Supreme Court Dismisses Oil Companies' Appeals for Purchase of Leasehold Land Under Madras City Tenants' Protection Act — Written Registered Leases with Building Stipulations Bar Section 9 Rights. The Court held that the proviso to Section 12 of the Act excludes tenants under written registered leases containing stipulations as to erection of buildings from seeking purchase of land under Section 9.

Civil appeals against the judgment of the Madras High Court rejecting applications under Section 9 of the Madras City Tenants' Protection Act, 1921, for purchase of leasehold land.

The appellant oil companies sought an order under Section 9 of the Act directing the landlords to sell the leasehold land at a price fixed by the court.

The landlords filed ejectment suits for recovery of possession of land after the expiry of long-term leases, and the oil companies applied under Section 9 to purchase the land.

The Madras High Court rejected the applications under Section 9, either affirming or reversing the findings of the trial court or lower appellate court. Some appeals arose from a remand order dated 3rd December 2009 passed by the Division Bench of the Supreme Court.

Whether the appellant oil companies, as tenants under written registered leases containing stipulations as to the erection of buildings, are entitled to seek an order under Section 9 of the Madras City Tenants' Protection Act, 1921, directing the landlords to sell the leasehold land. Whether the proviso to Section 12 of the Act, which excludes written registered leases with building stipulations from the Act's protection, applies to the appellants' leases.

The appellant oil companies argued that they were entitled to the benefit of Section 9 of the Act as tenants who had constructed buildings on the leasehold land. The respondent landlords contended that the proviso to Section 12 of the Act excluded the appellants from the Act's protection because the leases were written, registered, and contained stipulations as to the erection of buildings.

The proviso to Section 12 of the Madras City Tenants' Protection Act, 1921, as originally enacted, gives primacy to written registered leases with covenants regarding erection of buildings, thereby denying tenants under such leases the statutory right to purchase land under Section 9. This exclusion is not affected by subsequent amendments to the Act unless expressly repealed.

Section 9 of the Act grants the tenant, who is entitled to compensation under Section 3 and against whom a suit for ejectment has been instituted... to apply for an order directing the landlord to sell for a price to be fixed by the court, in whole or in part, the extent of land specified in the application. Section 12 as originally enacted had stated: 'Nothing in any contract made by a tenant shall take away or limit his rights under this Act provided that nothing herein contained shall affect any stipulations made by the tenant in writing registered as to the erection of buildings, in so far as they relate to buildings erected after the date of the contract.'

The landlords filed ejectment suits against the appellant oil companies. The oil companies filed applications under Section 9 of the Madras City Tenants' Protection Act, 1921, for purchase of the leasehold land. The Madras High Court rejected these applications by different impugned judgments, some of which arose from a remand order dated 3rd December 2009 passed by the Division Bench of the Supreme Court. The oil companies appealed to the Supreme Court.

• Madras City Tenants' Protection Act, 1921: Section 3, Section 9, Section 12
• Burmah Shell (Acquisition of Undertakings in India) Act, 1976:
• Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977:
• Esso (Acquisition of Undertakings in India) Act, 1974:
• Presidency Small Cause Courts Act, 1882: Section 41