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T.N. Ramachandra Setty Vs. B. Venugopal - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 313 of 1958
Judge
Reported inAIR1963Mys19
ActsCode of Civil Procedure (CPC) , 1908 - Order 40, Rule 1
AppellantT.N. Ramachandra Setty
RespondentB. Venugopal
Appellant AdvocateH.R. Venkataramaniah, Adv.
Respondent AdvocateE. Kanakasabhapathy, Adv.
Excerpt:
.....in favour of the assessee and against the revenue. - 1000/- but failed to hand over that money to the proprietors of b. action, and if a proper case is made out the court will, if so satisfied, subsequently allow the suit to continue and will not dismiss it. the plaintiff-appellant is entitled to his costs in this court as well as in the first appellate court......no. 89/1953.you are hereby (subject to your giving security to the satisfaction of the court) 'appointed receiver for the purpose of collecting the debts due to the firm b. s. j. and depositing the same into court' subject to the direction of this court from time to time and you are not entitled to any commission for this work under order 40 of the code of civil procedure, 1908, with full powers under the provisions of that order.'(underlining (here in single inverted commas) is mine).the receiver was specially appointed for the purpose of collecting the debts due to the firm, b. s. j. hall. further the order of appointment conferred on the receiver 'full powers under the provisions of' order 40 civil procedure code. in those circumstances, no separate permission was necessary for.....
Judgment:

K.S. Hegde, J.

1. The only question for consideration is whether the claim made in O. S. No. 270 on 1955 is barred by limitation.

2. O. S. No. 270/55 was brought by the Receiver appointed in O. S. No. 53 of 1953 on the file of the learned District Judge, Bangalore. He has also a party to O. S. No. 53/53. In the (SIC) under appeal the Receiver claimed a sum of Rs. 1000/- with interest from the defendant. It is alleged that the defendant encashed a cheque far Rs. 1000/- but failed to hand over that money to the Proprietors of B. S. J. Hall.

3. In the suit, the trial Court framed four (SIC) They are:

'1. Did the defendant encash the cheque for Rs. 1000/-? and hand over that amount to B. S. J. Hall on the same date to the knowledge of the plaintiff?

2. Is the plaintiff estopped from claiming the sum of Rs. 1,000/-?

3. Was the defendant only a carrier of the other partner Sri B. N. Rangiah Setty of his share? and

4. Is the plaintiff not entitled to file the suit against the defendant?'

The trial Court answered all the four issues in favour of the plaintiff and decreed the plaintiff's suit as prayed for. In appeal, the learned Additional Civil Judge, Bangalore, agreed with the (SIC)dings given by the trial Court on issues Nos. 1 to 3; but it held under issue No. 4 that the suit was barred by limitation. The reason for so (SIC) is that when the suit was instituted by the Receiver on 6-4-1955 he had not obtained the permission of the Court which appointed him though by means of an order dated 14-3-1956 that Court not only granted the necessary permission but also ratified the steps taken by the Receiver. It was contended before the first appellate Court that permission in question can be effective only from 14-3-1956 and consequently the suit under appeal must be deemed to have been validly instituted on 14-3-1956 by which time the suit claim had become barred.

4. The first appellate Court accepted that intention and dismissed the suit as mentioned (SIC). The question for consideration is whether the conclusion reached by the first appellate Court is correct in law. Unfortunately neither the defendant nor his counsel was present when this appeal was heard.

5. Under clause (d) of Rule 1 of Order 40 Civil Procedure Code the Court may by order:

'confer upon the receiver all such powers, as (SIC) bringing and defending suits and for the realisation, 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, of such of those powers as the Court thinks fit.'

The order appointing the Receiver reads as follows :

'To Sri T. N. Ramachandra Setty, the plaintiff abovenamed as per order of the High Court of Mysore, Bangalore, in Mis. Appeal No. 89/1953.

You are hereby (subject to your giving security to the satisfaction of the Court) 'appointed Receiver for the purpose of collecting the debts due to the firm B. S. J. and depositing the same into Court' subject to the direction of this Court from time to time and you are not entitled to any commission for this work under Order 40 of the Code of Civil Procedure, 1908, with full powers under the provisions of that Order.'

(Underlining (here in single inverted commas) is mine).

The Receiver was specially appointed for the purpose of collecting the debts due to the firm, B. S. J. Hall. Further the order of appointment conferred on the Receiver 'full powers under the provisions of' order 40 Civil Procedure Code. In those circumstances, no separate permission was necessary for filing suits for recovering the debts due to the firm B. S. J. Hall.

6. It was urged that in the case of a party Receiver, his right of filing a suit is not limited to the same extent as that of a stranger Receiver. In this connection the decision in Jabbar Ali v. Manmohan Pandey : AIR1929Cal110 was cited. It is unnecessary to pronounce on this contention in view of the conclusions reached in other respects.

7. The restriction mentioned in clause (d) of Rule 1 of Order 40 is not a restriction placed on the jurisdiction of the Court to entertain a suit. It is merely intended to control the action of the Receiver, who is an officer of the Court. If the Court, which appointed the Receiver, thought it fit, during the pendency of the suit which he had instituted without prior permission to approve the action of the Receiver in instituting the suit, no valid objection can be taken to the institution of the suit.

This question was considered in Rustomjee Dhunjibhai v. Frederic Gaebele, 51 Ind Cas 486 : (AIR 1919 Cal 426) wherein Greeves, J., held that if an action is commenced by or against a Receiver without any leave obtained from the Court, the defect can be cured by subsequent leave obtained from the Court to continue the! action, and if a proper case is made out the Court will, if so satisfied, subsequently allow the suit to continue and will not dismiss it. In the instant case, as mentioned earlier, the action of the Receiver has been ratified by the Court which appointed him, by its order dated 14-3-1956. In view of that Order, no valid objection can be taken to the institution of the suit.

8. In the result, this appeal is allowed; the decree and judgment of the first appellate Court is set aside and those of the trial Court restored. The plaintiff-appellant is entitled to his costs in this Court as well as in the first appellate Court.


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