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Rustomjee Dhunjibhai Sethna Vs. Frederic Gaebele and anr. - Court Judgment

LegalCrystal Citation
Decided On
Reported in51Ind.Cas.486
AppellantRustomjee Dhunjibhai Sethna
RespondentFrederic Gaebele and anr.
Cases Referred and Gowar v. Bennett
receiver, suit by or against, without leave of court - leave subsequently obtained, whether can validate proceedings--civil procedure code (act v of 1908), order xi, rule 1. - .....j. a. grant and co.4. on the 30th april 1918 the plaintiff before me was appointed in the bombay suit receiver to take charge of the sailing ship 'rabia khatoon' and otherwise to recover the freight and other profits to be earned by the employment of the 'rabia khatoon'; the order directs the receiver to pass his accounts but does not directly authorise him to sue. it appears that the attorneys of messrs. benoderam balchand telegraphed to the captain of the 'rabia khatoon' at spence's hotel, calcutta, on the 1st may informing him of the appointment of mr. sethna as receiver in the bombay suit.5. it appears from the affidavit of one ali muhammad rajabali lakhdhir, filed in this suit on the 9th may, that he came to calcutta under mr. sethna's order on the 4th may and took formal charge.....

Rafique, J.

1. On the 9th May last, I granted a Rule at the instance of the plaintiff, who is the Official Receiver of the Bombay High Court, calling on the defendants to show cause why the plaintiff should not take possession of a schooner called the 'Rabia Khatoon' at present lying in the Hooghly within the jurisdiction of this Court and why the defendant Krishna Shelly Bonnerjee, the Official Receiver of this Court, should not give up possession of the said vessel. The defendants now appear to show cause against this Rule.

2. On the 17th April 1918 a firm of Benoderam Balchand commenced a suit on the Original Side of the High Court of Bombay against J.A. Grant and Co., asking (inter alia) for a declaration that two sums of Rs. 1,71,644.10.6 and Rs. 1,36,763 49 were due to them from the defendants, for payment to them of these sums and interest thereon at 9 per cent. per annum from the date of the suit until payment, and for a declaration that the repayment of these sums was validly charged on the 'Rabia Khatoon.' They also asked for the appointment of a Receiver.

3. They claim a charge on the said vessel by virtue of a document of charge dated the 21st February 1918 executed in their favour by J. A. Grant and Co.

4. On the 30th April 1918 the plaintiff before me was appointed in the Bombay suit Receiver to take charge of the sailing ship 'Rabia Khatoon' and otherwise to recover the freight and other profits to be earned by the employment of the 'Rabia Khatoon'; the order directs the Receiver to pass his accounts but does not directly authorise him to sue. It appears that the attorneys of Messrs. Benoderam Balchand telegraphed to the Captain of the 'Rabia Khatoon' at Spence's Hotel, Calcutta, on the 1st May informing him of the appointment of Mr. Sethna as Receiver in the Bombay suit.

5. It appears from the affidavit of one Ali Muhammad Rajabali Lakhdhir, filed in this suit on the 9th May, that he came to Calcutta under Mr. Sethna's order on the 4th May and took formal charge of the vessel on that day.

6. Upon the 3rd May in Suit No. 519 of 1918 instituted in this Court on the 28th of April, by one Frederic Gaebele, who is described as ordinarily residing in Pondicherry but then residing at Spence's Hotel, Calcutta, carrying on business at Pondicherry, under the style of Frederic Gaebele and Co., against J.A. Grant and Co. carrying on business in Bombay. I, at the instance of the plaintiff in Suit No. 519 of 1918, appointed the Official Receiver of this Court interim Receiver of the 'Rabia Khatoon,' and on the 10th May the appointment was continued until the hearing of that suit.

7. Counsel for the plaintiff in the suit now before me desired to raise the question of my jurisdiction to make the order and as to whether the defendants J.A. Grant and Co. had been served with the Rule upon which the Receiver was appointed, but I declined to go into those questions in this suit. The plaintiff in Suit No. 519 of 1918 claims from the defendants a sum of Rs. 50,000 and interest and claims to be entitled to a charge in respect thereof on the 'Rabia Khatoon,' by virtue of a clause in a charter party dated the 6th March 1918 and entered into in Bombay between the plaintiff and the defendants in respect of the 'Rabia Khatoon.' The charter party provides that the chaterers (that is the plaintiff in Suit No. 519 of 1918) are to have a lien on the vessel for all moneys paid in advance. The charter party was put an end to by mutual consent, but the plaintiff claims to have advanced to the defendants Rs.10,000 upon the execution thereof and to have a lien on the vessel for this sum by virtue of the provision in the charter party to which I have referred. He applied for a Receiver as the owners Were trying to sell the vessel

8. It appears that in pursuance of my order of the 3rd May made in Suit No. 519 of 1918 a representative of the Official Receiver went on board the 'Rabia Khatoon' on the 3rd May and informed the captain that he had taken charge of the vessel. The captain states that he informed him prior to this of the order of the Bombay High Court which had been intimated to him by telegram. Under these circumstances Mr. Sethna applied to this Court for leave to proceed against the Receiver of the 'Rabia Khatoon' appointed by this Court, and leave being given he obtained this Rule.

9. The Rule should have come on for hearing on the 10th May, but it was not reached on that day and Monday the 13th May was fixed for the hearing. A preliminary objection was taken on that day on behalf of the defendant Gaebele that Mr. Sethna bad not obtained leave from the Court appointing him before instituting this suit and it was urged that this was a fatal defect which could not be cured by any leave subsequently obtained from the Bombay Court. No copy of the order appointing Mr. Sethna being available, I directed the Rule to stand over until the 17th May for production of (a) the order appointing Mr. Sethna, (b) any order subsequently obtained prior to the institution of the suit. On the 17th May the Rule again stood over as the orders had not been received from Bombay, and on the 20th May I heard the Rule. On that day the order appointing Mr. Sethna, to the contents of which I have already referred, was produced, and also an order obtained by Mr. Sethna in the Bombay Suit No 549 of 1918, dated the 15th May 1918, authorising him to continue the present suit.

10. Two questions accordingly arise on the present Rule, namely:

(1) Whether Mr. Sethna, having commenced this suit without the leave of the Bombay Court which appointed him, can continue the suit and these proceedings by virtue of the leave obtained by him to continue the proceedings by the order of the 15th May or whether I should decline to entertain the application and should ultimately dismiss the suit.

(2) Whether, under the circumstances, if I decide that Mr. Sethna can continue the proceedings, I should allow him to take possession of the 'Rabia Khatoon.

11. So far as the first question is concerned, I am asked to say by Counsel for the defendant Gaebele that the matter is concluded by authority, namely, by the decision of Mr. Justice Bodilly in Pramatha Nath Gangooly v. Khetra Nath Banerjee 32 C. 270; 9 C.W.N. 247 where, in a suit brought against a Receiver, he decided that the consent of the Court to sue a Receiver is a condition precedent to the right to sue and cannot he rectified by a subsequent application for permission to continue the action if it has been instituted without permission. That, of course, is a converse case to the present; but it is said that the same principle applies here.

12. In Miller v. Ram Ranjan Chakravarti 10 C. 1014; 5 Ind. Dec. (N.S.) 677 a decree passed against a Receiver was set aside on appeal, no leave having been obtained to sue him, the Court holding that he could not be sued without the leave of the Court. In Dunne v. Kumar Chandra Kisore 30 C. 593; 7 C.W.N. 390 the decision in Miller v. Ram Ranjan Chakravarti 10 C. 1014; 5 Ind. Dec. (N.S.) 677 is cited with approval, and it is stated that a Receiver can neither sue nor be sued without the leave of the Court.

13. In three cases decided on the Appellate Side of this Court, to all of which decisions Mr. Justice Mookerjee was a party, the Court has refused to follow the decision of Mr. Justice Bodilly in Pramatha Nath Gangooly v. Khetra Nath Banerjee 32 C. 270; 9 C.W.N. 247. In Banku Behary Dey v. Harendra Nath Mukherjee 8 Ind. Cas. 1; 15 C.W.N. 54 the Appellate Court stated that the lower Court, instead of dismissing the suit against the Receiver, should have stayed the proceedings to allow leave to be obtained to sue the Receiver, In Sarat Chandra v. Apurba Krishna Roy 11 Ind. Cas. 187; 15 C.W.N. 925; 14 C.L.J. 55 the Appellate Court held hat after executiou proceedings had been commenced leave could be subsequently obtained to execute against a Receiver. The third case of Maharaga of Burdwan v. Apurba Krishna Roy 10 Ind. Cas. 527; 15 C.W.N. 872; 14 C.L.J. 50 is to the same effect.

14. In this state of the authorities I do not think I should be bound by the decision of Mr. Justice Bodilly if I do not agree with it, assuming that it covers the point which I have to decide, and I think I am free to express my own view. This being so, I must say respectfully that I do not think that that decision is correct and I agree with the views expressed in the three cases reported in 15 Calcutta Weekly Notes, namely, that it is open to the Court at any time, even if leave has not first been obtained, to subsequently give leave to sue the Receiver. There is no doubt that the Court will always jealously protect its officer in pursuance of its duties and punish any interference with him by staying proceedings commenced against him without leave and by other appropriate penalties; but I think that even so, a Court, if a proper case is made out to its satisfaction, will subsequently allow the suit to continue and will not dismiss it.

15. I think, so far as I can ascertain, that this is in accordance with the English authorities, see Aston v. Heron (1834) 2 My. & K. 390 at pp. 393, 397; 39 E.R. 993; 3 L.J. Ch. 194 and Gowar v. Bennett (1847) 9 L.T. (O.S.) 310 which I quote as an authority from the statements of the case made in Kerr on Receivers, 5th Edition, page 181, page 204 of the 6th Edition, and Halsbury's Laws of England, Volume XXIV, page 382, as I have not been able myself to see the case.

16. So far as the present case is concerned, I have found no authority in point where the action has been commenced by a Receiver without first having obtained leave from the Court appointing him. Of course the powers of a Receiver are derived from the Court which appoints him, and there certainly seems considerable force in the argument addressed to me that if when he commences the suit he is not empowered to do so. by the appointing Court, it is beyond his powers and the defect cannot be cured by leave subsequently obtained; but on the whole I have come to the conclusion that it is open to the appointing Court under these circumstances to consider subsequently whether the suit is for the benefit of the estate, and if it is so satisfied, to validate the proceedings by subsequent leave. The result is that I think the original defect has been cured by the leave which Mr. Sethna obtained from the Bombay Court on the 15th May. On the 13th May the suit was incompetent, and if I had dealt with the present application on that day I should have stayed all proceedings in the suit, but I should not have dismissed the suit. The first point, therefore, made against this application fails.

17. SO far as the second point is concerned, there is no doubt that Mr. Sethna's appointment was prior in date and he acted with due diligence in endeavouring to take possession of the 'Rabia Khatoon' the Bombay suit in which he was appointed is also prior in date to the suit in this Court in which the Official Receiver of this Court was appointed Receiver. It is manifestly undesirable that two Receivers should remain in possession; at the same time I think it is right that the defendant Gaebele's interest should be protected, and the order I propose to make is, that if Mr. Sethna will undertake not to part with the vessel or the sale-proceeds, if he sells it, for one month from to day, the Official Receiver of this Court is to withdraw from possession. This will enable the defendant Gaebale to apply to be added as a party in the Bombay suit and get such order as he may be advised in that suit to protect his interests, or to apply to have Mr. Sethna appointed as Receiver in Suit No. 519 of 1918 of this Court. I think, however, that the Bombay Court is the proper tribunal to deal with the questions which arise between the parties.

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