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Sm. Renula Bose in Sir Kameshwar Singh of Darbhanga Vs. Anath Nath Bose and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1938Cal93,175Ind.Cas.908
AppellantSm. Renula Bose in Sir Kameshwar Singh of Darbhanga
RespondentAnath Nath Bose and ors.
Cases ReferredJawala Prosad Bhartia v. Hanumanbux
- .....which weighed with the court in that case appear to me to have even greater force in a mortgage suit where the court has specifically in terms decreed that the property should be brought to sale in the event of failure to redeem. a decision of mine, jawala prosad bhartia v. hanumanbux (1935) 40 cwn 1065, has been put before me and sufficiently indicates the lines on which, in my opinion, the observations of rankin c. j. should be applied in a mortgage suit.8. the general position appears to be that the court will not appoint a receiver in execution unless the circumstances are such as to make the sale of the properties a matter of serious difficulty. once a receiver in execution is appointed, the mortgagee will as a rule have little inducement to bring the properties to sale.....

Panckridge, J.

1. This is an application by Srimati Renula Bose, wife of defendant Anath Nath Bose, asking that a receiver be appointed of the rents, issues and profits of the properties comprised in an indenture of mortgage dated 25th May 1914. The mortgage was created in favour of the Maharajadhiraj Bahadur Sir Kameswar Singh of Darbhanga and the amount advanced by him was Rs. 6,00,000. Although the liability was expressed to be the joint and several liability of the defendant Anath Nath Bose and the other mortgagors, that is to say his brothers Amar Nath Bose and Amulya Nath Bose, there was a provision that if the property of which they were the joint owners was partitioned,' Anath Nath Bose would be entitled to redeem the share allotted to him by payment of Rs. 40,000 with interest. There was a clause in the mortgage deed which provided that in the event of any suit being brought for the recovery of the mortgage money, the mortgagee should be at liberty to apply for the appointment of a receiver, such receiver being the nominee of the mortgagee, to take charge of the mortgaged premises. This clause further provided that the consent of the mortgagors to such appointment should be deemed to be given by it.

2. The present suit was instituted in 1919 and the final decree was made on 12th June 1935. The decree was by consent, and to it were annexed terms of settlement. The terms of settlement were to the effect that the mortgage debt was settled at Rs. 4,58,058-1-9 up to 31st May 1935. The defendants covenanted to pay interest on this sum at the rate of 6 per cent, from June 1935 until realisation. The decretal amount with interest and costs was to be paid on or before 15th December 1935. There was a provision made for sale of the mortgaged properties by the Court, but with the limitation that the Registrar should not hold the sale prior to 15th December 1935. There was also a provision that the two-thirds share in the property belonging to the parties other than Anath Nath Bose should be put up for sale first and that Anath Nath Bose's share should only be brought to sale in case the other shares were insufficient to discharge the sum due. This however was to be without prejudice to Anath Nath Bose's right to redeem. It is not denied that the only payment on account of interest since 12th June 1935 has been a payment of Rs. 10,000. According to the terms of the deed, interest was accruing at the rate of Rs. 2,400 a month, and it is therefore obvious that the defendants are very seriously in arrear. Moreover they have instituted partition proceedings in which a receiver has been appointed of the mortgaged family properties, who is collecting the rents and profits and distributing them to the defendants.

3. On 17th September 1936 the plaintiff in the suit assigned the decree together with the judgment debt and the benefit of all the securities for it to the present applicant, the wife of the defendant Anath Nath Bose. On 2nd February 1937, the present applicant applied to be substituted as a plaintiff in the suit. The Court held that such an order was not one that could be made, and made an order under Order 21, Rule 16, giving leave to the applicant to execute the decree. The applicant in her petition draws attention to the extent to which mortgage interest is in arrear and also to the fact that the mortgaged property is producing a large income which is all being distributed to the defendants although there is enough to keep the mortgage interest down and at the same time to pay for the defendants' maintenance. She states that a reasonably speedy Bale is not possible having regard to the fact that many of the mortgaged properties are situated in the muffasil and outside the limits of this province, and she submits that in the circumstances the equitable course is for the Court to appoint a receiver who will collect the rents and profits and out of them pay the interest as it falls due to the applicant as transferee of the decree pending sale. Her application is supported by the defendant Anath Nath Bose who it is admitted has paid the Rs. 40,000 due from him. The other defendants oppose the application on various grounds.

4. First of all they say that the applicant cannot avail herself of the power, if any, to apply for a receiver contained in the mortgage deed, because under the order of 2nd February 1937, she is only a transferee, which means that her powers are limited to executing the decree of 12th June 1935 as it stands. The only right that is conferred on the plaintiff by that decree is the right to bring the properties to sale if the mortgage debt is not paid off by 15th December 1935. Without giving a definite decision on the point, I am inclined to think that what the clause with regard to the appointment of receiver contained in the deed contemplates is the appointment of a receiver pending suit before the final decree is passed. I have never known a case where it was sought to get a receiver appointed subsequent to the passing of the final decree on the basis of a clause empowering the mortgagee to apply for the appointment of a receiver or empowering him to appoint a receiver without the intervention of the Court. In any event I am of opinion that the clause does not give the plaintiff an unqualified right to have a receiver appointed in the circumstances mentioned in the clause, which has the effect of taking away from the mortgagors the right to object to such an appointment. The Court has to consider the matter, and even though the defendants could not be heard to oppose the application, it would be for the Court to deal with the situation on its merits. I think there is probably a good deal more to be said for the contention that the applicant can, by reason of the order of 2nd February 1937, only execute the decree as it stands and cannot ask the Court to enforce any rights based on the original mortgage and the deed of assignment which find no place in the decree. But I am not willing to decide that point finally.

5. Another point taken by the defendants is that the powers to appoint a receiver under Section 51, Civil P.C., are limited by Order 40, Rule 1, and reliance is placed on 58 All 949,1 which is a decision of the Full Bench of the Allahabad High Court. That was a case of a simple mortgage, and the Court held there was no power to appoint a receiver in execution because Order 40, Rule 1 (2) applied, and it could not be said that any party to the suit had a present right to remove the mortgagor from possession of the mortgaged property. That, case, however, is not concerned with an English mortgage, and it cannot be questioned that this Court has over and over again in the case of English mortgages appointed a receiver of the mortgaged property in oases where sub-rule (2) would operate to prevent such an appointment. In my opinion there is no difficulty in distinguishing Ram Swarup v. Anandi Lal : AIR1936All495 from the present case, although it is possible that on some future occasion the effect of O.40, Rule 1 (2), in the case of an English mortgage, will have to be further considered.

6. One of the affidavits in opposition propounds the astonishing theory that it would be inequitable to disturb the arrangement whereby the receiver in a partition suit is dispensing the income of the family property among the co-sharers. Learned Counsel has been wise enough not to adopt his client's submission on this part of the case, for anything less in conformity with equity than the conduct of the defendants in accepting considerable sums month by month and employing no part of them in paying their creditors is not easy to imagine. The difficulty, however, which I feel in the case is occasioned by the limitations which the 'various decisions have imposed upon the discretion of the Court to appoint receivers in execution of muffasil properties.

7. The leading case is that in Promathanath Malia v. H.V. Low & Co. : AIR1930Cal502 . That suit was a money suit in which the plaintiffs had obtained a decree, In execution Lort-Williams J. appointed a receiver of muffasil immovable properties with power to sell. Although the appeal against his order was dismissed, the observations of Rankin C. J. make it clear that although the Court has jurisdiction to make an order of the nature of the one which was the subject matter of the appeal, the ordinary mode of execution is by attachment and sale. The considerations which weighed with the Court in that case appear to me to have even greater force in a mortgage suit where the Court has specifically in terms decreed that the property should be brought to sale in the event of failure to redeem. A decision of mine, Jawala Prosad Bhartia v. Hanumanbux (1935) 40 CWN 1065, has been put before me and sufficiently indicates the lines on which, in my opinion, the observations of Rankin C. J. should be applied in a mortgage suit.

8. The general position appears to be that the Court will not appoint a receiver in execution unless the circumstances are such as to make the sale of the properties a matter of serious difficulty. Once a receiver in execution is appointed, the mortgagee 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 for 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. The Court, in considering this question, should also in my opinion take into consideration the diligence of the mortgagee. In this case, although the properties could have been sold in December 1935, there has been no attempt to bring them to sale. It is true that the applicant is rot personally responsible for any delay the mortgagee has displayed prior to the assignment, but, at the same time, in the 18 months that have elapsed since the redemption period expired, no attempt has been made to sell the properties and it is a matter that cannot be overlooked.

9. The applicant complains that the sale would be a matter of difficulty and delay because, as I have at the outset of this judgment stated, many of the properties are outside the limits of Bengal. I think that the applicant exaggerates the delay which this fact necessitates, but there is this to be observed that persons who advance money on landed property which is situated in the muffasil or in other Province must be taken to have contemplated the delay with which they will be faced when the time comes to realise the security by legal process. I think it would be an extremely undesirable thing if it came to be supposed that when a substantial portion of the mortgage securities are outside the local limits of the jurisdiction of the Original Side, the mortgagee can almost as of right obtain the appointment of a receiver in execution which, as I have pointed out, is a form of relief which the Courts are slow to encourage.

10. Without laying down any rule, it seems to me that in most oases the person who applies for the relief which is now sought should be able to point to some actual difficulty in carrying out the Bale, and not merely to a delay which he foresees on general grounds. At the same time I regard the conduct of the defendants, who do not deny that they can pay something towards their dues under the mortgage, as meriting no sympathy. However I make no order on the present application except that I give the applicant leave to renew it any time after 1st November 1938, if he is so advised. He may, of course, if he does renew his application, fail on the various points of law which I at present decline to decide. If the application is not renewed, there will be no order as to costs, but if it is renewed the costs will be dealt with by the Judge who hears the application. Costs of counsel certified.

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