MOOKHERJEE, J. ( 1 ) THIS Rule is directed against an order dated April 16, 1962, of the learned Subordinate Judge, First Court at Alipore, in connection with a Receiver matter in a partition suit. ( 2 ) THE petitioner instituted the instant suit for partition and accounts against the opposite parties 1 to 9 as Defendant Nos. 1 to 9. The properties in suit comprised premises Nos. 95 and 101, Alipore Road within the municipality of Calcutta and No. 2, Kings Road within the town of Howrah. Premises No. 95, Alipore Road consisted of a low tank-filled vacant land. Premises No. 101 comprised of two dilapidated buildings, one to the north of the other. The southern building was in the occupation of a tenant, paying Rs. 43 per month as rent. A portion of the northern building, which was in a dilapidated condition, was demolished by the Calcutta Corporation and the rest of it was in the wrongful occupation of some refugees. The Howrah property was entirely tenanted and fetched a rental of Rs. 500 per month. The plaintiff, that is to say the present petitioner, claimed two-third share in the suit properties, and on his prayer the Court appointed a Receiver of those properties. ( 3 ) ON December 16, 1960, the Receiver applied to the Court for permission to lease out premises No. 95, Alipore Road and a portion of premises No. 101, Alipore Road, viz. , the portion lying vacant after the demolition of the structures standing thereon on the ground that the existing income from those properties was very meager and quite insufficient to meet the dues of the Calcutta Corporation amounting to about Rs. 1,000. On December 19, 1960, the plaintiff and the Defendant No. 1 prayed for time to file objection to the Receiver's proposal. Time was granted till January 2, 1961, for that purpose. On that day the plaintiff filed his objection, but the Defendant No. 1 prayed for further time to file their objection. The petitions were ordered to be put up on January 5, 1961, which had already been fixed as the date for the hearing of the suit itself. On this latter date two orders were passed by the Court. By the first order the hearing of the suit was adjourned to January 19, 1961, on the prayer of the plaintiff.
The petitions were ordered to be put up on January 5, 1961, which had already been fixed as the date for the hearing of the suit itself. On this latter date two orders were passed by the Court. By the first order the hearing of the suit was adjourned to January 19, 1961, on the prayer of the plaintiff. The second order, which is relevant for our present purpose, written statement in these terms: defendant Nos. 4 to 9 file objection against the leasing out of the Alipore properties by the Receiver. The Defendant No. 1's petition for time is put up for orders. Defendant No. 1 to file objection against the Receiver's report. No costs of the petition. Heard the Receiver and the Defendant No. 1's lawyer. Defendant No. 1's lawyer has no objection to the lease proposed by the Receiver. Hence, the petition for time for filing objection is permitted to lease out the property on the terms as proposed. ( 4 ) ON January 19, 1961, the suit could not be heard and it has not yet been heard for various reasons which need not be stated here. On January 25, 1961, the plaintiff filed a petition praying for reconsideration and stay of operation of the Court's order dated January 5, 1961, permitting the Receiver to lease out the Alipore properties. This petition was ordered to be put up in the presence of the lawyers of all the parties on January 27 following. On that day the Receiver reported that he had already executed a lease in favour of one Ashalata Dass Sarma, who is the Opp. Party No. 11 in the present Rule. The Court expressed surprise as to how the Receiver could execute the lease without getting the draft approved by it and directed the Receiver to report the terms and condition on which the lease had been granted. On February 15, 1961, the Receiver disclosed that the entire premises No. 95, Alipore Road and the northern portion of the premises No. 101, Alipore Road, which were vacant lands, were let out for a term of twenty years with an option of renewal for a further term of twenty years, for a salami of Rs. 1,000 and at a rental of Rs. 125 per month. Thereafter, on March 14, 1961, the plaintiff filed a petition praying for the setting aside of the said lease.
1,000 and at a rental of Rs. 125 per month. Thereafter, on March 14, 1961, the plaintiff filed a petition praying for the setting aside of the said lease. The Defendant Nos. 4 to 9 also joined in this prayer of the plaintiff. ( 5 ) AFTER hearing the objections of the plaintiff and the Defendant Nos. 4 to 9, the Court condemned the action of the Receiver and removed him from his office but refused to set aside the lease holding as follows: no summary order can be passed to set aside or cancel a lease already executed and granted by the Receiver. The proper remedy of the aggrieved parties is to institute a regular suit to set aside the lease against the Receiver and also the lessee if the aggrieved parties think that the lease had been hurled through by the Receiver in collusion with the lessee. The lessee is a third party now in possession. As the matter has gone beyond the stage of controlling the action of the Receiver no relief could be given to the plaintiff and the Defendant Nos. 4 to 9 on their prayer to direct the Receiver to stay his hand in the matter of granting a lease because the Receiver has already done so, which is complained of, and already conveyed the property into the hands of the lessee, a third party, and the Receiver is armed with some sort of an order empowering him to grant the lease. Although I feed inclined to stay that the Receiver's action could not be justified yet no relief could be given to the aggrieved parties except by censuring the Receiver for his indiscreet act or considering whether or not to remove him from the position he now holds. ( 6 ) THE lease, as has been seen, has been granted for a period of twenty years with an option of renewal on the part of the lessee for a further term of twenty years. It is doubtful if the owners would be able to evict the tenant and get back possession of the lands even after forty years, for the tenancy created is a thika one. The properties in question are very valuable Calcutta Properties and if the lease stands, they would be practically lost forever to the owners. The premium for the lessee was a nominal one and the rental of Rs.
The properties in question are very valuable Calcutta Properties and if the lease stands, they would be practically lost forever to the owners. The premium for the lessee was a nominal one and the rental of Rs. 125 per month would be a very poor compensation for what the owners would lose. The very object of appointment of a Receiver, which is preservation of the estate pending the litigation, has been frustrated and any decree passed in the suit would now be quite meaningless. ( 7 ) THE lease was no doubt created with the permission of the Court. The order of the Court dated January 5, 1961, quoted earlier, said: the Receiver is permitted to lease out the property on the terms as proposed. But the real fact, unfortunately, was that the terms of proposed lease were not before the Court when it granted the permission. Evidently, the permission was granted under a misapprehension of votes. ( 8 ) THE Court committed another mistake while granting the permission. The plaintiff and one set of defendants had filed objections were pending were completely lost sight of by the Court and they had not at all been considered before granting the permission. ( 9 ) THE question now is whether, in the circumstances, the lease should be set aside as prayed for by the plaintiff petitioner. The lower Court thought that it could not be set aside on an interlocutory petition in the partition proceedings in view of the fact that the lease not being a party to the proceeding was not subject to the Court's jurisdiction. It has held that, once the transaction is completed by the Receiver with the sanction of the Court and some interest is created in favour of a third party, the transaction can be set aside only by a regular suit brought for that purpose. The lower Court while expressing the above view has not referred to any particular authority, but it appears that it relied upon the decision of Woodroffe, J. in (1) Krishna Chandra Ghosh v. Krishna Sakha Ghosh, 12 Calwn 1023. ( 10 ) WHAT happened in the case was this: The Receiver was given liberty from time to time, without further order of the Court, to lease out the suit property for a term not exceeding six years on such terms as to such Receiver might seem reasonable.
( 10 ) WHAT happened in the case was this: The Receiver was given liberty from time to time, without further order of the Court, to lease out the suit property for a term not exceeding six years on such terms as to such Receiver might seem reasonable. Under the above order, the Receiver granted a lease for a term of six years in favour of a certain person who was a party to the suit at a certain rental. Shortly before the expiry of this lease certain other persons, who were also parties to the suit, offered to take lease of the properties for the next term at an enhanced rent. The Receiver, however, notwithstanding the higher offer, granted a fresh lease for a further term of six years to the original party at the old rent. The party that offered the higher rental then moved the Court for striking down the lease as invalid. ( 11 ) UPON the above facts Woodroffe, J. held: i am not asked in this matter to control the action of the Receiver, because the Receiver has already done that which is complained of and conveyed the property into the hands of the lessee, a third party, to whom the Receiver, under the order giving him authority to do so, granted a lease which has been completed and under which possession has been given. Admittedly in this case, the lessee is also a party to the suit; but, although he is subject to the jurisdiction of the Court as a party, he is not subject to its jurisdiction as a lessee. This is not a case in which the matters rests on an agreement, which has not been carried out and in which the Court may interfere to prevent its Receiver from giving effect to the proposed agreement. This is a case in which the matter has passed out of the stage of agreement and has resulted in a conveyance of the property to the lessee. As long as that lease stands, the property must be taken to be in the lessee, and I do not think that I can, on this application, set aside that lease. The course open to the applicant appears tome by proceeding by suit against the Receiver, and also, if it is alleged that the lease was granted and obtained by collusion against the lessee.
The course open to the applicant appears tome by proceeding by suit against the Receiver, and also, if it is alleged that the lease was granted and obtained by collusion against the lessee. ( 12 ) THERE is, however, a later Bench decision of this Court, viz. , (2) Srish Chandra v. Debendra Nath, AIR 1929 Cal 828 in which it has been held that misrepresentation or concealment of material facts by the Receiver, amounting to fraud upon the Court, would be sufficient to justify the Court in setting aside a lease summarily. With respect we agree with this view. ( 13 ) IN Krishna Chandra v. Krishna Sakha (Supra), decided by Woodroffe, J. , the Receiver was given authority to grant lease on any term that might seem reasonable to him. He acted perfectly within the scope of this authority and the only allegation against him was that he had not exercised his discretion properly by not accepting the higher rent offered by the rival party. In the circumstances, there was no question of any fraud being practiced upon the Court. This decision, therefore, does not cover causes where fraud is alleged to have been practiced upon the Court. ( 14 ) THAT was also the view expressed by the Madras High Court in (3) Meyappa v. Nagammai, AIR 1933 Mad 67. There are considered both the Calcutta decisions referred to above, and preferred to follow Srish Chandra v. Debendra Nath (Supra), where fraud was practised upon the Court. ( 15 ) NOW, in the instant case, the Receiver granted the lease without disclosing its terms and conditions to the Court. The lease was virtually a permanent one. Had the Court been aware of the fact that the proposed lease was of that nature, it would certainly not have accorded its sanction to the lease. Non-disclosure of material facts by the Receiver led to an irreparable loss to the estate. This certainly amounted to a fraud upon the Court. Hence, upon the authority of Srish Chadra v. Debendra Nath (Supra), the lease can certainly be set aside in an interlocutory proceeding. ( 16 ) APART from the above consideration there is another ground, equally weighty, for which the lease should be set aside without driving the aggrieved party to a separate suit.
Hence, upon the authority of Srish Chadra v. Debendra Nath (Supra), the lease can certainly be set aside in an interlocutory proceeding. ( 16 ) APART from the above consideration there is another ground, equally weighty, for which the lease should be set aside without driving the aggrieved party to a separate suit. The Court's permission to the Receiver to lease out the suit properties was granted through mistake before the objections of the plaintiff and some of the defendants had been considered. It was the duty of the Court to set things right as soon as the mistake was brought to its notice. To compel the aggrieved party to seek his remedy in a separate suit would amount to penalizing the party for the Court's blunder which would be unfair and unreasonable. ( 17 ) OF course, it goes without saying that no order could be made affecting the interest of the lessee, who was not a party to the suit, without giving her a notice of the plaintiff's petition for the setting aside of the lease and an opportunity to be heard in the matter. It, however, appears from the records that the lessee appeared voluntarily in the Court below, although it is not quite clear whether after such appearance she participated any further in the proceedings. Besides, whatever might have been the position in the Court below, the lessee is a party being the Opposite Party No. 11 in the revisional application before us. The entire matter has been thrashed out in her presence, and hence no question of any further notice being given to her can arise. ( 18 ) FOR the reasons indicated hereinbefore, the lease should be set aside, and accordingly it is set aside. The Opposite Party No. 1 must quit and vacate the demised lands and remove the structures, if any, erected by her thereupon within six months from this date. In default, she will be liable to be removed therefrom on demolition of the said structures at her cost. The Opposite Party No. 11 will have to pay a reasonable amount, to be determined by the lower Court, for the use of the premises delivered to her by the exercise-Receiver till she gives up possession thereof.
In default, she will be liable to be removed therefrom on demolition of the said structures at her cost. The Opposite Party No. 11 will have to pay a reasonable amount, to be determined by the lower Court, for the use of the premises delivered to her by the exercise-Receiver till she gives up possession thereof. She will, however, be entitled to get back the balance, if any, out of the premium and the payments made by her after necessary adjustment of the above. The Rule is made absolute as above without any costs. Let the records go down as quickly as possible. Chakravarti, J. : I agree. Appeal dismissed.