Receivership and tenant rights: summary demolition and permit-room restraint cannot override disputed tenancy claims without proper proceedings.

Property under receivership remains in custodia legis, but the court or receiver does not acquire title free of existing third-party rights. A receiver may take preservation measures, yet cannot override statutory tenancy protections or conclusively decide disputed rights in a summary proceeding. Where a tenant is alleged to be using the premises for an activity outside the tenancy and prejudicial to preservation, preventive relief may be granted after a fair opportunity to respond. On the tenant's claim that the structures pre-existed and the permit room was lawfully licensed, those disputed questions required proper legal proceedings. The summary directions for demolition and restraint of the permit room were not sustained.

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Issues: Whether, in respect of property under receivership, the Court could summarily direct removal of alleged unauthorised constructions and prohibit operation of a permit room so as to affect a tenant's rights without resorting to appropriate legal proceedings.

Analysis: Appointment of a receiver places the property in custodia legis, but neither the Court nor the receiver acquires title free from existing rights and obligations of third parties. A receiver may take steps necessary for preservation of the property, yet cannot override statutory incidents of tenancy or deprive a tenant of protections conferred by the governing rent law. At the same time, where a tenant is alleged to be carrying on activity not flowing from the tenancy and prejudicial to preservation of the property, the Court may grant preventive relief after giving reasonable opportunity to meet the allegations. However, where the tenant asserts a specific defence that the structures were pre-existing and that the permit room was lawfully operated under a valid licence, such disputed questions affecting legal rights should not be conclusively determined in a summary proceeding on a receiver's report.

Conclusion: The summary directions for demolition and for restraining the permit room could not be sustained, and the appellant succeeded.

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