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Nrishinha Kumar Sinha Vs. Deb Prosanna Mukherjee and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1935Cal460,157Ind.Cas.140
AppellantNrishinha Kumar Sinha
RespondentDeb Prosanna Mukherjee and ors.
Cases ReferredKala Chand Banerji v. Jagannath Marwari
Excerpt:
- .....praying that certain mortgaged properties which are now in the custody of the court, through a receiver appointed by the court, be made over to the receiver in insolvency. it appears that in mortgage suit no. 53 of 1922, a receiver was appointed by the subordinate judge of burdwan, at the instance of the mortgagee, plaintiff in the suit, on the ground that it wasjust and convenient that a receiver should be appointed for protecting the mortgaged properties from being sold in auction for non-payment of government demand and rent.2. the order appointing a receiver was made on 5th april 1924, and payments towards satisfaction of the mortgage-debt were being made by the receiver under the direction of the court, from time to time. the mortgagor was adjudicated an insolvent by the.....
Judgment:

1. This is an appeal by a Receiver in insolvency; there is also an application for revision made by him in the alternative, and they are directed against an order passed by the learned Subordinate Judge of Burdwan on 7th January 1934, rejecting an application made by the Receiver praying that certain mortgaged properties which are now in the custody of the Court, through a Receiver appointed by the Court, be made over to the Receiver in insolvency. It appears that in mortgage Suit No. 53 of 1922, a Receiver was appointed by the Subordinate Judge of Burdwan, at the instance of the mortgagee, plaintiff in the suit, on the ground that it was

just and convenient that a Receiver should be appointed for protecting the mortgaged properties from being sold in auction for non-payment of Government demand and rent.

2. The order appointing a Receiver was made on 5th April 1924, and payments towards satisfaction of the mortgage-debt were being made by the Receiver under the direction of the Court, from time to time. The mortgagor was adjudicated an insolvent by the District Judge of Murshidabad, and the Receiver in insolvency was appointed by the learned Judge. Thereupon, on 2nd September 1933, the District Judge of Murshidabad addressed a letter to the Subordinate Judge of Burdwan, intimating that the Receiver in insolvency was in possession of the other properties of the insolvent, mortgagor, and that the Receiver appointed by the Subordinate Judge should make over charge of the mortgaged properties to the Receiver in insolvency. On the Subordinate Judge's expressing the view in his letter in reply to the District Judge of Murshidabad, that the Receiver in insolvency might be directed to appear before him to satisfy him that a direction as mentioned by the District Judge could be given as a matter of law and equity, the Receiver in insolvency made an application to the Subordinate Judge of Burdwan, praying the Court to direct the Receiver appointed in the mortgage suit to deliver possession of the properties committed to his charge to him (the Receiver in insolvency). The application thus made was rejected, and hence this appeal and the application for revision in the alternative. It may be mentioned at the outset that there is no appeal from the order passed by the Subordinate Judge in the case before us, on 27th January 1934, as there is no provision either in the Civil Procedure Code or in the Provincial Insolvency Act, which could confer a right to appeal; and nothing has been placed before us in support of the position that an appeal as preferred to this Court was maintainable under the law. The appeal must therefore be dismissed on the ground that no appeal lay to this Court from the order complained of. The case before us was allowed to be argued on the application for revision made in the alternative.

3. The facts relevant for the purpose of our decision are not in dispute, and we have no hesitation in stating that we are in agreement with the Court below, in the view expressed in its judgment, that the mortgaged properties belonging to the insolvent were in the custody of that Court not only for the benefit of the mortgagor but also for the benefit of the mortgagee, and that it was more to the benefit of the mortgagee at whose instance a Receiver was appointed in the mortgage suit. The Receiver was in point of fact making payments to the mortgagee decree-holder in satisfaction of the mortgage, in compliance with the direction of the Court. The question then arises, was the Receiver appointed in the mortgage suit a person who could be removed by the insolvency Court?

4. The answer to that question is to be found in the provision contained in Section 28(6) and Section 56(3), Provincial Insolvency Act. The right 'of a secured creditor to realise or otherwise deal with his security is unaffected by an order of adjudication, the equity of redemption only vesting in the Receiver in insolvency. Furthermore, the insolvency Court has no power under the law to remove a person from the possession or custody of property any person whom the insolvent has not the present right so to remove. The conjoint effect of the two statutory provisions referred to above is that the Receiver appointed for the benefit of the mortgagee, and at his instance in the year 1924, cannot be removed by the insolvency Court, the Receiver being a person in possession whom the insolvent judgment-debtor, in whose favour an order of adjudication was passed by the insolvency Court in the year 1933, has not the present right, to remove. It may be noticed in this connexion that as between the right of possession of a Receiver and of the assignee of the same estate under subsequent proceedings in bankruptcy, the doctrine of the English Chancery is that the appointment of the Receiver will not be superseded, nor his possession defeated by the bankruptcy proceedings. The Receiver first appointed by the Court is entitled to possession, and the assignee in bankruptcy is required to surrender possession to him: (see High on Receiver, Edn. 4, p. 184; and Skip v. Harwood, 3 Atk 564. As Lord Hardwicke observed in Skip v. Harwood, 3 Atk 564 a judgment creditor has no preference under commission of bankruptcy, though execution has been taken out if not actually executed; but then a commission of bankruptcy cannot supersede a decree of Court for a Receiver. In the above view of the case, the order passed by the Court below rejecting the application of the Receiver in insolvency for directing the Receiver appointed by the Burdwan Court, in 1924 in mortgage Suit No. 53 of 1922, to deliver possession of the mortgaged properties to him, must be upheld.

5. It is not necessary to discuss the rights of the Receiver in insolvency in the case before us any further; but as has been observed by their Lordships of the Judicial Committee in Kala Chand Banerji v. Jagannath Marwari, 1927 PC 108, it is plain that the rights of a secured creditor over a property is not affected by the fact that the mortgagor has been adjudicated an insolvent; that does imply that an action against the insolvent may proceed in the absence of the person to whom the equity of redemption has been assigned by operation of law. To him must be given the opportunity of redeeming the property. It is therefore to the interest of the mortgagee decree-holder to make the Receiver in insolvency a party to the pending proceedings, and it is also required of the Receiver in insolvency to have himself added as party to the same, as the person in whom the equity of redemption has vested by operation of law. In the result, the appeal is dismissed, and the application for revision is rejected. There is no order as to costs in this case.


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