Full Judgment Text
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PETITIONER:
KRISHNA KUMAR KHEMKA
Vs.
RESPONDENT:
GRINDLAYS BANK P.L:C. AND ORS.
DATE OF JUDGMENT02/05/1990
BENCH:
REDDY, K. JAYACHANDRA (J)
BENCH:
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.
HEADNOTE:
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
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any tenancy, that he had virtually created two new tenancies
after terminating the original tenancy of Grindlays, and
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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
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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
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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.
JUDGMENT:
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.
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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
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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
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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
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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
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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
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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
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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
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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."
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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
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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
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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.
979