Case Note & Summary
The litigation arose out of a lease deed executed on 29.10.1969 between Modern India Limited, as lessor, and Burmah Shell Oil Storage and Distributing Company of India Limited, as lessee, for a plot of land admeasuring 1800 square yards at Mahalaxmi, Mumbai, for a period of 35 years from 01.11.1969 to 31.10.2004. The lease deed contained no renewal clause and required surrender of the premises upon expiry. Following the enactment of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976, the undertaking of Burmah Shell vested in the central government and later in Bharat Petroleum Corporation Limited (BPCL), a government company, which became the lessee. Before expiry of the lease, the lessor wrote to BPCL on 15.06.2002 inquiring about renewal. BPCL responded on 25.03.2004 asserting a statutory right to renew the lease for another 35 years under Sections 5 and 7 of the 1976 Act. The lessor disputed this and filed a suit for eviction and mesne profits in the Small Causes Court, which was dismissed on 15.01.2007. The lessor then filed an appeal, which was dismissed by the Appellate Bench on 03.12.2010, affirming the statutory renewal right. Meanwhile, the lessor filed Writ Petition No.1584 of 2007 challenging the constitutional validity of Sections 5 and 7 of the 1976 Act and seeking quashing of the renewal letter and possession. The High Court on 14.10.2008 held the constitutional challenge covered by a previous judgment, leaving only the challenge to the renewal letter and possession. The writ petition was admitted on 09.02.2009 with an interim direction for BPCL to pay agreed rent pending dispute. The civil revision application was filed against the appellate order and was admitted on 16.03.2011, tagged with the writ petition. Subsequently, the Burmah Shell Act was repealed by the Repealing and Amending Act No.23 of 2016. Mumbai Metro Rail Corporation Limited sought intervention for temporary possession of part of the land for metro construction, and the High Court ordered deposit of compensation every six months. The lessor filed interim applications seeking directions for BPCL to deposit compensation received from MMRCL and to vacate for breach, and another application seeking restraint on BPCL from alienating the premises during strategic disinvestment. At the final hearing, the lessor argued that BPCL's renewal letter was invalid as no reasons were furnished; BPCL contended that no live issue remained in the writ petition after dismissal of the appeal and that there were concurrent findings by two courts. The judgment excerpt ends before the final decision, so the final outcome is not available in the provided text.
Headnote
A) Constitutional Law - Validity of Acquisition Legislation - Constitutional challenge to Burmah Shell (Acquisition of Undertakings in India) Act, 1976 - Burmah Shell (Acquisition of Undertakings in India) Act, 1976, Sections 5 and 7 - The High Court on 14.10.2008 observed that the constitutional validity of the provisions was covered by Trade Centre Developers and Builders Private Limited v. Union of India, AIR 1985 Bombay 4, and therefore only the challenges to the renewal letter and possession remained for adjudication. Held that the constitutional challenge did not survive (Paras 14-14.1).
B) Property Law - Lease Renewal - Statutory Right of Government Company to Renew Lease - Burmah Shell (Acquisition of Undertakings in India) Act, 1976, Section 5(2) and Section 7(3) - BPCL exercised renewal by letter dated 25.03.2004 for further 35 years; the trial court and Appellate Bench of Small Causes Court held that BPCL had a statutory right to renew the lease without fresh agreement, dismissing the eviction suit and appeal. The High Court was seized of the civil revision application against the appellate order wherein the petitioner argued the renewal was not in accordance with law because no reasons were furnished. Held that the lower courts recognized statutory renewal under Section 5(2) (Paras 9-16, 23).
C) Interim Relief - Compensation and Third-Party Rights - Payment of Compensation for Temporary Possession and Restraint on Alienation - Burmah Shell (Acquisition of Undertakings in India) Act, 1976, Sections 5 and 7 (contextual) and Mumbai Metro Rail Corporation intervention - The High Court directed deposit of adequate compensation every six months for temporary possession and granted liberty to MMRCL to determine permanent acquisition compensation; petitioner sought directions for BPCL to deposit compensation received from MMRCL and to restrain BPCL from alienating premises during strategic disinvestment. Held that interim orders were passed concerning compensation and possession pending final adjudication (Paras 19-22).
Issue of Consideration
Whether Sections 5 and 7 of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 are ultra vires and unconstitutional; whether BPCL's renewal letter dated 25.03.2004 is valid; whether the lessor is entitled to vacant possession and eviction of BPCL; whether the civil revision application should be allowed against concurrent findings of the lower courts
Final Decision
Final decision not mentioned in the provided text.
Law Points
- Sections 5 and 7 of Burmah Shell (Acquisition of Undertakings in India) Act
- 1976 provide statutory right to government company to renew lease on same terms
- constitutional validity upheld by Trade Centre Developers case
- eviction suit dismissed due to statutory renewal right
- interim compensation orders for temporary possession
Case Details
2021 LawText (BOM) (10) 24
Writ Petition No.1584 of 2007 with Interim Application (L) No.9613 of 2020; Civil Revision Application No.148 of 2011 with Interim Application (ST.) No.99618 of 2020 and 99620 of 2020
Ujjal Bhuyan, Madhav J. Jamdar
Dr. Milind Sathe, Mr. Gaurav Shrivastava, Ms. Nikita Vardhan, Mr. Harsh Shah, M/s. Kanga and Company; Mr. Atul Damle, Mr. S. R. Page; Mr. Musharaf Shaikh, Mr. Kiran Bhagalia; Mr. Ashok R. Varma; Ms. Uma Palsuledesai, Mr. Dushyant Kumar, AGP
Union of India and others; Bharat Petroleum Corporation Ltd. and others
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Nature of Litigation
Dispute over statutory renewal of a lease deed for a plot of land in Mahalaxmi, Mumbai, between Modern India Limited (landlord) and Bharat Petroleum Corporation Limited (government company lessee), involving challenge to constitutional validity of Burmah Shell (Acquisition of Undertakings in India) Act, 1976 and eviction proceedings.
Remedy Sought
Petitioner/landlord sought declaration that Sections 5 and 7 of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 are ultra vires and unconstitutional, quashing of BPCL's renewal letter dated 25.03.2004, and vacant possession of the premises; in civil revision, sought setting aside of Appellate Bench order dated 03.12.2010.
Filing Reason
BPCL claimed statutory right to renew lease for another 35 years under Section 5(2) and 7 of the acquisition Act; petitioner disputed renewal and sought eviction after lease expiry on 31.10.2004.
Previous Decisions
Trial court (Small Causes Court) dismissed suit T.E.R.Suit No.125/142 of 2004 on 15.01.2007; Appellate Bench of Small Causes Court dismissed Appeal No.165 of 2007 on 03.12.2010 affirming statutory renewal right; High Court had earlier on 14.10.2008 held constitutional challenge covered by Trade Centre Developers, leaving only prayer clauses (b) and (c).
Issues
Whether Sections 5 and 7 of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 are ultra vires and unconstitutional
Whether BPCL's letter dated 25.03.2004 exercising statutory renewal of lease is valid
Whether petitioner is entitled to vacant possession and eviction of BPCL
Whether Civil Revision Application should be allowed against concurrent findings of lower courts
Submissions/Arguments
Petitioner argued that BPCL's renewal vide letter dated 25.03.2004 was not in accordance with law because no reasons were furnished and there was no elaboration as to why renewal was sought.
BPCL contended that no live issue remained in the writ petition after dismissal of petitioner's appeal by Appellate Bench of Small Causes Court; and in civil revision there was concurrent finding by two courts.
Ratio Decidendi
Not mentioned in the provided text. However, the text indicates that the constitutional challenge to Sections 5 and 7 of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 was held covered by Trade Centre Developers and Builders Private Limited v. Union of India, AIR 1985 Bombay 4, and the lower courts held BPCL had a statutory right to renew the lease under Section 5(2) of that Act.
Judgment Excerpts
Under the said Act, the undertaking of Burmah Shell in India came to be vested in the central government. Sub-section (2) thereof provided that on the expiry of the term of any lease or tenancy, 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.
In the proceedings held on 14.10.2008 this court observed that in so far constitutionality of the provisions of the Burmah Shell (Acquisition of Undertakings in India) Act, 1976 was concerned, the same stood covered by a judgment of this court in Trade Centre Developers and Builders Private Limited Vs. Union of India, AIR 1985 Bombay 4.
Procedural History
The lessor filed a suit for eviction and mesne profits on 01.11.2004 in the Small Causes Court, registered as T.E.R.Suit No.125/142 of 2004, which was dismissed on 15.01.2007. The lessor filed Appeal No.165 of 2007 before the Appellate Bench of the Small Causes Court and also filed Writ Petition No.1584 of 2007 before the Bombay High Court challenging the constitutional validity of the acquisition Act and seeking quashing of the renewal letter and possession. On 14.10.2008, the High Court held the constitutional challenge covered by Trade Centre Developers, leaving prayer clauses (b) and (c) for adjudication, and admitted the writ petition on 09.02.2009 with an interim direction for rent payment. The Appellate Bench dismissed the appeal on 03.12.2010, affirming BPCL's statutory renewal right. The lessor then filed Civil Revision Application No.148 of 2011, which the High Court admitted on 16.03.2011 and directed to be heard with the writ petition. The Burmah Shell Act was repealed by the Repealing and Amending Act No.23 of 2016. Mumbai Metro Rail Corporation Limited filed Civil Application No.481 of 2017 seeking intervention and temporary possession, leading to an order on 16.10.2019 for deposit of compensation every six months. The lessor filed Interim Application (L) No.99618 of 2020 seeking directions for BPCL to deposit MMRCL compensation and Interim Application (L) No.99620 of 2020 for BPCL to vacate. Upon the Government of India inviting expression of interest for strategic disinvestment of BPCL on 07.03.2020, the lessor filed Interim Application (L) No.9613 of 2020 in the writ petition seeking restraint on alienation of the premises. The matters were heard together and reserved on 15.09.2021, with judgment pronounced on 08.10.2021.
Acts & Sections
- Burmah Shell (Acquisition of Undertakings in India) Act, 1976: 5, 7
- Maharashtra Rent Control Act, 1999:
- Repealing and Amending Act No.23 of 2016:
