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Ram Chandra Banerjee Vs. Baidyanath Roy Chaudhury and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtKolkata
Decided On
Reported inAIR1942Cal483
AppellantRam Chandra Banerjee
RespondentBaidyanath Roy Chaudhury and ors.
Cases ReferredAbdul Rahim v. Mt. Barira
Excerpt:
- .....10 nor article 89, limitation act, is applicable to this suit. the estate does not vest in a receiver appointed under the provisions of order 40, civil p.c. while functioning he is not a trustee, much less a trustee for a specific purpose. his position is that of an officer of the court appointing him and his official duty is to preserve and manage the subject-matter of the litigation. he is not the agent of the parties to the litigation in which he is appointed or of any one of them. he acts for the benefit of the party who 'ultimately becomes successful. the property is in custodia legis and through him the court discharges its functions of preserving the subject-matter of the litigation. he is only accountable to the court, which appointed him in his capacity as its officer. the.....
Judgment:

1. The Madhabpashwa estate of which the respondents are the proprietors was involved in debts. One of their creditors, a mortgagee, had instituted in 1927 a suit against them to recover his dues which was a heavy one (Suit No. 40 of 1927 of the first Court of the Subordinate Judge, Barisal). Two other creditors had started two execution proceedings (Nos. 4 and 10 of 1927) in that Court. In that suit and in those execution proceedings the appellant, a retired judicial officer, was appointed receiver on 3rd September 1927, on his furnishing security for Rs. 10,000 and on executing a security bond. The Court of Wards assumed charge of the Madhabpashwa estate in the early part of 1929 and the appellant was discharged from his office as receiver on 20th January 1929. He submitted his accounts to the Court which had appointed him, but instead of directing a ministerial officer of the Court to check his accounts the learned Subordinate Judge appointed the manager of the Court of Wards to check the same and directed him to report. The said officer submitted two reports - one on 7th February and the other on 2nd May 1930. The said reports came up for consideration on 5th January 1931. By an order made on that date the learned Subordinate Judge following the rule of practice indicated in Coomar Sattya Sankar Ghosal v. Rani Golapmoni Debi ('01) 5 C.W.N. 23 held that all the matters dealt with in those two reports could not be properly dealt with in proceedings arising out of exceptions to a receiver's accounts. He accordingly dealt with some of the matters referred to in the reports and some of the objections of the proprietors of the Madbabpashwa estate to the receiver's account and gave the latter leave to sue the receiver in respect of other matters which concerned the management of the estate by the said receiver. The receiver was finally discharged by an order dated 21st January 1932, which, however, expressly reserved the right of the Court of Wards and the proprietors of the Madhabpashwa estate 'to establish any claim they may make against him in a suit properly framed for the purpose.'

2. On 28th November 1931, the manager of the Court of Wards acting on behalf of the proprietors gave a notice under Section 80, Civil P.C, to the appellant, and on 21st March 1932, instituted this suit against him. In the suit the appellant is sought to be made liable for his negligence in the management of the estate which had been committed to him as receiver. In the plaint the details of the claim have been set out in two schedules B and C. The substance of the charge against him is that he negligently allowed rents due from the tenants to be barred by time, that he made large advances to his subordinate officers and failed to recover them, that he paid money without the sanction of the Court and that he allowed the teshildars to incur expenditure not sanctioned by the Court and which the Court ultimately refused to sanction. The learned Subordinate Judge in his preliminary judgment dated 30th September 1937 found that the appellant was 'guilty of wilful neglect and gross negligence in managing the estate.' He held the receiver liable to render account of his management from 3rd September 1927 to 19th January 1929, that is to say, for the period during which he had acted as receiver. This appeal is directed against that decree. While this appeal was pending the final decree was passed on the basis of the Commissioner's report by which the appellant has been directed to pay the respondents the sum of Rs. 5168-11-6 and costs. The appellant does not challenge the Commissioner's report or the correctness of the amount mentioned in the final decree. Nor does he challenge the finding against him in the preliminary decree to the effect that he had been guilty of wilful neglect and gross negligence in the management of the estate. The only point raised by his advocate is the question of limitation. On that question the learned Subordinate Judge held that Article 120, Limitation Act, was applicable and so the suit was in time.

3. In our judgment neither Section 10 nor Article 89, Limitation Act, is applicable to this suit. The estate does not vest in a receiver appointed under the provisions of Order 40, Civil P.C. While functioning he is not a trustee, much less a trustee for a specific purpose. His position is that of an officer of the Court appointing him and his official duty is to preserve and manage the subject-matter of the litigation. He is not the agent of the parties to the litigation in which he is appointed or of any one of them. He acts for the benefit of the party who 'ultimately becomes successful. The property is in custodia legis and through him the Court discharges its functions of preserving the subject-matter of the litigation. He is only accountable to the Court, which appointed him in his capacity as its officer. The right to take account from him or to take account of his management is primarily in the Court which appointed him and the right of an individual to sue him for accounts or in matters respecting his management is a right derived from the Court by reason of the leave given to him by the Court to sue. The real competition is between Article 36 and Article 120, Limitation Act. If the case comes within Article 36, Article 120 cannot apply.

4. Article 36 is a residuary article in respect of one class of suits. It is a general article for suits for compensation for acts and omissions amounting to torts which are not provided for elsewhere in the first division of Schedule 1, Limitation Act. That that article is applicable to torts only is indicated in col. 1. The malfeasance, misfeasance or nonfeasance complained of must be 'independent of contract' in order to attract that article. That article applies to suit which has for its basis the commission by the defendant of some act which is in itself unlawful or the improper performance of some lawful act, e.g., with negligence or some illegal omission, but the breach must be of a duty imposed by general law of the land and not a duty created by or resting upon a special engagement, in which case Article 36 would not apply, but some other article of the Limitation Act would. A receiver appointed under Order 40 of the Code engages to collect and account for the rents and profits. He engages to perform his duties well. One of his important duties for which he had engaged with the Court is to manage like a prudent owner. Even in matters of management he has not the same amount of discretion as an owner has, for in many matters he must seek direction from the Court and act under its sanction. Such being his position, if any loss occurs by reason of his misfeasance, malfeasance or nonfeasance in respect of the property committed to his care Or if loss results from his management or neglect of duties he is to make good the loss not by reason of any provision of the general law of the land but because of the breach of the duties he had agreed to discharge. The misfeasance, malfeasance or nonfeasance, as the case may be, on his part would not be 'independent of contract.'

5. We accordingly hold that Article 36 is not applicable to a suit of this description. Moreover, this is not a suit for compensation but in essence a suit for account against him. He is asked to give an account of his management. To establish a prima facie case against him the two schedules give details about monies lost on account of his negligence. If the Court found him guilty of negligence in the management of the property committed to his charge the correct form of the preliminary decree would have been to call upon him to give an account of his management for the whole period of his receivership. Neither the Commissioner appointed to take accounts nor. the Court at the final stage of the suit would have been limited to an enquiry in regard to those items only which are specified in the two schedules, and the plaintiff would have been entitled to have a decree whether sums of money not specified therein but Which on enquiry at. the final stage would hefcve been, found to have been lost by his default or, negligent management. This is an additional reason on which we hold that Article 86 is inapplicable. This additional reason leads us to hold that Article 115, Limitation Act, is not also applicable. There being thus no specific article of the Limitation Act applicable to this suit, the residuary article, namely, Article 120 must apply. It is unnecessary to consider in this case col. 3 of that article, for the suit has been instituted within six years even of the date of the appointment of the defendant. Even if the right to sue had accrued the day after his appointment this suit would be in time. But as the question is of some importance we would express our views on the point.

6. We have already said that one of the important duties of the receiver is to give an account of his management to the Court which appointed him. At any time before he is finally and unconditionally discharged the Court which had appointed him can require him to give such account. That Court had full jurisdiction to enquire not only into the question whether he had showed in his accounts the credits and debits correctly but could have enquired into the question as to whether he had been negligent in his management, and if so, what loss he had caused thereby. It is only as a matter of convenience and practice that the Court generally confines itself to the first mentioned question in exceptions to the receiver's account and leaves the other question to be gone into in a suit, on the footing that the investigation in the suit would be thorough and more satisfactory and fair to all, the parties and the receiver, for there would be the opportunity afforded to them to appeal to a higher tribunal from the decree passed in the suit. There would thus be no occasion or necessity to sue the receiver till that Court had come to the conclusion in a particular case that an enquiry into the receiver's management should be conducted not by itself in the proceedings started on exceptions but in a suit. In the latter case leave to sue to a named individual or to a group of named individuals is and must be given, for the Court not being a juridical person cannot sue in its name : Raj Raghubir Singh v. Jai Indra Bahadur Singh ('19) 6 A.I.R. 1919 P.C. 55. The leave to sue in such cases gives the plaintiff 'the right to sue' and 'the right to sue' does not arise till the Court which had appointed the receiver has determined that it would not itself proceed to make any enquiry into the alleged mismanagement of the receiver but would leave that enquiry to be conducted in a properly constituted suit to be filed by the person to whom it gives the leave to sue.

7. The leave to sue in such cases in our opinion stands on a different footing from the leave to sue the receiver given to a person who could have sued any one or all the parties to the litigation in which the receiver had been appointed in respect of any of the items of property committed to the charge of the receiver. In such cases the cause of action was already there and the leave to sue the receiver only obviates contempt proceedings to which the plaintiff in that suit would have been otherwise liable to, but it does not add to, modify or become a part of the cause of action. The 'right to sue' accrues only when a person becomes clothed with a legal character entitling him to a relief which a Court of law is competent to grant : Abdul Rahim v. Mt. Barira ('21) 8 A.I.R. 1921 Pat. 166. We accordingly hold that the 'right to sue accrues' in this class of suits which we have before us, when the leave to sue the receiver or the ex-receiver is given to a person by the Court which had appointed the receiver. This suit is accordingly not barred by time. The result is that this appeal is dismissed with costs.


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