1. Both these writ petitions have arisen out of the same order dated 16.8.2010 passed by Rent Control and Eviction Officer, Jhansi (hereinafter referred to as "RECO") in Case No. 7 of 2005 under Section 29-A (5) of U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as "Act, 1972") and therefore, have been heard together and are being decided by this common judgment.
2. The facts in brief are as under.
3. In respect to a piece of land measuring about 39375 sq. ft. situated at Jhansi Lucknow Road, Jhansi, owned by M/s R.B. Ganga Sahai Musuddilal, a partnership firm having its partners, namely, Sri Shyam Sunder Lal and Sri Brij Mohal Lal lease deed dated 21.12.1963 was executed in favour of M/s Burmah Shell Oil Storage and Distributing Company of India Limited (hereinafter referred to as "Burmah Shell") for letting out the aforesaid land for a period of 25 years with effect from 1.11.1963 on payment of monthly rent of Rs. 30/- with an option of renewal for a further period of 20 years . The Burmah Shell constructed underground storage tank and installed other equipments besides constructing a building thereon in furtherance of purposes for which the land was leased out, namely, establishment of a Pumping Plant.
4. The Parliament enacted Burmah Shell (Acquisition of Undertakings in India) Act, 1976 (hereinafter referred to as "Central Act, 1976") which came into force on 24.1.1976. All the rights, titles, interests of Burmah Shell in relation to its various undertakings in India stood transferred to and vested in Central Government. Section 4 of Central Act, 1976 provided the effect of such vesting whereby and whereunder, inter alia, all assets, rights, powers, authorities and privileges and all the property, movable and immovable, of Burmah Shell vested in the Central Government. It is not in dispute that by virtue of the provisions of Central Act, 1976, the rights and liabilities of Burmah Shell, in respect to aforesaid leased out land also vested in Central Government. Further by virtue of Section 7 (3) of Central Act, 1976, the lease of tenancy rights got vested in Bharat Petroleum Corporation Ltd. (hereinafter referred to as "BPCL"), a Government Company i.e. petitioner no. 1 in Writ Petition No. 47310 of 2011 (hereinafter referred to as "First Petition").
5. Twenty five years' lease period would have expired on 31.10.1988. Petitioner no. 1 (First Petition) namely, BPCL before expiry of the period of lease, sent a registered notice dated 20.6.1988 to the partners of the firm, exercising option/right of renewal of lease for a further period of 20 years with effect from 1.11.1988. It is said that the notice was served upon Sri Brij Mohan Lal Arora but notice sent to Sri Shyam Sunder Lal Arora was returned with the endorsement that he has died. However, the owners did not take any step nor replied the aforesaid notice.
6. Instead the respondents 1 to 6 (First Petition) filed Suit No. 93 of 2004 seeking ejectment of BPCL from the land in dispute. It was contested by BPCL by filing a written statement. The aforesaid suit is pending in the Court of Civil Judge (Junior Division), Jhansi.
7. Thereafter respondents 1 to 6 (First Petition) submitted an application under Section 29-A (5) of Act, 1972 for determination of annual rent with effect from 1.11.1988. It was registered as Case No. 7 of 2005. The BPCL contested this application by filing written statement. It contended that lease deed/agreement is still continuing, hence no application is entertainable under Section 29-A (5) of Act, 1972.
8. The RCEO i.e. respondent no. 7 (First Petition) however, has taken an otherwise view and following Section 29-A of Act, 1972, has determined the rent of land in dispute at the rate of Rs. 1,47,000/- per annum with effect from 1.1.1989 and BPCL has been directed to pay rent accordingly, to the owners of the land in question.
9. The First Petition has been filed by BPCL challenging the aforesaid order dated 16.8.2010 on the ground that application under Section 29-A of Act, 1972 for determination of rent was not maintainable and, therefore, the impugned order is wholly without jurisdiction.
10. On the contrary, the owners of land in question have filed Writ Petition No. 62317 of 2010 (hereinafter referred to as "Second Petition") assailing the aforesaid order dated 16.8.2010 of RCEO claiming that rent determined is very meagre. It should have been determined on the basis of current market value i.e. date on which application for determination of rent was filed by owners.
11. Sri Prakash Padia, learned counsel appearing for BPCL (petitioner-First Petition) contended, once the Government Company i.e. BPCL had exercised its option of renewal vested under the lease dated 21.12.1963, there was a statutory compulsion for such renewal on the same terms and conditions as contained in the lease deed, and, that being so, the lease deed would have continued till 31.10.2008. Hence no application could have been filed under Section 29-A of Act, 1972 seeking determination of rent in this case. He submitted that in view of Section 5 read with Section 7 of Central Act, 1976 which have overriding effect over the provisions of Transfer of Property Act, 1882 (hereinafter referred to as "Act, 1882") and any other law inconsistent thereto, the petitioners (First Petition) once exercise option of renewal, by operation of law the lease had to be treated renewed and such effect could not have been set at naught by landlord(s) or their representatives by keeping silence over the matter. Reliance is placed on Apex Court's decision in Bharat Petroleum Corporation Ltd. Vs. P. Kesavan and another AIR 2004 SC 2206, which is a three-Judges judgment of Apex Court. He further contended, where the agreement is already continuing and operating, no application under Section 29-A (5) of Act, 1972 would have been maintainable. For the said purpose he drew support from a Full Bench judgment of this Court in Trilok Chand Vs. Rent Control and Eviction Officer 1987 (1) ARC 290 and a Single Judge judgment in Roshan Lal Mittal Vs. Rent Control Eviction Officer 2007 (4) AWC 3174.
12. Sri Kartikeya Saran, learned counsel appearing for the respondents 1 to 6 (First Petition) and for petitioners (Second Petition), on the contrary, submitted that the earlier lease deed/agreement expired on 31.10.1988. There is no renewal thereof. Thus, the application under Section 29-A was rightly filed. Thereunder the owner is entitled to get the rent determined with effect from the date after expiry of the lease deed and such determination has to be made on the basis of prevailing market rate on the date when such application was filed. He also contended that Section 29-A contemplates agreement(s) which is/are executed after enforcement of the said provision and not the agreements which were executed before enactment of Section 29-A. He also placed reliance on Full Bench judgment in Trilok Chand (supra) and contended, there is no fresh agreement executed after enforcement of Section 29-A, and reliance on agreement executed earlier is not permissible.
13. In my view, following three issues need be adjudicated in this matter:
1.Whether the agreement/lease deed dated 21.12.1963 expired on 31.10.1988 or had continued for a further period of 20 years in view of Sections 5 and 7 of Central Act, 1976 and renewal notice sent by petitioner (First Petition)?
2.In case first issue is answered in favour of petitioners (First Petition), whether during the subsistence of lease deed/agreement, application under Section 29-A (5) of Act, 1972 is admissible?
3.The observations of the Full Bench in Trilok Chand (supra) that the agreement referred to in Sub-section 4 of Section 29-A is one which existed prior to coming into force Section 29-A or it refers to an agreement which is executed after the enforcement of Section 29-A and its effect in the present case.
Findings:
14. The Central Act, 1976 has been enacted by Parliament and is referable to its exclusive power of legislation under Seventh Schedule, List-I, Items 43 and 53. The Act, 1882 though is a Central Act but the legislative power is referable to concurrent list i.e. Seventh Schedule, List-III, Item-6. The Act, 1972 is a State Act. The legislative entry attracted is contained in Seventh Schedule, List-II, Item-18. It need not be reminded that Central legislation made in its exclusive power shall prevail over the State legislation in case of any inconsistency between the two vide Article 254 of the Constitution. In view of Section 3 of Central Act, 1976, by operation of law, rights, titles and interests of Burmah Shell in relation to its undertakings in India stood transferred to and vested in Central Government. By virtue of Section 4 of Central Act, 1976, whatever was the liability/ obligations/ rights/ interests etc., vested in Burmah Shell in relation to its undertakings in India, stood substituted by the Government in India. Section 5 of Central Act, 1976 is of much importance and quoted as under:
"5. Central Government to be lessor or tenant under certain circumstances.- (1) Where any property is held in India by Burmah Shell under any lease or under any right of tenancy, the Central Government shall, on and from the appointed day, be deemed to have become the lessee or tenant, as the case may be, in respect of such property as if the lease or tenancy in relation to such property had been granted to the Central Government, and thereupon all the rights under such lease or tenancy shall be deemed to have been transferred to, and vested in, the Central Government.
(2) On the expiry of the term of any lease or tenancy referred to in sub- section (1), such lease or tenancy shall, if so desired by the Central Government, be renewed on the same terms and conditions on which the lease or tenancy was held by Burmah Shell immediately before the appointed day."
(emphasis added)
15. There is a legislative declaration that in respect to any property which was under lease or tenancy rights with Burmah Shell, the Central Government shall be deemed to have become lessee or tenant, on and from the appointed date. The effect of such declaration is that in respect to such property, all the rights under such lease or tenancy shall be deemed to have been transferred to and vested in the Central Government. The provision talks of a deeming clause meaning thereby, by fiction created by legislation, wherever the mention of "Burmah Shell" is there in a lease deed of a document creating tenancy rights, it shall be read as it is "Central Government". The Central Government stepped into the shoes of Burmah Shell to act and to proceed in the same manner as Burmah Shell, and hence, would have acted or could have acted or proceeded so. I need not dwell much on the effect and consequences of a provision having a "deeming clause" but it would be suffice to give reference to a few of such precedents which have made the position clear and are binding on this Court.
16. The word "deemed" is normally used to create a statutory fiction. A provision creating a legal fiction whenever comes for interpretation, the Court has to ascertain the purpose for which fiction is created and thereafter only all those facts and consequences which are incidental or inevitable corollaries for giving effect to the fiction have to be assumed. This is what has been said in Commissioner of Income Tax, Delhi Vs. S. Teja Singh AIR 1959 SC 352. The Court quoted with approval observations of Lord Asquith in East End Dwellings Co. Ltd. Vs. Finsburg Borough Council 1952 AC 109 as under:
"If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so also imagine as real the consequences and incidents which if the putative state of affairs had in fact existed must inevitably have flowed from or accompanied it. ... The statute says that you must imagine a certain state of affairs; it does not say that having done so you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs."
17. A Statute having a deeming clause earlier came to be considered by Privy Council in Commissioner of Income Tax Bombay Presidency Vs. Bombay Trust Corporation AIR 1930 PC 54. It observed that what is implicit in the words must rule whatever may be the general consideration as to what the Legislature was minded or was likely to do. Privy Council was very much emphatic in the aforesaid decision when it observed, when a person is 'deemed to be', sometime the only meaning possible is that whereas he is not in reality that something, the Act of Parliament requires him to be treated as if he was. The use of the word "deemed" normally has the effect to render certain thing which otherwise may not be there. This word is apt to include the obvious, the uncertain, and, the impossible. It is not possible to contradict statutory fiction else the very purpose for which fiction is created may/would stand defeated. Where a deeming provision is made in a statute, the state of things will have to be assumed though such things may not exist and the rights of the parties may have to be determined on such imaginary things.
18. In State of Travancore-Cochin Vs. Shanmugha Vilas Cashewnut Factory AIR 1953 SC 222, the Court said, when a statutory provision creates a fiction, it is first necessary to find out the purpose for which it was created in order to understand the scope and implications of the fiction. Where the Legislature provides that something is to be deemed other than it is, the Court must be careful and see within what points and for what purpose it is to be so deemed.
19. The validity of any provision of Central Act, 1976 has neither been doubted nor up for consideration before this Court but suffice is to mention that it has already been upheld by Kerala High Court in Sankaranarayanan Nambiar Vs. Union of India AIR 1990 Kerala 5 and by Andhra Pradesh High Court in Mustafa Hussain Vs. Union of India and another AIR 1981 AP 283. Hence this Court has to apply the provisions of Central Act, 1976 as they are with full sweep.
20. Coming back to Sections 5 and 7 of Central Act, 1976, I find that substantially the issues in question stand covered therewith. In Bharat Petroleum Corporation Ltd. Vs. P. Kesavan (supra), the Apex Court with reference to Section 5 (1) said in para 13 of judgment that it provides for a legal fiction in terms whereof BPCL became a lessee in respect of a leasehold. A legal fiction must be given its full effect. Sub-section (2) of Section 5 is also imperative in character and must be construed as such. Here is a transfer by operation of law while Act, 1882 applies only to transfer by act of parties and, therefore, a transfer which takes place by operation of law need not meet the requirements of provisions of Act, 1882 or Indian Registration Act, 1908. Section 5, Sub-section (2) of Central Act, 1976 has created a right of renewal to the transferee in terms whereof, in the event of exercise of its option, the existing lease would stand renewed for a further term on the same terms and conditions. Section 7 of Central Act, 1976 empowers the Central Government to vest all rights, titles and interests, liabilities etc. which have transferred from Burmah Shell to it (Central Government), to further vest in Government Company, either on the date of notification or on such earlier or later date, as may be, specified in the notification. It is not in dispute that the Government of India has vested all such rights of Burmah Shell to BPCL. Therefore, whatever in Section 5 (1) and (2) could have been done by the Central Government is equally good and within the power of BPCL. This has further been clarified by Sub-section 3 of Section 7 which reads as under:
"7. (3) The provisions of sub-section (2) of section 5 shall apply to a lease or tenancy, which vests in a Government company, as they apply to a lease or tenancy vested in the Central Government, and reference therein to the" Central Government" shall be construed as a reference to the Government company."
21. Going further, and in this context, the Apex Court in Para 15 of the judgment in Bharat Petroleum Corporation Ltd. Vs. P. Kesavan (supra) said:
"... the appellant herein has expressed its desire to renew the lease, sub-section (2) of Section 5 read with sub-section (3) of Section 7 thereof shall be attracted."
22. In order to complete the reference to statutory provisions of Central Act, 1976, I may refer to one more provision i.e. Section 11 which reads as under:
"11. Effect of Act on other laws.- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act or in any decree or order of any court, tribunal or other authority."
23. Section 11 gives an overriding effect to the provisions of Central Act, 1976 over any other inconsistent law in force for the time being in force including any instrument, decree or order of Court, Tribunal or authority.
24. The cumulative effect of Sections 5 (2), 7 (3) and 11 of Central Act, 1976 would be, that, if the Government Company (i.e. BPCL in the present case) expresses its desire to renew the lease, the same would stand renewed on the same terms and conditions. It is in this context, in para 18 and 19 the Court in Bharat Petroleum Corporation Ltd. Vs. P. Kesavan (supra) said:
"18. We, therefore, are of the opinion that the legislative scheme contained in the said Act leads to only one conclusion that if Government company expresses its desire to renew the lease, the same would stand renewed on the same terms and conditions.
19. Section 5(2) and Section 7(3) of the Act are required to be given its purposive meaning, having regard to the object and purport the statute seeks to achieve. The Central Government by reason of the provisions of the said Act acquired running business undertakings dealing in distribution and marketing of petroleum products. The leases or tenancy for outlets are, therefore, continued to be kept with the Central Government or the Government company, as the case may be, so that no let or hindrance is placed in the matter of distribution of the products from established retails outlets, unless alternate arrangements are made. ... In that view of the matter, it is difficult to construe Section 5 (2) of the Act as not laying down a law not contemplating automatic renewal of the lease."
25. The above observations apply with full force in the present case. In view of above, I have no hesitation in observing, if the petitioner no. 1 (First Petition) i.e., BPCL has exercised option of renewal of lease in terms of lease deed dated 21.12.1963, by operation of law the lease deed stood renewed on the same terms and conditions and that being so, there would/could be no occasion for the landlords to approach RCEO for determination of rent for the reason that terms and conditions in such case shall be determined by lease itself.
26. The only thing which has to be seen, whether such an option was actually exercised or not. Para 8 of lease deed giving option of renewal to lessor reads as under:
"8. If the Lessees shall be desirous of renewing this present lease and of such desire shall have given to the Lessor not less than two months' notice in writing prior to the expiration hereof the Lessor shall grant to them a renewed lease of the said premises for a further period of 20 years to commence from the date of expiry hereof at the same rent and upon the same terms and conditions in all respect as are reserved and contained herein (excluding only this present covenant for renewal)."
27. It has not been disputed that such a notice was actually given by BPCL before expiry of lease deed. Registered notice sent on 20.6.1988 to the firm through its partner, was actually served upon one of the partners. It, thus, cannot be said that BPCL has not exercised its option of renewal in terms of agreement/lease deed which contemplates two months notice prior to expiration of the terms of lease deed.
28. Copy of renewal letter dated 20.6.1988 sent by BPCL is on record as Annexure 2 (First Petition). The averments in this regard have been made in para 8 of First Petition and the same have been replied in para 3 of the counter affidavit as under:
"3. That the contents of Para 8 and 9 of the writ petition are wrong as stated, hence denied. Further, it is stated that the alleged notice provided by the Corporation does not show any proof of receipt by the father of the petitioners. In any case, the Corporation has failed to act as if the lease was renewed, because no rent has been paid to the petitioner or deposited with the court since 1988.
It is further submitted that a lease deed cannot be renewed automatically as per the several orders by the apex Court without having an instrument coherently prepared and signed."
29. Before RCEO, the BPCL has pleaded that registered letter sent to Sri Brij Mohan Lal Arora was received by him on 20.6.1988 but one sent to Sri Shyam Sunder Lal Arora was received back with the endorsement that he is informed to have died. In the impugned order, the RCEO has recorded a finding in favour of BPCL about the said letter dated 20.6.1988 as under:
^^f}rh; i{k }kjk Jh ';ke lqUnj yky ,oa c`teksgu yky dks uksfVl fjU;qoy dh uksfVl (Lessor) dks 20&6&88 dks jftLVMZ Mkd ls Hksth x;h tks fd yht ds ,d i{k c`teksgu vjksjk dks izkIr gq;h rFkk ';ke lqUnj vjksjk ds e`r gksus dh lwpuk feyhA bl izdkj izekf.kr gS fd mDr uksfVl dk izFke i{k }kjk dksbZ izfrokn ugha fd;k x;k gSA foi{kh }kjk MhM dh 'krksZa dk ikyu djrs gq, uksfVl nh x;h^^ English Translation by the Court:
"The notice of renewal was sent by second party to Lessor namely, Sri Shyam Sunder Lal and Brij Mohan Lal by registered post on 20.6.1988, which was received by one party of lease Brij Mohan Arora while Shyam Sunder Arora was reported to be dead. Thus it is evident that the said notice was not objected to by the first party. Notice was given by opposite party complying with the conditions specified in the deed."
(emphasis added)
30. That being so, in view of Apex Court's decision in Bharat Petroleum Corporation Ltd. Vs. P. Kesavan (supra), the lease deed would be deemed to have renewed by operation of law. The mere fact that lessor(s) did not take any action for renewal would make no difference. The RCEO unfortunately has proceeded as if it was necessary for the lessor(s) to take steps for renewal of lease otherwise it would not have been deemed to have renewed and this view of RCEO is clearly illegal and contrary to the dictum of the Apex Court in Bharat Petroleum Corporation Ltd. Vs. P. Kesavan (supra).
31. Once it is clear that the lease deed dated 21.12.1963 after exercise of option of renewal by BPCL (petitioner no. 1-First Petition), stood renewed for a further period of 20 years, the rent payable by BPCL to the owner of land would be in terms of mutual agreement, namely, the lease deed dated 21.12.1963 by virtue of Sub-section 4 of Section 29-A. Hence the question of determination of rent under Sub-section (5) could not have arisen. For taking this view, I am fortified from the decision of this Court in Roshan Lal Mittal (supra) where, in para 22 and 23 of the judgment, the Court said:
"22. ... on a plain reading of Sub-section (5) of Section 29A, the intention of the Legislature is clear that fixation of rent under Section 29A shall be applicable from the date of expiration of term for which the land was let out or from the commencement of Section 29A of the Act whichever is later. ...
23. Three situations can be visualized--(i) where a lease has expired before the commencement of Section 29A of the Act, (ii) where a lease has expired after commencement of Section 29A of the Act, and (iii) where a lease has not yet expired and Section 29A of the Act has come into operation. Situations (i) and (ii) are covered within the ambit and scope of Section 29A of the Act. But in my opinion, Section 29A of the Act is not attracted in situation (iii), as is the present case, on a plain and simple reading of Sub-section (5) of Section 29A of the Act. Otherwise, a lessee, for whose benefit Section 29A of the Act has been enacted, would be placed in a worst position to pay the enhanced rent proportionate to the prevailing market value of the land on the date of commencement of Section 29A of the Act and not at the agreed rate."
(emphasis added)
32. In my view, situation (3) referred to in para 23 of judgment in Roshan Lal Mittal (supra) applies to the facts of the present case also. The Court has also said that liability to pay enhanced rent would accrue on the date on which the original agreement expire. In the present case, it cannot be said that the original agreement had expired on 31.10.1988, on account of exercise of option of renewal for 20 years by the Government Company and renewal of lease deed by operation of law for the said period. In that context, the agreement in the present case would have expired only on 31.10.2008. In this view of the matter, I have no hesitation in holding that there was no occasion for the petitioners (Second Petition) and respondents 1 to 6 (First Petition) to invoke jurisdiction of RCEO for determination of rent with effect from 1.11.1988 under Section 29-A (5) of Act, 1972.
33. The Issues No. (1) and (2) both are answered in favour of petitioners (First Petition) and the respondent-BPCL (Second Petition).
34. So far as Issue No. 3, as formulated above, is concerned, I need not labour on this aspect since this has also been clarified by this Court in Roshan Lal Mittal (supra) as is clear from para 15 of judgment which reads as under:
"15. ... The said observation of the Full Bench should be understood in the background facts of the case. Facts were that the lease had already expired in the year 1958. In that fact situation the aforesaid objections were made. It has taken care to observe that Sub-section (5) has made a provision "that the terms of the original lease have been kept undisturbed and the rights of parties thereunder are kept unimpaired." in the case of an unexpired lease, the mutually agreed rent is always there and this supports the view which is proposed in the judgment that in such cases an application under Sub-section (5) shall not be maintainable."
35. Be that as it may, and even otherwise, the aforesaid issue would have no impact upon the present case where the tenant/lessee is a person, legal or natural, whose agreement and right of renewal is governed by a Central Act which has overriding effect over any other statute. Nothing in Section 29-A of Act, 1972 can be read and interpreted in a manner so as to give it effect over and above the specific provisions of Central Act, 1976 i.e. Section 5 (2), 7 (3) and the consequences flowing therefrom. It is the Central Act, 1976 which shall prevail over the otherwise inconsistent provisions of State Act i.e. Act, 1972 and, therefore, so far as the present case is concerned, the effect and consequences which flow to govern the relation of lessor(s) and lessee in the light of provisions of Central Act, 1976, the same can neither be whittled down nor be otherwise affected by referring to the State Act, namely, Act, 1972.
36. The result of above discussion is that the impugned order passed by RCEO dated 16.8.2010 cannot sustain, being wholly without jurisdiction.
37. In view of above, writ petition no. 47310 of 2011 (First Petition) is hereby allowed and writ petition no. 62317 of 2010 (Second Petition) is hereby dismissed. Impugned order dated 16.8.2010 (Annexure 6 to Writ petition no. 47310 of 2011) is hereby quashed.
38. Parties shall bear their own cost.
Dt. 5.9.2012 PS