- (1.) By a lease deed dated 1/09/1970 M/s Kalinga Automobiles, Bhubaneshwar, orissa, a partnership firm leased land comprised in government of orissa Drawing No. C-311, Flat No. B of Civil Centre, Unit I situate at Bapuji Nagar Kajpath, Bhubaneshwar, orissa admeasuring 116 feet x 100 feet together with a service station standing thereon from 1/10/1969 for a period of 10 years renewable and determinable as provided in the lease deed. The Caltex (Acquisition of Shares of Caltex Oil Refining (India) Ltd. and of the Undertakings in India of Caltex (India) Ltd. ) Act, 1977 [hereinafter referred to as 'the Act'] was enacted by Parliament and pursuant to which M/s Caltex (India) Ltd. was taken over by the government of India and was amalgamated with the petitioner-corporation by an order made on 9/05/1978. Section 7 (1 of the Act provided that the rights arising under leases obtained by Caltex (India) Ltd. would vest in the central government. Section 7 (3 of the Act specifically provided that on the expiry of the term of any lease, if so desired by the central government, be renewed or continued, so far as may be, on the same terms and conditions on which the lease was originally granted or entered into. The Amalgamation Order provided in clause 5 thereof savings of contract etc. entered into by M/s Caltex (India) Ltd. as they would be subsisting or having effect immediately before the appointed day be of as full force and effect in favour of the appellant and may be enforceable fully and effectually as if the appellant had been a party thereto or as if it had been executed in favour of the appellant.
(2.) By a letter dated 23/05/1979 the appellant exercised the option of renewal of the lease for a further term of 10 yearsfrom the expiration of the present tenure of the lease in question. Thereafter, on 13/09/1989, the appellant wrote to the respondent that in terms of Section 5 and Section 7 (3 of the Act they exercised their right to renew the lease for a further period of 20 years commencing from 1/10/1989 on the same terms and conditions on which the lease dated 1/09/1970 held the lease immediately before 1977. On 23/03/1993 the respondent filed a petition under Article 226 of the Constitution for quashing of the said notice of renewal dated 13/09/1989. Before the High court the respondent contended as under :- (I) that no deed has been executed renewing the tease on its expiry on 30/09/1979 and, therefore, the appellant could not exercise any further option of renewal and the notice of renewal, to which we have adverted to earlier, dated 13/09/1989 sent by the respondent is without jurisdiction and the appellant is a trespasser; (Ii) that even if the appellant had a statutory right of renewal the same could be availed of only once and there could be no further renewal subsequent to 1989; (Iii) that in terms of the enactment the right of renewal has to be exercised when desired by the central government and the central government having not desired in the present case it is not open to the appellant to exercise that right; (Iv) that in view of enormous escalation of prices of land in the city of Bhubaneshwar it is an arbitrary and inequitable act on the part of the appellant to occupy the premises at a meagre rent of Rs. 1,900. 00 per month; and (V) that the respondent's offer to be appointed as an agent under the Corporation should have been acceded to and not to appoint illegally another agent. On behalf of the appellants it was contended before the High court that even in the absence of a deed the right of renewal could be exercised in accordance With the original terms contained in the lease deed and thus the appellant has a right to ask for a further renewal of 20 years and the notice of renewal cannot be stated to be illegal or arbitrary. The validity of the Act or any provision thereof not being in question and as the object of the Act is distribution of petroleum products which is in public interest and, therefore, such power could be exercised under the Act. However, it was made clear that the appellant is willing to enhance the rent subject to the condition of the lessor agreeing to renew the lease for a further period of 20 years.
(3.) The High court held that the appellant having replaced M/s Caltex (India) Ltd. in the terms of the Act and the Amalgamation Order while the original lease was subsisting and after expiry of the lease no fresh deed having been executed between the parties, clause 3 (g) of the lease deed was not acted upon and, therefore, the appellant cannot enforce a second renewal after the renewed term of 10 years which expired in 1989. The object of S. 5 (2 and 7 (3 of the Act being to give some breathing time, these provisions contemplate renewal of a lease for one term and, therefore, the appellant was not entitled to exercise any option for a further period after the renewed term ofthe communication dated 13/09/1989 was without jurisdiction and such a power was not available to the appellants. The contention that the central government not having expressed its desire was not accepted by the High court on the view that the appellants could not hold the lease subsequent to 1989 and, therefore, the position of the appellant was that of a trespasser and is, therefore, bound to pay damages at the rate of Rs. 5 thousand per month and thus accepted that contention also. The High court further took the view that if the respondent is desirous of continuing the sale of petroleum, there was no justification on the part of the Corporation to engage another person and forcibly occupy the premises.;