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Bhupendra Nath Bose Vs. Anil Kumar Mitter - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata High Court
Decided On
Case NumberLiquidation Claim Suit No. 3002 of 1969
Judge
Reported inAIR1971Cal351
ActsCode of Civil Procedure (CPC) , 1908 - Order 40, Rule 1
AppellantBhupendra Nath Bose
RespondentAnil Kumar Mitter
Advocates:Anindya Mitter, Adv.
Cases ReferredNothard v. Proctor
Excerpt:
the case dealt with appointment of receiver in the mortgaged suit under order 40, rule 1 of the civil procedure code, 1908 - it was found that receiver was present in collecting rents from mortgaged property in the execution of money decree proceeding - it was ruled that presence of the receiver in this regard, would not bar him from being appointed receiver in the subsequent mortgage suit in the same court - .....the absolute properties of nilmoni choudhury. the learned subordinate judge in the said mortgage suit appointed mr. r. n. mitter, the receiver appointed in the calcutta suit over the said properties also as the receiver of the mortgaged properties. in the mortgage suit it was alleged that the plaintiff. sridhar choudhury acted in collusion in having the said calcutta suit filed in order to defraud the creditors of nilmoni choudhury including the plaintiff in the said suit before the subordinate judge at dhanbad. the directions given to the receiver by the learned subordinate judge at dhanbad were in certain respects contrary to the directions given to the receiver by the calcutta high court.15. on the principle that 'where concurrent proceedings for similar reliefs are taken in two.....
Judgment:
ORDER

S.C. Ghose, J.

1. This is an application made by the plaintiff for appointment of a Receiver of the premises No. 24B, Theatre Road, Calcutta. The plaintiff is the mortgagee under an English mortgage dated 22nd September, 1964, executed by the defendant in favour of the plaintiff. This suit was instituted on 19th September, 1969, to enforce the said mortgage.

2. Preliminary decree in this suitwas passed on March 13, 1970, by consentof the parties for the sum of Rs. 52,333/-and further interest on the principal sumof Rs. 50,000/- and costs in Form 5A,Appendix 'D', Schedule 1 to the Code ofCivil Procedure.

3. This property is also subject to an earlier mortgage in favour of the Administrator General, West Bengal, representing the estate of one Sagar Dutta, deceased. The said prior mortgagee has not yet filed any suit to enforce the said mortgage.

4. The mortgagor has also other debts and liabilities under two several decrees passed in Suit No. 262 of 1969 and Suit No. 526 of 1969 for two several sums of Rs. 99,837.21 P. and Rs. 67,600/-respectively with interest on the aforesaid sums and costs. The said two ex parte decrees were passed on 28th March, 1969.

5. In execution of the decree passed in suit No. 262 of 1969, the decree holder Chagan Lal Daga has attached the right, title and interest of the defendant in this suit in the mortgaged property on 6th June, 1969. The said attachment is still subsisting. In execution of the decree in the other suit being suit No. 526 of 1969, the plaintiff in the said suit Chaganlal Daga got a Receiver appointed over the rents, issues and profits of the mortgaged property on 15th July, 1969.

6. On 18th July, 1969, the Receiver, Gopal Chandra Sett, an Advocate of this Court, appointed as mentioned hereinbefore in execution in suit No. 526 of 1969, wrote to the tenants of the mortgaged property to pay rent to him. On 21st July, 1969, the Receiver gave notice to the parties of the said suit No. 526 of 1969 that he would walk over the properties on 26th July, 1969. On 26th July, 1969, the Receiver walked over the properties, in the absence of the mortgagor.

7. On the 28th July, 1969, on the application of the defendant, Anil Kumar. Mitter. K. L. Roy J., passed an ad-interim order restraining the Receiver from realising the rents of the mortgaged property. The present suit on the aforesaid mortgage was instituted subsequently on the 19th September, 1969, as mentioned hereinbefore.

8. On the 22nd September, 1969, an order was made by T. K. Basu J. in said suit No. 526 of 1969 on the said application made by Anil Kumar Mitter inter alia restraining the Receiver from collecting rents if (1) the defendant continued to pay month by month and every month a sum of Rs. 2,000/- to Chagan Lal Daga and further (2) if the defendant paid off the entire decretal dues of the suit No. 526 of 1969 by May, 1970. T. K. Basu J. directed that in default of the aforesaid, the Receiver would collect rents issues and profits of the said property.

9. The defendant paid the monthly sums of Rs. 2,000/- upto the month of March, 1970 and caused to be forwarded a cheque for Rs. 2,000/- as instalment for the month of April, 1970 in terms of the said order dated 22nd September. 1969. The said cheque, however, was dishonoured by non-payment and was returned by Chagan Lal Daga's Solicitor on 23rd May, 1970. In the meantime on the 14th May, 1970, the present application was made by the plaintiff in this suit.

10. It is apparent from the facts recited above that in view of the failure of Anil Kumar Mitter to comely with the conditions mentioned in the order dated 22nd September, 1969, the Receiver appointed in the suit No. 526 of 1969 (Chagan Lal Daga v. Anil Kumar Mitter) became entitled to collect the rents, issues and profits of the mortgaged property. On the 26th May. 1970, the parties to this suit arrived at a compromise on which an order was passed by this Court. In accordance with the said compromise, the plaintiff inter alia obtained R.C. Kar, Solicitor for the plaintiff appointed as Receiver of the mortgaged property. It is not necessary to go into the other terms of the said compromise now.

11. Chagan Lal Daga on coming to know of the said appointment called upon R. C. Kar to relinquish his office in favour of the Receiver appointed in his suit being suit No. 526 of 1969. The Receiver R. C. Kar however did not relinquish his office.

12. Chagan Lal Daga on 20th August, 1970, made an application in this suit for recalling and/or setting aside the order of 26th May, 1970, inter alia appointing R. C. Kar. Solicitor, Receiver of the mortgaged property. After hearing the parties on the 24th September, 1970, I re-called the order passed by me on the 25th May, 1970. Mr R. C. Kar was discharged from action as Receiver of the mortgaged property. Mr. G. C. Sett Advocate, however was appointed by me as the interim Receiver of the mortgaged property in this suit as well. The said Receiver was directed to collect rents, issues and profits of the mortgaged property, but was prohibited from making any disbursement until further order save and except pay a sum of Rs. 2,500/- to Anil Kumar Mitter, defendant. I 'gave leave to Chagan Lal Daga to intervene in this application and file affidavit in opposition to the petition herein.

13. Mr. Amiya Nath Bose, learned counsel appearing in this application on behalf of Chagan Lal Daga submitted that in the instant case already a Receiver had been appointed by this Court in execution of the decree in suit No. 526 of 1969. The said Receiver had written to the tenants to pay rent as mentioned above and had in fact taken possession of the property. Therefore, no Receiver should be appointed in this application. If the plaintiff in this suit has a right paramount to that of the plaintiff of suit No. 526 of 1969, the only course available to the plaintiff in this suit is to apply in suit No. 526 of 1969 to be examined pro interesse suo and have the Receiver appointed in the said suit discharged. The Court has power and will make such order for the protection of the rents of the parties. Mr. Bose placed passage from Woodroffe's Receiver, 3rd Edn. page 71 in support of his aforesaid contention.

14. Mr. Bose relied on the case of Sridhar Choudhury v. Mungniram Bangar, AIR 1924 Pat 491. In the said case a suit was filed for dissolution of partnership and for partnership accounts in the High Court at Calcutta by Sridhar Choudhury on 17th July, 1923. An order by consent of the parties was passed in the said suit by the High Court at Calcutta appointing Mr. R. N. Mitter, an Advocate of Calcutta High Court, as Receiver of the partnership assets including certain colliery properties at Bihar. On 14th August, 1923, Mugniram Bangar and certain other persons filed a suit in the Court of the Subordinate Judge, Dhanbad, to enforce a mortgage executed by Nilmoni Choudhury on 22nd January 1920 on certain colliery properties stated to belong to the said partnership in the said partnership suit. Nilmoni Choudhury the executant of the mortgage was a defendant in the Calcutta suit for dissolution of partnership. At Dhanbad CourC the plaintiff in the suit for dissolution of partnership at Calcutta namely Sridhar Choudhury was also made a party defendant. The properties mortgaged were said to be the absolute properties of Nilmoni Choudhury. The learned subordinate Judge in the said mortgage suit appointed Mr. R. N. Mitter, the Receiver appointed in the Calcutta suit over the said properties also as the Receiver of the mortgaged properties. In the mortgage suit it was alleged that the plaintiff. Sridhar Choudhury acted in collusion in having the said Calcutta suit filed in order to defraud the creditors of Nilmoni Choudhury including the plaintiff in the said suit before the Subordinate Judge at Dhanbad. The directions given to the Receiver by the learned Subordinate Judge at Dhanbad were in certain respects contrary to the directions given to the Receiver by the Calcutta High Court.

15. On the principle that 'where concurrent proceedings for similar reliefs are taken in two different and independent Courts no order should be passed which may lead to friction or conflict of jurisdiction,' the Patna High Court held that the learned Subordinate Judge should not have appointed Receiver over the properties of which there had already been a Receiver appointed by another Independent Court, namely, the Calcutta High Court.

16. The said case of AIR 1924 Pat 491, was followed in the case of Subh Narain Singh v. M. M. Chakraborty, AIR 1969 Pat 256. In the said case a Receiver over a Motor Vehicle who had been appointed such Receiver was discharged by the Subordinate Judge Chapra, as the Official Receiver, High Court Calcutta had already been appointed Receiver of the same Car by Calcutta High Court. In appeal against the order of discharge the Division Bench of the Patna High Court held that subsequent discharge of the Receiver by the Subordinate Judge was justified on the principle enunciated in the aforesaid case of AIR 1924 Pat 491.

17. Mr. Bose then relied on the case of Anadi N.ath Mukheriee v. Shib Charan Trigunait, (1938) 42 Cal WN 33. In the said case an application was made for appointment of Receiver to this Court by the Auction Purchaser of a property In Calcutta which had been sold in pursuance of a mortgage decree passed by this Court for the sale of the said property. The sale was duly confirmed and sale certificate issued.

18. The application for appointment of Receiver was opposed by one of the defendants, Basanta Kumar Mitter, who was appointed Receiver for the property in question by the Subordinate Judge at Dhanbad in certain execution cases in that Court. On such oppositior no order was passed in the said application on the ground that 'it is obviously undesirable that the Receiver should be appointed in two Courts of concurrent jurisdiction so that order may be given possibly by one Court which may conflict with the orders that are given by the other Court.'

19. Mr. Bose concluded his submissions by saying that proper procedure should be resorted to by the petitioner by applying in the suit No. 526 of 1969 for the protection of his rights over thp properties.

20. Mr. Anindya Mitter appearing on behalf of the petitioner submitted that in suit No. 526 of 1969 the Receiver was appointed over this rents, issues and profits only of the said property and not over the property itself and thus there was no question of conflict of duties on the part of the two Receivers. I am unable to accept the said contention of Mr. Mitter. The Receiver, if appointed in this suit, will be entitled to and indeed be obliged to collect rents, issues and profits of the property itself. The rents, issue? and profits to be realised by the Receiver, if appointed in this Mortgage suit, shall form part of the mortgage security. Because in the instant case the mortgage is an English mortgage and there has been a conveyance of the interest of the owner in the mortgaged property to the mortgagee leaving for himself only the equity of redemption (See Prudential Assurance Co. Ltd. v. J. C. Galstaun & ors.) Thus, there may be a conflict of duties between the Receivers in both the suits. The Receiver in the suit No. 526 of 1969 may be directed to hold the rents, issues and profits collected by him for the benefit of the decree holder in that suit whereas the Receiver, if appointed in the mortgage suit must hold the rents, issues and profits as part of the securities for the benefit of the mortgagee.

21. Mr. Mitter then submitted that in the instant case if a Receiver is appointed in this suit, the principle enunciated in AIR 1924 Pat 491, as well as in 42 Cal WN 33 and AIR 1969 Pat 256, will not apply inasmuch as it would be a case of appointment of Receiver in two actions by the same Court and not by two independent Courts of concurrent jurisdiction.

22. Mr. Mitter then cited the case Of Khub Surat Koer v. Sarada Charan Guha. (1912) 16 Cal WN 126, decided by a Division Bench of this Court where a Receiver was appointed in a mortgage suit under Order 40, Rule 1 of the Code of Civil Procedure, although previous thereto a Receiver had already been appointed in a partition suit amongst owners of the properties. The plea of conflict of duties between two Receivers was overruled in the said case by the Division Bench with the following observation:

'The difficulty may be avoided by the appointment of the same person as Receiver in the two suits or if different persons are appointed as Receivers, the collection may be made by one of the Receivers only (for instance, by the Receiver in the partition suit), but the sums collected by him and payable to the mortgagors placed in the hands of the Receiver in the mortgage suit to be applied for the benefit of the mortgagee under the direction of the Judge.'

23. But it should be noted that from the report it does not appear as to whether the partition suit and the mortgage suit were filed in two different independent Courts or in the same Court or in two Courts one being subordinate to the other.

24. In England generally while appointing a Receiver in a subsequent incumbrancer's action, the Court makes the appointment 'without prejudice to the rights of prior incumbrancers who may think fit to take possession by virtue of their respective rights.' Upon the application of the legal mortgagee, the appointment of Receiver in the subsequent mortgagee's action becomes ineffective and as such Receiver in subsequent mortgagee's action becomes displaced at once. Reference may be made to a passage in Kerr on Receivers, 13th Edn. page 32 which reads as follows to wit:

'If a Receiver has already been appointed at the instance of a subsequent incumbrancer, the prior incumbrancer may apply for a Receiver, taut if the security of the subsequent incumbrancer includes other property, the Receiver already appointed will be treated as Receiver for the prior incumbrancer as to the property included in his security, only to avoid the expense of two Receivers.'

25. Reference may also be made to the case of Nothard v. Proctor, (1875) 1 Ch D 4. In the said case a Receiver and Manager was appointed by the Court of Bankruptcy over the properties of one Proctor against whom a petition for adjudication was filed. Proctor -thereafter died leaving by a Will all his properties to his wife who also was appointed the sole executrix. The executrix turned out the Receiver and took over possession of the assets of Proctor. Thereafter, the petitioner who had filed the petition for adjudication filed an action for administration of the estate of the deceased in the Court of Chancery. He also prayed for the appointment of a Receiver. Notice of motion for appointment of Receiver was served on the executrix. On the same day another creditor Blewitt instituted a suit in the Lord Mayor's Court against the executrix and on the same day by consent a decree for administration was passed therein and one Millord was appointed Receiver. Subsequent to the said appointment the motion for Receiver in the Court of Chancery was heard in the aforesaid suit and an order for the appointment of Receiver and Manager was passed by Vice-Chancellor Bacon. This order was confirmed in appeal. It should be noted, however, that the Lord Mayor's Court was a Court subordinate to the Court of Chancery and was not an independent Court in the sense as the Subordinate Judge's Court at Dhanbad is vis a vis the High Court at Calcutta.

26. In suit No. 526 of 1969 this Court in its original jurisdiction appointed Receiver in execution of the decree for money passed in the said suit over the mortgaged property. The instant application has been made also in the Original Side of this Court, i.e., the same Court.

27. Therefore, in my opinion the principles enunciated in the aforesaid cases by the Patna High Court as well as in the said case of (1938) 42 Cal WN 33 by McNair J. are not applicable to the instant case.

28. I therefore, direct, that Mr G. C. Sett, Advocate, is appointed Receiver of the mortgaged property. The said Receiver shall pay the all necessary outgoings of the property including the rates and taxes payable to the Corporation of Calcutta Wealth Tax as well as moneys payable to the Administrator General. West Bengal, representing the estate of Sagar Dutta, the first mortgagee in the first instance out of the rents, issues and profits of the motgaged property.

29. The Receiver shall thereafter hold the balance of the moneys collected or to be collected by him until further orders of the Court.

30. In order to obviate the possibility of any conflict I direct that notices of all applications that may be made in this suit by the plaintiff or defendant shall be served upon Chagan Lal Daga, Solicitor.

31. Similarly all applications that may be made by the intervener. Chagan Lal Daga, in his suit being suit No. 528 of 1969 must be made upon notice to the mortgagee. Bhupendra Nath Bose, the plaintiff in this suit.

32. The plaintiff's costs of this application shall be added to his claim. The intervener, Chagan Lal Daga's costs of this application shall be added to his claim in his suit No. 526 of 1969.


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