1990 (5) TMI 238 - SC - Indian Laws

Receiver exceeded authority creating new tenancy for Tatas, violating injunction order. Grindlays' tenancy upheld.

The court held that the receiver exceeded their authority by creating a new tenancy for Tatas, violating the injunction order, and rendering Tatas' ... - Issues Involved:1. Authority of the receiver to create tenancies.2. Validity of tenancies created by the receiver.3. Applicability of the West Bengal Premises Tenancy Act.4. Violation of injunction order by the receiver.5. Impact of surrendering part of the leased property on the remaining tenancy.6. Rights of tenants under the West Bengal Premises Tenancy Act.Detailed Analysis:1. Authority of the Receiver to Create Tenancies:The appellant contended that the receiver had no right or authority to create any lease or tenancy for a term exceeding three years without the leave of the court, as per Chapter 21 Rule 5(a) of the Original Side Rules of the Calcutta High Court. The receiver's creation of a monthly tenancy was argued to be illegal, violating the injunction order passed by Justice A.N. Sen, which restrained the tenants from selling or transferring any of the properties in Schedule 'A'. The court held that the receiver has only the powers expressly granted by the court and any act beyond this authority, such as creating a new tenancy, would be invalid.2. Validity of Tenancies Created by the Receiver:The court examined whether the receiver's actions in creating tenancies for Tatas and Grindlays were valid. It was held that the receiver's act of leasing Flats Nos. 1 and 2 to Tatas constituted creating a new tenancy, which was beyond his authority and violated the injunction order. Conversely, the continuation of Grindlays' tenancy for Flats Nos. 3 and 4 was not considered a new tenancy but an extension of the existing one, thus not violating the injunction order.3. Applicability of the West Bengal Premises Tenancy Act:The court considered whether the tenancies created by the receiver were protected under the West Bengal Premises Tenancy Act. It was determined that Grindlays, as an existing tenant, was protected under the Act. However, Tatas, being inducted as a new tenant in violation of the court's order, could not claim protection under the Act.4. Violation of Injunction Order by the Receiver:The court found that the receiver's creation of a new tenancy for Tatas violated the injunction order issued by Justice A.N. Sen, which prohibited the transfer of any properties in Schedule 'A'. This violation rendered the tenancy created for Tatas invalid and subject to cancellation.5. Impact of Surrendering Part of the Leased Property on the Remaining Tenancy:The court analyzed whether the surrender of Flats Nos. 1 and 2 by Grindlays affected their tenancy for Flats Nos. 3 and 4. Citing legal precedents, the court concluded that the partial surrender did not amount to an implied surrender of the entire tenancy. Therefore, Grindlays' tenancy for Flats Nos. 3 and 4 remained valid and was not considered a new tenancy.6. Rights of Tenants under the West Bengal Premises Tenancy Act:The court held that Grindlays, as an existing tenant, was entitled to protection under the West Bengal Premises Tenancy Act. However, Tatas, being a new tenant inducted in violation of the court's order, could not invoke the provisions of the Act for protection. Consequently, Tatas was liable to be evicted.Conclusion:The appeal was dismissed against Grindlays, affirming their tenancy and protection under the West Bengal Premises Tenancy Act. Conversely, the appeal was allowed against Tatas, invalidating their tenancy and ordering their eviction due to the violation of the court's injunction order. Each party was directed to bear its own costs.