1. This is a suit brought by Mr. K.B. Dutt and Mr. P.N. Chaudhuri, the present receivers appointed in suit No. 427 of 1907, which is a suit for the administration of the estate of one Gopal Lall Seal (deceased). The two defendant's are Shamal Dhone Dutt and Norendra Lal Dey, who were former receivers appointed in the same suit.
2. The present suit is one of a very novel character. It is a suit by the present receivers to recover from the former receivers an item which they say ought to appear in the accounts of the former receivers, which have not yet been passed and allowed by the Court. One would have to search in vain to find a suit of a similar nature to the present.
3. Now, what happened is this. The testator, Gopal Lall Seal, was a man of wealth, and he died leaving two widows, and also there was a document propounded which was said to be the last will and testament of Gopal Lall Seal, and litigation was instituted for the purpose of propounding that will. Mr. Robert Belchambers, who was then the Registrar of this Court, was appointed administrator pendente lite. That suit eventually together with the administration suit was compromised and the two defendants, by an order dated 29th January, 1908, were appointed receivers of the estate of Gopal Lall Seal. Mr. Belchambers, as administrator pendente lite, had incurred very heavy obligations to the Bank of Bengal in respect of the estate, and it therefore became necessary to provide for the payment of the debts that were due by Mr. Belchambers to the Bank of Bengal, and ultimately by an order of the Court, dated 8th July, 1908, which was made on the application and by the consent of all parties, it was ordered that the receivers should be at liberty to raise a loan of a sum not exceeding six lacs carrying interest at a rate not exceeding 7 per cent. per annum, repayable in three years from the date of the mortgage upon security of a sufficient portion of the estate. The order than; proceeded that the receivers do out of the said sum which was to be raised by them as aforesaid pay the balance of the debt due to the Bank of Bengal with interest thereon up to the date of payment and do also pay the costs, charges and expenses of all parties of and incidental to such loan or mortgage; and also that the receivers be at liberty to pay brokerage at the rate of one per cent. on the amount of the said loan.
4. It is not necessary to go through all the subsequent transactions. It is sufficient to say this that a broker called Sophianopoulos got the business in hand; he approached Messrs. Sanderson & Co.: and Messrs. Sanderson & Co. through their clients, Messrs. Andrew Yule & Co., undertook to find the money which the receivers were authorized to raise under the terms of the order of the 8th July 1908. The matter was completed, the one per cent. brokerage was paid to Sophianopoulos, and the other charges of the mortgage were properly paid. But out of the mortgage consideration Messrs. Sanderson & Co., acting on behalf of Andrew Yule & Co.. retained a sum of Rs. 6,000, which they said was their consideration for undertaking to raise the money on the mortgage. At one time the previous receivers disputed that amount. However the matter stands in this way: that Messrs. Sanderson & Co. kept back Rs. 6,000 and it is that sum, which was kept back by Sanderson & Co., which the present receivers seek to recover from the old receivers. Why a suit was not brought against Sanderson & Co. or Andrew Yule & Co. whoever had actually got this Rs. 6,000 in their coffers (if it is recoverable), I cannot understand. It is quite true that if the receivers by their wilful act and default permitted Messrs. Sanderson & Co. or Andrew. Yule &. Co. to retain this sum, they are jointly responsible as well as Messrs. Sanderson & Co. and Andrew Yule & Co. Nobody can doubt that where there are solvent parties who had actually got the money in their coffers, that in the first instance the receivers ought to have proceeded (if they had any right to sue) against Sanderson & Co. or Andrew Yule & Co. I very much doubt whether the learned Judge appreciated, when he gave leave to this suit being instituted against the former receivers, that this money was in fact never in the hands of the receivers at all, but was retained by Messrs. Sanderson & Co. under a claim of right. That being so, the present receivers have brought this suit against the old receivers.
5. First of all, it seems to me that this suit does not lie. There was no allegation in this case at all that the money could have been got on easier terms. The plaintiffs nowhere have stated in their plaint that the money could have been obtained on terms less onerous than those placed upon the defendants by Messrs. Sanderson & Co. and Messrs. Andrew Yule & Co. It is quite true that the defendants in the first instance did object to Messrs. Sanderson & Co., retaining this sum of Rs. 6,000 but Sanderson & Co. insisted on their right to retain this money, and it was not suggested that the money could have been obtained on terms other than those contained in the order which was actually carried into effect. And, moreover, the order authorised the receivers to pay the costs, charges and expenses of all parties of and incidental to such loan or mortgage. It is quite true that if the receivers had paid these costs, charges and expenses as being incidental to the loan or mortgage, the onus of justifying the costs, charges and expenses would fall upon the defendants. It is quite obvious that in this case there, is not an allegation anywhere in the plaint that the present plaintiffs or the estate had suffered any damage by the retention of this money by Sanderson & Co. But in so far as the suit is to recover damages, you have to plead the damage. In so far as the suit is a suit for money had and received, it does not seem to me that it is money had and received to the use of the plaintiffs, but money had and received by the defendants (if they are to be charged with this money) and being actually in their hands as officers of the Court. 'I am not aware that subsequent receivers can maintain a suit against the former receivers to recover funds which they allege ought to have been in their hands and which ought to form items in the account which the receivers lodged in Court. It may be, as Mr. Lahiri said, that in some cases this Court does not deal with these matters on a question of account but leaves them to be dealt with in a subsequent and regular suit. But what is clear is that in no case, that can be found in the reports, has a suit ever been maintained by a subsequent receiver against a former receiver. If any such suit has in fact been maintained it has been maintained by the persons who were entitled to the estate. It is obvious that no such suit as this has ever been maintained in the absence of the owners of the estate, and I must confess myself that I feel considerable doubt as to whether, when the accounts of the receivers have not been passed, you can pick out an item which ought to appear in the account and bring a regular suit for it. It seems to me that the practice that has always obtained in England is much more convenient, namely, that for money that the receiver actually has in his hands or ought to have in his hands as an officer of the Court, he ought to be dealt with summarily by being directed to pay it into Court or to be attached in default of his doing so. In my opinion, no such suit as this has ever been brought before the Court. The diligence of the various counsel that have been engaged in this case, has not been able to find any suit similar to the present. Of course it does not necessarily suggest that no such suit can be brought, but it does seem to suggest that of the very large number of cases with reference to receivers which come before the various Courts, nobody up to the present has ever thought that the subsequent receiver could sue the old receiver for a breach of duty that he committed as an officer of the Court, because that is really what the allegation in this case comes to that in breach of their duty as officers of the Court the two defendants failed to recover from Sanderson & Co. this sum of Rs. 6,000. To my mind, it is quite impossible that two subsequent officers of the Court could sue two former officers of the Court for breach of duty committed by them when the plaintiffs were officers of the Court, and when defendants wore discharged from acting as such. In my opinion, whatever the rights may be whether to proceed by regular suit or by motion for attachment those rights are not vested in the present plaintiffs. I cannot help thinking that a case like this where Messrs. Sanderson & Co. on behalf of their clients Andrew Yule & Co., have retained this sum of Rs. 6,000 (which nobody can suggest that they are not in a position to refund If they are required to do so) ought never to have been launched against the present defendants. The matter could have been litigated, if the plaintiffs had any rights, against Sanderson & Co. or Andrew Yule & Co. Whatever the rights of the present receivers may be, they ought never to have brought a suit of this nature, when it is not suggested that the defendants had even one penny of this money in their own pockets, and when this money all along remained in the coffers of Sanderson & Co. or Andrew Yule & Co. and who, if anybody, is liable to refund the same.
6. In my opinion, the present receivers are not in a position to institute the present suit. As a matter of fact if the money is due and the matter is litigated between the present receivers (plaintiff's) and the defendants, notwithstanding the litigation it can be open to the parties entitled to the estate to litigate the whole matter all over again because the present plaintiffs have got no estate or interest in the property of Gopal Lall Seal. They are mere receivers and if this suit is tried out, there is nothing to prevent the beneficiaries interested from having the matter dealt with over again,
7. In my opinion, a suit of the present nature does not lie. The plaint discloses no cause of action and the present suit therefore fails and must be dismissed with costs on scale No. 2.