Mr.
Anthony C. Leo Vs. Nandial Bal Krishnan & Ors [1996] INSC 1323 (24 October 1996)
G.N.
Ray, B.L. Hansaria G.N. Ray, J.
ACT:
HEAD NOTE:
THE
24TH DAY OF OCTOBER, 1996 Present :
Hon'ble
Mr. Justice G.N. Ray Hon'ble Mr. Justice B.L. Hansaria Ms. Indu Malhotra, Adv.
for the appellant mrs. Manik Karanjawala, Adv. for the Respondents
The
following Judgment of the Court was delivered :
Mr.
Anthony C. Leo V. Nandilal Bal Krishnan & Ors.
Leave
granted.
Heard
learned counsel for the parties. The order dated February 23, 1996 passed by
the Division Bench of the Bombay High Court in Appeal(Lodged) No. 3 of 1996 in
Suit No. 1010 of 1973 in the Ordinary Original Civil Jurisdiction arising out
of the Order dated December 6, 1995 passed by the learned Single Judge on the
reports of the receiver appointed by the Court in the said Suit No.1010 of 1973
in so far as the same affects the appellant. Mr. Anthony C.Leo is the subject
matter of challenge in this appeal.
Nandlal
Balkrishan Khanna and other partners of Khanna Construction House obtained a
lease of Plot No.44 of Scheme No. 58, Worli Estate, Bombay from the Municipal Corporation of
Greater Bombay. The said partners constructed a building on the said plot known
as Khanna Construction House. The appellant claims tenancy in respect of a room
in the said premises under the said partners where he is running a business
named and styled as Flora Chinese Restaurant. In view of disputes arising
between the partners of M/s Khanna Construction House, one of the partners
filed a suit in the ordinary original civil jurisdiction of the Bombay High
Court being Suit No. 1010 of 1973 against other partners for dissolution of the
firm and distribution of assets including the building Khanna Construction
House. The appellant is not a party in the said suit. Some time 1973, the
Bombay High Court appointed a Receiver in the said suit in respect of the
assets of the partnership firm including the said building Khanna Construction
House.
The
appellant's case is that the landlords of the building granted tenancy to Abdul
Rehman Noor Mohammad and others in respect of ground floor premises where the
said tenants started a restaurant in the name of Flora Restaurant, Some time in
1965, the said business together with the goodwill and benefit of tenancy
rights was taken over by J.S. Khanna and S.G. Khanna. In April, 1967, the said
Sri J.S. Khanna and S.G. Khanna assigned the said business as a going concern
together with goodwill and benefits of tenancy rights to Father S. Perreira. On
April 10, 1970, Father Perreira transferred the
said restaurant business to the appellant together with the goodwill and
benefits of tenancy. After taking over the said business, the appellant changed
the name of the business to Flora Chinese Restaurant. It is the specific case
of the appellant that when he got assignment of tenancy and business of the
restaurant, the tenanted premises had already in it lofts and two stand like
boxes attached on the outer wall for storing gas cylinders and air conditioning
units.
The
appellant has contended that in 1979, the landlords made a demand for
additional compensation for the box type stands affixed on the outer wall of
the premises for storing gas cylinders and air conditioning units. The landlord
also raised some dispute regarding the chimney duct in the restaurant premises.
According to the appellant, a meeting was held between the appellant and the
landlords at the instance of court receiver , and the landlords demanded extra
compensation at the rate of Rs. 2/- per square foot of the area where the said
two stands for housing gas cylinders and air conditioning units were installed.
On measurement, the said area was found to be 60 sq. ft. and the appellant had
agreed to pay additional amount of Rs.120/- per month. The landlords also
insisted that the appellant would bear additional insurance premium and the
appellant had agreed to such demand. The appellant has contended that under the
Fire Brigade Rules, the gas cylinders cannot be stored inside the premises but
such gas cylinders are required to be stored outside the premises.
The
appellant further contends that by letter dated June 25, 1979, the learned
Advocate of the appellant had informed the court receiver about such agreement
between the landlords and the appellant. The has also contended that in a
meeting between the said receiver and parties to the suit, t was decided that
the receiver would file a suit for eviction of the appellant in the Court of
Small Causes and one Mr. N.K.Desai was also engaged to file such suit for eviction
on behalf of the receiver. But till today, no such eviction suit has been filed
against the appellant.
In
March, 1995, after a lapse of about 16 years, the landlords thought of a short
cut measure to evict the appellant from the said premises without filing an ejectment
suit in the Court of Small Causes and in furtherance of such measure, induced
the court receiver to submit a report to High Court in the pending suit making
complaint against the appellant of construction of said lofts ad the said two
stand type boxes on the outer wall for storage of gas cylinders and air
conditioning units and the receiver prayed for a direction from the High Court
against the appellant for removal of the said lofts and the said box type
stands.
On
August 22, 1995, the said receiver submitted a further report in the said suit
alleging therein that appellant had a permit room in the said restaurant where
liquor was being served and such activity was illegal and contrary to the terms
of lease granted by Greater Bombay Municipal Corporation in favour of the
landlords prohibiting running a bar in the premises built on the leasehold
land.
The
receiver also sought for a direction from the High Court appellant for stopping
the said illegal activity of using the premises as a permit room and serving
liquor in a room in the said restaurant. The appellant contends that the
appellant was carving on the activity of having a permit room and serving
liquor to customers since several years after the lifting of the prohibition
policy in the State of Maharashtra. The appellant has also contended that he
has obtained license for such permit room and service of liquor in the
restaurant. The appellant has further contended that Greater Bombay a Municipal
Corporation is agreeable to allow service of liquor and running a permit room
in the leasehold property on payment of specified sum to the Corporation and
the appellant agrees to pay such amount to the Corporation.
In
support of the contention of the appellant that long before the receiver was
appointed in the said suit inter-se the partners of the said firm, the said two
box type stands and lofts were in existence in the premises where the appellant
had been carrying on his business of restaurant, supporting affidavits were
filed before the High Court by one Abdul Razak Dawood stating that Flora
Restaurant was started in 1962 by Noor Mohammed and others (though the year of
starting the said business of restaurant was wrongly mentioned as 1962 instead
of 1964). It was stated by the said Razak that he was associated with the
restaurant business ever since its inception and when J.S. Khanna and S.G. Khanna
took over the said business from Noor Mohammad, the said lofts and stands for
storing gas cylinders and air conditioning units were in existence. Mrs. Mande
D pente and her husband who were employed in the said restaurant in 1967, also
filed an affidavit stating that the said lofts and two stands were in existence
in 1967. Another affidavit affirmed by one Charlie D'Souza was also filed. The
deponent stated that he had been working in the restaurant since 1969 and ever
since his employment, he had seen the said lofts and stands. Similar affidavit
was filed by R.Murusen stating that he was employed in the kitchen of the
restaurant in 1967 and he had seen the said boxes and lofts ever since his
employment in 1967.
The
appellant also contended before the learned Single Judge, before whom the
reports of the receiver against him were filed, that the receiver appointed in
the suit for dissolution of partnership and for distribution of assets
including the said building Khanna Construction House was limited to
adjudication of rights and obligations inter-se parties and appellant not being
party to the same. his rights qua tenant was not required to be adjudicated in
the said suit and, in any event, his right as a tenant was protected under the
Bombay Rents Act. Although the appellant had not resorted to any act for which
his tenancy could be terminated and he could be evicted from the said premises
under his occupation as a tenant, even if it is assumed that the appellant was
liable to be evicted from the said premises, such eviction could only be
effected by institution of appropriate suit for eviction of the appellant in
the Small Causes Court under the Bombay Rents Act on permissible grounds under
the said Act. It was quite open to the High Court to grant permission to the
receiver for institution of suit for eviction of the appellant after being
prima facie satisfied on materials submitted before the Court that a case for
instituting suit for eviction was justified.
The
appellant also contended that the receiver is not entitled to bypass the
statutory requirement of evicting a tenant only in due process of law by
initiating eviction proceeding under the Bombay Rents Act in the appropriate
court simply by alleging, at the instance of landlords, that the tenant had
made constructions and had indulged in unauthorised activity of using a portion
of the tenanted premises as a permit room and place for service of liquor to
the customers. The appellant also contended that if the court would decided the
question of eviction of the appellant only on the basis of the reports of the
receiver, the valuable rights of a tenant protected under the Bombay Rents Act
would be defeated and the tenant would e deprived to have a full fledged trial
where he would be entitled to lead evidence in support of his case and cross
examine the witnesses of the landlord.
Such
contentions were, however, not accepted by the learned Single Judge and on the
findings, inter alia, that the appellant had made unauthorised construction of
the said lofts and box type stands on the outer wall and had also been using a
portion of the tenanted premises as a permit room and has been serving liquors
to the customers in such portion, when under the terms of lease granted by
Greater Bombay Municipal Corporation to the landlords use of the leasehold
property in vending liquors was prohibited, and by such action of appellant,
the lease in favour of the landlords was liable to be cancelled, the learned
Single Bench of the Bombay High Court directed that the concerned authorities
would not renew the permit of the appellant unauthorised constructions with the
aid of the police, if necessary.
The
appellant being aggrieved by such directions of the learned Single Bench,
preferred Appeal (Lodged) No. 3 before the Division Bench of the High Court and
the Division Bench by the impugned judgment dismissed the appeal and upheld the
directions given by the learned Single Bench. The Division Bench, however,
stayed demolition of the said constructions for a period of six weeks to enable
the appellant to take legal steps against the order.
At the
hearing of the appeal, Mr. Salve, the learned Senior Counsel appearing for the
appellant, has contended that the receiver was appointed in the said suit for
preservation of the properties in dispute for protecting the interests of the
parties to the suit. By such appointment, the court became custodia legis of
properties in suit through the officer of the court, namely, the receiver. Such
appointment of receiver does not amount to vesting of the properties in respect
of which receiver was appointed by annulling all incumbrance and rights of
third parties receiver or, for that matter of the court appointing the receiver
to maintain the properties in suit may be well appreciated. But being impelled
by such anxiety, neither the receiver nor the court can affect the tenant's
rights in the suit property well protected by the statute governing the
relationship between a landlord and tenant.
Mr.
Salve has submitted that even prima facie there was no material on the basis of
which the High Court could come to the finding that the appellant has altered
the tenants premises either before or after the appointment of receiver and
during the continuance of the receivership, in such a manner by making
permanent constructions in the tenanted premises which had either materially
altered the nature and character of the said premises or have endangered the
safety and security of the same. Mr. Salve has submitted that admittedly the
tenanted premises was being used as a restaurant for a very long time. The
appellant became the tenant when Father Perriara had transferred the tenancy
right together with goodwill of the restaurant business as an ongoing business
concern in favour of the appellant in April, 1970 and since then, the appellant
has been running the business of restaurant by changing its name from Flora
Restaurant to Flora Chinese Restaurant.
Mr.
Salve has submitted that the alleged unauthorised construction, namely, the
said lofts and box type stands on the outer wall for storing gas cylinders and
air conditioning units, were in existence long before the appellant got the
assignment of tenancy right in 1970. The appellant in support of such
contention about the existence of such lofts and box type stands, have filed
supporting affidavits by a number of persons as already indicated.
Mr.
Salve has submitted that for running a business of restaurant, storage of gas
cylinders was an indispensable necessity and it does not require any
imagination that the predecessor of the appellant who had run the business of
the restaurant must had stored gas cylinders in the premises.
Under
the Fire Brigade Rules, gas cylinders were required to be stored by ensuring
proper safety and such storage on outside walls was only just and proper and in
conformity of the Fire Brigade Rules. Precisely for the said reason, the
predecessors in restaurant business in the said premises had made arrangements
of such storage of gas cylinders by constructing box type stands on the outer
wall. Such box type constructions were also made for keeping air conditioning
units. It is nobody's case that the appellant installed air conditioning units.
It is nobody's case that the appellant installed air conditioning unit for the
first time in the said restaurant and it is the appellant who has been running
the business of restaurant in the premises in question for the first time after
obtaining assignment of tenancy right.
Mr.
Salve has submitted that the appellant's case of existence of the said lofts
and box type stands on the outer walls from long before and box type stands on
the outer walls from long before his induction as a tenant, gets ample support
from the affidavits affirmed by a number of persons who being closely
associated with the restaurant business in the tenanted premises long before
the induction of the appellant, have categorically stated about the existence
of such lofts and box type stands from long before the induction of the
appellant as a tenant. Such affidavits could not have been discarded in a
summary manner in disposing of the reports of the receiver, more so, when the
valuable tenancy right of a third party like the appellant was instrinsically
involved in the exercise of giving directions affecting the interest of the
tenant and nullifying the statutory protection of a tenant.
Mr.
Save has also submitted that landlords and the receiver were well aware of the
existence of such lofts and box type constructions had in June 1979, the
landlords made demands for extra payment at the rate of Rs.2/- per sq.ft. for
such construction measuring 60 sq.ft. in all and also additional premium on
account of storing gas cylinders by the appellant. The appellant's Advocate's
letter dated June 25, 1979 sent to the receiver clearly indicates the factum of
landlords and receiver's awareness of the existence of the said lofts and the
box type stands and the appellant to pay additional sum of Rs.120/- and
additional amount on account of premium.
Mr.
Salve has submitted that the landlords and the receiver were fully aware of the
legal position of the landlords vis-a-vis a tenant protected by the Bombay
Rents Act and a decision was taken long back to institute in the Court of Small
Causes under the said Rents Act, but such eviction suit was not instituted
presumably on appreciating that such attempt for eviction would be an exercise
in futility. Mr. Salve has also submitted that running a bar in a portion of
the restaurant is only ancillary to the main business of an eating house or
restaurant. Such bar was being run after obtaining valid license from the
appropriate statutory authority. The allegation of the threat of cancellation
of the lease granted by the Municipal Corporation to the landlords on account
of running a bar in the said premises is also unfounded, and a case such threat
is being set up as a ploy to oust the appellant. Consumption of liquor was
prohibited in Maharashtra when the lease was granted by the Corporation to the
landlords and, accordingly in the lease deed, a clause containing prohibition
of using the leasehold property for service of liquor in public is prohibited.
The Municipal Corporation on being approached by the appellant, has expressed
its willingness to allow consumption of liquor in the leasehold property by
amending the terms of lease on payment of specified sum.
Mr.
Salve has further submitted that a tenant may be liable to be evicted for unauthorised
construction or for other activities mentioned in the Rent Act. But the tenant
cannot be evicted from the tenanted premises on the alleged ground of unauthorised
construction or other illegal activities which may enable the landlord to
obtain order of eviction under the Bombay Rents act unless a suit for eviction
is filed before the Small Causes Court under the said Act and existence of
grounds for eviction are clearly established by leading evidence in such suit.
A landlord is also not entitled to demolish alleged unauthorised construction
in the tenanted premises unless the dispute about such construction is
adjudicated in an appropriate forum. In any event, the dispute as to the
existence of unauthorised construction by a tenant is required to be
adjudicated only in a suit instituted against the tenant where such dispute may
resolved on the basis of evidences to be adduced by the respective party by
examining witnesses in support of respective case.
Mr.
Salve has submitted that the appellant is not a party in the said suit, his
rights and protection as a tenant could not have been adjudicated in a summary
manner on the basis of reports filed by the receiver. The impugned order is not
only illegal but manifestly unjust and improper resulting in serious
miscarriage of justice.
It has
been contended by Mr. Salve that the receiver who merely holds dejure
possession of the property for the benefit of parties to the suit without the
property being vested in the receiver, has no higher rights than the landlords
themselves. If there was no receiver, the remedy of the landlords was to file a
suit against the tenant in the Court of Small Causes being the appropriate
court under the Bombay Rents Act. Such position is not changed by mere
appointment of a court receiver in a suit inter-se the landlords for
distribution of properties in which the tenant is not a party. Mr. Salve has
submitted that if such course of action against the tenant is permitted, it
would be easy for designing landlords to circumvent the provisions of Rent Act
by filing a suit amongst the landlords and after obtaining an order for
receiver in such suit even by consent, and then, with the instrumentality of
the receiver to obtain orders from Court in the said suit against the tenant in
complete disregard of the statutory protection of the rights of the tenants
under the Rents act regulating inter-se rights and obligations of a tenant and
landlord.
Mr.
Salve has also submitted that such procedure would be contrary to Order 40 Rule
1(2) of Civil Procedure Code which protects the rights of the persons who are
not parties to the suit as against the receiver. Mr. Salve has submitted that
the impugned directions of the High Court for demolishing the said lofts and
box type constructions and also direction prohibiting renewal of license for
running a bar by the appellant and restriction imposed on the appellant to have
a permit house and to run a bar in the tenanted premises, should be set aside
by allowing this appeal.
Mr. R.
Nariman, the learned Senior Counsel appearing for the respondents, has,
however, disputed the contentions of Mr. Salve. Mr. Nariman has contended that
for an order of eviction of a tenant, a suit under the appropriate Rent Act,
where such Act is applicable is to be instituted and such protection of the tenant
cannot be defeated without taking recourse under the provisions of the Rent
Act. But in the instant case, no order of eviction of the tenant has been
passed by the Court in giving the directions on the receiver by the impugned
order.
Mr. Nariman
has submitted that the receiver has been appointed in respect of properties in
dispute including the building, Khanna Construction House, because the Court
felt it expedient to preserve the properties in dispute by getting such
properties supervised and administered by its own officer, the receiver. When
the properties are custodia legis, the Court is not only competent to issue
necessary orders and directions on its officer, the receiver, for proper
preservation and maintenance of such properties but in a way, the Court is
under the obligation to issue appropriate orders and directions for effecting
such maintenance and preservation.
Mr. Nariman
has contended that a tenant has statutory protection against eviction except on
grounds for such eviction under the Rent Act and the relationship between a
landlord and tenant is controlled and regulated by the provisions of the Rent
Act. The circumstances under which an order of eviction is to be made, the
authority which will pass such order are contained in the Rent Act. Mr. Nariman
has submitted that it should be appreciated that although a tenant is free to
enjoy peaceful possession of the tenanted premises, he has no right to destroy
such premises or indulge in such activities which are likely to seriously
affect the safety and security of the house. Similarly, he is not entitled to
indulge in activities which will materially affect the nature and character of
the tenanted premises and is likely to bring about a situation by which the
superior right of the landlord in the premises will be in jeopardy. Such action
being per se illegal and unauthorised and beyond the usual rights of a lessee vis-a-
vis the lessor, the lessor or landlord has not only right to take recourse to
eviction of the lessee or tenant by bringing an action for eviction in
accordance with the provisions of the relevant tenancy act. If a landlord is
entitled to take suitable action for preventing a tenant in indulging in
unlawful activities in respect of tenanted premises, the receiver has certainly
such right. The receiver has a paramount duty to draw the attention of the
Court appointing the receiver, of such unlawful activities by the tenant and to
seek appropriate direction by way of remedial measures to prevent such
activities.
Mr. Nariman
has submitted that in the instant case, the receiver has not done anything
extraordinary. Since the tenant had changed the nature and character of the
tenanted premises by making permanent construction and had indulged in storing
gas cylinders endangering the safety and security not only of such premises but
of the entire building and has indulged in using the premises as bar, even when
the landlords under the terms of the lease are prohibited to indulge in such
activities at the risk of lease granted by Municipal Corporation of Greater
Bombay being cancelled, the receiver and, for that matter, the Court had a
solemn duty to pass appropriate orders and directions for prevention of such unauthorised
activities after affording the tenant an opportunity of being heard.
Mr. Nariman
has submitted that the tenant was put to notice of the allocation of his
illegal activities in the tenanted premises and was given opportunity to raise
his defences against such allegation. After giving the tenant reasonable
opportunity to place his case, the Court after being satisfied that the tenant
had indulged in illegal activities, not permitted to be undertaken in exercise
of his right as a tenant, has passed the directions contained in the impugned
order so that the directions contained in the impugned order so that the
properties in custodia legis are properly preserved during the pendency of the
said suit.
The
landlords, despite such orders or directions of the Court, still retain the
right to bring action for eviction under the Bombay Rents Act for the said
illegal activities.
In the
aforesaid facts, no interference is called for and the appeal should be
dismissed.
Giving
our careful consideration to one facts and circumstances of the case and
submissions made by the learned counsel for the parties, it appears to us that
a receiver is appointed by the Court when the Court entertains a view that for
preservation of the properties in suit, till the rights of parties to the suit
are finally adjudicated, such properties should be preserved by exercising
control and supervision of the same through the officer of the Court, the
receiver. The Court becomes custodia legis of the properties in suit in respect
of which receiver is appointed. Such de jure possession of the Court through
its receiver. however, does not bring about vesting of the properties in
receiver or in court free from incumbrance eve bendente lite. Despite
appointment of a receiver, rights and obligations of third parties in respect
of properties in custodia legis remain unaffected, where a receiver appointed
by the Court is in actual physical possession of a property, no one, whoever he
may be, can disturb the possession of the receiver and the Court may hold such
person who disturbs receiver's possession as guilty for committing contempt of
court. A man, who thinks he has a right paramount to that of receiver, must,
before he takes any step of his own motion, apply to the Court for leave to
assert his right. Grant of leave in such case is the rule and refusal to grant
leave is exception (Everest Coal Company Pvt. Ltd. v. State of Bihar and others
AIR 1977 SC2304). The rule that receiver's possession will not be disturbed
without leave of the Court is, however, not applicable if the receiver is not
in actual physical possession of the property.
Since
the properties in a suit is being managed, maintained and administered by the
Court through receiver, the receiver is under an obligation to take all
reasonable steps for preservation and maintenance of such properties.
If for
such preservation, action in civil or criminal court is necessary, receiver is
to draw the attention of the Court of relevant is to draw the attention of the
Court of relevant facts necessitating such legal action and take leave of the
Court to institute appropriate legal proceedings for the preservation of the
property. As the does not vest free from the incumberances in custodia legis by
annulling all rights and obligations attached to the property, the receiver
cannot interfere with any right of the third party, Sub rule (2) of Rule 1 of
Order 40 of the Code of Civil Procedure provides : "Nothing in this rule
shall authorise the court to remove from possession or custody of property any
person whom any party to the suit has not a present right to remove." Such
sub-rule clearly indicates that the Court and its officer, the receiver, does
not posses any right higher than the right a party to the suit possesses.
Where
a Rent Act is applicable, the inter-se rights and obligations of the landlord
and tenant are regulated and controlled by such Rent Act in areas where any
special law governing the incidents of tenancy is not applicable, the law
relating to lessor tenancy is not applicable, the law relating to lessor and
lessee as envisaged by the general law of the land, namely, Transfer of
Property Act, will regulate and determine inter se rights of landlord and
tenant. In dealing with the rights and obligations which is third party may
have in respect of a property in which a receiver has been appointed, the
receiver, like a party to the suit, will have same limitation. The receiver
will be bound by the incidence of tenancy flowing from the statute regulating
and determining inter se rights of landlord and tenant. Therefore, there is no
manner of doubt that no order for eviction of the tenant can be passed by the
Court at the instance of its officer, the receiver, without taking recourse to
appropriate proceedings for eviction of the tenant under the appropriate
statute regulating and governing the inter-se rights of landlord and tenant. It
may also be emphasised here that even apart from an eviction proceedings, any
incidence of tenancy which is regulated and controlled by a special statute
cannot be altered, varied or interfered with except in accordance with the
provisions of such statute. The Court in such cases has no jurisdiction to pass
orders and direction affecting the right of the tenant protected, controlled or
regulated by the Rent Act on the score of expediency in passing some order or
direction for the maintenance and preservation of the property in custodia legis.
It is
to be indicated that though a tenant of property in custodia legis cannot be
deprived of statutory protection of the rights of tenant vis-a-vis landlord, a
tenant cannot claim protection of any assumed right not flowing from the
incidence of tenancy. For example, if a tenant starts making some unauthorised
construction in the tenanted premises threatening safety and security of the
tenanted premises or of the building as a whole, the landlord certainly prevent
such activities by the tenant by bringing appropriate action in Court seeking
prohibitory and mandatory order against the tenant without seeking his
eviction. Such right to seek eviction under the appropriate tenancy law, if
permitted.
In our
view, if a tenant resorts to unauthorised and illegal activity in respect of
tenanted premises when such premises is in custodia legis, for prevention of
such illegal and unauthorised activities not consistent with any right flowing
from the incidence of his tenancy, it may not be necessary to institute a suit
for preventing the tenant from such illegal activities; but the Court, being
apprised by the receiver of such illegal activities of a tenant, thereby
obstructing the Court's overall supervision and concern for preserving or
maintaining the property in custodia legis, will be within its right to pass
suitable order or direction against the tenant for prevention of illegal and unauthorised
activities after giving the tenant reasonable opportunity to place his defences
against allegation of unlawful and illegal activity. What should be the
reasonable opportunity, must depend on the facts of each case. The Court, in
such a case, should ensure broadly that the tenant is not deprived of the
reasonable opportunity to which he would have been entitled if an action
against him in a court of law had been brought on such complaint.
It
appears to us that since the Court must be presumed to be fully unbiased in
deciding the allegation of defence and illegal activities of a tenant causing
prejudice against the lawful owner of in the matter of preservation and
maintenance of the property pendente lite, the necessity of adjudication of
such dispute by another court by bringing a legal necessary nor expedient. It,
however, should be made clear that if for the purpose of deciding the dispute
of defence and illegal activity affecting maintenance and preservation of the
property in custodia legis it become necessary to determine any right claimed
under a statute or flowing from some action inter parte as may be pleaded and
required to be decided, it is only desirable that the Court would refrain from
such determination in the summary proceeding initiated before it on the
complaint of the receiver or a party to the suit and the Court will direct the
receiver to seek adjudication of the dispute before a competent court by
bringing appropriate legal action. Save as aforesaid, it will not be correct to
contend that in no case the Court exercising control and supervision of the property
in suit by appointing a receiver will be incompetent even to pass direction
against a third party for the purpose of preservation of the property, once
such third party pleads defence in justification of his action. The question of
summary adjudication of his action. The question of summary adjudication by the
Court appointing the receiver or relegating the receiver to a regular suit for
adjudication of the dispute concerning third party will depend on the nature of
dispute and the defence claimed by the third party.
In the
facts of the case, however, it appears to us that the appellant tenant has come
out with a specific case that the structures in question were there before his
induction as a tenant. In support of such contention, a number of supporting
affidavits have been filed. The appellant has also contended that the landlords
and the receiver were fully aware of the existence of the structure long back,
and according to the appellant, at one point of time an agreement was reached
between the landlords and the appellant for payment of a sum of Rs. 120/- for
such construction covering about 60 sq. ft. besides further amount on account
of additional premium to be paid by the landlords and an Advocate's letter was
sent to the receiver apprising the receiver of such understanding between the
parties.
The
appellant has also claimed right to operate in a portion of the tenanted
premises a permit room for serving liquor to the customers of the hotel after
obtaining license from the statutory authority on the footing that such right
is incidental and ancillary to his right operate an eating house or restaurant.
Such contentions should not be decided in a summary proceeding to dispose of
reports of the receiver or a complaint by a party to the suit about alleged
illegal activities by a tenant in a property in suit. Any summary disposal of
such dispute on the claim of some legal right by the tenant is likely to
seriously affect the tenant, because once some constructions in the tenanted
premises are removed on a finding that such constructions were made illegally
and defence by the tenant, the tenant not only suffers the said direction of
removal at present but become liable to be evicted from the suit premises for
such defence construction by him. Similarly, the finding against the tenant on
the question of running a permit room cannot but seriously affect the tenant's
right to operate a permit room and is also likely to expose him to the risk of
being evicted from the suit premises.
In the
aforesaid facts, the impugned order cannot be held to be justified, we
therefore, allow the appeal and set aside the impugned order. It will be open
to the receiver to bring appropriate legal action against the tenant appellant
for removal of the alleged defence structure and for preventing him from
running a permit room in the tenanted premises, besides instituting a suit for
eviction under the Rent Act. By way of abundant caution, we make it clear that
we have not expressed any opinion on the respective rights of the parties.
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