Statutory lease renewal overrides transfer law where a special enactment vests rights and preserves continuity of operations

A special statute vesting leasehold rights in the Central Government and then in the Government company created a statutory right to renewal on the same terms and conditions. Because the enactment contained a non obstante clause and the transfer operated by force of law, the ordinary requirements governing transfers by act of parties under the Transfer of Property Act did not apply. The renewal provision was read purposively to preserve continuity of petroleum outlets, and the statutory fiction was given full effect. The appellant was therefore entitled to renewal of the lease, and Section 107 of the Transfer of Property Act could not defeat that right.

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Issues: Whether the appellant, upon exercising its option under the special statute, was entitled to renewal of the lease on the same terms and conditions, and whether the requirements of the Transfer of Property Act applied to such renewal.

Analysis: The leasehold interest of the original undertaking vested in the Central Government and then in the appellant by force of the special statute. Section 5(2) created a statutory right of renewal on the same terms and conditions, and Section 7(3) extended that entitlement to the Government company. The statute contained a non obstante clause, giving it overriding effect over other laws. A transfer effected by operation of law does not attract the ordinary requirements governing transfers by act of parties, and the special enactment had to prevail over the general law. The statutory fiction created by the Act had to be given full effect, and the renewal provision was construed purposively in light of the object of protecting continuity of petroleum outlets.

Conclusion: The appellant was entitled to renewal of the lease under the special statute, and Section 107 of the Transfer of Property Act did not defeat that statutory right.

Final Conclusion: The impugned judgments were set aside, the appeals were allowed, and the appellant's statutory entitlement to renewal was upheld, subject to the consequential directions issued by the Court.

Ratio Decidendi: Where a special statute vests leasehold rights and expressly provides for renewal on the same terms with overriding effect, the renewal operates by force of law and cannot be curtailed by general transfer or registration requirements applicable to transactions by act of parties.

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