• S.R Radhakrishnan v. Neelamegam (2003): Emphasized that actual physical possession is essential for the application under Section 9.
• Hindustan Petroleum Corporation Limited v. Spencer and Company (2004): Reinforced that legal or constructive possession does not suffice for claiming benefits under the Act.
• Mahendra Saree Emporium (Ii) v. G.V Srinivasa Murthy (2005): Clarified that mere permission to use premises does not equate to subletting if legal possession remains with the tenant.
• Other pivotal cases including P. Senniappan v. Kannammal (1998) and Vender Limited v. Antox India Private Limited (1990) were also referenced to establish the boundaries of 'actual physical possession'.

The High Court meticulously examined whether Hindustan Petroleum Corporation Ltd. maintained 'actual physical possession' of the leased property. Despite the respondent being the legal successor of ESSO Eastern Inc. and having erected a superstructure, the court found that the operational control was vested in M/s. Bhandari Agencies. The evidence pointed out that the respondent did not directly manage the petrol bunk; instead, it delegated this responsibility to its dealer. This delegation meant that the respondent lacked the direct physical occupancy required under Section 2(4)(ii)(b) of the Act.

The court highlighted that while the respondent remained the legal possessor, actual physical possession necessitates direct control and operation, which was absent in this scenario. The distinction between legal possession (the right to possess) and actual physical possession (the actual control and use) was pivotal in the court's deliberation.

Furthermore, the court criticized the lower court for overlooking established legal principles and relying overly on procedural aspects like tax payments, which do not equate to physical possession.

This judgment sets a clear precedent on the interpretation of 'actual physical possession' under the Tamil Nadu City Tenants' Protection Act. It underscores the necessity for tenants to demonstrate direct and ongoing control over the property to avail statutory benefits. For government undertakings and large corporations, this ruling mandates a closer examination of operational control rather than mere legal ownership when seeking to utilize Section 9 provisions.

Future litigations involving government entities or large corporations leasing properties will reference this case to ascertain whether entities meet the 'actual physical possession' criterion, potentially influencing lease agreements and property management practices.

4.1 Actual Physical Possession vs. Legal Possession

Actual Physical Possession refers to the tangible control and occupancy of a property. It implies that the tenant actively uses and manages the premises.

Legal Possession, on the other hand, denotes the recognized right to possess a property, which may not involve active management or use. It's plausible for a tenant to have legal possession while delegating operational control to another party.

4.2 Section 9 of the Tamil Nadu City Tenants' Protection Act

Section 9 grants tenants the option to purchase leased property upon lease termination, provided they meet certain conditions, including being in actual physical possession of the property. This provision is designed to protect tenants who have invested in constructing superstructures by allowing them continuity of their business operations.