A.P. Shah, J.@mdashThis chamber summons is taken out by the defendants Nos. 2, 7, 8, 11 and 13 to 26 to direct the respondents Nos. 1 to 3 to hand over possession of the premises in their occupation on the 6th floor of the building known as ''Shreeniketan'', situate at Dr. Annie Besant Road, Worli, Mumbai on the ground that the respondent No. 1 has created illegal sub-tenancies in favour of the respondents Nos. 2 and 3. In the alternative the said defendants are claiming for a direction to the Receiver to forcibly dispossess the respondents from the said 6th floor premises, if necessary, with the help of the police. The facts leading to this chamber summons are few and may be shortly stated:
2. The present suit is for partition and possession of the property bearing plot No. F in Shiv Sagar Estate along with the building "Shreeniketan" standing on the said plot. By order dated 13th February, 1978 passed in Notice of Motion No. 115 of 1978, the Court Receiver, High Court, Bombay was appointed Receiver of the said property with powers to collect the rent, manage the properties, to make all legal disbursement such as municipal taxes and other outgoings. On 24th July, 1978, by consent of all the parties in the suit, the aforesaid order was confirmed and the notice of motion was disposed of. Pursuant to the order passed by this Court, the Court Receiver, High Court, Bombay has taken formal possession of the property and is collecting rent and other income from the said property and has been making disbursement such as municipal taxes, water charges, electricity charges and other outgoings. It is a common ground that prior to the appointment of the Court Receiver, the respondent No. 1 Dolphin Fisheries Private Limited was in occupation of the premises on the 6th floor as a tenant.
3. Now the present chamber summons has been filed by the plaintiff alleging inter alia that the respondent No. 1 has illegally sub-let the 6th floor premises by inducting Dolphin Fisheries and Trading Private Limited, who are conducting a business centre in the premises and the respondent No. 3 Megha Visa Engineering and Petrochemicals Limited is allowed to occupy the premises without any leave or order of this Court. In a further affidavit filed on 19th February, 1997, it is alleged by the plaintiff that the 3rd respondent Megha Visa Engineering and Petrochemicals Limited has been illegally inducted after the appointment of the Court Receiver and this is tantamount to interfering with the possession of this Court and the course of justice. The plaintiff has therefore prayed that the respondents Nos. 1 and 2 as well as the respondent No. 3 should be evicted from the premises.
4. In their affidavit in reply the respondents have pointed out that the respondents Nos. 1 and 2 are not separate entities but are one and the common concern. The original name of the company was Dolphin Fisheries Private Limited. Now the name of the company has been changed to Dolphin Fisheries and Trading Private Limited on 19th November, 1984. Thus there is no sub-letting or parting with possession by the respondent No. 1 in favour of the respondent No. 2. The respondents have stated in their affidavit that the 2nd respondent has been running the business centre in the premises since 1987 and an agreement was entered into between the parties on 8th June, 1989. The respondent No. 2 agreed to render to the respondent No. 3 i.e., Megha Visa Engineering and Petrochemicals Limited office facilities, amenities, finances and services as stated in the agreement for a period of two years from 1st September, 1989 on the terms and conditions mentioned in the said agreement. The respondent No. 2 has merely granted certain facilities and amenities to the 3rd respondent for a limited period of time. Under the original agreement the period fixed was two years. It was renewed from time to time. Finally under agreement dated 27th September, 1995 the business centre arrangement has been availed of by the respondent No. 3 for a further period of three years. The respondents have maintained that they have merely permitted the respondent No. 3 to use the business centre facilities started by the respondent No. 2. The respondents have vehemently denied the allegation of the plaintiff that the respondent No. 2 has created a sub tenancy in favour of the respondent No. 3. The respondents contend that they are not parties to the suit and that neither the respondent No. 2 nor the respondent No. 3 can be evicted by taking out a chamber summons in the present suit. The remedy, if any, is to approach the Small Causes Court by filing a substantive suit. If the parties to the suit desire, the Receiver can take steps for filing a suit under the Bombay Rent Act on the ground of alleged sub-tenancy but the respondent No. 2 cannot be evicted from the premises in a summary fashion without recourse to the provisions of the Bombay Rent Act.
5. Mr. Sathe, learned Counsel for the applicants/defendants and Mr. Kapadia, learned Counsel for the plaintiff submit that the Receiver has been appointed in respect of the disputed building Shreeniketan because the Court felt it expedient to preserve the property in dispute by getting such property supervised and administered by its own officer, the Receiver. When the property is custodia legis, the Court is not only competent to issue necessary orders and directions on its officer, the Receiver, for proper preservation and maintenance of such property but in a way, the Court is under the obligation to issue appropriate orders and directions for effecting such maintenance and preservation. The learned Counsel submit that a tenant should not be allowed to indulge in activities which will materially affect the nature and character of the tenanted premises and is likely to bring about a situation by which the parties will not get anything in their suit if the tenancies are allowed to change hands in this fashion. The learned Counsel urged that the so called business centre arrangement is only a camouflage to hide the real transaction of sub-letting. Such action being per se illegal and beyond the usual rights of a lessee vis-a-vis the lessor, the lessor or the landlord has not only right to prevent such activities but has also right to take recourse to eviction of the lessee or tenant by bringing an action for eviction in accordance with the provisions of the relevant Act. It is contended that the action of the respondent No. 2 in inducting the respondent No. 3 clearly amounts to sub-letting and in any case it would amount to a transfer of the tenancy rights as provided u/s 13(1)(e) of the Bombay Rent Act. The learned Counsel submit that having regard to the fact that new parties are being inducted despite the appointment of Receiver, same should be treated as a serious interference with the possession of the Court and, therefore, an order for dispossession must be passed in order to preserve and protect the property. My attention was drawn to observations made by Justice Variava that the business centre is many a time used as a devise for creating unlawful sub-tenancies. It was further submitted that even assuming that the business centre run by the respondent No. 2 is genuine business centre and not merely an eyewash, even then the induction of the respondent No. 3, without the leave of the Court, must be treated as and when the property is in custody of the Court. It is urged that before starting such business centre, leave of the Court was necessary. In that connection my attention was drawn to the decision of the Supreme Court in
6. Mr. Subramaniam appearing for the respondents Nos. 1 and 2 and Mr. Presswala for the respondent No. 3 vehemently oppose the chamber summons on the ground that such a chamber summons is not maintainable in law. In that regard they place heavy reliance on Anthony Leo''s case (supra). The learned Counsel submit that the chamber summons is filed on a false premise. In the first place there is no sub-lease by the respondent No. 1 to the respondent No. 2. They are not separate entities but only there is a change in the nomenclature. The counsel further submit that the respondent No. 3 is not a sub-tenant or a licensee. In fact the respondent No. 3 is not put in possession of the premises. The respondent No. 3 is only availing of the facilities of the business centre started by the respondent No. 2. The learned Counsel submit that in any event the chamber summons is misconceived since the remedy is to file a suit for eviction before the Small Causes Court, as prescribed by Section 28 of the Bombay Rent Act. The question whether the respondent No. 3 is an unlawful transferee is required to be adjudicated only in a suit instituted against the tenant where such dispute can be resolved on the basis of evidence to be adduced by the respective parties. The learned Counsel argued that Section 28 of the Act clearly bars jurisdiction of other Courts in entertaining a claim for eviction. Therefore, it is not open for the landlord to seek eviction by this summary method particularly when the tenant is not even a party to the original suit. The learned Counsel argued that the Receiver has been appointed only for the limited purpose of collecting rent and the other income and for disbursing the municipal taxes and other outgoings. The Receiver who merely holds de jure possession of the property for the benefit of the parties to the suit without the property being vested in the Receiver, has no rights higher than the landlords themselves. If suit is not filed and Receiver was not appointed, the remedy of the landlord was to file a suit against the tenant in the Court of Small Causes being the appropriate Court u/s 28 of the Act. Such position is not changed by mere appointment of a Court Receiver in a suit inter se the landlords for division of properties in which the tenant is not a party. In a suit inter se between the co-owners for partition of the property in which the tenant is neither necessary nor even a proper party, the learned Counsel submitted that such course of action should not be permitted as it would encourage the landlord to file collusive suits amongst themselves and then with the instrumentality of the Receiver the tenants on the property would be evicted in complete disregard of the statutory protection of the right of the tenant under the Rent Act.
7. After hearing learned Counsel for the parties I am of the view that the present chamber summons is not maintainable in view of the law laid down by the Supreme Court in Anthony Leo''s case. In order to appreciate the ratio of the Supreme Court decision it will be necessary to note briefly the circumstances in Anthony Leo''s case.
Mr. Anthony Leo claimed to be a tenant of a building known as Khanna Construction House which belonged to a partnership firm M/s Khanna Construction House. He was carrying his business in the rented premises named and styled as Flora Chinese Restaurant. In view of disputes arising between the partners of M/s Khanna Construction House, one of the partners filed a suit in the ordinary original civil jurisdiction of the Bombay High Court being Suit No. 1010 of 1973 against the other partners for dissolution of the firm and distribution of assets including the building Khanna Construction House. Some time in 1973 this Court appointed a Receiver in the said suit in respect of the assets of the partnership firm including the said building Khanna Construction House. Sometime in March, 1995 the Receiver made a report to the High Court in the pending suit making a complaint against Mr. Leo of constructing lofts and two stand type boxes on the outer wall for storage of gas cylinders and air conditioning units and the Receiver prayed for a direction for removal of the said lofts and the said box type stands. The Receiver submitted a further report alleging that Mr. Leo had a permit room in his restaurant where liquor was being served and such activity was illegal and contrary to the terms of lease granted by the Greater Bombay Municipal Corporation in favour of the landlords prohibiting running a bar in the premises built on the leasehold land. The Receiver sought a direction from this Court against Mr. Leo for stopping the said illegal activity of using the premises as a permit room and serving liquor in a room in the said restaurant. Mr. Leo contended that he was carrying on the activity of having a permit room and serving liquor to customers since several years after the lifting of the prohibition policy in the State of Maharashtra. Mr. Leo also contended that he had obtained licence for such permit room and service of liquor in the restaurant. He also contended that the Corporation is agreeable to allow service of liquor and running a permit room in the leasehold property on payment of specified sum to the Corporation and that he agreed to pay such amount to the Corporation. The learned single Judge after hearing the parties recorded a finding that Mr. Leo has made unauthorised construction of the said lofts and box type stands on the outer wall and had also been using a portion of the tenanted premises as a permit room and has been serving liquors to the customers in such portion, when under the terms of lease granted by Greater Bombay Municipal Corporation to the landlords use of the leasehold property in vending liquors was prohibited, and by such action of Mr. Leo, the lease in favour of the landlords was liable to be cancelled. The learned single Judge also directed that the concerned authorities would not renew the permit of Mr. Leo for serving liquor. In that view of the matter, the learned single Judge directed demolition of the unauthorised construction and further restrained Mr. Leo from conducting the permit room with a further direction to the Corporation not to renew the liquor licence. An appeal against the decision of the learned single Judge was dismissed summarily by the Division Bench.
8. Even a cursory glance to the decision of the Supreme Court would show that the main controversy raised before the Supreme Court was similar to the present case although the factual position was somewhat different. In paragraph 28 of the judgment, the Supreme Court made a clear distinction between the case where the Receiver takes actual possession and a case where the Receiver is not in actual physical possession of the property. The Supreme Court observed that a Receiver is appointed by the Court when it entertains a view that for preservation of the properties in the suit, till the rights of the parties to the suit are finally adjudicated, such properties should be preserved by exercising control and supervision of the same through the officer of the Court, the Receiver. The Court becomes custodia legis of the properties in suit in respect of which Receiver is appointed. Such de jure possession of the Court through its Receiver, however, does not bring about vesting of the properties in the Receiver or in Court free from encumbrances even pendent lite. Despite appointment of a Receiver, rights and obligations of third parties in respect of properties in custodia legis remain unaffected. Where a Receiver appointed by the Court is in actual physical possession of a property, no one, whoever he may be, can disturb the possession of the Receiver and the Court may hold such person who disturbs the Receiver''s possession as guilty for committing contempt of Court. A man, who thinks he has a right paramount to that of Receiver, must, before he takes any step of his own motion, apply to the Court for leave to assert his right. Grant of leave in such case is the rule and refusal to grant leave is exception. After referring to the decision in Everest Coal Company (supra) the Supreme Court observed that the rule that Receiver''s possession will not be disturbed without the leave of the Court is, however, not applicable if the Receiver is not in actual possession of the property. Then the Supreme Court made a reference to Sub-rule (2) of Rule 1 of Order 40 of the CPC which provides: "Nothing in this rule shall authorise the Court to remove from possession or custody of property any person whom any party to the suit has not a present right to remove." Then the Supreme Court proceeded to observe that even if the Receiver is appointed, the inter se rights and obligation of the landlord and the tenant will continue to be regulated by the rent statute. Therefore, no order for eviction of the tenant can be passed by the Court at the instance of the Receiver without taking recourse to appropriate proceedings for eviction against the tenant under the appropriate statute regulating and governing inter se the rights of the landlord and the tenant. It will be useful to reproduce paragraph 31 of the decision of the Supreme Court which reads as follows:
31. Where a Rent Act is applicable, the inter se rights and obligations of the landlord and tenant are regulated and controlled by such Rent Act. In areas where any special law governing the incidences of tenancy is not applicable, the law relating to lessor and lessee as envisaged by the general law of the land, namely, Transfer of Property Act, will regulate and determine inter se rights and obligations which a third party may have in respect of a property in which a receiver has been appointed, the receiver, like a party to the suit, will have same limitation. The receiver will be bound by the incidences of tenancy flowing from the statute regulating and determining inter se rights of landlord and tenant. Therefore, there is no manner of doubt that no order for eviction of the tenant can be passed by the Court at the instance of its officer, the receiver, without taking recourse to appropriate proceedings for eviction of the tenant under the appropriate statute regulating and governing the inter se rights of landlord and tenant. It may also be emphasised here that even apart from an eviction proceeding, any incidence of tenancy which is regulated and controlled by a special statute cannot be altered, varied or interfered with except in accordance with the provisions of such statute. The Court in such cases has no Jurisdiction to pass orders and directions affecting the right of the tenant protected, controlled or regulated by the Rent Act on the score of expediency in passing some order or direction for the maintenance and preservation of the property in custodia legis.
9. The Supreme Court, however, carved out an exception to the rule laid down in the aforesaid paragraph. The Supreme Court observed that a tenant cannot claim protection of any assumed right not flowing from the incidences of tenancy. In that regard the Supreme Court gave an example of the tenant - who is causing damage to the property by making some unauthorised construction in the tenanted premises. The Supreme Court held that in such a situation the action of the tenant is obstructing the Court''s overall supervision and concern for preserving or maintaining the property in custodia legis and, therefore, the Court would be justified in taking action against the tenant. The following observations of the Supreme Court in that connection may be reproduced below.
32. It is to be indicated that though a tenant of a property in custodia legis cannot be deprived of statutory protection of the rights of tenant vis-a-vis landlord, a tenant cannot claim protection of any assumed right not flowing from the incidences of tenancy. For example, if a tenant starts making some unauthorised construction in the tenanted premises threatening safely and security of the tenanted premises or of the building as a whole, the landlord can certainly prevent such activities by the tenant by bringing appropriate action in Court seeking prohibitory and mandatory order against the tenant without seeking his eviction. Such right of the landlord must be held to be in addition to his right to seek eviction under the appropriate tenancy law, if permitted."
33. In our view, if a tenant resorts to unauthorised and illegal activity in respect of tenanted premises when such premises is in custodia legis. for prevention of such illegal and unauthorised activities not consistent with any right flowing from the incidence of his tenancy, it may not be necessary to institute a suit for preventing the tenant from such illegal activities; but the Court, being apprised by the receiver of such illegal activities of a tenant, thereby obstructing the Court''s overall supervision and concern for preserving or maintaining the property in custodia legis, will be within its right to pass suitable order or direction against the tenant for prevention of illegal and unauthorised activities after giving the tenant reasonable opportunity to place his defences against allegation of unlawful and illegal activity. What should be the reasonable opportunity, must depend on the facts of each case. The Court, in such a case, should ensure broadly that the tenant is not deprived of the reasonable opportunity to which he would have been entitled if an action against him in a Court of law had been brought on such complaint.
10. But again the Supreme Court cautioned the Courts in dealing with the allegation of unauthorised and illegal activities of a tenant. The Supreme Court observed that if in deciding such an issue it becomes necessary to record a finding affecting the right of the tenant under the statute, the Court should avoid such determination in summary proceedings. This is clear from the following observations made in paragraph- 34:
34. It appears to us that since the Court must be presumed to be fully unbiased in deciding the allegation of unauthorised and illegal activities of a tenant causing prejudice against the lawful owner in the matter of preservation and maintenance of the property pendente lite, the necessity of adjudication of such dispute by another Court by bringing a legal action before it, as a matter of course, is neither necessary nor expedient. It, however, should be made clear that if for the purpose of deciding the dispute of unauthorised and illegal activity affecting maintenance and preservation Of the property in custodia legis it becomes necessary to determine any right claimed under a statute or flowing from some action inter parte as may be pleaded and required to be decided, it is only desirable that the Court would refrain from such determination in the summary proceeding initiated before it on the complaint of the receiver or a party to the suit and the Court will direct the receiver to seek adjudication of the dispute before a competent Court by bringing appropriate legal action. Save as aforesaid, it will not be correct to contend that in no case the Court exercising control and supervision of the property in suit by appointing a receiver will be incompetent even to pass direction against a third party for the purpose of preservation of the property, once such third party pleads defence in justification of his action. The question of summary adjudication by the Court appointing the receiver or relegating the receiver to a regular suit for adjudication of the dispute concerning third party will depend on the nature of dispute and the defence claimed by the third party.
11. Finally in paragraph 36, the Supreme Court observed as follows:
36. The appellant has also claimed right to operate in a portion of the tenanted premises a permit room for serving liquor to the customers of the hotel after obtaining licence from the statutory authority on the footing that such right is incidental and. ancillary to his right to operate an eating house or restaurant. Such contentions should not be decided in a summary proceeding to dispose of reports of the receiver or a complaint by a party to the suit about alleged illegal activities by a tenant in a property in suit. Any summary disposal of such dispute on the claim of some legal right by the tenant is likely to seriously affect the tenant, because once some constructions in the tenanted premises are removed on a finding that such constructions were made illegally and unauthorisedly by the tenant, the tenant not only suffers the said direction of removal at present but becomes liable to be evicted from the suit premises for such unauthorised construction by him. Similarly, the finding against the tenant on the question of running a permit room cannot but seriously affect the tenant''s right to operate a permit room and is also likely to expose him to the risk of being evicted from the suit premises.
12. Let us consider the facts of the present case in the light of the law laid down by the Supreme Court in Anthony Leo''s case. The present suit is a suit inter se between the co-owners of the property for partition and possession. This Court has appointed Receiver in 1978 for the limited purpose of collecting rent and other income from the property and disbursing the municipal taxes and other outgoings. In pursuance of this order the Receiver has taken only formal possession and is recovering rent and other income and also discharging the taxes and other liabilities in respect of the properties. There is no dispute that the respondent No. 1 is a tenant of the 6th floor premises. The respondent No. 1 is not a party to the suit. During the pendency of the suit the respondent No. 1 is reconstituted as the respondent No. 2 and according to the respondents from 1989 the company is conducting a business centre in the premises. According to the respondents Nos. 1 and 2 this is a perfectly legitimate activity and no provision of the Rent Act is breached by them. On the other hand, the defendants and the plaintiff claim that this is a sub-letting and in any event it amounts to unlawful transfer of the tenancy rights within the meaning of Section 13(1)(e). In such a situation prior leave of the Court is necessary otherwise it would amount to interfering with the possession of the Court. If stern action is not taken in such cases, the very object of preservation of the property would be frustrated as at the conclusion of the litigation the parties would be deprived of its right even if the suit is decreed. Undoubtedly, u/s 15 of the Bombay Rent Act creation of sub-lease is prohibited. Section 13(1)(e) then provides a ground for eviction if the tenant has unlawfully transferred, assigned or sub-let the premises. But the Rent Act also provides a machinery for adjudication of the inter se dispute between the landlord and the tenant. The tenant is not liable to be evicted unless a ground under the Act is established before the appropriate forum. In the present case which arose in the City of Bombay, the appropriate forum is the Small Causes Court. This position is not changed merely because the Court has appointed a Receiver in respect of the property for overall supervision of the property. There is a serious dispute between the parties whether conducting of business centre would amount lo sub-letting in the facts and circumstances of the case. The respondents say that the respondent No. 2 is merely running a business centre where the respondent No. 3 is recipient of certain services. The possession continues and is with the respondent No. 2 and, therefore, any question of sub-lease or transfer of tenancy rights will not arise. On the other hand, the landlords claim that the so called business centre is a sham and bogus agreement and the real intention is to create a sub-lease. This controversy will have to be resolved before the appropriate forum u/s 28 of the Rent Act. The said section confers exclusive jurisdiction on the Small Causes Court. In these circumstances, it would not be proper for this Court to determine the dispute in a chamber summons. Moreover, any finding recorded by this Court in that behalf would directly affect the tenant''s right under the Bombay Rent Act. Such a finding would certainly entail eviction of the tenant. Therefore, the proper course is to file a suit in the Small Causes Court.
13. Mr. Kapadia tried to overcome these legal hurdles by raising a two-fold argument. Firstly, he argued that it is not necessary for this Court to decide the question whether there is actually sub-letting or transfer of tenancy rights. He urged that even in cases where only formal possession is taken, the tenant is duty bound to ask for appropriate leave before conducting any activity like a business centre whereby 3rd parties are brought on the premises. Since the respondents Nos. 1 and 2 have not obtained such a leave, the respondent No. 3 must be evicted. I am afraid that the argument of Mr. Kapadia cannot be entertained in view of the clear observation of the Supreme Court in paragraph 28. The Supreme Court categorically observed that the question of obtaining such leave would not arise where the Receiver has not taken actual possession. The second limb of the argument of Mr. Kapadia is that this Court can record evidence for ascertaining whether the transaction between the respondents Nos. 2 and 3 is a bona fide transaction of a business centre or a sub-lease or transfer under the garb of business centre. Mr. Kapadia says that this Court can record such finding for a limited purpose to find out whether the respondent No. 3 is a lawful occupant or not and if he is found to be an unlawful occupant, he should be removed from the premises and such finding will not prevent the tenant from raising appropriate defence in an eviction suit filed by the landlord. It is not possible to accede to the submission of Mr. Kapadia. If this Court records a finding that the business centre is a camouflage and the respondent No. 3 is actually an unlawful sub-tenant or a trespasser, this would clearly affect the tenant''s right. Surely such course is not permissible in view of the decision in Anthony Leo''s case. I hasten to add that there may be cases where such action would be necessary. Their Lordships of the Supreme Court have just given one example where the action of the tenant is likely to endanger the safety of the premises. But there might be other situations where interference by the Court would become necessary. Suffice it to say that the present case is not one of that type. Chamber summons is, therefore, liable to be dismissed and is accordingly dismissed. No order as to costs.
Ad interim reliefs granted on 11th April, 1996 to continue for a period of six weeks.
