SachIn Barick General Enterprises Pvt. Ltd. Vs. Sm. Parul Barick and ors. - Court Judgment

Excerpt:
- s.b. sinha, a.c.j.1. there shall be an order in terms of prayer (a) of the application.2. having heard the learned counsel for the parties, we are of the opinion that both the appeal and the application should be disposed of treating the appeal on the day's list.3. this appeal is directed against a judgment and order dated 15th september 1999 passed by a learned single judge of this court whereby and whereunder while granting leave to the appellant to induct a tenant, a receiver was directed to be appointed for the purpose of keeping the accounts secretly in his custody and giving inspection thereof to the parties, if they so require. it was further directed that the monthly remunerationof the receiver would come out from the income of the building and ultimately would be adjusted as against the cost of the suit.4. the fact of the matter is not in dispute. an administration suit has been filed by the respondent no. 1 series herein. another group of contenders in the suit are respondent 2(a) to 2(h) represented by mr. basu. the property in question is situated at 8, chlttaranjan avenue which had been brought in the schedule of the properties by way of amendment.5. it is not in dispute that from time to time applications had been made either orally or in writing on eight occasions for letting out different portions of the said property. it is further not in dispute that applications for appointment of receiver had been filed and two out of three applications had been rejected. it is stated that an application for appointment of receiver which has been filed after the aforementioned amendment hjis been carried out and the property situate at 8, chltlaranjan avenue was brought within the purview of the suit. another application for appointment of receiver had been filed which was directed to be heard along with the suit.6. in respect of one of such applications seeking leave to let out the property, an appeal was preferred and a division bench of this court by an order dated 31st july 1995 inter alia, directed that the appeal cannot be entertained as the appellant herein was entitled to seek leave from the court before letting out the properties, as an order of injunction had been in force.7. an application has been filed by the appellant herein for leave to let out 1500 square feet of the properly which has been fallen vacant. the respondents herein did not file any application for appointment of receiver. however, it appears that an oral prayer had been made for appointment of such receiver and upon hearing the learned counsel for the parties the learned trial judge passed the aforementioned order.8. it is now a well settled principles of law that although an order appointing receiver can be passed for the purpose of preservation of the property even if no formal application as such need to be filed, but there cannot be any doubt whatsoever that adequate materials must be brought on records so as to enable the court to arrive at a definite conclusion that it is just and convenient to appoint a receiver. if a receiver had not been appointed for a long time despite the fact that similar applications for grant of leave to let out portions of the property in question had been granted, we fall to understand why on an oral application made by the respondents herein a receiver should have been appointed. a receiver, as is well known, is not appointed unless a strong prima facie case is made out, even in a partition suit a receiver is not to be appointed automatically. this court in krishna deb & ors. v. surendra krishna nandi & ors. reported in 34 cwn 440 has held as follows :-'if, however, that prayer has really been given up an application for a receiver will scarcely lie. the words 'just and convenient' have been taken from the judicature act 1873 where the words are 'just and convenient'. the latter expression has been held to mean 'just and convenient' and it has been held that they do not mean that the courtis to appoint a receiver simply because the court thinks it convenient, but that they mean that the court should make the appointment for protection of rights or prevention of injury according to legal principles. a simple contract creditor who has no specified charge or no right to be paid out of a specified fund cannot in general ask for the appointment of a receiver. in owen v. home(2) the lord chancellor observed:- 'the plaintiffs here do not claim as specific appointees of any part of the defendants' separate estate. they are merely in the nature of general creditors seeking to obtain payment by a sort of equitable action of assumpsit or debt. in such a case it is a strong exercise of authority to deprive the defendant, on motion, of property on which the plaintiffs have no specific claim in order that if they establish their claim as creditors, there may be assets wherewith to satisfy them'. it has been also said that 'the slowness or inadequacy of the legal remedies open to general creditors who have no lien on the defendants' property are not consideration that can move a court of equity, in the absence of statutory authority, to intervene in their behalf, with the instrumentality of a receiver, to preserve the debtors' property' (pomeroy's equity jurisprudence vol. iv para 1533). there is thus a preponderance of authority so far as decisions of english and american courts are concerned in support of the view that in the absence of statutory provisions to the contrary a general contract creditor before judgment is not entitled to a receiver against his debtor upon whose property he has acquired no lien. under or. 40 r. 1, cpc, also the same view appears to have been taken, and it was only when an appointment was valldly made on the ground that the property was the subject matter of the suit that it was allowed by the appellate court to continue as a means of realising the amount decreed against the judgment debtor personally [ramasami naik v. ramasami chetty (3)]. we have also considered the merits and we find ourselves in agreement with the court below in its view that a proper case for the appointment of a receiver has not been made out, the more especially as the defence to the claim does not appear to be so frivolous as to require no investigation as the default of the defendant for the period subsequent to the suit has no very great bearing on the question. on the materials before us, we are not satisfied that circumstances exist in this case creating an equity on which alone the jurisdiction to appoint a receiver arises'. 9. in muniammal v. ranganatha nayagar reported in : air1955mad571 , the madras high court has laid down three principles which must be considered before an order appointing a receiver is passed. the said three principles referred to as three in number by the learned trial judge are enumerated in paragraph 19 which are no follows :--9.1. '19. the principles which should guide indian courts in the appointment of receiver are three in number. first of all a plaintiff applying for the appointment of a receiver must show 'prima facie' that he has a strong case and good title to the property or a special equity in his favour and that the property in the hands of the defendant is in danger of being wasted :-- 'muhammad qasim ravathor v. nagaraja moopnar' : air1928mad813 . it is not enough for the plaintiff to show that he has a fair question to raise as to the extent of the right alleged as in the case of a temporary injunction, but he must go further and make out that he has a good 'prima facie' title requiring court's protection and safeguarding pending litigation and which must be made out on the facts of that particular case. guruswami pandiyan v. s.k.p. chinnathambrar' air 1919 mad. 157 at p.158 (z14). 9.2. secondly, where the property is in media that is to say, in the possession of no one, a receiver can readily be appointed. but where any one is in possession under a legal claim strong & compelling reasons are necessary for interfering with such possession :-- 'sibaji raha sahib v. aiswariyanandaji sahib' air 1915 mad. 926 at p. 929 (z15): air 1924 mad 482 at p. 483 (z.112)'. thus the 'bonafide' purchaser of the property--'bona fides have to be presumed unless and until the contrary can be inferred--in dispute should not be disturbed by the appointment of a receiver unless there is some substantial and compelling ground for such interference. 9.3. where there is no apprehension of waste or danger, a receiver will not be appointed merely on the ground that the applicant apprehends difficulty in obtaining possession of properly in the event of success or in realising meane profits or the opposite party is poor or a woman. specific acts capable of being tested should be alleged; 21 mad lj 821(z11); air 1915 mad 926 (z15). violently stated vague allegations constitute no substitute for vacuum of facts. 9.4. thirdly, an application for appointment of a receiver should always be made promptly and delay in making it is a circumstance unfavourable to such an appointment. but of course the matter should be considered judicially in all its aspect before being disposed of as there may be legitimate reasons for preferring an application after delay: 'pattinharakcttu v. manavedan' : air1936mad966 . if all these conditions are satisfied, and it is found just and convenient to appoint a receiver, the court can exercise its discretion in favour of the applicant.' 10. further, mr. basu appearing on behalf of the respondent 2 series very categorically stated before us that he did not oppose the prayer of the appellants herein but submitted that when an order had been passed appointing receiver only for the purpose of overseeing the accounts maintained by the appellants the same need not be interfered with.11. mr. sarkar appearing on behalf of the respondents 1 to l(g) submitted a partition suit between the parties being suit no. 431 of 1974 is pending. learned counsel submits that the appellants had been enjoying the fruits of the rents and the application for appointment of receiver has been pending since 1974. the impugned order has not been passed in a suit for partition. pendency of such a suit, however, is not disputed by mr. das but we would not like to go into the aforementioned question. as the learned trial judge had been passing orders on similar applications, we fail to understand why at this juncture without any application an order for appointment of receiver has been passed. the principles which wererequired to be followed before passing an order appointing a receiver had not been considered by the learned trial judge. it is not a case where any allegation had been made against the appellant as regards non-maintenance or improper maintenance of the accounts. in our considered opinion, the purpose for which the receiver had been appointed could have been achieved by directing the appellant to submit a profit and loss account as also a balance sheet. mr. das states that his client shall file with the registrar, original side of this court a copy of the last audited balance sheet together with a copy of the profit and loss account. let the same be filed within two weeks from date hereof. the appellants shall also furnish particulars of the tenants if the same do not appear from the profit and loss account and/or the balance sheet. it will be open to the parties to take inspection of the said documents from the registrar, o.s.12. the order of the learned trial judge in so far as the same relates to appointment of receiver is set aside.with the aforementioned directions, this appeal and the application are disposed of. all undertakings are discharged.xerox certified copy of this judgment and order be made available to the parties on a priority basis.13. appeal disposed of