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Musst. Brij Indar Kuar Vs. Thakur Jai Indar Bahadur Singh - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtMumbai
Decided On
Judge
Reported in(1932)34BOMLR1188
AppellantMusst. Brij Indar Kuar
RespondentThakur Jai Indar Bahadur Singh
DispositionAppeal allowed
Excerpt:
.....legatee, and obtained a decree, affirming the charge and appointing a receiver. the defendant paid to the receiver the arrears of annuity due to the plaintiff, but the receiver misappropriated the same, and the plaintiff applied for execution of the decree by sale of the properties charged with the payment of her annuity :-; (1) that the receiver was not an agent of the plaintiff with authority to receive payment on her behalf;; (2) that there was no order of the court under which the defendant) paid or was authorized to pay the money to the receiver;; (3) that, under the circumstances, the plaintiff was entitled to recover the arrears of the annuity by sale of the properties charged. - - babu brijmohan dayal, a pleader of the court, was appointed receiver without security, with..........filed a reply raising various contentions as regards his undertaking. he also alleged that he had paid to the receiver three six-monthly instalments of rs. 6,180, rs. 6,000 and rs. 6,180 on account of annuities due from october 19, 1923, to april 18, 1925, and contended that if the receiver misappropriated the money and the securities, the loss should be borne by the appellant and the other annuitants.12. the district judge found against the respondent on all points and by his order dated july 4, 1928, he directed execution to issue.13. against this order the respondent appealed to the chief court of oudh. the learned judges agreed with the district judge that the respondent had failed to carry out his undertaking, but they held, differing from him, that the payment by the respondent of.....
Judgment:

Dinshah Mulla, J.

1. Thakur Rajindra Bahadur Singh died on October 18, 1912, leaving a will dated June 14,1907, and a codicil dated October 4, 1912. By his will he bequeathed the residue of his estate to his nephew, who is the respondent before this Board. By his codicil he left a monthly sum of Rs. 200 to the appellant, Rs. 500 to his widow, Rs. 300 to another daughter and Rs. 30 to a female servant, and charged certain properties with the payment of the annuities.

2. All the annuities fell into arrears and on January 30, 1920, the appellant, who was then a minor, brought the suit out of which the present appeal arises against the respondent to recover the arrears of the annuity due to her, for the administration of the estate of the testator, and for the appointment of a receiver. The other annuitants were joined as defendants to the suit.

3. Two other suits were also filed, one by the appellant's sister and the other by the servant, to recover the arrears of the annuities due to them.

4. All three suits were heard by the District Judge of Lucknow, and on October 14,1922, a preliminary decree was passed for the administration of the estate. Babu Brijmohan Dayal, a pleader of the Court, was appointed receiver without security, with power to sell the properties, and a scheme was framed for the payment of past as well as future annuities to all the four annuitants, A schedule of the properties charged with the payment of the annuities was appended to the decree.

5. Against this decree the respondent appealed to the Court of the Judicial Commissioner of Oudh, proposing an alternative scheme for the payment of thearrears which up to October 18,1923, had amounted to Ra. 73,950-8-0, and for the payment of future annuities. The Judicial Commissioner considered that the scheme was reasonable, and passed a decree on December 13, 1S23, declaring that the appellant was entitled to Rs. 26,400 for arrears up to October 18, 1923, and to a further payment of Rs. 200 per month for her life, and providing for the payment of the Rs. 73,950-80 out of two sums, one of Rs. 47,668-15-6, being the aggregate of four of the items specified in the schedule to the decree, and the other of Rs. 26,281-8-6 which the respondent was ordered to pay into Court to make up the Rs. 73,950-8-0. The four items referred to above were:-

Rs. 3,493 0 0 ... Estimated value of cattle in

the possession of the receiver.

Rs. 27,929 4 7 ... Represented by War Bonds purchased

out of Rs 20,000

paid into Court by the Court of

Wards under a decree for Ra. 1,00,000,

and deposited for safe custody with the

Allahabad Bank, Lucknow.

Rs. 1,746 10 11 ... Price of cattle sold by receiver.

Rs. 14,200 0 0 ... Government promissory notes also

deposited with the Allahabad Bank.

Rs. 47,668 15 6

6. It would appear that the respondent was restrained by an injunction from realising the decree for Ra. 1,00,000 against the the Court of Wards, It was directed by the decree that if the respondent paid into Court Rs. 26,281-8-6 and executed certain hypothecation deeds on or before March 12, 1924, the injunction should be dissolved, otherwise the appeal should be dismissed. The decree also contained a clause providing that ' all the annuitants shall be entitled to recover their annuities from theproperties ' specified in the decree. As regards future payments, it was directed that they should be made every six months instead of every month.

7. The respondent paid the Rs. 26,281-8-6 into Court, and filed the hypothecation deeds within the time fixed by the Court, and the injunction was removed by an order made on March 18, 1924.

8. Subsequently the receiver complained to the Court that no cattle had come into his possession, nor had any been received by him, and that the value of the War Bonds and the Notes had been over-estimated. Thereupon the respondent undertook to pay into Court the two cattle items and the deficiency, if any, that might arise on a sale of the securities.

9. In July, 1924, the receiver obtained possession of the securities from the Allahabad Bank, and he absconded in September, 1925. It is not known what he did with the securities) nor is it known how much he paid to the other annuitants,

10. After several fruitless attempts to recover the annuity due to her, the appellant presented an application to the District Judge on April 5, 1928, for execution of the decree by sals of the properties charged with the payment of the annuities under the decree. She stated that, in addition to the Rs. 26,400 awarded to her by the decree, a further sum of Rs. 3,600 had become due to her from October 19, 1928, up to April 18, 1925, and that nothing had been paid to her. She also complained that the respondent had failed to pay into Court the several sums which he had undertaken to pay.

11. To this the respondent filed a reply raising various contentions as regards his undertaking. He also alleged that he had paid to the receiver three six-monthly instalments of Rs. 6,180, Rs. 6,000 and Rs. 6,180 on account of annuities due from October 19, 1923, to April 18, 1925, and contended that if the receiver misappropriated the money and the securities, the loss should be borne by the appellant and the other annuitants.

12. The District Judge found against the respondent on all points and by his order dated July 4, 1928, he directed execution to issue.

13. Against this order the respondent appealed to the Chief Court of Oudh. The learned Judges agreed with the District Judge that the respondent had failed to carry out his undertaking, but they held, differing from him, that the payment by the respondent of the three sums to the receiver was proved. The question as to who should sutler for the receiver's defalcations was, they thought, one of great importance, and they referred the following question to a full bench:-

Where the judgment- debtor is proved to have paid money, due from him under a decree passed by the Court, to the receiver appointed by the Court for realising certain sums of money and making payments to the decree-holder or decreeholders or other money or property is proved to have come to his hands and the receiver is found to have misappropriated the money and the property, on whom should the loss fall f Should the loss fall on the judgment-debtor or on the judgment-creditor

14. The answer given by the full bench was that the loss should be borne by the judgment-creditor, that is, the appellant.

15. After receipt of the opinion the learned Judges delivered their judgment, They held that, having regard to the opinion of the fall bench, the only liability of the respondent was to pay what he had undertaken to pay into Court, which they fixed at Ra 13,621-14-10. Accordingly, they passed a decree on March ], 1929, declaring that the respondent was liable to pay Rs. 13,621-14-10, out of which the appellant was entitled to only a proportionate share, based apparently on the supposition that the other annuitants were in like case with the appellant, as to which there was no evidence. They also directed that unless the respondent paid the amount into Court on or before June 1,1929, a sufficient portion of theproperties should be attached and sold, but they seem to have given no direction as to the disposal of the sale proceeds in that event. From this decree the appellant has brought the present appeal to His Majesty in Council.

16. It was urged before their Lordships on behalf of the appellant that the charge created by the decree was not affected by the defalcations of the receiver, and that no payment having been made to her, she was entitled to be paid the full amount claimed by her out of the properties charged with the payment of the annuities. On the other hand, the respondent contended that except in respect of Rs. 13,621-14-10, which the appellate Court had ordered him topayblas charge had been satisfied and the properties freed from all liability to the appellant except for future instalments of her annuity. Their Lordships are unable to accede to this contention. In their opinion, the charge created by the codicil and affirmed by the decree was in no way affected or impaired by the embezzlement of the receiver. The decree provides in express terms that all the annuitants are entitled to recover their annuities from the properties charged. The appellant has admittedly received no part of the annuity due to her. She is, therefore, entitled to recover it by sale of the properties, and that is all she has asked. She makes no claim against the respondent personally.

17. As regards the three half-yearly instalments, their Lordships think that it is clear that the respondent paid them to the receiver at his own risk. Counsel for the respondent have been unable to point to any order of the Court under which the respondent paid or even was authorised to pay these sums to the receiver, and it would be impossible to hold that he was the agent of the appellant with authority to receive payment on her behalf.

18. The analogy relied on by the full bench of payment by a judgment-debtor to a bailiff charged with the execution of a warrant of arrest or attachment is fallacious, as every such warrant empowers the bailiff in express terms to receive payment from the judgment debtor.

19. Their Lordships cannot conclude the judgment without referring to what seems to have been a grave dereliction of duty on the part of the Court which appointed the receiver in this case, It may be that under the Civil Procedure Code the Court has discretion to appoint a receiver without security, but it should obviously be done only in the most exceptional circumstances. In the present case all the parties to the suit, except the respondent, were females and the appellant was until recently a minor. Under such circumstances their Lordships are unable to understand upon what ground the receiver could have been appointed without giving adequate security, and have been allowed to have the apparently unfettered control of money and securities to a large amount. Their Lordships think that the matter should be taken into consideration by the Chief Court and some very definite means devised whereby the recurrence of such a blot on the administration of justice may be avoided.

20. In the result their Lordships will humbly advise His Majesty that this appeal should be allowed, that the decree of the Chief Court dated March 1, 1929, should be set aside, and the order of the District Judge dated July 4, 1928, restored, subject to the variation that the properties should not be sold if the respondent pays Rs. 30,000 into the Chief Court within eight weeks from the date of the service upon him of a copy of the Order in Council, The respondentmust pay the costs of the appellant in the Chief Court and before this Board.

21. Their Lordships granted a petition of the appellant for the admission of further documents. The respondent must also pay the appellant's costs of this petition and the supplemental record.


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