A two-judge Bench of Justice L. Nageswara Rao and Justice BR Gavai while reiterating the case of Bharat Petroleum Corporation Limited v. R. Chandramouleeswaran and others has held that since Respondent No.1 was not in actual possession of the building and had sub-let/leased it to Respondent No. 2 he would not be entitled to the benefit under the Tenants Act and hence a writ petition under Article 226 by the landlord will be maintainable against it.

An appeal was preferred assailing the judgment of the Madras High Court which had denied the prayer of the Appellant landlord for directing the Respondents to vacate the property. The High Court had held that the relief claimed by the Appellant could not be granted in a petition under Article 226 of the Constitution of India and relegated the Appellant to an alternate remedy available in law.

Senior Counsel Mr. V. Giri appeared for the Appellant while Senior Counsel Mr. Kailash Vasdev appeared for the Respondents during the proceedings before the Court.

In this case, the Appellant had leased his vacant land to the Respondent which was renewed twice. The lease period came to an end on 31st December 2009. On the said premise Respondent No.1-­BPCL put up a petrol bunk, which was being operated by respondent No.2­ M/s Vijaya Auto Services, its licensor. Notices were issued by the Appellant to the Respondent to vacate the property when the lease got terminated, however, Respondent No.1 did not take any steps in connection with the same.

During the proceedings of the High Court, the Court noted that conduct of the Respondent No.1 was not befitting as an organ of a State.

The Appellant while referring to a precedent contended that the tenants would not be entitled to benefit and rights under the Tenants Act unless they are in actual physical possession of the building constructed by them. It was further argued that Respondent No.1 was enjoying the property without paying anything in return from the date of expiry of the lease and as such the conduct of the Respondent was unbecoming of a statutory corporation which is a State under Article 12 of the Constitution.

The Apex Court made a reference to the case of Bharat Petroleum Corporation Ltd. v. Nirmala and others and noted the view taken by the Court while interpreting the word 'actual physical possession.'

"The expression 'actual physical possession of land and building' would mean and require the tenant to be in actual physical possession and sub­clause (b) would not apply if the tenant has sub­let the building or has given the premises on leave and licence basis. It further held that the aforesaid decision would operate as res judicata in the case of the appellant and the landlords who were parties to the said decision."

Further, the Bench observed, "The position is amply made clear by observing that in case the appellants have let out or sub­let the building or given it to third parties, including dealers or licensees, they would not be entitled to protection and benefit under the Tenants Act."

Additionally, the Court held that the view taken by the High Court thereby relegating the Appellant to the alternate remedy available in law was not sustainable.

Also, the Bench held that while directing the Respondents to vacate the premises, it would also be necessary for the interests of justice to direct Respondent No.1 to pay arrears of market rent from 31st December 2009 till the date of delivery of possession at the market rate.

In the light of these observations, the Court allowed the appeal with the following directions – i) Respondent to vacate the premises and hand over peaceful and vacant possession of the same within 3 months; ii) Respondent was directed to pay arrears of market rent to the Appellant.

Also, Respondent No. 1 BPCL was ordered to pay the cost of Rs. 1 lakh to the Appellant.

The Court postponed the issue of determination of market rent for a period of three weeks.

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