G. SRIDHARAMURTIversusHINDUSTAN PETROLEUM CORPORATION LTD. AND ANR.

A                   G. SRIDHARAMURTI
                            v.
      HINDUSTAN PETROLEUM CORPORATION LTD. AND ANR.

                               SEPTEMBER 13, 1995

B                [K. RAMASWAMY, B.P. JEEVAN REDDY
                        AND B.L. HANSARIA, JJ .]

         Rent and Eviction :

C         Kamataka Rent Control Act, 1961/Esso (Acquisition of Undertakings
    in India) Act, 1974:

          Sections 21(1)(/) and 23(1)-Non-agricultural <and-Leased out to
    Essa Company-Essa Company merged into Hindustan Petroleum Corpora-
    tion-Premises Trans/erred to Corporation-Landowners application for
D   ejectment on ground of sub-letting-:-Held, Corporation became statutory
    tenant-Transfer was not a voluntary act of assignment of interest intra
    vivas-Application for ejectment dismissed.

          Constitution of India :

E         Anicle 254( 1)-Seventh Schedule, List III, Entry 6--Laws made by
    Parliament and Legislature of a State-Inconsistency between-Section 7 of
    Essa (Acquisition of Undenakings in India) Act, 1974 enacted by Parliament
    and section 23 of Kamataka Rent Control Ac~ 1961 occupying same
    field-Held, both cannot exist hannoniously-To the extent of inconsistency
F   Kamataka Act becomes void.
                                                                                  •
          The appellant leased out the premises in dispute to Esso Company
    in July, 1969. The said company was merged into the respondent- Corpora-
    tion on March 14, 1974. The appellant filed· an eviction petition under
    section 21 (l)(t) of the Karnataka Rent Control Act, 1961 against the Esso
G   Company and the respondent-Corporation for ejectment on the ground of
    sub-letting. The courts below dismissed the application holding that the
    Esso Company did not sublet the demised premises but by virtue of
    statutory operation of the Esso (Acquisition of Undertakings in India) Act,
    1974 the respondent-Corporation stood transposed as a tenant. The High
H   Court affirmed the said decision. Aggrieved, the owner of the premises
                                       634
                   G. SRIDHARAMURTI v. H.P.C. LTD.                       635

filed the appeal by special leave.                                              A
      It was contended by the appellant that in view of the non- obstante
clause of sub-section (1) of section 23 of the Karnataka Rent Control Act,
1961, continuance of the respondent-Corporation in the premises would be
deemed to be sub-letting within the meaning of section 21 (l) (f) of the Act.
                                                                                B
      Dismissing the appeal, this Court

      HELD : 1.1. By statutory operation of the Esso (Acquisition of
Undertakings in India) Act, 1974, the pre-existing tenancy rights held by
Esso Company with the appellant initially stood transferred and vested in C
the Central Government, and thereafter, by operation of Section 7 of the
Esso Act, the said rights in turn stood transposed and vested in the
respondent-Corporation as if the respondent-Corporation statutorily be-
came the tenant of the appellant-landlord. It is not voluntary act of the
assignment of interest intra vivos. [638-A-B, G)
                                                                                D
      1.2. On the Esso Act coming into force, by operation of Sections 5
and 7 thereof, the respondent-Corporation became statutory tenant and
thereby it cannot be construed to be an assignment of tenancy rights, which
the appellant-landlord had entered int9 with the Esso Company, by the
Central Government in favour of the respondent-Corporation. [638-E)             E
       1.3. Though sub-section (1) of section 23 of the Karnataka Act
employing non-obstante clause excluded operation of any other enactment,
there is no specific provision in List II of the Seventh Schedule to the
Constitution Covering the Act. On the other hand, by virtue of Entry 6 of       F
List III of the Seventh Schedule, the legislature of the State and also
Parliament can enact law in relation to immovable property. Since the
Esso Act is a Central enactment, and latter too, the non-obstante clause
in Section 7 of the Esso Act excludes the operation of Section 23 of the
Karnataka Act. Both, the Karnataka Act and the Esso Act, occupy same            G
field and both cannot exist harmoniously. So to the extent of inconsistency,
the Karnataka Act becomes void by operation of Article 254 of the Con·
stitution. [638-C-D]

     M/s. Parasram Hamand Rao v. Shanti Prasad Narinder Kumar Jain
and Anr., [1980) 3 sec 565; inapplicable.                          H
    636                    SUPREME COURT REPORTS [1995] SUPP. 3 S.C.R.

A           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8780 of
    1995.

         From the Judgment and Order dated 25/26.6.90 of the Karnataka
    High Court in C.R.P. No. 3628 of 1982.

B           S.K. Kulkarni for Surya Kant for the Appellant.

         Santosh Hegde, M.K. Michael, Rajiv Kapur and Wasim Qadri for
    Ms. Sushma Suri for the Respondents.

            The following Order of the Court was delivered :
c           Leave granted. We have heard learned counsel for the parties.

          An open space measuring 66.6 x 40 feet comprised in Survey No.
    432/25 in Ward No. XVII situated at Bangalore-Bellary Trunk Road in the
    City of Bellary, was in the possession of Esso Company pursuan"l to a lease
D   dated July 17, 1969 granted by the appellant. Esso Company was merged
    into respondent-Corporation on March 14, 1974. The appellant filed evic-
    tion petition under Section 21(1) (f) of the Karnataka Rent Control Act
    1961 (for short, 'the Act') for ejectment on the ground of sub-letting,
    impleading Esso Company and thereafter, the respondent-Corporation.
E   The Esso (Acquisition of Undertakings in India) Act, 1974 (for short, 'the.
    Act) came into force w.e.f. March 13, 1974. The courts below dismissed
    the application on the ground that the Esso Company had not sublet the
    demised premises but by virture of statutory operatjon under the Esso Act,
    the respondent-Corporation stood transposed as a tenant which is an
    involuntary act pursuant to Section 7 of the Act; and notwithstanding the
F   specific embargo created under Section 21 (1) (t) of the Act, it cannot be
    construed to be a sub-letting. The High Court also reached the same
    conclusion on 25/26th June, 1990 in CRP No. 3628/82. Thus this appeal by
    special leave.

            Shri Kulkarni, the learned counsel appearing for the appellant, con-
G tended that Section 21 (1) (f) of the Act clearly prohibits assignment or
    transfer "in any manner" of the interest of the tenant deeming it to be a
    sub-letting. Therefore, in view of the non-obstante clause contained in
    sub-section (1) of Section 23 of the Act, the continuance of the respon-
    dent-Corporation in the premises must be deemed to be due to sub-letting
H   within the meaning of Section 21 (1) (t) of the Act. In support of his
                   G.SRIDHARAMURTI v. H.P.C. LTD.                            637

contention, he placed strong reliance on a ratio laid down by this .Court in A
M/s. Parasram Hamand Rao v. Shanti Prasad Narinder Kumar Jain & Anr.,
{1980] 3 sec 565, inapplicable.

      To appreciate the contentions, it is necessary to look at the provisions
of the Esso Act.
                                                                                    B
        Section 5 of that Act envisages :

        "5. (1) where any property is held in India by Esso under any lease
        or under any right of tenancy, the Central Government shall, on
        and from the appointed day, be deemed to have become the lessee             C
        or tenant, as the case may be, in respect of such property as if the
        lease or tenancy in relation to such property had been granted to
        the Central Government, and there upon all the rights under such
        lease or tenancy shall be deemed to have been transferred to and
        vested in the Central Government."
                                                                                    D
      Sub-sections (1) and (2) of Section 7 of the Esso Act state :

         "7. (1) Notwithstanding anything contained in sections 3, 4 and 5,
          the Central Government may, if it is satisfied that a Government
          company is willing to comply, or has complied, with such terms            E
          and conditions as that Government may think fit to impose, direct,
          by notification, that the right, title and interest and the liabilities
          of Esso in relation to any undertaking in India shall, instead of
          continuing to vest in the Central Government, vest in the Govern-
        . ment company either on the date of the notification or on such
          earlier or later date (not being a date earlier than the appointed        F·
          day) as may be specified in the notification.

         (2) Where the right, title and interest and the liabilities of Esso
         in relation to its undertakings in India vest in a Government
         company under sub-section (1), the Government company shall, G
         on and from the date of such vesting, be deemed to have become
         the owner, tenant or lessee, as· the case may be, in relation to such
         undertakings, and all the rights and liabilities of the Central
         Government in relation to such undertakings shall, on and from
         the date of such vesting, be deemed to have become the rights and
         liabilities, respectively, of the Government company."                H
    638                  SUPREME COURT REPORTS (1995] SUPP. 3 S.C.R.

A          It would be clear from above provisions that by statutory operation
    of Sections 5 and 7 of the Esso (Acquisition of undertakings in India) Act,
    1974, the pre-existing tenancy rights held by Esso Company with the ap-
    pellant initially stood transferred and vested in the Central Government,
    and thereafter, by operation of Section 7 of the Esso Act, the said rights
    in turn stood transposed and vested in the Government company as if the
B   Government company statutorily became the tenant of the appellant-
    landlord. It is true that sub-section (1) of Section 23 of the Act employing
    non-obstante clause excluded operation of any other enactment. But it must
    be remembered that there is no specific provision in List II of the Seventh
    Schedule to the Constitution covering the Act. On the other hand, by
    virture of what has been stated in Entry 6 in List III of the Seventh
c   Schedule, the legislature of the State and also Parliament can enact law in
    relation to immovable property. Since th~ Esso Act is a Central enactment,
    and latter too, the non- obstante clause in Section 7 of Esso Act excludes
    the operation of Section 23 of the Act. Both the Act and the Esso Act
    occupy same field and both cannot exist harmoniously. So to the extent of
D   inconsistency, the Act becomes void by operation of Article 254 of the
    Constitution. On the Esso Act coming into force, by operation of Sections
    5 and 7 of that Act, the respondent-Corporation became statutory tenant
    and thereby it cannot be construed to be an assignment of tenancy rights,
    which the appellant-landlord had entered into with the Esso Company, by
    the Central Government in favour of the Government company.
E
          The ratio of M/s. Parasram Hamand Rao's case (supra) 1s map-
    plicable to the facts in this case. Therein, one Laxmi Bank which was a
    tenant with the appellant was in liquidation. The Official Liquidator had
    sold the tenancy rights in favour of the respondents. Thereby, the respon-
    dents became tenant of the demised premises. The landlord initiated
F   proceedings under Section 14(1)(b)of the Delhi Rent (Control) Act con-
    tending that it amounted to sub-letting. This Court accepting the conten-
    tion held that in view of the wide language employed in Section 14(1) (b),
    though the same was made in favour of the respondent through court, it
    amounted to transfer of an interest inter se. The ratio therein does not get
G   attracted to the facts in this case in view of the statutory operation of
    Sections 5 and 7 of Esso Act which is not voluntary act of assignment of
    interests intra vivas.

          The appeal is accordingly dismissed. No. costs.

H R.P.                                                       Appeal dismissed.