RAM BHAROSEY LAL GUPTA(D) BY LRS. & ORS. versus M/S HINDUSTAN PETROLEUM CORP. LTD. & ANR.

Citation: [2013] 6 S.C.R. 323 · Decided: 17-04-2013 · Supreme Court of India · Bench: C.K. PRASAD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

• 
[2013] 6 S.C.R. 323 
RAM BHAROSEY LAL GUPTA(D) BY LRS. & ORS. 
v. 
MIS HINDUSTAN PETROLEUM CORP. LTD. & ANR. 
(Civil Appeal No. 3902 of 2013) 
APRIL 17, 2013 
[CHANDRAMAULI KR. PRASAD AND 
V. GOPALA GOWDA, JJ.] 
A 
B 
Transfer of Property Act, 1882 - ss. 106 and 111(g) -
Lease - Renewal of - Property leased out for 20 years -
C 
Meanwhile, property mortgaged by appellant-lessor, but later 
redeemed to it - Determination of tenancy by appellant uls. 106 
of Transfer of Property Act on expiry of original lease period 
- Challenged by respondent no.1-lessee on ground that the 
lease deed contemplated a provision for renewal of the lease D 
for 20 years and that a notice for renewal of the lease had 
already been sent to the appellant - High Court holding that 
appellant was under legal obligation to renew the lease term 
for further period of 20 years in terms of clause 3 (d) of the 
lease deed - Propriety - Held: Not proper -Respondent no. 1 E 
did not comply with ihe requirements as provided under the 
lease deed - It did not send notice for renewal to the 
mortgagee who had stepped into the shoes of the owner of 
the property till the same was redeemed to the appellant-
lessor and thus failed to exercise its right to get renewal of F 
lease - No deemed renewal of lease in favour of respondent 
no. 1 in view of the notice sent to the appellant - Determination 
of tenancy by appellant uls106 of the Transfer of Property Act 
perfectly legal and valid - Respondent no. 1 also not entitled 
to continue as tenant with reference to s. 7 of the Caltex Act 
as no fairness, reasonableness and non-arbitrariness on its G 
part to avail right under that provision - Since respondent no. 1 
continued in possession of the property even after termination 
of tenancy, it is liable to pay mesne profits by way of damages 
323 
H. 
324 
SUPREME COURT REPORTS 
[2013] 6 S.C.R. 
A 
to appellant - Caltex [Acquisition of Shares of Ca/tex Oil 
Refining (India) Ltd. and of the Undertakings in India of Caltex 
(India) Limited] Act 1977 - s. 7. 
The property in question was leased out by the 
8 
appellant in favour of Mis Caltex India Ltd. for 20 years 
from 1.07.1960 renewable and determinable as provided 
in ttie lease deed on monthly rent. The said property was 
mortgaged by the appellant on 12.01.1962. Meanwhile, 
the Caltex [Acquisition of Shares of Caltex Oil Refining 
C 
(India) Ltd. and of the Undertakings in India of Caltex 
(India) Limited] Act 1977, came to be enacted and 
respondent no.1-Corporation became the successor of 
ori~inal lessee. The property was redeemed in favour of 
the appellant on 15.4.1983. 
D 
Subsequently, the appellant issued a notice under 
Section 106 and 111 (g) of the Transfer of Property Act 
to respondent No.1 determining the tenancy of the 
property and directed the first respondent to vacate the 
same. A suit for ejectment of the respondents and for 
E 
possession of the property was also filed by the 
ap·pellant. During pendency of the suit, the first 
respondent sent a notice to the appellant to execute 
renewal of lease deed; and also filed written statement 
specifically pleading that the lease deed contemplated a 
F 
provision for renewal of the lease for a period of 20 years 
and that a notice for renewal of the lease had already 
been sent to the appellant. 
The trial court held that the appellant was not entitled 
to terminate the tenancy in view of the Act of 1977 as the 
G said Act is a Special Act and prevails over the Transfer 
of Property Act. The order was set aside by the 1st 
appellate court. The respondents filed appeal before the 
High Court which allowed the same holding that the 
appellant-lessor was under the legal obligation to renew 
H 
tl)e lease term for further period of 20 years in terms of 
RAM BHAROSEY LAL GUPTA(D) BY LRS. v. HINDUSTAN 325 
PETROLEUM CORP. LTD. 
clause 3 (d) of the lease deed. 
The question which arose for consideration in the 
present appeal was whether the High Court was justified 
in setting aside the judgment of the first appellate court, 
A 
by holding that there was deemed renewal of lease of the 
8 
demised property for a period of 20 years from (07.1980 
to 1.07 .2000. 
Allowing the appeal, the Court 
HELD: 1.1. It is an undisputed fact that the demised 
C 
premises was mortgaged in favour of the mortgagee with 
possession as the appellant had executed mortgage 
deed in his favour on 12.01.1962, who continued to be a 
mortgagee till the appellant redee
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