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Lala Lachhman Das Vs. Lakshmi NaraIn and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in137Ind.Cas.70
AppellantLala Lachhman Das
RespondentLakshmi NaraIn and ors.
Cases ReferredBalakrishna Menon v. Kakkat Manakkal Uma
Excerpt:
receiver - costs of litigation--personal liability--civil procedure code (act v of 1908), section 11--execution proceedings--dismissal of application for execution of trial court's order--subsequent application to execute appellate court's order--res judicata. - - it was like an ordinary action between two litigants, and there is no reason why the successful defendant should suffer if the insolvent has no assets at all. 431, that 'if the official assignee brings an unsuccessful motion, however, careful he may have been, the order that the court would make generally would be that he has to pay the respondent's costs and he will have the right of indemnity given him by the previous order of the court......personal capacity but in that of the receiver of the estate, he could not be made liable for the costs personally. it seems to think that the decree in favour of the defendant for costs can be executed only as against the assets of the insolvent if any.5. the order passed against ganeshi lal was not an order passed by the insolvency court, whose orders for costs against the receiver ordinarily imply that they are to be paid out of the assets in his hands. the order for costs was passed by the civil court in a suit brought by the receiver against the defendant-respondent. it was like an ordinary action between two litigants, and there is no reason why the successful defendant should suffer if the insolvent has no assets at all. the order directed that ganeshi lal should pay the costs to.....
Judgment:

1. This case has been referred to a Division Bench because of an important point of law involved in it. Ganeshi Lal was the Receiver of the estate of an insolvent Jagpal Saran. He brought a suit against one Musammat Bhagwati for a declaration that a will in her favour was not genuine and the property devised by the testator passed to the insolvent and not to her. The suit was dismissed with costs, the order being that 'the plaintiff do pay Rs. 323-12 to the defendant as costs.' An application for executing the decree for costs against Ganeshi Lal personally was dismissed by the execution Court on the 12th of January, 1924. The Receiver had in the meantime appealed to the High Court and on the 14th of February, 1927, the High Court dismissed the appeal. The order for costs as entered in the decree was in the following words, 'And it is further ordered that the appellant aforesaid do pay to the respondent No. 1 aforesaid a sum of Rs. 481-11 only the amount of the costs incurred by the latter in this Court, and it is farther ordered that the costs incurred in the lower Court be paid as awarded by the said Court.

2. The defendant-decree-bolder executed the decree of the High Court for costs against Ganeshi Lal personally. The application was resisted on the ground of res judicata on account of the previous dismissal of a similar application, and the non-liability of the Receiver in his personal capacity. The Court below has dismissed the application holding that the decree could not be executed personally against Ganeshi Lal.

3. There is no force in the plea of res judicata. The previous application was for the execution of the decree of the first Court against Ganeshi Lal. That application was dismissed. The present application is for the execution of the decree of the High Court which was passed subsequent to that order and which directed the payment of the costs afresh. The previous order of the Subordinate Judge cannot, therefore, operate as res judicata when the question is as regards the interpretation of the High Court's decree. We accordingly overrule this plea.

4. The Court below is of opinion that inasmuch as Ganeshi Lal was litigating not in his personal capacity but in that of the Receiver of the estate, he could not be made liable for the costs personally. It seems to think that the decree in favour of the defendant for costs can be executed only as against the assets of the insolvent if any.

5. The order passed against Ganeshi Lal was not an order passed by the Insolvency Court, whose orders for costs against the Receiver ordinarily imply that they are to be paid out of the assets in his hands. The order for costs was passed by the Civil Court in a suit brought by the Receiver against the defendant-respondent. It was like an ordinary action between two litigants, and there is no reason why the successful defendant should suffer if the insolvent has no assets at all. The order directed that Ganeshi Lal should pay the costs to the defendant-respondent and in the absence of anything to show that the costs would be recovered only from the assets of the insolvent, Ganeshi Lal was liable to the defendant to pay her costs. Of course, it would be open to Ganeshi Lal or his heirs to apply to the Insolvency Court for an order that he may be reimbursed out of the estate of the insolvent. If Ganeshi Lal were still continuing as the Receiver it might possibly have been open to him to recoup himself out of the estate without even obtaining a previous order from the Insolvency Court.

6. It was pointed out by the Calcutta High Court in the case of In re Suresh Chander Gooye 51 Ind. Cas. 654 : 23 C.W.N. 431, that 'if the Official Assignee brings an unsuccessful motion, however, careful he may have been, the order that the court would make generally would be that he has to pay the respondent's costs and he will have the right of indemnity given him by the previous order of the court. Or he may obtain an indemnity from the creditor or other person in whose interest the motion is brought before he starts proceeding. The order for the costs should not be directed to be limited to the assets in the hands of the Official Assignee when the respondent is not in any way in default for which he may be partially mulcted in costs.' This case was followed by the Madras High Court in Balakrishna Menon v. Kakkat Manakkal Uma 114 Ind. Cas. 825 : 52 M. 263 : 28 L.W. 719 : 55 M.L.J. 673 : A.I.R. 1929 Mad. 105, in which it was held that 'where a decree dismissing the Official Receiver's appeal directed him to pay the costs of the respondents, without stating that the costs should be paid out of the insolvent's estate, the costs are executable personally against the then Receiver, though he had ceased to hold office at the time of execution'. The learned Judges pointed out that in the absence of an express order to the contrary the Receiver was personally liable to the opposite party who succeeds in the action, though the Receiver may have a right to be re imbursed out of the insolvent's estate.

7. We think that the principle expounded in this case is sound. There seems to be no justification why the successful defendant loose her costs if the insolvent has no assets. It was the duty of the Receiver to ask the court to confine the execution of the decree to the assets of the insolvent, if that had been the real intention. If he wanted to safeguard his personal interest he should have obtained an indemnity from the creditor or other person in whose interest he was starting the litigation. In the absence of any express direction in the decree, it must he held that the Receiver was in the first instance personally liable for the, costs.

8. We accordingly allow this appeal with costs and setting aside the order of the court below, allow the decree-holder's application for the execution of the decree for costs against Lala Ganeshi Lal personally. As Lala Ganeshi Lal is dead, the decree will be executable against the assets of the deceased in the hands of the heirs if any.


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