Govt Corporations Cannot Squat On Private Land Post-Lease Expiry: Andhra Pradesh HC

Public sector undertakings acting as model litigants cannot resort to unnecessary litigation by squatting on private properties without legal authorization after the expiry of lease agreements. The High Court of Andhra Pradesh has held that continued occupation of a site after the landlord refuses to renew the lease constitutes litigious possession, not lawful possession, thereby mandating the immediate restoration of property rights to the owner.

Justice Ravi Cheemalapati, presiding over the matter, addressed a writ petition challenging the refusal of a petroleum corporation to vacate premises despite the lease having ended in 2018. The Court emphasized that a government entity must not deprive citizens of their fundamental rights by maintaining illegal possession without paying rentals, terming such conduct as arbitrary and irrational under the Constitution of India, 1950.

Key Takeaways

Automatic License Cancellation

Under the Petroleum Rules, 2002, once a licensee loses the legal right to a site, any petroleum storage license granted for that location stands automatically cancelled.

Model Litigant Standards

Government-owned companies are expected to be role models in litigation and cannot utilize technical pleas to remain in possession of private land after their contractual rights have expired.

Article 226 Maintainability

High Courts can exercise writ jurisdiction to direct the handover of property where there is no semblance of a valid defense for retaining possession, bypassing the need for a civil suit.

Legal Right vs. Litigious Possession

The Court, in its reasoning, observed: "When that lease expired and when the landlord declined to renew the same and also called upon the erstwhile tenant to surrender possession, the erstwhile lessee could no longer assert that he had any right to the site. His continued occupation of something which he had no right to occupy cannot be regarded as source of a right to the land of which he himself was not in lawful possession."

Drawing upon the principles established in M.C. Chockalingam & Ors. Vs. V.Manickavasagam & Ors ( "1974 (1) SCC 48": 1973 CaseBase(SC) 236), the bench noted that litigious possession lacks a foundation in legal right and cannot be equated to lawful possession. The Court further noted the precedent in Hindustan Petroleum Corporation Ltd. & Anr Vs Dolly Das ( "(1999) 4 SCC 450": 1999 CaseBase(SC) 108), observing that corporations cannot act arbitrarily by squatting on sites without paying rents or using the property for its intended purpose.

The Court has the following directions:

"...directing the respondent nos.2 to 4 to remove the equipment, if any and handover possession of the subject property to the petitioner within a period of three (03) months from the date of receipt of copy of the order."

Ratio

Upon the expiry of a lease and the subsequent refusal of the lessor to renew the agreement, the lessee's status transitions to that of a tenant at sufferance; such litigious possession does not constitute 'lawful possession' required for the maintenance of statutory licenses or the continued occupation of the property. Under Constitution of India, 1950, the High Court is empowered to grant relief for the restoration of possession when a State entity continues to occupy land without any legal basis, as such an act is fundamentally arbitrary.

Background

The petitioner’s father had executed a lease deed in favor of a petroleum corporation in 1999 for a period of 20 years, ending on March 31, 2018. Following the father's demise, the property fell to the share of the petitioner through a registered settlement deed. The petitioner alleged that the corporation failed to pay lease amounts from 2005 onwards and refused to vacate the premises after 2018, instead seeking a renewal and installing electrical charging stations without consent.

The respondents contended that the petitioner lacked locus standi and argued that the corporation had continued to dispatch cheques to the original lessor's address. They further relied on specific clauses of the lease deed to suggest a tacit agreement for continuation. However, the Court relied on C.Albert Morris Vs K.Chandrasekharan and others ( "(2006) 1 SCC 228": 2005 CaseBase(SC) 1007) to reinforce that a dealer loses all 'rights to the site' upon lease expiry. Finding no merit in the corporation's technical objections, the Court allowed the writ petition.

Case Details:
Case No.: WRIT PETITION NO: 15956/2025
Neutral Citation: 2026:APHC:39396
Case Title: T V Yuvaraj v. The Union Of India and Others
Appearances:
For the Petitioner(s): SUDHAKARA RAO AMBATI
For the Respondent(s): SHREYAS REDDY, A RAVINDRA BABU (CENTRAL GOVT COUNSEL)

Source: 2026 CaseBase(AP) 15709