BHARAT PETROLEUM CORP.LTD. Vs CHEMBUR SERVICE STATION
Bench: R.V. RAVEENDRAN,H.L. GOKHALE, , ,
Case number: C.A. No.-002276-002276 / 2011
Diary number: 10064 / 2009
Advocates: PARIJAT SINHA Vs
R. P. GUPTA
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
Page 33
Page 34
Page 35
Page 36
Page 37
Page 38
Page 39
Page 40
Page 41
Page 42
Page 43
Page 44
Page 45
Page 46
Page 47
Page 48
Page 49
Page 50
Page 51
Page 52
Page 53
Page 54
Page 55
Page 56
Page 57
Page 58
Page 59
Page 60
Page 61
Page 62
Page 63
Page 64
Page 65
Page 66
Page 67
Page 68
Page 69
Page 70
Page 71
Page 72
Reportable IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2276 OF 2011 [Arising out of SLP [C] No.9134/2009]
Bharat Petroleum Corporation Ltd. … Appellant
Vs.
Chembur Service Station … Respondent
J U D G M E N T
R.V.RAVEENDRAN, J.
Leave granted.
2. The appellant - Bharat Petroleum Corporation Ltd.
(also referred to as BPCL) is a Public Sector Undertaking
under the administrative control of the Ministry of
Petroleum & Natural Gas, Union of India, engaged in
refining, distributing and selling petroleum products, such
as Motor Spirit (MS/Petrol), High Speed Diesel (HSD),
Kerosene, Liquefied Petroleum Gas (LPG), etc. all over the
country. It is the successor-in-title of Burmah-Shell Oil
Storage and Distributing Company of India Ltd. (for short
‘Burmah Shell’).
1
3. On 2.9.1971, Burmah Shell took on lease a piece and
parcel of land admeasuring about 680 sq.yds. bearing CTS
Nos. 339 and 339/1 situated at V.N. Purav Marg, Chembur,
Mumbai, for the purpose of a Storage Depot or Service
Station with the right to erect and maintain all manner of
equipment, plant, machinery, tanks, pumps and structures.
In the said plot, Burmah Shell erected and installed the
Dispensing pumps together with underground tanks and other
equipment, fittings and facilities for storage of petrol,
High Speed Diesel (HSD) and other products and constructed
some structures for carrying on the business of sale and
supply of such products. The said service station is also
referred to as a Retail Petroleum Outlet (for short ‘the
RPO’). On 1.4.1972, the appellant entered into a Dispensing
Pump and Selling Licence agreement (for short ‘DPSL
Agreement’) with the respondent, appointing it as the
dealer for selling the petroleum products of the appellant
from the said RPO.
4. The undertaking of Burmah Shell was taken over by the
Central Government and subsequently vested in Bharat
Petroleum Corporation Ltd., appellant herein, in accordance
with the provisions of the Burmah Shell (Acquisition of
Undertakings in India) Act, 1976 on 24.1.1976.
2
5. The respondent had originally two partners, Dharma Vir
Joshi and Mahesh Mangtani and on the death of Dharma Vir
Joshi, a fresh dealership agreement described as
‘Dispensing Pump and Selling Licence’ was executed between
the appellant and respondent on 1.12.1995. In terms of the
said agreement, the respondent was functioning as a dealer
of the appellant.
6. During a surprise inspection on 9.3.2007 carried out
by the Quality Control Cell of the appellant in the
presence of the Manager of the respondent, it was noticed
that one of the dispensing units (No.OIC 3633) was giving a
short delivery of 20 ml. of HSD (that is, when tested for
accuracy against a five litre calibrated measure, the
display showed 5.02 litres). When the Dispensing Unit was
checked on flash mode 55555 twice, it gave short delivery
of 210 ml. (that is as against 5 litres, the display showed
5.21 litres). Therefore, the Electronic Register Assembly
(ERA) of the said dispensing unit was removed from the Unit
and was sent for inspection to MIDCO - the manufacturer of
the dispensing Unit. MIDCO gave a report on 27.3.2007
stating that there was a deviation in the counting ERA and
the Microcontroller chip hardware in the ERA was not the
3
original component supplied by them with the Dispensing
Unit. The appellant, therefore, issued a show cause notice
to the respondent on12.6.2007 alleging that the respondent
had manipulated/altered the original chip with a view to
making illegal gain by cheating the customers of the
company, thereby causing breach of trust, and calling upon
the respondent to show cause within 15 days, as to why
action should not be taken including termination of the
dealership. The respondent sent a reply dated 10.7.2007
denying the allegations in the show cause notice.
7. The respondent filed a suit (Suit No.913/2008) in the
Court of Small Causes, Bombay for the following reliefs :
(a) for a declaration that it is the tenant of the
appellant in respect of the structures and equipment and
sub-tenant of the appellant in regard to the land comprised
in the suit premises (CTS Nos. 339 and 339/1, V.N. Purav
Marg, Chembur, Mumbai, measuring 6118 sq. ft.); (b) for a
declaration that the supply of petrol and petroleum
products by the appellant at the suit premises was an
essential supply under section 29 of the Maharashtra Rent
Control Act, 1999; (c) for a declaration that the show
cause notice dated 12.6.2007 was illegal and did not
constitute a just and sufficient cause for cutting off or
4
withholding the essential supply of petrol and petroleum
products; (d) for a permanent injunction restraining the
appellant from forcibly dispossessing respondent from suit
premises or in any manner interfering with the possession
of the respondent in regard to the suit premises; and (e)
restraining the appellant from withholding or cutting off
the supply of petrol and petroleum products from the suit
premises. An application for temporary injunction was also
filed to restrain the appellant from forcibly dispossessing
the respondent from the premises or interfering with its
possession of the suit premises and from withholding or
cutting off of any supply of petrol and petroleum products.
8. The appellant resisted the suit and the application
for temporary injunction by contending that the respondent
was neither a tenant, nor a sub-tenant, nor a deemed
tenant. The Court of Small Causes by interim order dated
13.5.2008 directed the appellant to maintain status quo as
on that date, that is, the respondent “shall remain in
possession of the suit premises” and the appellant shall
“continue to supply petrol and petroleum products to the
petrol pump in the suit premises”, till the preliminary
issue regarding jurisdiction to entertain the suit was
framed and a decision was rendered thereon.
5
9. Feeling aggrieved, the appellant filed an appeal. A
Division Bench of the Small Causes Court, by order dated
26.8.2008, partly allowed the appeal. It set aside the
order of the trial court in so far as it directed the
appellant to continue the supply of petrol and petroleum
products in the suit premises to respondent. The direction
that the appellant shall maintain status quo by permitting
the respondent to continue with the possession of the suit
premises was not disturbed. The appellate bench held that
the respondent had prima facie established its induction in
the suit premises as a licensee in the light of the
agreements dated 1.4.1972 and 1.12.1995. The said order
dated 26.8.2008 of the appellate bench of the Small Causes
Court was challenged by the respondent by filing W.P.
No.6689/2008, to the extent it reversed the direction for
supply of petroleum products. The said order was also
challenged by the appellant in W.P.No.8130/2008 to the
extent that it permitted the respondent to remain in
possession of the suit premises.
10. The respondent’s writ petition (WP No.6689/2008) was
dismissed by a learned Single Judge by judgment dated
1.10.2008. The writ petition filed by the appellant (W.P.
No.8130/2008) was disposed of by a brief order dated
6
29.1.2009, observing that “Instead of getting embroiled
with the larger issues raised in the present petition, in
my opinion, interest of justice would be subserved if the
petition is disposed of, by clarifying the order of status
quo granted by the Lower Court to mean that the said order
of status quo shall not preclude the petitioner (BPCL) from
taking recourse to recovery of possession of the suit
property from the respondent (plaintiff) by following due
process of law including by resorting to action under the
provisions of the Public Premises Act, if permissible.”
The said order is challenged in this appeal by special
leave.
Subsequent events
11. Certain subsequent events require to be noticed. The
respondent filed a second suit (Suit No.2557/2008) in the
City Civil Court, Mumbai, praying for the following
reliefs: (a) a declaration that supply of petrol and
petroleum products in the suit premises to respondent by
the appellant is an essential supply under the Essential
Commodities Act, 1955; (b) for a declaration that the
notice dated 12.6.2007 is illegal and a further declaration
that the appellant is not entitled to terminate/set aside
7
the dealership under the agreement dated 1.12.1995; and (c)
for an injunction restraining the appellant from stopping
the supply of petrol and petroleum products or acting upon
the notice dated 12.6.2007.
12. On 19.3.2009, the appellant terminated the dealership
agreement and informed the respondent that it shall have no
right to use the retail outlet premises for any purpose
whatsoever and the facilities (Motor Spirit and/or High
Speed Diesel pumps, storage tanks, pipes and fittings and
all other facilities erected and provided by the company at
the retail outlets) or to sell any petroleum products lying
in the retail outlets. Supply of petroleum products to the
said Retail Petroleum Outlet was also stopped. The said
termination however made it clear that the order was
without interfering with or disturbing the order of status
quo in regard to the possession passed on 30.5.2008 and
affirmed the orders dated 26.8.2008 and 29.1.2009 passed by
the appellate bench and the High Court respectively.
13. The respondent filed a third suit (Suit No.706/2009 in
the City Civil Court, Bombay) for the following reliefs :
(a) a declaration that the termination notice dated
19.3.2009 was illegal and unenforceable and that the
dealership agreement dated 1.12.1995 continues to subsist;
8
(b) for a permanent injunction restraining the appellant or
giving effect to the termination notice dated 19.3.2009;
and (c) for an order restraining the appellant from
discontinuing or withholding supply of petrol and petroleum
products and CNG to the petrol pump premises and declare
that the supply of petrol and petroleum products to the
said premises is an essential supply.
Contentions of appellant
14. The appellant has urged the following contentions :
(a) The dealership granted by the appellant in favour of
the respondent was in the nature of an agency for sale of
the petroleum products supplied by the appellant, in the
appellant’s property, under the appellant’s emblem (BPCL
Petrol Pump or Service Station). The respondent as the
dealer/agent uses the petrol pump premises and the
equipments therein as an agent of the appellant. The
respondent does not have any right, title or interest in
the premises. (b) A person appointed by the appellant, as
its dealer to sell the petroleum products supplied by the
appellant through the company retail outlet premises under
the terms of a Dispensing Pump and Selling Licence (DPSL)
agreement, on termination of the selling agreement –
9
cessation of supplies ceases to be a dealer. Consequently
he can neither sell any petroleum products in the retail
outlet premises, nor use the appellant’s retail outlet
premises or facilities for any other purpose, nor create
any obstruction to the running of the retail outlet by the
appellant directly or through another dealer - regular or
ad hoc. (c) Even if the termination of the dealership is
invalid, the only relief that could be claimed by the ex-
dealer/agent is award of compensation. A court could not
therefore grant temporary injunction requiring the
appellant to maintain status quo, thereby permitting the
respondent to hold on to the petrol pump premises and
prevent the use thereof by the appellant in the manner it
deems fit.
Contention of Respondent
15. The respondent contended as follows: (a) The DPSL
agreement executed on 1.4.1972 appointing the respondent as
a dealer, granted an exclusive licence to the respondent to
use the petrol pump premises for a period of 15 years; that
as the licensee is in lawful occupation of the premises, he
could not be dispossessed forcibly from the premises but
could only be evicted in a manner known to law. (b) As it
was in possession of the premises as a licensee as on
1
1.2.1973, it became a deemed tenant by virtue of Section
15A of the Bombay Rents, Hotel and Lodging House Rates
(Control) Act, 1947 (for short ‘the old Bombay Rent Act’);
and consequently it became entitled to the protection
against eviction under that Act. When the said Act was
repealed and replaced by the Maharashtra Rent Control Act,
1999 (for short ‘the MRC Act’); the protection against
eviction continued to be available to it under the MRC Act.
(c) There was no error or defect in the Dispensing Unit and
the decision to suspend the supplies and terminate the
licence were illegal and unwarranted.
Questions arising for consideration
16. On the contentions raised, the questions that arise
for our consideration are :
(i) What is the nature of a licence that is granted to the
respondent by the appellant under the DPSL agreement ?
(ii) Whether the High court was justified in upholding the
grant of an interim order of status quo directing the
appellant not to interfere with the respondent’s
‘possession’ of the petrol pump premises and requiring the
appellant to resort to appropriate legal action to secure
possession from the respondent ?
(iii) Whether the licence to use the petrol pump
premises for the purpose of sale of the petroleum products
1
of the appellant granted to respondent on 1.4.1972 could be
construed as a licence as defined in Section 5(4A) of the
old Bombay Rent Act so as to attract section 15A of the
said Act which provided that any person who was in
occupation of any premises as a licensee as on 1.2.1973
shall on that date be deemed to have become a tenant of the
landlord in respect of the premises in his occupation ?
The contract
17. Both parties agreed and submitted that the rights and
obligations of parties are governed by the terms of the
DPSL agreement dated 1.12.1995. We may therefore refer to
the relevant provisions thereof :
“WHEREAS the Company has at the request of the Licensees agreed to permit the Licensees to enter upon the Company’s premises described in the Schedule and shown on the blueprint attached hereto (hereinafter referred to as “the said premises”) as the Licensees of the Company for the purposes, and upon the terms and subject to the conditions hereinafter mentioned. …”
NOW THESE PRESENT WITNESS AND IT IS HEREBY AGREED AND DECLARED AS FOLLOWS :
“1. Subject to the conditions contained hereinafter the Company hereby grants Licence unto the Licensees for a period of 15 (fifteen) years and during the continuance of this Licence to enter upon the said premises and to use the Motor Spirit and/or H.S.D. Pumps, Storage Tanks, Pipes and Fittings and all other facilities erected and provided by the Company upon the said premises, and also any additional facilities at any time during the continuance of this Licence provided by the Company upon the said premises (all of which are hereinafter for brevity referred to as “the said facilities”) for the
1
purpose of the sale of Motor Spirit and/or H.S.D., Motor Oils, Greases and other Motor accessories, as the Licensees of the Company. The Company expressly reserves to itself the right to take back the whole or any portion of the said premises or the said facilities or alter them at any time during the continuance of this Licence at its sole discretion. x x x x
4. The said premises and the said facilities shall at all times during the continuance of this Licence remain the absolute property and in sole possession of the Company and no part of the said facilities shall be removed by the Licensees nor shall the position of any constituent part thereof or of the said premises be changed or altered without the previous written consent of the Company.
5. The premises and the said facilities hereby licensed to the Licensees shall only be used for stocking and selling/dispensing the Petroleum Products of the Company and shall not be used for any other purpose except as may be permitted in writing by the Company.
x x x x
9. Neither the Licensees nor the Licensees’ servants or agents shall interfere in any way with the working parts of the pumps or other equipment provided by the Company. x x x x
12. This Licence may be terminated without assigning any reason whatsoever by either party giving to the other not less than ninety days notice in writing to expire at any time of its intention to terminate it and upon the expiration of any such notice this Licence shall stand cancelled and revoked. The requisite period of notice may be reduced or waved by mutual consent.
x x x x
1
15. Upon the revocation or termination of this Licence for any cause whatsoever the Licensees shall cease to have any rights whatsoever to enter or remain on the premises or to use the said facilities and shall be deemed to be trespassers if they continue to do so. Upon such termination or revocation either under Clause 12 or Clause 13 hereof, if the Licensees or their servants and/or agents remain on the premise, the Company shall be at liberty to evict them by using such means as may be necessary and prevent them from entering upon the licensed premises.
x x x x
18. The Licensees hereby expressly agree and declare that nothing herein contained shall be construed to create any right other than the revocable permission granted by the Company in favour of the Licensees in respect of the Licensed premises/facilities strictly in accordance with the terms hereof. In particular nothing herein contained shall be construed to create any tenancy or other right of occupation whatsoever in favour of the Licensees.”
(emphasis supplied)
Re : Questions (i) and (ii)
18. Licence is defined in section 52 of the Indian
Easements Act, 1882 as under :
“52. ‘License’ defined :
Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.”
1
The definition of licence makes it clear that a licence
granted by the owner enables a licensee a right to do or
continue to do certain specified things in or upon an
immovable property.
19. In Associated Hotels of India Ltd. v. R.N. Kapoor (AIR
1959 SC 1262) this Court referred to the
difference between a lease and licence.:
“There is a marked distinction between a lease and a licence. Section 105 of the Transfer of Property Act defines a lease of immovable property as a transfer of a right to enjoy such property made for a certain time in consideration for a price paid or promised. Under Section 108 of the said Act, the lessee is entitled to be put in possession of the property. A lease is therefore a transfer of an interest in land. The interest transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease, and it follows from it that the lessee gets that right to the exclusion of the lessor……”
After referring to the definition of licence in Section 52
of the Easement Act, this court held:
“Under the aforesaid section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property. There is,
1
therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in Errington v. Errington [1952] 1 All E.R. 149, wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p. 155 :
"The result of all these cases is that, although a person who is let into exclusive possession is, prima facie, to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy."
“…The following propositions may, therefore, be taken as well-established : (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties - whether they intended to create a lease or a licence; (3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document a party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease…”
In C.M. Beena vs. P.N. Ramachandra Rao - 2004 (3) SCC 595,
this Court explained a Licence thus :
“Only a right to use the property in a particular way or under certain terms given to the occupant while the owner retains the control or possession over the premises results in a licence being created; for the owner retains legal possession
1
while all that the licensee gets is a permission to use the premises for a particular purpose or in a particular manner and but for the permission so given the occupation would have been unlawful.”
20. Licences can be of different kinds. Some licences with
reference to use of immovable property may be very wide,
virtually bordering upon leases. Some licences can be very
very narrow, giving a mere right enabling a person to visit
a premises – say a museum or a lecture hall or an
exhibition. In between are the licences of different hues
and degrees. All licences can not be treated on the same
footing. We may refer to some illustrations to highlight
the difference.
Illustration (A):
An owner of a property enters into a lease thereof,
but to avoid the rigours of Rent Control legislation, calls
it as a licence agreement. Though such a lease is captioned
as a ‘licence agreement’, the terms thereof show that it is
in essence, a lease. Such a licence agreement which puts
the licensee in exclusive possession of the premises,
untrammeled by any control, and free from any directions
from the licensor (instead of conferring only a bare
personal privilege to use the premises) will be a lease,
even if described as licence. For example, if the
1
exclusive possession of an apartment or a flat or a shop is
delivered by the owner for a monthly consideration without
retaining any manner of control, it will be a lease
irrespective of whether the arrangement is called by the
owner as a ‘lease’, or ‘licence’. As far as the person who
is let into exclusive possession, the quality and nature of
his rights in respect of the premises will be that of a
lease or a tenant and not that of a licensee. Obviously
such a ‘licensee’ cannot be ‘evicted’ or ‘dispossessed’ or
prevented from using the premises without initiating legal
action in accordance with law.
Illustration (B):
The owner of a land constructs a shopping mall with
hundred shops. The owner of the mall earmarks different
shops for different purposes, that is sale of different
types of goods/merchandise, that is shops for exclusive
clothing for men, shops for exclusive clothing for women,
shops for hosieries, shops for watches, shops for cameras,
shops for shoes, shops for cosmetics and perfumes, shops
for watches, shops for sports goods, shops for electronic
goods, shops for books, shops for snacks and drinks etc.
The mall owner grants licences in regard to individual
shops to licensees to carry on the identified or earmarked
1
business. The licensor controls the hours of business,
regulates the maintenance, manner of display, cleanliness
in the shops. The ingress and egress to the shop licensed
to the licensee is through the corridors in the mall
leading from three or four common access points/entrances
which are under the control of the licensor. The licensee
is however entitled to stock the shop with brands of his
choice though he does not have the right to change the
earmarked purpose, entertain any clientale or customers of
his choice and fix the prices/terms for his goods. He can
also lock the shop at the end of the business hours and
open it whenever he wants. No one else can trade in that
shop. In such a case, in spite of the restrictions,
controls and directions of the licensor, and in spite of
the grant being described as licence, the transaction will
be a lease or tenancy and the licensee cannot be
dispossessed or evicted except by recourse of law.
Illustration (C):
In a shopping complex or in a mall the owner gives a
licence to a person to use a counter to sell his goods in
consideration of a fee. The access is controlled by the
licensor and there is no exclusive use of any specific
space by the licensee. At the end of the day, the licensee
1
can close the counter. The space around the counter is
visited and used by customers to the mall and not
exclusively by the customers of the licensee. In such a
case, if the licence is terminated, the licensor can
effectively prevent the licensee from entering upon his
premises and the licensee will have no right to use the
counter except to remove his belongings. In such a licence
it may not be necessary for the licensor to sue the
licensee for ‘possession’ or ‘eviction’.
Illustration (D):
A much narrower version of a licence is where an
exhibitor of cinematograph films, or a theatre owner
permits a ‘customer’ or ‘guest’ to visit an entertainment
hall to view and enjoy a movie or a show for the price of a
ticket. The licensee is permitted to occupy a seat in the
theatre exclusively for the period of the show. Or a
cloakroom with toilet facilities in a public building
permits a visitor to use the toilet/closet facilities on
payment of a fee. The licensee is permitted to use the
toilet/closet exclusively to relieve himself. In such
cases, the licence is for a specific purpose and for a
specific period. The licensee has no other right to enter
the premises, nor the right to continue to occupy the seat
2
in the theatre or use the toilet/closet continuously. Such
a licensee can be forcibly removed by the licensor if the
licensee overstays or continues to occupy the seat beyond
the show, or refuses to leave the cloakroom. It is not
necessary for the licensor to sue the licensee.
Illustration (E):
A reputed manufacturer of textiles owns several retail
outlets in different parts of the country. The outlets are
housed in premises owned by the manufacturer or premises
taken by it on lease. The manufacturer employs a sales
manager on salary for each outlet to manage the outlet and
sell its products and entrust him with the keys of the
premises, so that he can open the outlet for business and
close the outlet at the end of the day. Or the
manufacturer, instead of engaging a sales manager, appoints
an agent who is permitted to sell only the products of the
manufacturer in the retail outlet, and receive a commission
on the turnover of sales. The manufacturer stipulates the
manner of sale, and the terms of sale including the prices
at which the goods are sold. The manufacturer also checks
the products sold periodically to ensure that only its
products (and not fakes) are sold. The manufacturer also
reserves the right to terminate the services of the sales
manager/agent. In such cases on termination of the services
2
of the employee/agent, the manufacturer can physically
prevent the sales manager/agent from entering the retail
outlet and make alternative arrangements for running the
outlet. There is no need to approach a court to ‘evict’ the
sales manager/agent.
21. Where an employer or principal permits the use of its
premises, by its employee or agent, such use, whether
loosely referred to as ‘possession’ or ‘occupation’ or
‘use’ by the employee or the agent, is on behalf of the
employer/principal. In other words, the employer/principal
continues to be in possession and occupation and the
employee/agent is merely a licensee who is permitted to
enter the premises for the limited purpose of selling the
goods of the employer/principle. The employee/agent cannot
claim any ‘possession’ or ‘occupation’ or ‘right to use’
independent of the employer/principal who is the licensor.
In such cases if the employee is terminated from service,
he cannot obviously contend that he is in “occupation” of
the premises and that he can be evicted or dispossessed
only by initiating action in a court of law. Similarly the
agent who is permitted to enter the premises every day to
sell the goods cannot, on termination of the agency,
contend that he continues to be in exclusive occupation of
2
the premises and unless evicted through a court of law
entitled to continue in occupation. This is because licence
that is granted to the employee/agent is a limited licence
to enter upon and use the premises, not for his own
purposes or his own business, but for the purposes of the
employer/principal, to sell its goods in the manner
prescribed by the employer/principal and subject to the
terms and conditions stipulated in the contract of
employment/agency in regard to the manner of sales, the
prices at which the goods are to be sold or the services to
be rendered to the customers. In such cases, when the
employment or agency is terminated and the
employer/principal informs the employee/agent that his
services are no longer required and he is no longer the
employee/agent, the licence granted to such employee/agent
to enter the retail outlet stands revoked and the ex-
employee/ex-agent ceases to have any right to enter the
premises. On the other hand, the employer/principal who
continues to have possession will be entitled to enter the
premises, or appoint another employee or agent, or
legitimately prevent the ex-employee/ex-agent from entering
upon the premises or using the premises. In such cases,
there is no need for the licensor (that is the employer or
the principal) to file a suit for eviction or injunction
2
against the ex-employee or ex-agent. The licensor can
protect or defend its possession and physically prevent the
licensee (employee/agent) from entering the outlet.
22. In this behalf we may refer to the decision of this
court in Southern Roadways Ltd. Madurai v. SM Krishnan
(1989) 4 SCC 603. In that case, Southern Roadways appointed
the respondent as its commission agent for carrying on its
business in Madras city. Southern Roadways took on lease a
godown and put it in the possession of the respondent for
the purpose of carrying on the agency business. The
agreement between the parties provided that Southern
Roadways could remove the agent at any time without notice
and upon removal, it could occupy the godown and also use
the services of the employees engaged by the agent. In the
course of audit, mismanagement and misappropriation by the
agent was discovered and as a result Southern Roadways
terminated the agency and took possession of the godown and
appointed another person as agent. The respondent prevented
the new agent and the appellant from carrying on the
business in the godown premises. Therefore the appellant
filed a suit for injunction against the respondent. A
learned Single Judge granted a temporary injunction. On an
appeal by the ex-agent, the division bench of the Madras
2
High Court vacated the injunction which was challenged
before this court by Southern Roadways. This Court allowed
the appeal. This court held:
“At the outset, we may state that we are not so much concerned with the rival claims relating to actual possession of the suit premises. Indeed, that is quite irrelevant for the purpose of determining the rights of the company to carry on its business. Mr. Venugopal, learned Counsel for the appellant also discreetly did not advert to that controversy. He, however, rested his case on certain facts which are proved or agreed. They may be stated as follows : The company was and is the tenant of the suit premises and has been paying rent to the owner. The lease in respect of the premises has been renewed up to November 22, 1993. It was the company which has executed the lease and not the respondent. The respondent as agent was allowed to remain in possession of the premises. It was only for the purpose of carrying on company's business. His agency has been terminated and his authority to act for the company has been put an end to. These facts are indeed not disputed. On these facts the contention of counsel is that when the agency has been terminated, the respondent has no legal right to remain in the premises or to interfere with the business activities of the company.
The principal has right to carry on business as usual after the removal of his agent. The Courts are rarely willing to imply a term fettering such freedom of the principal unless there is some agreement to the contrary. The agreement between the parties in this case does not confer right on the respondent to continue in possession of the suit premises even after termination of agency. Nor does it preserve right for him to interfere with the company's business. On the contrary, it provides that the respondent could be removed at any time without notice and after removal the company could carry on its business as usual. The company under the terms of the agreement is, therefore, entitled to assert and exercise its
2
right which cannot be disputed or denied by the respondent.
…under law, revocation of agency by the principal immediately terminates the agent's actual authority to act for the principal unless the agent's authority is coupled with an interest as envisaged under Section 202 of the Indian Contract Act. When agency is revoked, the agent could claim compensation if his case falls under Section 205 or could exercise a lien on the principal's property under Section 221. The agent's lien on principal's property recognised under Section 221 could be exercised only when there is no agreement inconsistent with the lien. In the present case the terms of the agreement by which the respondent was appointed as agent, expressly authorises the company to occupy the godown upon revocation of agency. Secondly, the lien in any event, in our opinion, cannot be utilised or taken advantage of to interfere with principal's business activities.
The crux of the matter is that an agent holds the principal's property only on behalf of the principal. He acquires no interest for himself in such property. He cannot deny principal's title to property. Nor he can convert it into any other kind or use. His possession is the possession of the principal for all purposes.
In this case, the respondents’ possession of the suit premises was on behalf of the company and not on his own right.
It is, therefore, unnecessary for the company to file a suit for recovery of possession. The respondent has no right to remain in possession of the suit premises after termination of his agency. He has also no right to interfere with the company's business.”
23. In this case, the DPSL Agreement clearly demonstrated
that licence granted by the appellant enabled the licensee
(respondent) to enter upon the retail outlet premises only
2
for the limited purpose of using the facilities (that is
Motor Spirit/HSD Pumps, storage tanks etc.) for purposes of
sale of appellant’s Motor Spirit, HSD, Motor oils, Greases
or other motor accessories (together referred to as
‘Products of the appellant’) as a licensee of the appellant
at the prices specified by the appellant. The respondent
could not sell any other goods or the products of any one
else. It could not charge a price different from what was
stipulated by the appellant. The respondent could not enter
the outlet premises if the licence granted to the
respondent to sell the appellant’s petrol and petroleum
products was terminated. In other words, the respondent-
licensee had no licence to enter the petrol pump premises
or use the ‘facilities’, if it could not sell the products
of the appellant. The relevant terms of the DPSL agreement
extracted in para 17 above show that the licence was given
to the licensee to enter the appellant’s outlet premises
and use the equipment/facilities provided by the appellant
for the exclusive purpose of sale of the products of the
appellant. This has been completely lost sight of by the
courts below.
24. It should be noted that the appellant has installed
specialized equipments (that is HSD/Petrol/oil
2
dispensers/pumps attached to storage tanks through
pipes/fittings) and the licence given to the respondent was
to enter upon the premises to use the said
equipment/facilities provided by the appellant for the
purpose of sale of the appellant’s products (that is motor
spirit, HSD, motor oil, grease etc.) at the rates/prices
fixed by the appellant. If the respondent could not sell
these petroleum products on account of
suspension/termination, there is no occasion or need for
the respondent to enter upon the outlet premises as it
cannot sell any other goods or use the outlet for any other
purpose. Therefore the licence to enter and use the outlet
premises also comes to an end when the licence is
terminated or supply of appellant’s products is stopped.
Clause 15 of the DPSL Agreement specifically provides that
on revocation or termination of the licence for any cause
whatsoever, the licensee shall cease to have any right to
enter or remain in the premises or use the facilities. As
the licence is only to enter the appellant’s outlet
premises to use the facilities for sale of appellant’s
petroleum products, if the licence to use the appellant’s
facilities for sale of appellant’s products comes to an end
and supply of appellant’s products for sale by the
respondent is stopped, there is no question of the licensee
2
entering the outlet premises at all or remaining in the
outlet premises or using the outlet premises.
25. To reiterate, the permission granted to the respondent
by the appellant to enter the outlet premises is for the
purposes of using the equipments/facilities belonging to
the appellant installed in the outlet, to sell the products
of the appellant. Under the licence (DPSL) agreement, the
respondent cannot enter the premises for any purpose other
than for using the facilities or equipment installed by the
appellant or for any purpose other than selling the
petroleum products of the appellant. Therefore the licence
to enter the premises and the licence to use the
facilities/equipment is incidental to the licence to sell
the products of the appellant as a licensed dealer,
distributor or agent. In this case the premises is a land
held on leasehold by the appellant wherein it has
constructed/erected certain structures and housed certain
facilities/ equipment. The premises is known as appellant’s
‘company owned retail outlet’. The goods/products sold
belong to the appellant. If the appellant decides to stop
the supply of its goods for sale in the said outlet,
automatically the licence granted to the respondent to
enter premises and use the facilities become redundant,
2
invalid and infructuous. There is no licence in favour of
the licensee to use the premises or use the facilities
independent of the licence to sell the goods of the
appellant. Further the agreement makes it clear that the
agreement does not create any tenancy rights in the
premises; that it is terminable by 90 days notice on either
side and it is terminable by the appellant even without
giving such notice in the event of breach. Therefore there
cannot be an injunction restraining the appellant from
entering upon its outlet premises or using the outlet for
its business or inducting any new dealer or agent.
26. Where the licence in favour of the licensee is only to
use the retail outlet premises or use the
equipments/facilities installed therein, exclusively in
connection with the sale of the goods of the licensor, the
licensee does not have the right to use the premises for
dealing or selling any other goods. When the licensee
cannot use the premises for any purpose on account of the
stoppage of supply of licensor’s goods for sale, it will be
wholly unreasonable to require the licensor to sue the
licensee for ‘possession’ of such company controlled retail
outlet premises. This is not a case where the licensee has
3
alleged that any amount is due to it from the licensor by
way of commission or remuneration for services, or that on
account of non-payment thereof it is entitled to retain the
retail outlet premises and facilities of the licensor by
claiming a lien over them under section 221 of the Indian
Contract Act, 1872. In regard to a licence governed by a
commercial contract, it may be inappropriate to apply the
principles of Administrative Law, even if the licensor may
answer the definition of ‘State’ under Article 12 of the
Constitution of India. In view of the above, it is
unnecessary to examine whether appellant is a ‘state’
within the meaning of that expression under Article 12 of
the Constitution of India, nor necessary to keep in view
the requirement that if the licensor answers the definition
of ‘state’, a duty to act fairly and reasonably without any
arbitrariness or discrimination is also implied. Be that as
it may.
27. It is made clear that this decision applies only to
licences where the licensor is the owner/ lessee of the
premises and the equipment (in this case dispensing pumps
and other equipment) and where the licensee is engaged
merely for sale of the products of the licensor. In other
words, this decision would apply to petrol stations which
are known as CCROs (‘Company Controlled Retail Outlets’).
3
If the licensee is himself the owner/lessee of the premises
where the petroleum products outlet is situated or where
the exclusive right to use the premises is given to the
licensee for carrying on any business or dealing with any
goods unconnected with the licensor, this decision may not
apply and it may be necessary for the licensor to have
recourse either to a Civil Court for a mandatory injunction
to give up the premises, or the Estate Officer under the
Public Premises Act for ‘eviction’ as the case may be,
depending upon the nature of licence and the status and
relationship of the parties.
28. In this case in pursuance of a routine inspection
certain serious irregularities were viewed and as a
consequence supply of its products was stopped, suspended
and a show cause notice was issued calling upon respondent
to show cause why action should not be taken including
termination of the dealership for the reasons stated
therein. Therefore when such a notice is issued as a
precursor to termination, the respondent licensee ceases to
have right to sell the goods in the outlet premises and
does not get the cause of action either to seek continuance
of the supply of the products or remain in and use the
premises. The show cause notice was followed by a
termination of the licence of dealership on 19.3.2009. Even
3
if the termination or non-supply amounts to breach of
contract, the remedy of the agent-licensee at best is to
seek damages, if it is established that the dealership was
wrongly determined or supply was wrongly stopped.
Consequently, the licensee does not have any right to use
the premises nor any right to enter upon the premises after
the termination of the agency.
Re: Question No.(iii)
29. The contention of the respondent is that as it was a
licensee from 1.4.1972, it become a deemed tenant under
section 15A of the old Bombay Rent Act (which provided that
any person in occupation of a premises as a licensee as on
1.2.1973, became a deemed tenant) and consequently can be
evicted only by filing a petition for eviction under the
Rent Act.
30. To appreciate the said contention of the respondent,
it is necessary to refer to the relevant provisions of the
relevant rent law. We may first refer to the definitions of
‘tenant’ and ‘licensee’ under the old Bombay Rent Act and
MRC Act.
Section 7(15)(a) of the MRC Act reads as follows :-
(15) “tenant” means any
Section 5(11) of the Old Bombay Rent Act
“Tenant” means any person by
3
person by whom or on whose account rent is payable for any premises and includes,-
(a) such person,-
(i) (i) who is a tenant, or (ii) (ii) who is a deemed tenant,
or (iii)(iii) who is a sub-tenant as
permitted under a contract or by the permission or consent of the landlord, or
(iv) (iv) who has derived title under a tenant, or
(v) (v) to whom interest in premises has been assigned or transferred as permitted,
by virtue of, or under the provisions of, any of the repealed Acts;
(b) a person who is deemed to be a tenant under section 25; (c) a person to whom interest in premises has been assigned or transferred as permitted under section 26;
x x x x x x x
whom or on whose account rent is payable for any premises and includes –
(a) Such sub-tenants and other persons as have derived title under a tenant (before the 1st day of February, 1973;
(aa) any person to whom interest in premises has been assigned or transferred as permitted or deemed to be permitted, under section 15;
x x x x x x x
(bb) such licensees as are deemed to be tenants for the purposes of this Act by section 15A;
x x x x x x x
Section 7(5) of the MRC Act
(5) ‘Licensee’, in respect of any premises or any part thereof, means the person who is in occupation of the premises or such part, as the case may be, under s subsisting agreement for licence given for a licence free or charge; and includes any person in such
Section 5(4A) of the old Bombay Rent Act
(4A) ‘licensee’, in respect of any premises or any part thereof, means the person who is in occupation of the premises or such part, as the case may be, under a subsisting agreement for licence given for a licence fee or charge; and includes any person in such occupation
3
occupation of any premises or part thereof in a building vesting in or leased to a co-operative housing society registered or deemed to be registered under the Maharashtra Co- operative Societies Act, 1960 (Mah. XXIV of 1961) but does not include a paying guest, a member of a family residing together, a person in the service or employment of the licensor, or a person conducting a running business belonging to the licensor or a person having any accommodation for rendering or carrying on medical or paramedical services or activities in or near a nursing home, hospital, or sanatorium or a person having any accommodation in a hotel, lodging house, hostel, guest house, club, nursing home, hospital, sanatorium, dharmashala, home for widows, orphans or like premises, marriage or public hall or like premises…….”
of any premises or part thereof in a building vesting in or leased to a co- operative housing society registered or deemed to be registered under the Maharashtra Co-operative Societies Act, 1960; but does not include a paying guest, a member of a family residing together, a person in the service or employment of the licensor, or a person conducting a running business belonging to the licensor, (for a person having any accommodation for rendering or carrying on medical or para-medical services or activities in or near a nursing home, hospital or sanatorium, dharmashala, home for widows, orphans or like premises, marriage or public hall or like premises………”
(emphasis supplied)
31. The old Bombay Rent Act recognised such licensees as
‘deemed tenants’ under section 15A and they are covered
under the definition of a tenant under section 7(15)(a) of
the MRC Act. Section 15A of the old Bombay Rent Act read as
follows : -
3
“15A. Certain licensees in occupation on 1st
February 1973 to become tenants-
(1) Notwithstanding anything contained elsewhere in this Act or anything contrary to in any other law for the time being in force, or in any contract where any person is on the 1st day of February 1973 in occupation of any premises, or any part thereof which is not less than a room, as a licensee he shall on that date be deemed to have become, for the purpose of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his occupation.
(2) The provisions of sub-section (1) shall not affect in any manner the operation of sub- section (1) of section 15 after the date aforesaid.”
Significantly there is no provision either in the old
Bombay Rent Act or under the MRC Act, enabling or treating
any person who became a licensee after 1.2.1973 as a deemed
tenant.
32. The occupation by the respondent was not occupation on
its own account, but occupation on behalf of the appellant.
Therefore the respondent was not in ‘occupation’ of the
outlet in its own right for its own proposes, but was using
the outlet and facilities in the possession and occupation
of the appellant, to sell the appellant’s products in the
manner provided in the DPSL Agreement. In such a situation,
the agent who is called as the licensee does not become a
deemed tenant. The condition for deemed tenancy is not the
3
description of the person as ‘licensee’, but the person
being in occupation of a premises as licensee as on
1.2.1973. A person who obtains a licence from the
government to sell liquor is a ‘licensee’. A person who
obtains a licence from the municipal corporation to
construct a building is also a ‘licensee’. A person
authorized to drive a motor vehicle is also a ‘licensee’.
Every person who holds any type of ‘licence’ does not
become a tenant. The deemed tenancy under Section 15A of
old Bombay Rent Act refers to a person who held a licence
to use a premises for his own use as on 1.2.1973.
33. Section 5(4A) of the old Bombay Rent Act defined a
licensee in respect of any premises or any part thereof, as
referring to the person who is in occupation of the
premises or such part under a subsisting agreement for
licence given for a licence fee or charge. The definition
makes it clear, a person in the service or employment of
the licensor, or a person conducting a running business
belonging to the licensor is not a ‘licensee’ where the
appellant has a retail outlet in a premises either owned or
taken on lease by it, where it has installed its
specialized equipment/facilities for sale of its products
and the outlet is exclusively used for the sale of the
3
products of the appellant, the unit is running business of
the appellant. An agent licensed to run the Retail
Petroleum outlet of the appellant, which is a running
business belonging to the appellant is not therefore a
‘licensee’ either under the old Bombay Rent Act (nor under
the new MRC Act). Therefore the respondent did not become a
tenant under the appellant nor became entitled to
protection against eviction.
34. Only those persons who held a licence to occupy any
premises as on 1.2.1973 could become deemed tenants under
Section 15(A) of the old Bombay Rent Act. As a person
conducting a running business on behalf of the owner of
such business is not a ‘licensee’ as defined under the Rent
Act, even if the person concerned was using premises on
1.2.1973, he will not become a deemed tenant. Consequently
the respondent could not claim that he became a deemed
tenant. Therefore the respondent could not claim the
protection of any rent control law as a tenant. One more
aspects may be noticed here. If the respondent had become a
deemed tenant in 1972, it would not have entered into an
agreement on 1.7.1995 reiterating that it continue to be a
licensee and that it does not have any leasehold or tenancy
rights in the premises. In view of the above, it is not
3
necessary to consider the alternative contention of the
appellant that even if the respondent had become a deemed
tenant in pursuance of the agreement dated 1.4.1972, such a
tenancy come to an end and the appellant again become
licensee pure and simple from 1.12.1995 when the fresh
agreement was entered, does not require to be considered.
Conclusion
35. In view of the above, this appeal is allowed. The
order of the High Court and the order of the courts below,
directing status quo are set aside. Consequently, the
appellant is entitled to continue in possession of the
petrol pump premises and use it for its business. The
appellant is also entitled to lawfully prevent the
respondent from entering upon the premises. The trial court
is directed to dispose of the suit expeditiously, on the
basis of the evidence, in accordance with law, keeping in
view the legal position explained above.
.................J. (R V Raveendran)
New Delhi; March 2, 2011.
3
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2276 OF 2010
ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 9134 OF 2009
Bharat Petoleum Corpn. Ltd. …Appellant
Versus
Chembur Service Station …Respondent
J U D G M E N T
Gokhale J.
Leave Granted.
2. This appeal seeks to challenge the order passed
by a Single Judge of the Bombay High Court dated 29th
January, 2009 disposing of the Writ Petition No. 8130 of
2008 filed by the appellant herein with certain
observations. The appellant intends to regain the
possession of a Retail Petroleum Outlet concerning which,
the High Court has observed that it will be open to the
appellant to proceed in respect of the concerned premises,
if they are public premises, by following due process of
law and not by force. According to the appellant however,
4
issuing a show cause notice, and terminating the dealership
after considering the reply of the respondent, is the
required due process of law and nothing more.
3. Short facts leading to this appeal are as
follows:- The appellant is the successor to the erstwhile
Burmah-Shell Oil Storage and Distributing Company of India
Ltd. (hereinafter referred to as Burmah Shell). On
2.9.1971, Burmah Shell took on lease a piece / parcel of
land admeasuring about 680 sq.yds. bearing CTS Nos. 339 and
339/1 situated at V.N. Purav Marg, Chembur, Mumbai. This
was for the purpose of erecting one or more petrol pumps
together with underground tanks and other fittings and
facilities for storage of petrol and High Speed Diesel
(HSD) Oil, for carrying on the business of sale & supply of
such products. Burmah Shell constructed the necessary
structures and erected the petrol pumps and other
structures, fittings and facilities which are jointly
referred to hereafter as Retail Petroleum Outlet (RPO). A
few rooms were also put up on that land for facilitating
the working of the RPO. On 1.4.1972, the appellant entered
into an agreement with the respondent, whereby the
respondent were appointed as the dealers for selling the
petroleum products of the appellant from the said RPO.
4
4. The Burmah Shell Company was taken over by the
Government of India under the Burmah Shell (Acquisition of
Undertakings in India) Act, 1976, and later the name of the
Company was changed to Bharat Petroleum Corporation Ltd.
(BPCL), the appellant herein. By a subsequent notification
issued under Section 7 of the said Act of 1976, the rights
and liabilities of Burmah-Shell in relation to its
undertakings in India, stood transferred to be appellant.
Accordingly, upon the aforesaid vesting by virtue of the
provisions of this Act, the appellant Company became the
lessee in respect of the said RPO at Chembur, Mumbai.
5. Subsequently, on the death of one of the partners
of the respondent, a fresh dealership agreement was
executed between the appellant and the respondent on
1.12.1995, and we are concerned with the rights and
liabilities of the parties under this agreement.
6. It so transpired that during a surprise
inspection carried out by the Quality Control Cell of the
appellant in the presence of the manager of the respondent,
it was noticed that one dispensing unit was making a short
delivery of 20 ml. of HSD per 5 litres. It was checked
twice thereafter, when it gave short delivery of 210 ml.
per 5 litres measure. Therefore, the Electronic Register
4
Assembly (ERA) of the said dispensing unit was removed
therefrom and was sent for inspection to the manufacturer
MIDCO. MIDCO gave a report on 27.3.2007 stating amongst
others, that there was a deviation in the ERA, but the
Microcontroller chip hardware in the ERA was not the
original as supplied by them. The appellant, therefore,
issued a show cause notice to the respondent on 12.6.2007
under the relevant provisions of the agreement between the
parties stating therein that the respondent had manipulated
/ altered the original chip with a view of making illegal
gain by cheating the customers of the Company, thereby
causing breach of trust, and calling upon the respondent to
show cause within 15 days, as to why action should not be
taken including termination of the dealership.
7. Respondent denied all these allegations by their
reply dated 10.7.2007, but before the appellant could take
any decision on the show cause notice, the respondent
instituted a suit in the Court of Small Cause at Mumbai
(being RAD suit No. 913/2008) for a declaration that the
respondent was a tenant of the appellant company in respect
of the structures, and a sub-tenant of the appellant in
respect of the land on which the RPO was situated. The
respondent made a further submission that the supply of
petrol and petroleum products was an essential supply under
4
Section 29 of the Maharashtra Rent Control Act (hereinafter
referred to as the MRC Act). The show cause notice,
therefore, was illegal, and that the appellant had no
sufficient cause for withholding the essential supply of
petrol and petroleum products. The respondent moved an
interim application to restrain the appellants from
dispossessing them from the said RPO and also from
withholding supply of petrol and petroleum products.
8. The appellant filed a reply to the injunction
application and stated amongst others that the respondent
was neither a tenant, nor a sub-tenant, nor a deemed tenant
in respect of the suit premises. In para 3 (b) it was
stated as follows:-
“b) The defendant is a Government company wherein the Govt. of India has more than 51% shares. The defendant is a lessee of land. The alleged suit premises are public premises within the meaning of Public Premises Eviction Act, 1971. The plaintiff who claims through the defendant possession of the suit premises is covered under the said Act.”
It was further stated that the respondent was
only a dealer, and the open piece of land under the
agreement was not covered in the definition of the
‘premises’ under the MRC Act, and that the MRC Act was not
applicable.
4
9. A learned Single Judge of the Court of Small
Causes initially granted an interim injunction as prayed by
the respondent herein. Since the appellant wanted the issue
regarding jurisdiction to be decided as a preliminary
issue, the learned Judge directed that until the framing of
preliminary issue regarding jurisdiction to entertain and
try the suit, and decision thereon, the appellant will not
dispossess the respondent from the petrol pump, and shall
continue to supply the petroleum products, though the
appellant will have the right to inspect the petrol pump
and equipments for the purpose of checking smooth working
of the same.
10. Being aggrieved by this order the appellant filed
an appeal before the Division Bench of Small Causes Court
at Mumbai (being Appeal No. 401 of 2008). The Division
Bench by its order dated 26.8.2008 allowed this appeal in
part deleting the direction to continue to supply petrol
and petroleum products, but maintained the order of status-
quo with respect to the possession of the respondent.
11. Being aggrieved by the part of that order which
vacated the direction to supply petrol and petroleum
products, the respondent filed a Writ Petition (bearing
W.P. 6689 of 2008) in the Bombay High Court. A Learned
4
Single Judge by his order dated 1.10.2008 dismissed the
said Writ Petition. The Learned Single Judge noted that
the respondent herein was claiming a tenant-landlord
relationship on the basis of the dealership agreement
between them, and then seeking a direction to supply petrol
and petroleum products as an essential supply to be enjoyed
by the tenant under Section 29 of the MRC Act. The Learned
Judge held that it had to be first decided as to whether
the relationship between them was that of tenant and
landlord. Until then, such a mandatory order could not be
passed. He further held that:-
‘any dispute or cause of action pertaining to the breach of terms and conditions of the such dealership agreement cannot be gone into by Court under MRC Act. The remedy is elsewhere.’
The Learned Judge held that the order of the lower
appellate court was reasoned and correct one.
12. The appellant also filed another Writ Petition
being Writ Petition No. 8130 of 2008 and challenged the
other part of the order dated 26.8.2008 to the extent it
was against the appellant viz. the direction to maintain
the status quo with respect to the possession of the RPO.
Another Learned Single Judge heard the petition and by his
order dated 29th January, 2009 held that:-
4
“Interest of justice would be subserved if the Petition is disposed of by clarifying the order of status quo granted by the Lower Court to mean that the said order of status quo shall not preclude the Petitioner from taking recourse to recovery of possession of the suit property from the Respondent/plaintiff by following due process of law including by resorting to action under the provisions of Public Premises Act, if permissible”
He further held that:-
“If the Competent Authority were to order eviction of the Respondent in the said proceedings, that order will naturally supersede the order of status quo passed by the Lower Court, if it were to be established that the property is public premises as it belongs to the Petitioner Corporation. In order words, order of status quo shall operate only till the Competent Authority and/ or the appropriate forum were to pass order of eviction against the Respondent in relation to the suit premises.”
13. The Counsel for the respondent submitted before
the Learned Single Judge that the observations in the order
may influence the proceedings pending between the parties
before the Civil Court. Thereon the Learned Single Judge
observed that the Civil Court is bound to follow the
mandate of law, if the suit premises are public premises,
and the question of precluding the petitioner from taking
recourse to the action under that act, if available, cannot
be countenanced. He further held that in spite of pendency
of the civil action, it will be open to the Petitioner
Corporation to proceed in respect of suit premises if the
same are public premises. Lastly he held that:-
4
“in any case the possession of the premises cannot be obtained by the Petitioner by force, but by following due process of law which option is left to the Petitioner in terms of this order.”
The petition was disposed of accordingly by the order
dated 29th January, 2009. Being aggrieved by this order the
present Petition for leave to Appeal has been filed on
4.4.2009.
14. It so transpired that the respondent on the other
hand filed another suit being Short Cause Suit No. 2557 of
2008 in the City Civil Court of Mumbai, seeking a direction
that the appellant should continue to supply the petroleum
products. A summons / notice dated 3.2.2009 was served on
the appellant. On 19.3.2009 the appellant has, by their
letter dated 19.3.2009 terminated the dealership agreement
and stopped the supplies of petroleum products to this RPO.
The respondent has thereafter fled a third suit bearing No.
706 of 2009 in the City Civil Court at Mumbai for a
declaration that the termination was illegal and
unforceable, and for other consequential reliefs.
15. As stated earlier, the main submission of the
appellant in the SLP is that they are not required to
proceed under The Public Premises (Eviction of Unauthorised
Occupant) Act, 1971, hereinafter referred to as the Public
Premises Act. They have terminated the dealership agreement
4
and stopped the supply of petroleum products. They contend
that they should be entitled to take possession without re-
course to the proceedings under the Public Premises Act.
According to them the observations of the Learned Single
Judge that the possession of the premises cannot be
obtained by force was uncalled for.
16. It is submitted on behalf of the appellant that
the relation between the appellant and the respondent is
that of a principal and an agent, and as a dealer, the
respondent cannot claim any kind of possessory right,
interest or any title in the premises from where the
business was being carried out on by virtue of the
dealership agreement. The appellant relied upon the
judgment of this Court in Southern Roadways Ltd. vs. S.M.
Krishnan [1989 (4) SCC 603] in this behalf, and
particularly paragraphs 12 to 22 there of. It is submitted
that the respondent only pays the electricity charges for
the activities carried on at the RPO. He does not pay
anything for the premises. He is not in any independent
occupation.
17. It is submitted that the respondent was an agent
of the appellant and in that capacity he was handed over an
open piece of land and a few structures thereon which
4
cannot be called, in any manner, ‘public premises’, under
the Public Premises Act. Since the respondent is not in an
independent occupation of the premises, there was no
question of taking any action against him as an
unauthorized occupant under the said act. The respondent
is simply an agent and the moment the agency is determined,
he has to vacate the premises. Issuance of a show cause
notice, considering the reply to the show cause notice, and
thereafter determining the dealership was the sufficient
compliance with the requirement of due process of law, and
nothing further was required to be done by the appellant to
get back the possession in the nature of filing of a suit
or obtaining an order from a competent authority.
18. Relying upon the judgment in Southern Roadways
(supra), it was submitted on behalf of the appellant that
the possession of the premises which an agent is having, is
basically the possession of the principal and he does not
occupy the premises independently. It was submitted that
though, in the agreement between the parties, the
respondent is referred as a licensee, it is essentially an
agreement of agency. Then, it was submitted that once the
agreement of dealership was terminated, the only relief
which could be sought by the dealer was to seek
compensation for loss of earning, in the event the
5
termination is held to be bad in law. There cannot be any
order of restoration of the dealership or any obstruction
in running of the RPO by the petroleum company even by way
of an ad-hoc arrangement. Reliance was placed in this
behalf on the judgment of this Court in Amritsar Gas v.
Indian Oil Corporation [1991 (1) SCC 533].
19. Some of the clauses of the dealership agreement
were pressed into service by the appellant, particularly
the following clauses:-
“i) In the preamble – “…. the Company has at the request of the Licensees agreed to permit the Licensees to enter upon the Company’s premises…”
ii) In Clause 1 – “… The company expressly reserves to itself the right to take back the whole or any portion of the said premises or the said facilities or alter them at any time during the continuance of this Licence at its sole discretion… …”
iii) In Clause 4 – “… The said premises and the said facilities shall at all times during the continuance of this Licence remain the absolute property and in sole possession of the Company and no part of the said facilities shall be removed by the Licensees nor shall the position of any constituent part thereof or of the said premises be changed or altered without the previous written consent of the company. …..”.
iv) In Clause 8 – “… Neither the Licensee nor the Licensees’ servants or agents shall interfere in any way with the working parts of the pumps or other equipment provided by the Company. …..”.
v) In Clause 12 – “This Licence may be terminated without assigning any reason whatsoever by either party giving to the other not less than
5
ninety days notice in writing to expire at any time of its intention to terminate it and upon the expiration of any such notice this Licence shall stand cancelled and revoked. The requisite period of notice may be reduced or waived by mutual consent.”
vi) In Clause 13 (a) – “ Notwithstanding anything to the contrary herein contained the Company shall be at liberty to terminate this Agreement forthwith upon or at any time on the happening of any of the events following:
…………………………
…………………………
(vii) – If the Licensees shall be guilty of a breach of any of the covenants and stipulations on their part contained in this agreement. …..”.
vii) In Clause 15 – “Upon the revocation or termination of this Licence for any cause whatsoever the Licensees shall cease to have any rights whatsoever to enter or remain on the premises or to use the said facilities and shall be deemed to be trespassers if they continue to do so. Upon such termination or revocation either under clause 12 or Clause 13 hereof, if the Licensees or their servants and/ or agents remain on the premises, the Company shall be at liberty to evict them by using such means as may be necessary and prevent them from entering upon the licensed premises.”;
viii) In Clause 18 - “ The Licensees hereby expressly agree and declare that nothing herein contained shall be construed to create any right other than the revocable permission granted by the company in favour of the Licensees in respect of the licensed premises/facilities strictly in accordance with the terms hereof. In particular nothing herein contained shall be construed to create any tenancy or other right of occupation whatsoever in favour of the Licensees.”
20. It was therefore, submitted on behalf of the
appellant that both the suits filed by the respondent were
5
mis-conceived. Firstly, the respondent has approached the
Court of Small Causes under the MRC Act for a declaration
that it is the tenant of the appellant in respect of the
structures, and a sub-tenant in respect of the land. In
that suit itself the respondent has prayed for an order
that the supply of petroleum products should be continued
as an essential supply under Section 29 of the MRC Act.
The Appellate Bench of the Court of Small Causes is right
in vacating the mandatory direction given by the Single
Judge of that Court to supply the petroleum products. Such
an order could not be granted in those proceedings, and the
Learned Single Judge of the High Court who heard was also
correct in not entertaining Writ Petition No. 6689 of 2008
filed by the respondent.
21. The case of the appellant, however was that the
appellant were right in challenging the other part of the
order of the Appellate Bench of the Court of Small Causes
wherein the bench had maintained the part of the order of
status-quo passed by a Single Judge at that Court with
respect to the possession of the respondent. The appellant
had, therefore, rightly filed the abovereferred Writ
Petition No. 8130 of 2008. According to the appellant,
they had not let out the premises to the respondent, but
had allowed the respondent only to sell appellant’s
5
petroleum products at a price fixed by the Ministry of
Petroleum from time to time. The manipulation in the
dispensing unit effected by the respondent had led to the
issuance of the show cause notice. The respondent had
rushed to the Court of Small Causes even before the reply
of the respondent could be considered by the appellant. By
seeking an injunction in the Court of Small Causes, the
respondent had restrained the appellant from taking any
decision on the show cause notice, which decision the
appellant has now taken after the impugned order was passed
by the Learned Single Judge in Writ Petition No. 8130 of
2008, who has held that the civil action initiated by the
respondent could not prevent the appellant from taking
action in accordance with due process of law. That is why
now the appellant has determined the respondent’s licence
by their letter dated 19.3.2009 and according to them that
is sufficient compliance of the requirement of due process
of law. According to the appellant, with this
determination of agency, the action in accordance with the
due process of law is complete and they can take the
possession of the RPO, if required forcibly. According to
them the emphasis of the Learned Single Judge on following
the due process under the Public Premises Act was
erroneous.
5
22. As against this submission of the appellant, it
was submitted on behalf of the respondent that the suit in
the Court of Small Causes was perfectly justified.
Firstly, it was pointed out that all throughout, the
respondent was described in the dealership agreement as a
licensee of the premises. According to them, the monthly
licence fee as described in Clause 2 (a) of the agreement
was nothing but the rent for the premises excluding the
municipal and government charges. The respondent relies
upon clause 2 (b) of the dealership agreement which reads
as follows:-
“ (b) The Licensees further agree to pay and discharge all rates, taxes, cesses, duties and other impositions and outgoings levied or imposed by the Municipality, Government or any other public body upon or in respect of the said premises and/ or the said facilities, provided that the Company shall pay the actual licence Fees payable to the Government for any Motor Spirit/ HSD Storage licence or licences required in connection with the said facilities under the Petroleum Act, 1934 and the Rules thereunder.”
23. According to the respondent, the respondent falls
within the definition of a tenant under Section 7 (15) of
the MRC Act. They point out that in any case, it is not
disputed that the respondent is in possession of the
concerned premises as a licensee since prior to 1.2.1973
when similar such licensees in occupation of premises came
be protected under Section 15 A of the then applicable
5
Bombay Rents, Hotel and Lodging Houses, Rates Control Act
1947 (shortly called as Bombay Rent Act), which act has
been since repealed and replaced by MRC Act and which
protection has been continued under the MRC Act. The
Bombay Rent act recognized such licensees as ‘deemed
tenants’ under Section 15 A and they are covered under the
definition of a tenant under Section 7 (15) (a) of the MRC
Act. Section 15 A of the Bombay Rent Act reads as follows:
-
“15A. Certain licensees in occupation on 1st February 1973 to become tenants-
(1) Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any contract where any person is on the 1st day of February 1973 in occupation of any premises, or any part thereof which is not less than a room, as a licensee he shall on that date be deemed to have become, for the purpose of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his occupation.
(2) The provisions of sub-section (1) shall not affect in any manner the operation of sub-section (1) of section 15 after the date aforesaid].”
Section 7 (15) (a) of the MRC Act reads as follows:-
(15) “tenant” means any person by whom or on whose account rent is payable for any premises and includes,-
(a) such person,-
(i) who is a tenant, or
5
(ii) who is a deemed tenant, or
(iii) who is a sub-tenant as permitted under a contract or by the permission or consent of the landlord, or
(iv) who has derived title under a tenant, or
(v) to whom interest in premises has been assigned or transferred as permitted,
By virtue of, or under the provisions of, any of the repealed Acts;”
24. The respondent submitted that the order passed by
the Learned Single Judge in Writ Petition No. 6689 of 2008
had confirmed the order passed by the Appellate Court which
meant that the injunction granted by the Ld. Single Judge
of the Court of Small Causes was continued and approved by
a Judge of the High Court. It was submitted that it is
true that the Leaned Single Judge did hold in Writ Petition
No. 6689 of 2008, that the respondent could not seek an
order for supply of petroleum products in the Court of
Small Causes under Section 29 of the MRC Act. For that
purpose the respondent has filed another suit in the City
Civil Court at Mumbai. It was submitted by the respondent
that both these suits and injunction granted by the Court
of Small Causes would become infructuous, if the appellant
was allowed to remove the respondent only on determination
of the dealership agreement. In any case, there was
nothing wrong in the Learned Single Judge observing in the
5
impugned order that the appellant ought to have resorted to
the remedy under the Public Premises Act, whereunder the
respondent will at least get an opportunity to defend its
position, though in a forum chosen by the appellant.
25. We have noted the submissions of both the
counsel. At the outset we must note that in the facts of
this case there is no conflict between the two orders
passed by the two Learned Single Judges. The Writ Petition
No. 6689 of 2008 was filed by the respondent to challenge
the order of the Appellate Bench of the Court of Small
Causes to the extent it was against the respondent viz.
that the respondent could not seek a direction for the
petroleum supply in their proceeding in the Court of Small
Causes. The grievance of the respondent in that writ
petition was only with respect to that part of the order,
and therefore, when the Learned Single Judge held that
there was no reason to interfere with that order, the order
will have to be read as confined to the grievance of the
respondent raised before the Learned Judge. The part of
the order of the Appellate Bench of the Court of Small
Causes protecting the possession of the respondent was not
under consideration in that Writ Petition which was filed
by the respondent. Any observation by the Learned Single
Judge in that order cannot be read as a determination on
5
the correctness or otherwise of this part of the order
which was not in challenge in that proceeding.
26. As far as the other part of the order of the
Appellate Bench, protecting the possession of the
respondent was concerned, the same was in challenge only
before the other Learned Single Judge in Writ Petition No.
8130 of 2008. That was at the instance of the appellant.
In that petition the Learned Single Judge has held that the
pendency of the proceeding in the Civil Court will not
preclude the appellant from taking steps in accordance with
due process of law, which according to the Learned Single
Judge was taking steps under the Public Premises Act, if
permissible.
27. When we consider all these aspects, we have to
note that, even if the respondent is an agent of the
appellant, the fact remains that he is in occupation of the
concerned premises consisting of the rooms and the
structures of the RPO situated on the particular plot of
land since 1.4.1972. The appellant has authorized the
respondent to be in occupation of this RPO by virtue of the
dealership agreement between the parties. The respondent
is not a trespasser. The ‘Public Premises’ are defined
under the Public Premises Act as follows:-
5
SC. “2(e) ” public premises” means -
(1) any premises belonging to, or taken on lease or requisitioned by, or on behalf of the Central Government, and includes any such premises which have been placed by that Government, whether before or after the commencement of the Public Premises (Eviction of Unauthorised Occupants) Amendment Act, 1980 (61 of 1980), under the control of the Secretariat of either House of Parliament for providing residential accommodation to any member of the staff of that Secretariat;
(2) any premises belonging to, or taken on lease by, or on behalf of –
(i) any company as defined in section 3 of the Companies Act, 1956 (1 of 1956), in which not less than fifty-one per cent of the paid up share capital is held by the Central Government or any company which is a subsidiary (within the meaning of that Act) of the first-mentioned company.
Unauthorised Occupation is defined under this Act as follows:-
SC.2 (g) “unauthorized occupation”, in relation to any public premises, means the occupation by any person of the public premises without authority for such occupation, and includes the continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever.”
28. The respondent is in occupation/control/charge of
the premises right from 1.4.1972 and is very much claiming
in the suit filed by them in the Court of Small Causes to
be a tenant or a deemed tenant under the MRC Act. It is in
this suit that he has obtained an interim order. In a
challenge to that interim order the Learned Single Judge
6
has permitted the appellant to take steps in accordance
with the Public Premises Act by observing that the
proceedings in the Civil Court will not hinder the
appellant from taking steps under the Public Premises Act,
if permissible. Thus, in fact to that limited extent the
order of the Learned Single Judge takes care of the
submission of the appellant viz. that the respondent’s suit
under the MRC is mis-conceived. Not only that, but the
Learned Single Judge has also observed that the “order of
status quo would operate only till the Competent Authority
were to pass order of eviction against the respondent in
respect to the suit premises”. In fact what is also
material to note, as quoted earlier in para 3 (b) of their
reply, the appellant themselves had contended before the
Court of Small Causes that the concerned premises are
Public Premises within the meaning of Public Premises
(Eviction of Unauthorised Occupants) Act, 1971. In the
present Special Leave Petition also the same is reiterated
by them in the list of dates by stating that in May 2008,
they filed the aforesaid reply to the interim application
in the Court of Small Causes wherein they took the
aforesaid legal position.
29. This being the position it is not possible for
this Court to find any fault with the impugned order passed
6
by the Learned Single Judge viz. that it will be open to
the respondent to take steps in accordance with the Public
Premises Act which will be the due process of law, and not
by any force. The termination of the dealership agreement
by the appellant will render the occupation of the premises
by the respondent to be unauthorised one and it will be
open to the respondent to take further steps to take
possession thereof though only in accordance with the due
process of law. This much minimum protection has to be
read into the relationship created between the parties
under the clauses of the agreement noted earlier. Besides,
an opportunity of being heard in a situation which affects
the civil rights of an individual has to be implied from
the nature of the functions to be performed by the public
authority which has the power to take punitive or the
damaging actions as held by a Constitution Bench of this
Court in Maneka Gandhi v. Union of India reported in [1978
(1) SCC 248].
30. It was submitted on behalf of the appellant that
in the event the respondent does not vacate the premises in
spite of the termination of the agreement of dealership,
the appellant will be entitled to use force to remove them,
if necessary. The appellant relied upon the observations
in para 85 of the judgment in Bishna Alias Bhiswadeb Mahato
6
and Others Vs. State of West Bengal reported in [2005 (12)
SCC 657]. It was a criminal case wherein among other
submissions the accused had submitted that they had
exercised the right of private defence as regards their
property leading to the incidents. In this context, it was
observed in the referred paragraph 85 as follows: -
“85. Private defence can be used to ward off unlawful force, to prevent unlawful force, to avoid unlawful detention and to escape from such detention. So far as defence of land against the trespasser is concerned, a person is entitled to use necessary and moderate force both for preventing the trespass or to eject the trespasser. For the said purposes, the use of force must be the minimum necessary or reasonably believed to be necessary. A reasonable defence would mean a proportionate defence. Ordinarily, a trespasser would be first asked to leave and if the trespasser fights back, a reasonable force can be used.”
To say the least, the submission based on this
paragraph is totally untenable. By no stretch of
imagination the respondent can be called a trespasser into
the concerned premises. The respondents have been
permitted to occupy the premises under the dealership
agreement and have been so occupying it under the agreement
with the appellant since 1st April 1972. A Submission
coming from a public authority in this fashion is totally
unacceptable and deserves to be rejected.
6
31. The appellant had relied upon the judgment in
Southern Roadways Ltd., Madurai Vs. S.M. Krishnan (supra)
to contend that the respondent can not claim any kind of
possessory right in the premises wherein the respondent was
working as an agent. There can not be much dispute with
the proposition though what is material to be note is that
in that case the appellant had taken a godown on lease and
the respondent was put in possession for carrying on his
agency business with the appellant. The appellant had
terminated the agency on coming to know about the
mismanagement of the business and wanted to take the
possession of the godown. On being prevented, the
appellant had filed a suit for a declaration of their right
of carrying on business in the concerned premises and
sought an injunction therein, initially in the Madras High
Court and subsequently in the SLP in this Court. The
appellant had not resorted to any use of force. While
granting the injunction the aforesaid observations have
been made.
32. In Indian Oil Corporation Ltd. Vs. Amritsar Gas
Service and Others (supra), the respondent was appointed as
a distributing agent of the gas cylinders in Amritsar. On
receiving the complaints about the working of the
distributorship, the appellant had terminated the agency.
6
Thereupon the respondent had moved the Civil Court whereas
the appellant had sought arbitration which was granted by
this Court and it was in that context that this Court has
observed that on termination of the agency the only relief
which could have been granted was to seek compensation for
loss of earning. The method of taking the possession was
not involved in either of the two cases. In neither of the
two cases the possession was sought to be taken by force.
33. It is instructive to note in this behalf that in
Olga Tallis Vs. Bombay Municipal Corporation [AIR 1986 SC
180] the question was with respect to the eviction of the
hutment dwellers from the footpaths of Mumbai. Section 314
of the Bombay Municipal Corporation Act provided that the
Municipal Commissioner may, without notice, cause an
encroachment to be removed. It was submitted on behalf of
Municipal Corporation that the footpath dwellers can be
removed by use of force and even without a notice. In the
judgment of the Constitution Bench, this Court held that
though the section did not specifically make it mandatory,
issuance of a notice was a minimum requirement. It was
submitted on behalf of Municipal Corporation that the
hutment dwellers can not have any defence. The relevant
observations of this Court in paragraph 47 of the judgment
6
(as reported in AIR 1986 SC Page 180) based on authorities
are as follows:-
“The proposition that notice need not be given of a proposed action because, there can possibly be no answer to it, is contrary to the well-recognized understanding of the real import of the rule of hearing.-----
-----Both the right to be heard from, and the right to be told why, are analytically distinct from the right to secure a different outcome; these rights to interchange express the elementary idea that to be a person, rather than a thing, is at least to be consulted about what is done with one.”
34. This was the approach of this Court where the
notice was not mandatory in the case of occupiers of
footpaths. This Court held that issuance of a notice and
affording of an opportunity was a minimum requirement. In
the present case as stated above, the respondents are
occupying the premises, may be as an agent of the
appellant, right from the 1st April 1972. According to the
appellant the respondent have no authority to remain on the
premises after the dealership agreement is terminated. As
against that the respondent has contended that respondent
is a tenant and in any case a ‘deemed tenant’ of the
premises. The respondent has moved the Court of Small
Causes for the declaration and has obtained an order of
status-quo. That order presently survives and is not set
aside though the Learned Single Judge has observed in the
6
impugned order that the order of status-quo would operate
only till the competent authority passes the order of
eviction. The respondents have not challenged this order
either by filing a Special Leave Petition or by filing any
cross objections in the present appeal, and therefore it
binds them. In the circumstances of the present case, the
Learned Single Judge has permitted the appellant to proceed
against the respondent under the Public Premises Act on the
footing that after the termination of the dealership
agreement the occupation would be unauthorised. He has
rightly observed that the pendency of the proceeding in the
Civil Court can not preclude the appellant from taking
recourse to recovery of the possession of the suit premises
by following due process of law including by resorting to
action under the provisions of Public Premises Act, if
permissible. He has, however, made it clear that in any
case possession can not be obtained by force. In our view,
there is no reason for this Court to take any different
view. The respondent has to be afforded an opportunity of
being heard, may be in the forum of the appellant, and only
after obtaining an order from the competent authority the
respondent can be evicted.
35. It is true that in Southern Roadways Limited
(supra) this Court did observe in paragraph 22 that the
6
possession of the respondent in that case was on behalf of
the company and not on his own right. And therefore, it
was not necessary for the company to file a suit for the
recovery of possession. Those observations will have to be
read as laying down the law in the fact situation which
emerged in that case and would apply to similar situations.
The issue with respect to the premises of a Public
Corporation did not arise in that matter. Besides, in the
facts of the case before us, amongst others the respondent
had raised the issue with respect to the nature of his
licence to remain on the premises, and had also sought the
protection which was available to the licencee in
occupation of the premises prior to 1.2.1973. Whether the
respondent was right in that contention or not is not for
this Court to determine. It is for the appropriate
authority to decide. That is the minimum opportunity which
will be required to be provided to the respondent in the
facts of the present case, when he is in occupation of the
concerned premises for nearly 40 years. It is also
relevant to note that even on the footing of being an
agent, apart from the right to receive the compensation in
a situation which could be placed under Section 205 of the
Contract Act, the agent also has the right to remain on the
property of the principal under Section 221 of the Contract
6
Act, for the reliefs which are available under that section
if he makes out such a case. It is another matter that as
stated above the respondent has placed his case on a higher
pedestal, but even on the basis that he is a mere agent, he
does have certain rights under Sections 205 and 221 of the
Contract Act, and para 13 of Southern Roadways Limited
(supra) specifically recognizes that. This being the
position it cannot be said that the respondent does not
deserve even an opportunity of being heard. What are the
relevant terms of the agreement between the parties, what
is their true connotation and what order could be obtained
by the appellant against the respondent, or what relief at
the highest the respondent would be entitled to, will have
be considered and decided before an appropriate forum.
36. It is also relevant to note that all throughout
the respondent has contended that respondent has been in
exclusive possession of the premises concerned, and all the
employees on the premises are that of the respondent. Even
in the first suit filed in the court of small causes,
respondent has pointed out that there was a problem with
respect to the dispensing unit once in the past in year
2002, and in consultation with the petitioner the
respondent took corrective measures. The reports all
throughout thereafter have been satisfactory and the
6
respondent has relied upon a voluminous correspondence in
that behalf in paragraphs 33 to 60 of the plaint filed in
the court of small causes. In the third suit bearing No.
706 of 2009 challenging the termination of the licence
filed in the City Civil Court Mumbai, the respondent has
specifically pleaded in paragraph 69 that the termination
was without any reasons and was contrary to public policy,
and was violative of Article 14 of the Constitution of
India. In paragraph 77, respondent has specifically
submitted that a technical fault in the machine cannot
amount to manipulation and that apart it was not a case of
adulteration. All these submissions of the respondent
require a determination. An opportunity of being heard is
something minimum in the circumstances. The proceedings
before the authority under the Public Premises Act is an
expeditious proceeding and that is something minimum in the
circumstances. A Public Corporation from which a higher
standard is expected, cannot refuse to follow this much
minimum due process of law.
37. In the circumstances we have no reason to
interfere with the order passed by the Learned Single
Judge. We, however, make it clear that the observations
made above are for the purposes of deciding the correctness
or otherwise of the impugned order passed by the Learned
7
Single Judge and not on the merit of the rival claims. We
make it very clear that in the event the appellant takes
the steps under the Public Premises Act, it will be open to
the respondent to plead their case before the competent
authority on all counts, though it will also be open to the
competent authority concerned to take its own decision on
the merits of the rival contention on facts as well as on
law.
38. This appeal is, therefore, dismissed though there
will be no order as to costs.
....................J. ( H.L. Gokhale )
New Delhi
Dated: March 02, 2011
7
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2276 OF 2011 [Arising out of SLP(C) No.9134/2009]
BHARAT PETROLEUM CORPORATION LTD. .......APPELLANT
Versus
CHEMBUR SERVICE STATION .....RESPONDENT
O R D E R
Leave granted.
In view of the divergence in views, the
Registry is directed to place the matter before the
Hon'ble Chief Justice of India for placing the matter
before a larger Bench.
......................J. ( R.V. RAVEENDRAN )
New Delhi; ......................J. March 02, 2011. ( H.L. GOKHALE )
7