Holding

The receiver may not create a new lease in violation of the injunction; Grindlays' tenancy is a continuation, while Tata's tenancy is a new lease barred by the injunction.

Summary

The appellant sought a declaration that certain properties belonged to a joint family and that a trust over them was void. A receiver was appointed with an injunction restraining any "transfer" of the properties. Grindlays Bank, the original tenant of four flats, surrendered two flats to Tata Finlay, and the receiver let those flats to Tata. The appellant argued that the receiver lacked authority to create new tenancies, that "transfer" includes lease, and that the receiver violated the injunction and Chapter 21 Rule 5(a) of the Original Side Rules. The Supreme Court held that "transfer" does include lease, that surrender of part of a tenancy does not amount to surrender of the whole, and that a mere change in rent does not create a new lease. Grindlays' tenancy, which became a monthly tenancy, was deemed a continuation of the original lease and therefore not a violation. However, the tenancy created for Tata was a new lease, contravening the injunction, and thus could not enjoy protection under the West Bengal Premises Tenancy Act and was liable to eviction. The appeal was dismissed against Grindlays and allowed against Tata.

Issues considered

The meaning of 'transfer' in the injunction and whether it includes lease.
Whether surrender of part of a tenancy amounts to surrender of the entire tenancy.
Whether the receiver's creation of a lease exceeding three years violates Chapter 21 Rule 5(a) of the Original Side Rules.
Whether the tenancy created for Tata constitutes a new lease barred by the injunction.
Whether Grindlays' post‑expiry monthly tenancy is a new lease or a continuation of the original tenancy.

Legislation cited

Code of Civil Procedures. Order XL rule 1(d)
Transfer of Property Acts. 205, s. 5
West Bengal Premises Tenancy Acts. 11, s. 13(1), s. 88

Subjects

receiverleasetransferinjunctiontenancysurrender of partWest Bengal Premises Tenancy ActTransfer of Property ActOriginal Side Rulesmonthly tenancyeviction

Judgment

KRISHNA KUMAR KHEMKA
A
v.
GRINDLAYS BANK P.L:C. AND ORS.

MAY 2, 1990

[S. RATNAVEL PANDIAN AND K. JAYACHANDRA B
REDDY, JJ.]

Calcutta High Court Original Side Rules: Chapter 21Rule5(a)-
Receiver of immovable property-Whether has power to lease property
for term exceeding three years.

Transfer of· Property Act: Sections 5 and 205-'Transfer of
c
property'-'Conveys'-lnterpretation-Surrender of part of tenancy-
Does not amount to implied surrender of entire tenancy-Increasep
reduction of rent-'-lmports surrender of existing lease and creation of
new tenancy.
D
West Bengal Premises Tenancy Act: Sections 11, 13( I) and 88-
Tenancy-Surrender of part---,Does not amount to implied surrender of
entire tenancy-increase reduction of rent-Imports surrender of
existing tease ana creation of new tenancy. -
I The appellant had filed a suit in the High Court of Calcutta for a E
declaration that the properties set out in the schedule belonged to a joint
family and that the trust created by the father of the plaintiff/appellant
in respect of the said properties was void. Pending the suit, a Receiver
was appointed by Justice A.N. Sen. While making the appointment the
learned Jndge had passed an order restraining the Receiver from selling
or "transferring" any of the properties. F

' The proper!Y in dispute is a buildinl!I at Alipore, Calcutta, which
comprised of four flats. Grindlays Bank Ltd., r.espondent No. 1, had
taken all the four flats on lease for 10 years from 1st June, 1958. After
the expiry of the period of lease, Grindlays continued to be the tei:iant.
On 1st April, 1978 Grindlays_surrendered a portion of the tenancy, G
namely, two flats i.e. flats Nos. 1 and 2, in favour of Tatas. The Receiver
let out these two flats to M/s Tata Finlay Ltd. with effect from February
7, 1979.

Questioning the action of the Receiver, an application was filed in
the High Court contending that the Receiver had no authority .to create H

961
962 SUPREME COURT REPORTS [1990] 2 S.C.R.

'
any tenancy, that he had virtually created two new tenancies after
A
terminating the original tenancy of Grindlays, and that neither Grind-
lays nor'tatas was entitled to occupy the premises and they were liable
to be evicted summarily. The learned Single Judge was not inclined to
order summary eviction as prayed for. An appeal was filed before the
Division Bench. The Division Bench inter alia observed that any such
B relief could he obtained in a suit but the same could not be filed in the
High Court inasmuch as the permises in question was situated outside 'r-
the Original Side Jurisdiction of the High Court.

Before this Court it was contended on behalf of the appellant that
(i) the Receiver had only such powers as were expressly granted by the
Court; (ii) "transfer" included lease and therefore the Receiver by
c creating a new lease i.e. tenancy, had violated the injunction .order
passed by Justice A.N. Sen; (iii) after the expiry of the stipulated period )
of lease in favour of Grindlays, the tenancy turned to be a monthly
tenancy and therefore the entire character of tenancy changed, and the
monthly tenancy therefore was a new tenancy; (iv) protection under the
D West Bengal Premises Tenancy Act could not be extended to the tenant
of a Receiver; (v) the break up of the tenancy affected the integrity of
the tenancy inasmuch as by virtue of this break up two new tenancies
had come into existence; and (vi) the lease in favour of Grindlays had
expired and by creating a monthly tenancy which may even go beyond
three years, the Receiver had created a new lease in violation of Chap-
E ter 21 Rule S(a) of the Original Side Rules.

In reply, it was contended on behalf of Talas that a monthly
tenancy in respect of the said two flats had been created in their favour
and therefore they were entitled to protection under the Tenancy Act.
r
F On behalf of Grindlays it was contended that after the expiry of .
j
the period of the original lease in !968, relationship between Grindlays
and the Trust continued to be of landlord and _tenant; that at all mate-
rial times they retained the tenancy in re~pect of fl_ats Nos. 3 an<! 4, and
were governed by the Tenancy Act; that the surrender of flats Nos. I
and 2 by the Grindlays and their continuati_on as tenants at reduced
G rent did not amount to a 11ew lell'!e In respect of flats Nos. 3 and 4, and
hence there was no transfer and _no violation of the Injunction.

Dismissing the appeal as against respondent No. I and allowing it
against respondent No. 2, this Court,

H HELD: (I) In the Transfer of Property Act, the word 'transfer' Is
K.K. KHEMKA v. GRINDLAYS BANK 963

• defined with reference to the word 'convey'. Similarly, the term 'trans-
/ fer' as used in Section 11 or Section 88 of the Bengal Tenancy Act. A
~
included a lease, as a lease is a transfer of an interest in immovable
property. A lease, therefore, comes within the meaning of the word
'transfer'. [968A-B]

Hari Mohan alias Hari Charan Pal v. Atal Krishana Bose & Ors., B
XXIII Vol. Indian Cases 925, referred to.
·~
(2) Surrender of part of the tenancy did not amount to implied
surrender of the entire tenancy. Likewise the mere increase or reduction

- ~
of rent also would not necessarily im_port a surrender of an existing
lease and the creation of a new tenancy. [972C-D)',
c
Konijeti Venkayya & Anr. v. Thammana Peda .Venkata Sub·
i. barao & Anr,_, AIR 19.57 A.P. 619 and N.M. Ponniah.Nadar v. Smt.
Kamalakshmi Amma/, AIR 1989 S.C. 467, referred to.

(3) The Tenancy in favour of Grindlays continued as monthly D
tenancy for a period exceeding three years. It was an accretion to the
,. old tenancy and not a new tenancy. It could not therefore be said that
the Receiver had created tenancy for a period exceeding three yea~~-ili
violation of Chapter 21 Rule S(a) of. the Original Side Rules. MereJY
I because there was change in the character of a tenancy, namely that it
had become a monthly teDaDcy, it did OOtamount to a new tenancy. [972G-H] E

Utility Articles Manufacturing Co. v. Raja Bahadur Motilal
~
Bombay Mills Ltd., AIR 1943 Born. 306, referred to.

(4) A clear injuction order was passed by Justice A.N. Sen speci-
' tically restraining the Receiver from creating any new tenancy. But the
injunction did not apply to the tenancy in favour of Grindlays in respect
F

' of flats Nos. 3 and 4 inasmuch as it was an old tenancy though in a
modification form. The Grindlays were theref11re entitled to the protec-
!ion under the provisions of the Tunancy Act. [974G-H; 975_A, CJ

DamadiJal & Ors. v. Parshram & Ors., [1976] Supp. SCR 645 G
and Biswabani (P) Ltd. v. Santosh Kumar Dutta, [1980] l SCR 650,
referred to•
>-
Smt, Ashrafi Devi & Anr. v. Satyapal Gupta & Ors., Suit No.
966 58 dated 9th Sept. 1977. Calcutta High Court and Armugha Goun-
der v. Ardhanari Mudaliar & Ors., AIR 1975 Madras 231, distinguished. H
964 SUPREME COURT REPORTS (1990] 2 S.C.R.

(5) In the case of Talas, it was a new tenancy. Such a lease came
A within the meaning of 'transfer' and in view of the injunction order
passed by Justice A.N. Sen, creation of such a new tenancy was legally
· barred. Consequently the Talas could not claim anY protection under
the provisions of the Act and were liable to be evicted. [978C]
\
-
B Kanhaiyalal v. Dr. D.R. Banaji, AIR 1958 S.C. 725 at p. 729;
Smt. Ashrafi Devi & Anr. v. Satyapal Gupta & Ors., (supra) and
Armugha Gounder v. Ardhanari Mudalier, (supra), referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2072
of 1990.

C From the Judgment and Order dated 13.5.1986 of the Calcutta
High Court in Suit No. 2479 of 1967.

M.K. Banerjee, Subrat Rai Choudhary, Gopal Subrarnanium,
N.P. Aggarwala, Anil Aggarwala, P.C. Sharma, L.P. Aggarwala, Ms.
D Indira Banerjee, R.N. Jhunjhunwala, Praveen Kumar, C.S. Vaid-
yanathan, P.R. Seetharaman, D.N. Mukherjee, Raj Kumr Gupta and
P .C. Kapur for the appearing parties.

The Judgment of the Couri was delivered by
\
E K. JAYACHANDRA REDDY, J. Leave granted.

This appeal is directed against the order of the Division Bench of
the High Court of Calcutta. The appellant was transposed as the
plaintiff in the Original Side suit No. 2479/67 in the High Court of
Calcutta. The suit was filed for a declaration that the various proper-
-
ties set out in the Schedule belonged and still belong to the joint family
r
F
consisting of the members mentioned in the plaint. Pending the suit an I
application was filed for appointment of a receiver for the various
properties mentioned jp Schedule 'A' annexed to the petition, for
injunction and for other reliefs. One Mr. S.C. Sen was appointed as
Receiver. A declaration was also sought in the suit that the trust dated
October 20th, 1948 created by late Gopi Krishna Khemka, father ofthe
G
plaintiff, is void and for cancellation of the same. Premises No. 38,
New Ro•.d, Alipore, building with open space was one of the proper-
ties belonging to the trust. Grindlays Bank Limited ('Grindlays' for
short), respondent No. 1 herein was the original tenant and they were.
occupying four flats and they surrenc\ered a portion of the tenancy
H namely two flats i.e. Flats Nos. 1 and 2 which came into effect from 1st
K.K. KHEMKA v. GRINDLAYS BANK [REDDY, J.] 965

April, 1978. The receiver let out these two flats to M/s Tata Finlay A'
Ltd. ('Tatas' for short) with Effect from February 7, 1979 pursuant to a
---'- letter written byTatas. Questioning the action of the receiver an appli-
cation was filed in the High Court contending that the receiver had no
authority to create any tenancy and that the receiver has virtually
created two new tenancies terminating the original tenancy of Grind-
lays a°'d it was contended before the learned Single Judge of the B
Calcutta High Court that neither Grindlays nor Tatas were entitled to
·-'. occupy the premises and they are liable to be evicted summarily. The
learned Single Judge was not inclined to order summary eviction as
prayed for but, however, observed that the respective contentions of

- .x: the parties as to the validity of the tenancy created in favour of Talas
have not been finally decided by the High Court and that the parties
are at liberty to agitate the same grounds in any action that they may
be advised to proceed for eviction of Talas and Grindlays. As against
c
.\. the order of the learned Single Judge, an appeal was filed before a
Division Bench. It was contended before the Division Bench that upon
surrender of Flats Nos. 1 and 2 by the Grindlays a fresh tenancy was
created by the receiver from 1st April, 1978 and the other tenancy in D
favour of Tatas is beyond the powers of the receiver and that the
receiver had no authority to create any tenancy either in favour of
Grindlays or Tatas. Various contentions were raised before the Divi-
sion Bench and ultimately the Division Bench having considered the
/ several submissions passed an order, the operative portion of which
reads as follows: E

"Therefore, the petitioner is entitled to get a decree for
-· possession on any ground mentioned in Section 13(1) of the
said Act and such relief can be obtained in a suit which
cannot be filed in this court inasmuch as the premises in
1 question is situated outside the original side jurisdiction of F
\ this Court."

More or less the same contentions are advanced befor us. Firstly it is
submitted that the receiver had no right or authority to create any
lease or tenancy in respect of the said flats for a term exceeding three
years at a time and such creation of a tenancy should be deemed to be G
only for a period of three years·terminable on the expiry of the said
j.. period. In this context a further submission is that upon surrender of
Flat Nos. 1 and 2 by Grindlays a fresh tenancy was created by the
receiver from 1st April, 1978 for which he had no authority. There-
...; fore, the High Court ought to have ordered summary eviction ofTatas
and Grindlays. H
966 SUPREME COURT REPORTS [1990] 2 S.C.R.

It is not in dispute that the tenancy in respect of Flat Nos. 1 and 2
·A
was surrendered by the Grindlays and from 1st April, 1978 Tatas was
inducted as tenant in respect of the said two flats at a monthly rent of
Rs.1200 and service charge at the rate of Rs.600 per month and since
then Tatas is a monthly tenant in respect of the said two flats. It is the
\
-
case of the Tatas that the terms of the tenancy were reduced into
B writing as recorded in the letter dated 7th February, 1979 and the
receiver adopted the same and did not raise any objection thereto, and
it claimed to be still a monthly tenant and therefore, they are entitled
to protection under West Bengal Premises Tenancy Act ('Act' for
short) and the appellant has no right to demand vacant possession of

c
the said flats from the Tatas. The stand taken by the Grindlays is that
the premises in question comprised of four flats and they took all the
four flats for 10 years on lease from 1st June, 1958. After the expiry of
the period of the said lease relationship between Grindlays and the
>(.

-
Trust continued to be that of landlord and tenant governed by the Act, j
and that in 1977 they agreed to surrender Flat Nos. 1 and 2 by the
letters dated 17th March, 1978 and 29th March, 1978 addressed to the
D Receiver in favour of Tatas. However, at all material times they
retained the tenancy in respect of Flat Nos. 3 and 4 and continued to
be tenant in respect of those flats and they are also governed by the
Act. In the letters written it is also stated by the Grindlays that their
continuation as tenant of flat Nos. 3 and 4 was acknowledged by the
Receiver by his letter dated 15th May, 1978. It is contended on behalf \
E of the appellant that after the expiry of the lease the receiver had no
power to grant a lease for a period exceeding three years without the
leave of this Court as envisaged in Chapter 21 Rule S(a) of the Original
Side Rules and that in the instant case without obtaining any such
leave receiver's granting monthly tenancies is illegal. Reliance was also
placed on the injunction order passed by Justice A.N. Sen sitting on
-
F Original Side while appointing the receiver. The learned Judge passed r
an order restraining the tenants from selling or "transferring" any of
the properties mentioned in Schedule 'A'. According to the appellants
+
the transfer includes lease and therefore, the Receiver by creating a
new lease i.e. tenancy has violated the injunction order and on that
ground also the action of the receiver should be held to be illegal. First
G w< shall dispose of this contention and then advert to the rest. Order 40
C.P. C. which provides for the appointment of Receivers empowers the
Court to confer upon the Receivers all such powers, as to bringing and
defending suits and for the realization, management, protection, pre·
servation and improvement of the property. In Satyanarayan Banerji
. "'
and Ors. v. Kalyani Prosad Singh Deo Bahadur and Ors., AIR 1945
H Calcutta 387, a Division Bench held that the object of appointment of
K.K. KHEMKA v. GRJNDLAYS BANK [REDDY, J.] 967

Receiver is not to divest the rightful owner of the title but only to
A
protect the property and an appointment might operate to change
~ possession but cannot affect the title to the property, which remains in
those in whom it was vested· when the appointment was made. In
Ratnasami Pillai v. Sabapathy Pillai and Ors., AIR 1925 Madras 318, it
is held that the Receiver has only such powers as expressly granted by
the Court. a·
~ Relying on these two decisions the learned counsel for the appel-
!ants submitted that in the instant case the Receiver has acted in such a
manner affecting the title to the property and to the detriment of the
interest of the rightful owner. Section 5 of the Transfer of Property
,)',
Act defines the meaning of 'transfer of property' and it is in the follow-
ing terms: c

~ "In the following sections "transfer of property" means, an
act by which a living person conveys property, in present or
in future, to one or more other living persons, or to him-
self, or to himself and one or more other living persons and D
"to transfer property" is to perform such act.

In this Section "living person" includes a company or
asssociation or body of individuals, whether incorporated
'
f or not, but nothing herein contained shall affect any law for
the time being in force relating to transfer of property to or E
by companies, associations or bodies of individuals."

- 1
In Mulla Transfer of Property Act, 7th Edition, page 48, there is a
passage in this respect which reads thus:

"The word "transfer" is defined with reference to the word F
"convey''. This word in English Law in its narrower and

' more usual sense refers to the transfer of an estate in hand;
but it is sometimes used in a much wider sense to include
any form of an assurance inter vivos. The definition in Sec.
205( l)(ii) of the Law of Property is "conveyance includes a
mortgage, charge, lease, assent, vesting declaration, vest- . G
ing instrument, disclaimer, release of every other assurance
of property or of any interest therein by any instrument
>- except a will." This is a special definition adopted for the
1I purposes of the Law of Property Act, 1925. The word "con-
veys" in Sec. 5 of the Indian act is obviously used in the
wider sense referred to above. Transferor .must have an H
968 SUPREME COURT REPORTS [1990] 2 S.C.R.

-
interest in the property. He cannot serve himself from it
A and yet convey it." \ '

The word 'transfer' is defined with reference to word 'convey'.

In Hari Mohan alias Hari Charan Pal v. Atal Krishna Bose and
B Ors., XXIII Vol. Indian Cases 925, a Division Bench of the Calcutta
High Court held that "the term 'transfer' as used in Section 11 or
~
Section 88 of the Bengal Tenancy Act, includes a lease, as a lease is a
transfer of an interest in immovable property". It is, therefore, clear
that a lease comes within the meaning of the word 'transfer' but in this
case the matter does not stop there. According to the learned counsel :-(
~

for the respondents the receiver has not created any new tenancy and
c the continuation of Grindlays as tenants in respect of Flats Nos. 3 and 4
does not amount to a new lease and, therefore, there is no transfer.
Consequently there is no violation of the injunction order passed by
J.
Justice A.N. Sen. Learned counsel for the respondents. referred to
various documents mostly in the form of letters between the receiver
D and the Grindlays. We have perused these letters. They go to show
that the Grindlays surrendered those two flats with the consent of the
receiver but the stand taken by them is that their continuation as
tenants of Flat Nos. 3 and 4 was acknowledged by the receiver and the.
same cannot be treated as a new lease. One of the questions is whether
mere surrender of Flats Nos. 1 and 2 affects the Grindlays' tenancy of
\
E Flats Nos. 3 and 4.

It is also contended by the learned counsel for the appellant that
after the expiry of the stipulated period the tenancy in question turned
to be a monthly tenancy and, therefore, the entire character of tenancy
-.
got changed. In Utility Articles Manufacturing Co. v. Raja B.ahadur
Motilal Bombay Mills Ltd., AIR 1943 Bombay 306, a Division Bench
r
F ~
consisting of Beaumont, C.J. and Kania, J. explaining the nature of
the monthly tenancy observed in the following terms:

"A characteristic of a periodical tenancy is that as each
period commences, it is not a new tenancy, it is really an
G accretion to the old tenancy. A monthly tenancy, that is, a
tenancy subject to a month's notice, creates in the first
instance a tenancy for two months certain. But as soon as _..
the third month commences, that is not a new tenancy; it ~
turns the original tenancy into a three months' tenancy,
and when the fourth month begins, the tenancy becomes a
H four months' tenancy, and so on so long as the tenancy
K.K. KHEMKA v. GRINDLAYS BANK [REDDY, J.J 969

continues, until that is to say, notice to quit is given." A

----
/
Relying on the above passage the learned counsel contended that the
monthly tenancy, therefore, is new tenancy. Even otherwise, accord-
ing to the learned counsel the integrity of the tenancy is broken up and
on that score also it is a new tenancy. Reliance is placed on Badri
Narain Iha and Ors. v. Rameshwar Dayal Singh and Ors., [1951] SCR B
153 it is observed:

"An inter se partition of the mokarrari interest amongst the
mokarraridars as alleged by the plaintiffs could not affect
their liability qua the lessor for the payment of the whole
·°"· rent, as several tenants of a tenancy in law constitute but a C
single tenant, and qua the landlord they constitute one
person, each constituent part of which ·possesses-certain
l common rights in the whole and is liable to discharge com-
mon obligations in its entirety."

In White v. Tyndall, 13 Appeal Cases 263 it is stated that the parties to D
whom a demise is made hold as tenants in common but what they
covenant to pay is one rent, not two rents and not each to pay is one
rent, not two rents and not each to pay half a rent but one rent. There
is a privity of the estate between the tenant and the landlord in the
I whole of the leasehold and he is liable for all the covenants running
with the land. · E

According to the appellant, in the instant case, if this principle i~
followed, the break up of the tenancy affected the integrity of the
tenancy inasmuch as by virtue of this break up two new. tenancies have
come into existence paying separate rents and, therefore', in that view
also it is a new tenancy. Yet another submission of the appellant is that F
the act of the receiver in leasing out in favour of Grindlays and Talas
for a period of more than three years was bad in view of Chapter 21
Rule 5(a) of the Original Side Rules. Though this point appears to
have been abandoned before the Division Bench yet it is also canvas-
sed before us. Chapter 21 of the Calcutta High Court Original Side
Rules deals with Receivers. Relevant part of the Rule 5 reads thus: G

"5. In every order directing the appointment of a Receiver
of immovable property, there shall, unless otherwise
ordered, be inserted the following directions:

(a) that the Receiver shall have all the powers provided for H
970 SUPREME COURT REPORTS [1990] 2 S.C.R.

in Order XL, rule l(d) of the Code, except that he shall
A
not, without the leave of the Court (1) grant leases for a
term exceeding three years.

"

B The submission is that the act of the Receiver in leasing out the flats in
the above manner beyond three years is in violation of this Rule and in
that view of the matter lease should be cancelled and the tenants
should summarily be evicted.

c
Learned counsel for the respondents, on the other hand, submit-
ted that there was no new tenancy and surrender of flats Nos. 1 and ·2 by
the Grindlays and retaining two more flats does not amount to a new
-
tenancy atleast so far as Grindlays is concerned and a reduction of rent j
also does not create new tenancy inasmuch as the rent that they had to
pay was only for two flats in respect of each their tenancy continue.

D In Wood/all's Law of Landlord and Tenant, 25th Edn. Page 969,
paragraph 2079 reads as under:

"2079. Implied surrender of part only. If a lessee for years
accept a new lease by indenture of part of the lands, it is a
surrender for that part only, and not for the whole (k); and
E though a contract for years cannot be so divided, as to be
avoided for part of the years and to subsist for the residue,
either by act of the party or act in law; yet the land itself
may be divided, and the tenant may surrender one or two
acres, either expressly or by act oflaw, and the lease for the
residue will stand good and untouched."
-
F
In Halsbury's Laws of England, 4th Edn. Volume 27, paragraph 449
read as under:

"449. Surrender by change in nature of tenant's occupa-
tion. A surrender is implied when the tenant remains in
G occupation of the premises in a capacity inconsistent with
his being tenant, where, for instance, he becomes the land-
lord's employee, or where the parties agree that the tenant
is in future to occupy the premsises rent free for life as a
licensee. An agreement by the tenant (o purchase the
reversion does not of itself effect a surrender, as the pur-
H chase is conditional on a good title being made by the
Landlord."
K.K. KHEMKA v. GR!NDLAYS BANK !REDDY, J.] 971

In Foa's General Law of Landlord and Tenant, 7th Edition by Judge
__d_ __ Forbes, paragraph 991 reads thus: A

"991. Lease of part, & c-lt has been held that acceptance
of a new lease of part only of the demised premises
operates as a surrender of that part and no more (b); but
any arrangement between landlord and tenant which B
operates as a fresh demise will work a surrender of the old
tenancy, and this may result from an agreement under
which the tenant gives up part of the premises and pays a
diminished rent for the remainder-and it may result from
the mere alteration in the amount of rent payable (c).
Where one only of two or more lessees accepts a new lease,
it is a surrender only of his share (d)." c
l
In Hill and Redman's Law of Landlord and Tenant, 16th Edn. on page
451, it is observed:

"Any arrangement between the landlord and tenant which D
operates as a fresh demise will work a surrender of the old
tenancy; and this may result from an agreement under
which the tenant gives up part of the premises and pays a
f diminished rent for the remainder, provided a substantial
difference is thereby made in the conditions of the tenancy.
But a surrender does not follow from a mere agreement E
made during the tenancy for the reduction or increase of

- rent, or other variation of its terms, unless there is some
special reason to infer a new tenancy, where, for instance,
the parties make the change in the·rent in the belief that the
old tenancy is at an end." -
F
From the above passage it can be inferred that surrender of a part does
not amount to implied surrender of the entire tenancy and the rest of
the tenancy remains untouched.

We shall now examine the cases cited. In Konijeti Venkayya and
Anotherv._ Tham~a_na Pedg_ Y'enl,g_tg~bbarao and Another, AIR G
1957 ;\.P. 619, Viswanat_lia S~_stri, J. referred to the above mentioned
passage from Wood/all's Law of Landlord and Tenant and observed
that the principle of Jaw is stated correctly.

It can therefore be seen that surrender of the part of the lease
does not amount to surrender of the whole. InN.M. Ponniah Nadarv. H
972 SUPREME COURT REPORTS (1990] 2 S.C.R.

A
Smt. Kamalakshmi Ammal, AIR 1989 SC 467 it is held: \
"A mere increase or reduction of rent will not necessarily
import a surrender of an existing lease and the grant of a
new tenancy. So also if on account of the variation in the
quantum of rent any consequential change is made regard-
B ing the time and manner of the payment of the rent it
cannot have the effect of graver consequences being
imported into the change of rent than what the parties had
intended and warrant a finding by the Court, that the
parties had intended to create a new tenancy in superses-
sion of the earlier one or that by operation of law a new
tenancy had come into existence."
c
From what has been considered above it emerges that surrender of
part of the tenancy does not amount to implied surrender of the entire
tenancy. Likewise the mere increase or reduction of rent also will not
necessarily import a surrender of an existing lease and the creation of a
D new tenancy. We have noticed above that the transfer includes 'lease'.
Therefore it becomes necessary at this stage to consider whether there
has been violation of in junction granted by Justice A .N. Sen which
formed part of the appointment order of the Receiver. So far as the
Grindlays are concerned we are unable to accede to the contention \
I
that a new tenancy is created.
E
It is true that Justice A.N. Sen issued an injunction restraining
the defendants from selling or transferring any of the properties.
There is some force in the submission of the learned counsel for the
appellant that the lease in favour of Tatas amounts to transfer but the
-
same cannot be said of Grindlays. Therefore the question of evicting
f them summarily on this ground does not arise. However, the submis-
sion of the learned counsel is that even the lease in favour of the
Grindlays ei,;pired and by creating a monthly tenancy it may even go
beyond three years, and therefore it is not only creating a new lease
but also is in violation of Rule 5 of the Original Side Rules. We think
we need not deal with this question elaborately in view of the main and
G important question regarding the applicability of the provisions of the
Act. Howt;ver, we have already considered and held that no new
tenancy is created so far Grindlays are concerned. Regarding the
contention of infraction of Rule 5 it must be noted that the tenancy
continued as monthly tenancy and it cannot be said that the Receiver
has created tenan.cy for a period exceeding three years and as observed
H in Utility's case it is an accretion to the old tenancy and not a new
K.K. KHEMKA v. GR!NDLAYS BANK [REDDY, J.] 973

'f tenancy, Merely because there is change in a tenancy namely that it A
.L has become a monthly tenancy, it does not amount to a new tenancy as
contended by the appellant so far as Grindlays are concerned.

It is also submitted on behalf of the Grindlays that no new lease
has been created by the Receiver and they come within the meaning of
B
'tenants' -and therefore they cannot be evicted except as provided
~
' under the provisions of the Act. Section 2(h) of the Act reads thus:
"tenant" means any person by whom or on whose account
or behalf, the rent of any premffies is, or but for a special
contract would be, payable and includes any person con-

~ tinuing in possesion after the termination of his tenancy or
in the event of such person's death, such of his heirs as
were ordinarily residing with him at the time of his death
c
l. but shall not include any person against whom any decree
or order for eviction has been made by a Court of com-
petent jurisdiction."
D
In Damadilal and Others v. Parashram and Others, [ 1976] Suppl. SCR
645 Section 2(i) of the Madhya Pradesh Accommodation Control Act,
1961 which is analgous to Section 2(h) of the Act has been considered
and it is held:
f "Tenancy has its origin in contract. There is no dispute that
E
a contractual tenant has an estate or property in the subject
matter of the tenancy, and heritability is an incident of the
tenancy. It cannot be assumed, however, that with the
determination of the tenancy the estate must necessarily
disappear and the statute can only preserve his status of
y irremovability and not the estate he had in the premises in
F
his occupation."
\
It is also further observed that:

"The definition makes a person continuing in possession

.. after the determination of his tenancy .a tenant unless a
decree or order for eviction has been made against him,
G
thus putting him on par with a person whose contractual
>- tenancy still subsists."

In Biswabani (P) Ltd. v. Santosh Kumar Dutta and Ors., [1980] 1 SCR
650 it is observed that: .
H
974 SUPREME COURT REPORTS [1990) 2 S.C.R.

"If thus the appellant was already in possession as a tenant \
A
of the premises an unsuccessful attempt to create a fresh
lease would not change the nature of his possession as from
a tenant to one in part performance under a void lease. The
appellant continues to be in possession as tenant merely
because the appellant and respondents 1 and 2 attempted
B to enter into a fresh lease which did not become effective."

Their Lordships referred to a passage in Wood/all on 'Landlord and
Tenant' Vol. 1, 27th Edn. page 187 para 446 which reads thus:

"Moreover, if the tenant enters into possession under a
void lease, he thereupon becomes tenant from year to year
c upon the terms~of the writing, so far as they are applicable
to and not inconsistent with a yearly tenancy. Such tenancy
may be determined by the usual notice to quit at the end of
the first or arty subsequent year, and it will determine,
without any notice to quit, at the end of the term
D mentioned in the writing. But if the lessee does not enter
he will not be liable to an action for not taking possession;
nor will an action lie against the lessor for not giving pos-
session at the time appointed for the commencement of the
term but before the lease is executed."

E In an unreported judgment of the Calcutta High Court in Smt. Ashrafi
Devi and Anr. v. Satyapal Gupta & Ors., Suit No. 966/58 dated 9tb
Sept., 1977 Justice Sabyasachi Mukbarji, as he then was, dealt with the
. question of cancelling the tenancy of lease created in respect of a room
and kitchen by the Official Receiver. In that case it was found that the
Official Receiver violating the order of the injunction granted lease
F which the Court found it to be illegal. Then the learned Judge pro-
ceeded further to consider whether such an illegality can be rectified in
the proceedings before the Court and it was held that "Therefore, by
acting in violation of the order of the court, no right, in my opinion,
can be created in favour of a third party. Indeed the court has not
acted. The action was in breach of the order of the court."
G
The learned counsel for the appellant relied on this judgment in
support of his submission that the lease in ifit, instant case created by
the Official Receiver is also illegal. From the facts of that case we find
a clear in junction order was passed specially restraining the Receiver
from creating any new tenancy and in gross violation of that order.
H But, in the instant case, the facts are different. The injunction granted
\
, K.K. KHEMKA v. GRINDLAYS BANK [REDDY, J.) 975

by A.N. Sen, J. does not apply to the tenancy in favour of Grindlays in
respect of flats Nos. 3 and 4 inasmuch as it is an old tenancy though in a
modified form. In Ashrafi Devi's, case as a matter of fact, the learned
A

Judge.observed:

"There was no question of the lease being given without
B
the power by the Receiver or in derrogation odn violation
of the order of the court. The lease within the competency
of a Receiver cannot be impeached or affected in the sum-
mary manner as was contended."

We have already noted that the Grindlays were the tenants in respect
of the four !lats. They surrendered two flats. This partial surrender does C
not put an end to the tenancy and we are satisfied that in respect of the
l Grindlays no new tenancy is created by the Receiver and they
continued to be the tenant and they are entitled to the protection
under the Act.
D
Shri Vaidyanathan, learned counsel appearing for one of the
respondents, relying un..the· Full Bench decision of the Madras High
Court in Arumugha Gounder v. Ardhanari Mudaliar and Others, AIR
1975 Madras 231 contended that the protection under the Act cannot
( be extended to the tenant of a Receiver. In that case the tenant was let
into possession of a land by Receiver appointed by the Court pending E
the suit. The question was whether the provisions of Tamil Nadu
Cultivating Tenants Protection Act, 1955 can be extended to such a
tenant. It was observed in para 6 that:

"So then the act of the Receiver in letting out the land in
the suit is an act of the Co.urt itself and it is done on behalf
of the Court, the whole purpose of the Court taking posses- F
sion through the Receiver appointed by it is to protect the
property for the benefit of the ultimate successful party. If
that is the essence and purpose of appointment of a
Receiver, as we hold it is, it will be difficult to agree that by
a literal application of the Tamil Nadu Cultivating Tenants G
Protection Act, it could be put beyond the reach of the
Court to give relief to the successful party entitled to
possession."

Before arriving at this conclusion, the Full Bench, as a matter of fact,
also observed in para 3:
H
976 SUPREME COURT REPORTS [1990] 2 S.C.R.

A "If literal application of the Tamil Nadu Cultivating
Tenants Protection Act is made, it may prima facie appear
that a tenant let into possession by a Receiver would be
entitled to statutory protection under the Act. A cultivat-
ing tenant in relation to any land has been defined to mean
a person who carries on personal cultivation on such land
B
under a tenancy agreement, express, or implied. A "land-
lord" in relation to a holding or part thereof is defined to
mean a person entitled to evict a cultivating tenant from
such holding or part. A tenant let into possession by a
Receiver appointed by Court literally appears to satisfy the
definition of "cultivating tenant" and the Receiver, the
c definition of "Landlord" because the former carried on
personal cultivating under a tenancy agreement."

The Full Bench however took the view that the Receiver appointed by
the Court acts as an Officer of the Court and he cannot create a lease
which takes the pending matter beyond the purview of the Court and
D
anyone who gets possession through such an act could only do so
subject to the directions and orders of the Court. In our view the
principle laid down by the Full Bench does not apply to the facts in the
instant case atleast to the case of Grindlays as in our view on new
tenancy is created in their favour. Even by the time the Receiver was
appointed the Grindlays were the tenants in respect of the four flats
E and they continued to be so. It is only later after due correspondence
that they made a partial surrender and those two flats were let out to
Tatas after due negotiations in respect of the rent. Grindlays' affidavit
shows that they have also sent rent by way of Bank pay orders and they
have been received by the Landlord. It is only for the first time on
F. 26.7.88 that the tenant was informed to stop the payment of rent.
Further the receiver has not acted in any manner affecting the title.

Now coming to the case of Talas we agree with the High Court
that it is a new tenancy. Such a lease comes within the meaning of
'transfer' and in view of the injunction order passed by A.N. Sen, J.
creation of such a new tenancy is legally barred. In Kerr on Receivers,
G 12th Edn. at p. 154 it is observed:

"The receiver does not collect the rents and profits by
virtue of any estate vested in him, but by virtue of his
position as an officer of the Court appointed to collect
property upon the title of the parties to the action.
H
K.K. KHEMKA v. GRJNDLAYS BANK [REDDY, J.J 977

In appointing a receiver the Court deals with the pos- A
session only until the right is determined, if the right be in
dispute."

It is also useful to note a passage from Sir John Woodroffe book "on
Receivers":
B
"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.''
c
In Kanhaiyalal v. Dr. D.R. Banaji, AIR 1958 SC 725 at p. 729 it was
.l observed:

"A receiver appointed under 0.40 of the Code of Civil
Procedure, unlike a receiver appointed under the insol- D
vency 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 dur-
ing the time that the Court exercises jurisdiction over the
f litigation in respect of the property."
E
In such a situation the question is whether the Tatas can invoke the
benefit of the provisions of the Act. In Smt. Ashrafi Devi's case this is
-. precisely the question that is decided, and we have already referred to
some of the observations made therein. Justice Sabyasachi Mukharji
held further:
F
"On behalf of the transferee of the said property, it was
contended that the West Bengal Tenancy Premises Act,
1956 protects such transferee. If however, a valid lease or a
tenancy had been created then of course, such a lease or a
tenant would be protected but that, in my opinion, begs the
question. Secondly, it was contended that no party should G
be made to suffer because of an Act of the Court, I have
not been able to appreciate this contention. The court
specifically prevented the transfer or creation of the
tenancy. The tenancy which is created was in derrogation
and in violation of the order of the court. Therefore, by
acting in violation of the order of the court, no right, in my H
978 SUPREME COURT REPORTS [1990] 2 S.C.R.

A opinion, can be created in favour of a third party. Indeed,
the court has not acted. The action was in breach of the
order of the court."

Similarly as observed in Arumugha Gounder's case any such act
\
-
of the Receiver done on behalf of the Court pendente lite and anyone
B
who ge,ts possession through such an act could only do so subject to the
directions and orders of the Court. If we apply the above principles to
the case of Tatas the tenancy created in their favour by the Reciever is
in violation and contrary to the injunction order and such an act is
subject_ to the directions and orders of the Court appointing the
Receiver. Therefore the tenancy created in favour of the Tatas was in
c breach of the order of the court and consequently the Tatas cannot
claim any protection under the provisions of the Act and they are
liable to be evicted. In the counter affidavit filed on their behalf, it is )
no doubt stated that they were inducted into possession and even
sending the cheques. The case of the appellant is that cheques were
never encashed. In any event as observed above, the new tenancy
D created in their favour contrary to the orders of the Court does not
create a right and is liable to be cancelled. Consequently the provisions
of the Act cannot be invoked by them. The appeal is therefore dismis-
sed as against respondent No. I Grindlays and allowed as against
respondent No. 2 Tatas. In the circumstances of the case, parties are
directed to bear their own costs.
E
R.S.S. Appeal dismissed.

-