Read Time: 07 minutes

The Supreme Court on Thursday imposed a cost of Rs One Lakh on Bharat Petroleum Corporation Ltd. (BPCL), on account of it continuing with the occupation of the a piece of land situated in Anna Salai, Nandanam, Chennai without paying any rent from December 31, 2009.

A bench of Justices L Nageshwar Rao and BR Gavai further held that such occupation was unbecoming of a statutory corporation, which is a State within the meaning of Article 12 of the Constitution of India.

These observations were made by the top Court while hearing an appeal filed by on National Company who was aggrieved by the judgment passed by the Division Bench of the High Court of Judicature at Madras, thereby denying its prayer for a direction to the respondents to vacate the property.  

The property in question, a vacant land situated at Anna Salai, Nandanam, Chennai was leased to the predecessor of the BPCL viz., Burmah Shell Oil Storage and Distributing Company of India by the predecessor of the appellant, initially for a period of 20 years in the year 1960.

Thereafter, the lease was renewed for another 20 years and finally for another period of 11 years vide a registered lease deed dated April 23, 1999 which came to an end on December 31, 2009. 

BPCL had put up a petrol bunk on the said premises, which was being operated by the respondent No.2­M/s Vijaya Auto Services, its licensor.

Before the expiry of the lease period, the appellant issued notices on four instances August 14, 2008; May 20, 2009; July 16, 2009 and October 3, 2009, whereby the lease was terminated and BPCL was asked to vacate the premises. 

Since BPCL neither vacated the said   premises   nor   took   steps   to   formalize a fresh lease agreement, the appellant approached Madras High Court praying for a direction to the respondents to vacate the said premises.

A division bench of the High Court held that the relief claimed by the appellant could not be granted in a petition filed under Article 226 of the Constitution of India and relegated the appellant to the alternate remedy available in law. 

The Division bench in its judgment relied on went on to say, “Though  we are perturbed by the conduct of the 1st respondent, we are  unfortunately unable to come to the rescue of the petitioner....".

The bench found that  in order to get the benefit under Section 9 of the Tamil Nadu City Tenants Protection Act, 1972, the petroleum company should have been in actual possession of the land and since they were not in actual possession, they were not entitled to   protection.

Relying on the dictum  R. Chandramouleeswaran, wherein it was held that the expression" actual possession of land and building" would mean and require the tenant to be in actual physical possession and the protection would not apply if the tenant has sub­let the building or has given the premises on leave and licence basis. 

A perusal of the agreement between BPCL and the dealer, showed that BPCL was not in actual physical possession of the land, and thus it was not entitled to the protection under the Tenants Act.

With this view, the bench has directed BPCL and the dealer to vacate the said premises and handover peaceful and vacant possession to the appellant.

"...it will also be necessary in the interests of justice to direct the respondent No.1­BPCL to pay arrears of market rent from December 31, 2009, till the date of delivery of possession at the market rate", said the Court.

Cause Title: National Company, Represented By Its Managing Partner v The Territory Manager, Bharat Petroleum Corporation  Ltd. & Anr.