Krishna Kumar Khemka Vs. Grindlays Bank
P.L:C. & Ors [1990] INSC 171 (2 May 1990)
Reddy,
K. Jayachandra (J) Reddy, K. Jayachandra (J) Pandian, S.R. (J)
CITATION:
1991 AIR 899 1990 SCR (2) 961 1990 SCC (3) 669 JT 1990 (3) 58 1990 SCALE (1)70
ACT:
Calcutta High Court Original Side Rules:
Chapter 21 Rule 5(a)Receiver of immovable property--Whether has power to lease
property for term exceeding three years.
Transfer
of Property Act: Sections 5 and 205--'Transfer of
property,--,Conveys'--Interpretation--Surrender of part of tenancy-- Does not
amount to implied surrender of entire tenancy- Increasely reduction of
rent--Imports surrender of existing lease and creation of new tenancy.
West
Bengal Premises
Tenancy Act: Sections 11, 13(1) and 88--Tenancy--Surrender of part----Does not
amount to implied surrender of entire tenancy--Increase reduction of
rent--Imports surrender of existing lease and creation of new tenancy.
HEAD NOTE:
The
appellant had filed a suit in the High Court of Calcutta for a declaration that
the properties set out in the schedule belonged to a joint family and that the
trust created by the father of the plaintiff/appellant in respect of the said
properties was void. Pending the suit, a Receiv- er was appointed by Justice
A.N. Sen. While making the appointment the learned Judge had passed an order
restrain- ing the Receiver from selling or ' 'transferring' ' any of the
properties.
The
property in dispute is a building at Alipore, Calcutta, which comprised of four fiats. Grindlays Bank Ltd.,
respondent No. 1, had taken all the four flats on lease for 10 years from 1st June, 1958. After the expiry of the period of
lease, Grindlays continued to be the tenant.
On 1st April, 1978 Grindlays surrendered a portion of
the tenancy, namely, two fiats i.e. fiats Nos. 1 and 2, in favour of Tatas. The
Receiver let out these two fiats to M/s Tata Finlay Ltd. with effect from
February 1979.
Questioning
the action of the Receiver, an application was filed in the High Court
contending that the Receiver had no authority to create 962 any tenancy, that
he had virtually created two new tenancies after terminating the original
tenancy of Grindlays, and that neither Grindlays nor Tatas was entitled to
occupy the premises and they were liable to be evicted summarily. The learned
Single Judge was not inclined to order summary eviction as prayed for. An
appeal was filed before the Division Bench. The Division Bench inter alia
observed that any such relief could be obtained in a suit but the same could
not be filed in the High Court inasmuch as the per- mises in question was
situated outside the Original Side Jurisdiction of the High Court.
Before
this Court it was contended on behalf of the appellant that
(i) the
Receiver had only such powers as were expressly granted by the Court;
(ii)
"transfer" included lease and therefore the Receiver by creating a
new lease i.e. tenancy, had violated the injunction order passed by Justice
A.N. Sen;
(iii)
after the expiry of the stipulated period of lease in favour of Grindlays, the
tenancy turned to be a monthly tenancy and therefore the entire character of
tenancy changed, and the monthly tenancy therefore was a new tenancy;
(iv) protection
under the West Bengal Premises Tenancy Act could not be extended to the tenant
of a Receiv- er;
(v)
the break up of the tenancy affected the integrity of the tenancy inasmuch as
by virtue of this break up two new tenancies had come into existence; and
(vi) the
lease in favour of Grindlays had expired and by creating a monthly tenancy which
may even go beyond three years, the Receiver had created a new lease in
violation of Chapter 21 Rule 5(a) of the Original Side Rules.
In
reply, it was contended on behalf of Tatas that a monthly tenancy in respect of
the said two flats had been created in their favour and therefore they were
entitled to protection under the Tenancy Act.
On
behalf of Grindlays it was contended that after the expiry of the period of the
original lease in 1968, rela- tionship between Grindlays and the Trust
continued to be of landlord and tenant; that at all material times they re- tained
the tenancy in respect of flats Nos. 3 and 4, and were governed by the Tenancy
Act; that the surrender of flats Nos. 1 and 2 by the Grindlays and their
continuation as tenants at reduced rent did not amount to a new lease in
respect of flats Nos. 3 and 4, and hence there was no trans- fer and no
violation of the injunction.
Dismissing
the appeal as against respondent No. 1 and allowing it against respondent No.
2, this Court,
HELD:
(1) In
the Transfer of Property Act, the word 'trans- fer' is 963 defined with
reference to the word 'convey'. Similarly, the term 'transfer' as used in
Section 11 or Section 88 of the Bengal Tenancy Act, included a lease, as a
lease is a trans- fer of an interest in immovable property. A lease, there-
fore, comes within the meaning of the word 'transfer'-[968A-B] Hari Mohan alias
Hari Charan Pal v. Atal Krishana Bose & Ors., XXIII Vol. Indian Cases 925,
referred to.
(2)
Surrender of part of the tenancy did not amount to implied surrender of the
entire tenancy. Likewise the mere increase or reduction of rent also would not
necessarily import a surrender of an existing lease and the creation of a new
tenancy. [972C-D] Konijeti Venkayya & Anr. v. Thammana Peda Venkata Subba- rao
& Anr. AIR 1957 A.P. 619 and N.M. Ponniah Nadar v. Smt. Kamalakshmi Ammal,
AIR 1989 S.C. 467, referred to.
(3)
The Tenancy in favour of Grindlays continued as monthly tenancy for a period
exceeding three years. It was an accretion to the old tenancy and not a new
tenancy- It could not therefore be said that the Receiver had created tenancy
for a period exceeding three years in violation of Chapter 21 Rule 5(a) of the
Original Side Rules. Merely because there was change in the character of a
tenancy, namely that it had become a monthly tenancy, it did not amount to a
new tenancy. [972G-H] Utility Articles Manufacturing Co. v. Raja Bahadur Motilal
Bombay Mills Ltd., AIR 1943 Bom. 306, referred to.
(4) A
clear injuction order was passed by Justice A.N. Sen specifically restraining
the Receiver from creating any new tenancy. But the injunction did not apply to
the tenancy in favour of Grindlays in respect of fiats Nos. 3 and 4 inasmuch as
it was an old tenancy though in a modification form. The Grindlays were
therefore entitled to the protec- tion under the provisions of the Tenancy Act.
[974G-H; 975A, C] Damadilal & Ors. v. Parshram & Ors., [1976] Supp. SCR
645 and Biswabani (P) Ltd. v. Santosh Kumar Dutta, [1980] 1 SCR 650, referred
to.
Smt. Ashrafi
Devi & Anr. v. Satyapal Gupta & Ors., Suit No. 966 58 dated 9th Sept. 1977. Calcutta High Court and Armugha Gounder
v. Ardhanari Mudaliar & Ors., AIR 1975 Madras 231, distinguished.
964
(5) In
the case of Tatas, it was a new tenancy. Such a lease came within the meaning
of 'transfer' and in view of the injunction order passed by Justice A.N. Sen,
creation of such a new tenancy was legally barred. Consequently the Tatas could
not claim any protection under the provisions of the Act and were liable to be
evicted. [978C] Kanhaiyalal v. Dr. D.R. Banaji, AIR 1958 S.C. 725 at p. 729; Smt.
Ashrafi Devi & Anr. v. Satyapal Gupta & Ors., (supra) and Armugha Gounder
v. Ardhanari Mudalier, (supra), referred to.
CIVIL
APPELLATE JURISDICTION: Civil Appeal No. 2072 of 1990.
From
the Judgment and Order dated 13.5. 1986 of the Calcutta High Court in Suit No. 2479 of 1967.
M.K. Banerjee,
Subrat Rai Choudhary, Gopal Subramanium, N.P. Aggarwala, Anil Aggarwala, P.C.
Sharma, L.P. Aggarwala, Ms. Indira Banerjee, R.N. Jhunjhunwala, Praveen Kumar,
C.S. Vaidyanathan, P.R. Seetharaman, D.N. Mukherjee, Raj Kumr Gupta and P.C. Kapur
for the appearing parties.
The
Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J. Leave granted.
This
appeal is directed against the order of the Divi- sion Bench of the High Court
of Calcutta. The appellant was transposed as the plaintiff in the Original Side
suit-No. 2479/67 in the High Court of Calcutta. The suit was filed for a declaration that the various properties set
out in the Schedule belonged and still belong to the joint family consisting of
the members mentioned in the plaint. Pending the suit an application was filed
for appointment of a receiver for the various properties mentioned in Schedule
'A' annexed to the petition, for injunction and for other reliefs. One Mr. S.C.
Sen was appointed as Receiver. A declaration was also sought in the suit that
the trust dated October 20th, 1948 created by late Gopi Krishna Khemka, father
of the plaintiff, is void and for cancellation of the same. Premises No. 38,
New Road, Alipore, building with open space was one of the properties belonging
to the trust.
Grindlays
Bank Limited ('Grindlays' for short), respondent No. 1 herein was the original
tenant and they were occupying four flats and they surrendered a portion of the
tenancy namely two flats i.e. Flats Nos. 1 and 2 which came into effect from
1st 965 April, 1978. The receiver let out these two flats to M/s Tata Finlay
Ltd. ('Tatas' for short) with Effect from Febru- ary 7, 1979 pursuant to a
letter written by Tatas. Question- ing the action of the receiver an
application was filed in the High Court contending that the receiver had no
authority to create any tenancy and that the receiver has virtually created two
new tenancies terminating the original tenancy of Grindlays and it was
contended before the learned Single Judge of the Calcutta High Court that
neither Grindlays nor Tatas were entitled to occupy the premises and they are
liable to be evicted summarily. The learned Single Judge was not inclined to
order summary eviction as prayed for but, however, observed that the respective
contentions of the parties as to the validity of the tenancy created in favour
of Tatas have not been finally decided by the High Court and that the parties
are at liberty to agitate the same grounds in any action that they may be
advised to proceed for evic- tion of Tatas and Grindlays. As against the order
of the learned Single Judge, an appeal was filed before a Division Bench. It
was contended before the Division Bench that upon surrender of Flats Nos. 1 and
2 by the Grindlays a fresh tenancy was created by the receiver from 1st April,
1978 and the other tenancy in favour of Tatas is beyond the powers of the
receiver and that the receiver had no authority to create any tenancy either in
favour of Grindlays or Tatas.
Various
contentions were raised before the Division Bench and ultimately the Division
Bench having considered the several submissions passed an order, the operative
portion of which reads as follows:
"Therefore,
the petitioner is entitled to get a decree for possession on any ground
mentioned in Section 13(1) of the said Act and such relief can be obtained in a
suit which cannot be filed in this court inasmuch as the premises in question is
situated outside the original side jurisdiction of this Court." More or
less the same contentions are advanced before us.
Firstly
it is submitted that the receiver had no right or authority to create any lease
or tenancy in respect of the said flats for a term exceeding three years at a
time and such creation of a tenancy should be deemed to be only for a period of
three years' terminable on the expiry of the said period. In this context a
further submission is that upon surrender of Flat Nos. 1 and 2 by Grindlays a
fresh tenancy was created by the receiver from 1st April, 1978 for which he had
no authority. Therefore, the High Court ought to have ordered summary eviction
of Tatas, and Grindlays.
966 It
is not in dispute that the tenancy in respect of Flat Nos. 1 and 2 was
surrendered by the Grindlays and from 1st April, 1978 Tatas was inducted as
tenant in respect of the said two flats at a monthly rent of Rs. 1200 and
service charge at the rate of Rs.600 per month and since then Tatas is a
monthly tenant in respect of the said two flats. It is the case of the Tatas
that the terms of the tenancy were reduced into writing as recorded in the
letter dated 7th February, 1979 and the receiver adopted the same and did not
raise any objection thereto, and it claimed to be still a monthly tenant and
therefore, they are entitled to protec- tion under West Bengal Premises Tenancy
Act ('Act' for short) and the appellant has no right to demand vacant
possession of the said flats from the Tatas. The stand taken by the Grindlays
is that the premises in question comprised of four flats and they took all the
four flats for 10 years on lease from 1st June, 1958. After the expiry of the
period of the said lease relationship between Grindlays and the Trust continued
to be that of landlord and tenant governed by the Act, and that in 1977 they
agreed to surrender Flat Nos. 1 and 2 by the letters dated 10th March, 1978 and
29th March, 1978 addressed to the receiver in favour of Tatas.
However,
at all material times they retained the tenancy in respect of Flat Nos. 3 and 4
and continued to be tenant in respect of those flats and they are also governed
by the act. In the letters written it is also stated by the Grind- lays that
their continuation as tenant of flat Nos. 3 and 4 was acknowledged by the
receiver by his letter dated 15th May, 1978. It is contended on behalf of the
appellant that after the expiry of the lease the receiver had no power to grant
a lease for a period exceeding three years without the leave of this Court as
envisaged in Chapter 21 Rule 5(a) of the Original side Rules and that in the
instant case without obtaining any such leave receiver's granting monthly tenan-
cies is illegal. Reliance was also placed on the injunction order passed by
Justice A.N. Sen sitting on original Side while appointing the receiver. The
learned Judge passed an order restraining the tenants from selling or
"transferring" any of the properties mentioned in Schedule 'A'.
According to the appellants the transfer includes lease and therefore, the
Receiver by creating a new lease i.e. tenancy has vio- lated the injunction
order and on that ground also the action of the receiver should be held to be
illegal. First we shall dispose of this contention and then advert to the rest.
Order 40 C.P.C. which provides for the appointment of Receivers empowers the
court to confer upon the Receivers all such powers, as to bringing and
defending suits and for the realization, management, protection, preservation
and improvement of the property. In Satyanarayan Banerji and Ors. v. Kalyani Prosad
Singh Deo Bahadur and Ors., AIR 1945 calcutta 387, a Division Bench held that
the object of appointment of 967 Receiver is not to divest the rightful owner
of the title but only to protect the property and an appointment might operate
to change possession but cannot affect the title to the property, which remains
in those in whom it was vested when the appointment was made. In Ratnasami Pillai
v. Sabap- athy Pillai and Ors., AIR 1925 Madras 318, it is held that the Receiver
has only such powers as expressly granted by the Court.
Relying
on these two decisions the learned counsel for the appellants submitted that in
the instant case the Re- ceiver has acted in such a manner affecting the title
to the property and to the detriment of the interest of the right- ful owner.
Section 5 of the Transfer of Property Act defines the meaning of 'transfer of
property' and it is in the following terms:
"In
the following sections "transfer of property" means an act by which a
living person conveys property, in present or in future, to one or more other
living persons, or to him- self, or to himself and one or more other living
persons and "to transfer property" is to perform such act.
In
this Section "living person" includes a company or association or
body of individuals, whether incorporated or not, but nothing herein contained
shall affect any law for the time being in force relating to transfer of
property to or by companies, associations or bodies of individuals." In Mulla
Transfer of Property Act, 7th Edition, page 48, there is a passage in this
respect which reads thus:
"The
word "transfer" is defined with reference to the word
"convey". This word in English Law in its narrower and more usual
sense refers to the transfer of an estate in hand; but it is sometimes used in
a much wider sense to include any form of an assurance inter vivos. The
definition in Sec.
205(1)(ii)
of the Law of Property is "conveyance includes a mortgage, charge, lease,
assent, vesting declaration, vest-.
ing
instrument, disclaimer, release of every other assurance of property or of any
interest therein by any instrument except a will." This is a special
definition adopted for the purposes of the Law of Property Act, 1925. The word
"con- veys" in Sec. 5 of the Indian act is obviously used in the
wider sense referred to above. Transferor must have an 968 interest in the
property. He cannot serve himself from it and yet convey it." The word
'transfer' is defined with reference to word 'convey'.
In Hari
Mohan alias Hari Charan Pal v. Atal Krishna Bose and Ors., XXIII Vol. Indian
Cases 925, a Division Bench of the Calcutta High Court held that "the term
'transfer' as used in Section 11 or Section 88 of the Bengal Tenancy Act,
includes a lease, as a lease is a transfer of an interest in immovable
property". It is, therefore, clear that a lease comes within the meaning
of the word 'transfer' but in this case the matter does not stop there.
According to the learned counsel for the respondents the receiver has not
created any new tenancy and the continuation of Grindlays as tenants in respect
of Flats Nos. 3 and 4 does not amount to a new lease and, therefore, there is
no transfer. Conse- quently there is no violation of the injunction order
passed by Justice A.N. Sen. Learned counsel for the respondents.
referred
to various documents mostly in the form of letters between the receiver and the
Grindlays. We have perused these letters. They go to show that the Grindlays surren-
dered those two flats with the consent of the receiver but the stand taken by
them is. that their continuation as tenants of Flat Nos. 3 and 4 was
acknowledged by the receiv- er and the same cannot be treated as a new lease.
One of the questions is whether mere surrender of Flats Nos. 1 and 2 affects
the Grindlays' tenancy of Flats Nos. 3 and 4.
It is
also contended by the learned counsel for the appellant that after the expiry
of the stipulated period the tenancy in question turned to be a monthly tenancy
and, therefore, the entire character of tenancy got changed. In Utility
Articles Manufacturing Co. v. Raja Bahadur Motilal Bombay Mills Ltd., AIR 1943
Bombay 306, a Division Bench consisting of Beaumont, C.J. and Kania, J.
explaining the nature of the monthly tenancy observed in the following terms:
"A
characteristic of a periodical tenancy is that as each period commences, it is
not a new tenancy, it is really an accretion to the old tenancy. A monthly
tenancy, that is, a tenancy subject to a month's notice, creates in the first
instance a tenancy for two months certain. But as soon as the third month
commences, that is not a new tenancy; it turns the original tenancy into a
three months' tenancy, and when the fourth month begins, the tenancy becomes a
four months' tenancy, and so on so long as the tenancy 969 continues, until
that is to say, notice to quit is given." Relying on the above passage the
learned counsel contended that the monthly tenancy, therefore, is new tenancy.
Even otherwise, according to the learned counsel the integrity of the tenancy
is broken up and on that score also it is a new tenancy. Reliance is placed on Badri
Narain Jha and Ors. v.
Rarneshwar
Dayal Singh and Ors., [1951] SCR 153 it is ob- served:
"An
interse partition of the mokarrari interest amongst the mokarraridars as
alleged by the plaintiffs could not affect their liability qua the lessor for
the payment of the whole rent, as several tenants of a tenancy in law
constitute but a single tenant, and qua the landlord they constitute one
person, each constituent part of which .possesses certain common rights in the
whole and is liable to discharge common obligations in its entirety." In
White v. Tyndall, 13 Appeal Cases 263 it is stated that the parties to whom a
demise is made hold as tenants in common but what they covenant to pay is one
rent, not two rents and not each to pay is one rent, not two rents and not each
to pay half a rent but one rent. There is a privity of the estate between the
tenant and the landlord in the whole of the leasehold and he is liable for all
the covenants running with the land.
According
to the appellant, in the instant case, if this principle is followed, the break
up of the tenancy affected the integrity of the tenancy inasmuch as by virtue
of this break up two new tenancies have come into existence paying separate
rents and, therefore, in that view also it is a new tenancy. Yet another
submission of the appellant is that the act of the receiver in leasing out in favour
of Grindlays and Tatas for a period of more than three years was bad in view of
Chapter 21 Rule 5(a) of the Original Side Rules.
Though
this point appears to have been abandoned before the Division Bench yet it is
also canvassed before us. Chapter 21 of the Calcutta High Court Original Side
Rules deals with Receivers. Relevant part of the Rule 5 reads thus:
"5.
In every order directing the appointment of a Receiver of immovable property,
there shall, unless otherwise or- dered, be inserted the following directions:
(a) that
the Receiver shall have all the powers provided for 970 in Order XL, rule 1(d)
of the Code, except that he shall not, without the leave of the Court (1) grant
leases for a term exceeding three years.
The
submission is that the act of the Receiver in leasing out the flats in the
above manner beyond three years is in violation of this Rule and in that view
of the matter lease should be cancelled and the tenants should summarily be
evicted.
Learned
counsel for the respondents, on the other hand, submitted that there was no new
tenancy and surrender of flats Nos. 1 and 2 by the Grindlays and retaining two
more flats does not amount to a new tenancy atleast so far as Grindlays is
concerned and a reduction of rent also does not create new tenancy inasmuch as
the rent that they had to pay was only for two flats in respect of each their
tenancy continue.
In Woodfall's
Law of Landlord and Tenant, 25th Edn. Page 969, paragraph 2079 reads as under:
"2079.
Implied surrender of part only. If a lessee for years accept a new lease by
indenture of part of the lands, it is a surrender for that part only, and not
for the whole (k); and though a contract for years cannot be so divided, as to
be avoided for part of the years and to subsist for the residue, either by act
of the party or act in law; yet the land itself may be divided, and the tenant
may surrender one or two acres, either expressly or by act of law, and the
lease for the residue will stand good and untouched." In Halsbury's Laws
of England, 4th Edn. Volume 27, paragraph 449 read as under:
"449.
Surrender by change in nature of tenant's occupation.
A
surrender is implied when the tenant remains in occupation of the premises in a
capacity inconsistent with his being tenant, where, for instance, he becomes
the landlord's employee, or where the parties agree that the tenant is in
future to occupy the premsises rent free for life as a licensee. An agreement
by the tenant to purchase the rever- sion does not of itself effect a
surrender, as the purchase is conditional on a good title being made by the
Landlord." 971 In Foa's General Law of Landlord and Tenant, 7th Edition by
Judge Forbes, paragraph 991 reads thus:
"991.
Lease of part, & c--It has been held that acceptance of a new lease of part
only of the demised premises operates as a surrender of that part and no more
(b); but any ar- rangement between landlord and tenant which operates as a
fresh demise will work a surrender of the old tenancy, and this may result from
an agreement under which the tenant gives up part of the premises and pays a
diminished rent for the remainder--and it may result from the mere alteration
in the amount of rent payable (c). Where one only of two or more lessees
accepts a new lease, it is a surrender only of his share (d)." In Hill and
Redman's Law of Landlord and Tenant, 16th Edn.
on
page 45 1, it is observed:
"Any
arrangement between the landlord and tenant which operates as a fresh demise
will work a surrender of the old tenancy; and this may result from an agreement
under which the tenant gives up part of the premises and pays a dimin- ished
rent for the remainder, provided a substantial differ- ence is thereby made in
the conditions of the tenancy. But a surrender does not follow from a mere
agreement made during the tenancy for the reduction or increase of rent, or
other variation of its terms, unless there is some special reason to infer a
new tenancy, where, for instance, the parties make the change in the rent in
the belief that the old tenancy is at an end." From the above passage it
can be inferred that surrender of a part does not amount to implied surrender
of the entire tenancy and the rest of the tenancy remains untouched.
We
shall now examine the cases cited. In Konijeti Venkayya and Another v. Thammana
Peda Venkata Subbarao and Another, AIR 1957 A.P. 6 19, Viswanatha Sastri, J.
referred to the above mentioned passage from Woodfall's Law of Landlord and
Tenant and observed that the principle of law is stated correctly.
It can
therefore be seen that surrender of the part of the lease does not amount to
surrender of the whole. In N.M. Ponniah Nadar v. 972 Smt. Kamalakshmi Ammal,
AIR 1989 SC 467 it is held:
"A
mere increase or reduction of rent will not necessarily import a surrender of
an existing lease and the grant of a new tenancy. So also if on account of the
variation in the quantum of rent any consequential change is made regarding the
time and manner of the payment of the rent it cannot have the effect of graver
consequences being imported into the change of rent than what the parties had
intended and warrant a finding by the Court, that the parties had intend- ed to
create a new tenancy in supersession of the earlier one or that by operation of
law a new tenancy had come into existence." From what has been considered
above it emerges that surren- der of part of the tenancy does not amount to
implied sur- render of the entire tenancy. Likewise the mere increase or
reduction of rent also will not necessarily import a surren- der of an existing
lease and the creation of a new tenancy.
We
have noticed above that the transfer includes 'lease'.
Therefore
it becomes necessary at this stage to consider whether there has been violation
of injunction granted by Justice A.N. Sen which formed part of the appointment
order of the Receiver. So far as the Grindlays are concerned we are unable to
accede to the contention that a new tenancy is created.
It is
true that Justice A.N. Sen issued an injunction restraining the defendants from
selling or transferring any of the properties. There is some force in the
submission of the learned counsel for the appellant that the lease in favour of
Tatas amounts to transfer but the same cannot be said of Grindlays. Therefore
the question of evicting them summarily on this ground does not arise. However,
the sub- mission of the learned counsel is that even the lease in favour of the
Grindlays expired and by creating a monthly tenancy it may even go beyond three
years, and therefore it is not only creating a new lease but also is in
violation of Rule 5 of the Original Side Rules. We think we need not deal with
this question elaborately in view of the main and important question regarding
the applicability of the provi- sions of the Act. However, we have already
considered and held that no new tenancy is created so far Grindlays are
concerned. Regarding the contention of infraction of Rule 5 it must be noted
that the tenancy continued as monthly tenancy and it cannot be said that the
Receiver has created tenancy for a period exceeding three years and as observed
in Utility's case it is an accretion to the old tenancy and not a new 973
tenancy. Merely because there is change in a tenancy namely that it has become
a monthly tenancy, it does not amount to a new tenancy as contended by the
appellant so far as Grind- lays are concerned.
It is
also submitted on behalf of the Grindlays that no new lease has been created by
the Receiver and they come within the meaning of 'tenants'-and therefore they
cannot be evicted except as provided under the provisions of the Act.
Section
2(h) of the Act reads thus:
"tenant"
means any person by whom or on whose account or behalf, the rent of any
premises is, or but for a special contract would be, payable and includes any
person continu- ing in possesion after the termination of his tenancy or in the
event of such person's death, such of his heirs as were ordinarily residing
with him at the time of his death but shall not include any person against whom
any decree or order for eviction has been made by a Court of competent
jurisdiction." In Darnadilal and Others v. Parashram and Others, [1976] Suppl.
SCR 645 Section 2(i) of the Madhya Pradesh Accommoda- tion Control Act, 1961
which is analogous to Section 2(h) of the Act has been considered and it is
held:
"Tenancy
has its origin in contract. There is no dispute that a contractual tenant has
an estate or property in the subject matter of the tenancy, and heritability is
an inci- dent of the tenancy. It cannot be assumed, however, that with the
determination of the tenancy the estate must neces- sarily disappear and the
statute can only preserve his status of irremovability and not the estate he
had in the premises in his occupation." It is also further observed that:
"The
definition makes a person continuing in possession after the determination of
his tenancy a tenant unless a decree or order for eviction has been made
against him, thus putting him on par with a person whose contractual tenancy
still subsists." In Biswabani (P) Ltd. v. Santosh Kumar Dutta and Ors.,
[1980] 1 SCR 650 it is observed that:
974
"If thus the appellant was already in possession as a tenant of the
premises an unsuccessful attempt to create a fresh lease would not change the
nature of his possession as from a tenant to one in part performance under a
void lease. The appellant continues to be in possession as tenant merely
because the appellant and respondents 1 and 2 attempted to enter into a fresh
lease which did not become effective." Their Lordships referred to a
passage in Woodfall on 'Land- lord and Tenant' Vol. 1, 27th Edn. page 187 para
446 which reads thus:
"Moreover,
if the tenant enters into possession under a void lease, he thereupon becomes
tenant from year to year upon the terms,of the writing, so far as they are
applicable to and not inconsistent with a yearly tenancy. Such tenancy may be
determined by the usual notice to quit at the end of the first or any
subsequent year, and it will determine, without any notice to quit, at the end
of the term mentioned in the writing. But if the lessee does not enter he will
not be liable to an action for not taking possession; nor will an action lie
against the lessor for not giving possession at the time appointed for the
commencement of the term but before the lease is executed." In an
unreported judgment of the Calcutta High Court in Smt. Ashrafi Devi and Anr. v.
Satyapal Gupta & Ors., Suit No. 966/58 dated 9th Sept., 1977 Justice Sabyasachi
Mukharji, as he then was, dealt with the question of cancelling the tenancy of
lease created in respect of a room and kitchen by the Official Receiver. In
that case it was found that the Official Receiver violating the order of the
injunction granted lease which the Court found it to be illegal. Then the
learned Judge proceeded further to consider whether such an illegality can be
rectified in the proceedings before the Court and it was held that
"Therefore, by acting in viola- tion of the order of the court, no right,
in my opinion, can be created in favour of a third party. Indeed the court has
not acted. The action was in breach of the order of the court." The
learned counsel for the appellant relied on this judgment in support of his
submission that the lease in the instant case created by the Official Receiver
is also ille- gal. From the facts of that case we find a clear injunction order
was passed specially restraining the Receiver from creating any new tenancy and
in gross violation of that order. But, in the instant case, the facts are
different.
The
injunction granted 975 by A .N. Sen, J. does not apply to the tenancy in favour
of Grindlays in respect of flats Nos. 3 and 4 inasmuch as it is an old tenancy
though in a modified form. In Ashrafi Devi's, case as a matter of fact, the
learned Judge observed:
"There
was no question of the lease being given without the power by the Receiver or
in derogation or in violation of the order of the court. The lease within the
competency of a Receiver cannot be impeached or affected in the summary manner
as was contended." We have already noted that the Grindlays were the
tenants in respect of the four flats. They surrendered two flats. This partial
surrender does not put an end to the tenancy and we are satisfied that in
respect of the Grindlays no new tenan- cy is created by the Receiver and they
continued to be the tenant and they are entitled to the protection under the
Act.
Shri Vaidyanathan,
learned counsel appearing for one of the respondents, relying on the Full Bench
decision of the Madras High Court in Arumugha Gounder v. Ardhanari Mudaliar and
Others, AIR 1975 Madras 23 1 contended that the protec- tion under the Act
cannot be extended to the tenant of a Receiver. In that case the tenant was let
into possession of a land by Receiver appointed by the Court pending the suit.
The
question was whether the provisions of Tamil Nadu Culti- vating Tenants Protection
Act, 1955 can be extended to such a tenant. It was observed in para 6 that:
"So
then the act of the Receiver in letting out the land in the suit is an act of
the Court itself and it is done on behalf of the Court, the whole purpose of
the Court taking possession through the Receiver appointed by it is to pro- tect
the property for the benefit of the ultimate successful party. If that is the
essence and purpose of appointment of a Receiver, as we hold it is, it will be
difficult to agree that by a literal application of the Tamil Nadu Cultivating
Tenants Protection Act, it could be put beyond the reach of the Court to give
relief to the successful party entitled to possession." Before arriving at
this conclusion, the Full Bench, as a matter of fact, also observed in para 3:
976
"If literal application of the Tamil Nadu Cultivating Ten- ants Protection
Act is made, it may prima facie appear that a tenant let into possession by a
Receiver would be entitled to statutory protection under the Act. A cultivating
tenant in relation to any land has been defined to mean a person who carries on
personal cultivation on such land under a tenancy agreement, express, or
implied. A "landlord" in relation to a holding or part thereof is
defined to mean a person entitled to evict a cultivating tenant from such
holding or part. A tenant let into possession by a Receiver appointed by Court
literally appears to satisfy the defini- tion of "cultivating tenant"
and the Receiver, the defini- tion of "Landlord" because the former
carried on personal cultivating under a tenancy agreement." The Full Bench
however took the view that the Receiver appointed by the Court acts as an
Officer of the Court and he cannot create a lease which takes the pending
matter beyond the purview of the Court and anyone who gets posses- sion through
such an act could only do so subject to the directions and orders of the Court.
In our view the princi- ple laid down by the Full Bench does not apply to the
facts in the instant case atleast to the case of Grindlays as in our view on
new tenancy is created in their favour. Even by the time the Receiver was
appointed the Grindlays were the tenants in respect of the four flats and they
continued to be so. It is only later after due correspondence that they made a
partial surrender and those two flats were let out to Tatas after due
negotiations in respect of the rent. Grind- lays' affidavit shows that they
have also sent rent by way of Bank pay orders and they have been received by
the Land- lord. It is only for the first time on 26.7.88 that the tenant was
informed to stop the payment of rent. Further the receiver has not acted in any
manner affecting the title.
Now
coming to the case of Tatas we agree with the High Court that it is a new
tenancy. Such a lease comes within the meaning of 'transfer' and in view of the
injunction order passed by A.N. Sen, J. creation of such a new tenancy is
legally barred. In Kerr on Receivers, 12th Edn. at p. 154 it is observed:
"The
receiver does not collect the rents and profits by virtue of any estate vested
in him, but by virtue of his position as an officer of the Court appointed to
collect property upon the title of the parties to the action.
977 In
appointing a receiver the Court deals with the possession only until the right
is determined, if the right be in dispute." It is also useful to note a
passage from Sir John Woodroffe book "on Receivers":
"The
Receiver being the officer of the Court from which he derives his appointment,
his possession is exclusively the possession of the Court, the property being
regarded as in the custody of the law, in gremio legis for the benefit of
whoever may be ultimately determined to be entitled thereto." In Kanhaiyalal
v. Dr. D.R. Banali, AIR 1958 SC 725 at p. 729 it was observed:
"A
receiver appointed under 0.40 of the Code of Civil Proce- dure, unlike a
receiver appointed under the insolvency Act, does not own the property or hold
any interest therein by virtue of a title. He is only the agent of the Court
for the safe custody and management of the property during the time that the
Court exercises jurisdiction over the litigation in respect of the
property." In such a situation the question is whether the Tatas can
invoke the benefit of the provisions of the Act. In Smt. Ashrafi Devi's case
this is precisely the question that is decided, and we have already referred to
some of the obser- vations made therein. Justice Sabyasachi Mukharji held
further:
"On
behalf of the transferee of the said property, it was contended that the West Bengal
Tenancy Premises Act, 1956 protects such transferee. If however, a valid lease
or a tenancy had been created then of course, such a lease or a tenant would be
protected but that, in my opinion, begs the question. Secondly, it was
contended that no party should be made to suffer because of an Act of the Court,
I have not been able to appreciate this contention. The court specifi- cally
prevented the transfer or creation of the tenancy. The tenancy which is created
was in derogation and in violation of the order of the court. Therefore, by
acting in violation of the order of the court, no right, in my 978 opinion, can
be created in favour of a third party. Indeed, the court has not acted. The
action was in breach of the order of the court." Similarly as observed in Arumugha
Gounder's case any such act of the Receiver done on behalf of the Court pen-
dente lite and anyone who gets possession through such an act could only do so
subject to the directions and orders of the Court. If we apply the above principles
to the case of Tatas the tenancy created in their favour by the Receiver is in
violation and contrary to the injunction order and such an act is subject to
the directions and orders of the Court appointing the Receiver. Therefore the
tenancy created in favour of the Tatas was in breach of the order of the court
and consequently the Tatas cannot claim any protection under the provisions of
the Act and they are liable to be evicted.
In the
counter affidavit filed on their behalf, it is no doubt stated that they were
inducted into possession and even sending the cheques. The case of the
appellant is that cheques were never encashed. In any event as observed above,
the new tenancy created in their favour contrary to the orders of the Court
does not create a fight and is liable to be cancelled. Consequently the
provisions of the Act cannot be invoked by them. The appeal is therefore
dismissed as against respondent No. 1 Grindlays and allowed as against
respondent No. 2 Tatas. In the circumstances of the case, parties are directed
to bear their own costs.
R.S.S.
Appeal dis- missed.
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