Krishna Kumar v. Grindlays Bank PLC, AIR 1991 SC 899

This case draws a clear line: a Receiver cannot grant a new tenancy beyond three years or in breach of an injunction without court leave. A lease is a transfer. So, leasing during an order that bans “transfer” is unlawful. The Supreme Court kept Grindlays as a continuing old tenant but ordered Tata Finlay to vacate because their tenancy was an illegal, new lease by the Receiver.

• Rule of thumb: Receiver = powers only as the Court grants.
• Injunction scope: “Transfer” covers leases too.

1. Could the Receiver create a new tenancy without the Court’s permission?
2. Did leasing to Tata Finlay violate the injunction against “transfer”?

• Receiver’s power: No lease beyond 3 years without leave of Court (Calcutta HC Original Side Rules, Ch. 21 R. 5(a)).
• Lease = Transfer: A lease transfers an interest in land; an injunction against transfer covers leasing too.
• Unlawful tenancies: A tenancy created in breach of court orders does not bind the true owner and lacks statutory protection.

• Receiver’s limit: No lease beyond 3 years without court leave; strict compliance is required.
• Lease = transfer: Creating a lease despite an injunction against transfer is unlawful and not binding.
• Different outcomes: Grindlays validly continued as tenant in remaining flats; Tata Finlay was an unlawful new tenant and liable to be evicted.
• No statutory shield: Unlawful tenants do not get protection under the West Bengal Premises Tenancy Act.

A Receiver acts only within court-granted powers. A lease is a transfer; making or continuing a lease contrary to an injunction or without leave is void and does not confer tenancy rights.

• Protects court control over receivership estates.
• Warns parties: injunctions bar all forms of transfer, including leases.
• Clarifies when continued occupation is a continuation vs. a new tenancy.

• 1 Receiver needs leave for leases beyond 3 years.
• 2 An injunction against transfer includes leasing.
• 3 Unlawful tenants get no statutory protection.
• 4 Partial surrender ≠ end of remaining tenancy.

Mnemonic: “RIL: Receiver, Injunction, Lease.”

• Receiver needs court leave.
• Injunction against transfer covers leases.
• Lease in breach is lawless (invalid).

3-Step Hook:

1. Check if an injunction restrains “transfer”.
2. Ask if court leave exists for the lease (esp. >3 yrs).
3. Classify occupation: continuation vs new tenancy.

Receiver

A court officer who manages property during a case; acts only under court authority.

Transfer

Conveying an interest in property; includes granting a lease.

Continuation Tenancy

Ongoing occupation after expiry that keeps the nature of the old tenancy unless terms fundamentally change.

Statutory Protection

Shield under tenancy laws; not available to tenants under unlawful leases from a Receiver.