2011 (3) TMI 1832 - SC - Indian Laws

Appeal Overturns Interim Order: Respondent Not a Tenant, No Possessory Rights Under DPSL Agreement; Section 15A Claim Rejected.

Bharat Petroleum Corporation Ltd. Versus Chembur Service Station

The appeal was allowed, overturning the HC's interim order of status quo. The court determined that the Respondent was not a tenant but an agent under the ... - Issues Involved:1. Nature of the Licence under the DPSL Agreement.2. Justification of the High Court's interim order of status quo.3. Applicability of Section 15A of the old Bombay Rent Act to the licence granted to the Respondent.Detailed Analysis:1. Nature of the Licence under the DPSL Agreement:The primary issue was to determine the nature of the licence granted to the Respondent by the Appellant under the Dispensing Pump and Selling Licence (DPSL) agreement. The Court examined the terms of the DPSL agreement, which explicitly stated that the Respondent was granted a licence to enter upon the Appellant's premises solely for the purpose of selling the Appellant's petroleum products. The agreement emphasized that the premises and facilities remained the absolute property and in sole possession of the Appellant, and that the Respondent had no right to use the premises for any other purpose or to claim any tenancy or other rights of occupation.The Court referred to the distinction between a lease and a licence as established in Associated Hotels of India Ltd. v. R.N. Kapoor and Southern Roadways Ltd. Madurai v. S.M. Krishnan, highlighting that a licence does not create any interest in the property and is merely a permission to use the property for a specific purpose. The Court concluded that the Respondent was not in possession of the premises in its own right but was using it on behalf of the Appellant to sell the Appellant's products. Therefore, the licence granted to the Respondent was a limited one, revocable upon termination of the dealership agreement.2. Justification of the High Court's Interim Order of Status Quo:The High Court had directed the Appellant to maintain the status quo, meaning the Respondent could remain in possession of the premises until the issue of jurisdiction was decided. The Appellant contended that the Respondent, being an agent, had no possessory rights and could be removed without resorting to legal action. The Court referred to Southern Roadways Ltd. Madurai v. S.M. Krishnan, which established that an agent's possession is on behalf of the principal, and upon termination of the agency, the principal can take possession without legal proceedings.However, the Court acknowledged that the Respondent had been in occupation since 1972 and had raised claims of tenancy and deemed tenancy under the Maharashtra Rent Control Act (MRC Act). The Court emphasized that the Respondent's occupation was not independent but on behalf of the Appellant. Therefore, the High Court's order to maintain status quo was set aside, allowing the Appellant to take possession and prevent the Respondent from entering the premises.3. Applicability of Section 15A of the Old Bombay Rent Act:The Respondent claimed to be a deemed tenant under Section 15A of the old Bombay Rent Act, which provided tenancy rights to licensees in occupation as of 1.2.1973. The Court examined the definitions under the old Bombay Rent Act and the MRC Act, noting that a person conducting a running business on behalf of the licensor is not considered a licensee under these Acts.The Court concluded that the Respondent, being an agent running the Appellant's business, did not qualify as a licensee entitled to deemed tenancy under Section 15A. The Respondent's occupation was not for its own use but for selling the Appellant's products, and thus, it did not become a tenant or deemed tenant. Consequently, the Respondent could not claim protection against eviction under the rent control laws.Conclusion:The appeal was allowed, setting aside the High Court's order of status quo. The Appellant was entitled to take possession of the petrol pump premises and prevent the Respondent from entering. The Court directed the trial court to dispose of the suit expeditiously, in accordance with the legal position explained. The Respondent's claim of deemed tenancy was rejected, affirming that the Respondent was merely an agent with no independent possessory rights.