case [supra] is inapplicable  to the  facts in  this case.  Therein,  one Laxmi Bank  which was  a tenant  with the  appellant was  in liquidation. The  Official Liquidator  had sold  the tenancy rights  in   favour  of   the  respondents.   Thereby,   the respondents became  tenant  of  the  demised  premises.  The landlord intitiated  proceedings under Section 14 (1) (b) of the Delhi  Rent [Control] Act contending that it amounted to sub-letting. This  Court accepting  the contention held that in view of the wide language employed in Section 14 (1) (b), though the same was made in favour of the respondent through court, it  amounted to transfer of an interest inter se. The ratio therein  does not  get attracted  to the facts in this case in  view of the statutory operation of Sections 5 and 7 of Esso  Act which  is not  voluntary act  of assignment  of interests intra vivos.      The appeal is accordingly dismissed. No costs.