2004 (4) TMI 643 - SC - Indian Laws

Summary

Issues Involved:
1. Entitlement to renewal of lease under the Burmah Shell (Acquisition of Undertakings in India) Act, 1976.
2. Applicability of Section 107 of the Transfer of Property Act.
3. Interpretation of Section 5(2) and Section 7(3) of the Burmah Shell Act.
4. Overriding effect of the Burmah Shell Act over other laws.

Detailed Analysis:

1. Entitlement to Renewal of Lease under the Burmah Shell Act:
The primary issue was whether the appellant was entitled to a renewal of the lease under the Burmah Shell (Acquisition of Undertakings in India) Act, 1976. The appellant claimed tenancy based on the Act, which transferred all rights of Burmah Shell to the Central Government and subsequently to the appellant. The appellant exercised its option to renew the lease, invoking Sections 5(2) and 7(3) of the Act.

2. Applicability of Section 107 of the Transfer of Property Act:
The lower courts held that Section 107 of the Transfer of Property Act required a registered instrument for renewal of the lease. However, the appellant argued that the provisions of the Burmah Shell Act, particularly Section 11, should prevail over the Transfer of Property Act. The Supreme Court concluded that the Burmah Shell Act, being a special statute, overrides the general provisions of the Transfer of Property Act.

3. Interpretation of Section 5(2) and Section 7(3) of the Burmah Shell Act:
Section 5(2) of the Burmah Shell Act mandates that upon the expiry of a lease, it shall be renewed on the same terms and conditions if desired by the Central Government or the Government company. The Court emphasized that this provision creates a right of renewal for the appellant. Section 7(3) extends this right to government companies. The Court interpreted these sections to mean that the lease would automatically renew upon the appellant expressing its desire to do so.

4. Overriding Effect of the Burmah Shell Act over Other Laws:
Section 11 of the Burmah Shell Act contains a non-obstante clause, giving it overriding effect over any other inconsistent laws. The Supreme Court held that this clause ensures the provisions of the Burmah Shell Act take precedence over the Transfer of Property Act. The Court cited precedents to reinforce the principle that special statutes override general statutes.

Findings:
The Supreme Court found that the Burmah Shell Act, being a special statute, overrides the Transfer of Property Act. The appellant's right to renew the lease was upheld based on Sections 5(2) and 7(3) of the Burmah Shell Act. The Court emphasized the legislative intent to ensure continuity in the distribution and marketing of petroleum products through established outlets.

Conclusion:
The impugned judgments of the lower courts were set aside. The Supreme Court directed that the appellant's lease be renewed on the same terms and conditions. Additionally, the appellant was ordered to pay a sum equivalent to 10 times the original rental from the date the original lease expired. The Court noted that this order should not be treated as a precedent. The appeals were allowed with no order as to costs.