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Judgment
A. Ramamurthi, J.—Defendant in O.S.No.3894 of 1982 on the file of VI Assistant Judge, City Civil Court, Chennai has preferred the
present revision petition aggrieved against the order dated 06.12.1999 in CMA No.263 of 1997 on the file of IV Additional Judge, City Civil
Court, Chennai, reversing the judgment in I.A.No.13549 of 1982 dated 13.10.1997 on the file of VI Assistant Judge, City Civil Court, Chennai.
2.The case in brief is as follows:- The plaintiff filed a suit against the defendant for recovery of possession of the suit property and claimed
Rs.14,400/= being the arrears of damages for use and occupation and for other reliefs. The defendant filed I.A.No.13549 of 1982 u/s 9 of the
City Tenants Protection act to direct the plaintiff to sell the suit land at a market price to be fixed by the Court. The land originally belonged to one
Saraswathi Dhanakotti and was leased to Caltex (India) Limited for a period of 5 years on 26.10.1957 with three renewal options of five years
each for the purpose of putting a petrol bunk. By an Act 17 of 1977 Caltex (India) Limited was taken over by the Central Government and vested
in a new Government Company called the Caltex Oil Refining (India) Limited. The last lease was executed by Shrimathi Saraswathi Dhanakotti in
favour of Caltex (India) Limited for the period 26.10.1972 to 25.10.1977. Subsequently, this Company was amalgamated with another
Government Oil Company called Hindustan Petroleum Corporation Limited. Ever since 26.10.1957 Caltex (India) Limited and its successors-in-
interest have been in continuous possession of the suit property. The tenancy has been recognised by the respective owners of the property from
time to time. The defendant is successor-in-interest to the erstwhile Caltex (India) Limited and Caltex Oil Refining India Limited and hence, a
tenant within the meaning of section 4 of the Madras City tenants Protection Act of 1921 (hereinafter referred to as ''The Act''). As a tenant, he is
entitled to purchase the suit site from the plaintiff u/s 9 of the Act at the market price to be fixed by the Court and hence the petition.
The plaintiff filed a counter affidavit and contended that the defendant is not entitled to claim benefit u/s 9 of the Act. The plaintiff had entered into
an agreement with the former owner even as early as 17.10.1973 and on the date of the agreement itself parted with sizeable cash. There was no
subsisting valid lease in favour of M/s. Caltex Limited. There is no clause relating to renewal of the lease deed and consequently the lease deed is
being executed in derogation of the agreement which will not bind the plaintiff. M/s. Caltex Company itself wrote on 18.01.1977 that they stood
subsisted for the original lessee and they did not also apply for renewal. It is only on 09.05.1978 u/s 396 of the Companies Act, the Hindustan
Petroleum Corporation came into existence and their rights were expressly denied. M/s. Caltex Company was permitted to put up only structures
like office bunk, fixtures and fittings such as oil tanks, counters, electrical fittings, lockers, lights and other small removable structures. The
embedding of underground structures like the tanks cannot come within the terminology ''building''. The company is not entitled to purchase the
site. There was only a small temporary superstructure consisting of glass panes and partitions occupying an area of 10 x 10 feet. The application
has not been made in the proper form as contemplated under law. The defendant is now a Government of India Undertaking and it is totally
inconceivable that the company should seek the conveyance of the site. There are series of writ petitions pending before the Court challenging the
validity of Act 17 of 1977.
The plaintiff also filed an additional counter affidavit that the application u/s 9 of the Act has to be dismissed as the mandatory requirements have
not been complied with. The defendant had not put up any construction over the suit land. The defendant had also sub-let the tenancy land and
such sub-tenant is in possession exclusively. The defendant is collecting the rent from sub-tenant and making illegal enrichment. A negligible portion
of the suit property is used for petrol bunk with 2 pumps without any permanent structure. Apart from that, there is a small service station. The suit
land is an extent of about 9 grounds and it is almost vacant and the sub-tenant is putting the land to unauthorised use by the third parties for parking
their vehicles, namely, buses and lorries and collecting parking charges from them. The defendant is not in actual physical possession of the
property and is not owning any superstructure. Hence, the application is liable to be dismissed.
The trial court on the basis of the evidence of P.W.1 and R.W.1 and Exs.A-1 to A-24 and B-1 to B-8 allowed the application filed by the
defendant and a Commissioner was also appointed. Aggrieved against this, the plaintiff preferred CMA No.263 of 1997 on the file of IV
Additional Court, City Civil Court and the learned Judge after hearing the parties, allowed the appeal, set aside the order passed by the trial court
and dismissed the application filed by the defendant claiming u/s 9 of the Act. Aggrieved against this, the defendant has come forward with the
present revision petition.
Heard the learned counsel for the parties.
The points that arise for consideration are
1)Whether the defendant is entitled to claim benefit u/s 9 of the City Tenants Protection Act ?
2)Whether the order passed by the lower appellate court is proper and correct ?
3)To what relief ?
Points: it is admitted that the plaintiff filed the suit against the defendant for recovery of possession of a piece of vacant land measuring 23,336
sq. ft. situate at No.1-L.Harrington Road, Chetpet, Madras-31 and for recovery of damages for use and occupation. There is no dispute that the
land originally belonged to one Mrs. Saraswathi Dhanakotti and was leased out to Caltex (India) Limited for five years on 26.10.1957. By an Act
17 of 1977, Caltex (India) Limited was taken over by the Central Government and vested in a new Government Company called the Caltex Oil
Refining (India) Limited. The last lease was admittedly executed by Shrimathi Saraswathi Dhanakotti in favour of Caltex (India) Limited for the
period ending with 25.10.1977. Subsequently, Caltex Oil Refining (India) Limited was amalgamated with another Government Oil Company called
Hindustan Petroleum Corporation Limited, the present defendant. After the filing of the suit for recovery of possession, the defendant filed a
petition u/s 9 of the Tamil Nadu City Tenants'' Protection Act (hereinafter referred to as ''The Act'') to direct the plaintiff to sell the suit land to
them at a market price to be fixed by the Court. The defendant Corporation claims that they are the successor-in-interest in the erstwhile Caltex
(India) Limited and Caltex Oil Refining (India) Limited and is a tenant within the meaning of section 4 of the Act and is entitled to purchase the site.
The plaintiff / respondent disputed the application and contended that the defendant / revision petitioner is not entitled to claim benefit under the
Act and they cannot be construed as a tenant in the eye of law. Further more, M/s. Caltex Company was permitted to put up structures only like
office bunk, fixtures and fittings, such as oil tanks, counters, electrical fittings, lockers, lights and other small removable structures. The embedding
of underground structures like the tanks cannot come within the terminology ''building'' and the underground tank erection will not satisfy the
requirements u/s 9 of the Act. There was only a small temporary superstructure consisting of glass panes and partition occupying an area of 10 x
10 feet and the petitioner had also sublet the tenancy land and such sub-tenant is in actual possession exclusively. To their knowledge, the sub-
tenant Mrs. Zhon is in possession and occupation of the suit land carrying on business and the petitioner is only collecting the rent from them. A
negligible portion of the suit property is used for petrol bunk with 2 pumps without any permanent structure. Substantial area is unauthorisedly used
by the third parties for parking their vehicles, namely, buses and lorries and collecting parking charges from them. About 7 grounds of land is being
used by third parties. The sub-tenant is also permitting mechanics to repair the lorries and water tankers.
The trial court allowed the application filed by the defendant, whereas the lower appellate court reversed the same and dismissed the application
filed u/s 9 of the Act. The learned counsel for the revision petitioner / defendant mainly contended that the lower appellate court having rightly held
that the suit property was taken on lease by Caltex India Limited and also the subsequent events namely, Act of Parliament under Act 17 of 77,
erred in holding that necessary ingredients u/s 9 of the Act have not been pleaded and the defendant Corporation is not in actual physical
possession of the property and there is no schedule to the petition. The appellate court also lost sight of various admissions made by the plaintiff in
Ex.R-5, wherein there is a specific reference about occupation of the piece of land and under Ex.R-7 also, there is a specific averment relating to
entry of possession based on a registered lease deed. These admissions are true and clear and admission in pleadings or judicial admissions are
admissible u/s 58 of the Evidence Act made by the parties. The dealer is only a licensee of the defendant, who is permitted to enter upon the retail
outlet on a Leave and Licence basis while possession is always with the defendant. It also erred in holding that Exs.P-7 to P-9, P-12 to P-20 are
subsequent to the suit. They relate to the payment of charges to the electricity as well as Corporation tax. The assessment of the property as well
as consumption card stand in the name of the defendant and payments are also made by them. Ex.P-1 conclusively proved that only a vacant land
was leased out for the purpose of storing, selling and distribution of petroleum products together with a right to the tenant to install, erect a
superstructure over the land. Only in pursuance of Ex.P-1, Caltex India Limited put up a superstructure under Ex.P-2 for the purpose of erecting
one or more pumps for sale of petroleum products. Clause 19 in Ex.P-9 also disclosed that the premises and outfit shall be remain the absolute
property of the Corporation and they can enter upon the premises to inspect, test, repair and to reduce and /or remove the outfit of the building
and the structures on the premises or any part thereof, affix the Corporation''s name plates thereto lock and/or seal the whole or any part thereof
against interference by the dealer or third parties. The finding of the court below that there was no superstructure is not correct. The
superstructures alone had been assessed to Municipal Tax by the Corporation of Madras, for which payments have been made by the defendants
by means of cheque and without a superstructure over the suit land, the Corporation would not have made a demand on them.
Section 2(1) of the Act defines ""building"" and sub-section 4 of Section 2 defines ""Tenant"" which reads as follows:
2(1): ""Building"" means any building, hut or other structure, whether of masonry, bricks, wood, mud or metal or any other material whatsoever
used.
2(4) ""Tenant"" in relation to any land - (i) means a person liable to pay rent in respect of such land, under a tenancy agreement express or implied,
and
(ii) includes)- (a) any such person as is referred to in sub-clause (i) who continues in possession of the land after the determination of the tenancy
agreement, (b) any person who was a tenant in respect of such land under a tenancy agreement to which this Act is applicable under sub section
(3) of section 1 and who or any of his predecessors in interest had erected any building on such land and who continues in actual physical
possession of such land and building..
It is therefore evidently clear that what was leased out by the owner of the property was only a vacant land and now the defendant attempted to
lay claim u/s 9 of the Act alleging that superstructures have been put up by their predecessors-in-interest and they continued to be in possession
and enjoyment of the property and, as such, they are entitled to claim benefit under the said Act. However, the learned counsel for the plaintiff
contended that the defendant cannot be construed as a tenant in the eye of law and there is no privity of contract between them. In short, they are
only the statutory tenants and they have sub-leased the property in favour of a third party, who is now in actual possession and enjoyment of the
property. Further more, when the defendant is not in actual possession and enjoyment of the property, they are not entitled to claim benefit u/s 9 of
the Act and on these grounds, the application u/s 9 of the Act is liable to be dismissed.
The burden is only upon the defendant to establish that they are tenants and there are permanent superstructures put up either by them or by
their predecessors-in-interest and they continued to be in possession and enjoyment of the property. No doubt, section 9 of the Act provides for
the right of the tenant to purchase the land in his occupation in case the landlord seeks to evict him from the same. The preconditions that would
enable a tenant are (i) he should be a tenant in possession of the land; (ii) he should have erected a superstructure on the land in respect of which
he would be entitled to claim compensation u/s 3 of the Act, (iii) a suit or proceedings in ejectment should have been taken by the landlord against
him and (iv) he should have applied to the Court for direction in that regard within one month from the date of service of the summons in such suit.
The building in respect of which compensation is payable to a tenant u/s 3 of the Act is a permanent structure resting on foundation embedded in
earth and not permitting its removal in tact. A bunk with tin roof fabricated on wooden frame with no definite structure, footing or foundation,
merely resting on the surface of the land, capable of being removed or transported embloc without affecting the land over which it is rested, cannot
be called a building within the meaning of the Act. It is clear that such physical and actual possession of the land and building is a sine qua non to
protect the benefit or statutory entitlement under the Act. The Act is not intended to enrich a tenant at the cost of the landlord. A tenant who has
sublet the leased property and is not himself in possession nor carrying on business in the leased property cannot claim the right u/s 9 of the Act.
Learned counsel for the revision petitioner relied on the decision reported in Hindustan Petroleum Corporation v. Raja D.V. Appa Rao
Bahadur , wherein it was held as follows:
Therefore, qua tenant, if the foreign company had a right to purchase the property that right will certainly enure to the benefit of the Indian
Company. There cannot be denial of such a right. Of course, that will be subject to satisfying the condition laid down under the Madras City
Tenants'' Protection Act, 1976, particularly Section 9"".
11.Reliance is also placed on T.R.P. Raja Sekara Bhoopathy Vs. Navaneethammal and Others, that the primordial requirements for a tenant to
claim the benefits under the Act is that he should be in actual physical possession of such land and building. The same view has also been reiterated
in the subsequent decisions, namely, Estate of K.J. Srinivasan and Others Vs. Hindustan Petroleum Corporation Limited (HPCL) and Others,
There is no dispute about the principles enunciated in the aforesaid decisions and the applicability of the same depends upon the facts and
circumstances in each case.
Learned counsel for the respondent / plaintiff relied on Bharat Petroleum Corpn. Ltd. and Another Vs. Municipal Corporation of Greater
Bombay and Another, that the fact the tanks were capable of being shifted showed that they are not ''building''. A structure cannot be shifted.
Reliance is also placed in C.N. Sivasankaran Nair ..vs.. V. Rajendran by Power of Attorney Agent, N. Velapan AIR 1985 Bomb 124 that the
building contemplated under sections 2(1) and 3 of the Act should therefore be one put up on the site on foundation with certain degree of
permanence and not easily portable or transportable as such.
It has also been held in G. Mohamed Thief and another ..vs.. The Bharath Petroleum Corporation Ltd., 2001 (1) CTC 10 relating to section
2(4) of the Act that ""renewal pursuant to statutory enactment and expiry of lease by efflux of time after statutory renewal, lessee cannot be
considered to be tenant holding over and they rank as trespassers and the lessee is not entitled for benefit of the Act.
It has also been held in Hamasa Patel and two others ..vs.. S. Balakrishnan and another 1997 3 L.W.769 that when failure by tenant to prove
physical possession, the benefit of the Act cannot be claimed, as possession is sine qua non for the tenant seeking to purchase the property u/s 9.
It is therefore clear from the aforesaid decisions that the building contemplated and therefore be one put up on the site on foundation with
certain degree of permanence. Now, the bunks have been embedded in the earth and there is no sufficient evidence relating to the nature of
construction in the property. The evidence adduced in the case also would indicate that there is no material to come to the conclusion that any
permanent construction was put up in the property. The documents filed on the side of the petitioner only indicates that there are licence for storage
of petrol in underground tanks, kiosk, washing ramp, car washer shelf, etc. Ex.P-21 dated 25.06.1975 is an agreement between Harrington
Service Station and M/s. Caltex India Limited. So far as the documents relating to the building are concerned, Ex.P-5 is a demand notice by the
Corporation of Madras. Ex.P-9 is a dealer agreement between the defendant and the Harrington Service Station, which describes the construction
in the second schedule namely, petrol tank, dispensing pump, kiosk, boundary wall . Etc/ The oral evidence of P.W.1 is also relevant to be
considered to arrive at a reasonable conclusion. According to him, Caltex (India) Limited put up superstructure consisting of sales room, shed,
tanks and pump. But in the cross examination, he admitted that he did not know personally what transpired between the plaintiff and the defendant
prior to 1995 and he has not seen any entry in the account books relating to construction of the building in the suit property. If really permanent
superstructures have been put up by the defendant or by their predecessors-in-interest, necessarily there would be corresponding entries in the
account book or they would be in a position to produce necessary documents. But significantly nothing has been done by them for reasons best
known to them. Kiosk is the shed for sales room and as per the Concise Oxford Dictionary, it means a light open-fronted booth or cubicle from
which food, newspapers, ticket, etc., are sold. Sometimes canvassed umbrellas are used for the purpose of doing the business in the area and only
in 1981, kiosk was put up. The aforesaid testimony of the witnesses and the physical features only pointed out that there could not have been a
permanent structure. There was only a temporary structure consisting of glass panes and partition occupying an area of 10 x 10 feet.
17.It is also necessary to state that according to the plaintiff, the defendant had sublet the land to the dealer and he is doing the business and most
of the area was rented out to third parties for the purpose of parking vehicles or repairing lorries, etc,. As adverted to, the defendant should
positively establish that he continues to be in possession and enjoyment of the property. No doubt, learned counsel for the revision petitioner
contended that the dealer is dealing in petroleum products only under leave and licence and the defendant had got every right to enter into the
property. It is necessary to keep in mind that when the dealer is in actual possession of the property, it cannot be considered possession in the eye
of law that the defendant is in actual possession of the property. It only means that even assuming that the defendant was a tenant in the property,
considering the fact that now a third party is in possession and enjoyment, the person now in occupation is only a sub-tenant. If that be so, when
the defendant is not in actual possession of the property, he is not entitled to claim benefit under the Act because possession is an important sine
qua non to invoke section 9. However, the learned counsel for the revision petitioner attempted to explain that their officers can enter the premises
for conducting various tests and the dealer is bound to vacate the property as and when demanded. Perusal of the agreement also indicates that the
dealer has to remove the structures within the period granted by them. This is one more circumstance to show that there could not have been a
permanent structure and that is why the question of removal has been introduced in the agreement.
P.W.1 also admitted in the course of evidence that selling of petroleum products and service station are the activities going on in the suit
property and approximately 7 or 8 employees were working there. However, the defendant has not paid salary to them and there is no control
over their appointment or termination of such employees except the dealer. On the other hand, Harrington Service Station Manager alone is having
the key of the bunk and the said Manager is also not paid by the defendant. On the other hand, Auto Care Centre in a different place is run by the
defendant company and all the employees of the Auto Care Centre are paid by the defendant. The dealer only is submitting returns to Commercial
Department. Clause 57 in Ex.P-9 reads as follows:
On the termination of licence and permission, the dealer will immediately remove from the premises all goods, property and effects belonging to
him and handover to the Corporation vacant and peaceful possession of the premises etc"".
Clause 24 of Ex.P-21 reads as follows:
The dealer shall leave the service station as good condition as it was when entrusted to his care, ordinary wear and tear accepted"".
Ex.R-13 is a notice dated 19.01.1995 issued to the defendant and 3 sub-tenants and they have been duly acknowledged.
Learned counsel for the revision petitioner contended that in some of the notices exchanged between the parties, there is a recital to the effect
as if it is in the occupation of the defendant and this would amount to an admission on the part of the plaintiff. As adverted to, at one point of time,
the erstwhile owners of the property had leased out the property to the predecessors-in-interest of the defendant. Possession was also actually
given to them and after Act 17 of 1977 was promulgated and thereafter there is no record to show that there was any lease agreement between
the parties. By operation of law only, the defendant became a statutory tenant of the property and for claiming benefit u/s 9 of the Act, it is the
primary duty to establish that there were permanent structures put up in the property and they continue to be in possession and enjoyment of the
same. The language employed u/s 2(4) and ii(b) of the Act, that the party continues in actual physical possession of land and building, has to be
kept in mind. Unless both conditions are satisfied, I am of the view that the defendant is not entitled to claim benefit under the provisions of Section
9 of the Act.
It is also pertinent to point out that there is no specific pleading in the affidavit to the effect that the defendant is in possession and enjoyment of
the property so as to claim benefit under the said Act. Para 2 of the affidavit indicates that Caltex (India) Limited and its successor-in-interest have
been in continuous possession of property, but the defendant herein is a different entity. Similarly, in para 3 of the affidavit, it is stated that the
defendant is a tenant within the meaning of section 4 of the Act and apart from that, it is not stated that they are in possession and enjoyment of the
property so as to qualify themselves to claim benefit under the provisions of Section 9. The tax receipts produced by the revision petitioner relating
to payment of tax alone are not sufficient to establish that they are in physical possession of the property. Even according to the agreement, the
electricity charges and water charges are paid only by the dealer, who is in possession of the property. Considering the fact that the revision
petitioner has failed to establish that they are in actual possession and enjoyment of the property and they do not come within the definition of
section 2 (4) of the Act, I am of the view that the order passed by the lower appellate court is proper and correct and no interference is called for.
21.For the reasons stated above, the revision petition fails and is dismissed. However, there will be no order as to costs. Consequently, CMP
No.8080 of 2000 and VCMP No.16175 of 2001 are closed.