Holding

Hindustan Petroleum Corporation Ltd. is protected under section 15A of the Bombay Rent Act, the tenancy rights vested in the Central Government by the Acquisition Act and subsequently in Hindustan Petroleum, and the eviction order is quashed.

Summary

Esso Eastern Inc., later Hindustan Petroleum Corporation Ltd., occupied a flat in Shyam Co‑operative Housing Society on a leave‑and‑licence basis from 1968, with the licence renewed yearly. By 1 February 1973 a subsisting licence existed, rendering the occupier a "deemed tenant" under section 15A of the Bombay Rent Act as amended by Maharashtra Act 17 of 1973. The Esso (Acquisition of Undertakings in India) Act 1974 transferred Esso’s undertakings to the Central Government, which under section 5 became the lessee/tenant, and a subsequent notification vested those rights in Esso Standard Refining Co., later renamed Hindustan Petroleum. The Society sought eviction under section 91(1) of the Maharashtra Co‑operative Societies Act, 1960. The trial court held the corporation protected by s.15A; the appellate court reversed, saying the licence was personal and could not be transferred. The Supreme Court held that the corporation, as successor‑in‑interest, retained the protection of s.15A, that the acquisition act transferred the tenancy rights, and quashed the eviction order.

Issues considered

Whether Hindustan Petroleum Corporation Ltd., as successor‑in‑interest of Esso Eastern Inc., is entitled to the protection of section 15A of the Bombay Rent, Hotels and Lodging House Rates Control Act, 1947 (as amended by Maharashtra Act 17 of 1973) given the subsisting licence on 1 February 1973.
Whether the Esso (Acquisition of Undertakings in India) Act, 1974 extinguished the licence and the tenancy rights, thereby preventing their vesting in the Central Government and its successors.
Whether a claim for ejectment of an occupant under a leave‑and‑licence agreement constitutes a "dispute touching the business of the society" within section 91(1) of the Maharashtra Co‑operative Societies Act, 1960.

Legislation cited

Bombay Rents, Hotels and Lodging House Rates Control Act, 1947s. 15A, s. 28(1), s. 5(4A)
Companies Act, 1956s. 396
Constitution of Indias. Article 139A, s. Article 226
Esso (Acquisition of Undertakings in India) Act, 1974s. 19, s. 3, s. 5, s. 7
Maharashtra Act No. 17 of 1973 (amending the Bombay Rent Act)s. 15A
Maharashtra Co-operative Societies Act, 1960s. 91(1)

Subjects

lease and licencedeemed tenantsection 15A protectionacquisition of undertakingssuccessor in interestevictionco‑operative housing societyArticle 226Article 139A

Judgment

HINDUSTAN PETROLEUM CORPORATION LTD. & ANR.
A v.
SHYAM CO-OPERATIVE HOUSING SOCIETY & ORS.

SEPTEMBER 19, 1988

a [A.P. SEN AND B.C. RAY, JJ.]

Constitution of India-Arts. 226/ 139-A-Sections 15A and 28-
Maharashtra Act 17 of 1975-Came into force on March 15, 1974--
Subsisting Licensee on Feb. 1, 1973~Person in occupation acquires
starus of'deemed tenant'-Entitled to protection u/s. 15A of the Act.
c Esso (Acquisition of Undertakings in lndia).Act 1974/Lube India
Ltd., Esso Standard Refining Company of India Ltd. Amalgamation
order 1974. ··

Sections 3, 5 and 19-Esso Standard Refining Co., taken over by
I:) Hindustan Petroleum Corporation Ltd.-Subsisting Licence in exis-
tence as on Feb. 1, 1973-Held Hindustan Petroleum Corpn. Ltd.
entitled to statutory protection u/s. 15A of the Bombay Rent Act.

The Esso Eastern Inc., a Company Organised and existing under
U.S. Laws was engaged in the business of distributing and marketing
E petroleum products manufactured by Esso Standard Rer.ning Co. of
India Ltd. and Lube India Ltd. and had established places of business
in India. In order to provide residential accommodation to its emp-
loyees the Co. had taken on leave and licence basis, Flat No. 35 in Block
No. 8 in the Housing Colony known as Shyam Niwas situate at Warden
Road now called Bhulabhai Desai Road, Bombay, for a period of one
y:: year in terms of the agreement in writing dt. 28th Nov., 1968 from one
Smt. Nanki M. Malkani, a member oftbe Co-operative Society. On 4th
Dec., 1%8 Respondent No. l Shyam Cooperative Housing Society Ltd. passed
a resolution admitting Petitioner No.·2 T.J. Mansuknani an employee of the
Co. as a nominal member of the Society though he was not the Iicencee.
The period of lease was initially renewed at the instance of the licensor
O for one year. On 29th Nov., 1971, Ms. Malkani wrote a .letter to the
Company saying that the agreement for lease and licence was due to
expire on that date; hence the period of licence be renewed yearly, from
time to time for 3 years on the expiry of each term of the licence. On this
basis the lease period stood extended till Nov. 30, 1973. Ill the mean-
while the State of Maharashtra enacted Act 17 of 1973. Since the Esso '
ft Stand_a_rd Inc. was in fact in occupation of the flat in qnestion as on ist
44
HINDUSTAN PETROLEUM CORPN. v. HOUSING SOCIETY 45
I
Feb., 1973, it acqµired the status of a tenant under section ISA of the
Act. A

On 13th March, 1974, the Esso (Acquisition of Undertakings in
India) Act, 1974 came into force and from that date hy virtue of sub-
section (1) of section S of the Act, the Central Govt. was deemed to be
· the tenant of the flat in question. B

By a letter of 9th April, 197S, sent by Ms. Malkani Res. 2, to the
Petr. she affirmed the terms and conditions of the licence and. by her
subsequent communications she informed that the Petr. who is
successor-in-interest of Esso Eastern Inc. to whom she had given the flat
continues in possession on the same terms and conditions of the lease.
c
On 11th Sept., 1980, the Society passed a resolution calling upon
the Petr .-Corporation'• to vacate the premises and asked Ms. Malkani,
Res. 2 for occupying the flat herself. Upon the Petitioner's failure to
vacate the premises the Society on September IS, 1986 filed an applica-
tion under section 91(1) of the Maharashtra Co-operative Society Act D
1960 before the 3rd Co-operative Court Bombay, for eviction of the
petitioner and its employee. On January 1981, Petitioner No. l permit-
ted its another employee to occupy the flat. The 3rd Cooperative Court
after considering evidence led by the parties, dismissed the claim of the
Society holding inter alia that Esso Eastern Inc. was in occupation of the
flat in dispute under a subsisting licence as on Feb. 1, 1973 and thus got E
the protection available to a licencee under sec. ISA of the Bombay
Rent Act and that the said protection could not be taken away merely by
the Society making a claim for eviction u/s 91(1) of the Act.

The Society being aggrieved appealed to the Maharashtra State-,,
Co-operative Appellate Court. The appellate Court took the view that f
leave and licence agreement confers only a personal right to occupy;
that right cannot be transferred nor inherited by the Hindustan
Petroleum Corpn., being successor-in-interest of Esso Eastern Inc. In
that view of the matter the appellate Cooperative Court held that the
Petitioner Corpn. cannot be said to have taken over the right of Esso
Eastern Inc. to occupy the flat under the leave and licence agreement. G
Accordingly it allowed the appeal filed by the Society and decreed the
claim of the Society and directed the Petr. Hindustan Petroleum Corpn.
to vacate the premises in question and further directed Res. 2, Ms.
Malkani to herself occupy the flat.
I The Petitioner thereupon filed a Writ Petition under Article 226 H
46 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R.

of the Constitution for quashing the judgment and order passed by the
A
Maharashtra State Co-operative Appellate Court. The said Writ
Petition was withdrawn to this Court under Article 139A of the
Constitution.

In the Writ Petition 3 questions have been raised viz (1) Whether
B the Hindnstan Petroleum Corporation Ltd. being a Successor-in-
interest of the Esso Eastern Inc. the licensee, was entitled to the protec-
tion of S. ISA of the Bombav Rents, Hotels and Lodging House Rates
Control /\ct, 1947, (Maharashtra Act 17 of 1973) havin~ regard to the
fact that Esso !<:astern Inc. was in occupation of the flat in dispute under
a subsisting licence as existing on 1st February, 1973?

c (2) Whether the Maharashtra State Co-operative Appellate
Court was jnstified in holding that the licence being purely personal and
upon acquisition of the Esso Eastern Inc. by the Central Government
under the Esso (Acquisition of Undertakings in India) Act 1974 the
agreement for leave and licence as existing on the appointed day i.e.
D 13th March, 1974 nnder section 2(a) of that Act, stood extingnished and
therefrom the right acquired by Esso Eastern Inc. under section ISA of
the Bombay Rent Act of being a protected tenant in relation to the flat
in question, could not be transferred to, or be vested in the Central '
Government nnder section 3 of the Acquisition Act. Further was it also
justified in holding that although the Esso Eastern Inc. was deemed to
E be a tenant of the disputed flat under section ISA of the Bombay Rent
Act, the Central Government could not be deemed to have become the
tenant. thereof under Sub-s. (1) of S. S of the Acquisition Act merely
because prior to the enactment of s. ISA of the Bombay Rent Act the
premises were held by Esso Eastern Inc. on an agreement of leave and
licence? (3) Whether a claim tor ejectment of an occupant of a flat in a
F cooperative housing society having been let into possession of the pre-
mises under an agreement for leave and licence executed between it and
a member of the Society, by virtue of its employer having became a
nominee member thereof is a "dispute touching the business of the
Society" within the meaning ofs. 91(1) of the Act?

G Allowing the Petition (which stood transferred from the High
Court to this Court) the Court,

HELD: Petitioner No. I-Hindustan Petroleum Corporation Ltd.
is clearly protected under section ISA of the Bombay Rents, Hotel and
Lodging House Rates Control Act 1947. [47G-H; 48A]
H
HINDUSTAN PETROLEUM CORPN. v. HOUSING SOCIETY [SEN, J.] 47

That Act came into force on March 15, 1974 and in the mean- A
while, the licencee Esso Eastern Inc. had already acquired the status of
deemed tenant under section ISA of the Bombay Rent Act as admit-
tedly, there was a subsisting licence as on 1st February, 1973. The
appellate Court has also failed to appreciate that the name of the Esso
Standard Refining Co. of India Ltd. was changed to Esso Eastern Inc.
by a certificatt of Amendment dated December 22, 1970 vide a Resolu- B
tion passed by the Board of Directors of the Corporation on 15th
December, 1970. [SSD-E]

The appellate Court was clearly in error in not appreciating that
under s. 3 of the Acquisition Act, the right, title and interest of Esso
Eastern Inc. in relation to its undertakings in India, shall stand trans-
ferrPd to, 'and shall vest in the Central Government as from the C
appointed day i.e. as from 13th March, 1974. Under Sub-s. (1) of S. 5,
thereof, the Central Government became the lessee or tenant, as the
case may be. By sub-s. (2) thereof, on the expiry of the term of any lease
or tenancy referred to in suh-s. (I) lease or tenancy, shall, if so desired
by the Central Government, he renewed on the same terms and condi- D
lions on which the lease or tenancy was held hy Esso immediately before
the appointed day. [SSF, 59A]

O.N. Bhatnagar v. Smt. Rukibai Narsingdas & Ors., [1982] 3
S.C.R. 681, referred to.
E
ORIGINAL JURISDICTION: Transferred Case No.7 of 1987

In

Transfer Petition No. 390 of 1986.
F
Dr. Y.S Chitale, T.U. Mehta and R.P. Kapur for the Petitioners.

N.N. Keshwani, R.N. Keshwani, Ms. Madhu Moolchandani and
K. Rajendra Chodhary for the Respondents.

The Judgment of the Court was delivered by G

SEN, J. The principal question in controversy in this petition
under Ari. 226 of the Constitution filed by the Hfo.dustan Petroleum
Corporation Ltd., a Government of.India undertaking, which has been
transferred from the High Court of Bombay to this Court under
f Art. 139A of the Constitution, is whether the petitioner is entitled tc> H
48 SUPREME COURT REPORTS [1988) Supp. 3 S.C.R.

the protection of s. 15A of the Bombay Rent, Hotel and Lodging
A
House Rates Control Act, 1947, introduced by Maharashtra Act
No. 17 of 1973 read withs. 5 of the Esso (Acquisition of Undertakings
in India) Act, 1974.

Put very briefly, the essential racts are these. The Esso Eastern
B Inc., a company organised and existing under the laws of the State of
Belaware, U.S.A., was carrying on, in India the business of distribut-
ing and marketing petroleum products manufactured by Esso Standara
Refining Company of India.Ltd., and Lube India Ltd., and had, for
that prupose, established places of business in India. The company had
taken severai flats in the :Metropolitan City of Greater Bombay and
elsewhere for accommodating their employees including Flat No.35 in
c Block No.8 in the housing colony known as Shyam Niwas situate at
Warden Road, now called Bhulabhai Desai Road, Bombay on leave
and licence basis for a period of one year in terms of an agreement in
writing dated 26th November, 1968 from Smt. Nanki M. Malkani,
respondent No. 2 herein. On 4th December, 1968 respondent No. 1
D Shyam Co-operative Housing Society Ltd. passed a Resolution admit-
ting petitioner No. 2 T.J. Nansukhani, and employee of the company,
as a nominal member of the society though he was not the licensee.
The company on 16th January, 1970 exercised the option of renewal of
the licence for another year i.e. till 30th November, 1970. On 29th
November, 1971, respondent No. 2 Smt. Nanki M. Malkani addressed
E a letter to the company intimating that the agreement for leave and
licence was due to expire on that date and accordingly the period of the
said licence was renewed, yearly, from time to time for thee years on
the expiry of each term of licence i.e. on 30th November, 1971, 30th
November, 1972 and 30th November, 1973. In the meanwhile, the
State Legislature of Maharashtra enacted Act No. 17 of 1973. The
F amendment Act also made consequential changes to which we shall
presently refer. Undoubtedly, the Esso Standard Inc. was in occupa-
tion of the flat in question as on !st February, 1973 and thus acquired
the status of a tenant under s. 15A of the Act.

On 13th March. 1974. the Esso (Acquisition of Undertakings in
G India) Act, 1974 was brought into force. As from that date, the Central
Government by virtue of sub-s. ( lJ of s. 5 of the Act was deemed to be
the tenant of the flat in question. On 9th April, 1975, respondent No. 2
Smt. Nanki M. Malkani sent a communication to the petitioner affirm-
ing the terms and conditions of the licence. Again, on 24th March
1975, she addressed a Jetter confirming that she had given the aforesaid
H flat to Esso Eastern Inc. in December 1968 on leave and licence basis
HINDUSTAN PETROLEUM CORPN. v. Hl\)USING SOCIETY [SEN, J,j 49

and the petitioner being the successor-in-title of that company had
A
been occupying the flat as licensee on the same terms and conditions.
On I ith September, 1980, the society passed.a resolution calling upon
the petitioner Corporation to.vacate the said premises and directing
that re,pondent No. 2 Smt. Nanki M. Malkani should herself occupy
the flat. Upon failure of the Corporation to vacate the premises, the
society on 15th September, 1980 filed an application under s. 91(1) of B
the Maharashtra Co-operative Societies Act, 1960 before the 3rd
Co-operative Court, Bombay for eviction of the petitioner and its
employee. On 7th January, 1981, petitioner No. 1 permitted an9ther
I employee to occupy the flat. The 3rd Co-operative Court, Bombay
after consideration of the evidence adduced by the parties, by its well-
reasoned judgment dated 6th June, 1983 dismissed the claims of the
society holding inter alia that Essa Eastern Inc. was in occupation of
c
the flat in dispute under a subsisting licence as on 1st February, i973
and thus got the protection available to a licensee under s. 15A of the
Bombay Rent Act and the said protection could not be taken away
merely by the society making a claim for e:viction under s. 91(1) of the
Act. Aggrieved, the society went up in ·appeal to the Maharashtra D
State Co-operative Appellate Court which, by its judgment dated 17th
,. March, 1984 allowea the appeal ana decreed the claim of the society
requiring petitioner No. 1 Hindustan Petroleum Corporation Ltd. to
vacate Flat No. 35 in Block No. 8 of the society building with a further
direction that respondent No. 2 Smt. Nanki M. Malkani should occupy
the flRt in question herself. Thereupon, the petitioner moved the High E
Court under Art. 22.6 of the Constitutipn for an appropriate writ,
direction or order for quashing the impugned judgment and order
passed by the Maharashtra: State Co-operative Appellate Court.

This petition mainly raises three questions. They are: (1)
)
Whether the Hindustan Petroleum Corporation Limited being a F
successor-in-interest of the Essa Eastern Inc., the licensee, was
entitled to the protection of s. 15A of the Bombay Rents, Hotel &
. Lodging House Rates Control Act, 1947, introduced by the
Maharashtra Act No. 17 of 1973, having regard to the fact that the
Essa Eastern Inc. was in occupation of the flat in dispute under a
subsisting licence as existing on 1st February 1973. (2) Whether the G
Maharashtra 'Sta.te 8oop.erative Appellate Court was justified in hold-
ing that a licence being purely personal, upon acquisition of the Essa
Eastern Inc. by the Central Government under the Esso (Acquisition
of UndertaKings in India) Act, 1974, the agreement for leave and
licence as existing on the appointed day i.e. 13th March, 1974 under
s. 2(a) of that Act, stood extinguished and therefore the right acquired H
50 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R.

A by Esso Eastern Inc. under s. 15A of the Bombay Rent Act of being a
protected tenant in relation to the flat in question, could not stand
transferred to, or be vested in, the Central Government under s. 3 of
.the Acquisition Act. Was it also justified in holding that although the
Esso Eastern Inc. was deemed to be a tenant of the disputed flat under
·s. 15A of the Bombay Rent Act, the Central Government could not be
B deemed to have become the tenant thereof under sub-s. (1) of s. 5 of
the Acquisition Act merely because prior to the enactment of s. 15A of
the Bomba} Rent Act the premises were held by Esso Eastern Inc. on
an agreement for leave and licence? (3) Whether a claim for ejectment of
an occupant of a flat in a cooperative housing society having been let \
into possession of the premises under an agreement for leave and
C licence executed between it and a member of the society, by virtue of
its employee having become a nominal member thereof, is a 'dispute
touching the business of the society' within the meaning of s. 91(1) of
the Act. In the view that we take on the first .two questions, there is no
need to answer the third which is already covered by the decision of
this Court in O.N. Bhatnagar v.Smt. Rukibai Narsindas & Ors., [1982]
p 3 SCR 681.

The statutory provisions bearing on these questions are set out
below. The relevant provision in sub-s. (!) of s. 91 of the Act, prior to
its amendment, provided:

"91( 1) Notwithstanding anything contained in any other
Jaw for the time being in force, any dispute touching the
..... business of•a society snail be referred by any of the
parties to the dispute ..... to the Registrar if both the
parties thereto are one or other of the following:

(a) a society .....
'·
(b) a member, past member or a person claiming
through a member ..... "

The definition of the term 'landlord' as contained in: s. 5(3) of the
G .Bombay Rent Act was amended to include 'in respect of a licensee
deemed to be tenant by s. ISA, the licenser who has given such
licence'. The expression 'licensee' as defined in sub-s·. (4A) thereof
introduced by the Amending Act, insofar as material, reads as follows:

"(4A) "licensee", in respect of a0y premises or any part
H thereof, means the person who is in occupation of the pre-
HINDUSTAN PETROLEUM CORPN. v. HOUSING SOCIETY [SEN, J.] 51

mises or such part, as tne case may be, under a subsisting A
agreement for licence given for a licence fee or charge' and
includes any person in such occupation of any premises or
part thereof in a building _vesting in or leased to a co-
operative housing society registered or deemed to be re-
gistered under the Maharashtra Cooperative Societies Act,
1960; but does not include a paying guest, a member of a B
family residing together, a person in the service or employ-
ment of the licensor etc; .... ~ and the expressions
"licence", "licenser" and "premises given on licence··
/ shall be construea accordingly."

Sub-s. (1) of s. 15A of the Bombay Rent, as introduced by the
Maharashtra Act No. 17 of 1973 provides: c

"15A(I). Notwithstanding anything contained elsewhere
in this Act or anything contrary in any other law for the
time being in force, or in any contract, where any person is
on February 1, 1973 in occupation of any premises, or any D
part thereof which is not less than a room, as a licensee he
shall on that date be deemed to have become, for the
' purposes of this Act, the tenant of the landlord, in respect
of the premises or part thereof, in his occupation."

Sec. 28( 1) of the Act insofar as material ~eads.

"28(1). Notwithstanding anything contained in any law
and notwithstanding that by reason of the amount of the
claim or for any other reason, the suit or proceeding would
not, but for this provision, be within its jurisdiction.
, F
(a) in Greater Bombay, the Court of Small Causes
Bombay,

(aa)

(b) ***** ***** G
shal\ have jurisdiction to entertain and try any suit or pro-
ceeding between a landlord and a .tenant relating to the
recovery of rent or possession of any premises to which any
of the provisions of this Part apply ..... and to decide any
application made under this Act and to deal with any claim H
52 SUPREME COURT REPORTS [ 1988] Supp. 3 S.C.R.

or question arising out of this Act or any of its provisions
A
and ..... no other court shall have jurisdiction to entertain
any such suit, proceeding or application or to deal with
such claim or question."

We must then refer to the relevant provisions of the Essa East-
B em Inc. The avowed object and purpose of the Essa (Acquisition of
Undertakings in India) Act, 1974, as reflected in the long title is to
provide for the acquisition and transfer of the right, title and interest
of Essa Eastern Inc., the foreign company, in relation to its under-
takings in India with a view to ensuring co-ordinated distribution and '
utilisation of petroleum products distributed and marketed in India by
Essa Eastern Inc. and for matters connected therewith or incidental
C thereto. The preamble to the Act is in these terms:

"Whereas Essa Eastern Inc. a foreign company, is carrying
on, in India, the business of distributing and marketing
petroleum products manufactured by Essa Standard Refin-
D ing Company of India Limited and Lube India Limited,
and has, for that purpose, established places of business at
Bombay and other places in India;

And whereas it is expedient in the public interest that
the undertakings, in India, of Essa Eastern Inc. should be
E acquired in order to ensure that the ownership and control
of the petroleum products distributed and marketed in In-
dia by the said company are vested in the State and thereby
so distributed as best to subserve the common good;"

Section 3 of the Act provides:
p
"3. Transfer and vesting in the Central Government of the
undertakings of Esso in India-On the appointed day, the
right, title and interest of Esso, in relation to its under-
takings in India, shall stand transferred to, and shall vest
in, the Central Government."
G
The Act received the assent of the President on the 13th March, 1974
and published on that day became the appointed day, as defined in
s. 2(a) of the Act. Sub-s. (1) of s. 5 provides:

"5. Central Government to be lessee or tenant under certain
H circum.<tances-( 1) Where any property is held in India b~
HINDUSTAN PETROLEUM CORPN. v. HOUSING SOCIETY [SEN, J.] 53

Esso under any lease or under any right of tenancy the
A
Central Government shall on and from the appointed day,
be deemed to have become the lessee or tenant, as the case
may be, in respect of such property 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 B
transferred to and vested in the Central Government."
J Section 7(1)_ ..Provides that, notwithstanding anything contained in
ss. 3, 4 and 6,. the Central Government may, if it is satisfied that a
Government company is willing to comply, or has complied, with such
terms and conditions as that Government may think fit to impose
direct, by notification, that the right, title and interest and the c
liabilities of Esso in relation to any undertaking in India shall, instead
of continuing to vest in the Central Government, vest in the Govern-
ment company either on the date of the notification or on such earlier
or later date (not being a date earlier than the appointed day) as may
be specified in the notifilcation. D

The Act makes provision that if there was any dispute with
regard to what is vested in the Central Government, the proper forum
was the Central Government for taking a decision. Sec. 19 of the Act
reads as under:
E
"19. Power to remove difficulties-If any difficulty arises
in giving effect to the provisions of this Act, the Central
Government may, by order, not inconsistent with the pro-
visions of this Act, remove the difficulty; .

Provided that no such order shall be made after the F
expiry of a period of two years from the appointed day."

Ih exercise of the powers conferred by sub-s.(1) of s. 7 of the Act, the
Central Government, in the Ministry of Petroleum & Chemicals issued
a notification No. GSR 131(E) dated 14th March 1974, that on being
satisfied that Esso Standard Refining Company of India Limited, a G
Government company, is willing to comply with the terms and condi-
tions imposed by the Central Government, hereby directs that the
righf, title and interest and the liabilities of Esso Eastern Inc., in
relation fo its undertakings in India, shall, instead of continuing to vest
in the Central Government, vest, w.e.f. the 15th day of March, 1974,
in Esso Standard Refining Company of India Limited. Indubitably. as H
54 SUPREME. COURT REPORTS [1988] Supp. 3 S.C.R.

A on the appointed day i.e. 13th March, 1974 under s. 2(a) of the Acquis-
ition Act, the Esso Eastern Inc. had acquired the status of a protected
tenant under s. 15_A of the Bombay Rent Act and the tenancy rights so
acquired in relation to the flat in question stood transferred to, and
became vested in, the Central Government. By virtue of the aforesaid
notification issued under s. 7(1) of the Act, the rights of tenancy in the
Ill flat in question instead of continuing to vest in the Central Govern-
ment became vested in Esso Standard Refining Company of India
Limited, a Government of India undertaking, w.e.f. 15th March, 1974.
It is also necessary to mention that the Central Government held, in \
the name of the President, 74% of the equity share capital of the Esso
Standard Refining Company of India Limited, which therefore
became a Government company as defined bys. 617 of the Companies
c;: Act, 1956. '

On 12th July, 1974 the Company Law Board, in exercise of the
powers conferred by sub-ss. (1) and (2) of s. 396 of the Companies
Act, 1956, read with the notification of the Government of India in the
I) Department of Company Affairs No. GS)l 443(E) dated 18th
October, 1972, made Lube India Limited a Esso Standard Refining
company of India Limited (Amalgamation) Order, 1974. Cl. (3) of the
said Order provided that as from the appointed day, the undertaking
of Lube India Limited shall stand transferred to, and vest in, Esso
Standard Refining Company of India Limited. As a result of the
II'. amalgamation of the two companies, the name of Esso Standard
Refining Company of India Limited was changed to Hindustan
Petroleum Corporation Limited. It is therefore evident that petition
No. 1 Hindustan Petroleum Corporation Limited, a Government of
India undertaking, is a successor-in-interest of Esso Eastern Inc. which
acquired the status of a deemed tenant under s. 15A of the Bombay
F Rent Act, which right devolved on the Centt:al Government under ·-
s. 6( 1) of the Acquisition Act.

Upon .these facts and the statutory provisions, the 3rd Co-
operative Court rightly concluded as under:

"Thus, it is clear th~t there was a .subsisting licence in
favour of opponent No. 3 as on 1.2.73. The definition
'Licensee' as given in Section 5(4A) of the Rent Act
includes inter alia a person in occupation of premises of a
co-operative housing society.

••• ••• •••
HINDUSTAN PETROLEUM CORPN. v. HOUSING SOCIETY [SEN, J.J SS

My findings on this issue are that the opponent No. 3 has a
A
right to the premises against opponent No. 1 as protected
tenant under Section !SA of the Rent Act."

In dealing with the question, it observed:

"The Supreme Court has clearly observed that the protec- B
tion given to a licensee under a valid licence as on 1.2. 73
under Act 17 of the amended Rent Act is available to a
j licensee of any premises or any part thereof in a building
vesting in or leased to a co-operative housing society.

This protection given to a licensee in the position men-
tioned above cannot be taken away merely by the society c
filing the case against the member and occupant for reliefs
to the opponent member. The provisions of the two legisla-
tions are to be harmoniously interpreted and such harmoni-
ous interpretation is possible. In case the occupant of a
premises gets protection under s. !SA of the Rent Act D
against the member, the society can implement the provi-
sions of s. 2( 16) of the Maharashtra Co-operative Societies
Act, 1960 by determining the rights of the member and
admitting a new member for the premises. Hence, my find-
ing on the second part of the issue are that the rights of
opponent No. 3 cannot be determined without determining E
the rights of opponent No. 1 i.e. Nanki M. Malkani, a
co-partner member in the suit premises."

In yiew of these findings, the 3rd Co-operative Court held in favour of
the petitioner corporation and dismissed the claim for eviction fileo by
J
the society under s. 91(1) of the Act. F

Curiously enough, while allowing the appeal, the State Appel-
late Court has observed as follows:

"One thing is clear that Hindustan Petroleum took over the
rights and liabilities of Esso Standard Eastern Co. We G
would like to point out that leave and licence agreement
confers only a personal right to occupy ..... that right
cannot be transferred nor it can·be inherited by Hindustan
Petroleum Corporation by virtue of the merger of Esso
-I Company with Hindustan Petroleum Corporation. Under
these circumstances it has to be noted that as soon as the H
56 SUPREME COURT REPORTS [1988) Supp. 3 S.C.R.

Esso Standard Eastern Co. was taken over by Hindustan
A
Petroleum Corporation, the rights under the leave and·
license agreement came to an end ..... it cannot be said
t)rnt it (Hindustan Petroleum Corporation) also took over
the rights of Esso Standard Eastern Co. to occupy the flat
under the leave and licence agreement.
B
Again it observed:

"At p. 299 of the record there is a letter dated 24.3.80
written by respondent No. 1 to the personal adviser of
Hindustan Petroleum Corporation Ltd. In the first para of
the said letter it is stated by respondent No. 1 that he has
c given the suit that to Esso Standard Eastern Inc. in
December 1968 on leave and licence basis and that Hindus-
tan Petroleum Corporation is the successor in title of the
Esso Company and that Hindustan Petroleum Corporation
is occupying the said flat:
D
Probably in ignorance of this legal position, the respondent
No. 1 wrote the above mentioned Jetter dated 24.3.80 to
Hindustan Petroleum Corporation .... Even supposing
that respondent No. 1 intended that respondent No. 3
should continue as a licensee after Esso Standard Eastern
E Co. was taken over by respondent No. 3 it has to be noted
that there was no separate leave and licence agreement
with Hindustan Petroleum Corporation namely, respon-
dent No. 3. Even assuming for the sake of argument that
respondent No. 1 intended that the flat should be occupied
on leave and licence basis by respondent No. 3 that leave
F and licence agreement was terminated by respondent No. I
by the above mentioned Jetter."

Further, it observed:

"However there is absolutely no evidence to show that the
licence was renewed at any time. The evidence of the
witness examined on behalf of respondent No. 2 clearly
shows that there was no renewal of the leave and licence
agreement ..... a'; mentioned above after the Esso was
taken over by respondent No. 3 the leave and licence
agreement automatically came to an end ..... under these
circumstances we feel that the rights tnat were given under
HINDUSTAN PETROLEUM CORPN. v. HOUSING SOCIETY [SEN, J.] 57

the leave and licence agreement were not available to
respondent No. 3 " A

Dr. Y.S. Chitale, learned counsel appearing for the petitioners
rightly contends that the findings reached by the Appellate Court are
manifestly erroneous and have caused a grave miscarriage of justice.
The finding that there was no subsisting licence existing as on 1st B
February, 1973 to attract the provisions of s. 15A of the Bombay Rent
Act in the case of the petitioner-Corporation is vitiated by its failure
to give effect to the admission contained in .the letter dated 24th
J
March, 1980 written by respondent No. 2, Smt. Nanki M. Malkani
which is to the effect:

"I had given the above flat to the then Essa Standard Inc. c
in December 1968 on leave and licence basis. You as a
successor in title of that company have been occupying the
flat as licensee on the same terms and conditions.

*** *** ••• **' D

As you and your predecessors in title are reputed organisa-
tion I had given the flat for your officers use in the expecta-
tion that you will return the flat, when I require it for my
own use.''
E
Besides this letter, the learned counsel for the petitioners drew our
attention to a sheaf of letters exchanged between respondent No. 2
Smt. Nanki M. Malkani and the Hindustan Petroleum Corporation
Ltd. sh.owing '1hat she accepted that there was subsisting agreement of
leave and licence as late as 24th March, 1980 which must by necessary
f
implication, give rise to the inference as to the existence of such a F
licence between its predecessor Esso Eastern Inc. as on !st February,
1973 which conferred on it the status of a protected tenant under
s. 15A of the Act. Indeed, the corrspondence shows that it was at the
behest of respondent No. 2 that every time cm the expiry of a term of
licence it came to be renewed from year to year till s. 15A of the
Bombay Rent Act was brought into force. Thereafter, the predeces- G
sor-in-interest of the petitioner, corporation was deemed to be her
tenant under s. 15A of the Bombay Rent Act. For instance, by letter
dated 9th April, 1975 she wrote to the Hindustan Petroleum Corpora-
tion Ltd. that the above flat had been in its possession since December
1, 1968. Again,"by letter dated 15th November, 1976, she wrote to the
t
Corporation forwarding the original bill of the society in support of her H
58 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R.

demand for payment ot enhanced taxes and charges. In view of these
A admissions ma.de in these letters and more particularly in the letter
dated 29th November, 1971 to Essa Eastern Inc. which reads as under:

"As the present agreement of leave and licence in regard to
above flat is due to expire on 30th November, 1973 that is
two years from hence, you would like me to give you an
undertaking of renewal of this agreement to justify' the
expenditure being incurred by you now,"

the findings of the Appellate Court are clearly erroneous. On the
other hand, it stands proved that Esso Eastern Inc. had acquired the
'
status of deem¢d tenant or protected licensee under s. !SA of the
C Bombay Rent Act a~on !st February, 1973. The findings of the Appel-
late Court to the contrary are therefore clearly erroneous. We are
unable to sus'tain the view taken by the Appellate'Court in not giving
effect to sub-s. (1) of s. 5 which vested the tenancy rights in relation to
the flat in question on the Central.Government as from appointed day.
ti> While it is true that a licence being personal is not capable of being
transferred; there was no warrant for the assumption by the Appellate
Court that the licence stood extinguished with the acquisition of the
right, title and int,erest of Esso Eastern Inc. under s. 3 of the Acquisi-
tion Act. That Act came into force on 15th March, 1974 and in the
meanwhile, the licensee Esso Eastern Inc. had already acquired the
l: status of deemed tenant under s. 15A of the Bombay Rent Act as
admittedly, there was a subsisting licence as on 1st February, 1973.
The Appellate Court has also failed to appreciate that the name of Esso
Eastern Inc. was thanged to Essa Eastern lnc. by a Certificate of
Amendment dated/22nd December, 1970 vide a Resolution passed by
the Board of Directors of the Corporation on 15th December, 1970. In
~ ·view of all this, the finding of the Appellate Court that the Hindustan
Petroleum Corporation Ltd. was entitled to the protection of s. 15A of '
the Bombay Rent Act clearly borders on traversity and can hardly be
sustained. ·

The Appellate Court was clearly in error in not appreciating that
<ji by s. 3 of the Acquisition Act, the right, title and interest of Esso
Eastern In6. in relation to its undertakings in India, shall stand trans-
ferred to, and sh~ll vest in, the Central Government as from the
appointed ~ay i.e. as from 13th March, 1\174. Under sub-s. ( 1) of s~ 5
thereof, the Central Government became the lessee or tenant, as the
case may be. By sub·s. (2J thereof, on the expiry of the term of any
M · lease or tenancy referred to in sub-s. (1), such lease or tenancy shall, if
HINDUSTAN PETROLEUM CORPN. v. HOUSING SOCIETY {SEN, J.i 59

so desired by the Central Government, be renewed on the same terms A
and conditions on which the lease or tenancy was held by Esso
immediately before the appointed day. By a notification issued on the
next date, the right, title and interest of the Central Government
became vested in Esso Standard Refining Company of India Ltd., a
Government company, w.e.f. 15th March, 1974. Furthermore, by
reason of Lube India and Esso Standard Refining Company°of India B
Ltd. Amalgamation Order, 1974 made by the Company Law Board
under s. 39611.\ & (2) of the Companies Act, 1956, the undertaking of
Lube lndia Ltd. vested ir, Esso Standard Refining Company of India
Ltd. and immediately upon sucli transfer, the name of Esso Standard
Refining Company of India Ltd., stood changed to Hindustan
fetroleum Corporation Ltd. c
In the premises, petitioner No. 1 Hindustan PetroleumCorpo-
ration Ltd. is clearly protected under s. lSA of the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947. In that view of the
matter, we do not think it necessary to deal with the contention as
regards the applicability of s. 9) of the Maharashtra Co-operative D
Societies Act, 1960. All aspects arising out of the submissions as to the
jurisdiction of the Registrar under s. 91(1) of the Act have already
been considered by this Court on O.N. Bhatnagar's case and we reit-
erate the principles laid down therein.

In the result, the petition under Art. 226 of the Constitution E
succeeds and is allowed. The judgment and order passed by the
Maharashtra State Co-operative Appellate Court dated June 6, 1983
allowing the claim of respondent No. 1 Shyam Co-operative Housing
Society for eviction of the petitioners as also the proceedings initiated
by it under s: 91 of the Maharashtra Co-operative Societies Act, 1960
are quashed. F
I
Y. Lal Petition allowed.