Banwarilal Agarwalla vs Sudhamoy Basu

P.N. Mookerjee, J.—An interesting question arises for discussion in the present case. The Petitioner is the tenant in respect of one shop room No. G.F. 5 in the ground floor of premises No. 201/A, Harrison Road, Calcutta. The opposite party is the receiver appointed in suit No. 1224 of 1950 of this Court on its Original Side in respect of the said premises and the Petitioner claims to hold the disputed shop room No. G.F. 5 under him as his landlord. The contractual rent was Rs. 65 per month. On the allegation that the said contractual rent was exorbitant the Petitioner applied before the rent controller, Calcutta, for fixation of the standard rent of the disputed shop room in accordance with the provisions of the West Bengal Premises Rent Control (Temporary Provisions) Act of 1950. That application was opposed by the opposite party on the merits and also on the ground that it was not maintainable in law as no leave of the Court, appointing him as receiver as aforesaid, had been obtained by the Petitioner for proceeding against him. This last objection, however, does not appear to have been considered by the rent controller and, as he found that on a proper assessment the Petitioner''s standard rent under the Rent Control Act of 1950 should be Rs. 23-14 per month on the materials before him, he passed an order to that effect, giving necessary relief to the Petitioner on the merits of his application. The landlord opposite party appealed from this decision of the rent controller and the learned appellate Judge has now upheld the receiver landlord''s contention that the application for standardisation of rent was not maintainable in law against him in the absence of leave of'' the appointing Court and. in that view of the matter, he has dismissed the Petitioner''s application without entering into its merits. Against this appellate decision the present Rule has been obtained by the Petitioner.

The Rule requiring leave to sue a receiver is not based on any statutory authority but had its origin on reasons or considerations of public policy [vide in this connection, Braja Bhusan Trigunait v. Sris Chandra Tewari AIR [1918] (Pat.) 100 : 47 I.C. 719; vide also, Banku Behary Dey v. Harendra Nath Mukerjee (1910) 15 C.W.N. 54.] It is an ancient rule of salutary import which has for all practical purposes become a part of the law of the land. It has seldom been departed from in actual practice where actions of the receiver qua receiver in relation to the properties in his charge are in question. The rule covers a wide field. Its application is not limited to suits, strictly so-called, but also extends to other legal proceedings [vide in this connection, A.B. Miller v. Ram Ranjan Chakravarti (1884) ILR 10 Cal. 1014; A.M. Dunne v. Kumar Chandra Kissore (1902) ILR 30 Cal. 593; W.R. Fink v. The Corporation of Calcutta (1903) ILR 30 Cal. 721; Santok Chand v. Sugan Chand Mahawat (1918) ILR 46 Cal. 432; Mrs. Levina Ashton v. Madhabmoni Dasi (1910) 14 C.W.N. 560; Jotindra Nath Choudhury v. Sarfaraj Mia (1910) 14 C.W.N. 653; Banku Behari Dey v. Harendra Nath Mukerjee (1910) 15 C.W.N. 54; and Sarat Chandra Banerjee v. Apurba Krishna Roy (1911) 15 C.W.N. 925]. The basic principle on which the rule is founded is unexceptionable and, as the appointing Court has a judicial discretion in the matter of granting such leave, and, as, in practice, such leave is readily granted in appropriate cases, the rule has very seldom worked any injustice. When the Court appoints a receiver over a particular property it is the Court which really takes charge of the same. The property remains in the custody and management of the Court-it does not, strictly speaking, vest in the receiver where the appointment is, as in the present case, under Order 40, Rule 1, of the Code [vide, Maharana Kunwar Vs. E.V. David and Others, ; Shyam Lal Gomatwala Vs. Nand Lal and Others, ; vide also in this connection, Haji Cassim Mamooji v. K.B. Dutt (1914) 19 C.W.N. 45] and the receiver merely acts as the Court''s officer in the matter of such management. It is only proper, therefore, and, indeed, it is imperative for the maintenance of the dignity of the Courts and respect for the judiciary, so essential for a stable administration, that the property or any rights therein should not be allowed to be affected or interfered with without the leave of the said appointing Court and the persons, desiring to take any step which might affect the said property or any rights therein, should be obliged to obtain that Court''s leave in that behalf. Such leave, as we have said above, is freely granted in appropriate cases. Its requirement, therefore, places no obstacle in the way of justice; on the other hand, it is clearly conducive to a sound judicial administration, avoiding chaos and confusion, which might otherwise ensue. It seems to us, therefore, that on principle the rule should have a wide application and as a proceeding for standardisation of rent may well affect the income or the payment to be made for occupation of the disputed property and may thus conceivably affect the said property, or, to be more precise, rights and liabilities of the parties in respect thereof in the matter of rent, there is no reason why the rule should not apply to such a proceeding.

The learned advocate for the Petitioner has, however, urged several grounds in support of the present rule. He has first contended that the reasons of public policy on which the rule is founded do not apply to proceedings for standardisation of rent. We have explained above the basic or the underlying reasons of the rule and we have shown also that those reasons cover a wide field. Indeed, the reasons are such as make the rule applicable to all actions against the receiver qua receiver in respect of the property in his charge and a proceeding for standardisation of rent, seeking to affect, as it does, the rights and liabilities of the parties in respect of the disputed premises in the matter of rent, is not outside its pale but is well within the reasons of the rule. To such a case, therefore, the rule cannot be refused application on the ground that it is outside its reasons and the Petitioner''s first contention must, accordingly, fail.

It was argued next that the basic principles on which the rule was founded were not sound, that, in any event, they did not apply to modern conditions, and the public policy which dictated the adoption of the rule and largely furnished its reasons had long become out-of-date. In discussing the reasons of the rule we have practically answered this argument and answered it against the Petitioner. We have already held that the rule rests on cogent reason and it is clear also that the considerations which sustain it are as much present today as they were in olden times. The Petitioner''s argument, therefore, cannot be accepted.

It seems to us further that it is not open to the Courts to examine the reasons of the rule and to refuse its application to a particular case, well within its fold, on the ground that those reasons are bad or that they or the public policy underlying them do not apply to modern conditions. The rule, as we have seen above, is a part of the law of the land and it is wide enough to cover all actions against the receiver qua receiver in respect of the property in his charge and to include within its scope a proceeding for standardisation of rent and, that being so, it seems to us that the Court is not free to disregard it on its own view of the soundness of its reasons or of the public policy which led to its adoption.

It is true that the rule, requiring leave of the appointing Court to proceed against the receiver, originated in reasons of public policy but it has, as we have said above, practically become a part of the law of the land. Initially, no doubt, the rule was adopted from the English system but, as in England, so in this country, this sound rule of prudence and practice crystallised as it were, through passage of time and long and almost uninterrupted application through ages and in various circumstances, into a rule of law. The rule, however, was never in doubt and, though originating in public policy, it has long become inextricably inter-woven into the texture of our legal system and acquired the sanctity of a rule of law. It will not be true to say that the rule emerged "from doubt into certainty "under the influence of successive judicial decisions". It was clear from the very beginning. It is, therefore, not open to Courts to examine the reasons of the rule or the public policy which might have initially lain behind the same and to refuse, upon such examination, to apply the rule to a particular case, to which it is otherwise applicable. Their clear duty is to apply the rule "with rigour" and, unless there are recognised exceptions and, in the present case, we find none, and the particular case falls within them and is thus outside the rule, the Courts cannot disregard it on any other consideration.

When a rule, originating in public policy, becomes crystallised into a rule of law it is not for the Courts to examine its reasons but their clear duty is to apply it as a part of the law of the land as sacred and binding as statutory enactments. Recognised exceptions have no doubt to be respected but, subject thereto, the rule must have full application. Support for this view is to be found in the well-known case of Rodriguez v. Speyer Brothers [1919] A.C. 59, where the Law Lords-though they differed in their ultimate conclusions and the final decision was of a majority of three to two-gave practically unanimous approval to the above proposition of law. There is little doubt that the minority judgments of Lord Atkinson and Lord Sumner were almost wholly based upon that proposition and the majority too accepted it although, according to them, it had no application to the facts of that particular case. The Lord Chancellor, Lord Finlay and Lord Parmoor were of the opinion that the case before them fell outside any inflexible rule of law (vide, pp. 67 and 68 of the report and pp. 136 and 141) and Viscount Haldane was apparently of the view that the rule there under consideration was not sufficiently well-established (vide p. 86).

That the Law Lords, constituting the majority, were not disputing the proposition, to which reference has been made above, appears fairly clear from the following passages in the majority judgments, namely,-

Per Lord Finlay L.C. at p. 66 of the Report:

The rule is founded on public policy ; but any such rule must be observed, even if there are circumstances in any particular case which make the enforcement contrary to public policy, and indeed detrimental to the interests of the country.

Per Viscouit Holdane at p. 81 where, in classifying rules founded on public policy, he speaks of "the law" which "although based originally on public policy has become so "crystallised that only a statute can alter it" and, then again, after referring to cases coming under it as the "first class" of cases, he proceeds to observe at p. 83 of the Report:

Whether the question is one of convenience is irrelevant if the case belongs to the first of the classes to which I have referred-that in which the principle is so definitely crystallised as part of the common law that it is inadmissible, notwithstanding that the original foundation of the principle may have been the convenience of the State, to go behind the rule to see whether the reason for it applies in a particular case.

Then follows a criticism of lord Watson''s statement in the Maxim-Nordenfelt case [1894] A.C. 535, that "decisions based on grounds of "public policy have not the same binding authority as decisions "which formulate principles which are purely legal".

It is also fairly clear from the report that the other majority judgment, namely, that of lord Parmoor, was mainly based upon the view that there was no established inflexible rule of law founded on public policy which governed the particular case before him (vide p. 136 and also p. 141) and in this judgment too it is expressly stated at the top of p. 136 that "it is beyond the "jurisdiction of tribunals to determine matters of national "policy".

It thus appears that the difference between the decisions of the two groups was confined entirely to the nature, scope and application of the rule which they were considering in the particular case before them. That rule, according to the minority (Lord Atkinson and, Lord Sumner), was well-established and absolute and unqualified and admitted of no exceptions. The lord Chancellor also held that the rule in question was an established rule of law but that it did not extend to the case before them ; or, in other words, that the rule had recognised exceptions. Viscount Haldane was apparently disinclined to treat the rule as a settled absolute rule of law in view of the sharp cleavage of judicial opinion on the point, as appearing to him, and lord Parmoor felt that no established inflexible rule of law, based on public policy, actually covered the case. Strictly speaking, therefore, the two groups differed only on the question of the nature, scope and application of the rule which was invoked before them and it was this difference which ultimately led to the divergence in their final conclusions in the case, the minority holding that the rule applied to the facts before them, the majority taking the contrary view. The proposition, however, which we have set out above, was not really doubted or seriously disputed.

A similar view of the law also appears in the earlier English cases reported in Egerton v. Earl Brounlow [1853] 4 H.L. Cases 1 and Janson v. Driefontein Consolidated Mines Ltd. [1902] A.C. 484 where Baron Parke and Lord Halsbury expressed themselves very clearly on the subject, and more recently, in the case of Continental Tyre Rubber Co., Ltd. v. Daimler Co., Ltd. [1915] 1 K.B. 893, 912-13 and, although the actual decision in this last-mentioned case was eventually reversed on appeal to the House of Lords [vide, Daimler Co. Ltd. v. Continental Tyre and Rubber Co. (Great Britain) Ltd. [1916] 2 A.C. 307, the observations of Lord Reading, C.J. at pp. 912-13 on this point were not really affected by the appellate judgment. At any rate, it is fairly clear that notwithstanding protests and observations to the contrary from a jurist of the eminence of Lord Watson in Nordenfeldt v. Maxim-Nordenfeldt Guns and Ammunition Co. (Supra), the proposition, we have stated above, received practically unanimous approval of the five Law Lords in Rodriguez v. Speyer Brothers (Supra). To us also the proposition seems to be sound and apparently well-founded, and, although the point is not altogether free from difficulty, on the present state of the authorities and in view of the well-recognised principles, discussed in Rodriguez''s case, we are unable to hold otherwise.

On the above view, too, the Petitioner''s present contentions cannot be accepted and the grounds, noted above, in support of the rule must fail.

The next point, urged in support of the rule, is to the effect that the Rent Control Act has expressly and in general terms authorised the institution of a proceeding for standardisation of rent by a tenant against his landlord and, there being no exception made in favour of a receiver landlord, such a proceeding can be instituted solely under the authority of the said Act even as against a receiver landlord and no question of any leave or the application of the rule, requiring such leave, can arise in connection with such a proceeding. In short, the submission is that a statutory right of action is not within the province of the said rule and is in no way affected by it and the Petitioner contends that the Rent Control Act having made no exception in the case of a receiver landlord a proceeding under the Act and expressly authorised by that statute against such a landlord stands on no different footing from similar proceedings against other landlords and is not hampered by any special rule applicable to receivers in relation to other proceedings. Prima facie, this submission appears to have considerable force but when closely examined it betrays an inherent weakness. A rule of law or a rule of practice firmly established as part of the law of the land is equally applicable to all actions statutory [vide, Pagge v. Neath District Tramways Co. [1895] 2 Ch.D. 508] or otherwise, unless there are exceptions, recognised in the said rule itself, or unless such exceptions are made expressly or impliedly by the statute in question conferring the particular right of action. The case of K. Kuppuswami Aiyar v. P.S. Suppan Chetti ILR (1907) Mad. 505 : 17 M.L.J. 483 may be cited as an instance of implied exception where the statute in question clearly contemplated an action against the receiver and indeed against the receiver alone. That was how it was treated by their Lordships, deciding the said case. On a consideration of the relevant statutory provisions, there involved, their Lordships apparently found in them an implied exception to the "rule of "leave", and if that view of the said statute was correct, and there is nothing to show that it was not, there can be no question that the application of the rule was there rightly refused. The same, however, cannot be said of the other Madras case, reported in V.K. Kelu Achan v. Thandavan Chettiar AIR [1933] (Mad.) 340, where Walsh, J. though he explained and distinguished the Kuppuswami''s case, as we have done above, made some definite observations which undoubtedly support, in a large measure, this branch of the Petitioner''s contention. It must be remembered, however, that the case before the Madras High Court in V.K. Kelu Achan v. Thandavan Chettiar AIR [1933] (Mad.) 340, was of a different character and the learned Judge did, as a matter of fact, base his decision upon another ground on the authority of an earlier decision of that Court, reported in S.A. Rajamier Vs. M.R.M.A. Subramaniam Chettiar and Others, , which was sufficient to justify his ultimate conclusion in the case before him. The learned Judge further found in that case that there was sufficient sanction from Court for proceeding against the receiver. The observations of Walsh, J. on the question, now before us, are, therefore, in the nature of obiter dicta, and in any event, they are far too wide for an unqualified acceptance. In our opinion, the rule requiring leave to proceed against a receiver is as much applicable to a statutory right of action as to a general right, save where, as in Kuppuswami''s case, a contrary intention can be found from the statute in question, where such action is likely to affect the property in his charge as such receiver or any rights therein. (The Rent Control Act is a general statute and not one contemplating actions against receivers alone or authorising particular actions against receivers as such, as the Madras statute which came up for consideration in Kuppuswami''s case. The Rent Control Act, therefore, cannot be placed within the exceptions so as to exclude rights of action given under it from the operation of the above rule, that is, the "rule of leave", which we are here considering. We, accordingly, overrule the Petitioner''s present contention.

It has also been argued before us that to require leave in this case would lead to manifold practical inconvenience and hardship and may even mean denial of justice. We do not think that this is so. In this simple matter unnecessary expenses may easily be avoided even on the Original Side of this Court by taking recourse to the "in person" procedure, so often adopted there nowadays, and, as leave to proceed against a "receiver is, as we have already said, very freely given, almost as a matter of course, unless there be mala fides on the part of the Appellant, we are far from convinced that there would be any sufficient inconvenience or hardship or any injustice to justify the exclusion of this case from the rigours of the rule in question, even assuming that such exclusion is permissible and there is grave doubt as to that if, as we have held above, the rule is part of the law of the land, or, possibly too, if the present case falls within the reasons of the rule even when it is regarded as a mere rule of public policy, on considerations of justice, hardships or inconvenience. This argument also, advanced by the Petitioner''s learned advocate, is accordingly, rejected.

It was last argued on behalf of the Petitioner that the rule, requiring leave to proceed against a receiver, is limited to proceedings before a Court, strictly so-called, and the rent controller not being such a Court in law, that rule cannot apply to proceedings before him. We are unable to accept this argument.

In the application of the rule no such exception appears to have been recognised and, indeed, so it seems to us, it has always been treated as absolute and of the widest scope and character.

We have also examined above the principle on which the rule is founded. That principle hardly justifies limiting the rule to proceedings before a Court, strictly so-called. On principle-and, also, as a matter of law,-the rule will equally apply to proceedings before judicial and quasi-judicial tribunals having some though not all the trappings of a Court of law, strictly so-called.

If, therefore, the rent controller has at least the attributes of such a tribunal, even if he be not a Court, strictly so-called, the Petitioner''s present argument must fail. We, accordingly, proceed to investigate this aspect of the matter.

Under the Rent Control Act of 1950 the controller performs judicial functions, deciding disputes between parties concerning their legal rights under the authority of the statute [vide, for example, Sections 9 and 10 read with Sections 3 and 17(2) of the Act] and in accordance with the CPC (vide, Rules 8, 9 and 10 of the Rent Control Rules, 1950), that is, the prescribed rules of the general law of procedure of the land. He is, therefore, certainly a Court in the wider sense of the term, if not a Court, strictly so-called, and is a judicial or, at least, a quasi-judicial tribunal possessing many of the attributes of a strict Court of law. This was the view taken under the earlier Rent Control Act of 1920 in H.D. Chatterjee v. L.B. Tribedi (1921) 26 C.W.N. 78 and In re: Allen Bros. Co. v. Bando and Co. (1922) 26 C.W.N. 845, where the rent controller''s position was more or less similar. The three cases in Kiron Chandra Bose v. Kalidas Chatterjee (1943) 47 C.W.N. 460; Sm. Suhashini Das v. Mahendra Kumar Bose (1947) 51 C.W.N. 818; and Bibhuti Bhusan Chakravarty v. Surendra Mohan Lahiri (1949) 4 D.L.R. (Cal.) 245, dealt with different matters and raised different considerations which are not relevant for our present purpose. The question which we are now considering was not before the Court on those occasions and we find nothing in those judgments which militates against the view we have taken of the position of the rent controller under the 1950 Act. We may add that, on principle, that view is well-supported by the recent decision of this Court in the case of Haripada Dutta v. Ananta Mandal (1951) 56 C.W.N. 124, following the Supreme Court decision in the The Bharat Bank Ltd., Delhi Vs. Employees of the Bharat Bank Ltd., Delhi and The Bharat Bank Employees'' Union, Delhi, .

We hold, accordingly, that the rent controller is at least a quad-judicial tribunal having strong affinities to a Court, strictly so-called, and, in proceedings before him, the rule requiring leave to proceed against a receiver will apply. The Petitioner''s argument, noticed above, is also, therefore, rejected.

The question, however, still remains whether the straightway dismissal of the Petitioner''s application for standardisation of rent merely because no leave to proceed against the receiver opposite party had been obtained can be supported. We do not think that the appellate order in this behalf can or ought to be sustained in the circumstances of this case. It is now well-established in this Court and in the other High Courts as well that the absence of leave at the initial stage is not necessarily fatal to the particular proceeding [vide, Banku Behari Dey v. Harendra Nath Mukherjee (supra); The Maharaja of Burdwan v. Apurba Krishna Roy (1911) 15 C.W.N. 872; Sarat Chandra Banerjee v. Apurba Krishna Roy (supra); Rustomji Dhanjibhai Sethna v. Frederic Gaebele (1918) ILR 46 Cal. 352 : 23 C.W.N. 496; Nripendra Kumar Dutta v. Nikunja Behari Das Chaudhuri AIR [1920] (Cal.) 778; Srihari Jana and Others Vs. Satya Charan Dulia and Others, ; Jamsedji F. Shroff v. Hussenbhai Ahmedbhai AIR [1920] (Bom.) 11: 22 Bom. L.R. 319; Karooth Parakote Ammuhutty v. K.P.K.P.T. Manavikraman ILR (1920) 43 Mad. 793 and Jagana Sanyasiah v. Mycherla Peda Atchanna Naidu (1921) 42 M.L.J. 339]. In a proper case leave may be obtained subsequently and such subsequent leave may well suffice in law to cure the defect, arising from the non-taking of leave prior to the institution of the proceeding. That has been clearly held in the cases cited and the contrary view once taken in the solitary case of Pramatha Nath Ganguli v. Khettra Nath Banerjee (1904) 9 C.W.N. 247 : ILR 32 Cal. 270-and we do not think that either Mutter''s case or Dunne''s case cited above, really touches the point or supports this authority has hardly met with favour either in this Court or in any of the other High Courts. Usually, in such cases, the proceedings in question are suspended for a time to enable the party concerned to obtain the necessary leave from the Court which appointed the receiver (vide, e.g., Banku Behari Dey''s case and Sarat Chandra Banerjee''s case already cited) and we find nothing in the case before us to justify a departure from this normal practice. To dismiss the present proceedings leaving the Petitioner to apply again for standardisation of rent after obtaining leave against the receiver opposite party may be somewhat prejudicial to his rights and will not certainly be conducive to justice. For this technical defect, not irremediable in law, the Petitioner may lose some just benefits, available to him in the present proceedings, if he is driven to start anew his claim for relief, and we are not prepared to adopt that unjust course when the law contains no such compulsion in that behalf. This Rule, therefore, must succeed to that extent and the Petitioner should be given an opportunity a reasonable opportunity and sufficient time-in that behalf to obtain the necessary leave and then to continue the present proceedings in accordance with law.

We, accordingly, make this Rule absolute in part, set aside the order of the learned appellate Judge and send the case back so that the Petitioner''s appeal u/s 32 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, may be heard in accordance with law after giving him an opportunity as indicated above, sufficient time to obtain the necessary leave against the receiver-Respondent. There will be no order for costs in this Rule.

Guha Ray, J.

I agree.