Bharat Petroleum Corporation Limited v. M.K.P. Roy and Sunil Roy

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE K.ABRAHAM MATHEW** **THURSDAY, THE 12TH DAY OF APRIL 2018 / 22ND CHAITHRA, 1940** **AS.No. 284 of 2001** **O.S.106/1990 of SUB COURT, MAVELIKKARA** ## **APPELLANTS/DEFENDANT IN O.S.:** **THE BHARAT PETROLEUM CORPORATION LIMITED, HAVING ITS REGISTERED OFFICE AT 31, NORTH BEACH ROAD, CHENNAI, REPRESENTED BY ITS TERRITORY MANAGER MR.BALAKRISHNAN NELLIYATH.** **BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR SRI.JOSON MANAVALAN** ## **RESPONDENTS/PLAINTIFFS 1 & 2 IN O.S.:** *** 1. M.K.P.ROY, S/O KOSHY, RESIDING AT POOVATHOOR HOUSE, KEEZHCHERIMEL MURI, VADAKKEKKARA VILLAGE, CHENGANNUR TALUK. (DIED, LEGAL HEIR RECORDED)** **2. SUNIL ROY, S/O M.K.P. ROY, RESIDING AT POOVATHOOR HOUSE, KEEZHCHERIMEL MURI, VADAKKEKKARA VILLAGE, CHENGANNUR TALUK. (RECORDED AS MAJOR)** *** IT IS RECORDED THAT THE 1ST RESPONDENT EXPIRED AND THE 2ND RESPONDENT ALONE IS HIS LEGAL HEIR AND THAT THERE IS NO NECESSITY TO IMPLEAD ANY OTHER LEGAL HEIRS OF DECEASED 1ST RESPONDENT AND FURTHER THAT THE 2ND RESPONDENT HAS BECOME MAJOR VIDE ORDER DATED 15.6.2015 IN MEMO DATED 6.6.2015 BEARING C.F.2435/15** **R2 BY ADVS. SRI.MATHEWS JACOB (SR.)** **SRI.P.B.KRISHNAN SRI.JACOB MATHEW P.** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 12-04-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **EL** **AS.No. 284 of 2001** ## **APPENDIX** ## **PETITIONER(S)' ANNEXURES** |**ANX.A**|**TRUE COPY OF THE MARKETING GUIDELINES ISSUED BY THE MINISTRY OF**| |---|---| ||**PETROLEUM & NATURAL GASES**| |**ANX.B**|**TRUE COPY OF THE REPORT DATED 6.9.2002 BY THE ELECTRICAL INSPECTOR,**| ||**ALAPPUZHA**| |**ANX.C**|**TRUE COPY OF THE NOTICE ISSUED BY THE SECRETARY, CHENGANNUR**| ||**MUNICIPALITY DATED 1.10.2002**| |**ANX.D**|**TRUE COPY OF THE PROCEEDINGS OF THE MUNICIPAL SECRETARY, CHENGANNUR**| ||**DATED 24.9.2002**| |**ANX.E**|**TRUE COPY OF THE CIRCULAT NO.4 ISSUED BY THE GOVERNEMNT OF INDIA**| ## **RESPONDENT(S)' ANNEXURE** ## **NIL** **TRUE COPY** **P.S. TO JUDGE** **EL** **16.4.2018** ## **K. ABRAHAM MATHEW, J.** -------------------------------------------------- A.S. No. 284 of 2001 -------------------------------------------------Dated this the 12[th] day of April, 2018 ## **J U D G M E N T** The appellant was the defendant in OS No. 106 of 1990 on the file of the Sub Court, Mavelikkara. The respondents were the plaintiffs. The suit was in respect of the plaint schedule immovable property, in which the appellant has set up an outlet for petrol and diesel. The land belongs to the second respondent, who is the son of the first respondent. By a registered lease deed, on 22.07.1974, the second respondent leased out the land to the Burmah Shell Oil Storage & Distributing Company India Ltd. to set up a retail outlet for petrol and diesel. The period of lease was five years. In 1976 by Burmah Shell (Acquisition of Undertakings in India) Act, 1970, the Government of India nationalized the company. Its assets vested in the Union Government on 24.01.1976, the date on which the Act came into force. The appellant Bharat Petroleum Corporation became A.S. No. 284 of 2001 **==> picture [20 x 8] intentionally omitted <==** the successor in title of the company. The provisions of the Act effected a statutory renewal of the lease for five years. The second respondent challenged its validity in OP No. 1322 of 1979, which was disposed of. He later filed OP No. 3856 of 1988, which was dismissed. The appeal also was dismissed. The extended period of lease came to an end by 09.04.1984. The appellant has no right to continue in possession of the property thereafter. In spite of demand by notice, the appellant failed to surrender vacant possession of the land. On these allegations the respondents prayed for a decree for recovery of possession with compensation for unauthorized use and occupation at an enhanced rate. In its written statement the appellant company denied its liability to surrender vacant possession of the land. It raised the contention that the land was originally taken on lease from the then owner on 09.04.1964 and acting upon it, it erected underground tanks for storage of petroleum products and constructed building on the A.S. No. 284 of 2001 **==> picture [20 x 8] intentionally omitted <==** leased out land. The lease of 1974 was only a renewal. It is entitled to the benefit of Section 106 of the Kerala Land Reforms Act. It prayed for dismissal of the suit. The trial court found that the lease of 1974 was a new lease and the appellant is not entitled to the benefit of Section 106 of the Act. It allowed the prayer of the respondents for recovery of possession with mesne profits at the rate of Rs.1,500/- per month from the date of the suit. The decree is challenged. - 2.Heard the learned counsel for the appellant and the respondents. - 3.The following points arise for consideration: - (i)Is the appellant entitled to the benefit of Section 106 of the Kerala Land Reforms Act? - (ii)Whether the lease of 1974 was a new lease? - (iii)Is the decree of the trial court liable to be set aside? - 4.The pivotal question is whether the appellant is entitled to the benefit of Section 106 of the Kerala Land Reforms Act, which is extracted below; A.S. No. 284 of 2001 ..4.. 106. **Special provisions relating to leases for commercial or industrial purposes** .- (1) Notwithstanding anything contained in this Act, or in any other law, or in any contract, or in any order or decree of court, where on any land leased for commercial or industrial purposes, the lessee has constructed buildings for such commercial or industrial purpose before the 20[th] May, 1967, he shall not be liable to be evicted from-such land, but shall be liable to pay rent under the contract of tenancy, and such rent shall be liable to be varied every twelve years. ## **Explanation** - For the purposes of this Section- (a) "lessee” includes a legal representative or an assignee of the lessee; and (b) "building" means a permanent or a temporary building and includes a shed. (1A)The lessor or the lessee may apply to such authority as may be prescribed for varying the rent referred to in Sub-section (1), and thereupon such authority may, after taking into consideration such matters us may be prescribed and after giving the lessor and the lessee an opportunity of being heard, pass such orders on the application as it deems fit. (2) If, between the 18[th] December, 1957 and the date of commencement of this Act, any decree or order of court has been executed and any person dispossessed by delivery, such person shall, on application before the land Tribunal, be entitled to restoration of possession: Provided that, before restoration, such person shall be liable to pay- i)the compensation paid by the landlord for any improvements in the land and subsisting at the time of restoration; (ii) the compensation for any improvements effected subsequent to the delivery; Provided further that he shall not be entitled to restoration if the property has passed on to the possession A.S. No. 284 of 2001 ..5.. of a bonafide transferee for value. (3) Nothing contained in Sub-section (1), Subsection (1A) and Sub-section (2) shall apply to lands owned or held by the Government of Kerala or a local authority. **Explanation** .- For the purposes of this Sub-section, "local authority" includes the Cochin Port Trust and any University established by an Act of the Kerala State Legislature. 5.To claim the benefit of Section 106 of the Kerala Land Reforms Act, the lease should be for commercial purpose and the construction should be before 20.05.1967. The trial court found that the appellant has not pleaded that it made constructions on the leased out land before 20.05.1967. Whether the appellant made constructions before that date is a question of fact. It is a matter to be pleaded and proved. In its written statement the appellant contended that the original lease was in 1964 and acting upon the lease, which was commercial, it made constructions on the land. But, there is no averment that the construction was before 20.05.1967. No evidence also has been adduced to prove that the appellant made any A.S. No. 284 of 2001 **==> picture [20 x 8] intentionally omitted <==** construction before that date. Thus, there is neither pleadings nor evidence to the effect that the appellant made constructions on the leased out land before the appointed date. 6.In the plaint there is no mention about the lease in 1964. The plaint discloses that the lease was in 1974, which is evidenced by Ext.A1 registered sale deed. To prove that the original lease was in 1964, the appellant produced Ext.B2 copy of the registered lease deed. It was marked in the earlier appeal (AS No. 763 of 1997) subject to proof. Under Section 57(5) of the Registration Act, a certified copy of a registered deed may be tendered in evidence to prove its contents. There is no specific denial of execution of Ext.B2 lease deed. The respondents only suppressed it in their pleadings. So, I think Ext.B2 is sufficient to prove that the land was leased out on 01.06.1964 for commercial purpose. - 7.Now, there are two lease deeds before the court, Ext.B2 A.S. No. 284 of 2001 **==> picture [20 x 8] intentionally omitted <==** of 1964 and Ext.A1 of 1974. Assuming that there is sufficient pleadings that construction was made before 20.05.1967, I shall examine whether there was surrender of lease of 1964 before the appellant executed Ext.A1 lease deed of 1974. - 8.In Ext.A1 lease of 1974 there is no mention about the lease of 1964. If it is read alone, it gives an impression that it is a new lease. But, that alone cannot be a ground to hold that it is a new lease. - 9.A new lease is created only when there is a surrender of the old lease. I shall first consider the decisions cited by the learned counsel for the respondents in support of his argument that the lease of 1974 is not a renewal, but a new lease. 10.In **Sulaikha Beevi** v. **K.C.Mathew** [1997 (1) KLT 69] a Division Bench of this Court held: “There is an implied surrender if the lessor grants a new lease to his lessee in respect of the same property and if the lessee accepts a new lease, it ipso facto determines the old A.S. No. 284 of 2001 ..8.. lease and results in surrender. The delivery of physical possession by the tenant to the landlord is not a prerequisite for an effective and valid surrender under Section 111(e) & (f) (of the Transfer of Property Act). It is axiomatic that implied surrender can also be inferred from the conduct of the parties.” But, that was a case where there was an express surrender; the second lease deed expressly mentioned that there was surrender of the lease hold properties. In **Gajraj Singh & Others** v. **State Transport Appellate Tribunal & Others** [(1997) 1 SCC 650] the Supreme Court examined the differences between the renewal and extension. The following observations in **Provash Chandra Dalui** v. **Biswanath Banerjee** [1989 supp (1) SCC 487] have been quoted in it: “... a distinction between 'extension' and 'renewal' is chiefly that in the case of renewal, a new lease is required while in the case of extension of the same lease continues in force during additional period by the performance of the stipulated act. In other words, the word 'extension' when used in its proper and usual sense in connection with a lease, means prolongation of the lease.” A.S. No. 284 of 2001 **==> picture [20 x 8] intentionally omitted <==** 11.The Supreme Court held that it is settled law that grant of renewal is a fresh grant though it breathes life into the operation of the previous lease or licence already granted. That was a case under the Motor Vehicles Act. 12.Another decision cited by the learned counsel for the respondents is **Sulaikha Beevi** v. **Mathew** [2001 (1) KLT 360]. In that case there was an express admission in the new lease deed that the lessee had surrendered the premises to the landlord. The provision that came up for consideration in **Indian Oil Corporation Ltd.** v. **Joseph Paul** [2016 (4) KLT 692] was Section 106 of the Kerala Land Reforms Act. In the original lease deed there was an agreement that at the expiry of the period of lease, the lease would be automatically and without any further act of the parties would be renewed for a further period of five years and after the expiry of that period, the tenant should surrender possession of the land after removing the structures constructed by them. A.S. No. 284 of 2001 **==> picture [26 x 8] intentionally omitted <==** The court held that from the above recitals in the documents and on the basis of the evidence, it could not be said to be a renewal of the original lease. The evidence disclosed that there was surrender of the earlier lease and subsequently a fresh lease deed was executed and it was on that basis, the buildings which existed in the property had been constructed. So, the construction at any rate could be possibly after 1981 and not prior to the appointed date mentioned in Section 106 of the Act. The last of the decisions relied on by the learned counsel for the respondents is **State of Gujarat & Others** v. **Nirmalaben S. Mehta & Another** [(2016) 9 SCC 240] wherein the court examined the differences between extension and renewal. It quoted the observation in **Gajraj Singh** 's case (supra) quoted above. 13.What can be gathered from the above decisions is that whether there was an implied surrender is a question of fact which depends upon the facts of each case. A.S. No. 284 of 2001 ..11.. 14.One of the two decisions relied on by the learned counsel for the appellant is **Chidambaram** v. **Arunachalam Pillai** [1987 (1) KLT 11]. The learned Judge has observed that enhancement of rent or surrender of a portion of the leasehold premises by themselves cannot evidence a new tenancy arrangement if it is seen that in spite of those facts the original transaction continued. In **T.K. Lathika** v. **Seth Karsandas Jamnadas** [(1999) 6 SCC 632] the first deed was in 1956 and the second in 1980. There were only two differences between the two leases. In the first one the lessor was the appellant's father and the rent for building was Rs.65/- per month while in the second one the lessor was the appellant and the rent was Rs.160/- per month. There was no implied surrender of the lease. The Supreme Court held that a mere alteration or improvement or even impairment of the former relationship could not ipso facto amount to implied surrender; it has to be ascertained on the terms A.S. No. 284 of 2001 **==> picture [26 x 8] intentionally omitted <==** of the new relationship vis-a-vis the erstwhile demise and then judged whether there was termination of the old jural relationship by implication. 15.In the light of the above decisions, I shall examine whether there was surrender of the lease of 1964. Admittedly, there was no express surrender. In the recitals in Ext.A1 second lease deed, there is no whisper about implied surrender also. 16.A comparison of Ext.B2 lease deed of 1964 and Ext.A1 sale deed of 1974 reveals that there are no differences between the terms and conditions except in the matter of the rent and the period of lease. In my opinion the decision of the Supreme Court in **T.K. Lathika** 's case (supra) squarely applies. Ext.A1 lease of 1974 is not a new lease. The old lease still continues to be in force. 17.The fact that there is neither pleadings, nor evidence to the effect that the appellant made constructions on the leased out land before 20.05.1967, I am compelled to hold that the appellant is not entitled to the benefit A.S. No. 284 of 2001 **==> picture [26 x 8] intentionally omitted <==** of Section 106 of the Kerala Land Reforms Act. The points are found against the appellant. In the result, this appeal is dismissed. Sd/- **K. ABRAHAM MATHEW JUDGE** bka/-