G. Sridharamurti
Vs. Hindustan Petroleum Corporation Ltd. & Anr [1995] INSC 492 (13 September 1995)
Ramaswamy,
K. Ramaswamy, K. Jeevan Reddy, B.P. (J) Hansaria B.L. (J)
CITATION:
1996 AIR 264 1995 SCC (6) 605 1995 SCALE (5)612
ACT:
HEAD NOTE:
O R D
E R
Leave
granted.
We
have heard learned counsel for the parties.
An
open space measuring 66.6 x 40 feet comprised in Survey No.432/25 in Ward No.XVII
situated at Bangalore- Bellary
Trunk Road in the
City of Bellary, was in the possession of Esso
Company pursuant to a lease dated July 17, 1969 granted by the appellant. Esso
Company was merged into respondent-Corporation on March 14, 1974. The appellant filed eviction petition under Section 21 (1)
(f) of the Karnataka Rent Control Act [for short, `the Act'] for ejectment on
the ground of sub-letting, impleading Esso Company and thereafter, the
respondent-Corporation. The Esso [Acquisition of Undertakings in India] Act, 1974 [for short, `the Esso
Act'] came into force w.e.f. March 13, 1974.
The courts below dismissed the application on the ground that the Esso Company
had not sublet the demised premises but by virtue of statutory operation under
the Esso Act, the respondent-Corporation stood transposed as a tenant which is
an involuntary act pursuant to Section 7 of the Act; and notwithstanding the
specific embargo created under Section 21 (1) (f) of the Act, it cannot be
construed to be a sub- letting. The High Court also reached the same conclusion
on 25/26th June, 1990 in CRP No.3628/82. Thus this appeal
by special leave.
Shri Kulkarni,
the learned counsel appearing for the appellant, contended that Section 21 (1)
(f) of the Act clearly prohibits assignment or transfer "in any
manner" of the interest of the tenant deeming it to be a sub-letting.
Therefore,
in view of the non-obstante clause contained in sub-section (1) of Section 23
of the Act, the continuance of the respondent-Corporation in the premises must
be deemed to be due to sub-letting within the meaning of Section 21 (1) (f) of
the Act. In support of his contention, he placed strong reliance on a ratio
laid down by this Court in M/s. Parasram Harnand Rao vs. Shanti Prasad Narinder
Kumar Jain & Anr. [(1980) 3 SCC 565].
To
appreciate the contentions, it is necessary to look at the provisions of the Esso
Act.
Section
5 of that Act envisages:
"5.
(1) Where any property is held in India by Esso under any lease or under any
right of tenancy, the Central Government shall, on and from the appointed day,
be deemed to have become the lessee or tenant, as the case may be, in respect
of such property as if the lease or tenancy in relation to such property had
been granted to the Central Government, and thereupon all the rights under such
lease or tenancy shall be deemed to have been transferred to and vested in the
Central Government." Sub-sections (1) and (2) of Section 7 of the Esso Act
state :
"7.
(1) Notwithstanding anything contained in sections 3, 4 and 5, the Central
Government may, if it is satisfied that a Government company is willing to
comply, or has complied, with such terms and conditions as that Government may
think fit to impose, direct, by notification, that the right, title and
interest and the liabilities of Esso in relation to any undertaking in India
shall, instead of continuing to vest in the Central Government, vest in the
Government company either on the date of the notification or on such earlier or
later date [not being a date earlier than the appointed day] as may be
specified in the notification.
(2)
Where the right, title and interest and the liabilities of Esso in relation to
its undertakings in India vest in a Government company under sub-section (1),
the Government company shall, on and from the date of such vesting, be deemed
to have become the owner, tenant or lessee, as the case may be, in relation to
such undertakings, and all the rights and liabilities of the Central Government
in relation to such undertakings shall, on and from the date of such vesting,
be deemed to have become the rights and liabilities, respectively, of the
Government company." It would be clear from above provisions that by
statutory operation, the pre-existing tenancy rights held by Esso Company with
the appellant initially stood transferred and vested in the Central Government,
and thereafter, by operation of Section 7 of the Esso Act, the said rights in
turn stood transposed and vested in the Government company as if the Government
company statutorily became the tenant of the appellant-landlord. It is true
that sub-section (1) of Section 23 of the Act employing non-obstante clause
excluded operation of any other enactment. But it must be remembered that there
is no specific provision in List II of the Seventh Schedule to the Constitution
covering the Act.
On the
other hand, by virtue of what has been stated in Entry 6 in List III of the
Seventh Schedule, the legislature of the State and also Parliament can enact
law in relation to immovable property. Since the Esso Act is a Central
enactment, and latter too, the non-obstante clause in Section 7 of Esso Act
excludes the operation of Section 23 of the Act. Both the Act and the Esso Act
occupy same field and both cannot exist harmoniously. So to the extent of
inconsistency, the Act becomes void by operation of Article 254 of the
Constitution. On the Esso Act coming into force, by operation of Sections 5 and
7 of that Act, the respondent-Corporation became statutory tenant and thereby
it cannot be construed to be an assignment of tenancy rights, which the
appellant-landlord had entered into with the Esso Company, by the Central
Government in favour of the Government company.
The
ratio of M/s. Parasram Harnand Rao's case [supra] is inapplicable to the facts
in this case. Therein, one Laxmi Bank which was a tenant with the appellant was
in liquidation. The Official Liquidator had sold the tenancy rights in favour
of the respondents. Thereby, the respondents became tenant of the demised
premises. The landlord intitiated proceedings under Section 14 (1) (b) of the
Delhi Rent [Control] Act contending that it amounted to sub-letting. This Court
accepting the contention held that in view of the wide language employed in
Section 14 (1) (b), though the same was made in favour of the respondent
through court, it amounted to transfer of an interest inter se. The ratio
therein does not get attracted to the facts in this case in view of the
statutory operation of Sections 5 and 7 of Esso Act which is not voluntary act
of assignment of interests intra vivos.
The
appeal is accordingly dismissed. No costs.
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