Thanka v. Balarama Iyer — 1968 DIGILAW 258 (KER)

JUDGMENT T.S. Krishnamoorthy Iyer, J. 1. These Second Appeals arise out of O.S. 530 and O.S. 532 of 1962 on the file of the Munsiff's Court, Chittoor. The receiver appointed in O.S. No. 59 of 1957 on the file of the Sub Court, Palghat in respect of the C schedule properties therein is the plaintiff in both the suits. O.S. 59 of 1957 was filed in the Trichur District Court as O.S. 87 of 1117 for partition and it was transferred to the Sub Court, Palghat. The final decree proceedings in the partition suit are still pending. 2. The plaintiff's brother was first appointed receiver in respect of the C schedule properties in the partition suit. The properties which are the subject matter of the suits giving rise to the Second Appeals are comprised in the C schedule in the partition suit. The plaintiff's brother when he was the receiver leased the plaint properties. in the two suits to the 1st defendant in O.S. 530 of 1962 who is the sole defendant in O.S. 532 of 1962. Ext. P-5 is the lease deed in respect of the properties in O.S. No. 530 of 1962 and Ext. P-15 is the lease deed in respect of the properties in O.S. 532 of 1962 in favour of the receiver After the death of the plaintiff's brother the plaintiff was appointed receiver. The suits are instituted by the plaintiff for recovery of possession of the plaint properties. 3. The only contention of the appellants is that they are entitled to the benefit of the Kerala Land Reforms Act, 1963 (Act 1 of 1964) and the decrees for recovery of possession of the properties have to be vacated. The courts below overruled the plea mainly on the ground that a lessee under a receiver appointed under O.40 R.1 C.P.C. is not entitled to claim fixity of tenure. 4. The point raised on behalf of the appellants is concluded by a decision of a Division Bench of this Court in Jacob v. Subramania Iyer ( 1960 KLT 68 ) The question considered in that case was whether a lessee holding under a receiver appointed by a court under O.40 R.1 C.P.C. pending suit can be evicted in view of S.4 of the Kerala Stay of Eviction Proceedings Act, 1957. Velu Pillai, J., speaking for the court observed: "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 of 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 circumstance 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 S.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 appear 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." The above observations have been quoted with approval in Ramaya Naidu v. Chilakayya (1960 KLT 66), in repelling the claim of a tenant under a receiver appointed by court for protection under S.5 of the Orissa Tenants Protection Act 3 of 1948. 5. The submission of the learned counsel for the appellants was that the decision in Jacob v. Subramania Iyer (1960 KLT 66) requires reconsideration and therefore the second appeals have to be referred to a Division Bench. I have heard the counsel on both sides in extenso and T am satisfied that it is not necessary to accede to the request of the appellant's counsel. 6. I have heard the counsel on both sides in extenso and T am satisfied that it is not necessary to accede to the request of the appellant's counsel. 6. The learned counsel for the respondents submitted that in these appeals it is unnecessary to decide about the correctness of the decision in Jacob v. Subramania Iyer (1960 KLT 66), because the receiver who granted the lease was not expressly authorised by the terms of the order of appointment and since he did not take the permission of the court, the appellants cannot be considered to be lessees. The order appointing the plaintiff's brother as receiver was directed to be produced by me in the course of the hearing of the Second Appeals and it was produced along with C.M.P. 9643 of 1968. Since the document is necessary for a proper disposal of the Second Appeal I have admitted the same in evidence. It is marked Ext. P-17. The said order is in these terms: "You are hereby appointed receiver of the properties shown in C schedule prepared by commissioner advocate Sri C. Narayana Menon except the property called m¡a{6af and directed to take possession and enter on management. You are to be in possession of the said property pending adjustment in the final decree and without liability to account and you are to appropriate the income of the properties unconditionally and irrespective of yield in lieu of current mesne profits due to your branch i.e., defendants 4 to 9, Each of the sharers will be responsible for a quarter of the land tax of the properties. The Neervarom charges (to be paid hereafter) in respect of the properties will be an item of accounting. You are not entitled to any remuneration. In matters not specified in this order, you are to take instructions from court and act accordingly. In the above order no express authority was conferred on the receiver to grant leases of me properties. On the other hand, there is an express direction that the receiver should be in possession of the properties and it is also provided in the order that in respect of the matters not specifically mentioned, orders of the court have to be obtained. On the other hand, there is an express direction that the receiver should be in possession of the properties and it is also provided in the order that in respect of the matters not specifically mentioned, orders of the court have to be obtained. A conferment of power to grant leases is necessary under O.40 R.1(d) of the C.P.C. Not only there was no such power but the receiver did not take the permission of the court also to grant the leases. Ext. P-5 Ext. P-15 are therefore not valid and binding on the plaintiff. The appellants therefore cannot even claim to be the lessees under the receiver appointed under O.40 R.1 C.P.C. Kerr in his book on the law and practice as to Receivers (13th Edition) has observed at page 185 thus: "If a receiver himself grants a lease without sanction, as between him and the person who takes the lease, the lease will be binding by estoppel. As between the lessee, however, and the owner of the legal estate, the lease has, in the absence of special circumstances, no binding force, even though it may have been made with the sanction of the Judge. The powers of the receiver are limited to receiving proposals and making arrangements as to the leasing of the property over which he has been appointed receiver. He has no power by a lease made in his own name to transfer the legal estate in the property, nor can such a power be given to him by the judge. If so it is unnecessary to consider whether the lessee of a receiver appointed by court under O.40 C.P.C. is entitled to claim protection under Act 1 of 1964. 7. Even if it is found that the receiver was competent to grant the leases since a receiver appointed under O.40 C.P.C. is not a person having any interest in the land leased, the said lessee cannot be a tenant as defined in S.2(57) of Act 1 of 1964. In Kanhaivalal v. Dr. D. R. Banaji ( AIR 1958 SC 725 ), Their Lordships of the Supreme Court observed: "A Receiver appointed under Or. 40 of the Code of Civil Procedure, unlike a Receiver appointed under the Insolvency Act, does not own the property or hold any interest therein by virtue of a title. In Kanhaivalal v. Dr. D. R. Banaji ( AIR 1958 SC 725 ), Their Lordships of the Supreme Court observed: "A Receiver appointed under Or. 40 of the Code of Civil Procedure, unlike a Receiver appointed under the Insolvency Act, does not own the property or hold any interest therein by virtue of a title. He is only the agent of the court for the safe custody and management of the property during the time that the court exercises jurisdiction over the litigation in respect of the property." 8. No property is therefore vested in the receiver appointed by the court under the Civil Procedure Code. The title to the property is in no way prejudiced in theory or principle by the appointment of receiver and remains in those in whom it was vested when the appointment was made. A receiver appointed under the Civil Procedure Code is different from a receiver in whom the properties vest on the making of an order of adjudication under the Insolvency Act. It is the official receiver alone who can legally deal with the properties of the insolvent after adjudication. The insolvent ceases to have any right title or interest in the properties vested in the receiver. The true position of a receiver in possession of the property which is the subject matter of litigation was considered in Harihar Mukerji v. Harendra Nath Mukerji (ILR 37 Calcutta 754) and D. Narain Roy v. Joges De (AIR 1924 Calcutta 600). In the former case Mookerjee and Carnduff, JJ., observed: "It is well settled that a Receiver by his appointment does not become the representative of the parties, but is an officer and representative of the Court which appoints him. The effect of the appointment of a Receiver is to bring the subject matter of the litigation in custodia legis, and the Court can effectively manage the property only through its officer, who is the Receiver. The effect of the appointment of a Receiver is to bring the subject matter of the litigation in custodia legis, and the Court can effectively manage the property only through its officer, who is the Receiver. In other words, the Receiver ordinarily is not the representative or agent of either party in the administration of the trust, but his appointment is for the benefit of all parties, and he holds the property for the benefit of those ultimately found to be the rightful owners:" And in the latter case Mookerjee, J., expounded the principle in the following words: "When the Court has appointed a receiver and the receiver is in possession, his possession is the possession of the Court by its receiver is the possession of all parties to the action according to their titles: Re Butler 1863 (13) Tr. Ch. R.456, Bertrand v. Davies 1862 (31) Beav. 429, Moir v. Blacker 1890 (26) LR Ir. 375: Re Ind Coone & Co. 1911 (2) Ch. 223. Ch. R.456, Bertrand v. Davies 1862 (31) Beav. 429, Moir v. Blacker 1890 (26) LR Ir. 375: Re Ind Coone & Co. 1911 (2) Ch. 223. The property passes into legal custody as the receiver is in the position of stakeholder and such custody is for the benefit of the true owner," The nature and quality of the possession of a Receiver appointed under the Civil Procedure Code is stated by Sir John Woodroffe in his book on the Law Relating to Receivers (Page 63 - 6th Edition) thus: "The receiver being the officer of the Court from which he derives his appointment, his possession is exclusively the possession of the Court, the property being regarded as in the custody of the law, in gremio legis for the benefit of whoever may be ultimately determined to be entitled thereto." Jagannadhadas, J., pointed out in P. Lakshmi Reddy v. L. Lakshmi Reddy: ( AIR 1957 SC 314 ) "A Receiver is an officer of the Court and is not a particular agent of any party to the suit notwithstanding that in law his possession is ultimately treated as possession of the successful party on the termination of the suit." Section 13 of the Land Reforms Act 1963 provides that "notwithstanding anything to the contrary contained in any law, custom, usage or contract, or in any decree or order of court, every tenant shall have fixity of tenure in respect of his holding, and no land from the holding shall be resumed except as provided in S.14 to 22." S.2, sub-s.(57) of the Land Reforms Act 1963 defined "tenant" thus: "'tenant' means any person who has paid or has agreed to pay rent or other consideration, for his being allowed by another to possess and to enjoy the land of the latter", and includes - the classes of persons referred to in sub clauses (a) to (j) therein. 9. It is not necessary to reproduce these clauses. The above provision makes it clear that a tenant to satisfy the above definition should be a person who has contracted to pay rent to a person to enjoy the land of such person. It is only against such a person that the tenant can claim fixity of tenure. 9. It is not necessary to reproduce these clauses. The above provision makes it clear that a tenant to satisfy the above definition should be a person who has contracted to pay rent to a person to enjoy the land of such person. It is only against such a person that the tenant can claim fixity of tenure. The words 'for his being allowed by another to possess and to enjoy the land of the latter' occurring in S.13 of Act 1 of 1964 are very significant and should not be overlooked. A tenant under a Receiver cannot therefore be brought in under S.2(57) of Act 1 of 1964. 10. In my view, S.3 clause (iv) of Act 1 of 1964 places the position beyond any doubt. The said provision reads thus: "3. Exemptions: (1) Nothing in this chapter shall apply to:- (iv) tenancies of land or of buildings or of both created by the Administrator General or the Official Trustee or an Official Receiver or officer appointed by a court under the provisions of any law, or by the court of wards, or by any person holding under, or deriving title from any of the officers or the court aforesaid: Provided that the provisions of this clause shall cease to apply to any tenancy created by the court of wards, where the landlord on whose behalf the tenancy was created does not terminate the tenancy by registered notice within a period of six months from the date on which the property was released from the superintendence of the court of wards." 11. The words "Officer appointed by a court under the provisions of any law etc." in the above sub clause will take in a receiver appointed under O.40 R.1 C.P.C as well. 12. But the learned counsel for the appellant pointed out that the omission of these words in S.3 of Act 9 of 1967 will show that the legislature intended to confer the benefit of S.4 and 5 of Act 9 of 1967 on tenants holding under Receiver appointed under the Code also. A similar contention based on the difference in language in S.3 (6) of the Kerala Eviction Proceedings Ordinance 1957 and S.3(6) of the Kerala Stay of Eviction Proceedings Act 1 of 1957 was advanced in the decision in Jacob v. Subramania Iyer ( 1960 KLT 68 ) already cited. A similar contention based on the difference in language in S.3 (6) of the Kerala Eviction Proceedings Ordinance 1957 and S.3(6) of the Kerala Stay of Eviction Proceedings Act 1 of 1957 was advanced in the decision in Jacob v. Subramania Iyer ( 1960 KLT 68 ) already cited. Their Lordships in overruling the contention observed: "We are free to admit, that the argument is plausible, but must say, 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 'Official Receiver' appointed by Government under S.59(1) of the Travancore Cochin Insolvency Act, 1955. The provisions of that Act are clear, that a receiver, not necessarily an official Receiver, can be appointed by court, in whom property will vest under the law of insolvency. S.59(1) itself makes provision, that only 'such persons as they (Government) think fit' may be appointed official Receivers, implying that there can be receivers outside that category. S.59(2) specially empowers the court to appoint any one other than an official Receiver, to be a Receiver or an interim receiver. S.58 makes elaborate provisions for the appointment of receivers in general, for requiring them to furnish security, and for the manner in which they shall exercise their functions. S.60 contemplates a case, where the court itself shall have all the rights, and may exercise all the powers of the receiver and under S.78(ii) the court itself is constituted a receiver. It is impossible to hold that such receivers who are not official Receivers, were left out of the Scope of S.3(h) of the Act. If this is so, the necessary foundation for the argument is lacking; there is neither 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 terms was given a wider connotation by the Act. We therefore consider, that the argument is not conclusive." 13. With great respect I agree with the above reasoning which should apply in this case also. Even if the term Official Receiver in S.3 of Act 9 of 1967 is referable to Official Receiver appointed under S.59(1) of the Insolvency Act, it cannot help the appellants. We therefore consider, that the argument is not conclusive." 13. With great respect I agree with the above reasoning which should apply in this case also. Even if the term Official Receiver in S.3 of Act 9 of 1967 is referable to Official Receiver appointed under S.59(1) of the Insolvency Act, it cannot help the appellants. In my view leases by Receivers appointed by the Code are not specifically exempted by Act 9 of 1967 because tenants of such Receivers do not satisfy the requirements of S.2(57) of Act 1 of 1964. If the contention of the appellants is upheld it will lead to the anomaly that while lessees of Receivers appointed under the Code who have no right or interest in the property leased are entitled to fixity of tenure while lessees from persons mentioned in S.3(b) of Act 9 of 1967 who have got an interest in the property leased will not be entitled to the benefits under Act 1 of 1964. It is not possible to attribute such an intent to the legislature. The reasonable inference is to hold that non inclusion of tenants G of lands from Receivers under the Civil Procedure Code in S.3 of Act 9 of 1967 is because they are not taken in by S.2(57) of Act 1 of 1964. S.2 of Act 9 of 1967 adopts the definition of 'tenant' in S.2(57) in Act 1 of 1964 for the purpose of the former enactment. If so, the tenant of a Receiver being a tenant not from a person who is the owner of the land or has any interest in the land, is not a tenant within the meaning of Act 9 of 1967 as well and it is therefore not necessary to include him in S.3 of Act 9 of 1967. The exemption provisions in an Act cannot be made use of to enlarge its scope. 14. In confirmation of the judgments and decrees of the courts below, the Second Appeals are dismissed with costs.