P SANKARANARAYANAN NAMBIAR Vs. UNION OF INDIA

JUDGEMENT

(1.) Three enactments, within a span of three years. The Esso (Acquisition of Undertakings in India) Act, 1974, Act No. 4 of 1974, the Burmah Shell (Acquisition of Undertakings in India) Act, 1976, Act No. 2 of 1976, and the Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited) Act, 1977, Act No. 17 of 1977, nationalised three foreign Companies, Esso Eastern Incorporated, the Burmah Shell Oil Storage and Distributing Company of (India) Ltd. and Caltex Oil Refining (India) Ltd., which carried on in India the business of distributing, marketing or refining and producing petroleum products having places of business in several parts of the country. The right, title and interest of these undertakings stood transferred to and were statutorily vested in the Central Government. The acquisitions of these Companies are now complete and they are no longer in challenge and those foreign companies are also not before court.

(2.) The assets which thus vested in the Central Government include leases and tenancy rights held by these three companies. The petitioners in these writ petitions are persons who had granted leases of their premises to the Burmah Shell or to the Esso standard companies. The rights of these landlords are regulated by two provisions, S.5(2) and S.7(3), identically worded in the two enactments, Act 4 of 1974 and Act 2 of 1976. These Acts provide that where any property is held in India by the two companies under any lease or under any right of tenancy, the Central Government shall be deemed to have become the lessee or tenant on and from the appointed day "as if the lease or tenancy in relation to such property had been granted to the Central Government" and thereupon "all the rights under such lease or tenancy shall be deemed to have been transferred to and vested in the Central Government". Section 5(2), then, provided thus:- 5. Central Government to be lessee or tenant under certain circumstances.- (1) xxxxxxxxxxxxxx (2) On the expiry of the term of any lease or tenancy referred to in sub-sec.(1), such lease or tenancy shall, if so desired by the Central Government, be renewed on the same terms and conditions on which the lease or tenancy was held by Burmah Shell immediately before the appointed day".

(3.) Section 7(1) empowered the Government to direct the vesting of the undertakings, in Government company, by appropriate notifications and, S.7(2) stated that the Government company, shall, 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 the undertakings and all the fights and liabilities of the Central Government shall be deemed to have become the rights and liabilities of the Government company. The provisions of sub-sec. (2) of S.5 regarding the right to renew the original lease available to the Central Government are extended to the Government company as S.7(3) enacts thus:-