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Onkarlal Radha Kishan Vs. V.S. Rampal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtRajasthan High Court
Decided On
Case NumberCivil Misc. Appeal No. 41 of 1958
Judge
Reported inAIR1961Raj179
ActsCode of Civil Procedure (CPC) , 1908 - Sections 51 - Order 40, Rule 1
AppellantOnkarlal Radha Kishan
RespondentV.S. Rampal and ors.
Appellant Advocate H.P. Gupta, Adv.
Respondent Advocate S.K. Jindal, Adv.
DispositionAppeal dismissed
Cases ReferredDamodar Moreshwar v. Radhabai Damodar
Excerpt:
.....learned chief justice, has a right to remain in possession and to appropriate the profits of the mortgaged property till the sale has actually taken place and that right cannot be defeated by the appointment of a receiver. appointment of a receiver, therefore, would have to depend upon the exceptional circumstances of a particular case and the court will have to determine in each case judicially whether it would be just and convenient to appoint a receiver. for instance it may be said that where the court is satisfied that the value of the security has diminished by the act of the mortgagor or otherwise or where the mortgage security is apparently insufficient to liquidate the entire dues of the mortgagee on the foot of the bond in suit, the court may be inclined to appoint a receiver..........passed in the suit on the 22nd september, 1952. later when the mortgage dues were not paid, the decree-holders applied for a final mortgage decree in june, 1954, which, after contest, was actually passed in their favour on 31st january, 1956. the decree-holders applied for execution of the decree in execution case no. 146 of 1956.the mortgaged property was proclaimed for sale but later the sale was stayed by an order of the court in civil suit no. 723 of 1956. meanwhile, it appears that in june, 1956, one fateh chand had obtained another mortgage decree against the judgment-debtor onkar lal. rampal and others, the decree-holders in this case, then filed a suit for declaration that the decree obtained by fateh chand in civil suit no. 444 of 1956 from the court of the sub-judge, first.....
Judgment:

Sarjoo Prosad C.J.

1. This appeal is by the judgment-debtor and is directed against an order dated 15-2-1958, passed by the Senior Civil Judge of Ajmer dismissing his objection.

2. It appears that a simple mortgage decree was obtained against the judgment-debtor appellant Onkarlal on the basis of three mortgage bonds. The preliminary decree was passed in the suit on the 22nd September, 1952. Later when the mortgage dues were not paid, the decree-holders applied for a final mortgage decree in June, 1954, which, after contest, was actually passed in their favour on 31st January, 1956. The decree-holders applied for execution of the decree in execution case No. 146 of 1956.

The mortgaged property was proclaimed for sale but later the sale was stayed by an order of the Court in Civil Suit No. 723 of 1956. Meanwhile, it appears that in June, 1956, one Fateh Chand had obtained another mortgage decree against the judgment-debtor Onkar Lal. Rampal and others, the decree-holders in this case, then filed a suit for declaration that the decree obtained by Fateh Chand in Civil Suit No. 444 of 1956 from the Court of the Sub-Judge, First Class, Ajmer, was a fraudulent and collusive decree and could not affect the mortgage property as against the rights of the plaintiffs-decree-holders. It was in this suit that the stay order in question was passed.

3. As there was delay in the disposal of the suit the decree-holders applied for fresh execution of the decree in the present execution case No. 76 of 1958 by the appointment of a receiver. In their application the decree-holders submitted that while the decree in favour of the decree-holders was for over Rs. 40,000/- the value of the property was barely Rs. 25,000/-. It should be observed that the mortgage property in question is a house. It was further alleged that the house was in a dilapidated condition and had not been white-washed or repaired for the last 15 years and the mortgagor had neglected the same and the property was deteriorating from day to day.

It was suggested that the judgment-debtor had no stake or interest left in the property and that he had allowed a collusive mortgage decree to be passed against him in favour of Fateh Chand. The decree-holders, therefore, prayed that a receiver should be appointed to take charge of the property and to look after it so that the usufruct may be available in the hands of the receiver for the liquidation of the mortgage debt; and the judgment-debtor may be prevented from realising any advance rent of the property or leasing out the property for long terms by taking advance payment to the great loss of the decree-holders.

The judgment-debtor, who appears to be in occupation of a portion of the property, the other portions having been let out to tenants fetching a rent of about Rs. 80/- to 90/- p.m., objected to the mode of execution claimed by the decree-holders. He not only repudiated the allegations made by the decree-holders but also contended that under the law no such execution by appointment of a receiver was maintainable.

4. The learned Civil Judge by his order in question upheld the contentions of the decree-holders and considered that in the circumstances of the case it was just and convenient to appoint a receiver to remain in charge of the property. At the same time he directed that the judgment-debtor might be permitted to continue to occupy a portion of the house in which he was already residing. The main argument which appears to have been addressed to the learned Civil Judge is that an application for execution by appointment of a receiver was not at all maintainable and a number of authorities were cited before him disclosing some conflict of judicial opinion on the point.

The learned Civil Judge was inclined to follow the majority view that such an application was maintainable and that even in execution proceedings on the basis of a simple mortgage decree a receiver could be appointed to take charge of the property.

5. Mr. Gupta on behalf of the appellant has contended that the decision of the learned Civil Judge is erroneous and he mainly relies upon the Full Bench decision of the Allahabad High Court in Anandi Lal v. Ram Sarup, AIR 1936 All 495: ILR 58 All 949, where Sulaiman C. J. appears to have disagreed with the view taken in a series of decisions by the Calcutta High Court as also by the Madras High Court and held that in the case of a simple mortgage decree a receiver could not be appointed to take charge of the mortgage property in execution. There the learned Chief Justice observes that,

'where a party to a suit, who is sought to be dispossessed is a simple mortgagor in possession then the Court has no power to appoint a receiver and to order his dispossession under the provisions of Rule 1, Order XL, of the Code of Civil Procedure'.

A simple mortgagor, according to the learned Chief Justice, has a right to remain in possession and to appropriate the profits of the mortgaged property till the sale has actually taken place and that right cannot be defeated by the appointment of a receiver. It is not necessary for us to examine in detail the reasonings of the learned Chief Justice for coming to this decision, for the obvious reason that even in the Allahabad High Court the decision does not appear to have been followed and the relevant rule had to be amended.

We may, for instance, refer to the decision in Bireshwar Banerji v. Sudhansu Shekhar Singh, AIR 1947 All 157. It was there held that a Court had power to appoint a receiver of property which was the subject of a simple mortgage in a suit by the mortgagee against the mortgagor in possession of the mortgaged property. That being so, obviously the position of the mortgagee cannot be worse off where a mortgage decree has been passed. As we have said a number of other High Courts have not accepted the Allahabad view and we would prefer in this connection to rest our decision upon the judgment of Fazl Ali C. J. as he then was in Haragopal Nandy v. Deoniti Prasad, AIR 1945 Pat 404.

In that judgment a large number of relevant case law on the point have been discussed by the learned Chief Justice who after a review of those decisions felt disinclined to follow the observations of Sulaiman C. J., in the case noted earlier and preferred to fall in line with the Division Bench judgment of the Bombay High Court where Beaumont C. J. pointed out the inconvenient results which followed from adopting a narrow interpretation of Order XL, Rule 1: vide Damodar Moreshwar v. Radhabai Damodar, AIR 1939 Born 54. Fazl Ali C. J. held that in a suit on a simple mortgage for sale of the mortgaged property the Court had jurisdiction to appoint a receiver to take possession of the mortgaged property and to realise the rents, income and profits of the property. It would be more so where the execution stage has reached.

6. The position is clearer by virtue of the enactment of Section 51(d) of the Code of Civil Procedure, which provides that the appointment of a receiver is one of the modes of execution available to a decree-holder in a proper case and the provisions of Order XL, Rule 1 of the Code were also suitably amended by adding the words 'whether before or after decree' in Clause (a) of the Rule to bring it in conformity with the provisions contained in Section 51. The two provisions, therefore, have to be read together in order to grant relief to the decree-holder by the appointment of a receiver.

The narrower view adopted in the above Full Bench decision of the Allahabad High Court on which reliance has been placed by the learned counsel for the judgment-debtor appellant does not appeal to us. That in an appropriate case a receiver can be appointed does not mean that the decree-holder can claim the appointment of a receiver as a matter of right. Ordinarily there can be no question that a Court would be disinclined to take the mortgage property from the possession of the mortgagor who under the law is entitled to continue in possession of the same until the ownership of the property has passed out of his hands by sale in execution of the final decree.

Appointment of a receiver, therefore, would have to depend upon the exceptional circumstances of a particular case and the Court will have to determine in each case judicially whether it would be just and convenient to appoint a receiver. It is not possible to lay down any hard and fast rule governing such circumstances because that will depend upon the facts of each case; for instance it may be said that where the Court is satisfied that the value of the security has diminished by the act of the mortgagor or otherwise or where the mortgage security is apparently insufficient to liquidate the entire dues of the mortgagee on the foot of the bond in suit, the Court may be inclined to appoint a receiver so as to place the rents and profits of the property in the hands of the Court to b.e dealt with in accordance with justice and equity of that particular case.

7. The Court has, therefore, the power under the law to appoint a receiver; but then the question is whether in the circumstances it was just and convenient to do so. The learned Civil Judge has not of course elaborately dealt with this aspect of the case, probably because that does not appear to have been seriously canvassed before him. He has, however, observed that the decree-holders had a genuine difficulty in proceeding with the execution of their decree to sell the property so long as the suit instituted by the decree-holders had not been decided and the decision of the suit itself was likely to take a long time.

Added to this fact are the allegations that the property was not being properly looked after and that it was in a dilapidated condition. There is an affidavit in support of the allegations where it is stated that although the decree was for more than Rs. 40,000/- the value of the property was hardly Rs. 25,000/- and that the property had not been repaired or whitewashed for the last 15 years and that it was neglected by the mortgagor.

The further allegation was that the mortgagor had brought about the collusive mortgage decree in favour of Fatehchand which was being challenged in that suit itself. Prima facie, therefore, it was just and convenient in the circumstances of this case to appoint a receiver on the terms on which the learned Civil Judge has done. In our opinion the order of the learned Civil Judge is fully justified and no adequate ground has been made out for our interference in appeal.

8. We accordingly dismiss the appeal with costs.


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