Supreme Court of India
BHARAT PETROLEUM CORPORATION LTD.versusCHEMBUR SERVICE STATION
- Citation
- 2011 INSC 174
- Decided
- 2 March 2011
- Disposal
- Matter referred to larger bench
- Bench
- R V RAVEENDRAN
Holding
The DPSL agreement creates a revocable licence, not a tenancy; the respondent is not a deemed tenant, and BPCL may recover possession under the Public Premises Act, subject to due‑process requirements.
Summary
Bharat Petroleum Corporation Ltd (BPCL) entered into a Dispensing Pump and Selling Licence (DPSL) agreement with Chembur Service Station, appointing it as a dealer to sell BPCL's petroleum products. After a surprise inspection revealed alleged manipulation of a dispensing unit, BPCL issued a show‑cause notice and subsequently terminated the agreement, stopping product supply. The respondent obtained interim orders maintaining its possession of the petrol pump and, initially, the supply of petroleum products. Various courts issued conflicting orders on whether the respondent was a tenant or merely a licensee and whether BPCL could evict the respondent under the Public Premises Act. The Supreme Court held that the DPSL agreement created a revocable licence, not a tenancy, and that the respondent did not become a deemed tenant under the Bombay Rent Act. Consequently, BPCL is entitled to regain possession of the premises and may seek eviction under the Public Premises Act, but must follow due process and cannot use force. The Court set aside the lower courts' status‑quo orders and dismissed the appeal.
Issues considered
- What is the nature of the licence granted to the respondent under the DPSL agreement – licence or tenancy?
- Was the High Court justified in upholding the interim status‑quo order and directing BPCL to seek possession through the Public Premises Act?
- Does the licence granted on 1‑April‑1972 fall within the definition of a licence under Section 5(4A) of the Bombay Rents, Hotel and Lodging Houses, Rates Control Act, 1947, thereby making the respondent a deemed tenant under Section 15A?
Legislation cited
Subjects
licencetenancydeemed tenantpublic premises actevictionagencydealership agreementpetroleum productsrent controlpossessiondue processcontract law
Judgment
[2011) 3 S.C.R. 632
A BHARAT PETROLEUM CORPORATION LTD.
V.
CHEMBUR SERVICE STATION
(Civil Appeal No(s). 2276 of 2011)
MARCH 02, 2011
B
[R.V. RAVEENDRAN AND H.L. GOKHALE, JJ.]
Public Premises (Eviction of Unauthorised Occupant)
Act, 1971 - Appellant, PSU, in the year 1972, entering into a
C dealership agreement with the respondent, appointing it as
dealer to sell appellant's petroleum products at appellant's
premises at ·the price specified by the appellant - Breach of
trust by the respondent - Show cause notice by the appellant
as to why dealership agreement be not terminated - Suit
o before the Single Judge of Court of Small Causes - Interim ·
order directing the appellant to maintain status quo to the
effect that the respondent shall remain in possession of the
petrol pump and that the appellant shall continue to supply
petrol and petroleum products to the petrol pump at the suit
E premises - On appeal, the Division Bench of the ~urt of
Small Causes vacated the direction to continue supply of
petrol and petroleum products but maintained the order of
status quo with respect to possession of the respondent -
Cross-writ petitions - High Court upheld the order which
F vacated the direction to the appellant to continue supply of
petrol and petroleum products - High Court also clarified that
the said order of status quo did not preclude the appellant
from taking recourse to recovery of possession of the suit
property from the respondent by following due process of law
including by resorting to action under the provisions of the
G Public Premises Act, if permissible - Meanwhile, termination
of the dealership agreement - On appeal, held: Difference of
opinion on issues as to nature of licence granted to the
respondent by the appellant under the Agreement; whether
H 632
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 633
SERVICE STATION
the High Court was justified in upholding the grant of interim A
order of status quo and diracting the appellant to secure
possession from the raspondent of the petrol pump premises
by resorting to proceedings under the 1971 Act; and whether
the respondent had become a deemed tenant in 1972 -
Matter referred to Larger Bench ...:. Bombay Rents, Hotel and B
Lodging Houses, Rates Control Act, 1947 - ss. 15A and
5(4A).
In the year 1972, the appellant Company-PSU
engaged In refining, distributing and selling petroleum C
. ' products, entered Into a Dispensing Pump and Selling
· Licence Agreement with the respondent, appointing It as
the dealer for selling the petroleum products of the
appellant from Its Retail Petroleum Outlet (RPO) at the
price specified by the appellant. In the year 1995, a fresh
dealership agreement was executed between the parties.. D
The respondent allegedly manipulated/altered the original
chip In the dispensing unit with a view to make Illegal
gain by cheating the customers of the company. The
appellant Issued a shQw cause notice to the respondent
to show cause as to why his dealership agreement E
should not be terminated. The respondent then flied a suit
In the Court of Small Causes for a declaration that the
respondent was a tenant of the appellant company in
respect of the structures, and sub-tenant of the appellant
In regard to the land on which RPO was sltuatedi that the F
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;
and that the show cause notice was Illegal and the
appellant had no sufficient cause for withholding the G
essential supply of petrol and petroleum products. The
respondent also flied an Interim application to restrain the
appellants from dispossessing them from the premises
and also from withholding supply of petrol and petroleum
products. The Slngle Judge of the Court of Small Causes H
634 SUPREME COURT REPORTS [2011] 3 S.C.R.
A granted an interim order of staus quo directing the
appellant not to dispossess the respondent from the
petrol pump and to continue the supply of petrol and
petroleum products to the petrol pump in the suit
premises to the respondent. On appeal, the Division
B Ben.ch of the Court of Small Causes set aside the
direction to continue the supply of petrol and petroleum
products in the suit premises to respondent but
maintained the order of status quo with respect to the
possession of the respondent.
c In the writ petition filed by the respondent, the order
vacating the direction to continue to supply petrol and
petroleum products was upheld. In the writ petition
challenging permission granted to the respondent to
remain in possession of the suit premises was disposed
D of by clarifying the order of status quo that the said order
shall not preclude the appellant from taking recourse to
recovery of possession of the suit property from the
respondent by following due process of law including by
resorting to action under the provisions of the Public
E Premises Act, if permissible. Meanwhile, the respondent
filed another suit seeking a direction that the appellant
should continue to supply the petroleum products.
Subsequently, the appellant terminated the dealership
agreement and stopped the supplies of petroleum
F products to RPO. Thereafter, the respondent filed a third
suit seeking declaration that the termination was illegal
and unenforceable. Therefore, the appellant filed the
instant appeal.
The questions which arose for consideration in this
G appeal are what is the nature of a licence that is granted
to the respondent by the appellant under the DPSL
agreement; 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
H
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR 635
SERVICE STATION
respondent's 'possession' of the petrol pump premises A
and requiring the appellant to resort to appropriate legal
action to secure possession from the respondent; and
whether the licence to use the petrol pump premises for
the purpose of sale of the petroleum products of _the
appellant granted to respondent on 1.4.1972 could be B
construed as a licence as defined in Section 5(4A) of the
Bombay Rents, Hotel and Lodging Houses, Rates Control
Act, 1947 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 c
date be deemed to have become a tenant of the landlord
in respect of the premises in his occupation.
Referring the matter to larger Bench, the Court
HELD: PER RAVEENDRAN J: D.
1.1. The definition of licence under the Easements
Act, 1882 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. Licences can be of different kinds. Some E
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. In between are the
licences of different hues and degrees. All licences can F
not be treated on the same footing. [Paras 18 and 20]
[656-G-H; 657-B-C; 659-C]
Associated Hotels of India Ltd. v. R.N. Kapoor AIR 1959
SC 1262; C.M. Beena vs P.N. Ramachandra Rao 2004 (3) G
sec 595 - referred to.
1.2. 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 H
636 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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.
B The employee/agent cannot claim any 'possession and
occupation or 'right to use' independent of the employer/
principal who is the licensor. 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
C 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
0
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 or
E 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
F 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 against the ex-employee or ex-agent. The
·G licensor can protect or defend its possession and
physically prevent the licensee (employee/agent) from
entering the outlet. [Para 21] [662-D-H; 663-A-D]
Southern Roadways Ltd. Madurai v. SM Krishnan (1989)
H 4 SCC 603 - referred to
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 637
SERVICE STATION
1.3. In the instant case, the DPSL Agreement clearly A
demonstrated that licence granted by the appellant
enabled the licensee-respondent to enter upon the outlet
premises only for the limited purpose of using the
facilities for purposes of sale of appellant's Motor Spirit,
HSD, Motor oils, Greases or other motor accessories as B
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 c
licence granted to the respondent to sell the appellant's
petrol and petroleum products was terminated. 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 courts below 0
completely lost sight of the same. [Para 23) [666-A-D-E]
1.4. 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 E
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 F
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 G
licence to use the appellant's facilities for sale of
appellant's products comes to an end and supply of
appellant's product for sale by the respondent is stopped,
there is no question of the· licensee entering the outlet
premises at all or remaining in the outlet premises or H
638 SUPREME COURT REPORTS (2011] 3 S.C.R.
A using the outlet premises. [Para 24] [666-G-H; 667-A-C]
1.5. 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 the instant case, the premises is
8
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
C 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, invalid and infructuous. There is no .
licence in favour of the licensee to use the premises or
D 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
E 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. [Para 25] [667-E-H; 668-A]
F
1.6. 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
G 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 the sue the licensee
for 'possession' of such company controlled retail outlet
H
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR 639
SERVICE STATION
premises. This is not a case where the licensee has A
alleged 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 s
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. [Para 26] [668-8-E] C
1.7. It is made clear that this decision applies only to
licences where the licensor is the owner/lessee of the
premise 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. D
In other words, this decision would apply to petrol
stations which are known as CCRO. (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 E
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 F
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. [Para 27] [668-G-H; 669-A-C]
G
1.8. In the instant 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 H
640 SUPREME COURT REPORTS [2011] 3 S.C.R.
A be taken including termination of the dealership.
Therefore, when such a notice is issued as a precursor
to termination, the respondent license 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
B 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
if the termination or non-supply amounts to breach of
contract, the remedy of the agent-licensee at best is to
c seek damages, if it is established that the dealership was
wrongly determined or supply was wrongly stopped.
Thus, 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. [Para 28] (669-C-F]
D 2.1. 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
E 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 description of the
F person as 'licensee', but the person being in occupation
of a premises as licensee as on 1.2.1973. Every person
who holds any type of 'licence' does not become a tenant.
The deemed tenancy under Section 15A of the Bombay
Rents, Hotel and Lodging Houses, Rates Control Act,
G 1947 refers to a person who held a licence to use a
premises for his own use as on 1.2.1973. (Para 32] (673-
C-F]
2.2. Section 5(4A) of the 1947 Act defined a licensee
in respect of any premises or any part thereof, as
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 641
SERVICE STATION
referring to the person who is in occupation of the A
premises or such part under a subsisting agreement for
licence given for a licence fee or charge. It makes clear
that 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 B
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 products of the
appellant, the unit is running business of the appellant. c
An agent licensed to run RPO of the appellant, which is
a running business belonging to the appellant is not
therefore, a 'licensee' either under the 1947 Act nor under
the Maharashtra Rent Control Act, 1999. Therefore, the
respondent did not become a tenant under the appellant 0
nor became entitled to protection against eviction. [Para
33] [673-G-H; 674-A-C]
2.3. 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 E
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. If the respondent had F
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. Thus, the
submission that even if the respondent had become a G
deemed tenant in pursuance of the agreement dated
1.4.1972, such a tenancy came to an end and the
appellant again became licensee pure and simple from
1.12.1995 when the fresh agreement was entered, does
not require to be considered. [Para 34] [674-D-G] H
I
642 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 2.4. The order of the High Court and the order of the
courts below, directing status quo are set aside. 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
B 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. [Para
. 35) [675-A-B]
Case Law Reference:
c
AIR 1959 SC 1262 Referred to Para 19
2004 (3) sec 595 Referred to Para 19
198.9 (4) sec 603 Referred to Para 22
D
PER GOKHALE J.:
1.1. In the facts of the instant case, there is no
conflict between the two orders passed by the two Single
Judges. The writ petition was filed by the respondent to
E challenge the order of the Appellate Bench of the Court
of Small Causes 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
F that part of the order, and therefore, when the Single
Judge held that there was no reason to interfere with that
order, the order would have to be read as confined to the
grievance of the respondent raised before the Judge.
The part of the order of the Appellate Bench of the Court
G 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 Single Judge in that order cannot be
read as a determination on the correctness or otherwise
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 643
SERVICE STATION
of this part of the order which was not in challenge in that A
proceeding. As far as the other part of the Appellate
Bench, protecting the possession of the respondent was
concerned, the same was in challenge only before the
other Single Judge in the Writ Petition at the instance of
the appellant. In that petition the Single Judge has .held B
that the pendency of the proceeding in the Civil Court
would not preclude the appellant from taking steps in
accordance with due process of law, which according to
the Single Judge was taking steps under the Public
Premises Act, if permissible. [Paras 25 and 26] [668-C-H; c
689-A]
1.2. 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 D
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. [Para 27] [689-B-C]
E
1.3. No fault can be found with the impugned order
passed by the Single Judge viz. that it would be open to
the respondent to take steps in accordance with the
Public Premises Act which would be the due process of
law, and not by any force. The termination of the F
dealership agreement by the appellant would render the
occupation of the premises by the respondent to be
unauthorised one and it would be open to the
respondent to take further steps to. take possession
thereof though only in accordance with the due process G
of law. This much minimum protection has to be read into
the relationship created between the parties under the
. clauses of the agreement. 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 H
644 SUPREME COURT REPORTS [2011] 3 S.C.R.
A functions to be performed by the public authority which
has the power to take punitive or the damaging actions.
[Para 29] [690-H; 691-A-C]
1.4. By no stretch of imagination the respondent can
8 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
C authority in this fashion is totally unacceptable and
deserves to be rejected. [Para 30] [692-B-C]
1.5. In the instant case, the respondents are
occupying the premises, may be as an agent of the
appellant, right from the 1st April 1972. The respondent
D 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 Single
Judge has observed in the impugned order that the order
of status-quo would operate only till the competent
E 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
instant appeal, and therefore, it binds them. In the
circumstances of the instant case, the Single Judge
F 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 unauthorized. He has rightly
observed that the pendency of the proceeding in the Civil
G Court cannot 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. However, it is made clear that in any case
H possession cannot be obtained by force. There is no
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR 645
SERVICE STATION
reason for this Court to take any different view. The A
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. [Para 34] [694-8-G]
B
1.6. In the facts of the instant case, 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. C
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 would be required to be provided to
the respondent in the facts of the instant case, when he
is in occupation of the concerned premises for nearly 40 D
years. 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 Act, for E
the reliefs which are available under that Section if he
makes out such a case. Furthermore, 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. Thus, it F .,,
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 G
highest the respondent would be entitled to, would have
to be considered and decided before an appropriate
forum. [Para 35] [695-C-H]
1.7. All throughout the respondent contended that H
646 SUPREME COURT REPORTS [2011] 3 S.C.R.
A they have been in exclusive possession of the premises
· concerned, and all the employees on the premises are
that of the respondent. In the third suit filed in the City
Civil Court, the respondent has specifically pleaded that
the termination of the licence was without any reasons
B and was contrary to public policy, and was violative of
Article 14 of the Constitution of India. The 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
c 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 are an expeditious
proceeding and that is something minimum in the
circumstances. A Public Corporation, from which a
0
higher standard is expected, cannot refuse to follow this
much minimum due process of law. [Para 36] [696-A-C-
F]
1.8. There is no reason to interfere with the order
E passed by the Single Judge. However, the observations
made are for the purpose of deciding the correctness or
otherwise of the impugned order passed by the Single
Judge and not on the merit of the rival claims. In the
event, the appellant takes the steps under the Public
F Premises Act, it would be open to the respondent to plead ·
their case before the competent authority on all counts,
though it would also be open to the concerned competent
authority to take its own decision on the merits of the
rival contention on facts as well as on law. [Para 37] [696-
G G-H; 697-A]
Southern Roadways Ltd. vs. S.M. Krishnan 1989(4) SCC
603; Amritsar Gas v. Indian Oil Corporation 1991 (1) SCC
533; Maneka Gandhi v. Union of India 1978 (1) SCC 248;
Bishna Alias Bhiswadeb Mahato and Ors. vs. State of West
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 647
SERVICE STATION
Bengal 2005(12) SCC 657; Olga Tallis vs. Bombay Municipal A
Corporation AIR 1986 SC 180 - referred to.
Case Law Reference:
1989(4) sec 603 Referred to. Para 16
B
1991 (1 > sec 533 Referred to. Para 18
1978 (1) sec 248 Referred to. Para 29
2005(12) sec 657 Referred to. Para 30
AIR 1986 SC 180 Referred to. Para 33 c
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2276 of 2011.
From the Judgment & Order dated 29.1.2009 of the High D
Court at Bombay in Writ Petition No. 8130 of 2008.
C.A. Sundaram, Parijat Sinha, Reshmi Rea Sinha, S.C.
Ghosh, Vikram Ganguly, Rohini Musa, Abhishek Gupta for the
AP,pellant.
E
R.P. Gupta, Suman Gupta, Mehul Milind Gupta, Omika
Dubey, Sushendra K. Chauhan for the Respondent.
The Judgment of the Court was delivered by
R.V. RAVEENDRAN, J. 1. Leave granted. F
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 G
petroleum products, such as Motor Spirit (MS/Petrol), High
Speed Diesel (HSD), Keros<;ne, Liquefied Petroleum Gas
(LPG), etc. all over the coun!ry. It is the successor-in-title of
Burmah-Shell Oil Storage and Distributing Company of India
Ltd. (for short 'Burmah Shell').
H
648 SUPREME COURT REPORTS [2011) 3 S.C.R.
A 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,
s 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
c 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
D 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
E 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
F 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
G 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.CIC 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
H the Dispensing Unit was checked on flash mode 55555 twice,
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 649
SERVICE STATION [R.V. RAVEENDRAN, J.]
it gave short delivery of 210 ml. (that is as against 5 litres, the A
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 B
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 c
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
0
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 E
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 F
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
withholding the essential supply of petrol and petroleum
products; (d) for a permanent injunction restraining the G
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. H
650 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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.
B
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,
C 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.
D
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
E 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
F 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
G 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 011/P No.6689/2008) was
dismissed by a learned Single Judge by judgment dated
H 1.10.2008. The writ petition filed by the appellant (W.P.
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 651
SERVICE STATION [R.V. RAVEENDRAN, J.]
No.8130/2008) was disposed of by a brief order dated A
29.1.2009, 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
Co1,1rt to mean that the said order of status quo shall not B
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. c
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 D
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/ E
set aside the 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 F
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 G
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 H
652 SUPREME COURT REPORTS [2011) 3 S.C.R.
A 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
8
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; (b) for a permanent
injunction restraining the appellant or giving effect to the
termination notice dated 19.3.2009; and (c) for an order
C 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.
D 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
E 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
F 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
G 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
H of the dealership is invalid, the only relief that could be claimed
'
BHA'f~AT PETROLEUM CORP. LTD. v. CHEMBUR 653
S~RVICE STATION [R.V. RAVEENDRAN, J.]
by the cl.x- dealer/agent is award of compensation. A court could A
not ther~fore grant temporary injunction requiring the appellant
to maintain status quo, thereby permitting the respondent to
1
hold on to the petrol pump premises and prevent the use
1
thereof by the appellant in the manner it deems fit.
' .B
Contention of Respondent
. . .
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 C
licensee is in lawful o·ccupation 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, D
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 E
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
F
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 G
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
H
654 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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
B
for the purpose of sale of the petroleum products of 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 1SA of the
said Act which provided that any person who was in
c 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
?
D The contract
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
E 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
F 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
G AGREED AND DECLARED AS FOLLOWS :
"1. 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
H the Motor Spirit and/or H.S.D. Pumps, Storage Tanks,
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 655
SERVICE STATION [R.V. RAVEENDRAN, J.]
Pipes and Fittings and all other facilities erected and A
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 B
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 c
during the continuance of this Licence at its sole discretion.
xx xx
4. The said premises and the said facilities shall at all
times during the continuance of this Licence remain the D
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. E
5. The premises and the said facilities hereby licensed to
the Licensees shall only be used for stocking and selling/
dispensing the Petroleum ProJucts of the Company and
shall not be used for any other purpose except as may be F
permitted in writing by the Company.
xx xx
9. Neither the Licensees nor the Licensees' servants or
agents shall interfere in any way with the working parts of G
the pumps or other equipment provided by the Company.
xx xx
12. This Licence may be terminated without assigning any
reason whatsoever by either party giving to the other not H
656 SUPREME COURT REPORTS (2011] 3 S.C.R.
A 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.
B
xx xx
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
C 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
D by using such means as may be necessary and prevent
them from entering upon the licensed premises.
xx xx
18. The Licensees hereby expressly agree and declare
E 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
F . be construed to create any tenancy or other right of
occupation whatsoever in favour of the Licensees.•
(emphasis supplied)
Re : Questions (i) and (ii)
G
18. Licence is defined in section 52 of the Indian
Easements Act, 1882 as under :
"52. 'License' defined :
H
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR 657
SERVICE STATION [R.V. RAVEENDRAN, J.]
Where one person grants to another, or to a definite A
number of other persons, a right to do, or continue to do,
in or upon the immovable property of the granter,
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." B
The 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 oflndia Ltd. v. R.N. Kapoor(AIR C
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 o
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 E
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......"
F
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 G
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 H
658 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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
B 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,
c 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
D 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
E 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 rear test is the
intention of the parties - whether they intended to create a
lease or a licence~ (3) if the document creates an interest
F 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
G
intention to create a lease .. ."
In C.M. Beena ·vs. P.N. Ramachandra Rao - 2004 (3)
SCC 595, this Court explained a Licence thus :
H "Only a right to use the property in a particular way or under
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 659
SERVICE STATION [R.V. RAVEENDRAN, J.]
certain terms given to the occupant while the owner retains A
the control or possession over the premises results in a
licence being created; for the owner retains legal
possession 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 B
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 C
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.
D
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 E
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) F
will be a lease, even if described as licence. For example, if
the exclusive 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 G
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. H
660 SUPREME COURT REPORTS [2011] 3 S.C.R.
A Illustration (8):
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
8
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
C to individual shops to licensees to carry on the identified or
earmarked business. 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
D 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
E 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
F will be a lease or tenancy and the licensee cannot be
dispossessed or evicted except by recourse of law.
Illustration CC):
In a shopping complex or in a mall the owner gives a
G 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
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR , 661
SERVICE STATION [R.V. RAVEENDRAN, J.]
· customers to the mall and not exclusively by the customers of A
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 B
'possession' or 'eviction'.
Illustration (0):
A much narrower version of a licence is where an exhibitor ·
of cinematograph films, or a theatre owner permits a 'customer' C
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 forthe 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 D
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 in the theatre or use the toilet/closet E
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 (El: F
A reputed manufacturer of textiles owns sel.teral retail
outlets in different parts of the country. The outlets are housed
iri premises owned by the manufacturer or premises taken by
it on lease. The manufacturer employs a sales manager on G
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 H
662 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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
B 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
of the employee/agent, the manufacturer can physically prevent
the sales manager/agent from entering the retail outlet and
c 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
D 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
E 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
F 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 the premises and unless
evicted through a court of law entitled to continue in occupation.
G 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
H and conditions stipulated in the contract of employment/agency
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR 663
SERVICE STATION [R.V. RAVEENDRAN, J.]
in regard to the manner of sales, the prices at which the goods A
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 B
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- c
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 against the ex-employee or ex-agent. The licensor
can protect or defend its possession and physically prevent the
0
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 E
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 F
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 G
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 H
664 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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
B
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
c 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
D 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
E 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.
F
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
G 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
H
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR 665
SERVICE STATION [R.V. RAVEENDRAN, J.]
removal the company could carry on its business as usual. A
The company under the terms of the agreement is,
therefore, entitled to assert and exercise its right which
cannot be disputed or denied by the respondent.
.... under law, revocation of agency by the principal 8
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 C
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 D
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.
i E
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 F
principal for all purposes.
In this case,· the respondents' possession of the ~uit
premises was on behalf of the company and not on: his
own right.
G
a:
It is, therefore, unnecessary for the company to file suit
for recovery of possession. The respondent has no tight
to remain in possession of the suit premises after
termination of his agency. He has also no right to inte.rtere
with the company's business." H
666 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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 for the limited purpose of using the facilities (that is Motor
Spirit/HSD Pumps, storage tanks etc.) for purposes of sale of
B 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 ~espondent could not sell any other goods
or the products of any one else. It could not charge a price
c 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
D 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
E 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 dispensers/
pumps attached to storage tanks through pipes/fittings) and the
F 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
G 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
H terminated or supply of appellant's products is stopped. Clause
'
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 667
SERVICE STATION [R.V. RAVEENDRAN, J.]
15 of the DPSL Agreement specifically provides that on A
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 B
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 entering the outlet premises at all or remaining in
the outlet premises or using the outlet premises. c
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 D
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 E
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'. F
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, invalid and
infructuous. There is no licence in favour of the licensee to use . G
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 H
668 SUPREME COURT REPORTS [2011) 3 S.C.R.
A 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
8
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
C 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
alleged that any amount is due to it from the licensor by way of
D 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
E 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
F 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
G 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
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR , 669
SERVICE STATION [R.V. RAVEENDRAN, J.]
('Company Controlled Retail Outlets').· If the licensee is himself A
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 8
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.
c
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 D
, 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 rig~1 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 E
and use the premises. The show cause notice was followed by
a termination of the licence of dealership on 19.3.2009. Even
if 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 F
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.(iiil
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 H
670 SUPREME COURT REPORTS [2011) 3 S.C.R.
A evicted only by filing a petition for eviction under the Rent Act.
30. To appreciate the said contention of the respondent,
it is necessary t<J refer to the relevant provisions of the relevant
rent law. We may first refer to the definitions of 'tenant' and
B 'licensee' under the old Bombay Rent Act and MRC Act.
Section 7<15Ha) of the MRC Section 5( 11) of the Old
16.ct reads as follows :- Bombay Rent Act
(15) "tenant" means any "Tenant" means any person
C person by whom or on by by whom or on whose
whose account rent is account rent is payable for
payable for any premises any premises and includes,-
and includes,-
(a) Such sub-tenants and
(a) such person,- other persons as have
0 derived title under a tenant
(i) who is a tenant, or (before the 1st day of
(ii) who is a deemed February, 1973;
tenant, or
(aa) any person to whom
(iii) who is a sub-tenant
E interest in premises has been
as permitted under a
assigned or transferred as
contract or by the permission
permitted or deemed to be
or consent of the landlord, or
permitted, under section 15;
(iv) who has derived title
under a tenant, or xxxxxxx
F (v) to whom interest in
premises has been assigned (bb) such licensees as are
or transferred as permitted, deemed to be tenants for the
purposes of this Act by
by virtue of, or under the section 15A;
G provisions of, any of the
repealed Acts; xxxxxxx
(b) a person who is deemed
to be a tenant under section
H 25;
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 671
SERVICE STATION [R.V. RAVEENDRAN, J.]
A
(c) a person to whom interest
in premises has been .
assigned or transferred as
permitted under section 26·•
B
xxxxxxx
Section 7(5) of the MRC Act Section 5(4A) of the old
Bombay Rent Act
(5) 'Licensee', in respect of c
any premises or any part (4A) 'licensee', in respect of
thereof, means the person any premises or any part
who is in occupation of the thereof, means the person
who is in occupation of the the case may be, under a
premises or such part, as subsisting agreement for
D
premises or such part, as licence given for a licence
the case may be, under s fee or charge; and includes
subsisting agreement for any person in such
licence given for a licence occupation of any premises
free or charge; and includes or part in a thereof building
vesting co-leased to a E
any person in such
occupation of any premises operative housing society
or part thereof in a building registered or deemed to be
vesting in or in or leased to registered under the
a co-operative housing Maharashtra Co-operative
Societies Act, 1960; but F
society registered or
deemed to be registered does not include a paying
under the Maharashtra Co- guest, a member of a family
operative Societies Act residing together, a person
1960 (Mah. XXIV of 1961) in in the service or
but does not include a employment of the licensor, G
paying guest, a member of a or a person conducting a
family residing together, a running business
person the service or belonging to the (for a
employment of the licensor, person having any
H
672 SUPREME COURT REPORTS (2011] 3 S.C.R.
A or a person conducting a accommodation for
running business rendering para-medical
belonging to the licensor, activities in or near a services
or a person having any or nursing home, hospital or
accommodation for or carrying on medical or
B rendering or carrying on sanatorium, dharmashala,
medical or paramedical home for widows, orphans or
services or activities in or like premises, marriage or
near a nursing home, public hall or like
hospital, or sanatorium or a premises ........ ."
C person having any
accommodation in a hotel,
lodging house, hostel, guest
house, club, nursing home,
hospital, sanatorium,
o dharmashala, home for
widows, orphans or like
premises, marriage or public
hall or like premises ...... ."
(emphasis supplied)
E
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
F follows: -
"15A. Certain licensees in occupation on 1st February
1973 to become tenants-
(1) Notwithstanding anything contained elsewhere in this
G 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
H on that date be deemed to have become, for the
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 673
SERVICE STATION [R.V. RAVEENDRAN, J.]
purpose of this Act, the tenant of the landlord, in A
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 B
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.
c
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
I in its own right for its own proposes, but was using the outlet
-and facilities in the possession and occupation of the appellant, D
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 description of the
person as 'licensee', but the person being in occupation of a E
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 F
holds any type of 'licence' does not become a tenant. The
deemed tenancy under Section 1SA 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 G
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 H
674 SUPREME COURT REPORTS [2011) 3 S.C.R.
A 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 equipmenVfacilities for sale of its products and the
outlet is exclusively used for the sale of the products of the
B 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
c 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
D 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
E 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
F leasehold or tenancy rights in the premises. In view of the
above, it is not necessary 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
G become licensee pure and simple from 1.12.1995 when the
fresh agreement was entered, does not require to be
considered.
Conclusion
H 35. In view of the above, this appeal is allowed. The order
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 675
SERVICE STATION
of the High Court and the order of the courts below, directing A
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 B
basis of the evidence, in accordance with law, keeping in view
the legal position explained above.
GOKHALE J. 1. Leave Granted.
2. This appeal seeks to challenge the order passed by a C
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 D
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,
issuing a show cause notice, and terminating the dealership
after considering the reply of the respondent, is the required E
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 F
referred to as Burmah Shell). On 2.9.1971, Burmah Shell took
on lease a piece I 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 G
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 H
676 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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.
B
4. The Burmah Shell Company was taken over by the
Government of India under the Burmah Shell (Acquisition of
Undertakings in India) Act, 1976, anti later the name of the
Company was changed to Bharat Petroleum Corporation ltd.
C (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
D 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
E 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
F 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
G 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
H relevant provisions of the agreement between the parties
BHARAT PETROLEUM CORP. I,.TD. v. CHEMBUR 677
SERVICE STATION [H.L. GOKHALE, J.]
stating therein that the respondent had manipulated I altered A
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. B
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 C
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 D
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 E
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 F
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 G
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."
H
678 SUPREME COURT REPORTS [2011) 3 S.C.R.
A 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
8
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
C 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.
D
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
E 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
F 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 Single 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
G 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
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 679
SERVICE STATION [H.L. GOKHALE, J.]
of tenant and landlord. Until then, such a mandatory order could A
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.
8
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 c
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 0
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 E
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"
F
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 G
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
H
680 SUPREME COURT REPORTS [2011) 3 S.C.R.
A 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
8
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
C 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:-
"in any case the possession of the premises cannot
be obtained by the Petitioner by force, but by following due
D 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
E 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
F summons I 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
G 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
H Public Premises (Eviction of Unauthorised Occupant} Act,
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 681
SERVICE STATION [H.L. GOKHALE, J.]
1971, hereinafter referred to as the Public Premises Act. They A
have terminated the dealership agreement and 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 B
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 C
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 D
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.
E
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 F
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 G
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.
H
682 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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
B 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
c the event the termination 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
D 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:-
E "(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
F 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
G 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
H
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 683
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:
E
(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
684 SUPREME COURT REPORTS [2011) 3 S.C.R.
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
F 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
G 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
H appellant's petroleum products at a price fixed by the Ministry
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 685
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
686 SUPREME COURT REPORTS [2011] 3 S.C.R.
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
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 687
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 F
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 G
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
•
688 SUPREME COURT REPORTS (2011) 3 S.C.R.
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
B 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
C 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
D 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
E 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
BHARAT PETROLEUM CORP. LTD. v. CHEM BUR 689
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, F
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 G
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
690 SUPREME COURT REPORTS [2011) 3 S.C.R.
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
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 691
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
692 SUPREME COURT REPORTS [2011] 3 S.C.R.
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
E 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
F 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
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 693
SERVICE STATION [H.L. GOKHALE, J.]
.. receiving the complaints about the working of the A
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 B
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
694 SUPREME COURT REPORTS [2011] 3 S.C.R.
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
C 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
D 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
E 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
F 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
G 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
H evicted.
BHARAT PETROLEUM CORP. LTD. v. CHEMBUR 695
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 F
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 G
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
696 SUPREME COURT REPORTS [2011] 3 S.C.R.
A 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
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
E 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
F 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
G 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
H 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 A
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. 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.
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