Skip to content


Thacker's Press and Directories Ltd. Vs. Metropolitan Bank Ltd. (11.04.1963 - CALHC) - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberIn the Matter of an appln. for leave to appeal to the Supreme Court in Re: Appeal No. 43 of 1962
Judge
Reported inAIR1963Cal515
ActsConstitution of India - Articles 133, 133(1) and 138(1); ;Code of Civil Procedure (CPC) , 1908 - Sections 2(2), 47 and 51
AppellantThacker's Press and Directories Ltd.
RespondentMetropolitan Bank Ltd.
Appellant AdvocateGouri Mitter and ;Dipankar Ghosh, Advs.
Respondent AdvocateSidharta Roy and ;G.B. Roy, Advs.
DispositionApplication dismissed
Cases ReferredMidnapore Zemindary Co. Ltd. v. Kumar Chandra Singh
Excerpt:
- mitter, j.1. this is an application for a certificate under article 133 or the constitution. there is no doubt that the value of the subject matter of the dispute is much above rs. 20,000/- and the prayer is that the court should certify that the appeal involves a substantial question of law or alternatively that the case is a fit one for appeal to the supreme court.2. the facts are as follows: the respondent bank mace advances of money to the appellant and the second respondent murari mohan chatterjee on certain securities. by consent of parties a decree was passed on march 14, 1958 declaring a charge on the properties of the appellant mentioned in the schedule annexed to the terms of settlement and directing the decretal amount of rs. 10,00,000/- to be paid in certain instalments spread.....
Judgment:

Mitter, J.

1. This is an application for a certificate under Article 133 or the Constitution. There is no doubt that the value of the subject matter of the dispute is much above Rs. 20,000/- and the prayer is that the Court should certify that the appeal involves a substantial question of law or alternatively that the case is a fit one for appeal to the Supreme Court.

2. The facts are as follows: The respondent bank mace advances of money to the appellant and the second respondent Murari Mohan Chatterjee on certain securities. By consent of parties a decree was passed on March 14, 1958 declaring a charge on the properties of the appellant mentioned in the schedule annexed to the terms of settlement and directing the decretal amount of Rs. 10,00,000/- to be paid in certain instalments spread over 20 years and providing further that in default of payment of the amount of six monthly instalments due within a calendar year the decree-holder would be at liberty to proceed to realise the same by execution sale of the charged assets or any part thereof without instituting a fresh suit. The properties referred to in the schedule are certain machinery, plants, furniture, fittings, equipment and utensils. As there was default on the part of the appellant to pay the monthly sums the decree-holder applied for execution of the decree on a tabular statement filed on December 22, 1960. The amount for which execution was levied was Rs. 1,00,625/- being the moneys due in respect of 23 instalments of Rs. 4,3/5/-each. The mode in which assistance of the Court was required under column 10 of the tabular statement was

'by appointment of receiver to sell the assets or a sufficient part thereof which stood charged for repayment or the decretal amount under the said decree dated March 14, 1958 in terms of Clause 5 of the said terms of settlement. . . . and also by appointment of a receiver of the portion or the leasehold premises being the ground floor and firstfloor of the main building of premises No. 6, Bentinck Street, Calcutta, and/or such order or other orders as to this Court might seem fit and proper.' The tabular statement was accompanied by an affidavit of Jitendra Nath Sen, Chief Accountant of the decree-holder bank, who after referring inter alia to the terms of settlement stated that the defendant had failed and neglected to pay any sum payable under the decree, that he had learnt from the landlord of the leasehold premises that the defendant had made default in payment of rent for a considerable period, that the defendant had made an application on November 18, 1959 for recording an alleged adjustment of the decree which had, however, been dismissed and by reason of the defaults committed by the defendant the decree holder was seeking to execute the decree by appointment of a receiver to sell the assets or a sufficient part thereof as also by appointment of a receiver over the leasehold premises. There was an averment that in the facts and circumstances of the case it was just and convenient that a receiver should be so appointed.

3. One Bejoyananda Dutta, a Director of the appellant company, affirmed an affidavit in opposition on August 16, 1961. The main contention therein put forward was that the decree under execution had been adjusted and/or satisfied by agreement in writing dated July 18, 1959 between the Bank and the Press. A copy of the agreement which formed an annexure to the decree in suit No. 2831 of 1956 wherein one Sadananda Chatterjee was the plaintiff and the Press, the Bank and Murari Mohan Chatterjee were the defendants was relied on for this purpose. The terms of settlement in that suit provided that there would be a decree against the Press and the Bank for Rs. 1,00,000/- and the assets of the press would stand charged in favour of the plaintiff Chatterjee for repayment of the decretal amount subject to the prior charge and mortgage in favour of the Bank in suit No. 1734 of 1957 out of which the present application has arisen. The annexure to the terms of settlement contemplated agreements being arrived at between the landlord one Gopinath Auddy and the Bank with regard to the tenancy of a portion of the building and other matters. Bejoyananda Dutta also stated in his affidavit that the application for recording the adjustment had been dismissed but an appeal preferred therefrom was still pending. Dutta's further contention was that in these circumstances the Press was not called upon to pay and/or was prevented from paying the decretal instalment in time and the Bank was not entitled to take advantage of such default. Dutta also stated 'that the present dues of the decree-holder can be easily realised by the appointment of a Receiver of the leasehold property alone while if the Receiver is appointed or the other assets of the defendant and there is a forced sale thereof the assets as aforesaid will have to be sold at a gross undervalue.' Several other objections with regard to the executability of the decree were taken in the affidavit but it is admitted that at the hearing of the application (which took place before me) the only point Put forward by counsel for the Press was that the decree had been adjusted by virtue of the agreement referred to and could not be executed. This contention did not find favour and an order was made on September 7, 1961 appointing O. Ahmed, a member of the Bar, receiver, in execution of the decree without being required to furnish any security, or the assets and properties charged under the decree and to sell the properties or a sufficient part thereof for payment of the decretal amount under the decree in terms of clause 5 of the terms of settlement as mentioned in cl. 7 of the tabular statement. The order as drawn up shows that the Receiver was clothed with other powers covered by Order 40 Rule 1(d) of the Code of Civil Procedure.

4. From this order an appeal was preferred on several grounds including (1) that no order for sale of the assets of the Press could be made without first having recourse to satisfaction of the alleged dues by appointment of a Receiver of the leasehold interest, (2) that the order entrusting the Receiver with the duty of selling the charged assets should not have been made, (3) that the appointment of a Receiver was inequitable and (4) that the decree-holder was not entitled to put the assets to sale without first exhausting the other remedies provided in the consent decree.

5. At the hearing of the appeal from the said order the only point canvassed on behalf of the Press was that the appointment of a Receiver to sell the charged assets was not justified in the circumstances of the case and was contrary to law. The preliminary objection that this point had not been urged before the trial Judge was overruled by the Division Bench observing that-

'If it be a case under Section 51(d) of the Code and the law prescribes or requires certain conditions to be fulfilled or certain facts to be proved before relief could be claimable or obtainable thereunder, it is open to the judgment-debtor to show, at any stage of the proceeding, be it appeal or otherwise, that necessary circumstances do not exist or necessary facts have not been proved to justify grant of relief under the section.'

After dealing with the numerous authorities cited on behalf of the appellant the learned Judges held that the order under appeal provided for what the appellant sought 'not the extra-ordinary mode of execution by appointing a receiver under Section 51(d) but the ordinary mode of execution by sale under Section 51(d) though not through the usual agency, viz., by the Registrar.' it may here be noted that the objection of the appellant to the sale by the Receiver mooted in the affidavit of Bejoyananda Dutt was that the machinery etc., would not fetch their proper value if such a course were adopted.

6. Before us it was argued on behalf of the proposed appellant that in rejecting the appeal the learned Judges had made a considerable departure from the settled law on the subject thus giving rise to a substantial question of law fit for trial by the Supreme Court, it was further argued that the case was a fit one for appeal to the Supreme Court under Article 133(1)(c) of the Constitution because the appointment of a Receiver in execution to sell properties charged under the decree was a matter of considerable public importance.

7. On behalf of the respondent it was argued that the learned Judges had not laid down any new principle of law or struck a new path but had after considering the facts of the case upheld the order of the trial Judge with a slight modification. A further point was taken, viz., that the judgment or order of the Division Bench was not a final order within the meaning of Article 133 of the Constitution, and, as such, there could be no question of grant of certificate under that Article.

8. There can be little doubt that if the judgment of The appeal Court is merely an order and not a decree, it does not satisfy the test of a final order under Article 183 of the Constitution. We have had occasion to consider various judicial pronouncements on the meaning of the expression 'final order' in Article 133 of the Constitution in recent cases viz., -- appeal No. 135 of 1961 -- Farbeniebriken Bayer Aktiengesellschaft v. Joint Controller of Patents and Designs decided on February 20, 1953 : : AIR1963Cal433 and in appeal No. 66 of 1961 Pankaj Kumar Pakhira v. Nanibala Pakhira decided on April 2, 1963 : : AIR1963Cal524 . Broadly speaking,

'an order is final if it amounts to a final decision relating to the rights of the parties in dispute in the Civil Proceeding. If after the order, the Civil proceedings still remains to be tried and the rights in dispute between me parties have to be determined, the order is not a final order within the meaning of Article 133'.

Jethanand and Sons v. State of Uttar Pradesh, : [1961]3SCR754 . The civil proceeding in this case is the execution proceeding which was started by the tabular statement. It is nowhere near completion. By its orders the Court has held that execution should proceed by the appointment of a receiver directing him to take possession of the charged assets and sell the same in due compliance with law. The Receiver has to make an inventory of goods, get them valued, advertise the sale properly, conduct the same and hold the sale-proceeds until further orders. The rights of the parties with regard to the charged properties nave not been finally decided. It is still open to the judgment-debtor to raise objections about the preparation of the inventory, the valuation of the goods and the advertisement to be published in connection therewith. All that the Court has decided is that a particular mode of execution should be adopted. So long as the sale does not take place, the judgment debtor can raise further or other objections. If any irregularities be committed at the sale, the press will no doubt apply for setting aside the same. It is not, there-fore, possible to hold that the rights of the parties to the execution proceedings have been finally adjudicated upon by this Court. In Abdul Rahman v. D. K. Kasim and Sons the Judicial Committee observed that it was not enough that the order made went to the root of the suit, viz., the jurisdiction of the Court to entertain it and that 'the finality must be a finality in relation to the suit. If after the order the suit is still a live suit in which the rights of the parties have still to be determined, no appeal lies against it under Section 109(a) of the Code.'

9. It was argued, however, on the strength of definition of a decree in Section 2(2) of the Code of Civil Procedure that any determination of a question under Section 47 of the Code amounted to a decree. I find myself unable to accept this contention. To be within Section 47 the question must be one relating to the execution, discharge or satisfaction of the decree. The determination of the mode of execution is certainly a matter relating to the execution of a decree but this test by itself is not enough. To find out whether the order amounts to a decree, we have to consider the definition of 'decree' in Section 2(2) of the Code as a whole, viz., that it must be 'the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit.' The question was considered by a Full Bench of this Court in Jagadiswari Debya v. Kailash Chandra Lahiri, 1 Cal WN 374 and the dictum of Banerjce, J. at page 382 of the report has been quoted with approval in later cases not only by this Court hut by other High Courts. The question before the Full Bench in that case was whether the Civil Court could make a partition of lands of a revenue paying estate when no separate allotment of Government revenue was asked for. In other words whether the partition was to be effected by the Collector or by a Civil Court Amin Banerjee, J. observed-

'It is not every order made in execution of a decree that comes within Section 244 (corresponding to the present Section 47)***** An order in execution proceedings can come under Section 244 only when it determines somequestion relating to the rights and liabilities of parties with reference to the relief granted by the decree; not when, as in this case, it determines merely an incidental question as to whether the proceedings are to be conducted in a certain way.'

In Srinibas Prosad Singh v. Kesho Prosad Singh, ILLR 38 Cal 754, where the question was whether execution of a Decree should be stayed on the furnishing of security and whether the order was appealable it was observed that every order made in course of proceeding in execution of a decree could not be treated as involving the determination of a question relating to the execution of a decree. The same view was taken in the case of Saraswati Barmonya v. Moti Barmonya, ILR 41 Cal 160: (AIR 1914 Cal 149). In Narar Chandra v. Kalipada Das : AIR1940Cal257 , Nasim Ali J. said

'the combined effect of Section 47 and Section 2(2) of the Code is that an order in execution proceeding is a decree, if, so far as regards the Court passing it, it conclusively determines a question relating to the rights and liabilities of the parties with reference to the relief granted by the decree.'

It is to be observed that this is in substance what had been said by Banerjee, J. in Jagadiswari's case, 1 Cal WN 374.

10. In Mukhtar Ahmed v. Muqarrab Hussain, ILR 34 ALL 530, the question before the Court was whether fresh attach-ment was necessary when the Court which had wrongly ordered the execution proceedings to be struck off for default of prosecution restored the same on the mistake being pointed out. On the objection being overruled the judgment debtor preferred an appeal to the High Court. The Court was of the view that although the words of Section 47 were, no doubt, very wide, if taken in their literal sense the intention of the legislature was not that every interlocutory order should be subjected to an. appeal. They referred with approval to the observations of Banerjee, J. quoted above and were of the view that the wording of Section 244 indicated that the question contemplated thereby

'must be of such a nature that it is possible to suppose that but for the section they could have formed the SUD-ject of determination by a separate suit'.

Mukhtar Ahmed's case, ILR 34 All 530 was followed byanother division bench of the Allahabad High Court inHussain Bhai v. Y. Beltu Shah Gilam, AIR 1924 ALL 808.

11. The same view was taken by the Patna High Court in Saurendra Nath v. Mritunjay Banerji, AIR 1920 Patna 249 where Dawson-Miller, C. J. observed that the words the decree 'shall be deemed to include the determination of any question within Section 47 .... must be limited by the words which immediately precede them and unless the decision appealed from is one which in some way determines the rights of the parties with regard to all or any of the matters in controversy in the suit, it cannot be included under the definition of decree'. In the Patna case the judg-ment debtor had filed a petition of objection to the valuation given by the decree-holders in the sale proclamation and having lost before the Subordinate Judge sought to prefer an appeal to the High Court. This judgment was followed in Shiva Narayan v. Narayan Prasad, AIR 1924 Pat 683.

12. There was some conflict of opinion in the Madras High Court to start with but in M. Desikachariar v. Rama Chandra Reddiar : AIR1951Mad55 a full bench of the Madras High Court after dealing exhaustively with the authorities of the other High Courts adopted the statement of law of Banerjee, J. in Jagadishwari's case, 1 Cal WN 374.

In Barkat Ram v. Bhagwan Singh, AIR 1943 Lah 140 a full bench of the Lahore High Court expressed the same view as Banerjee J. in Jagadiswari's case 1 Cal WN 374. This was followed in another proceeding between the same parties reported in Barkat Ram v. bhagwan Singh, AIR 1949 EP 222.

13. In my view, the order made in this case does notdetermine any question relating to the rights and liabilities of the parties with reference to the relief granted by the decree. It would be more appropriate to say that the question before the Court was whether the proceeding of sale was to be conducted in a certain way, namely, by the appointment of a receiver.

14. Quite apart from the above it seems to me that there is no substantial question of law which should be canvassed before the Supreme Court, in a recent case the Supreme Court has laid down certain principles for finding out when a substantial question of law is involved. In Chunilal v. Merits and Sons Ltd. v. Century Spinning and . : AIR1962SC1314 the Court said

'the proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly or substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. If the question is settled by the highest Court or the general principles to he applied in determining the question are well settled and there is a mere question of applying those principles of that the plea raised is palpably absurd the question would not be a substantial question of law.'

The only objection which was pressed before the trial Judge was that the decree could not be executed at all inasmuch as it had been adjusted by agreement. That contention being negatived no further plea was taken that the case was not one where the appointment of a receiver to sell the charged properties was justified. In a series of decisions of this Court it has been held that where there is no obstacle to a decree holder's applying for sale of properties belonging to the judgment debtor in the ordinary course the Court should not appoint a receiver in execution to take charge of the judgment debtor's properties and pay the decree holder from out of the income of the same or otherwise. So far as I am aware there is no decision laying down the proposition that assets charged by a decree cannot be put up to sale through a Receiver. After all it is for the parties to suggest how a sale can best be held and for the Court to examine the rival contentions before directing a particular course to be adopted. Section 51 of the Code of Civil Proce-dure lays down several methods by which a decree can be executed including one for attachment and sale of the properties of the judgment debtor and another for appointing a receiver. If the judgment debtor had objected to a com-bination of the two methods the trial Judge would have been bound to consider the objection and either called upon the decree-holder to bring forward further and better material in aid of its claim or refused the combination of prayers asked for.

15. In the case of Promotha Nath v. H. V. Low and Co. : AIR1930Cal502 the sheet anchor of the proposed appellant's case, a receiver had been appointed by way of execution of a colliery belonging to the judgment debtor with a direction that he should sell the property by public auction. Before the Court of Appeal various objections were raised on behalf of the appellant namely that the decree should have been transferred to the Court within whose jurisdiction the property was situate so that the sale could take place through that Court, that this Court had no jurisdiction to appoint a receiver of immovable property situate outside its local jurisdiction and that there was no case made out to show that there was legal or practical diffi-culty in procuring the sale in execution in the ordinary course. Rankin, C. J. pointed out that the mam difficulty arose from the circumstance that the respondents' application was amended and converted into an application for a receiver without any proper statement of facts being inluded in the affidavit so as to make a case for that form of relief and that it further appeared that this aspect of the matter had been overlooked and that there was little or no evidence before the learned trial Judge bearing upon this question. His lordship observed that it was certainly open to the Court to have the colliery sold in execution in such way as the Court might think most appropriate to the circumstance of the case and that 'even where it appears that the appointment of a receiver with power to sell will be the most appropriate course, prima facie at all events this application should be made as an application in execution of the Court within whose territorial jurisdiction the property is situate.' It is significant to note that the division bench did not allow the appeal because of the difficulties pointed out but gave the plaintiff a chance by further affidavit to satisfy the court why a receiver should be appointed with corresponding liberty to the judgment debtor to file a counter affidavit.

16. In the instant case the learned Judges of the division bench considered the above and many other cases and construed the order made by the executing court as one for the appointment of a person described as receiver to sell under Section 51(b) of the Code of Civil Procedure. They were careful to point out that normally sale was not contemplated under Section 51(d) but that did not mean that a receiver in execution appointed strictly under Section 51(d) could not be authorised or entitled to sell. It was observed that

'the executing court, directing Mr. Ahmed to take possession of the charged assets * * * * * does not connote that it has appointed a receiver in execution within the meaning of Section 51(d) of the Code. It has done no more than appointing a person, designating him a receiver; to conduct the sale (without attachment strictly so-called within the meaning of Section 51(b) thereof. What is to be sold consists of movables, possession of which must be taken by one, who sells, before he sells. Were that not so, what if certain moveables sold are missing *****? Immediate possession which has to be given to the purchaser on payment of the purchase money ***** cannot be given and the sale will come to little as the learned standing counsel emphasises. ***** The Court takes possession as an aid to the ultimate purpose of the intended sale in execution, that is, by way of an ancillary step, and it takes possession through its nominees, call him receiver or by any other name, but he may well be a receiver under Order 40 Rule 1 of the Code.'

17. No useful purpose will be served by exhaustively analysing the cases cited at the bar before us or before the appeal court. Whether a case has been made out for the somewhat unusual procedure of sale by a receiver is a mixed question of law and fact. The court has to examine the circumstances if there be any dispute as to the facts and then make up its mind whether it would be proper to adopt the method indicated above. There can be no dispute that in a proper case the Court has jurisdiction to combine the reliefs under Section 51(b) and Section 51(d) of the Code or make any other order appropriate to the case. But in my view it hardly lies in the mouth of a judgment debtor who only takes a plea that the decree has been satisfied or adjusted and does not raise any objection as to the method of execution suggested by the decree holder to prefer an appeal and contend before the appeal court that the mode put forward should not have been allowed. In Pramotha Nath Malia's case : AIR1930Cal502 the judgment debtor had objected to the order of the trial court and pressed the same objection on appeal. As already indicated the appeal bench consisting of Rankin C. J. and Ghcse, J. did not allow the appeal on the ground that the decree holder had failed to make out a case for appointment or a receiver to sell but gave the parties liberty to bring forward further or other material by supplementary affida-vits. That course was not adopted here. One thing now-ever is clear that if the sale be allowed to take place in the ordinary way after attachment by the Sheriff and the money be brought in into court other persons who nave decrees against the press would be entitled to ask for rateable distribution. To that extent the bank would lose the benefit of the charge over the assets.

18. in Kshitish Chandra v. Raja Janaki Nath : AIR1932Cal194 which was a case where a mortgage decree for sale had been made the court observed that 'in order to see whether it would be just and convenient to make the appointment (of receiver) one must consider what impediment there is or may be for the sale to be held'. The learned Judges who decided this case made similar observations in the case of Hemendra Nath v. Prokash Chandra : AIR1932Cal189 . In Jawla Prosad v. Hanumanbux Poddar, 40 Cal WN 1065 where the above authorities were cited Panckridge, J. observed:

'it may fairly be deduced from these cases that it the judgment debtor objects to the appointment of a receiver in execution, and if there is a reasonable chance of the decree holder being able to satisfy the decree by means of attachment and sale, he should be relegated to that remedy.'

The same learned Judge pointed out in In re Sm. Renula Bose : AIR1938Cal93 that

'Once a receiver in execution is appointed, the mort-gagee will as a rule have little inducement to bring the properties to sale and will tend to let matters drag on indefinitely. If the properties are producing a good income, it is probable that the mortgagee will have a more profitable investment than he will be able to obtain from the sale proceeds if the properties are brought to sale. This does not however mean that if there are substantial difficulties in the way of the sale the court will not help the mortgagee by appointing a receiver.'

Again in Midnapore Zemindary Co. Ltd. v. Kumar Chandra Singh, 52 Cal WN 736 : (AIR 1949 Cal 63) a division bench of this court observed that it was not always necessary that legal execution should be exhausted before the appointment of a receiver by way of equitable execution can be obtained,

19. In my view no case has been made out for the Supreme Court to examine the principles applicable to a case where a decree holder asks for the assistance of the executing court by the appointment of a receiver to sell the charged assets. The decree holder might have made out a better case (or the relief asked for and if any objection had been taken to that course the Court might have given the parties an opportunity of using further affidavits on that point. This question which was never canvassed before the executing Court was raised before the division bench of this court in appeal probably because no other loophole could be found in the order. It is clear that the judgment debtor is out to baulk the decree holder in all possible ways and has not paid any money or made any deposit in terms of the decree which was passed more than five years back except the sum of Rs. 20,000/- which had to be put in court as the precondition of an order of stay granted during the pendency of this application. This is not a case which would be covered by the principles laid down by the Supreme Court in : AIR1962SC1314 .

20. The application is dismissed with costs.

Bose, C.J.

21. I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //