HPCL must vacate petrol pump land in Dahanu within three months, the Bombay High Court has ruled, upholding a 15-day termination notice on the footing that a tenancy continuing after the original lease expired was monthly, not yearly. The Court also held that rent cheques the landlord never encashed still counted as evidence of how the tenant paid.
Mumbai: Hindustan Petroleum Corporation Ltd. (HPCL) argued that its tenancy over land used for a petrol pump could be ended only on six months’ notice. The Bombay High Court has rejected that claim and restored an eviction decree against the company [Hushang Adi Vakil v. Hindustan Petroleum Corporation Ltd.].
Justice Sandeep V. Marne allowed the landlord’s second appeal with costs in a judgment delivered on November 5, 2026, and directed HPCL to hand over the land within three months.
Why fifteen days were enough
The Court worked through Sections 106, 107, 111 and 116 of the Transfer of Property Act, 1882. Section 106 sets default rules where no contract, local law or usage says otherwise: a lease for agricultural or manufacturing purposes is treated as yearly, and a lease for any other purpose as monthly.
Section 116 covers holding over, where a lessee stays on after the lease ends and the lessor accepts rent or otherwise assents to the continued possession. The Court found that HPCL had that status, since rent was accepted after the original term ran out.
The original agreement did provide for a yearly lease, but nothing in evidence extended its ten-year term. On these facts, the Court held, the earlier yearly arrangement did not make the holding-over tenancy yearly for all time. What fixed its character was the purpose of the lease.
Running a retail petrol pump is not a manufacturing activity, the Court held, agreeing on that point with the concurrent findings below. The holding-over tenancy was therefore monthly, a 15-day notice under Section 106 sufficed, and the November 1998 notice had validly ended it.
ALSO READ: Jharkhand High Court Says Property Sale Alone Is No Ground To Evict Tenants
Notice was still needed, but not six months of it
The Court explained why a notice had to be served at all. Because the landlord accepted rent after the contractual lease expired, HPCL stayed on as a tenant holding over, and its possession could not be treated as having ended in 1974 with the original term. A positive notice under Section 106 was needed to terminate the continuing tenancy.
That left two separate questions: whether a notice was required, and how long it had to run. On the notice actually served, the Court answered both for the landlord. A notice was necessary, but six months was not.
Cheques that were never encashed
HPCL also objected to the landlord’s reliance on cheques for ₹4,100, pointing out that they had not been encashed. The High Court held that the relevant point was HPCL’s own conduct in tendering monthly rent, not whether the landlord took the money.
The Court referred to cheques from 1995 and to HPCL’s letter of June 9, 1995 describing the payment as monthly rent. The first appellate court had wrongly set this documentary evidence aside only because the cheques stayed unencashed, it held. That gave HPCL’s yearly-tenancy argument a further answer.
A 1964 lease and a 1998 notice
Vakil’s mother had leased the land to Esso under an agreement dated January 1, 1964, for ten years. HPCL succeeded to Esso’s interest and kept running a retail fuel outlet through dealers. After the original term ended, rent continued to be paid and accepted.
Vakil later claimed ownership under his mother’s will and terminated the tenancy by a notice dated November 19, 1998, effective December 31, 1998. His suit asked for possession and ₹49,200 in rent arrears. The trial court decreed it in August 2018, ordering delivery of possession, payment of the arrears and a separate inquiry into mesne profits.
The District Court at Palghar reversed that decree in November 2022, treating the tenancy as yearly and therefore needing six months’ notice. The High Court has now set that decision aside and confirmed the trial court’s decree. HPCL must deliver possession within three months, and the restored decree also covers the rent arrears and the separate mesne-profits inquiry.
Case: Hushang Adi Vakil v. Hindustan Petroleum Corporation Ltd.
Number: Second Appeal No. 228 of 2023
Court and Bench: Bombay High Court; Justice Sandeep V. Marne
Decision: November 5, 2026; reserved October 29, 2026
Citation: 2026:BHC-AS:45352
Outcome: Second appeal allowed with costs; trial court decree restored; possession to be handed over within three months.
