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Mohamed Hanif Abdul Hamid and ors. and B. Sahib Dittamal and Sons Pvt. Ltd. Vs. Chunilal Ukabhai Padia and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtMumbai High Court
Decided On
Case NumberNotice of Motion No. 698 of 1980 in Suit No. 492 of 1974
Judge
Reported inAIR1981Bom156
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rules 27, 52, 99, 99(1) and 101 - Order 40, Rule 1; Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Sections 15 and 15A
AppellantMohamed Hanif Abdul Hamid and ors. and B. Sahib Dittamal and Sons Pvt. Ltd.
RespondentChunilal Ukabhai Padia and ors.
Appellant AdvocateN.M. Bagadia,;R.B. Andhyarujina and;N.M. Ankolkar, Advs.
Respondent AdvocateN.L. Palan and;A.G. Shah, Advs.
Excerpt:
.....'subsequent leave' in a case where execution bad been levied on property in the hands of the court receiver without leave of the court. --it is well settled that where property has gone into the possession of a receiver appointed by a court, its sale either by private treaty or by its owner or in invitum as in a court sale without the leave of the court which appointed the receiver, is only voidable. there is, however, a direct authority of this high court that where a suit is instituted against the receiver appointed by a court, without obtaining the previous sanction of that court, the omission to obtain such sanction does not affect the jurisdiction of the court in which the suit is laid but is an illegality which can be effectively cured by the plaintiff obtaining the sanction during..........march, 1980 by the applicants on property in the hands of the court receiver appointed in this suit. shri aadbyarujina, learned counsel for the applicants thereafter sought leave to amend prayer (a) of the notice of motion by adding the words 'that this court may grant subsequent leave to regularise the execution levied by the applicants'.3. before i deal with the contentions urged by learned counsel, it is necessary to recite a few facts here in below :---4. the life insurance corporation of india ltd. (lic) as landlords of the premises situated at 37, hamam street, fort, bombay, filed an ejectment suit against the plaintiffs herein who were the partners of m/s. diamond jubilee washing company, being r. a. e. & b. suit no. 555/4500 of 1963. it is pertinent to note that the.....
Judgment:
ORDER

1. This Notice of Motion taken out by the applicants raises an interesting question with regard to the powers of this Court to grant 'subsequent leave' in a case where execution bad been levied on property in the hands of the Court Receiver without Leave of the Court.

2. The Applicants had initially prayed that this Court may regularise the execution of the Warrant of Possession in respect of the Decree in R. A. E. & B. Suit No. 555/ 4500 of 1963 in the Court of Small Causes at Bombay levied on 27th March, 1980 by the Applicants on property in the hands of the Court Receiver appointed in this suit. Shri Aadbyarujina, learned Counsel for the Applicants thereafter sought leave to amend prayer (a) of the Notice of Motion by adding the words 'that this Court may grant subsequent leave to regularise the execution levied by the Applicants'.

3. Before I deal with the contentions urged by learned Counsel, it is necessary to recite a few facts here in below :---

4. The Life Insurance Corporation of India Ltd. (LIC) as landlords of the premises situated at 37, Hamam Street, Fort, Bombay, filed an Ejectment Suit against the Plaintiffs herein who were the partners of M/s. Diamond Jubilee Washing Company, being R. A. E. & B. Suit No. 555/4500 of 1963. It is pertinent to note that the Defendants herein who were the partners of M/s. Garment Cleaning Works were not parties to the said suit. In the said suit, the Court of Small Causes passed a Decree in favour of the LIC on 29th October, 1966. The Defendants in that suit filed an Appeal to the Appellate Court of the Court of Small Causes and the Appeal was dismissed on 29th August, 1973. Thereafter the Defendants filed a Special Civil Application in the High Court on 29th October, 1973 and the same was dismissed on 9th November, 1974. On 6th April, 1972 the Defendants and the Plaintiffs entered into an Agreement of Leave and Licence where-under the defendants M/s. Garment Cleaning Works took over the conduct of the business of M/s. Diamond Jubilee Washing Company.

5. On 24th May, 1974 the present suit was filed by the partners of M/s. Diamond Jubilee Washing Company against the Defendants, the partners of M/s. Garment Cleaning Works for a declaration that the Defendants were trespassers in respect of the said shop at 27, Hamam Street, Fort, Bombay, and that the Defendants had no right, title or interest to conduct the said business. The Plaintiffs also prayed for a Mandatory Injunction against the Defendants directing them to remove themselves from the said premises and to hand over vacant and peaceful possession to the Plaintiffs On 10th June, 1974 the Court Receiver was appointed Receiver of the said shop at 37, Hamam Street, Fort, Bombay. On 22nd July, 1974 the present Applicants purchased the Building containing the shop premises from the LIC. On 17th November, 1974 the Applicants were granted leave by the High Court to be joined as party Defendants in the Special Civil Application, filed by the Plaintiffs herein against the LIC. After the Special Civil Application was dismissed, M/s. Diamond Jubilee Washing Company approached the Supreme Court for Special Leave and Special Leave Application was refused by the Supreme Court on 25th February, 1980. On 27th March, 1980 the Applicants herein executed the Decree and obtained possession of the suit shop from the Court Receiver without obtaining leave of this Court.

6. On 14th April, 1976, the defendants, the partners of M/8. Garment Cleaning Works filed a Declaratory Suit in the Court of Small Causes against the present Plaintiffs i.e. partners of M/s. Diamond Jubilee Washing Company.

7. The first question which arises in these proceedings is whether this Court has power to grant leave in retrospect once a decree was executed and possession taken from the hands of the Court Receiver. Shri Andhyarujina, learned Counsel for the Applicants submitted that this Court was competent to grant leave subsequently in order that the execution proceedings may be regularised. Shri Andhyarujina, relied upon the observations of the Madras High Court in the case of Veerappa Chettiar v. Mohamed Mythcen Mana Pillai, reported in : AIR1963Mad33 . The Court was pleased to observe;--

'It is well settled that where property has gone into the possession of a receiver appointed by a Court, its sale either by private treaty or by its owner or in invitum as in a Court sale without the leave of the Court which appointed the Receiver, is only voidable. This is not because the person who is the owner or the Court which brings the property to sale has no right or jurisdiction, as the case may be, to effect such a sale. But the property being in the possession of the receiver and, therefore, in custodia legis, no process without the leave of the Court which appointed the receiver can be levied upon such property. This aspect is not specifically mentioned by Rule 1 of O. 40, Civil Procedure Code but is part of the common law of receivers. It is only, where there is a total lack of jurisdiction to bring the property to sale in execution through Court can it be said that the sale is void as one without jurisdiction. But, where the Court is otherwise competent, and, has jurisdiction, the sale effected in exercise of that jurisdiction is not rendered void on account of want of leave of the Court which appointed the receiver. This view of the effect of a Court auction sale without leave of the Court which appointed the receiver is also supported by authority'.

8. Shri Andhyarujina then relied upon another decision of the Madras High Court, in the case of Rajagopala Venkata Narasimha V. Venkatalingam, reported in : AIR1944Mad372 , wherein the learned Judges were pleased to observe:--

'We have held that in our view the District Judge of Chittoor with the facts before him gave retrospective leave. We are unaware of any provision of law or statute that restricts discretion of a Court with regard to its control of the property in custodia legis. There is, however, a direct authority of this High Court that where a suit is instituted against the receiver appointed by a Court, without obtaining the previous sanction of that Court, the omission to obtain such sanction does not affect the jurisdiction of the Court in which the suit is laid but is an illegality which can be effectively cured by the plaintiff obtaining the sanction during the course of the litigation. This means of course that after the suit has been filed, retrospective leave can be given.'

9. Finally, Shri Andhyarujina relied upon the observations of the Supreme Court in the case of Everest Coal Co. Pvt. Ltd. v. The State of Bihar reported in : [1978]1SCR571 . Krishna Iyer, J. was pleased to observe :--

'When a Court puts a Receiver in possession of property, the property comes under Court custody, the Receiver being merely an officer or agent of the Court. Any obstruction or interference with the Court's possession sounds in contempt of that Court. Any legal action in respect of that property is in a sense such an interference and invites the contempt penalty of likely invalidation of the suit or other proceedings. But, if either before starting the action or during its continuance, the party takes the leave of the Court, the proceeding may continue to a conclusion on the merits. In the ordinary course, no Court is so prestige conscious that it will stand in the way of a legitimate legal proceeding for redressal or relief against its Receiver unless the action is totally merit-less, frivolous or vexatious or otherwise vitiated by any sinister factor. Grant of leave is the rule, refusal the exception. After all, the Court is not, in the usual run o! cases, affected by a litigation which settles the rights of parties and the Receiver represents neither party, being an officer of the Court. For this reason, ordinarily the Court accords permission to sue, or to continue. The jurisdiction to grant leave is undoubted and inherent, but not based on black-letter law in the sense of enacted law. Any litigative disturbance of the Court's possession Without its permission amounts to contempt of its authority; and the wages of contempt of Court in this jurisdiction may well be voidability of the whole proceeding. Equally clearly, prior permission of the Court appointing the Receiver is not a condition precedent to the enforcement of the cause of action. Nor is it so grave a vice that later leave sought and got before the decree has been passed will not purge it. If, before the suit terminates, the relevant Court is moved and permission to sue or to prosecute further is granted, the requirement of law is fulfilled. Of course, failure to secure such leave till the end of the tis may prove fatal.'

10. Reference may also be made to the observations of the Supreme Court in the case of Kanhaiyalal v. Dr. D.B. Banaji, reported in : [1959]1SCR333 , wherein the learned Judges were pleased to observe:--

'The general rule that property in custodia legis through its duly appointed Receiver is exempt from judicial process except to the extent that the leave of that Court has been obtained, is based on a very sound reason of public policy, namely, that there should be no conflict of jurisdiction between different Courts. If a Court has exercised its power to appoint a Receiver of a certain property, it has done so with a view to preserving the property for the benefit of the rightful owner as judicially determined. If other Courts or Tribunals of co-ordinate or exclusive jurisdiction were to permit proceedings to go on independently of the Court which has placed the custody of the property in the hands of the Receiver, there was a likelihood of confusion in the administration of justice and a possible conflict of jurisdiction.

The Courts represent the majesty of law, and naturally, therefore, would not do anything to weaken the rule of law, or to permit any proceedings which may have the effect of putting any party in jeopardy for contempt of Court for taking recourse to unauthorised legal proceeding. It is on that very sound principle that the rule is based. Of course, if any Court which is holding the property in custodia legis through a Receiver or otherwise, is moved to grant permission for taking legal proceedings in respect of that property, the Court ordinarily would grant such permission if considerations of justice require it. Courts of justice, therefore, would not be a party to any interference with that loud rule. On the other hand, all Courts of justice would be only too anxious to see that property is custodia legis is not subjected to uncontrolled attack, while, at the same time, protecting the rights of all persons who may have claims to the property'.

11. The ratio of the authorities cited above appears to be that although there is no statutory provision which requires a party to take leave of the Court to sue a Receiver, the rule regarding obtaining leave is part of the rules of equity and is based on public policy which requires that when the Court had assumed possession of the property in the interest of the litigants, the authority of the Court was not to be disturbed without first taking its leave. However, a party can apply for leave retrospectively, if it has omitted to obtain such leave prior to the filing of the suit or prior to initiating proceedings: in execution. It is, therefore, within the competence of the Court to grant such leave in retrospect; the only question being whether the granting of such 'subsequent leave' would, prejudice any party. It will, therefore, be necessary to investigate whether in the instant case the Court should grant the 'subsequent leave' sought by the Applicants as a mailer of formality or whether it should refuse to grant such leave on the ground that it would act to the prejudice of one of the parties.

12. Shri Palan learned Counsel for the Defendants, submitted that in this suit the Defendants claimed to be the lawful subtenants of the plaintiffs under Section 15 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as 'the Rent Act'). According to Shri Palan, the Defendants also claimed to be 'deemed tenant' under the provisions of Section 15 of the Rent Act. Shri Palan contended that in view of the fact that the Applicants executed the Decree, his clients had suffered irreparably; firstly because the present suit had become infructuous in view of the execution proceedings and secondly his clients had been deprived of offering obstruction at the time of the execution of the Decree. Shri Palan submitted that grave prejudice would be caused to his client, the defendants if this Court were to grant 'subsequent leave' at this stage.

13. There is considerable substance in the contention raised by Shri Palan. In view of the Applicants having executed the Decree and obtained possession of the suit premises from the hands of the Court Receiver without obtaining prior leave of this Court, the suit becomes infructuous in the sense that the defendants who could have agitated their title both as lawful sub-tenants or in the alternative as 'deemed tenant' have been deprived of agitating those issues before the Court. Shri Andhyarujina countered this objection raised by Shri Palan stating that the Defendants could agitate their claim in the suit filed by them in the Court of Small Causes. That remedy, however, does not appear to be open to the defendants any longer in view of the provisions of the amended Order 21, Rule 101. Order 21, Rule 101 provides :--

'Rule 101. All questions (including relating to right, title or interest in the property) arising between the parties to a proceeding on an application under Rule 27 or Rule 99 or their representative, and relevant to the adjudication of the application, shall be determined by the Court dealing with the application and not by a separate suit and for this purpose, the Court shall, notwithstanding anything to the contrary contained in any other law for the time being in force, be deemed to have jurisdiction to decide such questions.'

14. Shri Andhyarujina also submitted that under Order 21, Rule 99 it was open to the defendants to make an application to the Executing Court complaining that they had been wrongfully dispossessed. Order 21, Rule 99 (1) provides as follows :--

'99(1). Where any person other than the judgment-debtor is dispossessed of immoveable property by the holder of a decree for the possession of such property or, where such property has been sold in execution of a decree, by the purchaser thereof, he may make an application to the Court complaining of such dispossession'.

Therefore, it is clear that under Rule 99 of Order 21, Civil Procedure Code, it is only the party which has been dispossessed of immovable property which can make such an application. In the instant case, the im-moveable property being in the hands of the Court Receiver, who was dispossessed, only the Court Receiver could make such an application under Rule 99 of Order 21, Civil Procedure Code.

15. It, therefore, appears to me that the granting of subsequent leave to the applicants in this Notice of Motion will cause grave prejudice to the defendants. On the one hand they have been deprived of agitating their title in the suit; on the other they were deprived of obstructing the applicants at the time of the execution of the decree. To grant subsequent leave as prayed for by the applicants in this case would be to deprive the defendants of any future remedy of agitating their title to the suit premises. Shri Andhyarujina submitted that I should consider the issue whether the defendants had any right at all to obstruct the applicants in executing the decree. Shri Andharujina submitted that I should peruse the various affidavits fifed in these proceedings as also in the proceedings before the Court of Small Causes and find out for myself whether the defendants had a valid title which would entitle them to obstruct. I am afraid, I cannot accede to Shri Andhyarujina's request. The question whether the defendants had good grounds for offering obstruction to the execution of the decree or otherwise is a question which only the Executing Court can decide. It is not necessary at this stage for me to consider in detail whether the defendants had a valid title which would entitle them to obstruct the execution of the decree. At this stage, all that I have to be satisfied about is whether the defendants have a prima facie title which would be sufficient ground for obstructing the execution of the decree. Shri Palan pointed out that the defendants had been in possession of the suit premises since 1950 under various Agreements of Leave and Licence culminating in the Agreement dated the 6th of April, 1972. He, therefore, contended that the defendants had two-fold rights, one, that they claimed to be lawful sub-tenants under Section 15 of the Rent Act and further since they were in occupation of the premises on 1st of February, 1973, they also claim to be deemed tenants under Section 15-A of the Rent Act. The defendants, therefore, have established a prima facie case which would entitle them to obstruct the execution of the decree. Ultimately, whether they would succeed or fail in convincing the Executing Court of their title was a different matter entirely. I am, therefore, of the view that failure on the part of the applicants to obtain leave from this Court prior to executing the decree or to give notice to the Court Receiver under Order 21, Rule 52 of the Coda of Civil Procedure has resulted in stultifying any attempt by the defendants to offer obstruction to the execution of the decree. To accede to the prayer of the applicants for granting subsequent leave at this stage can only result in causing grave prejudice to the defendants' case. 1 am, therefore, of the view that it is in the interest of justice to refuse leave in retrospect at this stage and in order to restore status quo ante. In this view of the matter, the applicants, will have to restore possession of the suit premises to the Court Receiver. I do not think that any useful purpose will be served in compelling the plaintiffs to make a fresh application to execute the decree and I, therefore, consider it just and proper that in these proceedings only I should grant leave to the applicants to execute the decree afresh. In this manner parties will be restored to status quo ante as it prevailed prior to the execution of the decree by the applicants. When the applicants make a fresh attempt to execute the decree, it will be open to the defendants to obstruct the execution of the decree.

16. In the result, the Notice of Motion taken out by the applicants is dismissed. The applicants will hand over possession of the suit premises forthwith to the Court Receiver whom they had dispossessed earlier. The applicants are at liberty to execute the decree afresh and T grant them leave to do so. The applicants to pay to Shri Palan's clients costs of the Notice of Motion fixed at Rs. 300/-.

17. Shri Andhyarujina applies for stay of my order on the ground that the applicants desire to proceed further against my order. Slay granted till 5th March, 1981.

18. Notice of motion dismissed.


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