{"id":92309,"date":"1996-10-24T00:00:00","date_gmt":"1996-10-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/mr-anthony-c-leo-vs-nandial-bal-krishnan-ors-on-24-october-1996"},"modified":"2018-01-12T10:32:30","modified_gmt":"2018-01-12T05:02:30","slug":"mr-anthony-c-leo-vs-nandial-bal-krishnan-ors-on-24-october-1996","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/mr-anthony-c-leo-vs-nandial-bal-krishnan-ors-on-24-october-1996","title":{"rendered":"Mr. Anthony C. Leo vs Nandial Bal Krishnan & Ors on 24 October, 1996"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Mr. Anthony C. Leo vs Nandial Bal Krishnan & Ors on 24 October, 1996<\/div>\n
Author: G Ray<\/div>\n
Bench: G.N. Ray, B.L. Hansaria<\/div>\n
           PETITIONER:\nMR. ANTHONY C. LEO\n\n\tVs.\n\nRESPONDENT:\nNANDIAL BAL KRISHNAN & ORS.\n\nDATE OF JUDGMENT:\t24\/10\/1996\n\nBENCH:\nG.N. RAY, B.L. HANSARIA\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t       THE 24TH DAY OF OCTOBER, 1996
\nPresent :\n<\/p>\n
\t  Hon’ble Mr. Justice G.N. Ray
\n\t  Hon’ble Mr. Justice B.L. Hansaria
\nMs. Indu Malhotra, Adv. for the appellant
\nmrs. Manik Karanjawala, Adv. for the Respondents
\n\t\t      J U D G M E N T
\nThe following Judgment of the Court was delivered :
\nMr. Anthony C. Leo
\nV.\n<\/p>\n
Nandilal Bal Krishnan & Ors.\n<\/p>\n
\t\t      J U D G M E N T
\nG.N. Ray, J.\n<\/p>\n
     Leave granted.\n<\/p>\n
     Heard learned  counsel for the parties. The order dated
\nFebruary 23, 1996 passed by the Division Bench of the Bombay
\nHigh Court  in Appeal(Lodged) No. 3 of 1996 in Suit No. 1010
\nof 1973\t in the Ordinary Original Civil Jurisdiction arising
\nout of\tthe Order  dated December  6,  1995  passed  by\t the
\nlearned\t Single\t  Judge\t on  the  reports  of  the  receiver
\nappointed by  the Court\t in the said Suit No.1010 of 1973 in
\nso far\tas the same affects the appellant. Mr. Anthony C.Leo
\nis the subject matter of challenge in this appeal.\n<\/p>\n
     Nandlal Balkrishan\t Khanna and other partners of Khanna
\nConstruction House  obtained a lease of Plot No.44 of Scheme
\nNo. 58,\t Worli Estate, Bombay from the Municipal Corporation
\nof Greater  Bombay. The said partners constructed a building
\non the\tsaid plot  known as  Khanna Construction  House. The
\nappellant claims  tenancy in  respect of  a room in the said
\npremises under\tthe said  partners where  he  is  running  a
\nbusiness named\tand styled  as Flora  Chinese Restaurant. In
\nview of\t disputes arising between the partners of M\/s Khanna
\nConstruction House,  one of the partners filed a suit in the
\nordinary original  civil jurisdiction  of  the\tBombay\tHigh
\nCourt being Suit No. 1010 of 1973 against other partners for
\ndissolution of the firm and distribution of assets including
\nthe building Khanna Construction House. The appellant is not
\na party\t in the\t said suit.  Some time 1973, the Bombay High
\nCourt appointed\t a Receiver  in the  said suit in respect of
\nthe assets  of\tthe  partnership  firm\tincluding  the\tsaid
\nbuilding Khanna Construction House.\n<\/p>\n
     The appellant’s  case is  that  the  landlords  of\t the
\nbuilding granted  tenancy to  Abdul Rehman Noor Mohammad and
\nothers in  respect of  ground floor  premises where the said
\ntenants\t started   a  restaurant   in  the   name  of  Flora
\nRestaurant, Some  time in  1965, the  said business together
\nwith the  goodwill and\tbenefit of  tenancy rights was taken
\nover by\t J.S. Khanna  and S.G.\tKhanna. In  April, 1967, the
\nsaid Sri  J.S. Khanna  and S.G.\t Khanna\t assigned  the\tsaid
\nbusiness as  a going  concern  together\t with  goodwill\t and
\nbenefits of  tenancy rights  to Father S. Perreira. On April
\n10, 1970,  Father Perreira  transferred the  said restaurant
\nbusiness to  the appellant  together with  the goodwill\t and
\nbenefits of  tenancy. After  taking over  the said business,
\nthe appellant  changed the  name of  the business  to  Flora
\nChinese Restaurant. It is the specific case of the appellant
\nthat when  he got  assignment of tenancy and business of the
\nrestaurant, the\t tenanted premises  had already\t in it lofts
\nand two\t stand like  boxes attached  on the  outer wall\t for
\nstoring gas cylinders and air conditioning units.\n<\/p>\n
     The appellant has contended that in 1979, the landlords
\nmade a\tdemand for  additional compensation for the box type
\nstands affixed on the outer wall of the premises for storing
\ngas cylinders  and air conditioning units. The landlord also
\nraised some   dispute  regarding the  chimney  duct  in\t the
\nrestaurant premises.  According to  the appellant, a meeting
\nwas held  between the  appellant and  the landlords  at\t the
\ninstance of  court receiver  , and  the\t landlords  demanded
\nextra compensation at the rate of Rs. 2\/- per square foot of
\nthe area  where\t the  said  two\t   stands  for\thousing\t gas
\ncylinders and  air conditioning\t units\twere  installed.  On
\nmeasurement, the  said area  was found\tto be 60 sq. ft. and
\nthe appellant  had agreed  to pay  additional amount  of Rs.
\n120\/- per  month.  The\tlandlords  also\t insisted  that\t the
\nappellant would\t bear additional  insurance premium  and the
\nappellant had  agreed to  such\tdemand.\t The  appellant\t has
\ncontended  that\t under\tthe  Fire  Brigade  Rules,  the\t gas
\ncylinders cannot  be stored inside the premises but such gas
\ncylinders are  required to  be stored  outside the premises.
\nThe appellant further contends that by letter dated June 25,
\n1979, the learned Advocate of the appellant had informed the
\ncourt receiver\tabout such  agreement between  the landlords
\nand the\t appellant. The has also contended that in a meeting
\nbetween the  said receiver  and parties\t to the\t suit, t was
\ndecided that the receiver would file a\tsuit for eviction of
\nthe appellant  in the Court of Small Causes and one Mr. N.K.
\nDesai was  also engaged\t to file  such suit  for eviction on
\nbehalf of  the receiver.  But till  today, no  such eviction
\nsuit has been filed against the appellant.\n<\/p>\n
     In March,\t1995, after  a lapse  of about 16 years, the
\nlandlords thought  of a\t short\tcut  measure  to  evict\t the
\nappellant from the said premises without filing an ejectment
\nsuit in\t the Court  of Small  Causes and  in  furtherance of
\nsuch measure,  induced the court receiver to submit a report
\nto High\t Court in  the pending suit making complaint against
\nthe appellant  of construction of said lofts ad the said two
\nstand type  boxes on  the outer\t wall  for  storage  of\t gas
\ncylinders and air conditioning units and the receiver prayed
\nfor a  direction from  the High\t Court against the appellant
\nfor removal of the said lofts and the said box type stands.\n<\/p>\n
     On August\t22, 1995,  the\tsaid  receiver\tsubmitted  a
\nfurther report\tin  the\t said  suit  alleging  therein\tthat
\nappellant had  a permit\t room in  the said  restaurant where
\nliquor was  being served  and such  activity was illegal and
\ncontrary to  the terms\tof lease  granted by  Greater Bombay
\nMunicipal Corporation in favour of the landlords prohibiting
\nrunning a  bar in  the premises built on the leasehold land.
\nThe receiver also sought for a direction from the High Court
\nappellant for  stopping the  said illegal  activity of using
\nthe premises  as a  permit room and serving liquor in a room
\nin the\tsaid restaurant.  The appellant\t contends  that\t the
\nappellant was  carving on  the activity\t of having  a permit
\nroom and  serving liquor  to customers\tsince several  years
\nafter the  lifting of the prohibition policy in the State of
\nMaharashtra. The  appellant has\t also contended\t that he has
\nobtained license  for such permit room and service of liquor
\nin the\trestaurant. The appellant has further contended that
\nGreater Bombay a Municipal Corporation is agreeable to allow
\nservice of liquor and running a permit room in the leasehold
\nproperty on  payment of specified sum to the Corporation and
\nthe appellant agrees to pay such amount to the Corporation.\n<\/p>\n
     In support of the contention of the appellant that long
\nbefore the  receiver was appointed in the said suit inter-se
\nthe partners  of the said firm, the said two box type stands
\nand lofts  were in  existence  in  the\tpremises  where\t the
\nappellant had  been carrying  on his business of restaurant,
\nsupporting affidavits  were filed  before the  High Court by
\none Abdul  Razak Dawood\t stating that  Flora Restaurant\t was
\nstarted in 1962 by Noor Mohammed and others (though the year
\nof starting  the said  business of  restaurant\twas  wrongly
\nmentioned as  1962 instead  of 1964).  It was  stated by the
\nsaid Razak  that  he  was  associated  with  the  restaurant
\nbusiness ever  since its  inception and when J.S. Khanna and
\nS.G. Khanna  took over the said business from Noor Mohammad,
\nthe said  lofts and stands for storing gas cylinders and air
\nconditioning units were in existence. Mrs. Mande D pente and
\nher husband  who were  employed in  the said  restaurant  in
\n1967, also  filed an  affidavit stating\t that the said lofts
\nand two\t stands were in existence in 1967. Another affidavit
\naffirmed by one Charlie D’Souza was also filed. The deponent
\nstated that he had been working in the restaurant since 1969
\nand ever  since his  employment, he  had seen the said lofts
\nand stands. Similar affidavit was filed by R.Murusen stating
\nthat he\t was employed  in the  kitchen of  the restaurant in
\n1967 and he had seen the said boxes and lofts ever since his
\nemployment in 1967.\n<\/p>\n
     The appellant  also contended before the learned Single
\nJudge, before  whom the\t reports of the receiver against him
\nwere filed,  that the  receiver appointed  in the  suit\t for
\ndissolution   of partnership  and for distribution of assets
\nincluding   the said  building Khanna Construction House was
\nlimited to  adjudication of  rights and obligations inter-se
\nparties and  appellant not  being party\t to  the  same.\t his
\nrights qua  tenant was not required to be adjudicated in the
\nsaid suit  and, in  any event,\this right  as a\t tenant\t was
\nprotected under the Bombay Rents Act. Although the appellant
\nhad not\t resorted to  any act for which his tenancy could be
\nterminated and\the could  be evicted  from the said premises
\nunder his occupation as a tenant, even if it is assumed that
\nthe appellant  was  liable  to\tbe  evicted  from  the\tsaid
\npremises,  such\t  eviction  could   only  be   effected\t  by
\ninstitution  of\t appropriate  suit  for\t eviction  of\t the
\nappellant in  the Small\t Causes Court under the Bombay Rents
\nAct on\tpermissible grounds under the said Act. It was quite
\nopen to\t the High Court to grant permission to the  receiver
\nfor institution of suit for  eviction of the appellant after
\nbeing prima  facie satisfied  on materials  submitted before
\nthe Court  that a case for instituting suit for eviction was
\njustified.\n<\/p>\n
     The appellant  also contended  that the receiver is not
\nentitled to  bypass the\t statutory requirement of evicting a
\ntenant only  in due  process of\t law by\t initiating eviction
\nproceeding under  the Bombay  Rents Act\t in the\t appropriate
\ncourt simply by alleging, at the instance of landlords, that
\nthe tenant  had made  constructions and\t   had\tindulged  in
\nunauthorised activity  of using\t a portion  of the  tenanted
\npremises as  a permit  room  and place for service of liquor
\nto the\t customers. The appellant also contended that if the
\ncourt  would   decided\tthe  question  of  eviction  of\t the
\nappellant only\ton the basis of the reports of the receiver,
\nthe valuable  rights of\t a tenant protected under the Bombay
\nRents Act  would be defeated and the tenant would e deprived
\nto have\t a full\t fledged trial where he would be entitled to
\nlead evidence  in support  of his case and cross examine the
\nwitnesses of the landlord.\n<\/p>\n
     Such contentions\twere,  however, not  accepted by the
\nlearned Single\tJudge and  on the findings, inter alia, that
\nthe appellant had made unauthorised construction of the said
\nlofts and  box type  stands on\tthe outer  wall and had also
\nbeen using  a portion  of the  tenanted premises as a permit
\nroom and  has been  serving liquors to the customers in such
\nportion, when  under the  terms of  lease granted by Greater
\nBombay Municipal  Corporation\tto the\tlandlords use of the
\nleasehold property  in\t vending liquors was prohibited, and
\nby such\t action of  appellant, the  lease in  favour of\t the
\nlandlords was  liable to  be cancelled,\t the learned  Single
\nBench of  the Bombay  High Court directed that the concerned
\nauthorities would  not renew  the permit  of  the  appellant
\nunauthorised constructions  with the  aid of  the police, if
\nnecessary.\n<\/p>\n
     The appellant being aggrieved by such directions of the
\nlearned Single Bench, preferred Appeal (Lodged) No. 3 before
\nthe Division  Bench of the High Court and the Division Bench
\nby the impugned judgment dismissed the appeal and upheld the
\ndirections given  by the  learned Single Bench. The Division
\nBench, however,\t stayed demolition of the said constructions
\nfor a  period of  six weeks  to enable the appellant to take
\nlegal steps against the order.\n<\/p>\n
     At the  hearing of\t the appeal,  Mr. Salve, the learned
\nSenior Counsel\tappearing for  the appellant,  has contended
\nthat   the receiver  was appointed  in\tthe  said  suit\t for
\npreservation of the properties in dispute for protecting the
\ninterests of  the parties  to the suit. By such appointment,
\nthe court  became  custodia  legis  of\tproperties  in\tsuit
\nthrough the officer of the court, namely, the receiver. Such
\nappointment of\treceiver does  not amount  to vesting of the
\nproperties in  respect of  which receiver  was appointed  by
\nannulling  all\tincumbrance  and  rights  of  third  parties
\nreceiver or,  for that\tmatter of  the court  appointing the
\nreceiver to  maintain the  properties in  suit may  be\twell
\nappreciated. But  being impelled  by such   anxiety, neither
\nthe receiver nor the court can affect the tenant’s rights in
\nthe suit  property well\t protected by  the statute governing
\nthe relationship between a landlord and tenant.\n<\/p>\n
     Mr. Salve has submitted that even prima facie there was
\nno material  on the  basis of\twhich\tthe High Court could
\ncome to\t the finding  that the\tappellant  has\taltered\t the
\ntenants premises  either before\t or after the appointment of
\nreceiver  and during the continuance of the receivership, in
\nsuch a\tmanner by  making  permanent  constructions  in\t the
\ntenanted premises  which had  either materially\t altered the
\nnature and character of the said premises or have endangered
\nthe safety and security of the same. Mr. Salve has submitted
\nthat admittedly\t the tenanted  premises was  being used as a
\nrestaurant for\ta very\tlong time.  The appellant became the
\ntenant when  Father Perriara  had  transferred\tthe  tenancy
\nright together\twith goodwill  of the restaurant business as
\nan ongoing  business concern  in favour\t of the appellant in
\nApril, 1970  and since\tthen, the appellant has been running
\nthe business  of restaurant  by changing its name from Flora
\nRestaurant to Flora Chinese Restaurant.\n<\/p>\n
     Mr. Salve\thas submitted  that the alleged unauthorised
\nconstruction, namely,  the said lofts and box type stands on
\nthe  outer   wall  for\t storing  gas\tcylinders  and\t air
\nconditioning  units,  were  in\texistence  long\t before\t the
\nappellant got  the assignment  of tenancy right in 1970. The
\nappellant in  support of such contention about the existence
\nof such\t lofts and  box type  stands, have  filed supporting
\naffidavits by a number of persons as already indicated.\n<\/p>\n
     Mr. Salve\thas submitted that for running a business of
\nrestaurant, storage  of gas  cylinders was  an indispensable
\nnecessity and  it does\tnot require any imagination that the
\npredecessor of the appellant who had run the business of the
\nrestaurant must\t had stored  gas cylinders  in the premises.
\nUnder the Fire Brigade Rules, gas cylinders were required to
\nbe stored  by ensuring\tproper safety  and such\t storage  on
\noutside walls  was   only just\tand proper and in conformity
\nof the\tFire Brigade  Rules. Precisely\tfor the said reason,
\nthe predecessors in restaurant business in the said premises
\nhad made  arrangements of  such storage\t of gas cylinders by
\nconstructing box  type stands  on the  outer wall.  Such box
\ntype  constructions   were  also   made\t for   keeping\t air
\nconditioning units.  It is  nobody’s case that the appellant
\ninstalled air  conditioning units.  It is nobody’s case that
\nthe appellant  installed air conditioning unit for the first
\ntime in\t the said restaurant and it is the appellant who has
\nbeen running  the business  of restaurant in the premises in
\nquestion for  the first\t time after  obtaining assignment of
\ntenancy right.\n<\/p>\n
     Mr. Salve\thas submitted  that the\t appellant’s case of
\nexistence of the said lofts and box type stands on the outer
\nwalls from  long before\t and box  type stands  on the  outer
\nwalls from long before his induction as a tenant, gets ample
\nsupport from  the affidavits affirmed by a number of persons
\nwho being closely associated with the restaurant business in
\nthe tenanted  premises long  before  the  induction  of\t the
\nappellant, have\t categorically stated about the existence of
\nsuch  lofts  and  box  type  stands  from  long\t before\t the
\ninduction of  the appellant  as a  tenant.  Such  affidavits
\ncould not  have\t been  discarded  in  a\t summary  manner  in
\ndisposing of  the reports of the receiver, more so, when the
\nvaluable tenancy  right of  a third party like the appellant
\nwas  instrinsically  involved  in  the\texercise  of  giving
\ndirections  affecting\tthe  interest\tof  the\t tenant\t and
\nnullifying the statutory protection of a tenant.\n<\/p>\n
     Mr. Save  has also\t submitted that\t landlords  and\t the
\nreceiver were  well aware of the existence of such lofts and
\nbox type  constructions had in June 1979, the landlords made
\ndemands for  extra payment at the rate of Rs. 2\/- per sq.ft.
\nfor such  construction measuring  60 sq.ft.  in all and also
\nadditional premium  on account\tof storing  gas cylinders by
\nthe appellant.\tThe appellant’s Advocate’s letter dated June
\n25, 1979  sent to  the receiver clearly indicates the factum
\nof landlords  and receiver’s  awareness of  the existence of
\nthe said  lofts and the box type stands and the appellant to
\npay additional\tsum of\tRs. 120\/-  and additional  amount on
\naccount of premium.\n<\/p>\n
     Mr. Salve\thas submitted  that the\t landlords  and\t the
\nreceiver were  fully aware  of the  legal  position  of\t the
\nlandlords vis-a-vis  a tenant  protected by the Bombay Rents
\nAct and\t a decision  was taken long back to institute in the
\nCourt of  Small Causes\tunder the  said Rents  Act, but such
\neviction suit  was not instituted presumably on appreciating
\nthat such  attempt for\teviction would\tbe  an\texercise  in
\nfutility. Mr. Salve has also submitted that running a bar in
\na portion  of the  restaurant is  only ancillary to the main
\nbusiness of  an eating\thouse or  restaurant. Such  bar\t was
\nbeing run after obtaining valid license from the appropriate
\nstatutory  authority.\tThe  allegation\t of  the  threat  of
\ncancellation  of   the\tlease\tgranted\t by   the  Municipal
\nCorporation to\tthe landlords on account of running a bar in
\nthe said  premises is also unfounded, and a case such threat
\nis being set up as a ploy to oust the appellant. Consumption
\nof liquor  was prohibited  in Maharashtra when the lease was
\ngranted by the Corporation to the landlords and, accordingly
\nin the\tlease deed, a clause containing prohibition of using
\nthe leasehold  property for  service of\t liquor in public is
\nprohibited. The Municipal Corporation on being approached by
\nthe  appellant,\t has  expressed\t its  willingness  to  allow
\nconsumption of\tliquor in the leasehold property by amending
\nthe terms of lease on  payment of specified sum.\n<\/p>\n
     Mr. Salve\thas further  submitted that  a tenant may be
\nliable to  be evicted  for unauthorised\t construction or for
\nother activities  mentioned in\tthe Rent Act. But the tenant
\ncannot be  evicted from the tenanted premises on the alleged
\nground\tof   unauthorised  construction\t  or  other  illegal
\nactivities which  may enable the landlord to obtain order of
\neviction under\tthe Bombay  Rents  act\tunless\ta  suit\t for
\neviction is  filed before  the Small  Causes Court under the
\nsaid Act  and existence\t of grounds for eviction are clearly
\nestablished by\tleading evidence in such suit. A landlord is
\nalso  not   entitled  to   demolish   alleged\tunauthorised
\nconstruction in\t  the  tenanted premises  unless the dispute
\nabout such  construction is  adjudicated in  an\t appropriate
\nforum. In  any event,  the dispute  as to  the existence  of
\nunauthorised construction  by a\t tenant is  required  to  be
\nadjudicated only  in a\tsuit instituted\t against the  tenant
\nwhere such dispute may resolved on the basis of evidences to
\nbe adduced by the respective party by examining witnesses in
\nsupport of  respective case.\n<\/p>\n
     Mr. Salve\thas submitted  that the\t appellant is  not a
\nparty in  the said  suit, his  rights and  protection  as  a
\ntenant could  not have\tbeen adjudicated in a summary manner
\non the\tbasis of reports filed by the receiver. The impugned
\norder is not only illegal but manifestly unjust and improper
\nresulting in serious miscarriage of justice.\n<\/p>\n
     It has  been contended  by Mr.  Salve that the receiver
\nwho merely  holds dejure  possession of the property for the
\nbenefit of  parties to\tthe suit  without the property being
\nvested in  the receiver,  has  no  higher  rights  than\t the
\nlandlords themselves.  If there\t was no receiver, the remedy
\nof the\tlandlords was  to file\ta suit against the tenant in
\nthe Court  of Small Causes being the appropriate court under
\nthe Bombay  Rents Act.\tSuch position is not changed by mere
\nappointment of\ta court\t receiver in  a\t suit  inter-se\t the
\nlandlords for  distribution of\tproperties  in\t  which\t the
\ntenant is  not a party. Mr. Salve has submitted that if such
\ncourse of  action against  the tenant is permitted, it would
\nbe easy for designing landlords to circumvent the provisions
\nof Rent Act by filing a suit amongst the landlords and after
\nobtaining an  order  for  receiver  in\tsuch  suit  even  by
\nconsent, and  then, with the instrumentality of the receiver
\nto obtain  orders from\tCourt in  the said  suit against the
\ntenant in  complete disregard of the statutory protection of
\nthe rights  of the  tenants under  the Rents  act regulating
\ninter-se rights\t and obligations  of a\ttenant and landlord.
\nMr. Salve  has also  submitted that  such procedure would be
\ncontrary to Order 40 Rule 1(2) of Civil Procedure Code which
\nprotects the  rights of\t the persons  who are not parties to
\nthe suit  as against  the receiver.  Mr. Salve has submitted
\nthat  the   impugned  directions   of  the  High  Court\t for
\ndemolishing the\t said lofts  and box  type constructions and
\nalso direction\tprohibiting renewal of license for running a
\nbar  by\t  the  appellant  and  restriction  imposed  on\t the
\nappellant to  have a  permit house  and to  run a bar in the
\ntenanted premises,  should be  set aside  by  allowing\tthis
\nappeal.\n<\/p>\n
     Mr. R.  Nariman, the  learned Senior  Counsel appearing
\nfor the\t respondents, has, however, disputed the contentions
\nof Mr. Salve. Mr. Nariman has contended that for an order of
\neviction of a tenant, a suit under the appropriate Rent Act,
\nwhere such  Act is  applicable is  to be instituted and such
\nprotection of  the tenant  cannot be defeated without taking
\nrecourse under\tthe provisions\tof the Rent Act. But in\t the
\ninstant case,  no order\t of eviction  of the tenant has been
\npassed by the Court in giving the directions on the receiver
\nby the impugned order.\n<\/p>\n
     Mr. Nariman  has submitted\t that the  receiver has been
\nappointed in  respect of properties in dispute including the
\nbuilding, Khanna  Construction House, because the Court felt
\nit expedient  to preserve  the properties  in  dispute\t  by
\ngetting such  properties supervised  and administered by its
\nown officer,  the receiver. When the properties are custodia
\nlegis, the  Court is  not only\tcompetent to issue necessary
\norders and  directions on  its officer,\t the  receiver,\t for
\nproper preservation  and maintenance  of such properties but
\nin a  way, the\tCourt  is  under  the  obligation  to  issue
\nappropriate  orders   and  directions\tfor  effecting\tsuch
\nmaintenance and preservation.\n<\/p>\n
     Mr. Nariman  has contended\t that a tenant has statutory
\nprotection against  eviction  except  on  grounds  for\tsuch
\neviction under\tthe Rent  Act and the relationship between a
\nlandlord and  tenant is\t controlled  and  regulated  by\t the
\nprovisions of the Rent Act. The circumstances under which an
\norder of  eviction is\tto be made, the authority which will
\npass such  order are  contained in the Rent Act. Mr. Nariman
\nhas submitted  that it should be appreciated that although a
\ntenant is  free to enjoy peaceful possession of the tenanted
\npremises, he  has no  right  to\t destroy  such\tpremises  or
\nindulge in  such activities  which are\tlikely to  seriously
\naffect the  safety and security of the house. Similarly,  he
\nis  not\t  entitled  to\tindulge\t in  activities\t which\twill
\nmaterially affect  the nature  and character of the tenanted
\npremises and  is likely\t to bring about a situation by which
\nthe superior  right of\tthe landlord in the premises will be
\nin  jeopardy.\tSuch  action   being  per   se\tillegal\t and
\nunauthorised and  beyond the usual rights of a lessee vis-a-
\nvis the lessor, the lessor or landlord has not only right to
\ntake recourse  to  eviction  of\t the  lessee  or  tenant  by
\nbringing   an action  for eviction  in accordance  with\t the
\nprovisions of  the relevant  tenancy act.  If a\t landlord is
\nentitled to take  suitable action for preventing a tenant in
\nindulging in  unlawful activities  in  respect\tof  tenanted
\npremises,  the\t receiver  has\tcertainly  such\t right.\t The
\nreceiver has  a paramount  duty to draw the attention of the
\nCourt appointing  the receiver,\t of such unlawful activities
\nby the\ttenant and   to seek appropriate direction by way of
\nremedial measures to prevent such activities.\n<\/p>\n
     Mr. Nariman has submitted that in the instant case, the
\nreceiver has  not done\tanything  extraordinary.  Since\t the
\ntenant had changed the nature and character of\tthe tenanted
\npremises by  making permanent  construction and had indulged
\nin storing gas cylinders endangering the safety and security
\nnot only of such premises but of the entire building and has
\nindulged in  using  the\t premises  as  bar,  even  when\t the
\nlandlords under\t the terms  of the  lease are  prohibited to
\nindulge in  such activities  at the risk of lease granted by
\nMunicipal Corporation of Greater Bombay being cancelled, the
\nreceiver and,  for that\t matter, the Court had a solemn duty
\nto pass\t appropriate orders and directions for prevention of
\nsuch unauthorised  activities after  affording the tenant an
\nopportunity of being heard.\n<\/p>\n
     Mr. Nariman  has submitted\t that the  tenant was put to
\nnotice of  the allocation  of his  illegal activities in the
\ntenanted premises  and was  given opportunity  to raise\t his
\ndefences against  such allegation.  After giving  the tenant
\nreasonable opportunity\tto place  his case,  the Court after
\nbeing satisfied\t that the  tenant had  indulged\t in  illegal
\nactivities, not\t permitted to  be undertaken  in exercise of
\nhis right  as a\t tenant, has passed the directions contained
\nin the\timpugned order\tso that\t the directions contained in
\nthe impugned  order so that the properties in custodia legis
\nare properly preserved during the pendency of the said suit.
\nThe landlords,\tdespite such  orders or\t directions  of\t the
\nCourt,\t still retain the right to bring action for eviction
\nunder the  Bombay Rents Act for the said illegal activities.
\nIn the\taforesaid facts,  no interference  is called for and
\nthe appeal should be dismissed.\n<\/p>\n
     Giving our\t careful  consideration\t to  one  facts\t and
\ncircumstances of  the  case  and  submissions  made  by\t the
\nlearned counsel\t for the  parties, it  appears to  us that a
\nreceiver is appointed by the Court when the Court entertains
\na view\t that  for preservation\t of the\t properties in suit,
\ntill the  rights  of  parties  to    the  suit\tare  finally
\nadjudicated,  such   properties\t should\t  be  preserved\t  by
\nexercising   control and supervision of the same through the
\nofficer of  the\t Court,\t the  receiver.\t The  Court  becomes
\ncustodia legis of the properties in suit in respect of which
\nreceiver is  appointed. Such de jure possession of the Court
\nthrough its receiver. however, does not bring  about vesting
\nof  the\t properties  in\t receiver  or  in  court  free\tfrom
\nincumbrance eve\t bendente lite.\t Despite  appointment  of  a
\nreceiver, rights  and  obligations  of\t  third\t parties  in
\nrespect of  properties in  custodia legis remain unaffected,
\nwhere a\t receiver  appointed  by  the  Court  is  in  actual
\nphysical possession  of a  property, no\t one, whoever he may
\nbe, can disturb the possession of the receiver and the Court
\nmay hold  such person  who disturbs receiver’s possession as
\nguilty for  committing contempt\t of court. A man, who thinks
\nhe   has   a right  paramount to   that\t of receiver,  must,
\nbefore he  takes any  step of  his own\tmotion, apply to the
\nCourt for  leave to assert his right. Grant of leave in such
\ncase is\t the rule  and refusal\tto grant  leave is exception
\n(Everest Coal Company Pvt. Ltd. v. State of Bihar and others
\nAIR<\/a> 1977  SC2304). The\trule that receiver’s possession will
\nnot be disturbed without leave of the Court is, however, not
\napplicable  if\tthe  receiver  is  not\tin  actual  physical
\npossession of the property.\n<\/p>\n
     Since the\tproperties  in\ta  suit\t is  being  managed,
\nmaintained and\tadministered by\t the Court through receiver,
\nthe receiver  is under\tan obligation to take all reasonable
\nsteps for  preservation and  maintenance of such properties.
\nIf for\tsuch preservation, action in civil or criminal court
\nis necessary, receiver is to draw the attention of the Court
\nof relevant  is to  draw  the  attention  of  the  Court  of
\nrelevant facts\tnecessitating such  legal  action  and\ttake
\nleave  of   the\t Court\t to  institute\t appropriate   legal
\nproceedings for\t the preservation  of the  property. As\t the
\ndoes not  vest free from the incumberances in custodia legis
\nby annulling   all  rights and\tobligations attached  to the
\nproperty, the  receiver cannot\tinterfere with\tany right of
\nthe third  party, Sub  rule (2) of Rule 1 of Order 40 of the
\nCode of\t Civil Procedure  provides :  “Nothing in  this rule
\nshall authorise\t the court  to\tremove\tfrom  possession  or
\ncustody of  property any  person  whom any party to the suit
\nhas not a present right to remove.”\n<\/p>\n
     Such sub-rule  clearly indicates that the Court and its
\nofficer, the receiver, does not posses any right higher than
\nthe right  a party to  the suit possesses.\n<\/p>\n
     Where a Rent Act is applicable, the inter-se rights and
\nobligations of\tthe landlord  and   tenant are regulated and
\ncontrolled by  such Rent  Act in areas where any special law
\ngoverning the  incidents of  tenancy is\t not applicable, the
\nlaw relating  to lessor\t tenancy is  not applicable, the law
\nrelating to  lessor and\t lessee as  envisaged by the general
\nlaw of\tthe land,  namely, Transfer  of Property  Act,\twill
\nregulate and  determine inter  se  rights  of  landlord\t and
\ntenant. In  dealing with the rights and obligations which is
\nthird party  may have  in respect  of a\t property in which a
\nreceiver has  been appointed,  the receiver, like a party to
\nthe suit,  will have  same limitation.\tThe receiver will be
\nbound by  the incidence\t of tenancy flowing from the statute
\nregulating and\tdetermining inter  se rights of landlord and
\ntenant. Therefore, there is no manner of doubt that no order
\nfor eviction of the tenant can be passed by the Court at the
\ninstance  of  its  officer,  the  receiver,  without  taking
\nrecourse to  appropriate proceedings  for  eviction  of\t the
\ntenant\tunder\tthe  appropriate   statute  regulating\t and
\ngoverning the inter-se rights of landlord and tenant. It may
\nalso be\t emphasised here  that even  apart from\t an eviction
\nproceedings, any incidence of tenancy which is regulated and
\ncontrolled by a special statute cannot be altered, varied or
\ninterfered with\t except in accordance with the provisions of
\nsuch statute. The Court in such cases has no jurisdiction to
\npass orders and direction affecting the right of  the tenant
\nprotected, controlled  or regulated  by the  Rent Act on the
\nscore of  expediency in\t passing some order or direction for
\nthe maintenance and preservation of the property in custodia
\nlegis.\n<\/p>\n
     It is  to be indicated that though a tenant of property
\nin custodia legis cannot be deprived of statutory protection
\nof the\trights of tenant vis-a-vis landlord, a tenant cannot
\nclaim protection  of any  assumed right not flowing from the
\nincidence of tenancy. For example, if a tenant starts making
\nsome unauthorised  construction\t in  the  tenanted  premises
\nthreatening safety  and security of the tenanted premises or
\nof the\tbuilding as  a whole, the landlord certainly prevent
\nsuch activities by the tenant by bringing appropriate action
\nin Court seeking prohibitory and mandatory order against the
\ntenant without\tseeking\t  his eviction.\t Such right  to seek
\neviction under the appropriate\ttenancy law, if permitted.\n<\/p>\n
     In our  view, if  a tenant\t resorts to unauthorised and
\nillegal activity  in respect  of tenanted premises when such
\npremises is  in\t custodia  legis,  for\tprevention  of\tsuch
\nillegal and  unauthorised activities not consistent with any
\nright flowing  from the incidence of his tenancy, it may not
\nbe necessary  to institute  a suit for preventing the tenant
\nfrom such  illegal activities; but the Court, being apprised
\nby the\treceiver of  such illegal  activities of  a  tenant,
\nthereby obstructing  the  Court’s  overall  supervision\t and
\nconcern\t for  preserving  or  maintaining  the\tproperty  in
\ncustodia legis,\t will be  within its  right to pass suitable
\norder or  direction against  the tenant\t for  prevention  of
\nillegal and  unauthorised activities after giving the tenant
\nreasonable  opportunity\t  to  place   his  defences  against
\nallegation of unlawful and illegal  activity. What should be
\nthe reasonable\topportunity, must  depend on   the  facts of
\neach case.  The Court, in such a case, should ensure broadly
\nthat  the   tenant  is\t not  deprived\t of  the  reasonable
\nopportunity to\twhich he  would have  been  entitled  if  an
\naction against\thim in\ta court\t of law\t had been brought on
\nsuch complaint.\n<\/p>\n
     It appears to us that since  the Court must be presumed
\nto be  fully unbiased  in deciding the allegation of defence
\nand illegal activities of a tenant causing prejudice against
\nthe lawful  owner of  in  the  matter  of  preservation\t and
\nmaintenance of\tthe property pendente lite, the necessity of
\nadjudication of such dispute  by another court by bringing a
\nlegal necessary\t nor expedient.\t It, however, should be made
\nclear that  if for  the purpose\t of deciding  the dispute of
\ndefence and  illegal activity  affecting  maintenance\t and
\npreservation of\t  the  property in  custodia legis it become
\nnecessary to  determine any right claimed under a statute or
\nflowing from  some action  inter parte as may be pleaded and
\nrequired to  be decided, it is only desirable that the Court
\nwould  refrain\t from  such  determination  in\tthe  summary
\nproceeding initiated  before it\t on  the  complaint  of\t the
\nreceiver or  a party  to the suit and  the Court will direct
\nthe receiver  to seek  adjudication of\tthe dispute before a
\ncompetent court\t by bringing  appropriate legal action. Save
\nas aforesaid,  it will\tnot be correct to contend that in no
\ncase the  Court exercising  control and\t supervision of\t the
\nproperty  in   suit  by\t  appointing  a\t  receiver  will  be
\nincompetent even to pass direction against a third party for
\nthe purpose of preservation of the property, once such third
\nparty pleads  defence in  justification of  his action.\t The
\nquestion  of  summary  adjudication  of\t   his\taction.\t The
\nquestion of  summary adjudication  by the  Court  appointing
\nthe receiver  or relegating  the receiver  to a regular suit
\nfor adjudication  of the dispute concerning third party will
\ndepend on  the nature  of dispute and the defence claimed by
\nthe third party.\n<\/p>\n
     In the  facts of  the case,  however, it  appears to us
\nthat the  appellant tenant has come out with a specific case
\nthat the  structures  in  question  were  there\t before\t his
\ninduction as  a tenant.\t In support  of such  contention,  a
\nnumber\tof   supporting\t affidavits  have  been\t filed.\t The
\nappellant has  also contended  that the\t landlords  and\t the
\nreceiver were  fully aware of the existence of the structure
\nlong back,  and according  to the appellant, at one point of
\ntime an\t agreement was reached between the landlords and the
\nappellant for  payment of  a  sum  of  Rs.  120\/-  for\tsuch
\nconstruction covering  about  60  sq.  ft.  besides  further
\namount on  account of  additional premium  to be paid by the
\nlandlords and  an Advocate’s letter was sent to the receiver
\napprising the\treceiver  of such  understanding between the
\nparties.\n<\/p>\n
     The appellant  has also  claimed right  to operate in a
\nportion of  the tenanted  premises a permit room for serving
\nliquor to the customers of the hotel after obtaining license
\nfrom the  statutory authority on the footing that such right
\nis incidental  and ancillary  to his right operate an eating
\nhouse or  restaurant. Such contentions should not be decided
\nin a  summary  proceeding  to  dispose\tof  reports  of\t the
\nreceiver or a complaint by a party to the suit about alleged
\nillegal activities  by a  tenant in  a property in suit. Any
\nsummary disposal  of such dispute on the claim of some legal
\nright by  the tenant  is  likely  to  seriously\t affect\t the
\ntenant, because\t once some  constructions  in  the  tenanted
\npremises are  removed on  a finding  that such constructions
\nwere made  illegally and  defence by  the tenant, the tenant
\nnot only  suffers the  said direction  of removal at present
\nbut become   liable to be evicted from the suit premises for
\nsuch defence  construction by  him. Similarly,\tthe  finding
\nagainst the  tenant on the question of running a permit room
\ncannot but  seriously affect the tenant’s right to operate a
\npermit room and is also likely to  expose him to the risk of
\nbeing evicted from the\tsuit premises.\n<\/p>\n
     In the  aforesaid facts,  the impugned  order cannot be
\nheld to be justified, we therefore, allow the appeal and set
\naside the impugned order. It will be open to the receiver to
\nbring appropriate  legal action against the tenant appellant
\nfor  removal  of  the  alleged\tdefence\t structure  and\t for
\npreventing him\tfrom running  a permit\troom in the tenanted
\npremises, besides  instituting a suit for eviction under the
\nRent Act.  By way of abundant caution, we make it clear that
\nwe have\t not expressed\tany opinion on the respective rights
\nof the parties.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Mr. Anthony C. Leo vs Nandial Bal Krishnan & Ors on 24 October, 1996 Author: G Ray Bench: G.N. Ray, B.L. Hansaria PETITIONER: MR. ANTHONY C. LEO Vs. RESPONDENT: NANDIAL BAL KRISHNAN & ORS. DATE OF JUDGMENT: 24\/10\/1996 BENCH: G.N. RAY, B.L. HANSARIA ACT: HEADNOTE: JUDGMENT: THE 24TH DAY OF OCTOBER, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-92309","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nMr. Anthony C. Leo vs Nandial Bal Krishnan & Ors on 24 October, 1996 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/mr-anthony-c-leo-vs-nandial-bal-krishnan-ors-on-24-october-1996\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mr. Anthony C. 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