HINDUSTAN PETROLEUM CORPORATION LTD Vs. JOHN

JUDGEMENT

(1.) The defendants are the appellants. The suit by the plaintiffs was for recovery of possession on the strength of their title with mesne profits. The suit was resisted by the defendants. The suit was decreed by the Trial Court. The appeal filed by the defendants as A. S. 249 of 1992 was dismissed by a learned Single Judge. This appeal is filed by the defendants under S.5(ii) of the High Court Act.

(2.) The plaint schedule property was leased by the predecessor of the plaintiffs the owner of the property to the Esso Standard Eastern, Inc on 29.9.1970 on a monthly rent of Rs. 300/-. The term of the lease was ten years from 1.6.1970. The lease deed conferred a right on the tenant to exercise an option for renewal of the lease for a further term of ten years. The relevant clause, Clause.3(d) in the lease deed Ext. A1 dated. 29.9.1970 read as follows:

(3.) The term of the lease was to expire by 1.6.1980. On 18.3.1980 the defendant exercised the option of renewal conferred on it under the lease deed by Ext. B1. That notice informed the landlord that the defendant company was exercising its option for renewal of the lease for a period of ten years from 1.6.1980 to 31.5.1990 at a rent of Rs. 350/- per month in terms of Clause.3(d) of the lease deed. The extended period of the lease on the basis of this option expired on 31.5.1990. Meanwhile on 13.3.1974 the Esso (Acquisition of Undertakings in India) Act, 1974, Act 4 of 1974 came into force having received the assent of the President on 13.3.1974. On 18.4.1989 a notice was sent on behalf of the landlords calling upon the defendants to vacate the premises on the basis that the period of the renewed lease expired on 31.5.1990 and under law, defendants were bound to surrender vacant position. Reply marked Ext. A3 was sent on behalf of the defendants informing the landlord that the earlier option to continue was in terms of the lease deed and inspite of the exercise of that option, the defendants have the right to exercise a further option under the Esso (Acquisition of Undertakings in India) Act, 1974, hereinafter referred to as the Act. On 27.2.1990 under Ext. A4 Hindustan Petroleum Company in which the rights of Esso had come to vest by virtue of the Act informed the landlord that it was exercising the option to renew the lease in terms of S.5, 8 and 7(3) of the Act and they were exercising the option to continue for a further period of twenty years commencing from 1.6.1990 on the same terms and conditions contained in the lease agreement Ext. A1. Disputing this position taken up by the defendants, the plaintiffs filed the suit for recovery of possession on 9.7.1990. The plaintiffs took the stand that in view of the exercise of option by the lessee on the expiry of the original ten years, which commenced on 1.6.1970, the right of the defendant to have an option either under the contract or under the Act had come to an end and the defendants were liable to vacate the premises on demand by the landlord. The defendants filed a written statement raising the contention that the first option exercised by them to continue from 1.6.1980 until 31.5.1990 was the option available under the lease deed and the exercise of such an option cannot stand in the way of the defendants exercising a further option or a one time option under the Act. The defendants took the stand that the original term of the lease must be deemed to be twenty years in view of the option to renew available to the tenant and if so the statutory renewal under the Act would be for a further term of twenty years and the same would expire only by 31.5.2010. The Trial Court took the view that the exercise of option by the defendants by Ext. B1 dated 18.3.1980 must be deemed to be an exercise under the Act and since the option under the Act available was only a right to exercise an option for continuing for one more term, on the expiry of the period on 31.5.1990, the defendants were bound to vacate the premises. The Trial Court therefore granted the plaintiff a decree for recovery on the strength of title and granted to the defendants four months' time to surrender vacant possession. In the appeal filed by the defendants, the learned Single Judge agreed with the view taken by the Trial Court and confirming the decree for eviction, dismissed the appeal. It is this decision that is challenged in this further appeal under the Kerala High Court Act.