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.