1. The petition is directed against an order made in Misc. C. A. No. 31/5/1966, on 21-12-1966 by the learned Civil Judge, Gulbarga. The said appeal was preferred by the first respondent herein against an order of appointment of a receiver made in O. S. No. 165/1 of 1965, by the learned Munsiff. Shorapur.
2. The few facts necessary for the disposal of the petition are as follows:--
The petitioner is the plaintiff in O. S. No. 165/1 of 1965. He has sued for a decree declaring his title to the suit schedule properties and for an Injunction. The suit was filed against the respondent herein as also one Narayana Rao. The second respondent Paddamma and one Gundamma were the widows of one Subba Rao. Subsequent to the death of Subba Rao. the two widows are said to have divided the properties inherited by them and continued to be in separate possession and enjoyment of their respective shares till the death of the widow Gundamma on 14-8-1965. The present petitioner claiming to be the legatee under a will executed by the said Gundamma has filed this suit. The first respondent Babu Rao also filed a suit O. S. No. 89/1 of 1965 in the same Court in respect of the same properties and for similar reliefs on 1-9-1965 claiming to have been adopted by Gundamma. The suit of the present petitioner was filed on 21-8-1965. In both the suits temporary injunctions were granted. In regard to the injunction granted in favour of the first respondent, who is the plaintiff in O. S. No. 89/1/1965, it transpired that the same was made absolute after a decision in an appeal before the learned District Judge, Gulbarga, A subsequent petition before the Court under Section 115, C.P.C was also dismissed, thus sustaining the order of injunction granted in favour of the first respondent in respect of the very properties involved in the present suit. The petitioner before this Court having been unsuccessful in his attempts to resist the grant of an injunction in O. S. No. 89/1/65 filed by the first respondent herein, filed an application for the appointment of a receiver under Rule 1, Order 40, C.P.C. In O.S. No. 165/1 of 1965 the trial Court allowed the application and granted the relief prayed for. The third defendant therein namely, Babu Rao preferred an appeal before the learned Civil Judge, Gulbarga, against that order for appointment of a receiver. The appellate Court set aside the order made by the trial Court and dismissed the application for the appointment of a receiver. Aggrieved by this order, the plaintiff has approached this Court in the present revision petition.
3. Sri B. Murlidhar Rao, the learned counsel appearing for the petitioner, formulated the following two propositions
1. That the order for appointment of a receiver without appointing any person by name was not appealable within the meaning of Rule 1 (s) of Order 43, C. P. C. and as such the decision in appeal would be one without jurisdiction.
2. That, at any rate, the order for appointment of a receiver was one falling purely within the judicial discretion of the trial Court and as such should not have been interfered with in appeal in the absence of material pointing to an abuse of such discretion.
4. Before adverting to the submission made at the Bar, it would be convenient, to refer to the order in question and also the relevant provisions of the Code of Civil Procedure.
5. The order of appointment of a receiver which is in question here, runs thus:
'(a) for the reasons aforesaid the petition filed by Srinivasa Rao on 12-11-1965 under the provisions of Order 40, Rule 1 of the Code of Civil Procedure is hereby allowed.
(b) Accordingly the subject matter of the suit shall be taken in the custody of this Court through a Receiver who is going to be appointed.
(c) A practising lawyer of this Court shall be appointed as Receiver after consulting the counsel appearing for both the sides.'
The relevant provisions of the Code of Civil Procedure are as follows:--
'Order 40, Rule 1, Appointment of Receivers-- (1) Where it appears to the Court to be just and convenient, the Court may by order-
(a) appoint a receiver of any property whether before or after decree;
(b) x x x x
(c) x x x x
X X X X
(d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rent and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Court thinks fit.
Order 43, Rule 1. Appeals from orders. -- An appeal shall lie from the following orders under the provisions of Section 104, namely;--
X X X X
(s) an order under Rule 1 or Rule 4 of Order XL.'
6. In support of the first of the above propositions Sri Murlidhar Rao the learned counsel appearing for the petitioner relied on several decisions of the High Courts of Bombay, Allahabad, Nagpur, Calcutta and Assam. In particular, he invited attention to the cases reported in Narbadashankar Mugatram Vyas V. Kevaldas Raghunathdas, AIR 1915 Bom 41; Mohamed Askari v. Nisar Hussain, AIR 1920 All 149; Raje Gopalrao v. Raje Devidas, AIR 1938 Nag 540 and Ram Chandra Dey v. Jhumarmal Jain, AIR 1958 Assam 171. The Calcutta decision referred to by him is one reported in Kshitish Chandra Achariya Choudhry v. Raja Janakinath Roy : AIR1932Cal194 . Sri K. Jagannatha Shetty, the learned counsel appearing on behalf of the respondents, placed strong reliance on certaindecisions of the High Courts of Madras, Patna, Lahore and Travancore and Cochin in support of the contrary view. The decisions relied on by him are: Palaniyappa v. Palaniappa, AIR 1918 Mad 1147 (FB); Firm Raghbir Singh v. Narijan Singh, AIR 1923 Lah 48; Manohar Lal v. Kishan Lal, AIR 1938 Lah 10; Gobind Ram v. Ganesh Ram, AIR 1922 Pat 577; Nrisingha Charan v. Rajniti Prasad Singh, AIR 1932 Pat 360 and K.P. Thampy v. Ram Kurup, AIR 1956 Trav-Co 264.
7. Before attempting an analysis of the case law cited in support of the respective contentions as aforesaid it is necessary briefly to refer to an argument by Sri Jagannath Shetty. His submission was that the petitioner should not be heard on the question of maintainability of the appeal, the order in which is in question here, in the absence of any such plea having been raised during the hearing of that appeal. It was further contended that the appellate Court was not suffering from any inherent lack of jurisdiction to hear the appeal as appeals directed against appointment of a receiver did lie to that Court under Order 43, Rule 1 (s), C.P.C. Hence in the absence of a specific objection to the exercise of jurisdiction by the appellate Court during the hearing of the appeal by the present petitioner, he should be deemed to have waived his right in that regard. He also submitted that the petitioner after having taken a chance of a decision in the appeal, which according to him was not maintainable and in not having objected to the exercise of jurisdiction by the appellate Court, should be deemed to have acquiesced in the proceedings in question. For all these reasons it was contended that it would not be open to the petitioner to raise that question for the first time in the revision petition. In support of the above submission Sri Shetty relied on the decisions in : 2SCR747 ; : AIR1960All573 ; AIR 1927 Mad 130 (FB) and Channiah v. R.T.A., 1967-2 Mys LJ 637. In opposition Sri Murlidhar Rao relying on a decision in Kiran Singh v. Chaman Paswan, : 1SCR117 , submitted that a decree made by the appellate Court in the appeal, which was not maintainable was a nullity and that its invalidity could be set up whenever and wherever it was sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings, A defect of jurisdiction whether pecuniary or territorial, or whether it was in respect of the subject matter of the action, would strike at the very authority of the Court to pass any decree, and such a defect could not be cured even by consent of parties. This question would call for a decision only in the event of this Court coming to the conclusion that the appeal before the learned Civil Judge was not maintainableunder Rule 1 (s) of Order 43, C.P.C. In the view I am disposed to take on the question of maintainability of the appeal, any further discussion on this aspect of the controversy is rendered unnecessary.
8. Among the decided cases relied on, on behalf of the petitioner those of the High Courts at Bombay, Allahabad and Calcutta, have been analysed in the decision in AIR 1958 Assam 171. It is therefore, unnecessary to attempt a further analysis of the cases. Suffice it to observe that, broadly speaking, all those decisions turn primarily on the interpretation placed on the language of the rule in question and on general considerations such as avoidance of multiplicity of appeals or proceedings. The decision by a majority in the Full Bench case in AIR 1918 Mad 1147 (FB) was considered and was either distinguished or not followed. It may also be observed at this stage that certain anomalies pointed out in the majority opinion in that case have not been explained away in any reasonable manner, if I may say so with respect, in so far as I have been able to gather from the said decisions while coming to the conclusion that in the absence of an appointment of a receiver by name any order regarding the appointment of a receiver would amount to merely a statement regarding the entertainment of an intention to appoint a receiver within the meaning of Rule 1 of Order 40, Civil P. C. In this view of the matter, it was concluded that such an order would not be an order falling under Rule 1 of Order 40, Civil P. C., making it appealable under Rule 1 (s) of Order 43, Civil P. C.
9. In AIR 1938 Nag 540, Stone, C. J., while referring to the Madras, Patna and Lahore cases, did not think it necessary to analyse or distinguish them as, in his opinion, the point raised in those cases did not fall to be considered in the case on hand. His Lordship has also indicated the practice to be followed in cases falling under Order 40, Rule 1, Civil P. C. However, It was observed by the learned Chief Justice that on an examination of the above cases it would be seen that they turned upon whether the order that was appealed against was final or something less than final order. Therefore, the order which had the characteristic of finality would become appealable although a receiver had not been actually named by way of appointment. In such a situation more than one order would become necessary in the exercise of jurisdiction under Rule 1 of Order 40, Civil P. C. In the passage extracted below, a dilemma that may arise from the application of the test of finality, as adumbrated in the Madras, Lahore and Patna views, has been referred to and the manner in which it can be avoided does not appear to be specifically disagreeing with the principle relating to the right of appeal as laid down in these decisions. The passage runs thus:
'To make two separate orders, in my opinion, might cause great inconvenience and some injustice. It may well be that such an order as the first named, that is to say, an order stating that a receiver will be appointed but leaving at large who he shall be, or an order such as it was stated was made in this case that the application is granted, when the application is merely an application for appointment of a receiver unnamed, is not such an order as Order 40, Rule 1 (a) contemplates. It may be that such an order cannon be appealed against as not being a final order. But it is that order that decides the matter of substance between the parties. On the other hand, it may be that that order is appealable in which case, if the person aggrieved by it waits until the next order appointing the receiver by name is passed, he will find himself on appeal by the argument that his appeal is out of time. No litigant should, in my opinion, be placed on horns of this kind of dilemma and it can be very easily avoided by taking care that there is only one order and that that order appoints the receiver by name. Many cases may arise where such an order will be preceded by an announcement by the Court that it has come to the conclusion that in the circumstances of the case a receiver should be appointed. But that announcement should not be made so as to amount to an order.'
10. In the same decision, Niyogi, J., the other learned Judge preferred to follow the language employed in Rule 1 of Order 40 in conjunction with Form 9 Appendix F, of Civil P. C. In this connection it is observed thus:
'.....From these considerations, itmust follow that the only order which is appealable is the order appointing a receiver by name and that alone would give the party aggrieved a right of appeal. There is a principle underlying this because, if an appeal is permitted from a finding which contains merely an expression of the opinion of the Judge as to the expediency of the appointment of a receiver, no receiver may ultimately be appointed and the appeal would be of a purely academic character and the order would be infructuous.'
11. In a brief reference to the Full Bench case of the Madras High Court, the learned Judge has observed that he was not in agreement with the interpretation put upon the word 'order' in the said decision. It may, however, be mentioned that it was not indicated in what conceivable cases that an order for appointment of a receiver would become infructuous.
12. In the case in AIR 1958 Assam 171 the High Court of Assam, after referring to cases of the several High Courts in-eluding the Full Bench decision of the Madras High Court, was Inclined to accept the view of the Bombay, Calcutta and Allahabad High Courts in coming to the conclusion that an appeal against an order for appointment of a receiver, not actually naming a receiver as such, was premature. It may also be seen from certain observations therein that the case primarily turned on an interpretation of the provisions of Order 40, Rule. 1. Civil P. C., and keeping in view the principle of interpretation that in interpreting a statute an interpretation which might lead to multiplicity of proceedings should be avoided. It may however, be mentioned that the learned Judges, if I may say so with respect have not considered or explained certain anomalous situations, pointed out in the decisions of the Madras and Patna High Courts, which would arise from an acceptance of the view that an order appointing a receiver should necessarily name the receiver in the context of a right of appeal as envisaged under Rule 1 (s) of Order 43, Civil P. C.
13. I shall now proceed to consider the cases in favour of the view that an order for the appointment of a receiver, without actually appointing any one by name, would be appealable under Rule 1 (s) of Order 43, Civil P.C. The first of these cases is the Full Bench of the Madras High Court in AIR 1918 Mad 1146. The majority opinion was in favour of the conclusion that an order for the appointment of a receiver was as much an order 'appointing a receiver' under Rule 1, Order 40, Civil P. C. The observations are as follows;
'.....It is not, therefore, improperto speak of an order 'for the appointment of a receiver' as an order 'appointing a receiver' within the meaning of Order 40, Rule 1.' After referring to the English practice their Lordships referred to certain anomalies or difficulties that may arise in this connection. They are expressed thus:
'.....In a majority of cases, the appeal will be directed against the determination that it is necessary to appoint a receiver rather than against the particular person appointed as the person to be appointed is very often a matter of agreement between the parties. This construction may, no doubt, lead to a multiplicity of appeals as was pointed out in 1915-29 Ind Cas 504 = (AIR 1915 Bom 41) but I do not sec how that can be avoided in any view; for instance one man may be appointed receiver, and after appeal filed, he may resign and another appointed. In fact the learned pleader who argued that the order was not appealable said that if after an appeal the person appointed as receiver resigned or ceased to be receiver, the appeal abated, though the grounds of appeal may have been solely directed to challenging the necessity for the appointment of any receiver'.
Again at page 1149 it is observed:
'There may again be a difficulty in ascertaining the date of appointment of a receiver and the date may become important for calculating the period of limitation for appeal. The order appointing a named person as receiver may appoint him receiver and direct him to give security within a limited time, or may make the appointment conditional on giving security; Seton, Form No. 5 p. 727. No. 1, p. 757. In the former case If the person appointed does not give the security he may cease to be receiver and an appeal presented in the meantime would become useless .....'
14. In this connection it will be relevant to refer to a further difficulty adverted to by Bucknill, J. in AIR 1922 Pat 577. In the view expressed therein, it would be clear that the questions that fall for consideration in an order for appointment of a receiver would not be the name as for the appointment of a particular person as a receiver. That being the position, it is not quite clear as to how it would be necessary to avoid an order for the appointment of any person as a receiver in order to question an order for appointment of a receiver. Indeed there may be cases where the objections would be wholly confined to the qualifications or only to the decision to appoint a receiver.
15. Bucknill, J. in the above cited decision at page 579 has observed thus:
'I must confess that, so far as I myself am concerned I am inclined to think that the logic of the matter rests better upon the Madras decision that upon the other decisions. To my mind the objection which has been suggested that there might be a series of appeals is not really very material. One cannot but contemplate the marked distinction which exists between the fact of a necessity for the appointment of a receiver and the circumstances relating to the qualifications and the conditions upon which 'the' receiver is appointed. Why it is necessary that there should be present before an appeal can be preferred, a combination of those two factors which in themselves are disconnected? Io do not see why there should not be an appeal from the decision that the appointment of a receiver is necessary nor why there should not be another appeal against the status or personality of any individual who is actually appointed the receiver in a case.' (underlining (italics) (here in ' ') is mine).
16. In the case in AIR 1956 Trav-Co 264 it is laid down that the test to be applied regarding the question whether an order for the appointment of a receiver is appealable or not, is whether the order in appeal has an element of finality about it. At page 265 of the above decision their Lordships have observed as follows:
'.....There is a degree of finality inthe order appealed against in the present case which we hold is enough to bring it under the category of appealable orders contemplated under Order 43, Rule 1 (s). Hence the preliminary objection is overruled.'
17. In view of the aforesaid enunciations, it is unnecessary to refer to the other cases relied on by Sri Jagannath Shetty on this question.
18. On an examination of the several cases cited in support of the view that an order appointing a receiver should also nominate a particular person as a receiver for such an order to become appealable under Rule 1 (s) of Order 43, Civil P. C., it will be seen that the decisions turn on the Conclusion that there cannot be more than one order under Rule 1 of Order 40, Civil P. C., or at any rate, in so far as Clause (a) of that Rule is concerned. In my view, on a fair reading of the entire Rule, particularly Sub-clauses (a) & (d) together it would follow that the orders or directions that might be issued under Sub-clauses (d) of that rule could be issued sometime subsequent to the actual appointment of a receiver by name. At any rate, there is nothing in Order 40, Rule 1 itself prohibiting the making of such separate and Independent orders. It is no doubt true that ordinarily directions envisaged under Sub-clauses (d) of that Rule are issued along with the warrant of appointment. But, it is also possible for such directions to be issued as and when they become necessary and after a lapse of some time subsequent to the issuance of warrant of appointment. In such a situation, it may not be reasonable to conclude that any such subsequent directions are part of the earlier order of appointment of a receiver. Nor would it be reasonable to hold that they are not orders which are appealable under Rule 1 (s) of Order 43. Civil P. C. Once this position is reached, it follows that any order made under Rule 1 of Order 40 would become appealable.
19. Still the question remains whether an order made without actually appointing a receiver by name is an order falling within the ambit of Rule 1 (a) of Order 40. The argument which has found favour in some of the decisions, on this question, is that It amounts to an interlocutory determination which is in the nature of a declaration of an intention to appoint a receiver and is not an appointment of a receiver as envisaged under Rule 1 (a) of Order 40. As earlier mentioned, the view of the Madras, Patna and Lahore High Courts on this question is to the contrary. These High Courts in arriving at this conclusion have proceeded on the basis of the degree of finality attached to such orders. Haying to make a choice between the two views discussed above, I should say that the view expressed In the decisions of the Madras, Patna and Lahore High Courtsappeals to me. I am, therefore, in respectful agreement with that view.
20. I hold, therefore, that an order for appointment of a receiver without actually appointing any one by name would be appealable under Order 43, Rule 1 (s), Civil P. C., provided there is a degree of finality about it.
21. In my view, there is another approach to this question. Even assuming that an order for the appointment of a receiver, whether such an order expressly contemplates a further order regarding the appointment of a receiver by name or not, it would be an order binding on the parties to the litigation. In this context it is relevant to refer to a decision of the Federal Court in AIR 1950 FC 140 Rayarappan v. Madhavi Amma. In that case, the question for determination was whether an appeal lay against an order removing a receiver, in the context of Section 104 and Order 43, Rule 1 (s). Civil P. C. Although it was plain from the language of Rule 1 of Order 40, that there was no express provision relating to the making of any such order, their Lordships after a reference to the provisions of the General Clauses Act, observed that if Order 40, Rule 1, Civil P. C., was read along with the provisions of the General Clauses Act, it would follow by necessary implication that the order of removal would fall within the ambit of that Rule 1. It was further observed that once such a decision was reached it would become appealable under the provisions of Rule 1 (s) of Order 43, Civil P. C. Their Lordships further referring to a decision of the Calcutta High Court in Sripati Datta v. Babhuti Bushan Batta, AIR 1926 Cal 593 have observed as follows: (para 7 at p. 141):
'.....That decision, in our opinion,Is sound and states the law on the point correctly. It may further be pointed out that the scheme of Order 43 in making certain orders appealable is of a two-fold character. In a number of cases an appeal has been allowed from all kinds of orders passed under a certain rule, while in other cases the right of appeal has been limited only to certain specific orders passed under a certain rule. Reference in this connection may be made to Order 43, Rule 1 (v) and Rule 1 (t). In these rules appeal has been allowed against the certain specific orders but not against all the orders that could be made under these rules. Order 40, Rule 1 falls in the category of cases where all orders made under it have been made appealable and it has not been said that the only order appealable is the one appointing a receiver. Whenever an order can be brought within the purview of Order 40, Rule 1 it at once becomes appeal able under the provisions of Order 43, Rule 1 (s).'
Though the above decision is one relating to the removal of a receiver, theprinciple enunciated in the passage above extracted will, in my opinion, equally apply to an order for the appointment of a receiver.
22. In the light of the above discussion, I am of the opinion that the contention advanced on behalf of the petitioner that the appeal of the respondents in the lower Court was not maintainable and consequently the order or decision made thereon was without jurisdiction, should fail.
23. The next contention urged on behalf of the petitioner was that the appellate Court exceeded its jurisdiction in interfering with the order of the trial Court for the appointment of a receiver. Reliance in this behalf is placed on a decision in Bipan Lal v. I. T. Commr., . The argument is that the appointment of a receiver is a matter, which falls within the discretionary powers of a Court and as such is not ordinarily reviewable on appeal except to correct a clear and manifest abuse of justice. Sri K. Jagannatha Shetty, the learned counsel appearing on behalf of the respondents, did not dispute this proposition. But, what he submitted was that a trial Court in the exercise of its discretionary power relating to the appointment of a receiver, had clearly overlooked the several relevant circumstances or at any rate, assumed certain facts in favour of such an appointment of receiver. His contention was that the two elements to be considered in all cases where an appointment of a receiver was sought were that the existence of reasonable probability that the plaintiff asking for the appointment of a receiver would ultimately succeed in obtaining the general relief sought for in his suit and that the property in controversy would be wasted or destroyed unless a receiver was appointed.
He also submitted that it would not be enough to make mere general avermentsrelating to the acts of waste or damage to the property. It must be established by affidavits setting out the grounds upon which such petition was based. In addition to the above circumstances, the conduct of the parties would also become relevant. In support of this proposition, which, was not disputed by Sri Muralidhar Rao, reliance has been placed on the decisions in Iswara Shastry v. Ramakrishna Shastry, 1965-1 Mys LJ 342, Bore Gowda v. K. Channegowda, 1965-2 Mys LJ 548, Saraswathi Bai v. Kamala Bai, 1964-1 Mys LJ 551 and Krishnaswamy v. Thangavelu, AIR 1935 Mad 430. In the last of the above decisions, after a detailed examination of the several cases bearing on the subject, Ramaswamy, J. has enunciated five principles, which have been described by him as the 'panch sadaachar', which should be borne in mind by the Courts while exercising equity jurisdiction in appointing receivers. The principles are; that the question of appointing a receiver is a matter resting in the discretion of the Court; that a receiver should not be appointed unless the party has an excellent chance of succeeding in the suit; that plaintiff himself shall show that there was some emergency or danger or loss that may be caused to the right involved in the suit; that an order appointing a receiver shall not be made if it has the effect of depriving a defendant of do facto possession; that, however, the position would be different if the property is shown to be 'in medio' that is to say, in the enjoyment of no one, and that the Court should always look into the conduct of the parties who seek for the appointment of a receiver.
24. Judging in the light of the principles above mentioned I am of the opinion that it is not established by the petitioner that the appellate Court had exercised its discretion in a capricious or arbitrary fashion. It is clear from the facts in the case that the first respondent had already secured an injunction in respect of the very properties in his own suit, O. S. No. 89/1 of 1965. The said temporary injunction after contest was sustained and made absolute by the District Court concerned. Although the present petitioner had secured a temporary injunction in his favour in his own suit, presumably being under the impression that he would not succeed in securing an order of confirmation of the temporary injunction obtained by him, being faced with an order of the Dist. Court, he has lodged the present application for the appointment of a receiver. As regards acts of waste and damage attributed to the defendants it is observed by the learned Civil Judge that they remain merely as averments and no basis has been afforded for the entertainment of such belief by the petitioner. Consequently there is an order of temporary injunction in favour of the first respondent, which is confirmed by the District Court which, at any rate, is prima facie, proof that the defendant is in possession of the properties. In these circumstances, the learned Munsiff, who dealt with the matter of the appointment of a receiver came to the conclusion that the properties were 'in medio', that is in the occupation of none of the parties. If in these circumstances the learned Civil Judge interfered with the order of appointment of a receiver, it cannot be said to be an improper exercise of jurisdiction by the appellate Court.
25. It may, however, be mentioned that the situation of having to resolve the difficulty arising from such conflicting orders of injunction could well have been avoided by the learned Munsiff, if only he had dealt with the interlocutory injunctionmade by him earlier in the two suits, together.
26. Sri Muralidhar Rao submitted that the learned appellate Judge had not understood the facts correctly and as such the order passed by him was not entitled to be sustained. In this regard, he drew attention to a statement in the narration of facts by the learned Civil Judge to the effect that the learned Munsiff had not at all referred to the order of temporary injunction made by the learned District Judge, Gulbarga. It is no doubt true that this statement of the learned Civil Judge is not accurate. Be that as it may, this circumstance by itself is not sufficient to come to the conclusion that the order of the learned Civil Judge is vitiated.
27. In the result, this revision petition fails and is dismissed. In the circumstances of the case, there will be no order as to costs.
28. Revision dismissed.