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2003 DIGILAW 614 (CAL)

JAYANTI BURMAN v. ISWAR SATYA NARAYANJEE

2003-12-05

D.K.SETH, RAJENDRA NATH SINHA

body2003
RAJENDRA NATH SINHA, J. ( 1 ) THIS appeal has been filed by the defendant/appellant being aggrieved and dissatisfied with the order dated 29th April, 2003 passed by the learned Civil Judge, Senior Division, Second Court, Howrah in title Suit No. 152 of 2000 wherein the learned Court allowed the petition under order 40, Rule 1 by appointing a receiver for the suit properties. ( 2 ) THE background of the suit may be stated in brief: the plaintiff/respondent filed the suit for recovery of possession and mesne profit as against the defendant/appellant in respect of quite a large number of suit properties being municipal holding numbers 52, 52a and 52/1- 52/35 and 52/36, J. N. Mukherjee Road, Salkia, Howrah. It is further stated in the plaint that the relationship in between the parties is that of the owner of the suit properties and the lessee from time to time of different deeds with a clause for renewal of the lease. ( 3 ) THE eventual renewal of the lease was within 30th September, 1995 which was put in writing. According to the plaintiff/respondent the defendant/appellant failed and neglected to get the lease renewed, but continued to hold the properties leading to the filing of the suit. The reliefs claimed in the plaint consist amongst others are recovery of khas possession of the entire 'a' schedule premises measuring about 12 bighas having the aforesaid municipal holding numbers, a decree for mesne profits on and from 1st January, 1998 at the rate of rs. 4,50,000/- per month till recovery of khas possession, receiver, injunction, attachment and costs etc. ( 4 ) AS the defendant/appellant did not seek to renew the lease within 30th september, 1995 in writing their period of lease expires on 31st March, 1996 (within six months from the last date of seeking renewal ). They were also called upon to hand over peaceful and vacant possession but of no effect, leading to the filing of the aforesaid suit. A claim of Rs. 2,53,36. 000/- towards mesne profit at the rate of Rs. 4,50,000/- per month from 1st January, 1998 till the date of institution of the suit was prayed. They were also called upon to hand over peaceful and vacant possession but of no effect, leading to the filing of the aforesaid suit. A claim of Rs. 2,53,36. 000/- towards mesne profit at the rate of Rs. 4,50,000/- per month from 1st January, 1998 till the date of institution of the suit was prayed. It has been alleged that the defendant/ appellants were collecting rents and/or money from the inducted sub-lessees without the consent of the petitioners and have allowed several unauthorised occupants in the suit property, thus allowing illegal and unauthorised person to occupy the suit property. It has also been averred in the petition that the defendant/appellants were trying to transfer and/or encumber the suit properties in the aforesaid manner. Defendant/appellant's contention is that by a letter dated 29. 9. 1995 they exercised their right of renewal. ( 5 ) NOW the question in between the parties as to whether the lease has been determined and/or if the defendant/appellants are continuing after exercising right of renewal? ( 6 ) THE plaintiff/respondent filed the petition under Order 40 Rule 1 read with section 151 of the Civil Procedure Code, seeking for appointment of a receiver on the grounds amongst others that the defendant/appellant has inducted several sub-lessees without the consent of the petitioner, allowed several unauthorised occupants in the suit properties collecting rents, and/or money from such sub-lessees and unauthorised occupants. It has also been contended that they are also trying to transfer or alienate the suit properties for wrongful gain and/or try to encumber the properties by raising the illegal and unauthorised construction and taking huge salami by inducting sub-tenants. Prayer was made for appointment of the receiver so that rents may be collected from the sub-lessees and unauthorised occupants may be released therefrom and a proper account may be made and handed over the same to the plaintiff/ respondent. ( 7 ) THE matter was initially heard on 5. 11. 2003 and judgment was reserved by making it a 'cav. Thereafter the plaintiff/respondent has come up with an affidavit drawing the attention of the Court in respect of some subsequent events. Both the sides exchanged affidavits in connection with the same. ( 8 ) IT is alleged that one Babulal Show and his son Rajesh Kumar Show were inducted tenants after receiving a salami of Rs. 85,000/- and Rs. 45,000/-respectively. Thereafter the plaintiff/respondent has come up with an affidavit drawing the attention of the Court in respect of some subsequent events. Both the sides exchanged affidavits in connection with the same. ( 8 ) IT is alleged that one Babulal Show and his son Rajesh Kumar Show were inducted tenants after receiving a salami of Rs. 85,000/- and Rs. 45,000/-respectively. They affirmed affidavits before notary public on 5. 8. 2003. ( 9 ) DURING the intervening period since 16. 6 order of this Court some seven new tenants/occupants' names find place amidst the suit properties. In respect of six tenants their serial number has been changed. ( 10 ) IT has further been alleged that despite an undertaking given in Court for payment of municipal dues, the opposite party has failed and neglected to make payment resulting in issuance of order of warrant of attachment and sale under section 120 (1) and section 122 (2) of the Howrah Municipal corporation Act, 1980. In respect of 9 holding numbers 52/1-52/36, all in respect of tax dues for the 3rd quarter 03'-04' in its entirety totalling Rs. 12,73,436/ -. ( 11 ) DIFFERENT photocopies of some documents, i. e. , demands of the municipalities have been annexed together with the petition and it has been urged that the receiver has already been appointed and despite undertaking in court no such payment has been made. The aforesaid application has been controverted by submitting an affidavit-in-opposition which is one of denial in respect of any order dated 16th June and it has further been submitted therein that the said Babulal Show and his son Rajesh Kumar Show have sworn affidavit on 5. 8. 2003 prior to the hearing of this case but no attention of this Court was drawn to that effect in course of hearing then. It has been averred therein that it was to mislead this Court and delaying the pronouncement of judgment in respect of municipal bills. It has been submitted that whenever the Municipal authority served bills and/or notice of demand for payment of tax they have paid the same and the last of such demand was made by the Municipal Authority on 25th November, 2002 claiming Rs. 20. 237/ -. It has been submitted that whenever the Municipal authority served bills and/or notice of demand for payment of tax they have paid the same and the last of such demand was made by the Municipal Authority on 25th November, 2002 claiming Rs. 20. 237/ -. It appears from the said notice of demand that it was addressed in the name of the plaintiff as owner and in the name of the defendant as the occupier. The photocopies of the notices are dated 25th November, 2003 and the receipts of payments are annexed herewith and marked as Annexure 'r3' collectively. ( 12 ) IN the affidavit in reply it has been averred that it has been ascertained from the office of the municipal corporation that the bills then presented and served upon the respective premises and as such it was incorrect on the part of the defendant/appellant to deny on oath that they did not receive at all the bills. ( 13 ) IT further transpires that the receiver appointed by the Court below has taken over and correspondence is shown in his name from Annexure 'c' to the affidavit-in-reply by the defendant Lalit Kumar Bagla sworn on 27. 11. 2003. It also goes to show from Annexure 'c' series wherein the receiver has written to the Collector, Howrah Municipal Corporation stating that he was so appointed but not authorised to make any payment in the absence of any specific direction from the learned Court and as such he requested to keep the matter pending. ( 14 ) ON the aforesaid submission Mr. S. P. Roychowdhury, learned senior advocate ably assisted by Mr. Sukumar Bhattacharya has contended that the appointment of receiver being a specific relief, the very nature of the suit be looked into. The case in hand is neither a suit for partition and/or for dissolution of partnership or accounts where distribution of profits etc. is involved. In this case the defendant/appellant is admittedly a lessee in possession and the only question as to whether the lease has been determined and/or renewal sought is to be adjudicated. Keeping in view of the nature of the suit itself and in the absence of any allegation of commission of waste, dereliction of duties in maintaining the suit properties in proper conditions and/or neglecting to look after the same, this impugned order ought not to have been passed. Sri. Keeping in view of the nature of the suit itself and in the absence of any allegation of commission of waste, dereliction of duties in maintaining the suit properties in proper conditions and/or neglecting to look after the same, this impugned order ought not to have been passed. Sri. Anindya mitra learned senior counsel leading the plaintiff/respondent side has contended that the property is a very valuable property worth several crores of rupees and that in the absence of due preservation of the suit properties and collection of the rents from the sub-tenants and the occupants and outsiders remaining therein, the properties may be encumbered and it will be hazardous for the plaintiff/respondents even if he succeeded eventually in the suit itself. Furthermore the subsequent development has been shown that the municipal taxes have been accumulated to the extent of Rs. 12 lakhs of rupees which are not been paid but according to the terms of the lease is payable by the lessee for both the shares and this is the admitted position keeping in view of the Annexure 4' of the affidavit-in-opposition filed on behalf of the defendant/appellant. ( 15 ) SRI Roychowdhury in course of his argument has contended that in the present context of the accumulated arrears are to be paid by way of instalments of Rs. 1,00,000/- within a month and rest by instalments. ( 16 ) MR. Mitra has contended that whatever be the nature of the suit till its pendency it has got to be looked into that keeping in view of urgency and imminent danger to prevent any waste and/or dereliction of duties in maintaining the suit property free from all encumbrance is the prime duty of the lessee which in the present context goes to show that the defendant/ respondent lessee has failed to discharge. ( 17 ) APPOINTMENT of a receiver is one of the harshest remedies which the law provides for the enforcement of right. If it is shown that the person seeking the appointment of a receiver is exposed to manifest peril a receiver may be appointed. In this instant case there is glaring example of non-payment of municipal taxes which is accumulated to the extent of more than 12 lakh rupees leading to the issue of warrant of attachment and notice of lease under section 120 (1) and section 122 (2) of the Howrah Municipal Corporation Act. In this instant case there is glaring example of non-payment of municipal taxes which is accumulated to the extent of more than 12 lakh rupees leading to the issue of warrant of attachment and notice of lease under section 120 (1) and section 122 (2) of the Howrah Municipal Corporation Act. ( 18 ) KEEPING in view of the aforesaid discussion and the principles of appointment of receiver in mind we are of the view that it is a fit case for appointment of a receiver as is apparent from the materials on record. ( 19 ) ON perusal of the entire materials we find that Sri Debabrata Biswas, advocate, who has been appointed receiver has opened an account in his name but we are of the view that in the event of appointment as a receiver one should open the account not in the personal/individual capacity but describing himself as the appointed receiver by the Court mentioning the number of suit itself. We do not propose to make any further order and/or directions/guidelines to the receiver as it is the domain of the learned Court below wherever he has been appointed to seek directions if so necessary from the learned Court below from time to time and to be governed by the directions/orders of the appointing Court. ( 20 ) IN these circumstances, we feel that the receiver should continue and collect the rent and take steps for liquidating the municipal rates. At the same time, as offered by Mr. Roychowdhury; his clients may pay Rs. 1 lac within a month and may continue to pay @ Rs. 30,000/- per month to liquidate the municipal rates. ( 21 ) IN the result, the appeal be dismissed but in the circumstance there will be no order as to costs. ( 22 ) ALL the CAN petition stands disposed of accordingly. ( 23 ) I have the privilege of going through the judgment written by my learned brother R. N. Sinha, J. I fully agree and concur with the judgment delivered by His Lordship. However, I would like to add a few words of mine. ( 24 ) THE facts are more and less admitted. Mr. Roychowdhury had raised a few legal contentions, which we are supposed to answer in the context in which the appeal has been placed before us. However, I would like to add a few words of mine. ( 24 ) THE facts are more and less admitted. Mr. Roychowdhury had raised a few legal contentions, which we are supposed to answer in the context in which the appeal has been placed before us. The order appealed against is one under order 40 Rule 1 CPC appointing a receiver. Admittedly, the property is a leasehold property. The plaintiff/respondent has filed the suit for recovery of possession and mesne profits on the ground of expiry of the lease by efflux of time. In terms of the lease, the defendant/appellant is supposed to raise construction and induct tenants and on the expiry of the lease the construction so made would vest in the lessor. The lease was renewable for a further period of 30 years. But such option of renewal is supposed to be exercised six months before the expiry of the lease. The lease which continues for almost 100 years was last renewed with effect from 1st April, 1966 for 30 years due to expire on 31st of March, 1996. According to the plaintiff, this option of renewal was not exercised. On the other hand, the defendant/appellant had claimed that they had exercised the option by issuing an undated letter on 29th of September, 1995 alleged to have been served under certificate of posting. These allegations of renewal by the defendant/appellant were disbelieved by the learned Court below and having regard to the facts had allowed the application for appointment of receiver. This order has since been challenged in this appeal. ( 25 ) ADMITTEDLY, the lessor is entitled to the rent @ 3,000/- per month under the lease. In terms of the lease, the defendant/appellant is entitled to collect the rent from the tenants during the terms of the lease. Mr. Roychowdhury for the appellant had contended that since the option has been exercised, the lessee defendant/appellant is entitled to the benefit of the lease and in law he is entitled to hold over until a decree for eviction is passed and continue to collect the rent. Against such collection of rent, the plaintiff had claimed mesne profits. Even if the suit is decreed, the plaintiff would be entitled to claim mesne profits. Against such collection of rent, the plaintiff had claimed mesne profits. Even if the suit is decreed, the plaintiff would be entitled to claim mesne profits. But if the suit fails, then the plaintiff would not be entitled to claim mesne profits except the rent agreed upon and in that event, the defendant/lessee would be deprived of the fruits of the lease. The appointment of receiver virtually amounts to granting the whole relief prayed for in the suit before the decree is passed. According to him, in a suit for recovery of possession on the termination of lease, there is no scope for appointment of receiver. Such suit stands altogether on a different footing from the suits for partition or accounts etc. The learned court ought not have disbelieved the defence case at this stage. When there is a scope for renewal of the lease and option has been exercised, it is to be presumed that the lease is subsisting. Therefore, the possession of, and the right to collect rent by, the defendant, cannot be interfered with. He also contends that there are no allegations, which can justify the appointment of receiver. He had led us through the pleadings to support his contention. ( 26 ) IT is a settled proposition of law that the appointment of receiver can be justified on facts when the property is being wasted or dissipated at the hands of the person in occupation. Receiver is appointed to protect and preserve the property. The nature of the suit or the nature of the relief claimed is not a factor relevant for the purpose of considering the question of appointment of receiver. If on facts, it appears that it is necessary to preserve or protect the property or save the property from waste or dissipation then the Court has every discretion to appoint a receiver. At the same time, it is also a settled proposition of law that if in law a person is entitled to possession, he cannot be dispossessed if he is in lawful possession. ( 27 ) MR. Roychowdhury had contended that none of these rounds can be attracted in the present case since the option has been exercised, the defendant is in lawful possession, he cannot be dispossessed. But it seems that there is a fallacy in the argument of Mr. Roychowdhury vis-a-vis the order appealed against. ( 27 ) MR. Roychowdhury had contended that none of these rounds can be attracted in the present case since the option has been exercised, the defendant is in lawful possession, he cannot be dispossessed. But it seems that there is a fallacy in the argument of Mr. Roychowdhury vis-a-vis the order appealed against. Inasmuch as the learned Court in the order appealed against has appointed the receiver only for the purpose of collecting rent from the sub-tenants and occupants and keeping accounts of the rents/monies realized from the suit property. There is nothing to indicate that receiver would take possession of the property. Therefore, the question of dispossession by appointment of receiver is not relevant in the present case. In fact, before the learned Court below, there is no material on which dissipation or waste can be alleged. The learned Trial Court had proceeded on the prima facie case found from the materials on record that the lease stood expired. In a case where lease with option for renewal expired on efflux of time and there are some materials that such option is exercised, the Court may not appoint receiver only on that ground without any further material to support such appointment. We could have interfered with the order but for the materials brought before us by way of application for incorporating subsequent documents and supplementary affidavit in connection with which opposition and reply had been exchanged and hearing was given to the parties. We had allowed these facts to be brought before the Court though this was vehemently opposed by Mr. Roychowdhury that this application cannot be entertained. In our view the Court is not bound by technicalities. At the same time, Order 41 Rule 27 permits admission of additional evidence. Though this provision may not apply in a proceeding determined on affidavits but on the principle analogous to it, applications or affidavits may be permitted to bring on materials including subsequent events and documents relevant for the purpose of determining the real question at issue. The Court cannot be oblivion of the situation. It may note materials till the judgment is delivered but after giving opportunity of hearing to the parties in appropriate cases where the Court finds it fit for the ends of justice to exercise such discretion in law to allow such materials to be brought on record. The Court cannot be oblivion of the situation. It may note materials till the judgment is delivered but after giving opportunity of hearing to the parties in appropriate cases where the Court finds it fit for the ends of justice to exercise such discretion in law to allow such materials to be brought on record. ( 28 ) THE allegation that has been made is that the Howrah Municipal corporation had issued Notices of Demand, attaching the properties with threat of auction sale on account of non-payment of municipal rates. Mr. Roychowdhury had denied that any municipal rate is due except a meagre amount of about Rs. 20,000/- and odd and that all municipal rates in respect of which bills were raised have since been paid. In the application and the supplementary affidavit seeking to bring this material on record, the plaintiff/respondent has made specific averment with regard to the municipal rates due, yet except making a bald statement that all municipal rate bills that were raised have since been paid, the allegation has not been specifically denied. Neither any materials have been disclosed to show that the demand raised by the Municipal corporation are incorrect or that the dues have been paid. The only receipt that has been shown relates to the Premises No. 52, whereas the municipal rates are due in respect of other premises. This has not been dealt with by Mr. Roychowdhury's client. At the same time, the bills issued by the Municipal corporation, as disclosed, shows a staggering accumulation of about Rs. 12 lacs and odd due to the Municipal Corporation on account of municipal rates in respect of the suit properties. There is already an attachment and threat of auction. It is also pointed out that the municipal rate bills were raised and served. A statement made on oath is to be specifically denied. When matters are dealt with on affidavit, the Court has to depend on the materials disclosed on the affidavit. ( 29 ) UNDER the terms of the lease, the lessee is supposed to pay the municipal rates both owners and occupiers shares. This is not disputed by Mr. Roychowdhury. On instruction, he had also offered to pay a sum of Rs. 1 lac within a month and liquidate the municipal rates in instalment of rs. 30,000/- per month. This itself shows that municipal rates are due and payable. This is not disputed by Mr. Roychowdhury. On instruction, he had also offered to pay a sum of Rs. 1 lac within a month and liquidate the municipal rates in instalment of rs. 30,000/- per month. This itself shows that municipal rates are due and payable. Attachment of a property and threat of sale on account of municipal dues and a staggering accumulation of Rs. 12 lacs definitely are materials which lead the Court to conclude prima facie that there is likelihood of waste and dissipation of the property and exercise its discretion for preserving the property, particularly, to liquidate the accumulated municipal rates, justifying the appointment of the receiver. Even if we set aside the order of appointment of receiver but still then it will not prevent the plaintiff from seeking appointment of receiver on the basis of the subsequent events and materials so disclosed immediately hereafter. It would be pure technical a matter resulting into an empty formality. At the same time, the Court cannot close its eyes and sit idle when materials are brought before it that there is every likelihood of the property being wasted and dissipated, the Court has to pass appropriate order taking into consideration the materials so disclosed, for preserving and protecting the property. The Court is also empowered to do so in an appeal when circumstances so warrant in exercise of its power under Order 41 Rule 33 CPC. ( 30 ) IN fact, this accumulation of municipal rates is also for the period during which the lease subsisted. Therefore, prima facie it appears that the defendants/ appellants had failed to discharge their obligation under the lease. Having failed to discharge their own obligation and thereby exposing the property to the danger of waste and dissipation, the defendants/appellants cannot take advantage of their own wrong in order to oppose the appointment of receiver. Appeal dismissed.