TMI Blog2005 (10) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... - The Hindustan Petroleum Corporation Ltd. The said dealership is being carried on in the leased site belonging to the first respondent. The Government of Pondicherry granted No Objection Certificate under Rule 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 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 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 le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 any enquiry into the right of the lessee to hold the property and the same is not a bar to the writ petition. Consequently, the Division Bench confirmed 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. 5. 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 cancellation of licence. - (1) Every licence granted under these rules shall - (i) stand cancelled, if the licensee ceases to have any right to the site ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 secured by a person by law, a legally enforceable claim, a recognised and protected interest the violation of which is wrong, the interest, claim or 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 Rules. 6. Mr. L.N. Rao further submitted that the appellant is a tenant holding over and that the conduct of the first respondent establishes acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of tenancy. Hence, although the Schedule mentions as vacant land the recitals clearly mention the presence of shed and hence the appellant has raised the plea of statutory tenancy. 8. Mr. R. Sundaravardan, learned senior counsel appearing for respondent 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 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 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 possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the law relating to the import, transport, storage, production, refining and blending of Petroleum. 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 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 certificate after considering the suitability of the site proposed. 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, 1976, is not required to consider and decide whether the licensee is in rightful possession or not. The purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed the ratio laid down by the Federal Court in the case of Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden and Anr. (supra). 12. Mr. Ashok Bhan, learned counsel appearing for respondent No. 3 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 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 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 14. The following judgments may also be beneficially looked into in support of the above submission: 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 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 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 emb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 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 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 latter a tenant holding over or a tenant at will. In view of the concluding words of section 116 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad v. State of A.P. and Ors., AIR1996SC140, in paragraphs 8 9 this Court observed as under: Para 8 - Tenant at sufferance is one who comes into possession of land by lawful title, but who holds it by wrong after the termination of the term or expiry of the lease by efflux of time. The tenant at sufferance is, therefore, one who wrongfully continues in possession after the extinction of a lawful title. There is little difference between him and a trespasser. In Mulla's Transfer of Property Act (7th Edn.) page 633, the position of tenancy at sufferance has been stated thus: A tenancy at sufferance is merely a fiction to avoid continuance in possession operating as a trespass. It has been described as the least and lowest interest which can subsist in reality. It, therefore, cannot be created by contract and arises only by implication of law when a person who has been in possession under a lawful title continues in possession after that title has been determined, without the consent of the person entitled. A tenancy at sufferance does not create the relationship of landlord and tenant. At page 769, it is stated regarding the right of a tenant holding over thus: The act of ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; in the first part of Rule 13. If, however, the applicant for the licence is not the owner, there is no question of his showing title to the property and the only requirement of the law is to produce to the satisfaction of the authority documentary evidence with regard to his lawful possession of the property. The word 'lawful', therefore, naturally assumes significance in the second part while it was not even necessary in the first part. The fact that after expiry of the lease the tenant will be able to continue in possession of the property by resisting a suit for eviction, does not establish a case in law to answer the requirement of lawful possession of the property within the meaning of Rule 13. Lawful possession cannot be established without the concomitant existence of a lawful relationship between the landlord and the tenant. This relationship cannot be established against the consent of the landlord unless, however, in view of a special law, his consent becomes irrelevant. Lawful possession is not litigious possession and must have some foundation in a legal right to possess the property which cannot be equated with a temporary right to enforce recovery of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be in possession after the termination of the lease; (2) the lessor or his representative should accept rent or otherwise assent to his continuing in possession. The use of the word 'otherwise' suggests that acceptance of rent by the landlord has been treated as a form of his giving assent to the tenant's continuance of possession. There can be no question of the lessee continuing in possession until the lease has expired, the context in which the provision for acceptance of rent finds a place clearly shows that what is contemplated is that the payment of rent its acceptance should be made at such a time in such a manner as to be equivalent to the landlord assenting to the lessee continuing in possession. In the case of Konchada Ramamurty Subudhi (dead) by his L.Rs. v. Gopinath Naik and Ors., [1967]2SCR559, this Court held as under: Where the suit for ejectment of tenant after termination of tenancy, having been dismissed, a compromise decree was passed in the appellate court, enabling the decree-holder, by its terms to execute the decree if the judgment-debtor failed to pay rent for any three consecutive months. Held the compromise deed d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady issued and that might be issued in future should not be treated or considered as consent from my client for your occupying the schedule mentioned property. We are, therefore, of the opinion that mere acceptance of rent by the landlord-Its respondent herein from the tenant in possession after the lease has been determined either by efflux of time or by notice to quit would not create a tenancy so as to confer the erstwhile tenant the status of a tenant or a right to be in possession. We answer this issue accordingly. 15. We shall now consider whether the appellant is a statutory tenant on the basis of the recitals of the lease agreement. It is seen from the Schedule to the Plaint in O.S. No. 569 of 2004 filed by the landlord that only a vacant site was lease out. The Schedule reads thus: Schedule of Property In Pondicherry RD, outgrew Sub.RD., Thattanchavady Revenue Village, the vacant site covering an extent of OH. 10A. 28 CA (approximately 11050 sq. ft.) within R.S. No. 242/2 pt. And bounded on the north by land belonging to Small Industries Service Institute, Extension center, on the West by house and land belonging to Divert Kannagi, on the South by Pondy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voked. The said Act was enacted on 7.6.1969 to regulate the letting of residential and non-residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the Union Territory of Pondicherry. The Building has been defined as under: 2(4) building means any building or hut or part of a building or hut, let or to be let separately for residential or non-residential purposes and includes- (a) the garden, grounds and out-houses, if any, appurtenant to such building, hut or part of such building or but and let or to be let along with such building or hut; (b) any furniture supplied by the landlord for use in such building or hut or part of a building or hut, but does not include a room in a hotel or boarding house; The term landlord and tenant have also been defined. The terms landlord includes the person who is receiving or is entitled to receive the rent of a building. The term tenant means any person by whom or on whose account rent is payable for a building. This apart, the landlord has filed O.S. No. 569 of 2004 with the following prayer in the plaint which reads thus: (i) directing fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary records not only relating to his ownership but also regarding his possession. It is implicit, that the owner having a title to the property, if he can satisfy the licensing authority with regard to his possession also, will indeed be in 'lawful possession', although the word 'lawful' is not used in the first part. It is in that context that the word 'possession' is even not necessary to be qualified by 'lawful' in the first part of Rule 13. If, however, the applicant for the licence is not the owner, there is no question of his showing title to the property and the only requirement of the law is to produce to the satisfaction of the authority documentary evidence with regard to his lawful possession of the property. The word 'lawful', therefore, naturally assumes significance in the second part while it was not even necessary in the first part. The fact that after expiry of the lease the tenant will be able to continue in possession of the property by resisting a suit for eviction, does not establish a case in law to answer the requirement of lawful possession of the property within the meaning of Rule 13. Lawful possession cannot be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be the building of the landlord in order to attract the statutory protection of the Rent Control Act. This issue is, therefore, answered against the tenant. This Court in the case of Bhuneshwar Prasad and Anr. v. United Commercial Bank and Ors. (supra) considered the case of an agreement creating a fresh tenancy within the meaning of Section 116 of the Transfer of Property Act and held that it can be inferred from the conduct of the parties. This Court approved the judgment in Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden and Anr. (supra) and distinguished on facts the judgment of this Court in Bhawanji Lakhamshi and Ors. v. Himatlal Jamnadas Dani and Ors. (supra). In paragraph 7 of the said judgment, this Court observed as under: Para 7 - Mr. Sanyal, learned Senior Counsel appearing for the appellants contends that Section 116 of the Transfer of Property Act would not be attracted merely on acceptance of rent. Reliance is placed upon a decision of the Federal Court in Kai Khushroo Bezonjee Capadia v. Bai Jerbai Hirjibhoy Warden. We agree that to bring a new tenancy into existence within the meaning of Section 116, there should be an agreement as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to rent or an amount which was fixed as standard rent did not amount to acceptance of rent from a lessee within the meaning of Section 116 of the Transfer of Property Act. The present is not a case of acceptance of amounts equivalent to rent or amounts fixed as standard rent but acceptance of increased rent. It was also observed that: (SCC p. 394, para 13) We do not say that the operation of Section 116 is always excluded whatever might be the circumstances under which the tenant pays the rent and the landlord accepts it. The whole basis of Section 116 is that a landlord is entitled to file a suit for ejectment and obtain a decree for possession and, therefore, his acceptance of rent after expiry of lease is an unequivocal act referable to his desire to assent to the tenant continuing possession. It would be absent in cases where there are restrictions as contemplated by rent laws. In such cases, therefore, it is for the tenant where it is said that the landlord accepted the rent not as a statutory tenant but only as a legal tenant indicating his assent to the tenant's continuing possession, to establish it. 19. The argument of Mr. L.N. Rao, learned senior counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to in this Rule has necessarily to be regarded as right which is in accordance with law and the right to the site must be one which is capable of being regarded as lawful. We have already referred to Bhawanji Lakhamshi and Ors. v. Himatlal Jamnadas Dani and Ors. (supra) wherein this Court held that the act of holding over after the expiration of the term does not create a tenancy of any kind. A new tenancy is created only when the landlord assents to the continuance of the erstwhile tenant or the landlord agrees to accept rent for the continued possession of the land by the erstwhile tenant. The contention of Mr. L.N. Rao that the landlord's assent should be inferred from the conduct of the landlord who had filed the suit for ejectment, but did not pursue the same, has no force. This suit was withdrawn with liberty to file a fresh suit on 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 asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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