# 3 S.C.R. 632 BHARAT PETROLEUM CORPORATION LTD v. CHEMBUR SERVICE STATION

- **Citation:** [2011] 3 S.C.R. 632
- **Court:** Supreme Court of India
- **Decided:** 2011-03-02
- **Case number:** Civil Appeal No. 2276 of 2011
- **Bench:** R.V. Raveendran, H.L. Gokhale
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/3-s-c-r-632-bharat-petroleum-corporation-ltd-v-chembur-service-station-27476
- **Pages:** 66

## Headnote

Public Premises (Eviction of Unauthorised Occupant)
Act, 1971 - Appellant, PSU, in the year 1972, entering into a
C dealership agreement with the respondent, appointing it as
dealer to sell appellant's petroleum products at appellant's
premises at ·the price specified by the appellant - Breach of
trust by the respondent - Show cause notice by the appellant
as to why dealership agreement be not terminated - Suit
o before the Single Judge of Court of Small Causes - Interim ·
order directing the appellant to maintain status quo to the
effect that the respondent shall remain in possession of the
petrol pump and that the appellant shall continue to supply
petrol and petroleum products to the petrol pump at the suit
E premises - On appeal, the Division Bench of the ~urt of
Small Causes vacated the direction to continue supply of
petrol and petroleum products but maintained the order of
status quo with respect to possession of the respondent -
Cross-writ petitions - High Court upheld the order which
F
vacated the direction to the appellant to continue supply of
petrol and petroleum products - High Court also clarified that
the said order of status quo did not preclude the appellant
from taking recourse to recovery of possession of the suit
property from the respondent by following due process of law
including by resorting to action under the provisions of the
G Public Premises Act, if permissible - Meanwhile, termination
of the dealership agreement - On appeal, held: Difference of
opinion on issues as to nature of licence granted to the
respondent by the appellant under the Agreement; whether
H
632
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 633
SERVICE STATION
the High Court was justified in upholding the grant of interim A
order of status quo and diracting the appellant to secure
possession from the raspondent of the petrol pump premises
by resorting to proceedings under the 1971 Act; and whether
the respondent had become a deemed tenant in 1972 -
Matter referred to Larger Bench ...:. Bombay Rents, Hotel and B
Lodging Houses, Rates Control Act, 1947 - ss. 15A and
5(4A).
In the year 1972, the appellant Company-PSU
engaged In refining, distributing and selling petroleum C
. ' products, entered Into a Dispensing Pump and Selling
· Licence Agreement with the respondent, appointing It as
the dealer for selling the petroleum products of the
appellant from Its Retail Petroleum Outlet (RPO) at the
price specified by the appellant. In the year 1995, a fresh
dealership agreement was executed between the parties.. D
The respondent allegedly manipulated/altered the original
chip In the dispensing unit with a view to make Illegal
gain by cheating the customers of the company. The
appellant Issued a shQw cause notice to the respondent
to show cause as to why his dealership agreement E
should not be terminated. The respondent then flied a suit
In the Court of Small Causes for a declaration that the
respondent was a tenant of the appellant company in
respect of the structures, and sub-tenant of the appellant
In regard to the land on which RPO was sltuatedi that the F
supply of petrol and petroleum products by the appellant
at the suit premises was an essential supply under
Section 29 of the Maharashtra Rent Control Act, 1999;
and that the show cause notice was Illegal and the
appellant had no sufficient cause for withholding the G
essential supply of petrol and petroleum products. The
respondent also flied an Interim application to restrain the
appellants from dispossessing them from the premises
and also from withholding supply of petrol and petroleum
products. The Slngle Judge of the Court of Small Causes H
634
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A granted an interim order of staus quo directing the
appellant not to dispossess the respondent from the
petrol pump and to continue the supply of petrol and
petroleum products to the petrol pump in the suit
premises to the respondent. On appeal, the Division
B Ben.ch of the Court of Small Causes set asi

## Text

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A
B
[2011) 3 S.C.R. 632
BHARAT PETROLEUM CORPORATION LTD.
V.
CHEMBUR SERVICE STATION
(Civil Appeal No(s). 2276 of 2011)
MARCH 02, 2011
[R.V. RAVEENDRAN AND H.L. GOKHALE, JJ.]
Public Premises (Eviction of Unauthorised Occupant)
Act, 1971 - Appellant, PSU, in the year 1972, entering into a
C dealership agreement with the respondent, appointing it as
dealer to sell appellant's petroleum products at appellant's
premises at ·the price specified by the appellant - Breach of
trust by the respondent - Show cause notice by the appellant
as to why dealership agreement be not terminated - Suit
o before the Single Judge of Court of Small Causes - Interim ·
order directing the appellant to maintain status quo to the
effect that the respondent shall remain in possession of the
petrol pump and that the appellant shall continue to supply
petrol and petroleum products to the petrol pump at the suit
E premises - On appeal, the Division Bench of the ~urt of
Small Causes vacated the direction to continue supply of
petrol and petroleum products but maintained the order of
status quo with respect to possession of the respondent -
Cross-writ petitions - High Court upheld the order which
F
vacated the direction to the appellant to continue supply of
petrol and petroleum products - High Court also clarified that
the said order of status quo did not preclude the appellant
from taking recourse to recovery of possession of the suit
property from the respondent by following due process of law
including by resorting to action under the provisions of the
G Public Premises Act, if permissible - Meanwhile, termination
of the dealership agreement - On appeal, held: Difference of
opinion on issues as to nature of licence granted to the
respondent by the appellant under the Agreement; whether
H
632
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 633
SERVICE STATION
the High Court was justified in upholding the grant of interim A
order of status quo and diracting the appellant to secure
possession from the raspondent of the petrol pump premises
by resorting to proceedings under the 1971 Act; and whether
the respondent had become a deemed tenant in 1972 -
Matter referred to Larger Bench ...:. Bombay Rents, Hotel and B
Lodging Houses, Rates Control Act, 1947 - ss. 15A and
5(4A).
In the year 1972, the appellant Company-PSU
engaged In refining, distributing and selling petroleum C
. ' products, entered Into a Dispensing Pump and Selling
· Licence Agreement with the respondent, appointing It as
the dealer for selling the petroleum products of the
appellant from Its Retail Petroleum Outlet (RPO) at the
price specified by the appellant. In the year 1995, a fresh
dealership agreement was executed between the parties.. D
The respondent allegedly manipulated/altered the original
chip In the dispensing unit with a view to make Illegal
gain by cheating the customers of the company. The
appellant Issued a shQw cause notice to the respondent
to show cause as to why his dealership agreement E
should not be terminated. The respondent then flied a suit
In the Court of Small Causes for a declaration that the
respondent was a tenant of the appellant company in
respect of the structures, and sub-tenant of the appellant
In regard to the land on which RPO was sltuatedi that the F
supply of petrol and petroleum products by the appellant
at the suit premises was an essential supply under
Section 29 of the Maharashtra Rent Control Act, 1999;
and that the show cause notice was Illegal and the
appellant had no sufficient cause for withholding the G
essential supply of petrol and petroleum products. The
respondent also flied an Interim application to restrain the
appellants from dispossessing them from the premises
and also from withholding supply of petrol and petroleum
products. The Slngle Judge of the Court of Small Causes H
634
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A granted an interim order of staus quo directing the
appellant not to dispossess the respondent from the
petrol pump and to continue the supply of petrol and
petroleum products to the petrol pump in the suit
premises to the respondent. On appeal, the Division
B Ben.ch of the Court of Small Causes set aside the
direction to continue the supply of petrol and petroleum
products in the suit premises to respondent but
maintained the order of status quo with respect to the
possession of the respondent.
c
In the writ petition filed by the respondent, the order
vacating the direction to continue to supply petrol and
petroleum products was upheld. In the writ petition
challenging permission granted to the respondent to
remain in possession of the suit premises was disposed
D of by clarifying the order of status quo that the said order
shall not preclude the appellant from taking recourse to
recovery of possession of the suit property from the
respondent by following due process of law including by
resorting to action under the provisions of the Public
E Premises Act, if permissible. Meanwhile, the respondent
filed another suit seeking a direction that the appellant
should continue to supply the petroleum products.
Subsequently, the appellant terminated the dealership
agreement and stopped the supplies of petroleum
F
products to RPO. Thereafter, the respondent filed a third
suit seeking declaration that the termination was illegal
and unenforceable. Therefore, the appellant filed the
instant appeal.
The questions which arose for consideration in this
G appeal are what is the nature of a licence that is granted
to the respondent by the appellant under the DPSL
agreement; whether the High Court was justified in
upholding the grant of an interim order of status quo
directing the appellant not to interfere with the
H
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR
635
SERVICE STATION
respondent's 'possession' of the petrol pump premises A
and requiring the appellant to resort to appropriate legal
action to secure possession from the respondent; and
whether the licence to use the petrol pump premises for
the purpose of sale of the petroleum products of _the
appellant granted to respondent on 1.4.1972 could be B
construed as a licence as defined in Section 5(4A) of the
Bombay Rents, Hotel and Lodging Houses, Rates Control
Act, 1947 so as to attract Section 15A of the said Act
which provided that any person who was in occupation
of any premises as a licensee as on 1.2.1973 shall on that c
date be deemed to have become a tenant of the landlord
in respect of the premises in his occupation.
Referring the matter to larger Bench, the Court
HELD: PER RAVEENDRAN J:
D ..
1.1. The definition of licence under the Easements
Act, 1882 makes it clear that a licence granted by the
owner enables a licensee a right to do or continue to do
certain specified things in or upon an immovable
property. Licences can be of different kinds. Some E
licences with reference to use of immovable property may
be very wide, virtually bordering upon leases. Some
licences can be very very narrow, giving a mere right
enabling a person to visit a premises. In between are the
licences of different hues and degrees. All licences can F
not be treated on the same footing. [Paras 18 and 20]
[656-G-H; 657-B-C; 659-C]
Associated Hotels of India Ltd. v. R.N. Kapoor AIR 1959
SC 1262; C.M. Beena vs P.N. Ramachandra Rao 2004 (3) G
sec 595 - referred to.
1.2. Where an employer or principal permits the use
of its premises, by its employee or agent, such use,
whether loosely referred to as 'possession' or
'occupation' or 'use' by the employee or the agent, is on H
636
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A behalf of the employer/ principal. In other words, the
employer/principal continues to be in possession and
occupation and the employee/agent is merely a licensee
who is permitted to enter the premises for the limited
purpose of selling the goods of the employer/principle.
B The employee/agent cannot claim any 'possession and
occupation or 'right to use' independent of the employer/
principal who is the licensor. This is because licence that
is granted to the employee/agent is a limited licence to
enter upon and use the premises, not for his own
C purposes or his own business, but for the purposes of
the employer/principal, to sell its goods in the manner
prescribed by the employer/principal and subject to the
terms and conditions stipulated in the contract of
employment/agency in regard to the manner of sales, the
0
prices at which the goods are to be sold or the services
to be rendered to the customers. In such cases, when
the employment or agency is terminated and the
employer/principal informs the employee/ agent that his
services are no longer required and he is no longer the
employee/agent, the licence granted to such employee or
E agent to enter the retail outlet stands revoked and the exemployee/ex-agent ceases to have any right to enter the
premises. On the other hand, the employer/principal who
continues to have possession will be entitled to enter the
premises, or appoint another employee or agent, or
F legitimately prevent the ex-employee/ ex-agent from
entering upon the premises or using the premises. In
such cases, there is no need for the licensor (that is the
employer or the principal) to file a suit for eviction or
injunction against the ex-employee or ex-agent. The
· G licensor can protect or defend its possession and
physically prevent the licensee (employee/agent) from
entering the outlet. [Para 21] [662-D-H; 663-A-D]
Southern Roadways Ltd. Madurai v. SM Krishnan (1989)
H 4 SCC 603 - referred to
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR
637
SERVICE STATION
1.3. In the instant case, the DPSL Agreement clearly A
demonstrated that licence granted by the appellant
enabled the licensee-respondent to enter upon the outlet
premises only for the limited purpose of using the
facilities for purposes of sale of appellant's Motor Spirit,
HSD, Motor oils, Greases or other motor accessories as
B
a licensee of the appellant at the prices specified by the
appellant. The respondent could not sell any other goods
or the products of any one else. It could not charge a
price different from what was stipulated by the appellant.
The respondent could not enter the outlet premises if the c
licence granted to the respondent to sell the appellant's
petrol and petroleum products was terminated. The
respondent-licensee had no licence to enter the petrol
pump premises or use the 'facilities', if it could not sell
the products of the appellant. The courts below 0
completely lost sight of the same. [Para 23) [666-A-D-E]
1.4. If the respondent could not sell these petroleum
products on account of suspension/ termination, there is
no occasion or need for the respondent to enter upon the
outlet premises as it cannot sell any other goods or use
E
the outlet for any other purpose. Therefore, the licence
to enter and use the outlet premises also comes to an
end when the licence is terminated or supply of
appellant's products is stopped. Clause 15 of the DPSL
Agreement specifically provides that on revocation or
F
termination of the licence for any cause whatsoever, the
, licensee shall cease to have any right to enter or remain
in the premises or use the facilities. As the licence is only
to enter the appellant's outlet premises to use the
facilities for sale of appellant's petroleum products, if the
G
licence to use the appellant's facilities for sale of
appellant's products comes to an end and supply of
appellant's product for sale by the respondent is stopped,
there is no question of the· licensee entering the outlet
premises at all or remaining in the outlet premises or H
638
SUPREME COURT REPORTS
(2011] 3 S.C.R.
A using the outlet premises. [Para 24] [666-G-H; 667-A-C]
1.5. The licence to enter the premises and the licence
to use the facilities/equipment is incidental to the licence
to sell the products of the appellant as a licensed dealer,
8 distributor or agent. In the instant case, the premises is
a land held on leasehold by the appellant wherein it has
constructed/erected certain structures and housed
certain facilities/equipment. The premises is known as
appellant's company owned retail outlet'. The goods/
products sold belong to the appellant. If the appellant
C decides to stop the supply of its goods for sale in the said
outlet, automatically the licence granted to the
respondent to enter premises and use the facilities
become redundant, invalid and infructuous. There is no .
licence in favour of the licensee to use the premises or
D use the facilities independent of the licence to sell the
goods of the appellant. Further, the agreement makes it
clear that the agreement does not create any tenancy
rights in the premises; that it is terminable by 90 days
notice on either side and it is terminable by the appellant
E even without giving such notice in the event of breach.
F
Therefore, there cannot be an injunction restraining the
appellant from entering upon its outlet premises or using
the outlet for its business or inducting any new dealer or
agent. [Para 25] [667-E-H; 668-A]
1.6. Where the licence in favour of the licensee is only
to use the retail outlet premises or use the equipments/
facilities installed therein, exclusively in connection with
the sale of the goods of the licensor, the licensee does
G not have the right to use the premises for dealing or
selling any other goods. When the licensee cannot use
the premises for any purpose on account of the stoppage
of supply of licensor's goods for sale, it will be wholly
unreasonable to require the licensor the sue the licensee
for 'possession' of such company controlled retail outlet
H
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR
639
SERVICE STATION
premises. This is not a case where the licensee has A
alleged that any amount is due to it from the licensor by
way of commission or remuneration for services, or that
on account of non-payment thereof it is entitled to retain
the retail outlet premises and facilities of the licensor by
claiming a lien over them under Section 221 of the s
Contract Act, 1872. In regard to a licence governed by a
commercial contract, it may be inappropriate to apply the
principles of Administrative Law, even if the licensor may
answer the definition of 'State' under Article 12 of the
Constitution. [Para 26] [668-8-E]
C
1.7. It is made clear that this decision applies only to
licences where the licensor is the owner/lessee of the
premise and the equipment (in this case dispensing
pumps and other equipment) and where the licensee is
engaged merely for sale of the products of the licensor. D
In other words, this decision would apply to petrol
stations which are known as CCRO. (Company
Controlled Retail Outlets'). If the licensee is himself the
owner/lessee of the premises where the petroleum
products outlet is situated or where the exclusive right E
to use the premises is given to the licensee for carrying
on any business or dealing with any goods unconnected
with the licensor, this decision may not apply and it may
be necessary for the licensor to have recourse either to -..
a Civil Court for a mandatory injunction to give up the F
premises, or the Estate Officer under the Public Premises
Act for 'eviction' as the case may be, depending upon the
nature of licence and the status and relationship of the
parties. [Para 27] [668-G-H; 669-A-C]
1.8. In the instant case, in pursuance of a routine G
inspection certain serious irregularities were viewed and
as a consequence supply of its products was stopped,
suspended and a show cause notice was issued calling
upon respondent to show cause why action should not H
640
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A be taken including termination of the dealership.
Therefore, when such a notice is issued as a precursor
to termination, the respondent license ceases to have
right to sell the goods in the outlet premises and does
not get the cause of action either to seek continuance of
B the supply of the products or remain in and use the
premises. The show cause notice was followed by a
termination of the licence of dealership on 19.3.2009. Even
if the termination or non-supply amounts to breach of
contract, the remedy of the agent-licensee at best is to
c seek damages, if it is established that the dealership was
wrongly determined or supply was wrongly stopped.
Thus, the licensee does not have any right to use the
premises nor any right to enter upon the premises after
the termination of the agency. [Para 28] (669-C-F]
D
2.1. The occupation by the respondent was not
occupation on its own account, but occupation on behalf
of the appellant. Therefore, the respondent was not in
'occupation' of the outlet in its own right for its own
proposes, but was using the outlet and facilities in the
E possession and occupation of the appellant, to sell the
appellant's products in the manner provided in the DPSL
Agreement. In such a situation, the agent who is called
as the licensee does not become a deemed tenant. The
condition for deemed tenancy is not the description of the
F person as 'licensee', but the person being in occupation
of a premises as licensee as on 1.2.1973. Every person
who holds any type of 'licence' does not become a tenant.
The deemed tenancy under Section 15A of the Bombay
Rents, Hotel and Lodging Houses, Rates Control Act,
G 1947 refers to a person who held a licence to use a
premises for his own use as on 1.2.1973. (Para 32] (673C-F]
2.2. Section 5(4A) of the 1947 Act defined a licensee
in respect of any premises or any part thereof, as
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR
641
SERVICE STATION
referring to the person who is in occupation of the A
premises or such part under a subsisting agreement for
licence given for a licence fee or charge. It makes clear
that a person in the service or employment of the licensor,
or a person conducting a running business belonging to
the licensor is not a 'licensee' where the appellant has a B
retail outlet in a premises either owned or taken on lease
by it, where it has installed its specialized equipment/
facilities for sale of its products and the outlet is
exclusively used for the sale of the products of the
appellant, the unit is running business of the appellant. c
An agent licensed to run RPO of the appellant, which is
a running business belonging to the appellant is not
therefore, a 'licensee' either under the 1947 Act nor under
the Maharashtra Rent Control Act, 1999. Therefore, the
respondent did not become a tenant under the appellant 0
nor became entitled to protection against eviction. [Para
33] [673-G-H; 674-A-C]
2.3. As a person conducting a running business on
behalf of the owner of such business is not a 'licensee'
as defined under the Rent Act, even if the person E
concerned was using premises on 1.2.1973, he will not
become a deemed tenant. Consequently, the respondent
could not claim that he became a deemed tenant.
Therefore, the respondent could not claim the protection
of any rent control law as a tenant. If the respondent had
F
become a deemed tenant in 1972, it would not have
entered into an agreement on 1.7.1995 reiterating that it
continue to be a licensee and that it does not have any
leasehold or tenancy rights in the premises. Thus, the
submission that even if the respondent had become a G
deemed tenant in pursuance of the agreement dated
1.4.1972, such a tenancy came to an end and the
appellant again became licensee pure and simple from
1.12.1995 when the fresh agreement was entered, does
not require to be considered. [Para 34] [674-D-G]
H
I
642
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[2011] 3 S.C.R.
A
2.4. The order of the High Court and the order of the
courts below, directing status quo are set aside. The
appellant is entitled to continue in possession of the
petrol pump premises and use it for its business. The
appellant is also entitled to lawfully prevent the
B respondent from entering upon the premises. The trial
court is directed to dispose of the suit expeditiously, on
the basis of the evidence, in accordance with law. [Para
. 35) [675-A-B]
c
D
Case Law Reference:
AIR 1959 SC 1262
Referred to
Para 19
2004 (3) sec 595
Referred to
Para 19
198.9 (4) sec 603
Referred to
Para 22
PER GOKHALE J.:
1.1. In the facts of the instant case, there is no
conflict between the two orders passed by the two Single
Judges. The writ petition was filed by the respondent to
E challenge the order of the Appellate Bench of the Court
of Small Causes that the respondent could not seek a
direction for the petroleum supply in their proceeding in
the Court of Small Causes. The grievance of the
respondent in that writ petition was only with respect to
F that part of the order, and therefore, when the Single
Judge held that there was no reason to interfere with that
order, the order would have to be read as confined to the
grievance of the respondent raised before the Judge.
The part of the order of the Appellate Bench of the Court
G of Small Causes protecting the possession of the
respondent was not under consideration in that Writ
Petition which was filed by the respondent. Any
observation by the Single Judge in that order cannot be
read as a determination on the correctness or otherwise
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR
643
SERVICE STATION
of this part of the order which was not in challenge in that A
proceeding. As far as the other part of the Appellate
Bench, protecting the possession of the respondent was
concerned, the same was in challenge only before the
other Single Judge in the Writ Petition at the instance of
the appellant. In that petition the Single Judge has .held B
that the pendency of the proceeding in the Civil Court
would not preclude the appellant from taking steps in
accordance with due process of law, which according to
the Single Judge was taking steps under the Public
Premises Act, if permissible. [Paras 25 and 26] [668-C-H; c
689-A]
1.2. Even if the respondent is an agent of the
appellant, the fact remains that he is in occupation of the
concerned premises consisting of the rooms and the
structures of the RPO situated on the particular plot of D
land since 1.4.1972. The appellant has authorized the
respondent to be in occupation of this RPO by virtue of
the dealership agreement between the parties. The
respondent is not a trespasser. [Para 27] [689-B-C]
E
1.3. No fault can be found with the impugned order
passed by the Single Judge viz. that it would be open to
the respondent to take steps in accordance with the
Public Premises Act which would be the due process of
law, and not by any force. The termination of the F
dealership agreement by the appellant would render the
occupation of the premises by the respondent to be
unauthorised one and it would be open to the
respondent to take further steps to. take possession
thereof though only in accordance with the due process G
of law. This much minimum protection has to be read into
the relationship created between the parties under the
. clauses of the agreement. Besides, an opportunity of
being heard in a situation which affects the civil rights of
an individual has to be implied from the nature of the H
644
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A functions to be performed by the public authority which
has the power to take punitive or the damaging actions.
[Para 29] [690-H; 691-A-C]
1.4. By no stretch of imagination the respondent can
8
be called a trespasser into the concerned premises. The
respondents have been permitted to occupy the
premises under the dealership agreement and have been
so occupying it under the agreement with the appellant
since 1st April 1972. A submission coming from a public
C authority in this fashion is totally unacceptable and
deserves to be rejected. [Para 30] [692-B-C]
1.5. In the instant case, the respondents are
occupying the premises, may be as an agent of the
appellant, right from the 1st April 1972. The respondent
D has moved the Court of Small Causes for the declaration
and has obtained an order of status-quo. That order
presently survives and is not set aside though the Single
Judge has observed in the impugned order that the order
of status-quo would operate only till the competent
E authority passes the order of eviction. The respondents
have not challenged this order either by filing a Special
Leave Petition or by filing any cross objections in the
instant appeal, and therefore, it binds them. In the
circumstances of the instant case, the Single Judge
F permitted the appellant to proceed against the
respondent under the Public Premises Act on the footing -
that after the termination of the dealership agreement the
occupation would be unauthorized. He has rightly
observed that the pendency of the proceeding in the Civil
G Court cannot preclude the appellant from taking recourse
to recovery of the possession of the suit premises by
following due process of law including by resorting to
action under the provisions of Public Premises Act, if
permissible. However, it is made clear that in any case
H possession cannot be obtained by force. There is no
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR
645
SERVICE STATION
reason for this Court to take any different view. The A
respondent has to be afforded an opportunity of being
heard, may be in the forum of the appellant, and only after
obtaining an order from the competent authority the
'· respondent can be evicted. [Para 34] [694-8-G]
1.6. In the facts of the instant case, amongst others
B
the respondent had raised the issue with respect to the
nature of his licence to remain on the premises, and had
also sought the protection which was available to the
licencee in occupation of the premises prior to 1.2.1973. C
Whether the respondent was right in that contention or
not is not for this Court to determine. It is for the
appropriate authority to decide. That is· the minimum
opportunity which would be required to be provided to
the respondent in the facts of the instant case, when he
is in occupation of the concerned premises for nearly 40
D
years. Even on the footing of being an agent, apart from
the right to receive the compensation in a situation which
could be placed under Section 205 of the Contract Act,
the agent also has the right to remain on the property of
the principal under Section 221 of the Contract Act, for E
the reliefs which are available under that Section if he
makes out such a case. Furthermore, the respondent has
placed his case on a higher pedestal, but even on the
basis that he is a mere agent, he does have certain rights
under Sections 205 and 221 of the Contract Act. Thus, it F .,,
cannot be said that the respondent does not deserve
even an opportunity of being heard. What are the relevant
terms of the agreement between the parties, what is their
true connotation and what order could be obtained by
the appellant against the respondent, or what relief at the G
highest the respondent would be entitled to, would have
to be considered and decided before an appropriate
forum. [Para 35] [695-C-H]
1.7. All throughout the respondent contended that H
646
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A
they have been in exclusive possession of the premises
· concerned, and all the employees on the premises are
that of the respondent. In the third suit filed in the City
Civil Court, the respondent has specifically pleaded that
the termination of the licence was without any reasons
B
and was contrary to public policy, and was violative of
Article 14 of the Constitution of India. The respondent has
specifically submitted that a technical fault in the
machine cannot amount to manipulation and that apart
it was not a case of adulteration. All these submissions
c of the respondent require a determination. An
opportunity of being heard is something minimum in the
circumstances. The proceedings before the authority
under the Public Premises Act are an expeditious
proceeding and that is something minimum in the
0
circumstances. A Public Corporation, from which a
higher standard is expected, cannot refuse to follow this
much minimum due process of law. [Para 36] [696-A-CF]
1.8. There is no reason to interfere with the order
E
passed by the Single Judge. However, the observations
made are for the purpose of deciding the correctness or
otherwise of the impugned order passed by the Single
Judge and not on the merit of the rival claims. In the
event, the appellant takes the steps under the Public
F
Premises Act, it would be open to the respondent to plead ·
their case before the competent authority on all counts,
though it would also be open to the concerned competent
authority to take its own decision on the merits of the
rival contention on facts as well as on law. [Para 37] [696G G-H; 697-A]
H
Southern Roadways Ltd. vs. S.M. Krishnan 1989(4) SCC
603; Amritsar Gas v. Indian Oil Corporation 1991 (1) SCC
533; Maneka Gandhi v. Union of India 1978 (1) SCC 248;
Bishna Alias Bhiswadeb Mahato and Ors. vs. State of West
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR
647
SERVICE STATION
Bengal 2005(12) SCC 657; Olga Tallis vs. Bombay Municipal
Corporation AIR 1986 SC 180 - referred to.
Case Law Reference:
1989(4) sec 603
Referred to.
Para 16
1991 (1 > sec 533
Referred to.
Para 18
1978 (1) sec 248
Referred to.
Para 29
2005(12) sec 657
Referred to.
Para 30
AIR 1986 SC 180
Referred to.
Para 33
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2276 of 2011.
A
B
c
From the Judgment & Order dated 29.1.2009 of the High D
Court at Bombay in Writ Petition No. 8130 of 2008.
C.A. Sundaram, Parijat Sinha, Reshmi Rea Sinha, S.C.
Ghosh, Vikram Ganguly, Rohini Musa, Abhishek Gupta for the
AP,pellant.
R.P. Gupta, Suman Gupta, Mehul Milind Gupta, Omika
Dubey, Sushendra K. Chauhan for the Respondent.
The Judgment of the Court was delivered by
R.V. RAVEENDRAN, J. 1. Leave granted.
E
F
2. The appellant - Bharat Petroleum Corporation Ltd. (also
referred to as BPCL) is a Public Sector Undertaking under the
administrative control of the Ministry of Petroleum & Natural
Gas, Union of India, engaged in refining, distributing and selling G
petroleum products, such as Motor Spirit (MS/Petrol), High
Speed Diesel (HSD), Keros<;ne, Liquefied Petroleum Gas
(LPG), etc. all over the coun!ry. It is the successor-in-title of
Burmah-Shell Oil Storage and Distributing Company of India
Ltd. (for short 'Burmah Shell').
H
648
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A
3. On 2.9.1971, Burmah Shell took on lease a piece and
parcel of land admeasuring about 680 sq.yds. bearing CTS
Nos. 339 and 339/1 situated at V.N. Purav Marg, Chembur,
Mumbai, for the purpose of a Storage Depot or Service Station
with the right to erect and maintain all manner of equipment,
s plant, machinery, tanks, pumps and structures. In the said plot,
Burmah Shell erected and installed the Dispensing pumps
together with underground tanks and other equipment, fittings
and facilities for storage of petrol, High Speed Diesel (HSD)
and other products and constructed some structures for carrying
c on the business of sale and supply of such products. The said
service station is also referred to as a Retail Petroleum Outlet
(for short 'the RPO'). On 1.4.1972, the appellant entered into a
Dispensing Pump and Selling Licence agreement (for short
'DPSL Agreement') with the respondent, appointing it as the
D dealer for selling the petroleum products of the appellant from
the said RPO.
4. The undertaking of Burmah Shell was taken over.by the
Central Government and subsequently vested in/Bharat
Petroleum Corporation Ltd., appellant herein, in accordance
E
with the provisions of the Burmah Shell (Acquisition 'of
Undertakings in India) Act, 1976 on 24.1.1976.
5. The respondent had originally two partners, Dharma Vir
Joshi and Mahesh Mangtani and on the death of Dharma Vir
F
Joshi, a fresh dealership agreement described as 'Dispensing
Pump and Selling Licence' was executed between the appellant
and respondent on 1.12.1995. In terms of the said agreement,
the respondent was functioning as a dealer of the appellant.
6. During a surprise inspection on 9.3.2007 carried out by
G the Quality Control Cell of the appellant in the presence of the
Manager of the respondent, it was noticed that one of the
dispensing units (No.CIC 3633) was giving a short delivery of
20 ml. of HSD (that is, when tested for accuracy against a five
litre calibrated measure, the display showed 5.02 litres). When
H the Dispensing Unit was checked on flash mode 55555 twice,
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR
649
SERVICE STATION [R.V. RAVEENDRAN, J.]
it gave short delivery of 210 ml. (that is as against 5 litres, the
A
display showed 5.21 litres). Therefore, the Electronic Register
Assembly (ERA) of the said dispensing unit was removed from
the Unit and was sent for inspection to MIDCO - the
manufacturer of the dispensing Unit. MIDCO gave a report on
27.3.2007 stating that there was a deviation in the counting
B
ERA and the Microcontroller chip hardware in the ERA was
not the original component supplied by them with the
Dispensing Unit. The appellant, therefore, issued a show cause
notice to the respondent on12.6.2007 alleging that the
respondent had manipulated/altered the original chip with a c
view to making illegal gain by cheating the customers of the
company, thereby causing breach of trust, and calling upon the
respondent to show cause within 15 days, as to why action
should not be taken including termination of the dealership. The
respondent sent a reply dated 10. 7 .2007 denying the
0
allegations in the show cause notice.
7. The respondent filed a suit (Suit No.913/2008) in the
Court of Small Causes, Bombay for the following reliefs : (a)
for a declaration that it is the tenant of the appellant in respect
of the structures and equipment and sub-tenant of the appellant
E
in regard to the land comprised in the suit premises (CTS Nos.
339 and 339/1, V.N. Purav Marg, Chembur, Mumbai,
measuring 6118 sq. ft.); (b) for a declaration that the supply of
petrol and petroleum products by the appellant at the suit
premises was an essential supply under section 29 of the
F
Maharashtra Rent Control Act, 1999; (c) for a declaration that
the show cause notice dated 12.6.2007 was illegal and did not
constitute a just and sufficient cause for cutting off or
withholding the essential supply of petrol and petroleum
products; (d) for a permanent injunction restraining the
G
appellant from forcibly dispossessing respondent from suit
premises or in any manner interfering with the possession of
the respondent in regard to the suit premises; and (e)
restraining the appellant from withholding or cutting off the
supply of petrol and petroleum products from the suit premises.
H
650
SUPREME COURT REPORTS
[2011] 3 S.C.R.
A An application for temporary injunction was also filed to restrain
the appellant from forcibly dispossessing the respondent from
the premises or interfering with its possession of the suit
premises and from withholding or cutting off of any supply of
petrol and petroleum products.
B
8. The appellant resisted the suit and the application for
temporary injunction by contending that the respondent was
neither a tenant, nor a sub-tenant, nor a deemed tenant. The
Court of Small Causes by interim order dated 13.5.2008
directed the appellant to maintain status quo as on that date,
C that is, the respondent "shall remain in possession of the suit
premises" and the appellant shall "continue to supply petrol and
petroleum products to the petrol pump in the suit premises", till
the preliminary issue regarding jurisdiction to entertain the suit
was framed and a decision was rendered thereon.
D
9. Feeling aggrieved, the appellant filed an appeal. A
Division Bench of the Small Causes Court, by order dated
26.8.2008, partly allowed the appeal. It set aside the order of
the trial court in so far as it directed the appellant to continue
E the supply of petrol and petroleum products in the suit premises
to respondent. The direction that the appellant shall maintain
status quo by permitting the respondent to continue with the ·
possession of the suit premises was not disturbed. The
appellate bench held that the respondent had prima facie
F established its induction in the suit premises as a licensee in
the light of the agreements dated 1.4.1972 and 1.12.1995. The
said order dated 26.8.2008 of the appellate bench of the Small
Causes Court was challenged by the respondent by filing W.P.
No.6689/2008, to the extent it reversed the direction for supply
of petroleum products. The said order was also challenged by
G the appellant in W.P.No.8130/2008 to the extent that it permitted
the respondent to remain in possession of the suit premises.
10. The respondent's writ petition 011/P No.6689/2008) was
dismissed by a learned Single Judge by judgment dated
H 1.10.2008. The writ petition filed by the appellant (W.P.
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR
651
SERVICE STATION [R.V. RAVEENDRAN, J.]
No.8130/2008) was disposed of by a brief order dated
A
29.1.2009, observing that "Instead of getting embroiled with the
larger issues raised in the present petition, in my opinion,
interest of justice would be subserved if the petition is disposed
of, by clarifying the order of status quo granted by the Lower
Co1,1rt to mean that the said order of status quo shall not
B
preclude the petitioner (BPCL) from taking recourse to recovery
of possession of the suit property from the respondent (plaintiff)
by following due process of law including by resorting to action
under the provisions of the Public Premises Act, if permissible."
The said order is challenged in this appeal by special leave. c
Subsequent events
11. Certain subsequent events require to be noticed. The
respondent filed a second suit (Suit No.2557/2008) in the City
Civil Court, Mumbai, praying for the following reliefs: (a) a
D
declaration that supply of petrol and petroleum products in the
suit premises to respondent by the appellant is an essential
supply under the Essential Commodities Act, 1955; (b) for a
declaration that the notice dated 12.6.2007 is illegal and a
further declaration that the appellant is not entitled to terminate/ E
set aside the dealership under the agreement dated 1.12.1995;
and (c) for an injunction restraining the appellant from stopping
the supply of petrol and petroleum products or acting upon the
notice dated 12.6.2007.
12. On 19.3.2009, the appellant terminated the dealership
F
agreement and informed the respondent that it shall have no
right to use the retail outlet premises for any purpose
whatsoever and the facilities (Motor Spirit and/or High Speed
Diesel pumps, storage tanks, pipes and fittings and all other
facilities erected and provided by the company at the retail
G
outlets) or to sell any petroleum products lying in the retail
outlets. Supply of petroleum products to the said Retail
Petroleum Outlet was also stopped. The said termination
however made it clear that the order was without interfering with
or disturbing the order of status quo in regard to the possession
H
652
SUPREME COURT REPORTS
[2011) 3 S.C.R.
A passed on 30.5.2008 and affirmed the orders dated 26.8.2008
and 29.1.2009 passed by the appellate bench and the High
Court respectively.
13. The respondent filed a third suit (Suit No. 706/2009 in
8 the City Civil Court, Bombay) for the following reliefs : (a) a
declaration that the termination notice dated 19.3.2009 was
illegal and unenforceable and that the dealership agreement
dated 1.12.1995 continues to subsist; (b) for a permanent
injunction restraining the appellant or giving effect to the
termination notice dated 19.3.2009; and (c) for an order
C restraining the appellant from discontinuing or withholding
supply of petrol and petroleum products and CNG to the petrol
pump premises and declare that the supply of petrol and
petroleum products to the said premises is an essential supply.
D Contentions of appellant
14.