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Seth Loonkaran Sethiya Vs. Ivan E. John and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal From Order No. 102 of 1973
Judge
Reported inAIR1975All113
ActsCode of Civil Procedure (CPC) , 1908 - Sections 96 - Order 32, Rule 1 - Order 40, Rule 1 - Order 43, Rule 1
AppellantSeth Loonkaran Sethiya
Respondentivan E. John and ors.
Appellant AdvocateS.P. Srivastava, Adv.
Respondent AdvocateRadha Krishna, Adv.
DispositionAppeal allowed
Excerpt:
civil - appointment of receiver - order 43 rule 1 and order 40, rule 1 of code of civil procedure, 1908 - appointment of receiver under order 40 rule 1 - appeal filed under order 43 (d) against the order of appointment of receiver giving him directions without discretion - person effected directly by order can appeal under order 32, rule 1 - court at first passed an order which was modified later by passing second order - again third order has been passed on the basis of first order such order is wrong - receiver has been appointed by the court giving him some directions without any discretion is appealable falls under order 43 and rule 1. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas,.....mehrotra, j.1. this is the plaintiff's appeal against the order of the trial court directing the receiver to pay a sum of rs. 58,295.49 to the defendant-respondent no. 5/2, nirmal kumar patni, the plaintiff has prepared and produced abound paper book which, for the facility of reference, has been referred to by us as paper book, vol. no. 1 and the defendant-respondent no. 5/2, nirmal kumar patni, has similarly prepared and produced an unbound paper book which has been referred to by us as paper book vol. no. 2.2. in volume 1 at page 23 a reference has been made to the judgment of the supreme court in civil appeal no. 110 of 1961 reported in : [1962]1scr868 and we think the short background of the litigation can be usefully reproduced from the judgment of the supreme court after suitable.....
Judgment:

Mehrotra, J.

1. This is the plaintiff's appeal against the order of the trial Court directing the Receiver to pay a sum of Rs. 58,295.49 to the defendant-respondent No. 5/2, Nirmal Kumar Patni, The plaintiff has prepared and produced abound paper book which, for the facility of reference, has been referred to by us as paper book, Vol. No. 1 and the defendant-respondent No. 5/2, Nirmal Kumar Patni, has similarly prepared and produced an unbound paper book which has been referred to by us as paper book Vol. No. 2.

2. In Volume 1 at page 23 a reference has been made to the judgment of the Supreme Court in Civil Appeal No. 110 of 1961 reported in : [1962]1SCR868 and we think the short background of the litigation can be usefully reproduced from the judgment of the Supreme Court after suitable amendments:

3. At Agra, there were three spinning mills and one flour mill, all of which together were described as the John Mills, and originally the John family or their predecessors were the owners of all these mills. At the relevant time other persons had acquired interest therein. Such persons were Hira Lal Patni, the original defendant No. 5 and Munni Lal Mehra, the original Defendant No. 6, Gambhirmal Pandya Pvt. Ltd., the original defendant No. 3, M/s. John Jain Mehra and Co. The plaintiff-appellant before us, Seth Loonkaran Sethiya, advanced large amounts to Messrs. John and Co., defendant-respondent No. 4 on the security of its business assets and stocks. On April 18, 1949, the said Loonkaran Sethiya filed original Suit No. 76 of 1949 in the court of the Civil Judge. Agra against John and Co., for the recovery of the amount due to him by sale of the assets of the said Company. To that suit the partners of Messrs. John and Co., for convenience described as 'defendants first set' and the partners of M/s. John, Jain and Mehra & Co., who were for convenience described as defendants second set, were made parties. Pending the suit the said Loonkaran Sethiya plaintiff filed an application under Order 40, Rule 1, Civil Procedure Code for the appointment of a Receiver. By an order dated May 21, 1949, the learned Civil Judge appointed two joint Receivers. The said order dated May 21, 1949, was modified in appeal by this Court and the order of appointment of Receiver was confined to the share of Messrs. John and Co., in John. Jain and Mehra and Co. Subsequently, the trial Court by its order dated December 1, 1951, directed the Receivers to take possession of the share of the defendants second set also. The combined effect of the said orders was that the Receivers took possession of the entire properties of the two sets of the defendant. On August 23, 1955, the High Court discharged the Receivers appointed by the learned Civil Judge and appointed another Receiver in their place.

4. On April 5, 1954, the trial Court passed a preliminary decree against the defendants directing them to deposit the decretal amount in court within the prescribed time and in default the plaintiff was given a right to apply for a final decree for sale of the business assets of the defendants. The decree also gave a right to apply for a personal decree in case the sale proceeds were not sufficient to discharge the decree. The preliminary decree directed that the Receivers should continue on the property until discharge.

5. Against the preliminary decree passed in Suit No. 76 of 1949, two appeals were filed in this Court and they were numbered as First Appeal No. 465 of 1954 and First Appeal No. 65 of 1955, Both were connected and disposed of by a common judgment by a Division Bench of this Court. Some relevant passages from the said judgment have been reproduced in the paper book Vol. No. 1 at pages 257 to 262. The operative portion of the judgment has been reproduced in paper book Vol. No. 2 at pages 66 to 69. The suit has been decreed against the defendants first set (defendants Nos. 1, 2. 3 and 4) for a certain sum. It has been dismissed against the defendant second set (defendants Nos. 5, 6 and 7). The defendants first set were directed to pay or deposit in court the decretal amount together with interest within six months from the date of the judgment. In default the plaintiff would be entitled to apply for a final decree for sale of the business assets as detailed in the said judgment. It has been also directed that if the net sale proceeds of the said assets are found insufficient to satisfy the amount decreed in favour of the plaintiff then the latter will get a personal decree against the defendants Nos. 1 to 3 for the balance of his claim remaining due after sale. The Receiver was directed to continue on the property until discharge.

6. The plaintiff has felt aggrieved with the said judgment disposing of First Appeals Nos. 465 of 1954 and 65 of 1955 and has filed an appeal in the Supreme Court which is still pending. The Supreme Court has passed a stay order which is included in the paper book Vol. No. 1 at pages 308 to 310. It shows that the Supreme Court has directed the trial Court 'not to make any orders with regard to the discharge of the Receiver appointed in this case as this Court is now seized of the appeal and orders in that behalf will be made by this Court. The Receiver will continue to function until further orders are made..... In the meantime status quo with regard to the possession of the mills and other properties in the possession of the parties as obtaining to-day will be maintained.'

7. In the long-drawn-out litigation stretching over such a long span various efforts were made so that the various mills should remain in production and the estate might not be put to loss. It is unnecessary to recount such steps from time to time. This appeal is concerned with the flour mill and in respect of this mill the respondent No. 5/2, Nirmal Kumar Patni, moved an Application No. 7728-C expressing his readiness to run the said mill (which has been described as Mill No. 5 in the various orders passed by the trial Court) on the same terms and conditions on which Mill No. 4 had been granted to the defendants first set. The trial court disposed of the said application by its order dated 31-5-1968 end since it is the foundation on the basis of which the trial court has disposed of the controversy (which is the subject-matter of this appeal) it is expedient to reproduce this order which is included at pages 84 and 85 of the paper book Vol. no. 1:--

'7728 C. Application on behalf of Sri Nirmal Kumar Patni, defendant 2nd set that he is prepared to run Mill No. 5 on the same terms and conditions on which Mill No. 4 has been granted to the defendants 1st set. The plaintiff has no objection without prejudice to his rights and so also other defendants have no objection if the Mill No. 5 is given to Sri Patni to run on the conditions imposed above. The Mill No. 5 shall be given to Sri Patni on the conditions given above except that as it is a smaller mill he should furnish security for Rs. 7,000/-, only. Sri Patni will run Mill No. 5 under the supervision of the court and the Receivers. He would arrange to start the mill from 15th July, 1968, shall keep accounts in duplicate and shall furnish one copy of the same to the court each month. The accounts shall be audited half yearly by an auditor appointed by the Court. He shall furnish security to the extent of Rs. 7,000/-. He would bear all the losses and in case of profits after meeting all the expeness he shall claim 50% of the net profits as his charges for running the mill on behalf of the estate.

The draft of the security be submitted in the court by Mrs. D. Marzano and Sri Patni by 4th July. 1968. In case the defendants fail to honour the above terms by 15th July, 1968, then plaintiff's offer shall be considered.

Sd/- H. C. Mittal,

Civil Judge, Agra.

It is made further specifically clear that the mill shall run under the supervision of the Court and if and when the Court will find that Sri Nirmal Kumar Patni is not honouring the above terms or in any manner defalcating the accounts etc.. the aforesaid arrangement shall be liable to be ended

Sd/- H. C. Mittal,

Civil Judge, Agra

31-5-68.'

8. The security was furnished by Nirmal Kumar Patni and he was put in possession of the flour mill in October. 1968. It seems that even though the order dated 31st May, 1968, had directed that the mill would start from 15th July, 1968, but the same did not happen. It is not necessary to discuss the reasons why the mills could not be started for a very long time after the passing of the said order dated 31st May, 1968. It is an admitted position that Nirmal Kumar Patni did not have sufficient finances to run the mills on his own and, therefore, he was in search of associates who could invest moneys and run the mills. On 23rd February, 1970, Nirmal Kumar Patni, moved an application No. 9225-Ga (page 105 of the paper book Vol. No. 1) and he, stated therein that he entered into an agreement with one Kesari Chand under which the flour mill was to be run on the terms and conditions incorporated in the agreement whose draft was being placed for the approval of the Court. The draft agreement is included at pages 107 to 116 of the paper book, Vol. no. 1. In the preamble of the said draft agreement it was clearly stated that Nirmal Kumar Patni did not have sufficient means to meet the expenses needed for starting the mills and as such he approached Kesri Chand for running the said mills as the latter had the necessary experience and finances needed for the said purpose. Para. 12 of the draft agreement laid down as under:

'Party No. 2 will pay to party No. 1 the charges at the rate of Rs. 3,50 per ton of wheat or other grains milled subject to a minimum guarantee of Rupees 6,000/- (Rupees six thousand) which will be payable in each month in advance irrespective of the fact that the mill remains closed for any period wholly or partially, the grinding charges will be payable to the party No. 1 to the extent of his half share and balance shall be paid to the Receiver or to be deposited in the court being the share of the Estate.' The plaintiff submitted his objection to the said draft agreement. A copy of the said objection dated 20-3-1970 (9264-C) is included in the paper book at pages 117 to 119 of the paper book Vol. No. 1. Inter alia, the plaintiff's objection was that under the order dated 31-5-1968 read with the previous order dated 17-5-1968 N.K. Patni was permitted to run the mill himself with his own investment and not authorised to entrust the mill to any body else under any agreement whatsoever. Further, the plaintiff stated in para. 4 of his objection as follows: 'That during the period of authorised Board of Managers various offers were received by different persons to run the flour mill under the supervision of theBoard of Managers and Receiver and the Hon'ble Court for grant of a licence to carry on their exclusive business on payment in between Rs. 13,000/- and 15,000/- and set the mill electrified with their own investment and deduct the expenditure approved by the Hon'ble Court for that purpose by adjusting half payment monthly. The mill can even now be worked on such terms and conditions.'

9. The Receiver also submitted his objection to the draft agreement and a copy of the said objection (9269-C) is included at pages 120 to 124 of the paper book Vol. No. 1. He suggested certain changes in respect of the grinding charges and in respect of the minimum guarantee. Certain other suggestions were also made which it is not necessary to notice. The trial Court by its order dated 3rd April, 1970, granted its sanction to the arrangement under which Kesari Chand was to run the mills but various amendments and modifications were directed to be incorporated in the draft agreement. The rate of minimum grinding charges payable by Kesari Chand was raised from Rs, 3.50 per ton (as given in the draft agreement) to Rs. 4/- per ton. Further, it was directed that 'there should be a minimum guarantee of income of at least Rs. 6,000/- per month to the estate apart from any arrangement regarding minimum guarantee between Shri N.K. Patni and Shri Kesari Chand. I want to make it clear that in any case a minimum sum of Rs. 6,000/- p. m. shall be payable to the estate as income from Mill No. 5 irrespective of what Shri Patni sets. Shri Patni shall not get any thing whatsoever out of the amount of Rupees 6,000/- per month payable to the estate'. A final draft of the agreement embodying the modifications suggested by the trial Court was directed to be filed in the court. The second draft agreement was, therefore, submitted along with the application 9312-C dated 10-4-1970. In the said application it was mentioned that the draft was in consonance with the order of the court dated 3-4-1970 except in one respect namely, regarding the repayment of electrification expenses to the estate. While the Court had directed that half the electrification expenses should be borne by Kesari Chand himself, under the draft submitted the estate was made liable for the entire electric expenses. It was stated in the application that Kesari Chand was not prepared to bear half of the expenses of electrification on account of the increase in the rate of grinding charges. Paras. 11 and 12 of the second draft agreement are reproduced below:--

'Para. 11. Party No. 2 will pay the grinding charges @ Rs. 4/- per ton of wheat or other grains milled subject to a minimum guarantee of Rs. 7,500/- which will be payable in cash each month in advance irrespective of the fact that the mill remains closed for any period wholly or partially; the grinding charges will be payable to the Party No. 1 to the extent of Rs. 1,500/- and the balance of Rupees 6,000/- shall be paid to the Receiver on behalf of the estate or to be deposited in the court being the minimum guarantee to the estate.

12. If the grinding charges calculated (r) Rs. 4/- per ton exceeds Rs. 7,500/-then in that case the excess amount will be payable by Party No. 2.'

Again, the plaintiff submitted his objection dated 24-4-1970 being 9358-C, a copy of which is included in the paper book Vol. No. 1 at pages 158 and 159. The plaintiff again reiterated that in the year 1967 there were parties who were offering between Rs. 13,000/- and Rs. 15,000/-per month as grinding charges and who also were prepared to get the mill electrified. The plaintiff desired that there should be an open bidding for the maximum benefit of the estate. The plaintiff drew attention to the fact that there was another person in the field who also offered to run the mills. It seems that in view of a rival coming in the field and offering more attractive terms to the estate, Kesari Chand on the same day i.e., 24-4-1970 came out with his readinees to give a sum of Rs. 12,000/- per month as the mimimum grinding charges and to bear half of the electrification charges without right of reimbursement This is clear from 9375-C at page 160 of the paper book Vol. No. 1. The trial Court disposed of the matter by its order dated 24-4-1970 and as it is the final order it is reproduced in extenso. A true copy of the said order is included in the paper book Vol. No. 1 at pages 161 and 162:

'9225-C, 9226-C, 9269-C, 9264-C, 9282-C, 9292-C, 9293-C, 9312-C, 9314-C, 9321-C, 9330-C. 9332-C, 9358-C, 9361-C, 9368-C, 9369-C, 9370-C, and 9375-C. Heard the parties, the Receiver and the applicants. During the course of hearing both Sri K.P. Agarwal, the new applicant, and Sri Satya Narain Gupta son of Sri Kesri Chand (for Sri Kesri Chand) old applicant, state that they are prepared to pay in all a minimum sum of Rs. 12,000/- to the estate, out of which Sri N.K. Patni may be paid such amount as the court deems fit. Sri N.K. Patni also agrees to it. Both Sri K.P. Agarwal and Sri Satya Narain Gupta on behalf of Sri Kesri Chand also agree that they will bear half the electrification charges without a right of reimbursement. Shri Kesri Chand withdraws his request to the effect that the entire electrification, expenses spent by him should be reimbursed to him. Since both the parties are agreeable to take the mill on the same termspreference is given to Sri Kesri Chand in whose favour an order had already been passed on 3-4-1970. Sri Kesri Chand shall submit an amended draft within, four days. In case Sri Kesri Chand does not take the mill, the claim of Sri K.P. Agarwal will be considered.'

10. On 29-4-1970 the trial court passed the following order which is included at page 163 of the paper book Vol. 1:

'9225-C, 9226-C, 9269-C, 9264-C, 9282-C, 9292-C, 9293-C, 9312-C, 9314-C, 9321-C, 9330-C, 9372-C, 9358-C, 9361-C, 9368-C, 9369-C, 9370-C and 9375-C. Heard the parties, the Receiver and Sri P.N. Agarwal, Advocate for the new applicant Sri K.P. Agarwal. No draft has been filed by the old applicant Sri Kesri Chand as yet although it was to be filed by yesterday. Sri N.K. Patni states that Sri Kesri Chand is not prepared to take the mill. Under the circumstances the new applicant Sri K.P. Agarwal is directed to file a final draft by 6-5-1970.'

Thereafter, Kesri Chand moved an application on 1st May, 1970, setting out the reasons why he could not submit the amended draft agreement within the time laid down by the court and he sought the court's permission to be allowed to submit the draft agreement. The agreement itself was submitted along with the said application. It will be seen that this was the third agreement submitted to the Court for its approval. A copy of the agreement is included in the paper book at pages 168 to 181. Paras 10 and 11 of the third agreement are important and they are reproduced below:

'10. That Party No. 2 will pay the grinding charges of Rs. 4/- per ton of wheat or other grains milled subject to a minimum guarantee of Rs. 12,000/- which will be payable in each month in advance, irrespective of the fact that the mill remains closed for any period wholly or partially. If this sum of minimum guarantee of Rs. 12,000/- is not paid within 15 days of the due date then this deed shall automatically stand cancelled and Party No. 2 shall give back the possession of the Mill as per any orders of the Court.

11. If the grinding charges calculated at Rs. 4/- per ton exceed Rs. 12,000/- then in that case the excess amount will be payable by Party No. 2 to the estate at the end of each month.'

By its order dated 1st May, 1970, the trial Court approved the said agreement and it seems thereafter Kesri Chand was put in possession and he began to run the flour mill. In accordance with the agreement he began to deposite in court the minimum grinding charges of Rs. 12,000/- per month Nirmal Kumar Patni moved an application dated 4th May. 1970, (9391-C) whose true copy is included at page 33 of the paper book Volume 2. He prayed that he should be granted Rupees 6,000/- per month from out of the minimum grinding charges of Rupees 12,000/- per month in accordance with the orders of the court dated 31-5-1968 and 3-4-1970. The Receiver objected to the said application by paper No. 9421-C dated 22-5-1970. In his objection the Receiver contended 'that the order dated 31-5-1968 envisaged 50% profit only in case when the parties run the mill themselves but in this case mill has been given on licence to Sri Kesri Chand and Sri N. K, Patni will not be investing anything. Under the circumstances this decision of premium cannot be governed by the order dated 31-5-1968 of the learned Court. At this juncture your honour has to determine what amount has to be given to him out of these Rs. 12,000/-.' Subsequently, from time to time Nirmal Kumar Patni moved various applications seeking ad hoc payments which were made to him. The plaintiff filed objection to such applications of Patni. The trial Court by its order dated 4th September, 1970, disposed of 9391-C (Patni's application dated 4th May. 1970), 9441-C (plaintiff's objection to the said application), 9443-C (Receiver's objection dated 30-5-1970) and 9542-C (plaintiff's supplementary objection dated 4-9-1970). In the body of the order it has been stated that the order dated 31st May, 1968, still stands. The court further held that unless and until the net profits were ascertained no amount could be paid to Patni. The trial Court in the last part of its order observed:

'In future he will get nothing out of the amount of Rs. 12,000/- per mouth which will be deposited by Kesri Chand till the net profits are found out but he may be given ad hoc payments from time to time on applications moved by him.'

10-A. The order under appeal was passed on 2-2-1973. This order was passed with reference to Patni's application No. 10586-C dated 13-1-1973. A true copy of the said application is included at page 263 of the paper book Vol. 1. Patni prayed that the court should direct payment of Rs. 58,295.49 to him in accordance with the accounting given in the said application. In brief, Patni arrived at the said figure in the following manner:

A sum of Rs. 1,68,000/- was deposited by Kesri Chand as minimum grinding charges of Rs 12,000/- per month from 1-5-1970 to 31-8-1971. Patni claimed that he was entitled to 50% of the amount so deposited i.e.. he claimed to be entitled to Rs. 84,000/-. Out of a share of Rupees 84,000/- Patni said that he had received a total sum of Rs. 23,500/- in the shape of ad hoc payments from time to time andhe admitted that a further sum of Rupees 2204.51 was also liable to be adjusted from his share on account of the insurance charges which were payable by him but which were actually paid by the Receiver for insuring the flour mill.

Thus Patni claimed that after adiusting both the said sums i.e., Rs. 23,5007- and Rs. 2204.51 out of his share of Rs. 84,000/-he was entitled to the net sum of Rupees 58,295.49. The plaintiff filed his objection dated 17-1-1973 by paper No. 10594-C a true copy whereof is included at pages 268 to 278. Inter alia, it was contended that the 50% basis as originally contemplated under the order dated 31-5-1968 had been clearly modified and substituted by the order dated 3-4-1970 and subsequently by the court's final order dated 24-4-1970 whereunder Patni himself had agreed that he would be paid only such mount as the court deemed fit out of the sum of Rs. 12,000/- to be deposited bv Kesri Chand in the court. Various other detailed objections were advanced by the plaintiff and he prayed that no sum should be Daid to Patni and his application should be dismissed. The Receiver also filed his report, dated 18-1-1973 by paper No. 10592-C, a true copy of which is included at pages 265 to 266 of the paper book Vol. No. 1. The report was asked for regarding, the details of ad hoc payments made to Patni and also to give the maximum grinding capacity of the mill. Patni filed his rejoinder dated 20-1-1973 to the plaintiff's objection dated 17-1-1973. A true copy of the said rejoinder is included at pages 70 to 75 in the paper book Vol. No. 2. By the order under appeal, the trial court allowed Patni's said application D/-13-1-1973 (paper No. 10586-C) and a direction was given that he should be paid Rs. 58.295.49 'representing full payment of his share of profit of Mill No. 5 UP to 31st August. 1971.' It may be stated here that various other earlier applications by Patni wherein he asked for payments from time to time were also disposed of by the said order under appeal. This is mentioned at the foot of the order. However, we need not consider the said earlier applications as the final application dated 13-1-1973 included the claim of Patni for the period ending 31st August. 1971. The claim set up by Patni in his earlier applications was included in his last application dated 13-1-1973.

11. We have heard the learned Counsel for the parties at length.

12. Shri Brijlal Gupta, the learned Counsel for the respondent No. 5/2 Nirmal Kumar Patni, raised a preliminary objection that the appeal was not maintainable on the following three grounds:

1. The impugned order is not appealable under Order 43. Rule 1 (s) Civil Procedure Code which lays down that onlyan order under Rule 1 or Rule 4 of Order 40 is appealable. Now, there is no dispute that Order 40. Rule 4 cannot apply to the facts of the case and we have to see whether the impugned order can be said to have been passed under any of the clauses in Order 40. Rule 1 (1), Clauses (a), (b) and (c) of the said provision do not seem to be attracted to the facts of the instant case. The short point is whether Clause (d) will take in an order of the type which was passed bv the trial Court. Shri Brijlal Gupta contends that the impugned order is not covered by Clause (d) and, therefore, it is not appealable.

2. The plaintiff-appellant, Loonkaran Sethiya, cannot be said to be a person aggrieved by the impugned order under appeal and hence he had no right to file the instant appeal against the said order. The learned Counsel further developed this point by submitting that the flour mill was not one of the secured properties which were hypothecated in favour of the plaintiff by the defendants first set. AS the Suit No. 76 of 1949 was instituted to enforce the charge created in favour of the plaintiff, therefore, the flour mill basically fell out of the scope of the suit and further in this connection it was also brought to our notice by the learned Counsel that the said suit has been dismissed against the defendants second set including Nirmal Kumar Patni. respondent No. 5/2 by the Division Bench of this Court by its judgment dated December, 1972, whereby the aforesaid two First Appeals Nos. 465 of 1954 and 65 of 1955 were disposed of. We have earlier adverted to the said judgment.

3. The aforesaid orders dated 31st May, 1968, and 3rd April, 1970 and 24th April. 1970, became final between the parties and the impugned order under appeal merely works out the directions contained in the said orders. As the impugned order contains merely the arithmetical calculation on the basis of the earlier orders, therefore, it is not open to the appellant to challenge the figure work when the very basis of the said figure work contained in the three aforesaid earlier orders had become final.

13. We may say that so far as the second and the third grounds are concerned, we have not found much substance in them. It is an admitted fact that the Reciver took possession of the properties of the defendants first set and the defendants second set including the flour mill in question. Again, it is an admitted fact that income is being realised from the flour mill in the shape of grinding charges which have been paid by Kesri Chand and the said charges are being credited to the estate. Admittedly, the Receiver has been appointed at the instance of the plaintiff and for his benefit so that he may not behandicapped in the realisation of his dues. In such a situation the plaintiff will certainly be an interested or aggrieved party if the income of the estate gets a shrinkage due to payments being made to any of the defendants or other persons. If the plaintiff gets a Receiver appointed over certain properties during the pendency of the suit then surely he (the plaintiff) is vitally interested in seeing that the income of the estate in the hands of the Receiver gets maximised and is not allowed to be reduced or frittered away. He has a stake in the maximisation and preservation of the income of the estate during the pendency of the litigation. It should be emphasised that we are not examining the correctness or otherwise of the earlier orders whereunder the Receiver took possession of the flour mill. Those orders are not before us and it is an admitted fact that they have become final between the parties. Therefore, the fact that the flour mill is not one of the secured properties and is outside the scope of the suit filed by the plaintiff-appellant to enforce his security has no relevance in view of the admitted position that the Receiver is functioning over the flour mill and both Nirmal Kumar Patni, respondent No. 5/2 and Kesri Chand are purporting to function under the Receiver of the court. The wider question touching upon the propriety or the correctness of the appointment of the Receiver over the flour mill when the said mill is not one of those assets which were hypothecated in favour of the plaintiff does not fall for our consideration in the present appeal. The fact that the suit has been dismissed against the defendants second set by the Division Bench while disposing of First Appeals Nos. 465 of 1954 and 65 of 1955 is again wholly irrelevant. Even though the suit has been dismissed against the defendants second set, still, it is the specific direction of the Division Bench that the Receiver shall continue to function. We have noticed above that not only there is such a specific direction in the preliminary decree passed by the Division Bench in the aforesaid appeals, there is a clear direction to the same effect in the stay order which has been passed by the Supreme Court in the plaintiff's appeal against the aforesaid judgment of the Division Bench. As long as the Receiver functions and collects income from the flour mill, the plaintiff can be said to be a person interested in the collection and preservation of the income. We have also not been impressed by the contention of the learned Counsel that the impugned order does not stand on its own and is a mere working out of the directions contained in the earlier orders dated 31st May, 1968. 3rd April, 1970 and 24th April, 1970. We shall discuss the scope and effect of each of the said three orders while dealing with the contentions of the learned Counsel on the merit of the impugned order. However, here it will suffice to state that we do not think that the impugned order is such as cannot be challenged without setting aside the earlier orders. In other words, we do not accept the learned Counsel's contention that the impugned order is a mere arithmatical calculation of any specific direction given by the court in its earlier order.

14. However, the first ground, which Shri Brijlal Gupta has raised in favour of his contention that the appeal is not maintainable has undoubtedly raised a difficult question of law on which judicial opinion is sharply divided and we now propose to notice the same.

15. Shri Brijlal Gupta has placed reliance on the following cases;

Paul v. C.I. Antony : AIR1971Ker277 . Balbir Anand v. Ram Jawaya , Ajit Singh v. Yamuna Devi . Fateh Chand v. Amar Nath, AIR 1933 Lah 216.

16. Shri Rajeshwari Prasad, the learned Counsel for the plaintiff-appellant, has sought to distinguish the said cases and in turn he has placed reliance on Laxmanrao v. Amritlal, (1966) ILR Gui 784. Ammal v. Ponnammal. AIR 1952 Trav.-Co. 448. Vellavan v. Narayanswami AIR 1948 Mad 452, Lachminarayan v. H. Naik and Co AIR 1947 Pat 5, Sambasiva Chettiar v Secretary of State. AIR 1940 Mad 703. Eastern Mortgage and Agency Co. Ltd. v. Fakruddin Mohd. Chaudhury, 17 Ind Cas 849 and an unrecorted decision of this Court in Seth Govind Das v. Seth Banarsi Das, F. A. F. O. No. 31 of 1969 decided on 24-4-1973 (All). The case reported in Rayanappan v. Madhavi Amma AIR 1950 FC 140 has also been brought to the notice of the Court.

16-A After having 'perused the aforesaid cases, we are of the view that the order under appeal is appealable. Order 40 (1) (d). Civil Procedure Code lays down as under:

'40 (1). Where it appears to the Court to be lust and convenient the Court may by order-- (a) .....

(b) .....

(c) .....

(d) confer upon the receiver all such powers, as to bringing and defending suits and for the realisation, management, protection, preservation and improvement of the property, the collection, of the rents 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.'

17. It seems that when the impugned direction was given by the trial Court directing the Receiver to pay tothe respondent Patni a certain amount out of the grinding charges deposited by Kesri Chand, the said court was conferring upon the receiver the power relating to the application and disposal of the rents and profits of the property and hence the said direction was made under O. 40 (1) (d). Civil Procedure Code. The leading case which has been relied upon by Shri Brijlal Gupta is where a Division Bench of the said Court consisting of Wanchoo, C.J. and Dave, J., took the view that there is difference between a direction which leaves no discretion in the Receiver and which the latter is bound to carry out and the conferment of a power upon the Receiver which necessarily implies a discretion being left in the Receiver. The Rajasthan view is that only in the latter situation the provision of Order 40, Rule 1 (d), Civil Procedure Code will be attracted and not in the former case. It may be stated that in the subsequent cases relied upon by Shri Brijlal Gupta, that is and , there is no independent discussion but they have merely followed . In AIR 1933 Lah 216 also there is not much discussion. It is a single Judge pronouncement of the said court. Therefore, we have to see. whether the distinction between 'power' and 'direction' laid down by the Rajasthan Court is a valid distinction in relation to the controversy at hand. The Court in laid down:--

'Conferment of such powers, in our opinion, implies that the receiver is left with the discretion to decide himself whether he would exercise those powers in a particular set of circumstances. But where the court merely passes an order or gives a direction on which the receiver is bound to comply with, it cannot be said that any power is being conferred on the receiver within the meaning of Clause (d) of this Rule..... Certain directions that can be given to a receiver with respect to money in his hand may amount to conferment of power, if some discretion is left in the receiver as to the application and disposal of the money; but if there is no discretion left in the receiver, and he has merely to carry out the order of the Court, it cannot be said that any power was being conferred on the receiver within the meaning of Clause (d).'

18. A learned Single Judge of the Gujarat High Court has differed from the Rajasthan view. In ILR (1966) Guj 784 it has been laid down:

'The giving of a direction to a receiver to do an act, which but for the direction the receiver had no power to do amounts to conferment of power on the receiver within the meaning of Order 40, Rule 1, Clause (d) even though the receiver has no discretion in the matter of carrying out the direction.....

I cannot assent to the broad proposition that conferment of power on the receiver must necessarily imply that the receiver is given the discretion to decide whether to exercise the power or not. To read the word power in the context of Clause (d) in such a narrow and constricted manner would be not only to refuse to give full meaning and effect to that word but also to deny the right of appeal in cases where it may be most needed and if denied, might work grave injustice. The word 'power' is, I think, used in the broad sense of authority or capacity to do an act and where an order made by the court confers such authority or capacity on the receiver to do an act which otherwise he would not have authority or capacity to do, it would be an order conferring power on the receiver to do such act within the meaning of Clause (d).'

19. We think the Gujarat view is sound. We do not think that the Rajasthan view is correct that the conferment of power must imply a vesting of discretion. There seems to be no basis or justification for this interpretation of the word 'power'. In Bouvier's Law Dictionary (Baldwin's Century Edition) 'power' has been defined as follows:--

'The right, ability, or faculty of doing something. The distinction between 'power' and 'right' whatever may be its value in ethics, in law it is very shadowy and unsubstantial. He who has legal power to do anything has the legal right;

Technically, an authority by which one person enables another to do some act for him.'

There are 18 clauses in Stroud's Judicial Dictionary where in the different contexts in which the expression 'power' has been judicially noticed has been discussed. It is not necessary to embark upon a discussion of different contexts in which the expression has been used from time to time in various statutes. The important point is that the said word is used in different senses in accordance with the context in which it is used.

20. In Salmond on Jurisprudence, 12th Edn., a definition of the word 'power' has been suggested and it is like this:--

'A power may be defined as ability conferred upon a person by the law to alter, by his own will directed to that end, the rights, duties, liabilities or other legal relations, either of himself or other persons. .....Power is either ability to determine the legal relations of other persons, or ability to determine one's own. The first of these -- power over other persons -- is sometimes called authority: the second -- power over oneself -- is usually termed capacity.'

The definition cannot itself be said to be exhaustive. However, it at least shows that in the field of jurisprudence discretion is not considered to be an essential ingredient of the concept of power.

21. In Volume 72 Corpus Juris Secundum at pp. 404-406. while dealing with the classification of powers, it is laid down that powers may be discretionary or imperative.

'A general power of appointment is never coupled with a duty to make the appointment, but a special power may be either discretionary or it may be coupled with a duty. A special power is discretionary where its exercise or non-exercise depends wholly on the volition of the grantee; it is coupled with a trust duty where its exercise is obligatory on the grantee. Powers in trust are imperative, unless their execution or non-execution is expressly made to depend on the will of the grantee.'

This again shows that it is not always correct to say that discretion is a necesary ingredient of power as wrongly thought by the Rajasthan Court in the aforesaid cases.

22. Like most words in the English language, the word 'power' also has no fixed meaning. It takes its meaning, content and scope from the context, the settings, the background in which, and the purpose for which it is used. Basically, it means authority and we must distinguish between the authority itself and the manner of its exercise or its nature. Whether any discretion is left Or not and whether any direction is imperative or directory relate to the manner and exercise of the power and not to the basic ingredient of authority itself. Without authority, a valid act cannot be done irrespective of whether the act is discretionary on the part of the doer of the act, or, he is bound to do it. In both situations, he must have authority. The Rajasthan Court failed to keep separate the ingredient of authority from the nature and manner of its exercise and hence thought that power must necessarily be associated with discretion and freedom of options. It will depend upon the circumstances and context whether power is associated with discretion or with the absence of discretion. In a special power of attorney, the attorney is directed to do an act, for example, to present a document for registration or to execute a document. No discretion is left to the attorney either to present the document for registration or not to present it: similarly, the attorney is directed to execute a document and no discretion is left to him either to do the job or not to do it. Yet despite the imperative nature of the direction given to the attorney it is said that power is conferred on the attorney by a special power of attorney. Shri Jagdish Swarup in his Legislation and Interpretation (1st Edn. 1968) at p. 578 has used two expressions 'permissive powers' and 'compulsory powers'. He says, 'Permissive powers' contained in an Act are not to be construed as compulsory unless there is anything in the context or subject-matter justifying such a construction. 'Reliance has been placed for this proposition upon Attorney-General v. Simpson, (1901) 2 Ch 671 at p. 712. It follows that powers can be both permissive and compulsory. Very often both the types are to be found in statutes. For example. Section 390 of the U.P. Nagar Mahapalika Adhiniyam, 1959 bears the heading 'power to inspect premises for sanitary purpose' and it lays down:--

'Power to inspect premises for sanitary purpose. -- (1) The Mukhya Nagar Adhikari may inspect any building or other premises for the purpose of ascertaining the sanitary condition thereof.

(2) If it shall appear to the Mukhya Nagar Adhikari necessary for sanitary reasons so to do. he may, by written notice, require the owner, or occupier of any building to cause the same or any portion thereof to be limewashed, disinfected or otherwise cleansed.'

23. Similarly, Section 392 bears the heading 'Power to require repairs of insanitary buildings and it lays down:--

'Power to require repairs of insanitary buildings.-- (1) If it shall appear to the Mukhya Nagar Adhikari that any building intended for or used as a dwelling is in any respect unfit for human habitation the Mukhya Nagar Adhikari may. by written notice, require the owner of the building to show cause why an order be not made to execute such works or carry out such alterations as would render the building fit for human habitation.

(2) In addition to serving a notice under this section on the owner of the building the Mukhya Nagar Adhikari may serve a copy of the notice on any other person having an interest in the building or in the land on which such building has been erected, whether as mortgagee lessee or otherwise.

(3) If the owner and any person referred to in Sub-section (2) fail to file any objection or the Mukhya Nagar Adhikari upon hearing of any objections filed is satisfied that the execution of works or carrying out of alteration is necessary to render the building fit for human habitation he shall by written notice require the owner of the building within a reasonable time, not being less than 21 days as may be specified in the notice, to execute such works or carry out such alterations.

(4) Where it appears to the Mukhya Nagar Adhikari that immediate action is necessary for the purpose of preventingimminent danger to any person or property by the continuance of a dwelling in a state unfit for human habitation, he may dispense with the issue of a notice under Sub-section (1) and forthwith issue the notice referred to in Sub-section (3) and serve a copy thereof on any other person referred to in Sub-section (2).'

24. Now, both these provisions are obviously permissive. In contrast, let us see Section 273 (1) of the same Act:--

'Power of Mukhya Nagar Adhikari in respect of public streets. -- (11 The Mukhya Nagar Adhikari shall from time to time cause all public streets vested in the Mahapalika to be levelled, metalled or paved, channelled, altered and repaired, as occasion shall require, and may also from time to time widen, extend or otherwise improve any such streets or cause the soil thereof to be raised, lowered or altered and may place and keep in repair fences and posts for the safety of pedestrians: Provided that no widening, extension or other improvement of a public street, the aggregate cost of which will exceed five thousand rupees or such higher amount as the Mahapalika may from time to time fix, shall be undertaken by the Mukhya Nagar Adhikapi unless or until such undertaking has been authorised br the Mahapalika.'

25. It is clear that the said provision contains imperative injunctions coupled with permissible directions.

25-A. In, this connection, we may extract here the observations of Sarkar, J. in State of Uttar Pradesh v. Singhara Singh : [1964]4SCR485 :--

'The rule adopted in Taylor v. Taylor, (1876) 1 Ch D 426 is well recognised and is founded on sound principle. Its result is that if a statute has conferred a power to do an act and has laid down the method in which that power is to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed.'

26. It shows that the notion of discretion is not always to be associated with the conferment of power.

27. Clause (d) of Order 40, Rule I. Civil Procedure Code speaks of the conferment of power upon the receiver relating to many matters including 'the application and disposal of such rents and profits'. The impugned order, in our view is clearly covered by the said clause.

28. We, therefore, hold that the impugned order is appealable and the cases relied upon by Shri Rajeshwari Prasad lay down the correct law. The Division Bench of our Court in F. A. F. O. No. 31 of 1969, D/- 24-4-1973 (All), has also held such orders to be appealable eyen though the reasoning is somewhat different.

29. Coming to the merits of the order, we feel that the same cannot be allowed to stand. Shri Rajeshwari Prasad attacked the impugned order mainly on the ground that it was passed on the basis of the court's order dated 31-5-1968 treating the latter as still effective and binding even though the same had ceased to be effective and binding. Shri Brijlal Gupta, on the other hand, contended that the trial Court was right in thinking that the order dated 31-5-1968 was still effective and binding even though, somewhat modified by the subsequent orders. Even if Shri Brijlal Gupta be right in his contention that the order dated 31-5-1968 was not completely obliterated or superseded by the subsequent orders, still, the point remains whether in the material respect it was so modified that the basis of division of profit or income laid down in the said order was not operative when the impugned order was passed. Now, we have already reproduced the order dated 31-5-1968. So far as the division of income is concerned it lays down. 'He (Patni) would bear all the losses and in case of profits after meeting all the expenses, he shall claim 50% of the net profits as his charge for running the mill on behalf of the estate.' Admittedly, Nirmal Kumar Patni was not able to run the mill on behalf of the estate. Kesri Chand, who was brought on the scene was offering to run the mill on certain terms and conditions but he was not to run the mill on behalf of the estate. He was to run the mill on his own and after paying grinding charges to the estate, he was to retain the entire profits for his own benefit. We think that the new arrangement which was sought to be brought about by the trial Court's order dated 3-4-1970, was radically different from the arrangement which was contemplated by the trial Court's order dated 31-5-1968. By its order dated 3-4-1970, the trial Court sought to ensure a minimum guaranteed income of Rs. 6,000/- to the estate by way of grinding charges. Unfortunately, neither in the order dated 3-4-1970 nor in the draft agreement which was submitted hi furtherance of the said order, the basis of division between Patni and the estate was laid down. We have earlier extracted para. 11 of the said draft agreement and it will show that Patni's attempt was that the minimum guarantee should be raised from Rs. 6,000/- to Rupees 7,500/- and out of the latter sum Rs. 6,000/- should go to the estate, while Rs. 1,500/- should come to him. It is not stated in the agreement as to how the division was to take place in case the grinding charges were to exceed the minimum guarantee of Rs. 7,500/-. However, even the said draft agreement underwent a big change by the court's order dated 24-4-1970. We have earlier reproducedthe said order dated 24-4-1970. Inter alia, it is stated in the said order. 'During the course of hearing both Sri K.P. Agarwal, the new applicant and Sri Satya Narain Gupta, sen of Sri Kesri Chand (for Sri Kesri Chand) old applicant, state that they are prepared to pay in all a minimum sum of Rs. 12,000/- to the estate, out of which Sri N.K. Patni may be paid such amount as the court deems fit. Sri N.K. Patni also agrees to it.' It is obvious that in agreeing to leave the question of his payment to the Court. Patni clearly indicated that he was not entitled to the basis of payment laid down in the order dated 31-5-1968. Indeed, he could not be entitled to the said basis as the very foundation of the earlier order had undergone a big change in the subsequent orders. Whether the order dated 31-5-1968 has been superseded or only modified is really not material. So far as the basis of payment is concerned, the basis laid down in the earlier order has been completely wiped out. In the earlier order, the basis was 50% sharing of the net profits. The grinding charges now payable to the estate are its gross income. Various deductions will have to be made to arrive at the net income. In the earlier order, the estate was to run the mill through Patni. Now, Kesri Chand is to run the mill on his own on lease or licence from the estate. The amount to be paid to Patni has been left to be decided by the court. It is not without significance that in the second draft agreement (submitted in pursuance of the order dated 3-4-1970) Patni was seeking a sum of Rs. 1,500/- out of Rs. 7,500/- (amount of minimum guarantee).

30. We, therefore, think that the impugned order suffers on account of the basic error which the trial court committed, namely, in thinking that the basis of payment laid down in the trial Court's order dated 31-5-1968 continued to be efficacious despite the subsequent developments. We think that the Receiver's objection dated 22-5-1970 (Paper No. 9421-C) very correctly pointed out 'That the order dated 31-5-1968 envisaged 50% profit only in case when the parties run the mill themselves but in this case mill has been given on licence to Sri Kesri Chand and Sri N.K. Patni will not be investing anything. Under the circumstances this decision of premium cannot be governed by the order dated 31-5-1968 of the learned Court. At this juncture your honour has to determine what amount has to be given to him out of these Rs. 12,000/-.'

31. We may notice here another contention of Shri Brijlal Gupta in support of the impugned order. He contended that in view of the trial Court's order dated 4-9-1970, the controversy about his client's share in the amount deposited byKesri Chand stood finally decided. We do not agree with this contention. The rule of res judicata does not applv to such a situation. In : [1964]5SCR946 . it was laid down:--

'Interlocutory orders are of various kinds; some like orders of stay, injunction or receiver are designed to preserve the status QUO pending the litigation and to ensure that the parties might not be prejudiced by the normal delay which the proceedings before the court usually take. They do not in that sense, decide in any manner the merits of the controversy in issue in the suit and do not of course, put an end to it even in part. Such orders are certainly capable of being altered or varied by subsequent applications for the same relief, though normally only on proof of new facts or new situations which subsequently emerge. As they do not impinge upon the legal rights of parties to the litigation the principles of res judicata do not apply to the findings on which these orders are based, though if the applications were made for relief on the same basis after the same has once been disposed of, the court would be justified in rejecting the same as an abuse of the process of the court.'

Therefore, we do not think that the parties became bound by the interpretation which the trial court by its order dated 4-9-1970 placed on the order dated 31-5-1968. Moreover, when the matter has subsequently come up before us in appeal, we can examine the correctness of the earlier order dated 4-9-1970 even though no appeal was filed against the said order. See : [1960]3SCR590 , observations of Das Gupta, J. Lastly, it has to be emphasised that if the order dated 4-9-1970 were to be held as final and binding between the parties, then also the impugned order must be set aside as the order dated 4-9-1970 directed that until the net profits were determined, Patni was not to get anything though he might be given ad hoc payment. Admittedly, when the impugned order was passed, there had been no determination of the net profits. The impugned order treated the amounts deposited by Kesri Chand to be the net profits and directed Patni to be paid his 50% share. The sums deposited by Kesri Chand are really gross receipts of the estate and not its net profits. Therefore, even if the order dated 4-9-1970 were to be treated as final, the impugned order must be held to be violative of the said order. However, we desire to make it clear that there is no justification for attaching any finality to the order dated 4-9-1970.

32. Shri Brijlal Gupta argued that when over Rs. 23,000/- were paid to his client as ad hoc payments, the idea was that he would be entitled to substantialsums out of the deposited amount. We do not think that this is a correct approach. Patni cannot found any right on the basis of the ad hoc payments made to him from time to time. However, we would like to impress upon the court below that it should exercise greater circumspection in making ad hoc payments. The court below shall keep in view the directions which we propose to make hereinafter.

33. Shri Brijlal Gupta lastly contended that the impugned order should not be disturbed and the payment directed to be made to Patni by the said order might be upheld as an ad hoc payment to his client. He sought a justification for the said payment on a variety of grounds. It was contended that Patni had made big investments in the property, the flour mill had been allotted to him in some partition decree, other co-owners of the estate were gaining similar advantages etc. In this connection we have to remember that the capacity of Patni as a co-owner in the John Mill properties or his interest in the estate in the hands of the Receiver has to be kept apart from his present claim based on the court's order directing the fiour mill to be run on a certain basis. In fact, in the impugned order the trial court itself emphasised this aspect of the matter. The said Court observed:

'The plaintiff has filed a lengthy objection in which he has enumerated a number of liabilities of Patni. Most of them are vague and some of them are the liabilities of Patni as a co-sharer of the estate. Those liabilities will be adjusted only when the entire estate is divided between the co-sharers. The control for running the mill is altogether a different matter. Here the capacity of Patni is that of a licencee as any third person could have taken the mill on the same terms. The matter of this contract should not be confused with the share of Patni in the estate.'

We think the trial court has correctly sought to keep apart the two capacities of Patni and the learned Counsel is, therefore, not entitled to found any claim in respect of the deposits made by Kesri Chand on the grounds which really touch upon the status of Patni as a co-owner interested in the estate. So far as the point raised by Shri Gupta that other co-owners of ,the estate were gaining similar advantages as was claimed by Patni is concerned, we have not been satisfied in what manner any other co-owner has been allowed the claim as has been allowed to Patni by the trial Court. It is true that the order dated 31-5-1968 allowing Patni to run the mill is based on the same terms and conditions on which Mill No. 4 was granted to the defendants first set. However, we do not know whether the original arrangement was carried out by the defendants first set in respect of Mill No. 4 or not and what happened subsequently has not been brought to our notice in respect of the said mill and the arrangement made by the defendants first set in respect thereof We have not been shown that subsequent developments in connection with the said mill also proceeded on the same lines on which the original arrangement in respect of Mill No. 5 (the flour mill) proceeded in the instant case. Therefore, we do not think that the impugned order can be justified on the said basis. Moreover, even if a wrong position has been taken in respect of one co-owner it should not provide a justification for repeating the same mistake in connection with the other co-owner. We therefore, do not see any validity in the contention raised by the learned Counsel.

34. We fail to see why Patni should be allowed such a big amount in the facts and circumstances which have been disclosed to us. The Receiver very pertinently pointed out that the initial arrangements visualised big financial investments on the part of Patni in running the mill. He also agreed to bear the losses, if any, suffered in the venture and in the case of profits he agreed to share half and half with the estate. Now under the agreement, as it stands, it is Kesri Chand who is running the entire show and no one can interfere with his management. He has been investing the moneys needed for running the mill. Patni has nothing to do with the management of the concern and, needless to emphasise, the entire funds are being provided by Kesri Chand. It is difficult for us to appreciate what services he is rendering to the concern. In the agreement, of course, he is a party but his role and his liability are absolutely insignificant. A claim has been advanced on his behalf that it was on account of his efforts that the minimum grinding charges were enhanced to Rupees 12,000/- per month and he was instrumental in bringing Kesri Chand on the stage. It is contended that if Patni had not acted in the matter the estate could not have gained in the manner it has gained due to the arrangement with Kesri Chand. Unfortunately, the record of the case does not bear out this claim. We have emphasised earlier in our judgment that if Patni had his way then the estate would have been subjected to a big loss. In the first draft agreement Kesri Chand was prepared to pay grinding charges at the rate of Rs. 3.50 per ton subject to a minimum guarantee of Rs. 6,000/-. In the second draft agreement the minimum guarantee was raised to Rs. 7,500/- and out of the said sum Rs. 6,000/- was to go to the estate and Patni was to be paid Rs. 1,500/-. The rate of grinding charges was increased to Rs. 4/- per ton. It should be noted that this increase was brought about because of the objections of the plaintiff and the Receiver. Lastly, in the final agreement dated 1st May, 1970. the minimum guarantee was raised to Rupees 12,000/-. This increase was the direct result of the efforts of the plaintiff who brought on the scene a rival against Kesri Chand. It was the appearance of this rival, Sri K.P. Agrawal with his offer to pay a minimum sum of Rs. 12,000/- which induced Kesri Chand also to increase his offer. In the matter of electrification charges also it was the offer of Shri K.P. Agrawal that compelled Kesri Chand to agree to the reimbursement of half of the electrification expenses. Even as late as 29th April. 1970, Patni stated before the court that Kesri Chand was not prepared to take the mill and thereupon the court directed the new applicant K.P. Agarwal to file a final draft by 6th May, 1970. It was only then that Kesri Chand moved his application on 1st May, 1970 and submitted the 'agreement dated 1st May, 1970, which was approved by the court. In this state of affairs we do not think that Patni can be said to have played such a role as would entitle him to claim that his activities have resulted in any benefit to the estate. In fact, the estate would have suffered loss if reliance had been placed upon Patni. It was really the plaintiff to save the estate from suffering a loss.

35. We. however, do not propose ourselves to decide the amount which should be paid to Patni. In the circumstances of the case, it should be initially done by the court below. The said eourt has really not dealt with the objection raised by the plaintiff in his objection 'dated 17-1-1973 (Paper No. 10594-C). The trial court made a sweeping observation in the impugned order that most of the said objections were vague and some of them related to the liabilities of Patni as a co-sharer of the estate. We do not think that this is the correct way for the disposal of the said objection. We, therefore, feel that it would be proper that the trial court should take up the objections, sift them and dispose them of on merit. Patni's rejoinder to the said objection included at pages 270 to 275 in the paper book Vol. 2, shall also be considered. The Receiver's objection shall also be considered. It will also be open to the parties to file fresh objections and replies if they so desire. The basis of sharing of profits laid down in the order dated 3lst May, 1968 shall be completely disregarded. The trial court will, after considering the entire circumstances, decide what amount, if any, should be paid to Patni, in excess of the sums which he has already received by way of ad hoc payment, We think that in no circumstances such payments should exceed the sum of Rs. 1,500/- per month out of the monthly minimum guarantee of Rs. 12,000/- deposited by Kesri Chand. It has come out from the record that as the mill caught fire, therefore, for a long period no amount was deposited by Kesri Chand by way of a minimum guarantee. For such periods in respect of which no amount was deposited by Kesri Chand, Patni, will not be entitled to anything whatsoever. He will be entitled to the maximum sum of Rupees 1,500-/ per month only where Kesri Chand deposited Rs. 12,000/- for the months concerned. We should like to make it clear that we are not directing that Patni should be paid a sum of Rs. 1,500/- per month and we are only fixing the maximum amount to which he may be entitled in case the trial court, after disposing of the objections of the plaintiff and the Receiver, feels inclined to award some amount to Patni. The sum of Rs. 1,500/- has been so fixed because Patni was himself claiming the said amount in the second draft agreement and the increase of the, minimum guarantee of Rs. 7,500/- to Rupees 12,000/- in the last agreement was the result of the plaintiff's effort and not that of Patni. We also direct that hereafter no ad hoc payments should be made to Patni in the manner in which they have been made from time to time. The court would first decide the objections, determine the amount payable to Patni and only thereafter direct the payment to be made. Till the objections are disposed of, no further sum should be paid to Patni.

36. The appeal is allowed with costs and the matter is remanded to the court below for a fresh disposal in accordance with our directions and observations made hereinbefore.


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