1

A.F.R

Reserved on: 27. 11.2019

Delivered on: 19.12.2019

Court No. - 1

Case :- WRIT - C No. - 36576 of 2019

Petitioner :- Puneet Kumar Singh

Respondent :- Bharat Petroleum Corporation Ltd. And Another

Counsel for Petitioner :- Tarun Agrawal

Counsel for Respondent :- Vikas Budhwar,Utkarsh Tripathi,Vijay

Kumar Rai

Hon'ble Ramesh Sinha,J.

Hon'ble Ajit Kumar,J.

(Delivered by Ramesh Sinha,J.)

1.Heard Sri Tarun Agrawal, learned counsel for the petitioner and Sri

Vikas Budhwar, learned counsel for respondent Corporation.

2.Invoking extraordinary jurisdiction of this Court under Article 226

of the Constitution of India, the petitioner herein has challenged the order

dated 2.11.2019, whereby candidature of the petitioner for the allotment

of retail outlet dealership of petroleum products, in connection with

advertisement dated 25.11.2018, has been rejected.

3.In narrow compass the facts of the case can be drawn like this that

petitioner pursuant to advertisement dated 25.11.2018 issued by Bharat

Petroleum Corporation Ltd, namely, respondent no. 1, invited application

for allotment of retail outlet dealership of the petroleum product in district

Chandauli for allocation at old National Highway No. 2 between Varanasi

and Chandauli. The petitioner applied vide application dated 24.12.2018

filling up online application form. Petitioner submitted the documents in

respect thereof which included the lease document relating to the land

offered by the petitioner falling in Khasra No. 154 with a dimension of

35X35 metres total measuring to 1575 square metres.

4.The piece of land offered by the petitioner vide his application

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(hereinafter referred to as the Land in question) was obtained by the

petitioner under a lease agreement executed and registered on

14/15.12.2018 for a period of 29 years and 11 months by the original

tenure-holder Mangla Singh and thus, in view of the detail submitted by

the petitioner, petitioner's application was entertained in Group-I category

and having been selected in the draw of lots, he became entitled for

consideration for allotment of retail outlet dealership.

5.In the meanwhile, it appears that, some complaint was made

regarding offer of land by the petitioner to be not a valid offer and

consequently a notice was issued to the petitioner by the Territory

Manager Retail (Varanasi) on 10.6.2019 asking him to confirm as to

whether the land offered by him was already subject matter of lease

agreement between the tenure-holder Mangla Singh and one M/S. B.S.C.-

C&C- “JV” (hereinafter referred to as original lessee) executed and

registered on 20.11.2017 and was in subsistence till 19.11.2019. He was

asked to submit reply within ten days.

6.The petitioner did submit a reply explaining away that the land

though formed part of the lease agreement between tenure-holder and one

original lessee but in view of surrender of land measuring 1925 square

meters by the lessee on 15.9.2018 Mangla Prasad the tenure-holder got

the right to execute a fresh lease of 1575 square meters out of the

surrendered part. The petitioner appended with his reply dated 19.5.2019

the confirmation letter.

7.Having thus, received the reply of the petitioner the Territory

Manager enquired from the Deputy Registrar, Sadar, Chandauli as to

whether the second lease dated 15.12.2018 was valid in face of the fact

that there already existed a lease dated 25.5.2018 in favour of one

original lessee and whether the surrender letter amounted to a valid

surrender and as to whether on the basis of such letter of surrender a

subsequent lease could have been executed. The Deputy Registrar,

Chandauli in his reply dated 28.6.2019 declined to answer the questions

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on the ground that the he does not enjoy any authority under the

Registration Act, 1908 to enquire into the validity of written instrument

and so far as the letter dated 15.9.2018 issued by the original leessee

Satish Kumar in respect of lease deed numbers 53077/2018 and 5282 of

2018 is concerned no legal opinion can be expressed in respect of the

legal effect of such letter.

8.It appears that on the same date i.e., 22.6.2019 the Territory

Manager also enquired from the original lessee as to whether this letter

was issued by Satish Kumar and in reply to that the authorized signatory

of original lessee wrote to the Territory Manager that such letter is a valid

one to the best of his knowledge and was issued by his office.

9. It appears that considering the reply of the petitioner submitted on

19.6.2019, the reply of the Deputy Registrar and that of Satish Kumar and

having visited the site, the Land Evaluation Committee submitted report

that the land did not meet the required norms and consequently the

candidature of the petitioner was rejected vide order dated 27.7.2019.

10. The order dated 27.7.2019 came to be challenged before this Court

vide Writ Petition No. 26050 of 2019 and as the order was absolutely non-

speaking except referring to some report of the Land Evaluation

Committee which was not discussed in the order and similarly orders

were passed by the Corporation in some other matters challenged in a

number of writ petitions filed before this Court all were heard and decided

together by common judgment dated 13.8.2019 with Writ C No. 24484 of

2019 (Ansar Ali Vs. Union of India and 2 others) quashing the order

impugned including the one dated 27.7.2019 (supra). The matter was

remitted to the authority to consider afresh by supplying copy of the

reports to the respective petitioners inviting their objections and then to

decide the same by means of a reasoned and speaking order.

11.In view of the judgment of the High Court dated 13.8.2019 (supra),

the respondents issued noticed to the petitioner on 4.10.2019 inviting

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objection and the petitioner submitted reply on 10.10.2019. Having

considered the reply of the petitioner, this time the respondent-

Corporation again rejected the candidature of the petitioner by a detailed

order dated 2.11.2019 on the ground that in view of Clause-7 of the lease

deed dated 25.5.2018 and Section 111(e) and Section 111 (f) of the

Transfer of Property Act, the surrender under the letter dated 15.09.2018

would not amount to absolute surrender and consequently the offer of a

piece of land would not be one referable to Group-I category and thus the

candidature of the petitioner would be liable to be considered under

Group-III category. Thus the candidature of the petitioner as such in

Group-I category came to be rejected.

12.Assailing the order impugned now, the arguments advanced by

learned counsel for the petitioner is three fold:-

(A) The lease was validly executed and registered and no one having put

it to challenge the title and possessory rights to the extent as provided for

under the lease were intact and valid on the date offer was made, for a

period of 29 years and 11 months and such being the position on the date

of submission of application by the petitioner, the offer of the petitioner

was a valid offer of piece of land as defined under Group-A category and,

therefore, the respondents were not justified in rejecting the same;

(B) The surrendered part of the lease under the letter dated 15.9.2018

(hereinafter referred to as letter) was a valid surrender in the light of the

provision contained under Section 111 (e) and Section 111 (f) of the

Transfer of Property Act, 1872 (hereinafter referred to as T.P. Act, /) and

the interpretation thereof by the respondent Corporation is errorenous in

law;

(C) A mere condition prescribed under the surrender letter as “ Just in

case there is some emergency space requirement for me and in case the

surrender plot remain unused by you, I may use it temporarily” would not

make the surrender bad and resultantly the subsequent lease is not invalid

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so as to reject the candidature of the petitioner in Group-A I category, in

other words the argument is that the surrender letter was a valid one per

provision contained in Para-7 of the lease deed dated 25.5.2018.

13.Thus advancing the above arguments further, on the argument A,

learned counsel for the petitioner has placed reliance upon Clause 4 (V) of

the Guidelines as contained under the Brochure dated 24.11.2018 framed

for selection of dealers for Regular and Rural Retail Outlets (for short

Brochure). Clause-5 of the Brochure as it defines Groups I, II and III is

reproduced hereinunder:

“Group 1: Applicants having suitable piece of land in

the advertised location/area either by way of

ownership/ long term lease for a period of minimum 19

years 11 months or as advertised by the OMC.

Group 2: Applicants having Firm Offer for a suitable

piece of land for purchase or long term lease for a

period of minimum 19 years 11 months or as advertised

by the OMC.

Group 3: Applicants who have not offered land in the

application.”

14.The above provision has been quoted to the extent it is necessary

for the appreciation of the argument of the petitioner referable to Group-I.

15.It is submitted by the learned counsel that since he had a valid lease

agreement qua a of piece of land with a dimension of 35 metres X 45

metres and it being not questioned either by the lessor or by the original

lessee who had surrendered that piece of land and since the lease was for a

period of 29 years 11 months, a period more than required one, in favour

of the petitioner to bring him within the ambit and scope of Group-I. He

submits that it is not disputed that the land fell in Khasra 154 and was part

of transfer by registered document and that too by a tenure-holder, the

mere complaint by a third party would not make the offer of piece of land

within Group-I category as bad. So according to him in view of the

definition of land provided under Clause 4 (V), the petitioner being

eligible candidate his application was rightly entertained and having been

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selected in draw of lots, he was right in offering the land for allotment of

dealership of the petroleum products under the letter dated 7.2.2019.

16.The argument B and C since relate to the issue of surrender and part

of surrender of lease rights by the original lessee referable to Section 111

(e) and 111 (f) of the Act, 1882 and the scope of para-7 of the lease deed

dated 25.5.2018 both being related to each other the legal argument is

that surrender of part of lease rights was valid and so also the subsequent

lease in favour of the petitioner. Learned counsel for the petitioner has

relied upon various authorities of the High Court and the Supreme Court

in support of his argument. He has drawn attention of the Court to Section

111 Sub-sections (e) and (f) Act No. 87 of 1882. For the appreciation of

the argument so advanced, the two clauses are reproduced hereunder:

“(e) by express surrender; that is to say, in case the

lessee yields up his interest under the lease to the lessor,

by mutual agreement between them;

(f) by implied surrender;”

17.It has been argued by learned counsel for the petitioner that a bare

reading of Clauses (e) and (f) clearly provide that the legislative intent is

to acknowledge surrender of lease rights by act of specific written

document or by implied surrender to wit by consent and, therefore, he

argues that since Clause-7 of the lease deed prescribes for surrender of

lease rights, entitling the lessee to take such an action in the light of the

provision as contained in Clause (e) and (f). He contends that if original

lessee had written letter, expressing relinquishment of his lease rights in

respect of lease land, it would be a valid one.

18.He has placed reliance upon paragraph-27 of the Judgment of Apex

Court in the case of H.K. Sharma v.. Ramlal (2019) 4 Supreme Court

Cases 153. Paragraph-27 relied upon by the petitioner's counsel,of the

judgment is reproduced hereunder:

“27. This Court in ShanMathuradas Manganlal & Co.

V Nagappa Shankarappa Malage considerd the scope

of Clauses (e) and (f) of Section 111of the TP Act and

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laid down the following principle in para 19 as under:

(SCC P. 665)

“19. A surrender under clauses (e) and (f) of Section

111 of Transfer of Property Act, is an yielding up of the

term of the lessee’s interest to like a contract by mutual

consent on the lessor’s acceptance of the act of the

lessee. The lessee cannot, therefore, surrender unless

the term is vested in him; and the surrender must be to

a person in whom the immediate reversion expectant on

the term is vested. Implied surrender by operation of

law occurs by the creation of a new relationship, or by

relinquishment of possession. It the lessee accepts a

new lease that in itself is a surrender. Surrender can

also implied from the consent of the parties or form

such facts as the relinquishment of possession by the

lessee and taking over possession by the lessor.

Relinquishmement of possession operates as an implied

surrender. There must be a taking of possession, not

necessarily a physical taking, but something amounting

to a virtual taking of possession. Whether this has

occurred is a question of fact.”

19.In support of his contention he has further relied upon the judgment

of Calcutta High Court in the Case of Abdul Majid v. Hari Charan Hlder

and others 53 Ind. Cas 17 (MANU/ WB/0200/1917) and has placed

reliance on paragraphs 2 and 3, wherein concurrent view has been

expressed by two Judges. Paras 2 and 3 run as under:

“ 2. It is contended on behalf f the plaintiff appellant

that the surrender was not really a surrender, but a

sale, because there was consideration, the

consideration being the rent for which a decree had

been obtained and accrued since the date of suit. It

appears to me that there is no reason for saying that it

was not a surrender to the landlord; no authority has

been shown to us for holding that the surrender must be

by instrument registered. For these reasons this appeal

must be dismissed with costs.

3. I agree. Under Section 111 of the Transfer of

Property Act, a lease of Immovable property

determines, by express surrender, that is to say, by the

lessee yielding up his interest under the lease to the

lessor, by mutual agreement between them. It is found

that in this case the lessee did surrender her interest by

mutual agreement, and it seems to me that it makes no

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difference that the mutual agreement was by reason of a

consideration that was received from the tenant by the

landlord. The Transfer of Property Act does not require

a registered document in such cases and no authority

has been shown to us in support of this contention.”

20. Learned counsel for the petitioner has drawn our attention on para-

16 of the judgment in the case of Elias Meyer v. Manoranjan Bagchi

and others 22c WN 441 (MANU/ WB/0534/1918). Para 16 of the

judgment runs as under:

“16. In this country a surrender or relinquishment does

not require to be in writing but can be inferred from the

acts of the parties. This is well illustrated by the case of

Chundermani Byabhsa v. Shambu Chandra

Chukerbutty [1864] W.R. 270, a decision which has

never been question in this Court.”

21.Reliance has also been placed upon a judgment of Andhra Pradesh

High Court in the Case of Konijeti Venkayya and ors v. Thammana Peda

Venkata Subbarao and others AIR 1957 AP 619 (MANU/ AP/

0347/1955). Counsel for the petitioner has vehemently argued that in

India lease rights are surrendered orally also and at times even such

relinquishment can be inferred from the conduct of the parties. He has

tried to distinguish the Indian legal position from English one where the

statute requires for surrender to be documented one evidencing the

factum of surrender. He has relied upon para-6, 13 and 17 of the judgment

(supra) which are reproduced hereinunder:

“6. On a surrender by the lessee, a lease of immovable

property comes to an end. It has to be ascertained

whether there was an actual surrender or surrender in

fact by the plaintiff of his leasehold right under Exhibit

B-8 in favour of the lessor, his father. In England it has

been held that where the subject- matter of the lease is

a reversion, it is a ‘ a matter, lying in grant, and not in

livery, and of which therefore, there could be no valid

surrender in fact otherwise than by deed.” Lyon v. Reed

(1844) 153 ER 118 126 (E). under Section 111(e) of the

Transfer of Property Act if a lessee yields up his interest

under the lease to the lessor by mutual agreement

between them, there is an express surrender or

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surrender in fact. In India, a surrender may be oral and

may by inferred from the acts and conduct of the parties

there being no statutory provision like Section 3 of the

English Statute of Frauds that a surrender should be

evidenced by a document in writing or like Section 3 of

8 and 9 Vic. C. 106 requiring a deed for the purposes.

See Elias. Myer V. Maoranjan 22 Cal W/N 441: (AIR

1919 Cal 694) (F) Brojo Nath V. Maheswar 28 Cal LJ

220; (AIR 1918 Cal 233) (1) (G) Chunder Monee Nya

Busan V. Sham-buchandra Chukerbutty 1884) WR CR

270 (H) and Narasimma V. Lakshmana ILR 13 Mad 124

126, 127 (I).

13. According to English Decisions a fresh lease

accepted by a lessee during the continuance of a prior

lease operates as a surrender of the original lease

because by accepting the new lease, the lessee is a

party to an act the validity of which he is, by law,

afterwards stepped from disputing and which would not

be valid if the first lease continued to exist and the

lessor was not in a position to upt the lessee in

possession at the date of the new lease. The law

attributed the ofrce of estappel to certain acts of

notoreity such as livery of sees in, entry, aceptance of

an estate See Parke B. in (1844) 153 ER 118 127 (E)

and Chitty, J. in Wallis V. Hands 1893 2 CH 75 at PP

79 and 82 (o). The grant of new lease to a stranger with

the tenants' assent and change of possession at about

the time of the new lease were held to bring the case

within the scope of the doctrine of implied surrender.

The insistence on delivery of possession by the old

lessee and the assumption that the lessor was in

possession at the date of the new lease and delivered

possession under the new lease was due to the fact that,

in England, it was for a long time considered necessary

that a lessor should be in possession of the land

intended to be leased. I twas therefore decided by the

English Courts that where a lessee assented to a lease

being granted to Anr. And also gave up possession to

the new lessee there was a surrender by operation of

law. Davision V. Gent (1857) 1 H & N 744 (p), 189 & 2

CH 75 at pp 79 and 82 (o). This requirement of the

English common law that the lessor should have been

in possession and given possession to the lessee at the

time of the lease was dispensed with by Section 4 (2) of

the Law of property Act, 1925, but it influenced the

course of decision In England. Another consideration

which weighed with the English Courts in holding that

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an assent by the tenant to the new lease would not

amount to a surrender by operation of law without

actual delivery of possession to the new tenant was

adverted to by Chitty,J., in 1893 2 CH 75 PP. 79 and 82

(o), in these terms:

To hold that mere oral assent to new lease operates as

surrender in law would be a' most dangerous doctrine;

it would practically amount to a repeal of the Statute of

frauds and would let in all the mischief against which

the statute is intended to guard; the policy of that

statute is carried still further by the Statute 8 and 9 Vic.

C.106, Section 3 which requires a deed in cases where

formerly a mere writing would have sufficed.

17. It was argued for the Respondent that even if

Exhibits B-8 and B-12 were inconsistent or in

compatible, the operation of Exhibit B-8 would remain

suspended only during 1947-1948 at the end of which

the term of Exhibit B012 would expire and that Exhibit

B-8 would continue to be in force from 1948-1949

onwards till 1962-1963 according to its tenor. Reliance

was placed on the following observation of Ramesam J

in (MANU/ TN/ 0049/292: ILR 48 Mad 815, 819 AIR

1925 Mad 127, 1278 ) (N).

22. Then again, learned counsel for the petitioner submits that in the

case of Jamuna Oil Mills v. The AddI. District Judge and others 1978

AWC 413 All (MANU/UP/ 0547/1978). Paragraphs 34 and 35 run as

under:

“34. To begin with it, it will be proper to give in brief

the requirements of express or implied surrender of

tenancy rights. Section 111 of the Transfer of Property

Act lays down, amongst others, that a tenant can

surrender his or her rights expressly or impliedly.

Woodfall in his book on ‘ Landlor and Tenant’, 27

th

ED.

P. 362 says that “an implied surrender can also be by

the conduct of both the parties” He writes “the term

surrender by operation of law or implied surrender

(there being no distinction is the expression used to

describe all those cases where the law implies

surrender from unequivocal conduct of both parties

which is inconsistent with the continuance of the

existing tenancy;

35. In Amar Krishna v. Nazir Hasan AIR 1939 Oudh

257 at page 267 it was observed:

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An implied surrender takes place either by the creation

of new relationship between the lesor and the lessee

such as the acceptance of a new lease which must

operate as implied surrender of the old one or in other

ways based on the consent of the parties or by the

relinquishment of possession by the lessee and taking

over possession by the lessor which would lead to the

inference of an implied surrender of the lease.”

23. Placing reliance upon another judgment in the case of T.K. Lathika

v. Karsandas Jamandas AIR 1995 SC 3335, (MANU/SC/0535/1999).

Learned counsel for the petitioner has placed emphasis on paragraphs

11,12,13, and 15 which are reproduced hereunder:

“11. The principle which governs the doctrine of

implied surrender of a lease is that when certain

relationship exist between two parties in respect of a

subject matter and a new relationship has come into

existence regarding the same subject matter, the two

sets cannot co-exist, being inconsistent and

incompatible between each other, i.e. if the latter can

come into effect only on termination of the former, then

it would be deemed to have been terminated in order to

enable the latter to operate. A mere alteration or

improvement or even impairment of the former

relationship would not ipso facto amount to implied

surrender. It has to be ascertained on the terms of the

new relationship vis- a-vis the erstwhile demise and

then judge whether there was termination of the old

jural relationship by implication.

12. The following passage in the Halsbury’s Law of

England, 4

th

Edn. Vol 27 at page 355, is apposite:

449. Surrender by change in nature of tenant’s

occupation. A surrender is implied when the tenant

remains in occupation of the premises in a capacity

inconsistent with his being tenant, where, for instance,

be becomes the landlord’s employee, or where the

parties agree that the tenant is in future to occupy the

premises rent free for life as a license. An agreement by

the tenant to purchase the reversion does not itself

effect a surrender, as the purchase is conditional on a

good title being made by landlord.

13. In Hill and Redman’ s Law of Landlord and Tenant

(16

th

Edn.) at page 451 it is observed that “ a surrender

does not follow from a mere agreement made during the

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tenancy for the reduction or increase of rent, or other

variation of its terms, unless there is some special

reasons to infer a new tenancy, where, for instance , the

parties make change in the rent under the belief that the

old tenancy is at an end.

15. In Krishna Kumar Khemka V. Grindlays Bank

MANU/SC/0200/1991: [1990] 2 SCR 961 a two- judge

Bench of this Court held thus:

Surrender of a part doe not amount to implied

surrender of the entire tenancy and the rest of the

tenancy remains untouched….

Likewise the mere increase or reduction of rend also

will not necessarily import a surrender of an existing

lease and the creation of anew tenancy”

24.Justifying the part of surrender of land as legally sustainable and

accordingly defending letter dated 15.9.2018 and consequently

subsequent lease deed dated 14/15.12.2018, learned counsel for the

petitioner has cited the Supreme Court Judgment in the Case of Krishna

Kumar Khemka v. Grindlays Bank P.L.C. and others (1990) 3 Supreme

Court Cases 669 where the Apex Court vide paragraphs 8 and 9 has held

thus:

“8. Learned counsel for the respondents, on the other

hand, submitted that there was no new tenancy and

surrender of flat Nos. 1 and 2 by the Grindlays and

retaining two more flats does not amount to a new

tenancy at least so far as Grindlays is concerned and a

reduction of rend also does not create new tenancy

inasmuch as the rent is that they had to pay was only

for two flats in respect of each (sic which) their tenancy

continue.

9. In Woodfall’s Law of Landlord and Tenant, (25

th

edn.,

p. 969 paragraph 2079 reads as under:

“2079. Implied surrender of part only. If a lessee for

yeas accepts a new lease by indenture of part of the

lands, it is a surrender for that part only, and not for

the whole; and though a contract for years cannot be so

divided, as to be avoided for part of the years and to

subsist for the residue, either by act of the party or act

in law; yet the land itself may be divided, and the tenant

may surrender one or two acres, either expressly or by

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act of law, any the lease for the residue will stand good

and untouched.”

In Halsbury’s Law of England(4

th

end., Volume 27)

paragraph 449 reads and under:

“449. Surrender by change in nature of tenant’s

occupation. A surrender is implied when the tenant

remains in occupation of the premises in a capacity

inconsistent with his being tenant, where, for instance,

he becomes the landlord’s employee, or where the

parties agree that the tenant is in future to occupy the

premises rent free for life as a licensee. An agreement

by the tenant to purchase the reversion does not of itself

effect a surrender, as the purchase is conditional does

not itself being made by the landlord.”

In Foa’s General Law of Landlord and Tenant (7

th

edn. ) by Judge Forbes, paragraph991 reads thus:

91. Lease of part- It has been held that acceptance of a

new lease of part only of the demised premises operates

as a surrender of that part and no more; but any

arrangement between landlord and tenant which

operates as a fresh demise wil work a surrender of the

old tenancy, and this may result from an agreement

under which the tenant gives up part of the premies and

pays a diminish rent for the remainder- and it may

result from the mere alteration in the amount of rent

payable. Where one only of two or more lessees accepts

a new lease, it is a surrender only of his share.”

In Hill and Redman’s Law of Lanlord and Tenant (16

th

edn. On page 451 ) it is observed:

“Any arrangement between the landlord and tenant

which operates as a fresh demise will work a surrender

of the old tenancy and this may result from an

agreement under which the tenant gives up part of the

premises and pays a diminished rent for the remainder,

provided a substantial difference is thereby made in the

condition of the tenancy. But a surrender does not

follow from a mere agreement made during the tenancy

for the reduction or increase of rent, or other variation

of its terms, unless there is some special reason to infer

a new tenancy, where, for instance, the parties make the

change in the rent in the belief that the old tenancy is at

an end.”

From the above passages it can be inferred that

surrender of a part does not amount to implied

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surrender of the entire tenancy and the rest of the

tenancy remains untouched. We shall now examine the

cases cited. In Konijeti Venkayya V. Thammana Peda

Venkata Subbaro Viswanatha Sastri,J.referred to the

abovementioned passage from Woodfall’s Law of

Landlord and tenant and observed that the principle of

law is stated correctly.”

25.Finally defending the lease deed executed in favour of the petitioner

by the original tenure holder, learned counsel for the petitioner has relied

upon the judgment of the Apex Court in the Case of ITC Ltd v. State of

U.P. (2011) 7 Supreme Court Cases 493 wherein it has been held that

unless and until a duly executed and registered lease deed is questioned

and canceled by competent court of law, it will have all legal effects and

can not by itself amount to be bad by any unilateral action even at the end

of lessor. Learned counsel has placed reliance upon legal position held by

the Supreme Court in paragraph 30 of the said judgment which runs as

under:

“30. A lease governed exclusively by the provisions of

the Transfer of property Act, 1882 (“the TP Act, for

short) could be canceled only by filling a civil suit for

its cancellation or for a declaration that it is illegal,

null and void and for the consequential relief of

delivery back possession. Unless and until a court of

competent jurisdiction grants such a decree, the lease

will continue to be effective and binding. Unilateral

cancellation of a registered lease deed by the lessor will

neither terminate the lease nor entitle the lessor to seek

possession. This is the position under private law. But

where the grant of lease is governed by a statute or

statutory regulations, and if such statute expressly

reserves the power of cancellation or revocation to the

lessor, it will be permissible for an authority, as the

lessor, to cancel a duly executed and registered lease

deed, even if possession has been delivered, on the

specific grounds of cancellation provided in the

statute.”

26.A careful reading of the aforesaid citation reveals that even the

lessor does not have the right to unilaterally terminate the lease and seek

possession so long as the existing rights the lease has not been

15

surrendered by the lessee. The lessor would not get any right out of his

action except in those cases where the statutory regulation reserves the

right of cancellation or revocation in favour of the lessor. So it is a

statutory authority which enjoys the right to cancel the lease even

unilaterally in cases where possession has been delivered to the lessee,

provided of course, where grounds for cancellation are part of terms and

condition of the lease.

27.Learned counsel for the petitioner has urged that in the present case,

it is just a complaint by complainant a third party, and neither lessor nor,

the original lessee who had surrendered part of the lease land making way

for a subsequent lease in favour of the petitioner, has questioned the

subsequent lease. The factual position of surrender followed by

subsequent lease has created indefeasible rights favour of the petitioner

and would not automatically get rendered as bad so as to reject his

candidature on that count. He argues, therefore, the piece of land so long

as it is a subject matter of a valid conveyance, until, of course cancelled or

set aside or declared non est or bad by a competent court of law, the

authorities were not justified in holding that the lease itself was bad.

28.On the question of condition being led in the surrender letter on

right to re-entry in case of emergency or in case of non use of land, it is

argued that this right stood extinguished the moment a subsequent lease

got executed by the lessor. He submits that the execution of the

subsequent lease, the petitioner being lessee herein entered into

possession and the contingency as stipulated in the letter of surrender

stood evaporated. It is further submitted that the lessee of the original

lease had a contract of transfer in his favour from the original lessor and

any terms and condition would be intra party on the principle of privity of

contract between the two and it is admitted to the original lessee and the

lessor and it has not been doubted at all even by the Corporation that the

original lessee prior to the execution of subsequent lease on 15.12.2018

did not re-enter the land and so, those conditions would not be any more

16

binding either upon the lessor or upon the petitioner and to the limited

extent described under the lease agreement the rights, title have flown in

favour of the petitioner from the lease agreement and the rights and

interest of the original lessor have even got extinguished qua the land and

the land has to be taken as a clean land free from all encumbrances to be

taken within the definition of land under Clause 4 (V) of the Brochure as

of Group-I category.

29.He submits that the complaint was absolutely baseless and the

Corporation was not justified in questioning the lease deed and, therefore,

he submits that the order impugned is not sustainable in the eyes of law

and is liable to be quashed.

30.Per contra the argument advanced by the learned counsel for the

respondent Corporation Sri Vikas Budhwar is that in view of the provision

contained under the Registration Act which came into force in the year

1908, the legal position prior to the said order would not be applicable. In

the present case according to him, a document that conveys transfer of

immovable property is necessarily required to be registered under Section

17 of the said Act failing which the document is inadmissible in law and a

document which is inadmissible in law cannot create any right or title in

the eyes of law and thus the argument is that letter of surrender dated

15.9.2018 cannot be a valid surrender within the meaning and scope of the

provisions of Transfer of Property Act,1882 read with relevant provision

of registration under the Indian Registration Act, 1908.

31. The second argument advanced by the learned counsel for the

respondent is that Clause-7 of the lease agreement does not talk of part

surrender of lease and since the original lessee pursuant to the lease

agreement dated 25.5.2018 was bound by the terms and conditions

contained therein, he was not justified in surrendering lease rights in

respect of the part of the property in variation to the conditions prescribed

under the lease agreement and if at all it could have been, it ought to have

been a registered one.

17

32.The third argument advanced by learned counsel appearing on

behalf of the Corporation is that it is well within the rights of the

Corporation to determine whether a land is suitable or not for the

purposes of setting up retail outlet of the petroleum products. He submits

that though dealership offer by the respondent Corporation is on the basis

of owned dealership retail outlets, in the present case, but the Corporation

would be the best judge to determine that a particular land is a suitable

land for the purposes of investment. He submits that investment is long

drawn one and, therefore, it has to be secured one. He submits that merely

because the land is as per the measurement and located at the site itself

would not make it suitable in every sense of word, meaning thereby, he

argues, if the document qua land creates an impression of any likelihood

of civil litigation relating to rights and title of the land property, the

Corporation would be justified in not treating such land to be suitable

land. Thus according to him merely because lessor and the original lessee

have not questioned the title, it would hardly matter as in case if the

documents relating to the lease or title of land are such that may make it

questionable in court of law at an future point of time resulting in a long

drawn civil litigation.

33.It is argued that the Corporation, may be a public sector

Corporation, but if it is dong business then it is the best judge to ensure its

business prospects. Merely because an advertisement has been issued

inviting application and one is selected in draw of lots, would not create

any indefeasible right in his favor to claim for allotment of dealership as

a rule.

34.On the legal point raised by Sri Vikas Budhwar that if a lease deed

is executed and it's surrendered is sought and the surrender of rights is in

part of the lease property, it cannot be as part relinquishment is not con-

templated either under the original lease agreement or under Section 111

of T.P. Act 1882 and if at all it is done, it is in variation to the clause of

lease agreement and so it is required to be registered. Sri Budhwar has

18

drawn attention of the Court towards Clause-7 of the original lease deed

dated 25.5.2018 executed by the tenure holder Mangal Singh in favour of

Ms. B.S.C.- C&C-JV. Clause-7 of the original lease deed dated 25.5.2018

is reproduced herein under:

“7.That the lessee shall be at liberty to vacate to de-

termine this agreement by giving notice of two months

in writing to the lessor expiring at any time during the

currency of this period.”

35.A bare reading of the Clause 7 clearly reveals that lessee shall be at

liberty to vacate to determine this agreement by giving notices of two

months in writing to the lessor during the currency of the lease period. It

is argued that it talks of whole surrender of the lease as it refers to deter-

mination of the lease itself. Sri Budhwar has also taken us to Clause-8 of

the lease deed which runs as under:

“8. That if lessee become unable to complain the

above terms and condition the lessor will able to com-

pensate his loss from the lessee company property situ-

ated at the above plot (land)”

36.Clause-8 of the lease shows that the lease has been executed on the

terms and conditions is styled as such “hereinafter mentioned which is

ageed by the parties as follows” shows that the terms and condition

bound the lessee to act in the manner in which they are provided. He ar-

gues that since the lease did not provide for the part surrender of the land,

the surrender letter dated 15.92011 would not amount to a lawful

surrender.

37.Advancing the argument further he submits that under Section

111(e) what is contemplated is the surrender of the entire interest under

the lease. He has relied upon paragraph-10 of the judgment in the case of

Tirath Ram Gupta v. Gurubachan Singh and another AIR 1987

Supreme Court 770 which runs as under:

19

“The lessee has a right to transfer by sub-lease even a

part of his interest in the property as provided in

Section 108(j) of the Transfer of Property Act. A

transferee from the lessee has a right to claim the bene-

fit of contract to the lessee's interest, vis-a-vis the land-

lord, (vide Section 108 second paragraph of clause (c)

of the Transfer of Property Act) Thus a sub-lessee who

has obtained a part of the interest of the head tenant

will be entitled to claim the benefit of the contract vis-

a-vis the lessor, as the lessee (head tenant) cannot sur-

render the lease in part. Section 111(e) contemplates a

surrender of the entire inter- est under the lease and not

a part of the interest alone. Moreover, a lease can be

determined only by restoring pos- session in respect of

the entire property which was taken on lease (see

Section 108(m). Section 115 of the Transfer of Property

Act provides that the surrender of a lease does not prej-

udice an under-lease of the property or in part thereof

previously granted by the lessee. The lessee, having

parted with a part of the interest in the property in

favour of the sub-lessee, cannot surrender that part of

the property which is in the possession of the sub-lessee

for he cannot restore possession of the same to the

lessor apart from the fact the he can terminate the con-

tract of lease only as a whole and not in respect of a

part of it. Having regard to all these factors, even with-

out going into the question of the partial surrender of

lease being vitiated by collusion, it is not open to the

appellant in law to contend that the second respondent

is entitled to and had validly surrendered a portion of

the lease-hold property and the first respondent, being

the sub-tenant is bound by the surrender and should de-

liver possession.”

38.He further argues that mere act or conduct of the party whether in

writing or otherwise would not amount to determination of lease unless

such intention to surrender in the existing lease is incorporated in writing

any subsequent agreement is acknowledgment of the consent of the lessee

in that regard. He therefore, seeks to urge that a surrender has to be in

writing and that has to be a registered one and it should be in respect of

entire property. He has placed reliance upon the Judgment of Supreme

Court in the Case of H.K. Sharma Vs. Ram Lal (2019) 4 Supreme Court

Cases 153 in which vide paragraphs 23 to 35 the Court has held thus:

20

“23. in other words, the question that arises for consid-

eration is when the lessor enters into an agreement to

sell the tenanted property to his lessee during the sub-

sistence of the lease, whether execution of such

agreement would ipso facto result in determination of

the lease and sever the relationship of lessor and the

lessee in relation to the leased property.

24. In our considered opinion, the aforementioned

question has to be decided keeping in view the provi-

sions of Section 111 of the TP Act and the intention of

the parties to the lease- whether the parties intended to

surrender the lease on execution of such agreement in

relation to the tenanted premises or they intended to

keep the lease subsisting notwithstanding the execution

of such agreement.

25. Chapter V of the TP Act deals with the leases of im-

mo0valble property. This chapter consists of Section

105 to Section 117.

26. A lease of an immovable property is a contract be-

tween the lessor and the lessee. Their rights are gov-

erned by Sections 105 to 117 of the TP Act read with the

respective State rent laws enacted by the State. Section

111 of the T Act deals with the determination of lease.

Clauses (a) to (h) set out the grounds on which a lease

of an immovable property can be determined. Clauses

(e) and (f) with which we are concerned here provide

that a lease can be determined by an express surrender;

in case, the lessee yields up his interest under the lease

to the lessor by mutual agreement between them where-

as clause (f) provides that the lease can be determined

by implied surrender.

27. This Court in Shah Mathuradas Manganlal & Co.

V. Nagappa Shankarappa Malage considered the scope

of clauses (e) and (f) of Section 111 of he TP Act and

laid down the following principles in para 19 as under:

(SCC p. 665)

“19. A surrender under clauses (e) and (f) of Section

111 of Transfer of Property Act, is an yielding up of the

term of the lessee's interest to him who has the immedi-

ate reversion or the lessor's interest. It takes effect like

a contract by mutual consent on the lessor's acceptance

of the act of the lessee. The lessee cannot, therefore,

surrender unless the terms vested in him; and the sur-

21

render must be to a person in whom the immediate re-

version expectant on the term is vested. Implied surren-

der by operation of law occurs by the creation of a new

relationship, or by relinquishment of possession. It the

lessee accepts a new lease that in itself is a surrender.

Surrender can also be implied from the consent of the

parties or from such facts as the relinquishment of pos-

session by the lessee and taking over possession by the

lessor. Relinquishment of possession operates as an in-

plied surrender. There must be a taking of possession,

not necessarily a physical taking, but something

amounting to a virtual taking of possession. Whether

this has occurred is a question of fact.”

28. It is in the light of the aforementioned legal princi-

ple, the question involved in this case has to be exam-

ined.

29. Perusal of agreement to sell dated 13.5.1993 (An-

nexure P-1) shows that though the agreement contains

9 conditions but none of the conditions provides, much

less in specific terms, as to what will be the fate of the

tenancy. In other words, none of the conditions set out

in the agreement dated 13.5.2003 can be construed for

holding that the parties intended to surrender the ten-

ancy rights.

30. A fortiori, the parties died not intend to surrender

the tenancy rights despite entering into an agreement of

sale of the tenanted property. In other words, if the par-

ties really intended to surrender their tenancy rights as

contemplated in clauses (e) or (f) of Section 111 of the

TP Act while entering into an agreement to sell the suit

house, it would have made necessary provision to that

effect by providing a specific clause in the agreement. It

was, however, not done. On the other hand, we find that

the conditions set out in the agreement do not make out

a case of express surrender under clause (e) or implied

surrender under clause (f) of Section 111 of the TP Act.

31.It is for this reason, the law laid down by this court

in R.Kanthimathi has no application to the facts of this

case and is therefore, distinguishblae on fact. Indeed it

will be clear from mere perusal of para 4 of the said de-

cision quoted hereinbelow:(SCC p.341)

“4. As aforesaid, the question for consideration is ,

whether the status of tenant as such changes on the exe-

22

cution of an agreement of sale with the landlord. It is

relevant at this junction first to examine the terms of the

agreement of sale. The relevant portions of the agree-

ment of sale recorded the following:

'I the aforesaid Mrs Bratrict Xavier hereby agree out of

my own free will, to sell, convey and transfer the prop-

erty to you Mrs. R. Kanthimathi wife of Mr. S. Ra-

maswami, 435 Trichy Road, Coimbatore for a mutually

agreed sale consideration of Rs. 25,000/

I shall be proceeding to Coimbatore and shall execute

the sale deed and present the same for admission and

registration before the Registering Authority, accepting

and acknowledge payment of the balance of considera-

tion of Rs. 5000 (Rupees five thousand only) at the time

of registration and shall complete the transaction for

sale and conveyance as the property demised has al-

ready been surrendered to your possession.

(emphasis in original)

The words highlighted in italics of the agreement were

construed by their Lordships for holding that these ital-

icised words in the agreement clearly indicate that the

parties had really intended to surrender their tenancy

rights on execution of the agreement of sale and bring

to an end their jural relationship of the landlord and

tenant.

32. As observed supra, such is not the case here be-

cause we do not find any such clause or a clause akin

thereto in the agreement dated 13-5-1993 and nor we

find that the existing conditions in the agreement dis-

cern the intention of the parties to surrender the tenan-

cy agreement either expressly or impliedly.

33. In the light of the foregoing discussion, we are of

he consiered opinion that the tenancy in question be-

tween the parties did not result in its determination as

contemplated under Section 111 of the TP Act due to ex-

ecution of the agreement dated 13-5-1993 between the

parties for sale of the suit house and the same remained

unaffected notwithstanding execution of the agreement

dated 13-5-1993

34. A fortiori, the respondent (lessor) was rightly held

entitled to file an application against the appellant

(lessee) under Section 21 (1) (a) of the U.P. Act and

23

seek the appellant's eviction from the suit house after

determining the tenancy in question.

35. Before parting, we make it clear that we examined

the terms of the agreement dated 13-5-1993 only for

deciding the question as to whether the execution of

agreement, in any manner, resulted in determination of

the existing tenancy rights between the parties in rela-

tion to the suit house in the context of the TP Act and

the U.P. Act and not beyond it.”

39.On the question of agreement that varies essential terms of existing

registered lease, it must be registered one. The learned counsel for the re-

spondent has drawn our attention to Section 107 of the Transfer of Proper-

ty Act and Section 17 of Registration Act. Which are reproduced hereun-

der:

“107. 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 instru-

ment.”

“Section 17 - Indian Registration Act, 1908

(1) The following documents shall be registered, if the

properties to which they relate is situate in a district in

which, and if they have been executed on or after the

date on which, Act No. XVI of 1864, of the Indian Reg-

istration Act 1866, or the Indian Registration Act 1871,

or the Indian Registration Act 1877, or the this Act

came or comes into force, namely:-

(a) instruments of gift of immovable property;

(b) other non-testamentary instruments which purport

or operate to create, declare, assign, limit or extin-

guish, whether in present or in future, any right, title or

interest, whether vested or contingent, of the value of

one hundred rupees, and upwards, to or in immoveable

property;

(c) non-testamentary instruments which acknowledge

the receipt or payment of any consideration on account

of the creation, declaration, assignment, limitation or

extinction of any such right, title or interest; and

(d) leases of immoveable property from year to year, or

24

for any term exceeding one year, or reserving a yearly

rent;

(e) non-testamentary instruments transferring or as-

signing any decree or order of a court or any award

when such decree or order or award purports or oper-

ates to create, declare, assign, limit or extinguish,

whether in present or in future, any right, title or inter-

est, whether vested or contingent, of the value of one

hundred rupees and upwards, to or in immoveable

property (Added by Act No. 21 of 1929);

PROVIDED that the State Government may, by order

published in Official Gazette, exempt from the opera-

tion of this sub-section any leases executed in any dis-

trict, or part of a district, the terms granted by which

do not exceed five years and the annual rent reserved

by which do not exceed fifty rupees.

(2) Nothing in clauses (b) and (c) of sub-section (1) ap-

plies to -

(i) any composition-deed; or

(ii) any instrument relating to shares in a joint stock

company, notwithstanding that the assets of such com-

pany consists in whole or in part of immovable proper-

ty; or

(iii) any debenture issued by any such company and not

creating, declaring, assigning, limiting or extinguishing

any right, title or interest, to or in immovable property

except insofar as it entitles the holder to the security af-

forded by a registered instrument whereby the company

has mortgaged, conveyed or otherwise transferred the

whole or part of its immovable property or any interest

therein to trustees upon trust for the benefit of the hold-

ers of such debentures; or

(iv) any endorsement upon or transfer of any debenture

issued by any such company; or

(v) any document not itself creating, declaring, assign-

ing, limiting or extinguishing any right or title or inter-

est of the value of one hundred rupees and upwards to

or in immovable property, but merely creating a right to

obtain another document which will, when executed,

create, declare, assign, limit or extinguish any such

right, title or interest; or

25

(vi) any decree or order of a court [except a decree or

order expressed to be made on a compromise and com-

prising immovable property other than that which is the

subject-matter of the suit or proceedings] (Substituted

by Act No. 21 of 1929 for the words 'and any award');

(vii) any grant of immovable property by government;

or

(viii) any instrument of partition made by a revenue of-

ficer; or

(ix) any order granting a loan or instrument of collater-

al security granted under the Land Improvement Act

1871, or the Land Improvement Loans Act 1883; or

(x) any order granting a loan under the Agriculturists

Loans Act 1884, or instrument for securing the repay-

ment of a loan made under that Act; or

[(x-a) any order made under the Charitable Endow-

ments Act 1890 (6 of 1890) vesting any property in a

treasurer of Charitable Endowments or divesting any

such treasurer of any property; or] (Inserted by Act No.

39 of 1948)

(xi) any endorsement on a mortgage-deed acknowledg-

ing the payment of the whole or any part of the mort-

gage-money, and any other receipt for payment of mon-

ey due under a mortgage when the receipt does not pur-

port to extinguish the mortgage; or

(xii) any certificate of sale granted to the purchaser of

any property sold by public auction by a civil or rev-

enue officer.

Explanation: A document purporting or operating to

effect a contract for the sale of immovable property

shall not be deemed to require or ever to have required

registration by reason only of the fact that such docu-

ment contains a recital of the payment of any earnest

money or of the whole or any part of the purchase mon-

ey. (Inserted by Act No. 2 of 1927)

(3) Authorities to adopt a son, executed after the 1st

day of January 1872, and not conferred by a will, shall

also be registered.

26

40.From the bare perusal of the aforesaid provision, it is urged, it is

quite clear that every document which conveys transfer of immovable

property needed to be registered and unless such document is registered, it

does not at all or in anyway conveys the title may be in the limited scope

of the document so executed. Learned counsel for the respondent has

placed reliance upon para-3 of the judgment of Supreme Court in the

Case of Sunil Kumar Roy v. Bhowra Kankanee Collieries Ltd. And oth-

ers AIR 1971 Supreme Court 751 which runs as under:

“3. Mr. B. Sen for the appellant sought to raise the

question about the admissibility of Exh. A-4 for want of

registration. In the first place this contention cannot be

entertained so long as the finding of the High Court on

the only point which was canvassed before it about the

reduction of the rate of royalty is not set aside. The

High Court had held after an examination of the evi-

dence that it had not been proved that there was any

change in the market condition in July or in December

1953 to call for a reduction in the rate of royalty or that

there was any mutual lessor or the lessee for such re-

duction which was to become effective from July 1952.

No attempt was made by Mr. Sen to persuade us to re-

verse this conclusion. Even on the assumption that a

mutual arrangement or agreement as evidenced by Exh.

A-4 was arrived at between the appellant and the East-

ern Coal Co. Ltd., we are unable to agree that any re-

duction in the rate of royalty could have been effected

by means of Exh. A-4 which had not been registered un-

der the provisions of the Indian Registration Act. It is

well settled by now that a document which varies the

essential terms of the existing registered lease, such as

the amount of rent, must be registered: See Durga

Prasad Singh V. Rajendera Narain Bagchi, (1910) ILR

37 Cal 293 which was approved by the Full Bench in

Lalit Mohan Ghosh v Gopal Chuck Coal Company

(1912) ILR 39 Cal 294 (FB) decision of the Madras

High Court in Obai Goundan v. Ramalinga Ayyar,

(1899) LIR 22 mad 217, taking a contrary view has not

been followed by the High Courts in India and the con-

sistent view that has been taken in that registration of

an agreement is necessary which reduces the rent of an

existing registered lease. See Mulla on Indian Registra-

tion Act, 7

th

Edn. Pages 75-76.

27

41.Learned counsel for the respondents has placed reliance upon para-

graphs 12 and 15 of the Judgment of the Supreme Court in the Case of

Chandrakant Shankarao Machale v. Parubhai Bahiru Mohite (dead)

(2008) 6 Supreme Court Cases 745. Paras 12 and 15 runs as under:

“12. The deed of mortgage dated 28-2-1983 was a reg-

istered document. The terms of a registered document

could be varied or altered only by another registered

document. A finding of fact has been arrived at that the

appellant could not prove his possession as a tenant.

We have noticed hereinbefore that the appellant was put

in possession a a mortgagee. It was, therefore, in our

opinion, impermissible in law to change his status from

a mortgagee to that of a lessee by reason of an unregis-

tered deed of lease (eve if we assume that the same had

been executed.)

15. The deed of mortgage was a registered one. It ful-

filled the conditions of a valid mortgage. Its terms

could not have been varied or altered by reason of an

unregistered document so as to change the status of the

parties from mortgagee to a lessee. [See S. Saktivel V.

M Venugoal pillai (SCC p. 108, para 6: AIR paras 6-

7)].

42.Counsel for the respondent has further placed emphasis upon

paragraph 31 of the judgment of the Supreme Court in the case of K.B.

Saha and sons private limited v. Development Consultant Limited

(2008) 8 Supreme Court Cases 564. Para 31 runs as under:

“31. The High Court in the impugned judgement relied

on a decision of the Allahabad High Court in Ratan Lal

V. Hari Shanker to hold that since the appellant wanted

to extinguish the right of the respondent with the help of

the unregistered tenancy, the same was not a collateral

purpose. In Ratan lal case while discussion the mean-

ing of the terms “ collateral purpose” the High Court

had observed as follows: (AIR pp. 180-81, para 4)

“4. The second contention was that the partition deed,

even if it was not resisted could certainly be looked into

for a collateral purpose... but the collateral purpose

has a limited scope and meaning. It cannot be used for

the purpose of saying that the deed created or declared

28

or assigned or limited or extinguished a right to immov-

able property... term “collateral purpose' would not

permit the party to establish any of these acts from the

deed.”

43. Counsel for the respondent has further placed reliance upon the judg-

ment of the Madras High Court in the case of B. Ahmed Marcair v.

Muthuvlliappa Chettiar 1961 AIR (Madras) 28 in which vide paragraphs

7 and 8 the court held thus:

“7. In this connection the learned District Munsif has

pertinently pointed out the implications of the decision

in Gopal Chandra Das v Harendra Natha datta, 63

Ind Cas 483 (Cal). In that case the Calcutta High Cout

held that though no writing was ordinarily necessary in

this country for surrendering a tenancy if the original

lease is registered the surrender of a portion of the ten-

ancy with an abatement of rent can only be effected by

a registered instrument as in such a case the surrender

involves a variation of the original contract of tenancy.

The Calcutta High Court has also held that oral evi-

dence as regards such surrender is inadmissible under

Section 92 of the Evidence Act. This decision has been

cited with the approval in the well-known commentaries

on the Transfer of Property Act by Chitaley and Annaji

Rao, Third Edition (1950) page 1861.

8.When the facts lead to the conclusion that there was

sufficient interruption, substantial Interference – it need

not be physical exposition (?) (Sic (dispossession) to

the quiet enjoyment of the lessee of the demised land

unde the lessor assured to the lessee under Section 108

C of the Transfer of Property Act what are the conse-

quences which flow? The Courts below have rightly re-

lied on the decision in Dhunput Singh v. Mohomed

Kazim , ILR 24 Cal 296 and held that the lessee in this

case can plead that his obligation to pay rent or bal-

ance of rent due to the lessor be held under suspension

or must be held to have abated by reason of the conduct

of the lessor. The effect of partial eviction by a lessor

has been dealt with in the following passage at page

659 under Section 108(L) in Mulla's Transfer of Prop-

erty Act Fourth Edition (by C.J. S.R.Das)

“If the premises are let for one rent, the rule of English

law is that the eviction of the lessee by the lessor from

29

part of the demised premises suspends the rent for the

whole. The reason of the rule given in the earlier cases

is that the landlord being in feudal times the defender

and protector of the tenant should not be encouraged to

disturb him. In later cases the reason given is that the

landlord is not entitled to apportion his wrong. Judicial

decisions in India on this point have not been uniform.

In some cases this rule of English law has been followe

and it has been held that if the rent is an entire rent for

all the property leased, eviction by the lessor of the

lessee from part of the property leased suspends the

whole rent.”

44.Yet another judgment in that regard relied upon by learned counsel

for respondent is of Calcutta High Court in the case of M.S. Ram Singh v.

Bijoy Singh Surana AIR 1972 Calcutta 190 wherein the Court in paras

19, 20 and 21 has held thus:

“19. Mr. Banerjee referred to the decision in Bengal

Coal Co. Ltd V. Nonoranjan Bagchi AIR 1919 Cal 694

in which it was observed that a surrender or relinquish-

ment does not require to be in writing but may be in-

ferred from acts of parties. In Abdul Majid V . Hari

Charan Halder AIR 1919 Cal 840, it was held that a

surrender is not required to be by an instrument regis-

tered. The same view was taken in Sari Debi V. Saila-

bala Dasi AIR 1920 Cal 858 in which it was held that

even though the original tenancy was created by the

registered lease, its surrender would be valid if it is ac-

cepted and acted upon by the landlord. But in the

present case, as the surreder was by instrument in writ-

ing it was compulsory registrable as was held in Nadig

Neelakanta Rao V. state of Mysore. AIR 1960 Mys 87. It

was held that as the instrument of surrender purports to

extinsguish the rights of the tenant, valued at over Rs.

100.- it is compulsorily registrable.

20. Mr. Ghosh disputed the contention and in his turn

contended on the authorities of this Court cited above,

that as the surrender was accepted and acted upon as

also evidenced by Exs 6 and 7, no further instrument

was necessary. He further contended that surrender was

not an extinguishment of interest in immovable property

as contemplated in Cl. (B) of Section 17 (1) of the said

Act but as it was relinquishment of the lessee's interest,

Cl. (b) of Section 17 (1) was not attracted. Further the

30

interest of the original tenant was that of a monthly ten-

ant and such tenancy does not require registration un-

der Cl. (d) and its surrender accordingly did not require

registration. Mr. Ghosh also contended that the EX. 7

did not by itself create declare or extinguish any right

as would appear reading the document as a whole and

accordingly it came under the exception in Cl. (b) of

sub-section (2) of S.17. On that ground the decision in

Nadig Neelkanta Ra, AIR 1960 Mys 87 (supra) was

sought to be distinguished.

21. As we have seen surrender is an extinguishment of

the lessee's interest and there is no dispute that value of

the interest would be over Rs. 100/-. the document re-

cites a surrender in praesenti and even if the surrender

purports to be effective on a further date, it would make

no difference on this aspect for the purposes of registra-

tion. Clause (b) of Section 17 (1) includes all instru-

ments which purport or operate to create, assign, limit

or extinguish whether in present or in future any right,

title or interest of value of Rs. 100/- and upwards to or

in immovable property. Apart from the surrender as evi-

denced by the document Ex.7 and the evidence in sup-

port thereof there is no other pleading or evidence in

support of oral surrender nor it is dependent on any

subsequent document. The document Ex. 7, as we have

see, purports to extinguish the interest of the lessee in

his tenancy, and though a surrender on a future date as

contended it is an invalid surrender, for the purpose of

Section 17(1) of the Indian Registration Act the docu-

ment is compulsorily registrable and is not excepted by

any of the provision of the Act.

45.Placing reliance upon the judgment of Allahabad High Court in the

case of Ratan Lal and others Vs. Hari Shanker and others AIR 1980 Al-

lahabad 180. It is contended by the learned counsel for the respondent

that mere family arrangement cannot be itself a document to create rights

in favour of the beneficiaries which otherwise is required under law to be

compulsorily registriable. Learned counsel for the respondent has placed

reliance upon paragraph -5 of the judgment which is reproduced

hereunder:

“Learned counsel then contended that the deed could

be treated to be a family arrangement was not compul-

31

sorily registrable. This was not compulsorily

registerable. This contention, in my opinion, is not cor-

rect. The Supreme Court in the case of Kale V. By. Di-

rector of Consolidation , (AIR 1976 SC 807), held that

a family arrangement in case it is oral needs no regis-

tration, but if the terms thereof were reduced into writ-

ing, it became imperative to have the document regis-

tered and unless it was registered, it could not be

looked into. The pleas of family arrangement is sought

to be derived from Exhibit-1. That document is in writ-

ing. Even if it was treated to be a family arrangement, it

required registration, and having not been registered, it

could not be looked into for the purposes of showing it

to be a family arrangement.

46.He has relied upon a judgment of the Madras High Court in the case

of Ranganatha Gounder v. Perumal Nattar AIR 1999 Madras 133

wherein vide paragraph-3 of the judgment the Court has held thus:

“3. Mr.V Raghavachari, learned Counsel appearing for

the petitioner, therefore contended that the order of the

Court below is bad in law and the document shall not

be received in evidence. Mr. K. Kannan, learned coun-

sel appearing for the respondent would state that there

is no legal right in favour of the defendant as a lessee

when he executed the document in question and when

that is so, he cannot validly transfer or extinguish any

such alleged right in the property. Therefore, according

to him, the document is not hit be Secs. 17 (1) (b) and

49 (c) of the Act. In elaborating this argument, he wold

add that there is no lease document between the parties

and, therefore, there is no legal right in the defendant.

Applying my mind to the argument of the learned Coun-

sel for the respondent, I find that no foundation is laid

for such an argument. It must be noticed that the plain-

tiff himself relies upon this document. Mr. V.

Raghavachari, in support of his contention that this

document requires compulsory registration and in the

absence of the same, it shall not be received in evi-

dence, brought to my notice three judgments viz. Ran-

gayya Appa Rau v. Kameshwara Rau , (1897) ILR 20

Mad 367: 7 m ad LJ 59 (DB); Neelakanta Rao. Vs. Sate

of Mysore, AIR 1960 Mys 87 (DB) and M.S. Ram Singh

V. B.S. Surana , AIR 1972 Cal 190 (DB) . In the first

case, the plaintiff was a Zamidar ad the defendant was

a tenant. He sues for declaration of his title and for

32

possession of certain land of which the first defendant

had been in possession as a tenant. It appears that the

tenant having fallen into difficulties executed a docu-

ment on the 20

th

June, 1888 addressed to the plaintiff in

the following terms:

“ To the Zamidar, (sic) & C, relinquishment report put

in by Govindarazulau Kameswara Rau, cultivator of

Gurazada. Being unable to cultivae the 16 acres 84

cents of dry land and 7 acrs and 87 cents of wet land,

24 acres and 72 cents in all which I have been cultivat-

ing in the village of Gurazada, and finding it inconve-

nient to pay the arrears on it, I have relinquished the

rights to the Sirkar (i.e. Zamidar). I agree to the re-

moval of that land from the village accounts in my

name for Fasli 1298 and to your disposing of the same

at your pleasure without may having anything to do

with the arrears of Rs. 600 and odd due thereon. This

relinquishment report is put in with consent.”

The Courts below refused to admit that document for

want of registration. In that context, the learned Judges

of this Court held that the document referred to above

was one given for consideration which moved from the

plaintiff to the defendant, that is the waiver by the for-

mer of his right to the arrears of rent amounting to Rs.

600 due at the time of relinquishment, which is clear

from the terms of the instrument itself and therefore, it

requires registration. In Neelakanta Rao v. state of

Mysore (AIR 1960 Mys 87) (referred above) , the ques-

tion that was considered is whether the surrender deed

executed between the tenant in favour of the landlord

requires registration or not. The learned Judges have

held as follows:

“A surrender deed executed by the tenant in favour of

the landlord in respect of this tenancy the due of which

exceeds Rs. 100 is clearly an instrument which purports

to extinguish the right of the tenant, the value of which

is over Rs. 100/- and as such comes within Cl. (B) of

Sec. 17 91) and therefore is compulsorily registable.

Such a document if not registered, cannot be received in

evidence of the transaction of surrender affecting the

property in view of S.49, Registration Act.”

This was followed in the last judgment referred to

above, In the case on h and, there is no dispute that the

value of the property is more than Rs. 100/- since the

33

plaintiff himself valued the suit properties at Rs. 300/-.

Therefore, I have no hesitation to hold that the docu-

ment dated 22-6-1995 stated to be entered into between

the defendant and the plaintiff in O.S. No. 859 of 1995

on the file of Additional District Munsif, Villupuram, is

compulsorily registrable and as it is not so done, it is

inadmissible in evidence. Civil Revision petition is al-

lowed. No costs Consequently C.M.P. No. 17480 of

1998 is dismissed.”

47.Learned counsel for the respondent has finally relied upon the judg-

ment of the Apex Court in the case of Kale and others v. Deputy Director

of Consolidation and others to argue that the family arrangement though

have been held to be binding amongst the members of the family but such

family arrangements may not be having any binding effect in respect of

third party who is a stranger to the same and further no arrangement in

respect of the strangers who are not part of the family would amount to a

valid settlement creating rights, can be permitted to do away with the con-

dition of registration of such a document. Further he has argued that even

in cases of family settlement where it is sought to be reduced in writing

then it is compulsorily required to be registered one. He submits that an

oral family settlement may have a mutual binding effect and to that extent

it may determine the rights of the parties to which they mutually agreed

but when it is sought to be documented to have a force of law then it is re-

quired to be registered one. He has placed reliance upon paragraph-4 of

the judgment of the Apex Court in which speaking for himself and for the

majority V. R. Krishna Iyer, J and Murtaza Fazl Ali, J observed thus:

“(4) It is well settled that registration would be neces-

sary only if the terms of the family arrangement are re-

duced into writing. Here also, a distinction should be

made between a document containing the terms and

recitals of a family arrangement made unde the docu-

ment and a mere memorandum prepared after the fami-

ly arrangment had already been made either for the

purpose of the record or for information of the court for

making necessary mutation. In such a case the memo-

randum itself does not create or extinguish any rights in

immovable properties and therefore does not fall within

34

the mischief of Section 17(2) (sic (Section 17 (1) (b)?)

of the Registration Act and is, therefore not

compulsorily registrable;”

48.Thus, the judgment of the High Court was set aside on the ground

that it did not acknowledge the oral settlement between the parties for the

reason that parties on account of some oral settlement/ some mutual set-

tlement that was sustainable but then the High Court erred in law in re-

jecting such compromise only for being unregistered. It is argued by

learned counsel for the respondent that the Apex Court took the view on

account of the fact that mutuation petition before the Assistant Commis-

sioner did not carry any terms of the family settlement but was merely in

the nature of memorandum. Justice R.S. Sarkaria though gave a separate

judgment but agreed to the findings returned by the majority on the

ground that since the petition did not itself create or decline any right qua

the immovable property above the value of Rs. 100/- or more was not hit

by Section 17(b) of the Registration Act.

49.It has been finally submitted by the learned counsel appearing for

respondent Corporation that since the condition prescribed under the al-

leged surrender letter amounted to variation of the conditions of the orig-

inal lease, and so it was of necessity required to be registered in view of

Section 17 of the Registration Act, 1908. Learned counsel for the

respondent has further sought to distinguish the legal position prior to

1908 from post 1908 when Indian Registration Act came into force.

50.On the consideration of business prospects and discretion of the

Corporation to consider the land as suitable or not, learned counsel for the

petitioner has argued that evaluation of credentials and land evaluation at

the site is primary function of the committee constituted for such purpose

and the committee so constituted conducts its affairs very fairly in the

presence of the applicant and after such exercise being conducted if it is

found that the land is not suitable, Corporation has no reason to disagree

unless there exists any element of bias, mala fides or arbitrariness

35

reflected from the action and the decision taken by the committee. The

judgment of committee qua suitability of site on the spot and wisdom of

the Corporation's officials in the evaluation of the report qua suitability

of land should not be ordinarily permitted to be questioned because it is

the ultimate interest of the Corporation which is at the stake and not the

person who has applied for the allotment of dealership. It is argued that to

the extent of fairness in action, one can always plead for right to be con-

sidered but where no such element is detectable, one cannot claim the al-

lotment as a rule merely because one has been selected in the draw of lots.

51.It is argued by the learned counsel for the respondent Corporation

that since the lease itself has become questionable even if not by institu-

tion of civil proceedings at the end of lessor or lessee but the papers and

the document that have been executed did have the elements to make it

questionable in a court of law, and so the Corporation cannot be com-

pelled to set up petrol pump unit for the sale of petroleum products com-

pulsorily over such place.

52.Having heard learned counsels for the parties and their arguments

advanced across the bar and having perused the records and having con-

sidered the merits in this case, two points emerge:

(A) Whether the piece of land offered by the petitioner is a subject matter

of a valid lease deed, and so an offer of land deserves to be considered

under Group-I?

(B) Whether the suitability of the land determined by the Corporation can

be questioned and discretion of the respondent Corporation in the facts

and circumstances of the present case, should be judicially reviewed in the

absence of any mala fides or arbitrariness.

53.Now coming to the question that relates to the lease document of

the petitioner dated 14/ 15.12.2018 presented by the petitioner seeking

allotment of the retail outlet dealership, it is needed to be examined as to

36

whether the rights created under the said lease agreement could be said to

be a valid one and to that extent the lease to be held valid so as to hold

the respondent's stand to the contrary as incorrect.

54.Lease has come to be defined under the Transfer of Property Act as

a transfer of a right to enjoy such property, made for certain time, ex-

pressed or implied or in perpetuity in consideration of price paid or

promised (Section 105 T.P. Act). So virtually transfer of property and in-

terest therein by means of lease deed could be time specific or in perpetu-

ity. A lease can, of course, be in the form of a written contract or as per

the local usage (106 TP Act) . However, whether time specific or in

perpetuity a lease has to be made only by a registered instrument but it

should be accompanied by delivery of possession by the lessor in favour

of the lessee (107 TP Act).

55.The rights and liabilities of the lessor as per Section 108 of the T.P

Act are governed by the terms and condition that are contained in the

lease document and so also they guide the future course of action for the

purposes of determination of lease except as provided for under Section

111 of the T.P. Act, or to further create such lease in favour of a third

party.

56.The argument advanced in the present case centers around the

provision contained under Section 111 of the T.P. Act especially clauses

(e) and (f) that talk of express and implied surrender of lease. Learned

counsel for the petitioner has argued first in favour of clause (e) of Sec-

tion 111 and since the surrender letter has been objected to by the

respondent being not a registered document as it varies the terms and

conditions of the lease by conduct of dividing/ partitioning two property

by lessee, alternatively it has been argued that the letter of surrender and

thereafter no objection by the original lessee in respect of subsequent

lease executed by the tenure-holder in favour of the petitioner, would

amount to implied surrender.

37

57.Learned counsel for the petitioner has drawn our attention to para-

graph-27 of quoted hereinabove in the case of H.K. Sharma (supra)

where implied surrender of lease has been discussed referring to another

judgment of the Apex Court in the Case of Shah Mathurdas Maganlal &

Co, that creation of a new relationship or relinquishment of the posses-

sion, is an act indicative of implied surrender of the lease and therefore,

it is argued that since by the letter dated 15.9.2018 the original lease virtu-

ally surrendered certain area of the lease property in favour of the tenure

holder lessor, it would amount to be a valid surrender in view of Section

111 and as such the relinquishment of the right would not require to be

registered on one hand, and the second is that since the original lesee did

not put any objection to the subsequent lease of a part of land in favour of

the petitioner on 14/15.12.2018, such a conduct would be deemed as it

would amount to be an implied surrender.

58.We have carefully gone through the judgment of the Apex Court

and we find that the Apex Court has held vide paragraph 29 that the lease

rights since are governed by the terms and condition contained therein and

if the subsequent agreement did not provide about the fate of tenancy ear-

lier created, such subsequent agreement would not amount to surrender of

tenancy rights created under the lease and thus, vide paragraphs 32 and 33

the Court has held thus:

“32. As observed supra, such is not the case here be-

cause we do not find any such clause or a clause akin

thereto in the agreement dated 13-5-1993 and nor we

find that the existing condition in the agreement discern

the intention of the parties to surrender the tenancy

agreement either expressly or impliedly.

33.In the light of the foregoing discussion, we are of

the considered opinion that the tenancy in question be-

tween the parties did not result in its determination as

contemplated under Section 111 of the TP Act due to ex-

ecution of the agreement dated 13-5-1993 between the

parties for sale of the suit house and the same remained

38

uneffected not withstanding execution of the agreement

dated 13-5-1993.”

59.Applying the above principle to the facts of the present case, we

find that in this case the term of the lease did not provide any such

surrender or transfer of part of the land and, therefore, it is difficult to

accept the letter of the lessee dated 15.9.2018 to be a letter referable to

clause-7 of the lease agreement as the said clause does not talk of the part

surrender of the lease rights qua land, or right in respect of part of the land

or the relinquishment of rights in respect of any specific part of the land,

nor, does it talk of part specific surrender of land nor, as to how part of

land came to identified to justify any part specific surrendered of the lease

rights. No such measurement was carried out on the spot to partition the

land lawfully by a lessee in the absence of such right being conferred un-

der the lease agreement to provide it a separate regular revenue number so

as to hold that there was a consent or agreement between the original

lessee and lessor to vary the lease in the manner in which it is stated to be

done on account of the letter issued by the original lessee.

60.Coming to the judgment in the case of Abdul Majid (supra) it

again refers to the mutual agreement of the rights as a whole while

relinquishment or surrender has come to be recognized under Section

111of T.P. Act and that it cannot be read to be recognized part surrender

of the lease rights. In cases where the part cannot be identified except

when undertaken in accordance with provision of revenue laws and if the

land falls in a revenue village the partition, therefore, unless it is identifi-

able in law with due exercise of act of partition, the part surrender of

rights would amount to varying the condition of the lease agreement uni-

laterally and the legal position being very much clear that the document

that acknowledges any relinquishment of rights in variation to the term of

lease it is required to be registered. Such rights would not acquire validi-

ty by mere oral consent of the parties. The Apex Court judgment in the

case of Sunil Kumar (supra) is very much attracted and applicable here in

39

this case that the document that varies the essential terms of the existing

registered lease is required to be registered under Section 17 of the Regis-

tration Act.

61. The doctrine of implied surrender as has come to be discussed by

Andhra Pradesh High Court in its judgment in the case of Konijeti

Venkayya (supra) also talks of a fact position where the subsequent

agreement or mutual agreement has come to be reached between the par-

ties in respect of lease property. Interest that has been held to be valid in

the said case would not be attracted in the setting of the facts of the

present case where there is no such surrender of wholesome lease rights at

any point of time. It is a case where the surrender is guided by an act of

partitioning the land which condition is not there in the present case to be

taken as a right conferred upon the lessee under the original lease agree-

ment, inasmuch as Clause 7 of the original lease agreement also does not

stipulate any such situation where lease rights can be relinquished in part.

62.In our view judgment in the cases of Jamuna Oil Mills (supra) and

T.K. Lathika (supra) would not be attracted as well in the present case.

The land lord and tenant relationship which has come to be discussed in

the said case is in respect of the tenanted premises as a whole the area of

land that had been surrendered and not any part of the interest being

transferred or relinquished in respect thereof.

63.Learned counsel appearing for the petitioner has vehemently urged

that in the light of the judgment of the Apex Court in the case of Krishan

Kumar Khemka (supra) the part surrender of the lease has come to be

recognized and acknowledged as valid in law and a mere part surrender

would not amount to surrender of entire lease rights. It is interesting to

note that in the said case the Court was virtually dealing with the rights of

the lessor because the lessee who had the tenanted premises of four flats

had come to relinquish rights in respect of two flats duly identified as

separate property and then in respect of remaining two flats the Court ob-

40

served that it would be a surrender of rights in respect of part of the prop-

erty and the Court, therefore, held that surrender of a part of the lease

property would not amount to implied surrender of the entire tenancy and

the rest of the tenant would remain untouched. Grindlays Bank that was

the tenant of the four flat and had surrendered two flat only which was

treated to be a partial surrender and therefore, in that fact background the

Court held that they would continue to enjoy the tenancy in respect of the

two remaining flats in their possession.

64.It is not disputed by the parties that the lease agreement is governed

under the Transfer of Property Act and, therefore, if the lease rights can be

created by a registered document and the document does not create any

right that the lease property can be partitioned and any part surrender

thereof can be made by the lessee and the property is identified as one and

the same, in our considered opinion lessee cannot be permitted partition it

in the absence of express condition so as to relinquish interest in part.

65.The judgment in the case of State of H.P. Vs. Kishan Lal (supra)

very clearly holds that Section 111 (e) contemplates surrender of the en-

tire interest under the lease and not a part of the interest alone. It is worth

noticing that the judgment of the Apex Court in the Case of H.P v. Kishan

Lal by a two judge bench has not been referred to and discussed in the

case of Krishan Kumar Khemka (supra) relied upon by learned counsel

for the petitioner.

66.In the case of H. K. Sharma Vs. Ram Lal (supra) the Apex Court

had categorically held that a subsequent agreement ipso facto would not

result in determination of lease. The question therefore, is what are the

terms and conditions provided in the lease and any act bringing an end to

the agreement between the original lessor and the lessee has to be seen

and given validity if mutually agreed in tune with terms and condition of

the original lease agreement.

41

67.Coming to the issue of registration of a document as it is argued by

the learned counsel for the respondent Corporation that the lease surrender

letter dated 9.6.2018 was required to be registered one in order to create

any right in favour of the lessor, to execute a subsequent lease, we find

that while the lease agreement is necessarily required to be registered un-

der Section 107 of the Transfer of Property Act, Section 17 of the Regis-

tration Act provides that non testamentary instruments that purport, de-

cline or limit or extinguish rights in immovable property are required to

be registered. Since in the present case, it has been argued by the learned

counsel for the respondent Corporation that the doctrine of implied sur-

render would not be attracted as a part of property is sought to be surren-

der or in other words part of interest in the property is sought to be relin-

quished, the letter which has set into motion a subsequent lease was nec-

essarily required to be registered one and since it is not a registered doc-

ument, it cannot create any right in favour of the lessor to execute a subse-

quent agreement in respect of that property or part of the property surren-

dered.

68.He also argues that while the rights and properties are governed

under the lease agreement in between the parties if a document is not reg-

istered which is otherwise required to be compulsorily registered, then on

that count any subsequent document has come to be executed, the

Corporation being third party is not bound by such agreement nor, there

can it be compelled to acknowledge and admit that such a subsequent

lease agreement as valid one. If any document is not required for any col-

lateral purposes and was definitely meant to create rights to further create

a third party right, such document of necessity, is required to be regis-

tered under the law. The Collateral purpose it is argued, as defined under

the said judgment, would not be for the purposes of creating or assigning

or limiting or extinguishing any right in the immovable property. Collat-

eral purpose has also come to be defined in the Ratan Lal and others

(supra) by Allahabad High Court wherein it was held that parties in a

42

family arrangement that create right by putting them down in writing

would not amount a collateral purpose and such document is required to

be necessarily registered. So also the Madras High Court in the Case of

Raghunath G (supra) and the same has remained reiterated by the Apex

Court in the case of Kalu and other (supra).It is therefore, rightly argued

that since the letter of the original lessee is sought to create a new kind of

right in favour of the lessor, relinquishing the rights in part of the proper-

ty, it would require to be registered in law.

69.What the petitioners have sought to urge is that the letter dated

15.9.2018 should be read in evidence as an act of surrender of lease, can-

not be accepted in the light of legal principle discussed above. It is a case

where the petitioner wants the Corporation to read a document which is

otherwise inadmissible in evidence for want of due registration. Act of

surrender under the letter dated 15.9.2018 is an express act and not guided

by any mutual agreement and therefore, to that extent it being unilateral

document creating right in favour of the lessor by means of alleged relin-

quishment of interest by the original lessee, it cannot be binding on the

Corporation, a third party and the Corporation cannot be held to have

manifestly erred in rejecting the letter that entitled the original tenure

holder to create a further lease.

70.The legal position that emerges out from the above discussions can

be summarized as under:

(i) Every transfer of rights and interest by a lease agreement to be time

specific or in perpetuity is required to be in writing.

(ii) Every transfer of rights and interest in immovable property for a

period beyond one year under lease agreement is required to be by

registered instrument.

43

(iii) A lease agreement lays down terms and condition granting rights and

interest of lessee and any variation done by the lessee is permissible in

writing only and such document is also required to be registered.

(iv) Section 111 (e) and (f) contemplate relinquishment of rights and inter-

est whether by express act or implied as required in law but such relin-

quishment should be of lease rights in its entirety as it determine the base

as a whole.

(v) Part relinquishment of interest and rights qua leased property is rec-

ognized in India but that would be (a) subject to lease agreement (b) if

lease property can be divided and identifiable, in other words part relin-

quishment/ surrender should be part specific and this position should be

discernable from the terms of lease.

(vi) Division of a holding/ land or property under a lease if identified as

one, it would amount to verying the terms and conditions of lease and, so

is necessarily required to be registered.

(vii) Any mutual agreement to permit part surrender of property under a

lease except when it provides for that, unless registered, will not bind a

third party, as having no evidentiary value thereof and no rights can flow

in favour of a third person.

71. In view of the above we are of the view that the lease deed if it has

come to be rejected by the Corporation for not creating sufficient right in

favour of the petitioner so as to accept offer of land, a subject matter of

the lease agreement for the purpose of allotment of retail outlet dealership,

nothing wrong has been committed and therefore the question-A stands

answered in negative against the petitioner.

72.So far as the other question regarding the discretion of the

Corporation, we are of the view that the Corporation is in the best position

to decide which land suits to its business prospects and the discretion ex-

44

ercised in that regard has to be seen only from the view that the corpora-

tion would be interested in providing its investment only in safe and se-

cured land. If the Corporation has found that the document pertaining to

the land are not absolutely clean in the sense that there exists chances of

litigation in future qua the land in which investment is to be made, the

Corporation is in best position to understand to take decision as to

whether the investment should be made or not over such land. So the suit-

ability of the land lies within the domain and the discretion of the

Corporation.

73.The Indian Oil Corporation being a public sector corporation and

huge public money being involved in the matter any investment of the

public money in a property that may turn out to be disputed in future

would be against the public policy also and, therefore, we are of the opin-

ion that for the purpose of suitability of land the discretion exercised by

the Corporation in the normal circumstances be not interfered with unless

it is found to be an act absolutely arbitrary hit by Article 14 of the Consti-

tution or for mala fides in exercise of the discretion by the Corporation.

74.An exercise of evaluation and decision making is subject to judicial

review in the event an action is vitiated for bias, mala fides and in viola-

tion of principles of natural justice. Even evaluation of credentials if viti-

ated for utter ignorance of laws or by whimsical action, would invite in-

terference but where a document becomes a matter of contentious issue

and involves complicated question of facts qua title and needed

adjudication by a civil court for its valid declaration as involving valuable

rights of parties, Corporation, a third party would be justified in keeping

its hand off. Case in hand has the element to invite long drawn civil

litigation in future and so if corporation decides to term such land as not

suitable, we do not find any fault with the Corporation.

75. From the discussions that we have made above, we do not find that

the discretion exercised by the Corporation is in any manner arbitrary or

45

capricious one so as to warrant interference by this Court under Article

226 of the Constitution. Consequently the writ petition fails and is dis-

missed with no order as to cost.

Order Date :- 19.12.2019

Nadeem Ahmad

(Ajit Kumar,J.) (Ramesh Sinha,J.)