KRISHNA KUMAR KHEMKA A v.

GRINDLAYS BANK P.L:C. AND ORS.

MAY 2, 1990

[S. RATNAVEL PANDIAN AND K. JAYACHANDRA B

REDDY, JJ.]

Calcutta High Court Original Side Rules: Chapter 21Rule5(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'-lnterpretation-Surrender of part of tenancy-

Does not amount to implied surrender of entire tenancy-Increasep reduction of rent-'-lmports surrender of existing lease and creation of new tenancy.

West Bengal Premises Tenancy Act: Sections 11, 13( I) and 88- Tenancy-Surrender of part---, Does not amount to implied surrender of entire tenancy-increase reduction of rent-Imports surrender of existing tease ana creation of new tenancy. -

The appellant had filed a suit in the High Court of Calcutta for a E 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 Receiver was appointed by Justice A.N. Sen. While making the appointment the learned Jndge had passed an order restraining the Receiver from selling or "transferring" any of the properties.

The proper!Y in dispute is a buildinl!I at Alipore, Calcutta, which comprised of four flats. Grindlays Bank Ltd., r.espondent 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 tei:iant.

On 1st April, 1978 Grindlays_surrendered a portion of the tenancy, G namely, two flats i.e. flats Nos. 1 and 2, in favour of Tatas. The Receiver let out these two flats to M/s Tata Finlay Ltd. with effect from February 7, 1979.

Questioning the action of the Receiver, an application was filed in the High Court contending that the Receiver had no authority .to create H

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 he obtained in a suit but the same could not be filed in the '

High Court inasmuch as the permises in question was situated outside 'rthe 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 Receiver; (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 S(a) of the Original Side Rules.

In reply, it was contended on behalf of Talas 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.

r F On behalf of Grindlays it was contended that after the expiry of . j the period of the original lease in !968, relationship between Grindlays and the Trust continued to be of landlord and _tenant; that at all material times they retained the tenancy in repect of fl_ats Nos. 3 an<! 4, and were governed by the Tenancy Act; that the surrender of flats Nos. I and 2 by the Grindlays and their continuati_on as tenants at reduced G rent did not amount to a 11ew lell'!e In respect of flats Nos. 3 and 4, and hence there was no transfer and _no violation of the Injunction.

Dismissing the appeal as against respondent No. I and allowing it against respondent No. 2, this Court,

H HELD: (I) In the Transfer of Property Act, the word 'transfer' Is

K.K. KHEMKA v. GRINDLAYS BANK 963

• defined with reference to the word 'convey'. Similarly, the term 'trans- A / fer' as used in Section 11 or Section 88 of the Bengal Tenancy Act. included a lease, as a lease is a transfer of an interest in immovable property. A lease, therefore, comes within the meaning of the word 'transfer'. [968A-B]

Hari Mohan alias Hari Charan Pal v. Atal Krishana Bose & Ors., B

~ 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 im_port a surrender of an existing - lease and the creation of a new tenancy. [972C-D)', c

Konijeti Venkayya & Anr. v. Thammana Peda .V enkata Sub barao & Anr,_, AIR 19.57 A.P. 619 and N.M. Ponniah.Nadar v. Smt.

Kamalakshmi Amma/, AIR 1989 S.C. 467, referred to.

(3) The Tenancy in favour of Grindlays continued as monthly D 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 yea~~-ili I

violation of Chapter 21 Rule S(a) of. the Original Side Rules. MereJY because there was change in the character of a tenancy, namely that it had become a monthly teDaDcy, it did OOtamount to a new tenancy. [972G-H] E

Utility Articles Manufacturing Co. v. Raja Bahadur Motilal

~ Bombay Mills Ltd., AIR 1943 Born. 306, referred to. '

(4) A clear injuction order was passed by Justice A.N. Sen specitically restraining the Receiver from creating any new tenancy. But the F '

injunction did not apply to the tenancy in favour of Grindlays in respect of flats Nos. 3 and 4 inasmuch as it was an old tenancy though in a modification form. The Grindlays were theref11re entitled to the protec- !ion under the provisions of the Tunancy Act. [974G-H; 975_A, CJ

DamadiJal & Ors. v. Parshram & Ors., [1976] Supp. SCR 645 G and Biswabani (P) Ltd. v. Santosh Kumar Dutta, [1980] l 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.

(5) In the case of Talas, 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 Talas 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.

C 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 Subrarnanium, N.P. Aggarwala, Anil Aggarwala, P.C. Sharma, L.P. Aggarwala, Ms.

D 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 Couri was delivered by

E K. JAYACHANDRA REDDY, J. Leave granted.

This appeal is directed against the order of the Division 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 jp 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 ofthe plaintiff, is void and for cancellation of the same. Premises No. 38, New Ro•.d, 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 surrenc\ered a portion of the tenancy H namely two flats i.e. Flats Nos. 1 and 2 which came into effect from 1st

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K.K. KHEMKA v. GRINDLAYS BANK [REDDY, J.] 965

April, 1978. The receiver let out these two flats to M/s Tata Finlay A' ---'-

Ltd. ('Tatas' for short) with Effect from February 7, 1979 pursuant to a letter written byTatas. Questioning 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 a°'d it was contended before the learned Single Judge of the B ·-'.

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 -

.x: the parties as to the validity of the tenancy created in favour of Talas have not been finally decided by the High Court and that the parties c are at liberty to agitate the same grounds in any action that they may

.\. be advised to proceed for eviction of Talas 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 D 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 Divi- /

sion Bench and ultimately the Division Bench having considered the several submissions passed an order, the operative portion of which reads as follows: E

"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 1 cannot be filed in this court inasmuch as the premises in question is situated outside the original side jurisdiction of F \ this Court."

More or less the same contentions are advanced befor 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 G only for a period of three yearsterminable on the expiry of the said j.. 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. There-

...; fore, the High Court ought to have ordered summary eviction ofTatas and Grindlays.

A 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 B 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 protection 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 - c 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 j 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 17th March, 1978 and 29th March, 1978 addressed to the D 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 Grindlays 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

E 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 S(a) of the Original Side Rules and that in the instant case without obtaining any such - leave receiver's granting monthly tenancies is illegal. Reliance was also placed on the injunction order passed by Justice A.N. Sen sitting on r F 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 violated the injunction order and on that ground also the action of the receiver should be held to be illegal. First G w< 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, pre servation and improvement of the property. In Satyanarayan Banerji and Ors. v. Kalyani Prosad Singh Deo Bahadur and Ors., AIR 1945 H Calcutta 387, a Division Bench held that the object of appointment of

K.K. KHEMKA v. GRJNDLAYS BANK [REDDY, J.] 967

Receiver is not to divest the rightful owner of the title but only to A 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. Sabapathy Pillai and Ors., AIR 1925 Madras 318, it is held that the Receiver has only such powers as expressly granted by the Court. a

~ Relying on these two decisions the learned counsel for the appel- !ants submitted that in the instant case the Receiver has acted in such a manner affecting the title to the property and to the detriment of the

,)', interest of the rightful owner. Section 5 of the Transfer of Property Act defines the meaning of 'transfer of property' and it is in the followc ing 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 himself, or to himself and one or more other living persons and D "to transfer property" is to perform such act.

In this Section "living person" includes a company or

' asssociation or body of individuals, whether incorporated f or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or E 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:

1 "The word "transfer" is defined with reference to the word F '

"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( l)(ii) of the Law of Property is "conveyance includes a mortgage, charge, lease, assent, vesting declaration, vest- . G ing instrument, disclaimer, release of every other assurance

of property or of any interest therein by any instrument

1 except a will." This is a special definition adopted for the

I purposes of the Law of Property Act, 1925. The word "conveys" in Sec. 5 of the Indian act is obviously used in the wider sense referred to above. Transferor .must have an H

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.

Consequently 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 surrendered 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 receiver 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 B.ahadur 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

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K.K. KHEMKA v. GRINDLAYS BANK [REDDY, J.J 969

continues, until that is to say, notice to quit is given." A

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 Iha and Ors. v. Rameshwar Dayal Singh and Ors., [1951] SCR

153 it is observed: B

"An inter se 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 C 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 D 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. E

According to the appellant, in the instant case, if this principle i~ 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 F the act of the receiver in leasing out in favour of Grindlays and Talas 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: G

"5. In every order directing the appointment of a Receiver of immovable property, there shall, unless otherwise ordered, be inserted the following directions:

(a) that the Receiver shall have all the powers provided for H

in Order XL, rule l(d) of the Code, except that he shall not, without the leave of the Court (1) grant leases for a term exceeding three years.

B 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.

D In Wood/all'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 oflaw, 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 G 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 (o purchase the reversion does not of itself effect a surrender, as the pur- H chase is conditional on a good title being made by the Landlord."

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K.K. KHEMKA v. GR!NDLAYS BANK !REDDY, J.] 971

In Foa's General Law of Landlord and Tenant, 7th Edition by Judge Forbes, paragraph 991 reads thus:

"991. Lease of part, & c-lt 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 arrangement 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 451, it is observed:

"Any arrangement between the landlord and tenant which D 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, provided a substantial difference is thereby made in the conditions of the tenancy.

But a surrender does not follow from a mere agreement E 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 therent 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 Anotherv._ Thama_na Pedg_ Y'enl, g_tgbbarao and Another, AIR G 1957 ;\.P. 619, Viswanat_lia S~_stri, J. referred to the above mentioned passage from Wood/all's Law of Landlord and Tenant and observed that the principle of Jaw is stated correctly.

It can therefore be seen that surrender of the part of the lease does not amount to surrender of the whole. InN.M. Ponniah Nadarv.

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 intended 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 surrender of part of the tenancy does not amount to implied surrender of the entire tenancy. Likewise the mere increase or reduction of rent also will not necessarily import a surrender of an existing lease and the creation of a D 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 in junction 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 f them summarily on this ground does not arise. However, the submission of the learned counsel is that even the lease in favour of the Grindlays ei,; pired 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 G important question regarding the applicability of the provisions of the Act. Howt; ver, 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 tenan.cy for a period exceeding three years and as observed H in Utility's case it is an accretion to the old tenancy and not a new

K.K. KHEMKA v. GR!NDLAYS BANK [REDDY, J.] 973

'f tenancy, Merely because there is change in a tenancy namely that it A .L has become a monthly tenancy, it does not amount to a new tenancy as contended by the appellant so far as Grindlays 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 B '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 premffies is, or but for a special

contract would be, payable and includes any person continuing in possesion after the termination of his tenancy or c 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 Damadilal and Others v. Parashram and Others, [ 1976] Suppl. SCR D

645 Section 2(i) of the Madhya Pradesh Accommodation Control Act, 1961 which is analgous to Section 2(h) of the Act has been considered and it is held: f "Tenancy has its origin in contract. There is no dispute that a contractual tenant has an estate or property in the subject E

matter of the tenancy, and heritability is an incident of the tenancy. It cannot be assumed, however, that with the determination of the tenancy the estate must necessarily disappear and the statute can only preserve his status of y irremovability and not the estate he had in the premises in F \

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 G .. 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: .

"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 Wood/all on 'Landlord 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 termsof 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 arty 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."

E In an unreported judgment of the Calcutta High Court in Smt. Ashrafi Devi and Anr. v. Satyapal Gupta & Ors., Suit No. 966/58 dated 9tb Sept., 1977 Justice Sabyasachi Mukbarji, 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 F 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 violation 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." G The learned counsel for the appellant relied on this judgment in support of his submission that the lease in ifit, instant case created by the Official Receiver is also illegal. From the facts of that case we find a clear in junction order was passed specially restraining the Receiver from creating any new tenancy and in gross violation of that order.

H But, in the instant case, the facts are different. The injunction granted

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K.K. KHEMKA v. GRINDLAYS BANK [REDDY, J.) 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 derrogation odn 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 !lats. They surrendered two flats. This partial surrender does C not put an end to the tenancy and we are satisfied that in respect of the Grindlays no new tenancy 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 un..the Full Bench decision of the Madras High Court in Arumugha Gounder v. Ardhanari Mudaliar and Others, AIR 1975 Madras 231 contended that the protection 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 E the suit. The question was whether the provisions of Tamil Nadu Cultivating 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 Co.urt 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 protect 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 G 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: H

"If literal application of the Tamil Nadu Cultivating Tenants 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 definition of "cultivating tenant" and the Receiver, the definition 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 possession through such an act could only do so subject to the directions and orders of the Court. In our view the principle 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. Grindlays' affidavit shows that they have also sent rent by way of Bank pay orders and they have been received by the Landlord. It is only for the first time on F. 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 Talas 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.

K.K. KHEMKA v. GRJNDLAYS BANK [REDDY, J.J 977

In appointing a receiver the Court deals with the pos- A session 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. Banaji, AIR 1958 SC 725 at p. 729 it was observed:

"A receiver appointed under 0.40 of the Code of Civil Procedure, unlike a receiver appointed under the insol- D vency 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 observations made therein. Justice Sabyasachi Mukharji held further:

F "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 G be made to suffer because of an Act of the Court, I have not been able to appreciate this contention. The court specifically prevented the transfer or creation of the tenancy. The tenancy which is created was in derrogation and in violation of the order of the court. Therefore, by acting in violation of the order of the court, no right, in my H

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 pendente lite and anyone who ge, ts 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 Reciever 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 right 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. I 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 dismissed.

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