In a significant ruling, the Supreme Court has dismissed Indian Oil Corporation Limited’s appeal in a decades-old property dispute, directing the public sector oil major to vacate a petrol pump site in Kerala. The court upheld the Kerala High Court’s findings and granted the landowner relief after a legal battle that began more than 30 years ago.
Background of the Case
The dispute dates back to 1966, when Indian Oil Corporation (IOC) entered into a dealership agreement to run a petrol pump on land owned by P.C. Sathiyadevan and his family in Ernakulam, Kerala.
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The land was formally leased to IOC for 20 years. In 1994, after the lease period ended, the landowner approached the trial court seeking recovery of possession of the property.
IOC resisted eviction by invoking Section 106 of the Kerala Land Reforms Act, which protects tenants who had constructed commercial buildings on leased land before 20 May 1967. The company claimed it had begun construction of the petrol pump before the cut-off date and was therefore entitled to continue in possession.
What the Law Says
Section 106 of the Kerala Land Reforms Act protects a commercial lessee from eviction if:
- The lease was for commercial or industrial use, and
- The lessee constructed buildings on the land before 20 May 1967.
If both conditions are met, eviction is barred, and only rent can be revised periodically.
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Trial Court vs High Court
The trial court had initially ruled in favour of Indian Oil, relying on findings of the Land Tribunal which stated that construction had begun before the statutory cut-off date.
However, the Kerala High Court overturned this decision in 2010. The High Court held that the documents produced by IOC were insufficient to prove that construction had actually commenced before 20 May 1967.
The court concluded that the company was not entitled to protection under Section 106 and allowed the landowner’s suit for recovery of possession.
Supreme Court’s Observation
Hearing the appeal, a bench of Justice B.V. Nagarathna and Justice Alok Aradhe closely examined the records and agreed with the High Court’s reasoning.
The bench observed that merely claiming construction was not enough. Clear proof was required to show that the buildings existed before the statutory cut-off date.
“The High Court was justified in holding that the appellant failed to establish construction prior to 20.05.1967,” the bench noted while dismissing the appeal.
The court further held that both conditions under Section 106 must be strictly fulfilled, and in this case, Indian Oil had failed to do so.
Six Months’ Time Granted to Vacate
Although the appeal was dismissed, the Supreme Court granted limited relief to Indian Oil considering the long-standing nature of the dispute and the fact that a petrol pump is currently operating on the land.
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The court allowed six months’ time for IOC to vacate and hand over vacant possession of the property to the landowner.
It also directed the company to:
- File an undertaking within three weeks
- Hand over possession within six months
- Not seek any extension
- Not create third-party rights
- Clear any pending rent dues
The bench made it clear that the landowner had already waited since 1994 and further delay could not be justified.
Final Decision
The Supreme Court dismissed the civil appeal filed by Indian Oil Corporation and upheld the Kerala High Court’s judgment directing eviction of the company from the property.
The matter stands concluded with a firm timeline for vacating the premises.
Case Title: Indian Oil Corporation Ltd. v. P.C. Sathiyadevan (D) by LRs
Case No.: Civil Appeal No. 8576 of 2011
Decision Date: January 21, 2026
