BHARAT PETROLEUM CORPORATION LTD. v. CHEMBUR SERVICE STATION

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SERVICE STATION [H.L. GOKHALE, J.] premises be changed or altered without the previous A 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 8 provided by the Company ..... .".

(v) In Clause 12 - ''This Licence may be terminated witpout 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 C expiration of any such rrotice this Licence shall stand cancelled and revoked. The requisite period of notice may be reduced or waived by mutual consent."

(vi)'ln Clause 13 (a) - " Notwithstanding anything to the D' 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:

(vii) - If the Licensees shall be guilty of a breach of any of the covenants and stipulations on their part contained in this agreement. ..... ". F (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 G 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 atJiberty to evict them by using such means as may be necessary and prevent them from entering upon the H

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A 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 B 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." c

20. It was therefore, submitted on behalf of the appellant that both the suits filed by the respondent were mis-conceived. Firstly, the respondent has approached the Court of Small Causes under the MRC Act for a declaration that it is the tenant D 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 a:-: 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 E 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 petroleum products at a price fixed by the Ministry

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SERVICE STATION [H.L. GOKHALE, J.] of Petroleum from time to time. The manipulation in the A 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. B 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 c 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, 0 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. E

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 F 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:- G

" (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 H

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A 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 B 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 C 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 Bombay Rents, Hotel and Lodging Houses, Rates Control Act 1947 (shortly called as Bombay Rent Act), which act has been since repealed and replaced by D 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. E Section 15 A of the Bombay Rent Act reads as follows:-

"15A. Certain licensees in occupation on 1st February 1973 ·to become tenants- F (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 G 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. H

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SERVICE STATION [H.L. GOKHALE, J.] (2) The provisions of sub-section (1) shall not affect A 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 8 whose account rent is payable for any premises and includes,-

(a) such person,-

(i) who is a tenant, or c (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 D landlord, or

(iv) who has derived title under a tenant, or

(v) to whom interest in premises has been assigned or transferred as permitted, E

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 submittect by the respondent that both these suits and injunction granted by the H •

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A 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 impugned order that the appellant ought to have resorted to the remedy under the Public Premises Act, whereunder 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 F observation by the Learned Single Judge in that order cannot be read as a determination on the 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 G 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 H

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SERVICE STATION [H.L. GOKHALE, J.] the Civil Court will not preclude the appellant from taking steps A 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 there aspects, we have to note 8 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 C 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:-

SC. "2(e) " public premises" means - D (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 E 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 H

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A 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 B 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."

C 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 D the Learned Single Judge has 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 E 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 F 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 G 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.

H 29. This being the position it is not possible for this Court

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SERVICE STATION [H.L. GOKHALE, J.] to find any fault with the impugned order passed by the Learned A 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 B 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. C 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 0 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 E appellant relied upon the observations in para 85 of the , ·judgment in Bishna Alias Bhiswadeb Mahato and 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 F 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. .. , H

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A 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 8 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 C 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.

o 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 G 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 H a distributing agent of the gas cylinders in Amritsar. On

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SERVICE STATION [H.L. GOKHALE, J.] .. receiving the complaints about the working of the distributorship, the appellant had terminated the agency. Thereupon 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 C 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 D 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 E 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 (as reported in AIR 1986 SC Page 180) based on authorities are as follows:- F ·· .·.

"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.-- G

--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 wit.h H

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A 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 8 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 impugned 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.

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SERVICE STATION [H.L. GOKHALE, J.]

35. It is true that in Southern Roadways Limited (supra) A this Court did observe in paragraph 22 that the possession 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 B 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 c 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 0 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, E the agent also has the right to remain on the property of the principal under Section 221 of the Contract Act, for the reliefs which are available under that section if he makes out such a case. It is another matter that as stated ahove 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. H

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36Copy pinpoint36. 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 B 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 respondent has relied upon a voluminous c 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 0 Article 14 of ~he 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.

37Copy pinpoint37. 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 Single 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

BHARAT PETROLEUM CORP. LTD. v. CHEMBUR . 697 SERVICE STATION [H.L. GOKHALE, J.] 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.

38Copy pinpoint38. This appeal is, therefore, dismissed though there will be no order as to costs. B

ORDER

Leave granted.

In view of the divergence in views, the Registry is directed c to place the matter before the Hon'ble Chief Justice of India for placing the matter before a larger Bench.

N.J. Matter referred to larger Bench.