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Jacob Vs. Subramonia Iyer - Court Judgment

LegalCrystal Citation
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 289 of 1959
Reported inAIR1960Ker212
ActsTenancy Law; Kerala Stay of Eviction Proceedings Act, 1957 - Sections 2(1), 3 and 4; Transfer of Property Act, 1882 - Sections 105; Code of Civil Procedure (CPC) , 1908 - Order 40, Rule 1; Travancore-Cochin Insolvency Act, 1955
RespondentSubramonia Iyer
Appellant Advocate R.K. Mathew and; George Vadakkel, Advs.
Respondent Advocate T.S. Krishnamoorthy Iyer and; G.R. Menon, Advs.
DispositionRevision dismissed
Cases ReferredEappen Mathen v. Narayana Iyer
.....filed for stay of eviction proceedings by petitioner who was lessee of suit property under a receiver appointed by court - petitioner contended that he cannot be evicted by reason of section 4 - by considering arrangement entered into court and receiver regarding lease of disputed property it found that provisions of section 4 not complied with - section 4 accordingly not applicable to case - petition dismissed. - - clearly, this reasoning cannot be sustained on the terms and provisions of the act, and counsel for the respondent-receiver in this civil revision petition, was unable to support it. the property is transferred by one person in favour of another and includes kanapattam'.wherever the transfer of property act applies, a lease of immovable property, as defined by..........the generalrule is, that the appointment of a receiver does not of itself operate to change any title, right or interest or to vest any title or estate in the receiver' (american jurisprudence, vol. 45, page 125, article 151). in india too the position is not different, and has been stated thus by mukerjee j., in eastern mortgage and agency co. v. md. fazlul karim, air 1926 cal 385 :'the property in his (the receiver's) hands is in custodia legis for the person who can make a title to it. ....... .he collects and receives therents, issues and profits, not upon his own title but upon the title of some persons, parties to the action.'the distinction between the case of a receiver under the insolvency act and that of receivers appointed under the civil procedure code was stated in.....

Velu Pillai, J.

1. The revision petitioner claims to be a lessee of the suit properties, under a receiver appointed by court, who cultivated them in the year 1134 M. E. When the receiver advertised for making fresh arrangements for the cultivation of the properties in the year 1135 M. E., the petitioner contended, that he cannot be evicted, by reason of Section 4 of the Kerala Stay of Eviction Proceedings Act '1957, which may hereafter be referred to as the Act. The contention was overruled by the order sought to be revised on tbe ground that Section 4 of the Act is applicable only to a lease which was subsisting on the date of the commencement of tbe Act, and not to a lease which came into existence afterwards. Clearly, this reasoning cannot be sustained on the terms and provisions of the Act, and counsel for the respondent-receiver in this Civil Revision Petition, was unable to support it. P. T. Raman Nayar J. by whom this Civil Revision Petition was heard in the first instance, referred it to a Division Bench for decision, as he considered that 'the question whether a lease granted by a receiver of court comes within the mischief of Act I of 1957 -- quite apart from whether such a receiver can be brought within the term 'Official Receiver' so as to make the exemption in Section 3 (b) of the Act applicable -- is one of general importance'.

2. The relevant part of Section 4 of the Act is in these terms;

'Notwithstanding anything to the contrary, contained in any other law for the time being in force or in any contract, with effect on and from the commencement of this Act, no suit or other proceedings for eviction of a person from his holding. ........ shall lie in any court and all suits,proceedings in execution of decrees or orders and other proceedings pending in the courts at such commencement for such eviction ........ shallbe stayed'.

A holding has been defined thus, in Section 2(1) of the Act :

'In this Act, unless the context otherwise requires: 1. 'holding' means any immovable property held under a single transaction by which a leasehold right in tbe property is created and possession of! the property is transferred by one person in favour of another and includes Kanapattam'.

Wherever the Transfer of Property Act applies, a lease of immovable property, as defined by Section 105 of that Act, must be held to involve 'a transfer of a right to enjoy such property.' A lease so defined has other characteristics too, but they are not germane to the controversy before us, and need not be considered. It is undoubted that a transfer of a, right to enjoy property is a transfer of an interest! in property; this was also held in Korah Punnen v. Parameswara Kurup Vasudeva Kurup, 1955 Ker LT 924 : ((S) ATR 1956 Trav-Co 1) (FB). A lease was held to be a conveyance and not a mere contract in Ragoonathdas v. Morarji, ILR 16 Bom 56S and in Kandasami Pillai v. Ramasami Mannadi, ILR 42 Mad 203 : (AIR 1919 Mad 168) (FB). It may be said to create a right in rem. The right or estate transferred to the lessee, is called the leasehold. Where therefore there is no leasehold, there] is no 'holding' as defined in the Act.

3. An arrangement of the kind entered into by the petitioner for the cultivation of properties under a court receiver is called a lease in some districts; in others, it is described or referred to as a sale, by auction, where auction is held, of the. right to collect the usufruct of the properties for a specified period,' generally one year, and in some others, as a mere licence. But the terms 'lease' and 'sale' are used only in a general and loose way. The text-books also make mention of leases by receivers under orders of court. All this, however, is without reference to the definition of 'holding', which is a new concept introduced into the Act and into some other enactments in the State of a similar nature. It seems to us, that unless a transaction falls strictly within the definition of a 'holding' in the Act, Section 4 cannot be made applicable to it. A similar view was taken by this court in Rajappa Pillai v. Ponnammal, 1958 Ker LT 844 where in repelling the argument, that the Act does not prescribe, that the lease should be by a person having an interest in the property, T. K. Joseph J. observed as follows :

'A lease of immovable property creates an interest therein, and this presupposes that the lessor has some interest in the property which would enable him to convey to the lessee an interest in the property.'

We endorse this opinion of the learned Judge, founded as it is, on the definition of a lease. 'A receiver appointed under the general power of the court does not, by the mere fact of his appointment, become vested with any title or estate in the property involved.' (Corpus Juris Secundunr, volume 75, page 748, Article 105). '..... the generalrule is, that the appointment of a receiver does not of itself operate to change any title, right or interest or to vest any title or estate in the receiver' (American Jurisprudence, Vol. 45, page 125, Article 151). In India too the position is not different, and has been stated thus by Mukerjee J., in Eastern Mortgage and Agency Co. v. Md. Fazlul Karim, AIR 1926 Cal 385 :

'The property in his (the receiver's) hands is In custodia legis for the person who can make a title to it. ....... .He collects and receives therents, issues and profits, not upon his own title but upon the title of some persons, parties to the action.'

The distinction between the case of a receiver under the Insolvency Act and that of receivers appointed under the Civil Procedure Code was stated in Satyanarayan Banerji v. Kalyani Prosad, AIR 1945 Cal 387 to be, that 'tbe legal estate in the property of an insolvent is vested in the receiver in insolvency, whereas no property is vested in a receiver appointed under the Code, who is merely the manager unpointed by the court of the properties in question.' Under the English Law, though a receiver appointed by the court can grant a lease with the consent of the court, '........ the lessee wiltnot obtain a legal estate unless the legal owner is party to the lease' (Halsbury's Laws of England, 3rd Edition, Vol. 23, page 424, Article 1013),

4. It was contended, that under Order 40. Rule 1 (c) of the Civil Procedure Code, the court can 'commit' the property to 'the possession, custody or management' of the receiver, and that this implies, that in law, a receiver can have 'possession' of the property, as distinguished from mere custody. Even so, it docs not follow, that a lease by the receiver constitutes a 'holding' within the meaning of the Act. What after all, is the nature of the possession of a receiver? The possession ofa receiver is as has been repeatedly stated in several cases, 'that of all parties to the action according to their title.' The 'custody and possession (of the receiver) is that of the law or the court, and is like that of a temporary occupant or caretaker' (American Jurisprudence, Vol. 45, page 128 Article 152).

In Paterson v. Gas Light and Coke Co. (1.896) 2 Ch. 476, the relation of a mill company to its receiver appointed by court was stated by Lindley. L J. to be 'not the relation of outgoing and incoming tenant, nor of vendor and purchaser, but that of owner and caretaker', and by Lopes L. I., to be that of 'mere custodians placed there by the order of the court; they are mere caretakers'. The effect of the appointment of a receiver 'is not to oust any party of his right to possession of the property, but merely to retain it for the Benefit of the party, who may ultimately appear to be entitled to it.' See Basu on Receivers, 1937 Edition, page 757. The appointment of a receiver places the property in the physical possession or custody of the receiver as a ministerial officer of the court, having charge of the receivership and accountable to the court, and he has been referred to in some cases 'as an arm' in other cases, 'as a hand' of the court, and in still others, as 'part of its machinery,'

Thus in Rajah of Venkatagiri v. Isakpalli Sub Hah, ILR 26 Mad 410, the actual or physical possession of a property by a Magistrate, by reason of an attachment under Section 146, Crl. P. C. was held not to amount to dispossession of either party or to discontinuance of his possession, the seisin or legal possession, being with the true owner during the attachment. The same view was taken in Brojendra Kishore Roy v. Bharat Chandra Roy, 31 Ind Cas 242 : (AIR 1916 Cal 751). The character ot the possession of a receiver who is put in possession pursuant to an order under Order 40, Rule I, C. P. C., cannot be different. In Morrill v. Noyes, (1863) 56 Me 458 : 96 Am. Dec 486, the court observed :

'....the utmost effect of his (receiver's) appointment is to put the property from that time into his custody, as an officer of the court, but not to change the title or even the right of possession in the property.'

The learned counsel for the receiver contended, that notwithstanding the, generality of the terms as above, employed in Order 40, Rule 1 (c), O. P. C., the possession of the court or the receiver is not judicial possession. The Court, of course, is not a juridical person and it cannot take property; this was so decided in Raj Raghubir Singh v. Jai Indra Bahadur Singh, ILR 42 All 158 : (AIR 1919 PC 55) and Mehdi Alikhan v. Chunni Lal, AIR 1929 All 834. It was accordingly ruled in Jaya Motion Pictures Ltd. v. Ramakrishna Iyer, 1957 Ker LT 754: (AIR 1958 Kerala 303), that a receivership for a building does not operate as an order of eviction, as contemplated by the provisions of the Lease and Rent Control Order.

5. The remedies available to a receiver, under a 'lease' granted by him, are not all of them, available to a landlord. Where the property is in the possession of a lessee who has accepted the lease with knowledge of the appointment of the receiver, the latter may obtain possession by summary proceedings. Sivarajan v. Official Receiver ILR (1953) Trav-Co 30: (AIR 1953 Trav-Co 205) decided, that an express undertaking in the lease deed to surrender the property, can be summarily enforced by the court, the undertaking being really in favour of the court, the principle being, that

` 'the summary enforcement of the undertaking thus taken by the court is only a step towards thedischarge of the duties of the court in the management of the estate, and it cannot be said that the court has lost its jurisdiction in that direction, merely because the property has been put in the possession of a lessee...... it is perfectly within the competence of the court to summarily enforce that undertaking and to evict the lessee from the property.' Similarly, where a lease was obtained by fraud, and with the connivance of a receiver appointed widen Section 146, Cr. P. C., it was set aside summarily, in Meyappa Chettiar v. Nagammai Achi, AIR 1933 Mad 67 (2). Misrepresentation or concealment of material facts in obtaining a lease from courts is sufficient to justify a summary order cancelling it, as held in Strish Chandra v. Debendra Nath, AIR 1929 Cal 828. In Surendra Keshub Roy b. Doorgasoondery Dosee, ILR 15 Cal 253, Trevelyan J., maintained, that

'a court has complete power to enforce summarily a contract made by it, when managing or administering an estate, whatever that contract may be.'

6. The position may now be summed up. A court or receiver taking possession of property in suit does not thereby derive any title to it, much less any interest in it, not even a right of possession, except for administering or managing or preserving it for the benefit o the party rightfully entitled to it; if so, there is no interest to transfer or to convey. In administering the property, a court cannot act directly, but has perforce to function through the agency of others; in this respect unlike the court, a receiver can, if he so intends or if the circumstances warrant, act by himself, but in the generality of cases he may find it necessary or expedient not to do so, but only through others. To us, it seems inconceivable, that the legislature had intended, by enacting a provision like Section 4 of the Act, to interfere with and thereby paralyse the administration of the properties committed to the court, unless there are very strong grounds to believe, that this was intended. The reasons which might conceivably have induced the legislature to curtail or suspend a landlord's right of eviction, do not appeal! to us to have any application, to that of a court or its officer, who is in no sense a landlord, but who merely preserves the property for the benefit of the party who may be found entitled to it. Confronted with this, the learned counsel for the petitioner had to contend, that the so-called 'lease' subsists only during the continuance, and must come to an end upon the termination, of the receivership, relying on the observations of the Travaneore-Cochin High Court in Eappen Mathen v. Narayana Iyer, AIR 1953 TC 268 that a lease by a mortgagee will be determined upon the redemption of the mortgage by the mortgagor. We are not called upon to make a pronouncement on this, but must state, that we are by no means certain, as the learned counsel appeared to be, that once the provisions applicable to a lease are extended to transactions of the character before us, there can be a half-way house in that process, apart from clear legislative provisions.

7. It was next argued, that whereas the Kerala Stay of Eviction Proceedings Ordinance, 1957, which preceded the Act had made an express provision in Section 3 (b) exempting 'rights created by the.... Official Receiver or by any officer appointed by a court under the provisions of any law, or by any person holding under or deriving title from any such officer,' from the operation of the Ordinance, the corresponding provision in Section 3 (b) of the Act has exempted only 'rights created by . . Official Receiver' from the operation of the Act, and that this indicates a conscious departure by the Legislature, from what was intended by the Ordinance. We are free to admit, that the argument is plausible, but mustsay, that it cannot prevail, unless the basic 'assumption can be maintained that the term 'Official Receiver', occurring in the Ordinance and in the Act,has the same connotation, and means an 'OfficialReceiver' appointed by Government under Section 59 (1)of the Travancore-Cochin Insolvency Act, 1955. Theprovisions of that Act are clear, that a receiver, notnecessarily an Official Receiver, can be appointedby courts, in whom property will vest under the lawof insolvency. Section 59(1) itself makes provision,that only 'such persons as they (Government) thinkfit' may be appointed Official Receivers, implyingthat there can be receivers outside that category. Section 59(2) specially empowers the court to appointanyone, other than an Official Receiver, to be a receiver or an interim receiver. Section 58 makeselaborate provisions for the appointment of receiversin general, for requiring them to furnish security,and for the manner in which they shall exercise their functions. Section 60 contemplates a case,where the court itself shall have all the rights, andmay exercise all the powers of the receiver and under Section 78 (ii) the court itself is constituted a receiver.It is impossible to hold, that such receivers, whoare not Official Receivers, were left out of thescope of Section 3 (b) of the Act, If this is so, the necessary foundation for the argument is lacking; there isneither logic nor reason to limit the extended meaning of the term 'Official Receiver', within the confines of the Travancore-Cochin Insolvency Act, 1955.It may well be, that the term was given a widerconnotation by the Act, We therefore consider, thatthe argument is not conclusive. We do not think,that the requirement as observed, of a strict compliance with Section 4 of the Act, is satisfied by the arrangement under which the properties in this casewere entrusted to the petitioner, by the court receiver. We, therefore hold, that Section 4 is inapplicable to arrangements which are entered into by acourt or by a receiver appointed by it, for the cultivation and realisation of the properties involved in a suit. This revision petition is therefore dismissedwith costs.

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