Bharat Petroleum
Corporation Ltd. Vs. Chembur Service Station
J U D G M E N T
R.V.RAVEENDRAN, J.
1.
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').
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.
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 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 5withholding 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.
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 729.1.2009, 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 8the 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; 9(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
- 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
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
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 1.2.1973, 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 12of 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
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
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 :
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 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 x4. 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. 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.
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 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
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." 15The 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, 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 17 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 18exclusive
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 19business. 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 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 21in
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 22of 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 23the 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 24against 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 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 26 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 27for 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 28dispensers/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 29entering 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,
30invalid 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 31alleged 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'). 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 33if 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 Section 5(11) of the Old Act reads as follows
:- Bombay Rent Act (15) "tenant" means any "Tenant" means any
person by 34 person by whom or on whose whom or on whose account rent account rent
is payable for is payable for any premises any premises and includes,-
and includes - (a) such
person,- (a) Such sub-tenants and other persons as have derived (i) (i) who is
a tenant, or title under a tenant (before (ii) (ii) who is a deemed tenant, the
1st day of February, 1973; or(iii)(iii) who is a sub-tenant as (aa) any person to
whom permitted under a contract interest in premises has been or by the permission
or assigned or transferred as consent of the landlord, or permitted or deemed to
be (iv) (iv) who has derived title permitted, under section 15; under a tenant,
or(v) (v) to whom interest in x x x x x x x premises has been assigned or
transferred as permitted, (bb) such licensees as are deemed to be tenants for
the by virtue of, or under the purposes of this Act by provisions of, any of the
section 15A; repealed Acts; x x x x x x x (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 Section
7(5) of the MRC Act Section 5(4A) of the old Bombay Rent Act (5) `Licensee', in
respect (4A) `licensee', in respect of any premises or any part of any premises
or any part thereof, means the person thereof,
means the person who
is in occupation of the who is in occupation of the premises or such part, as premises
or such part, as the case may be, under s the case may be, under a subsisting agreement
for subsisting agreement for licence given for a licence licence given for a licence
free or charge; and includes fee or charge; and includes any person in such any
person in such 35occupation of any premises occupation of any premises or part thereof
in a or part thereof in a building vesting in or building vesting in or leased to
a co-operative leased to a co-operative housing society registered housing society
registered or deemed to be registered or deemed to be registered under the Maharashtra
Co- under the Maharashtra Co-operative Societies Act, operative Societies Act,
1960 (Mah. XXIV of 1961) but 1960; but does not include a does not include a paying
paying guest, a member of a guest, a member of a family family residing together,
A residing together, a
person person in the service or in the service or employment employment of the licensor,
of the licensor, or a person or a person conducting a conducting a running running
business belonging business belonging to the to the licensor, (for a licensor or
a person having person having any accommodation for accommodation for rendering
rendering or carrying on or carrying on medical or medical or paramedical para-medical
services or services or activities in or activities in or near a near a nursing
home, nursing home, hospital or hospital, or sanatorium or sanatorium, dharmashala,
a person having any home for widows, orphans or accommodation in a hotel, like premises,
marriage or lodging house, hostel, guest public hall or like house, club, nursing
home, premises........." hospital, 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
: - 36 "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 37description 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
38products 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 39necessary 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.
Bharat Petoleum
Corpn. Ltd. ...Appellant Vs Chembur Service Station ...Respondent
J U D G M E N T
Gokhale J.
1.
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, 41issuing 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. 42
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 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 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.
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 46Single 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:- "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:- 48 "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 49and 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
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 51termination 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 52 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: ..............................
.............................. 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 53mis-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 54petroleum 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.
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 56Bombay 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 57 (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 58impugned order that the appellant ought to have resorted to the remedy under
the Public Premises Act, where under 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 59the 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:- 60 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 61has 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 62by 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 63and 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.
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. 65Thereupon 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 66(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 67impugned 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 68possession 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 69Act, 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 70respondent 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 71Single 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
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