# C. ALBERT MORRIS v. K. CHANDRASEKARAN AND ORS

- **Citation:** [2005] Supp. 4 S.C.R. 779
- **Court:** Supreme Court of India
- **Decided:** 2005-10-26
- **Bench:** Dr. Ar. Lakshmanan, Al Tamas Kabir
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/c-albert-morris-v-k-chandrasekaran-and-ors-20981
- **Pages:** 29

## Headnote

B
Petroleum Rules, 1976---'Rules 144 and 153(1)-Lease of vacant LandF or installation of retail outlet of-petrol-Accessory construction put up by
tenant-Installation after getting No Objection Certificate from State-After C
expiry of lease suit for eviction-Dismissal thereof for default-Landlord
approaching the authorities for seeking cancellation of permission to tenant
to store petroleum and also seeking revocation of No Objection CertificateWrit petition seeking non-renewal of licence to carry on petrol bunk as the
tenant had lost right to the site-Allowed by High Court and upheld in writ
appeal-Jn appeal, held: Mere continuance in occupation of the demised D
premises after expiry of the lease, notwithstanding receipt of an amount by
the landlord would not create a tenancy so as to confer on the erstwhile
tenant the status of tenant or a right to be in possession-The word 'right'
used is s. 153(1) only means a legal right to continue on the Land-'-Juridical
possession or litigious possession do not connote a valid legal right to E
continue in possession under the rule-Unless the person seeking a licence
is in a position to establish a right to the site, he would not be entitled to
hold or have his licence renewed-Since the leased premises was a vacant
land, and the constructions thereon belonged to the tenant, he was not a
statutory tenant in view of the construction· on the site°"·"Rent Control and
Eviction-Pondicherry Buildings (Lease and Rent Control) Act. 1969.
F
The appellant was the dealer of the second respondent. The said
dealership was being carried on in the leased site belonging to the first
respondent-landlord. Government (\ad granted No Objection Certificate under
Rule 144-(llof the Petroleum Rules, 1976 for the installation of the retail
outlet of petrol and HSD. First respondent had only leased vacant site to put G
up a petrol bunk with accessory constructions thereon. Respondent-landlord
filed a suit for decree of eviction and possession of the leased land. The same
was dismissed for default. Landlord filed application for restoration of the
suit. During pendency landlord again issued a notice Of termination of lease.
779
H
780
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.
" · A The defence of appellant-tenant was that he was a statutory tenant governed
by the Rent Control Act as during renewal of the lease deed there were superstructures. Landlord also approached the authorities seeking revocation of
the No Objection Certificate granted to the appellant. He also sought a Writ
of Mandamus before High Court seeking direction that the licence of the
B appellant to carry on petrol bunk shall not be renewed. He contended that the
same was liable to be cancelled under Rule 153(1) of the Petroleum Rules as
the appellant had lost right to the site. The Writ Petition was allowed. It held
that though the possession of the site did not entitle the appellant for renewal,
he could be dispossessed only under due process of Jaw. In writ appeal, Division
Bench confirmed the order of Single Judge holding that though the possession
C was illegal but the filing of suit did not prevent the first respondent from
seeking a writ remedy. Hence the present appeal.
Dismissing the appeal, the Court
HELD: 1. A mere continuance in occupation of the demised premises
D after the expiry of the lease, notwithstanding the receipt of an amount by the
quondam landlord would not create a tenancy so as to confer on the erstwhile
tenant the status of tenant or a right to be in possession. Mere acceptance of
rent by the landlord-respondent herein from the tenant in possession after
the lease has been determined either by efflux of time or by notice to quit
E would not create a tenancy so as to confer the erstwhile tenant the status of
a tenant or a right to be in possession. [792-A, B; 799-G I
F
Bhawanji lakhamshi and Ors. v. Himatlal Jamnadas Dani and Ors.,
p 972] 2 SCR 890; Raptakos Brett & Co. ltd. v. Ganesh Property., [I 9981 7
SCC I 84; Saleh

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C. ALBERT MORRIS
A
v.
K. CHANDRASEKARAN AND ORS.
OCTOBER 26, 2005
[DR. AR. LAKSHMANAN AND AL TAMAS KABIR, JJ.]
B
Petroleum Rules, 1976---'Rules 144 and 153(1)-Lease of vacant LandF or installation of retail outlet of-petrol-Accessory construction put up by
tenant-Installation after getting No Objection Certificate from State-After C
expiry of lease suit for eviction-Dismissal thereof for default-Landlord
approaching the authorities for seeking cancellation of permission to tenant
to store petroleum and also seeking revocation of No Objection CertificateWrit petition seeking non-renewal of licence to carry on petrol bunk as the
tenant had lost right to the site-Allowed by High Court and upheld in writ
appeal-Jn appeal, held: Mere continuance in occupation of the demised D
premises after expiry of the lease, notwithstanding receipt of an amount by
the landlord would not create a tenancy so as to confer on the erstwhile
tenant the status of tenant or a right to be in possession-The word 'right'
used is s. 153(1) only means a legal right to continue on the Land-'-Juridical
possession or litigious possession do not connote a valid legal right to E
continue in possession under the rule-Unless the person seeking a licence
is in a position to establish a right to the site, he would not be entitled to
hold or have his licence renewed-Since the leased premises was a vacant
land, and the constructions thereon belonged to the tenant, he was not a
statutory tenant in view of the construction· on the site°"·"Rent Control and
Eviction-Pondicherry Buildings (Lease and Rent Control) Act. 1969.
F
The appellant was the dealer of the second respondent. The said
dealership was being carried on in the leased site belonging to the first
respondent-landlord. Government (\ad granted No Objection Certificate under
Rule 144-(llof the Petroleum Rules, 1976 for the installation of the retail
outlet of petrol and HSD. First respondent had only leased vacant site to put G
up a petrol bunk with accessory constructions thereon. Respondent-landlord
filed a suit for decree of eviction and possession of the leased land. The same
was dismissed for default. Landlord filed application for restoration of the
suit. During pendency landlord again issued a notice Of termination of lease.
779
H
780
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.
" · A The defence of appellant-tenant was that he was a statutory tenant governed
by the Rent Control Act as during renewal of the lease deed there were superstructures. Landlord also approached the authorities seeking revocation of
the No Objection Certificate granted to the appellant. He also sought a Writ
of Mandamus before High Court seeking direction that the licence of the
B appellant to carry on petrol bunk shall not be renewed. He contended that the
same was liable to be cancelled under Rule 153(1) of the Petroleum Rules as
the appellant had lost right to the site. The Writ Petition was allowed. It held
that though the possession of the site did not entitle the appellant for renewal,
he could be dispossessed only under due process of Jaw. In writ appeal, Division
Bench confirmed the order of Single Judge holding that though the possession
C was illegal but the filing of suit did not prevent the first respondent from
seeking a writ remedy. Hence the present appeal.
Dismissing the appeal, the Court
HELD: 1. A mere continuance in occupation of the demised premises
D after the expiry of the lease, notwithstanding the receipt of an amount by the
quondam landlord would not create a tenancy so as to confer on the erstwhile
tenant the status of tenant or a right to be in possession. Mere acceptance of
rent by the landlord-respondent herein from the tenant in possession after
the lease has been determined either by efflux of time or by notice to quit
E would not create a tenancy so as to confer the erstwhile tenant the status of
a tenant or a right to be in possession. [792-A, B; 799-G I
F
Bhawanji lakhamshi and Ors. v. Himatlal Jamnadas Dani and Ors.,
p 972] 2 SCR 890; Raptakos Brett & Co. ltd. v. Ganesh Property., [I 9981 7
SCC I 84; Saleh Bros. v. K. Rajendran and Anr., AIR (1970) Madras 165; R. V.
Bhupal Prasad v. State of A. P. and Ors. [I 9951 5 SCC 698; Karmani Industrial
Bank ltd. v. The Province of Bengal and Ors., AIR (1951) SC 285 and
Konchada Ramamurty Subudhi (dead) by his l.Rs. v. Gopinath Naik and Ors.,
AIR (1968) SC 919, relied on.
Kai Khushroo Bazonjee Capadia v. Bai .ferbai Hi1jibhoy Warden and
G Anr., AIR 1949 FC 124, referred to.
1.2. Any right which the dealer has over his site was the right which
he had acquired in terms of the lease. When that Jease expired and when the
landlord declined to renew the same and also called upon the erstwhile tenant
to surrender possession, the erstwhile lessee could no longer assert that he
H had any right to the site. His continued occupation of something which he
C. ALBERT MORRIS v. K. CIIANDRASEKARAN
781
had no right to occupy cannot be regarded as source of a right to the land of A
which he himself was not in lawful possession. [806-Fl
1.3. The word "right" used in Rule 153(1) of the Petroleum Rules, 1976
only means a legal right to continue on the land. The term "juridical
possession" or "litigious possession" do not connote a valid legal right to
continue in possession within the meaning of Rule 153 of the Petroleum B
Rules, 1976. The occupation without consent is wrongful occupation.
[802-C, DJ
MC. Chockalingam and Ors. v. V Manickavasagam and Ors., [1974[ I
sec 48, relied on.
1.4. Rule 153(1) (i) of the Petroleum Rules is "right to the site" for
storing petroleum. It is not the right for storing petroleum on the site. That
is so because that aspect is dealt with specifically in sub-clause (ii) of Rule
153(1) which refers to a no objection certificate, which the District authority
c
or the State Government is required to give. No Objection Certificate which D
is granted under Rule 144 is the one given by the concerned authority stating
that it has no objection for the storage of petroleum on the site after examining
the site plan and other relevant factors. The words "right to the site" have,
therefore, to be understood as referring to right to the site on which the
petroleum is stored. A person can be said to have a right to something when
it is possible to find a lawful origin for that right. A wrong cannot be a right E
of a person who trespasses on to another's land cannot be said to have a right
to the land vis-a-vis the owner because he happens to be in possession of that
land. Mere presence on the land by itself does not result in a right to the
land. Such presence on the premises may ripen into a right by reason of
possession having become adverse to the true owner by reason of the passage F
of time and possession being open uninterrupted, continuous and in one's own
right. [806-B, C, D El
1.5. It cannot be said that the landlord's assent should be inferred from
the conduct of the landlord who had filed the s·uit for ejectment, but did not
pursue the same. This suit was withdrawn with liberty to file a fresh suit on G
the same cause of action, liberty which the Court has granted. The possession
of this site by the erstwhile lessee does not ripen into a lawful possession
merely because the landlord did not proceed with the suit for ejectment at
that time, but reserved the right to bring such a suit at a later point of time.
That cannot amount to an assent on his part to the continued occupation of
the landlord under cover of a right asserted by the erstwhile lessee. The words H
782
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.
A "right to the site" in Rule 153(1) (i) must, therefore, be given their full
meaning and the effect that unless the person seeking a licence is in a position
to establish a right to the site, he would not be entitled to hold or have his
licence renewed. [807-B, CJ
2.1. What was leased out was a vacant land and that the lessee was given
B a right to construct a compressor room, store room, a bath room and latrine
together with a septic tank. Therefore, the provisions of The Pondicherry
Buildings (Lease and Rent Control) Act, 1969 cannot be invoked. The said
Act was enacted to regulate the letting of residential and non-residential
buildings and the control of rents of such buildings and the prevention of
C unreasonable eviction of tenants therefrom in the Union Territory of
Pondicherry. [801-B, CJ
Bhuneshwar Prasad and Anr. v. United Commercial Bank and Ors.,
120001 7 sec 232, relied on.
2.2. It is also mentioned in the plaint that the appellant/tenant herein
D is not a statutory tenant or tenant holding over since he has been clearly
apprised that no rent will be received from him subsequent to the
determination of the tenancy and that any amount that might be paid by him
will be adjusted towards compensation for illegally occupying the schedule
mentioned property. It was also submitted that the first defendant was given
E possession of a vacant site only and no building was leased out by the plaintiff.
[802-BI
2.3. It is abundantly clear from the recitals in the plaint, the schedule
to the notice and to the plaint and also of the lease deed that the word "leased
out" was only a vacant site to put up a petrol bunk with accessory constructions
F thereon. The mention of a small shed in the current lease is undoubtedly
belonged to the tenant himself and, therefore, the building put up by the tenant
situated in the vacant site belongs to the landlord cannot be said to be the
building of the landlord in order to attract the statutory protection of the Rent
Control Act. [804-A, Bl
G
3. It cannot be said that the first respondent is not entitled to maintain
the writ petition as the proceedings initiated by him before the Collector for
cancellation of the No Objection Certificate is pending. While granting NOC,
the Collector is not concerned about the ownership of the land. He is
concerned about the location of the land and its suitability as a place for ·
storage of petroleum. Rule 144 deals with the grant of NOC does not
H contemplate an enquiry into the ownership of the land nor does it require the
C. ALBERT MORRIS v. K. CHANDRASEKARAN [LAKSHMANAN, l] 783
Collector to enquire into the nature of the right claimed by the person who A
has applied for the NOC. 1807-F, G]
CIVIL APPELLATE JURISDICTION: Civil Appeal No, 1027 of2005.
From the Judgment and Order dated 7, 10.2003 of the Madras High Court
in W.A. No. 1149 of2002.
B
L.N. Rao, S, Aravindh and V. Ramasubramanian for the Appellant.
R, Sundaravardhan, R. Nedumaran, Ashok Panigrahi and Rajiv Rufus for
the Respondent No. I.
Ashok Bhan, T.A. Khan, V.K. Venna and D.S. Mahra for the Respondent
No. 3.
Mukul Rohtagi, Sr.Adv., Sanjay Kapur, Rajeev Kapur, Sanjeev Kumar
and Ms. Subhra Kapur for the Respondent No. 2.
The Judgment of the Court was delivered by
DR. AR. LAKSHMANAN, J. The above appeal is directed against the
final judgment and order of the High Court of Judicature at Madras dated
7.10.2003 in Writ Appeal No. 1149 of2002 thereby dismissing the same.
The short facts which are relevant for the disposal of this appeal are
as under:
The appel!ant-C. Albert Morris is the tenant of the first respondent-K.
c
D
E
Chandrasekaran (landlord) vide a lease deed for ten years culminating in the
year 1966. The appellant is the dealer of the second respondent. The Hindustan F
Petroleum Corporation Ltd. The said dealership is being carried on in the
leased site belonging to the first respondent. The Government of Pondicherry
gr3.nted No Objection Certificate under Ru le 144(1) of the Petroleum Rules,
1976 for the installation of retail outlet of petrol and HSD. The said No
Objection Certificate mentioned the details and description of the location of G
the said outlet As already noticed, the appellant entered into a lease deed
with the first respondent-landlord for a period of ten years. The purpose of
the lease was clearly mentioned as for running a petrol bunk On 15.5.1992,
the landlord issued notice to the appellant seeking vacant possession of the
property. The appellant caused a reply notice to the same denying the various
allegations. Consequently, the landlord filed O.S. No. 58 of 1994 on the file H
784
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.
A of the Principal sub-Judge, Pondicherry praying for a decree of eviction and
possession. The said suit was dismissed for default and non-prosecution.
The landlord, however, filed an application for restoration of the said suit.
During the pendency of the application of the restoration, the landlord again
issued a notice of termination of lease entered into between the appellant and
the first respondent-landlord. The appellant caused a reply notice to the
B landlord. The appellant-tenant also raised the defence that during the renewal
of the lease deed, there were super-structures on the same and hence the
appellant is a statutory tenant governed by the Rent Control Act and hence
the notice is wholly illegal. On 4.12.1996, the landlord then approached the
3rd respondent-the Joint Chief Controller of Explosives (South Circle), Shastri
C Bhawan, Chennai seeking to cancel the permission granted to the appellant
for the storage of petroleum. The landlord also approached the authorities at
Pondicherry to revoke the No Objection Certificate granted in the name of the
appellant.
While so, the landlord sought for a writ of mandamus before the High
D Court directing that the licence of the appellant to carry on petrol bunk shall
not be renewed. It was his contention that the appellant had lost his right to
site and hence was liable to be cancelled under Rule I 53 ( l) of the Petroleum
Rules, 1976. In reply to the writ petition, the appellant put forth the following
submissions:
E
I.
That the right to site envisaged under the Petroleum Rules is
synonymous to the right of mere possession as the licence to
trade in petroleum and also the No Objection Certificate for
storage. were still valid and not cancelled under the law;
2.
That the appellant was a tenant holding over and not a tenant
F
at sufferance or a trespasser as put forth by the landlord;
3.
That the tenant is also a statutory tenant and hence entitled to
the protection of the Rent Acts.
The above submissions of the appellant did not find favour with the
G learned single Judge of the High Court who allowed the writ petition filed by
the landlord purely relying upon the decisions based on the Cinematograph
Act to conclude that a "right" only meant a "legal right to continue in
occupation or possession without interruption" and that the possession of
the site did not entitle him for renewal. However, the learned single Judge held
that the appellant could be dispossessed only under the due process of law.
H
C. ALBERT MORRIS v. K. CHANDRASEKARAN [LAKSHMANAN. J.] 785
Aggrieved by the same, the appellant approached the Division Bench A
of the High Court by way of an appeal. The Division Bench upheld the order
of the learned single Judge but on different reasons. The Division Bench gave
a finding that the appellant is not a lawful tenant and that the possession was
not legal possession and that the earlier suit filed by the landlord would not
be in any manner prevent him from seeking a writ remedy. The Bench also
held that the provisions of Rule 144 of the Petroleum Rules does contemplate B
any enquiry into the right of the lessee to hold the property and .the same
is not a bar to the writ petitiori. Consequently, the Division Bench confinned
the judgment of the learned single Judge. Aggrieved by the dismissal of the
writ appeal, the appellant has preferred this appeal.
We heard Mr. L.N. Rao, learned senior counsel appearing for the appellant
and Mr. R. Sundaravardan, learned senior counsel appearing for respondent
No. 1, Mr. Mukul Rohtagi, learned senior counsel appearing for respondent
No. 2 and Mr. Ashok Bhan, learned counsel appearing for respondent No. 3.
Mr. L.N. Rao made the following submissions:
Mr. L.N. Rao invited our attention to Rule 153(1) of the Petroleum Rules
which reads as under:
"153. Suspension and cancei/ation of licence.-( I) Every licence
c
D
granted under these rules shall
E
(i)
stand cancelled, if the licensee ceases to have any right to the
site for storing petroleum;
(ii)
stand cancelled, if the no-objection certificate is cancelled by the
District Authority or the State Government in accordance with
sub-rule (I) of rule 151;
F
(ii)
be liable to be suspended or cancelled by an order of the licensing
authority for any contravention of the act or of any rule thereunder
or of any condition contained in such licence, or by order of the
Central Government if it is satisfied that there are sufficient
grounds for doing so:
Provided that -
(a)
before suspending or cancelling a licence under this rule, the
holder of the licence shall be given an opportunity of being
heard;
G
H
.. i'
786
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.
A
(b) the maximum period of suspension shall not exceed three months;
B
c
D
E
and
(c)
the suspension of a licence shall not debar the holder of the
licence from applying for its renewal in accordance with the
provisions of rule 149.
(2) Notwithstanding anything contained in sub-rule (I), an opportunity
of being heard may not be given to the holder of a licence before his
licence is suspended or cancelled in cases -
(a)
where the licence is suspended by a licensing authority as an
interim measure for violation of any of the provisions of the act
or these rules, or of any conditions contained in such licence and
in his opinion such violation is likely to cause imminent danger
to the public:
Provided that where a licence is so suspended, the licensing authority
shall give the holder of the licence an opportunity of being heard
before the order of suspension is confirmed; or
(b) where the licence is suspended or cancelled by the Central
Government, if that government considers that in the public
interest or in the interest of the security of the State such
opportunity, should not be given.
(3) A licensing authority or the Central Government suspending or
cancelling a licence under sub-rule ( l ), shall record its reasons for so
doing in writing."
Mr. L.N. Rao submitted that the "right" mentioned in Rule 153(1) of the
F Petroleum Rules will have to be interpreted in a widest manner possible and
it is synonymous to the mere right of possession as the provision itself does
not classify the nature of right. Thus the same would stand to be differently
interpreted than the position contemplated under the Cinematograph Act. He
placed reliance on the line of cases starting from Mis. East India Hotels
G wherein this Court categorically asserted that the right to remain in possession
would also include the right to carry on the business for which it was allowed
and hence the appellant was entitled to renewal of his licence as the same
was not validly cancelled by any authority. Our attention was also drawn to
the Black's Law Dictionary which explains "right" as something that is due
to a person by just claim, legal guarantee, a power privilege or immunity
H secured by a person by law, a legally enforceable claim, a recognised and
C. ALBERT MORRIS v. K. CHANDRASEKARAN [LAKSHMANAN, J.] 787
protected interest the violation of which is wrong, the interest, claim or A
ownership that one has in tangible or intangible property. Thus even going
by this meaning the right of the appellant is a right of possession as accepted
by the Courts below and as laid down by this Court in East India Hotels case
the right to possession will and should also include the right to carry on the
activity contemplated by such possession. Thus the appellant cannot be said
to have lost the right to the site as envisaged by Rule 153(1) of the Petroleum B
Rules.
Mr. L.N. Rao further submitted that the appellant is a tenant holding
over and that the conduct of the first respondent establishes acquiescence
on his behalf for having received the rents but not taking any steps for C
eviction for more than 10 years. He cited the judgment in Kai Khushroo
Bezonjee Capadia v. Bai Jerbai Hitjibhoy Warden and Anr., AIR (1949) FC
124: In the said judgment, it has been held that whenever rents are submitted
as rents and the same has been received by the landlord and that his conduct
to acquiesce with the continuance of tenancy then it is not necessary that
the payments should be made only as rents as such. Any payment equivalent D
to the rental amounts and voluntary receipt of the same by the landlord and
also his conduct of not seeking to throw the tenant out would conclusively
assert the right of the appellant as a tenant holding over.
He also invited our attention to the judgment of this Court in Bhawanji
Lakhamshi and Ors. v. Himatlal Jamnadas Dani and Ors., [ l 972] 2 SCR 890 E
which according to him would categorically assert that where the conduct of
the parties is such that there is an offer of rent and acceptance then there
arises a relationship of tenancy. At any rate, the appellant can never be called
as a trespasser or a tenant at sufferance.
Further, Mr. L.N. Rao relied on the judgment of this Court in Bhuneshwar
Prasad and Anr. v. United Commercial Bank and Ors., [2000] 7 SCC 232. This
Court after following both the judgments of Kai Khushroo Bezonjee Capadia
v. Bai Jerbai Hiriibhoy Warden and Anr., (supra) and also that of Bhawanji
Lakhamshi and Ors. v. Himatlal Jamnadas Dani and Ors. (supra) held that
F
if the conduct proves a relationship of landlord and tenant then the tenant G
is entitled to the consequent protection under law.
It was further submitted that the appellant is not entitled to usurp
jurisdiction of the High Court under Art. 226 of the Constitution of India to
issue a mandamus not to renew the licence and that the High Court ought
not to have entered into this aspect even before the concerned authority H
788
SUPREME COURT REPORTS [1005] SUPP. 4 S.C.R.
A expresses its mind as to whether the licence issued is liable to be cancelled
or not. Therefore. the High Court is in error in pre-judging the issue.
Concluding his arguments, Mr. L.N. Rao submitted that the appellant is
a statutory tenant on the basis of the recitals of the lease agreement wherein
the property leased out was not a vacant site alone. Even at the time of the
B agreement, there was a shed put up by the appellant pursuant to his earlier
agreement of tenancy. Hence, although the Schedule mentions as vacqnt land
the recitals clearly mention the presence of shed and hence the appellant has
raised the plea of statutory tenancy.
Mr. R. Sundaravardan, learned senior counsel appearing for respondent
C No.1 made the following submissions:
It is contended that the use of the word "rent" does not lead to an
inference of a fresh concluded contract in the absence of an offer and
acceptance of a fresh contract which are lacking in the instant case. The
D landlord has expressly and unequivocally manifested his intention that whatever
amount that was received by him after the efflux of time the lease concerned
was only towards damages for use and occupation and not towards rent.
According to the learned senior counsel, the term ''right" has to be
construed as only a legal right and not a right to continue on the land without
E the consent of the landlord as the tenant. The word "right" is used in Rule
153(1 )(i) of the Petroleum Rules. 1976 only to mean a legal right to continue
on the land. It was submitted that the term "juridical possession" or "litigious
possession" do not connote a valid legal right to continue in possession
within the meaning of Rule 153 of the Petroleum Rules, 1976. All occupation
without consent is wrongful occupation. According to him, reference to Kai
F Khushroo Bezonjee Capadia v. Bai Jerbai Hi1jibhoy Warden and Anr. (supra)
(
is not apposite to the facts of the case. Instead in Bhawanji lakhamshi and
Ors. v. Himatlal .Jamnadas Dani and Ors. (supra), the observations of Patanjali
Shastri, J. in the judgment of Kai Khushroo Be:c:onjee Capadia v. Bai Jerbai
Hirjibhoy Warden and Anr .. (supra) were relied on. The judgment in the case
G of Saleh Bros. v. K Rajendran and Anr., AIR (1970) Madras 165 refers to
consensus of judicial opinion as to present controversy being in favour of
the landlord and in turn refers to Karmani Industrial Bank ltd v. The
Province of Bengal and Ors., AIR (1951) SC 285 to show that the user of the
word "rent" does not conclude the matter and that the judgment in the case
of Kai Khushroo Bezonjee Capadia v. Bai .!erhai Hi1_jibhoy Warden and Anr.,
H (supra) should be confined to the facts of the case vide paragraphs 12 to 18
I I
-
CALBERT MORRIS 1· K. CHANDRASEKARAN [LAKSHMANAN, J.] 789
at page 170 of Saleh Bros. v. K. Rajendran and Anr., (supra) and the latter A
paragraph referring to the unifonnjudicial opinion of the High Courts of India.
The Federal Court judgment turned upon the facts of the case; the landlord
was pitted against the main lessee and an official receiver who threatened to
take possession and, therefore, he had no option but to take the sub-lessee
as a lessee.
B
Replying to the argument of Mr. L.N. Rao, in regard to the statutory
protection, Mr. R. Sundaravardan submitted that there is no question of any
statutory protection in this case as the term of the lease deed in question
which is in effect a continuation of original lease of 1984 makes it abundantly
clear that what was leased out was only a vacant site to put up a petrol bunk C
with accessory constructions thereon. The mention of a small shed in the
current lease which belongs to the lessee himself cannot be said to be the
building of the landlord. The basic and dominant object of the lease is to
effect a petrol bunk at the instance of the lessee which could be achieved by
·•· · lease of vacant site only.
Mr. Mukul Rohtagi, learned senior counsel appearing for respondent
No.2-Thc Hindustan Petroleum Corporation Limited, invited our attention to
the Preamble of the Petroleum Act, 1934 which reads as under:
D
"An Act to consolidate and amend the law relating to the import,
transport, storage, production, refining and blending of Petroleum." E
For effectuating the purpose of the said Act, the Petroleum Rules, 1976
have been framed.
For the purposes of storing petroleum in tank(s), an applicant has to
apply, under Rule 144 of the Petroleum Rules, 1976, to the District authority F
with two copies of the site plan showing the location of the premises proposed
to be licenced for a certificate to the effect "that there is no objection to the
applicant receiving a licence for the site proposed". The District Authority is
thus required to consider and grant no objection ce1tificate after considering
the suitability of the site proposed.
G
Under Rule 153(1) of the Petroleum Rules, 1976, every licence granted
under these Rules shall stand cancelled, if the licensee ceases to have any
right to the site for storing petroleum. The purpose of Rule 153(1) is that the
licence should be cancelled once the licensee is evicted from the site. The
authority, while exercising its power under Rule 153 of the Petroleum Rules, H
790
SUPREME COURT REPORTS 12005] SUPP. 4 S.C.R.
A 1976. is not required to consider and decide whether the licensee is in rightful
possession or not. The purpose of obtaining the licence and the "No Objection
Certificate", under the Petroleum Rules, has to be understood keeping in mind
the object and purpose of the Petroleum Act.
It was submitted that to invoke Rule 153, the right to use the site and
B possession of the licensee should have ceased/come to an end. In this case,
however, the licensee is still in possession and is not liable to be evicted,
without following due process of law.
It was further submitted that the issue whether the licensee has any
statutory protection, is not required to be decided in the proceedings under
C Section I 53( I) of the Petroleum Rules, 1976. Admittedly, the designated
authority under the Petroleum Rules is not competent to decide whether the
licensee is a protected tenant or whether the notice to quit has been validly
issued. The term "right'' as used in Rule 153(1) cannot be construed as only
a legal right, as alleged by the first respondent. The purpose and object of
D the Petroleum Act and the Rules framed thereunder is not to empower the
authorities designated therein, to determine whether the licensee has a legal
right or not.
The first respondent/landlord has no role whatsoever or locus standi to
contest the present proceedings. The present dispute arises only between the
E authority designated under the petroleum Rules and the licensee.
F
G
H
It was submitted that the first respondent by withdrawing the suit of
eviction and accepting the further rent has impliedly permitted the appellant
to continue as a tenant and further affinned the tenancy. The possession/right
to the site, of the appellant, on the said site hence continues.
It was submitted that the Federal Court in the case of Kai Khushroo
Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden and Anr., (supra) held as
under:
" .... If now the landlord accepts rent from such person or otherwise
expresses assent to the continuance of his possession, a new tenancy
comes into existence as contemplated by Section l 16 of the Transfer
of Property Act, and unless there is an agreement to the contrary,
such tenancy would be regarded as one from year to year or from
month to month in accordance with the provisions of Section 116 of
the Act."
C. ALBERT MORRIS v. K. CHANDRASEKARAN [LAKSHMANAN. J.] 791
Reliance was placed on the judgment of this Court in Bhawanji A
Lakhamshi and Ors. v. Himatlal .Jamnadas Dani and Ors. (supra) wherein the
aforementioned passage was referred to, had affirmed the ratio laid down by
the Federal Court in the case of Kai Khushroo Bezonjee Capadia v. Bai
.Jerbai Hirjibhoy Warden and Anr (supra).
Mr. Ashok Bhan, learned counsel appearing for respondent No.3 B
submitted that the licence was granted on 30.11.1984 according to the
procedures and Rules as laid down in the Petroleum Act and on the basis of
"No Objection Certificate" dated 6.7.1984 which was issued by the Additional
District Magistrate, Pondicherry vide Certificate No. 4834/84/F. It was submitted
that the third respondent does not have the jurisdiction to enquire into C
contractual intricacies amongst third parties. The Division Bench of the High
Court granted interim stay of the order dated 11.2.2002 passed by the single
Judge. Subsequently, the third respondent stayed its earlier order dated
8.5.2002. The writ appeal was finally disposed of on 17.10.2003 upholding the
order of the single Judge. In pursuance of this order, the third respondent
cancelled the licence on 17.12.2003. Against the order passed by the Division D
Bench, the appellant preferred this appeal wherein this Court granted stay of
the operation of the judgment and order dated 7.10.2003 of the High Court.
Therefore, the third respondent vide another order dated 9.2.2004 stayed its
earlier order dated 17.12.2003. It was further submitted that the disputes are
between the appellant and respondent No.1. As per the Petroleum Rules, E
1976, the third respondent is the licensing authority. He shall grant such
licence only on receipt of a "No Objection Certificate" from the District
Authority who happens to be the Additional District Magistrate. The third
respondent does not have the jurisdiction to go into the legalities and rights
of the other third parties. It confines its domain to the objections of the
District Authority. The question of right to the site in dispute is pendente lite F
and the third respondent is only following the order passed by the Courts.
In view of the submissions made, learned counsel pleaded that this Court may
pass such orders as deemed fit in the interest of justice and equity.
We have carefully considered the rival submissions. We have been
taken through the pleadings, the annexures, the documents filed along with G
the appeal and the judgments of the High Court.
Though the arguments of the learned senior counsel appearing for the
appellant are attractive on the first blush yet on a careful reconsideration of
the same, it has no merits. The judgments cited by the learned senior counsel H
792
SUPREME COURT REPORTS (2005] SUPP. 4 S.C.R.
A appearing for the appellant are not only distinguishable on facts but also on
law. Much argument was advanced on the receipt of the rent by the landlord
after the cancellation of the lease. The consensus of judicial opinion in this
country is that a mere continuance in occupation of the demised premises
after the expiry of the lease, notwithstanding the receipt of an amount by the
quondam landlord would not create a tenancy so as to confer on the erstwhile
B tenant the status of tenant or a right to be in possession. In this context, we
may refer to judgment of this Court in Raptakos· Brett & Co. ltd. v. Ganesh
Property, [ 1998] 7 SCC 184. In paragraph 13 of the said judgment, this Court
held as under:
c
D
"Jn view of the aforesaid settled legal position, it must be held
that on the expiry of the period of lease, the erstwhile lessee continues
in possession because of the law of the land, namely that the original
landlord cannot physically throw out such an erstwhile tenant by
force. He must get his claim for possession adjudicated by a competent
Court as per the relevant provisions of law. The status of an erstwhile
tenant has to be treated as a tenant at sufferance ·akin to a trespasser
having no independent right to continue in possession."
The following judgments may also be beneficially looked into in suppol1
of the above submission:
E
The judgment in Saleh Bros. v. K. Rajendran and Anr., (supra) which
deals with the receipt of rent subsequent to the notice determining lease and
pending adjudication suit and as to whether receipt of rent by itself amounts
to waiver. In paragraphs 12, 19,20 & 31, this Court held as under:
"Para 12. The receipt of rent may only create a presumption and
F
cannot by its own force amount to a waiver. Section 113 consists of
two limbs: (a) the express or implied consent of the person to whom
notice is given and (b) "the act of the person giving the notice
showing the intention to treat the lease as subsisting". In order to
constitute a waiver, both the limbs must concurrently operate, which
G
H
means," that an act by itself and of its own force. without reference to
the intention of the parties, cannot bring about a waiver. So much is
quite clear from the plain language of the section, which embodies the
basic principles, and I find no justification for reading the Illustrations
as being repugnant to the section. Every effort should be made to
interpret the Illustration in conformity with the main section. The
principle underlying Section 116 of the Act will also apply in applying
C. ALBERT MORRIS v. K. CHANDRASEKARAN [LAKSHMANAN. J.] 793
Section 113 as this is also a case of continuance of the lease restoring A
the old tenancy.
Para 19-I shall next refer to another recent decision of the Supreme
Court, in (1968) 2 Andh WR (SC) 42: (1968) 2 SCJ 291: ( 1968) 2 Mad
LJ (SC) 42 = (AIR 1968 SC 4 71 ). In that decision, too, the Supreme
Court pointed out that under Section 113 of the Transfer of Property B
Act the act which operates as a waiver must show an intention to treat
the lease as subsisting and other party's consent, express or implied
therefor. In that case the tenants, who were holding over, issued, on
12th August, 1953, a notice to the landlord of their intention to vacate
the premises on 3 lst August, 1953. But by their letter, dated 26th
August they withdrew that notice. The landlord did not agree to the C
withdrawal of the notice and insisted that the lease had been determined
under Section 111 (h) of the Transfer of Property Act Dealing with
the question of waiver, the Supreme Court observed as follows:-
"Clearly Section 113 contemplates waiver of the notice by any act on D
the part of the person giving it, if such an act shows an intention to
treat the lease as subsisting and the other party gives his consent... ..
express or implied therefor. The law under the Transfer of Property
Act on the question in hand is not different from the law in England.
Once a notice is served determining the tenancy or showing an
intention to quit on the expiry of the period of the notice, the tenancy E
is at an end, unless with the consent of the other party to whom the
notice is given the tenancy is agreed to be treated as subsisting."
Para 20-"The question therefore is, quo animo the rent was received,
and what the real intention of both parties was?"
Para 3-The decision in Kai Khurshroo v. Bai Jerbai, ( 1949) FCR 262
= (1949) FLJ 168 =AIR 1949 FC 124, turned upon the peculiar facts
of that case and there was a difference of opinion, Patanjali Sastri, J.,
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as he then was, taking a different view. There, after notice to quit,
defendants 2 and 3 who claimed to be sub-tenants insisted upon
continuing in possession and paid the rent month after month. The G
majority took the view that the landlord had obvious motive in receiving
the payments of rent after a particular period i.e. the appointment of
a receiver of the property of the mortgagor at the instance of his
mortgagee. Having regard to the uniform view taken in all the decisions,
both Indian and English, I am not inclined to interpret this decision H
794
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.
,
A
of the Federal Court as an authority for the position that the payments
and receipt of rent as such in every circumstance would amount to
waiver, whatever may be the circumstances of the case and the intention
of the lessor".
In the case of Bhawanji Lakhamshi and Ors. v. Himatlal Jamnadas
B Dani and Ors. (supra), this Court observed as under:
"The act of holding over after the expiration of the term does not
create a tenancy of any kind. If a tenant remains in possession after
the determination of the lease, the common law rule is that he is a
tenant on sufferance. A distinction should be drawn between a tenant
C
continuing in possession after the determination of the term with the
consent of the landlord and a tenant doing so without his consent.
The former is a tenant at sufferance in English Law and the latt¢r a
tenant holding over or a tenant at will. In view of the concluding
words of section 116 of the Transfer of Property Act, a lessee holding
D
E
F
over is in a better position than a tenant at will. The assent of,the
landlord to the continuance of possession after the determination of
the tenancy will create a new tenancy. What the section contemplates
is that on one side there should be an offer of taking a new lease
evidenced by the lessee or sub-lessee remaining in possession of the
property after his term was over and on the other side there must be
a definite consent to the continuance of possession by the iandlord
expressed by acceptance of rent or otherwise. In Kai Khushroo
Bezonjee Capadia v. Bai Jerbai Hzijibhoy Warden and Anr. the Federal
Court had occasion to consider the question of the nature of the
tenancy created under Section I 16 of the Transfer of Property Act and
Mukherjea J. speaking for the majority said, that the tenancy which
is created by the "holding over" of a lessee or under-lessee is a new
tenancy in law even though many of the terms of the old lease might
be continued in it, by implication; and that to bring a new tenancy
into existence, there must be a bilateral act. It was further held that
the assent of the landlord which is founded on acceptance of rent
G
must be acceptance of rent as such and in clear recognition of the
tenancy right asserted by the person who pays it.