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Ali Ismail Doodha and ors. Vs. MomIn Bibi and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 102 of 1950
Judge
Reported inAIR1952Cal52,55CWN135
ActsCode of Civil Procedure (CPC) , 1908 - Order 40, Rules 1 and 2 - Order 43, Rule 1
AppellantAli Ismail Doodha and ors.
RespondentMomIn Bibi and ors.
Appellant AdvocateA.K. Sen, Adv.
Respondent AdvocateS.C. Mitter, Adv.
DispositionAppeal allowed
Cases ReferredRaja Prithwi Chand Lall v. Kumar Pramathanath Roy
Excerpt:
- .....judgment delivered by mukherjea j. in which i concurred on april 21, 1948. it is true that in that appeal the receiver mr. bon bihari das was not a party. but the views of mukherjea j. are entitled to considerable weight because he was construing the provisions relating to the receiver's remuneration. it has been argued that the premia should be paid out of the corpus of the estate because the remuneration payable to the receiver was so small that it would be unfair to ask him to bear the burden of these premia. mukherjea j. in the judgment observed:'as regards premiums to be paid to the guarantee society which has stood surety for the receiver it may be as mr. sen has argued that such costs should not be paid out of the estate when the receiver is not acting without any salary. in the.....
Judgment:

Harries, C.J.

1. This is an appeal from an order of Sen J. dated March 17, 1950 dismissing objections made to an account submitted by a Receiver, and passing the account so submitted.

2. The respondent Mr. Bon Bihari Das was appointed a Receiver in a suit '(Ali Ismail Doodha v. Momin Bibi & ors)' by an order dated December 8, 1947. He filed an account for the period January 1, 1949 to June 30, 1949, and various objections to this account were taken by the appellants. Only one objection was pressed before the learned Judge before whom. the accounts came for approval and that, objection was, that the Receiver was not entitled to charge five per cent on the value of the corpus of the property of which he had taken possession by way of remuneration. The contention was that the Receiver was only entitled by way of remuneration to charge five per cent on all income which he collected from year to year. But the learned Judge held that upon a true construction of the order appointing Mr. Bon Bihari Das as a Receiver he was entitled by way of remuneration to five per cent of the value of the corpus of the property of which he had taken possession. The only issue in this appeal is what on the true construction of the order appointing the Receiver is the remuneration payable to him.

3. The suit in question was an administration suit in which the estate of one Ahmed Ariff Bham was sought to be administered. The estate consisted entirely of moveable property the main items being jewellery and shares in certain companies. In the year 1947 one Mohammed Azim Mahmood Salehji was Receiver in the suit and he apparently was acting without remuneration. An application was made to remove the Receiver and to appoint some other person in his stead. The Court eventually acceded to this application and by an order of December 8,1947 Mahammed Azim Mahmood Salehji. was removed from the office of Receiver and the present respondent Mr. Bon Bihari Das was appointed in his stead. The relevant portion of the order removing the old Receiver and appointing the respondent in his stead is as follows:

'It is ordered that the said Mahommed Azim Mahmood Salehji be and he is hereby discharged from further acting as such Receiver as aforesaid of the properties mentioned in the said order dated the thirty-first day of. August one thousand nine hundred and forty ('our and that he do pass his final accounts before one of the Judges of this Court..................and it is further ordered that subject to his furnishing security to the satisfaction of the Registrar of this Court Mr. Bon Bihari Das, Barrister-at-law be and he is hereby appointed on a remuneration of five per cent on all collections to be made by him the Receiver of the said property with power to him to get in and collect the outstanding debts and claims due in respect of the said property and with all powers provided for in order XL, Rule 1 Clause (d) of the Code of Civil Procedure and that he be at liberty to pay out of the funds to come to his hands the premium and all costs in respect of such security as aforesaid: And it is further ordered that the heirs of Mahmood Musaji Saleji (who was Receiver herein previous to the said outgoing Receiver) and all persons claiming under them do deliver up quiet possession of the said property together with all account books papers memoranda and writings relating thereto to the said incoming Receiver: And it is further ordered that the said incoming Receiver do take possession of the property and do collect the issues and profits thereof.: And it is further ordered that the said incoming Receiver do make an inventory of the properties of the estate in the presence of the attorneys for the parties within one month from the date of service upon him of an office copy of this order and that he do put in loose precious stones and other jewelleries if any in a sealed box in the presence of the attorneys for the parties and deposit the same in the safe custody of the Imperial Bank of India.............'

4. It appears that one of the parties made an application to the Court that the Receiver should be entitled to pay the premium in respect of the security ordered out of the corpus of the estate and Sen J. who heard the application so ordered. An appeal from that order to the Appellate Bench was dismissed.

5. Before Sen J. it was contended that in a true construction of the order appointing the respondent Receiver he was only entitled to five per cent on the income of the estate which he collected. It was said that it was inconceivable that any Court would order the Receiver to be paid five per cent on the corpus of the property because he was required to do nothing to reduce the property into possession.

6. It was further contended before Sen J. that in the appeal to which I have made reference the meaning of the term relating to remuneration was considered by the Bench and that the Bench in its judgment expressed the view that the Receiver was only entitled to charge commission on the income Sen J. was of opinion that the Bench decision was only a decision on the point as to how the premium for the security had to be paid and that any observations as to the scope of the clause relating to remuneration was at most obiter. He further was of opinion that on a true construction of the order the Receiver was entitled to five per cent on the total value of the property which was the subject-matter of the estate.

7. The appellants being aggrieved have preferred this appeal and Mr. S. C. Mitter on behalf of the respondent has taken a preliminary point that no appeal lies. His contention is that the order of Sen J. does not amount to a judgment and therefore is not appealable.

8. In my view the order of Sen J. is a judgment and therefore an appeal lies. Mr. Mitter's argument is that it cannot be a judgment because the Receiver is not a party in the proceedings. But it appears to me that these are proceedings between the Receiver and the appellants. The proceedings were as it were initiated by the Receiver who presented as he was bound to do, his accounts for the approval of the Court. The appellants were entitled to object and they did object claiming that the remuneration claimed by the Receiver in the account submitted was not in accordance with the order. In order to determine this objection the Court had to construe the provisions for remuneration in the order appointing Mr. Bon Bihari Das as Receiver. The Court construed those provisions and held that Mr. Bon Bihari Das was entitled as remuneration to five per cent on the value of the corpus of the property. It appears to me that this was a decision between the parties to this appeal finally determining the rights and obligations of the parties with respect to remuneration. It decided that the Receiver was entitled to what he claimed and that was an obligation to which the appellants were bound to submit.

9. The question as to what is a 'judgment' has been the subject-matter of numerous decisions in this and other Presidency Courts. The classic definition is that given by Sir Richard Couch C. J. in 'The Justices of the Peace for Calcutta v. The Oriental Gas Co.', 8 Beng LR 433 at page 452. He observed :

'We think that 'judgment' in Clause 15 means a decision which affects the merits of the question between the parties by determining some right or liability. It may be either final or preliminary or interlocutory the difference between them being that a final judgment determines the whole cause or suit and a preliminary or interlocutory judgment determines only a part of it, leaving other matters fo be determined.'

10. Mr. Mitter has contended that the order appealed from does not amount to a 'judgment' because the Receiver was not a party to that order. The respondent was appointed Receiver in the suit and these proceedings were originated by him in that suit. He asked for approval of his accounts and one of the items in that account was a sum by way of remuneration. That item was challenged and on the invitation of the Receiver the Court was asked to adjudicate. It did adjudicate between the parties and in my judgment it decided the question and it was a question affecting the merits of the Receiver's claim. The decision of Sen J. that the Receiver was entitled in the accounts to claim remuneration as contended was a decision finally determining the rights of the parties and therefore a 'judgment'.

11. In any event it appears to me that we are bound by authority to hold that an appeal does lie in a case such as the present.

12. In the case of 'Raja Prithwi Chand Lall v. Kumar Pramathanath Roy', A F O O No. 23 of 1943 decided on June 11, 1943 a Bench held that an order made disallowing certain items in an account submitted by a Receiver was an appealable order. The Bench did not decide that it was appealable by reason of the fact that it was a 'judgment' but held that it was appeal-able as an order made under Order 40, Rule 1 of the Civil P. C.

13. In that particular case objection was taken to certain items claimed as legitimate expenses by the Receiver. Edgley J. eventually allowed the Receiver these items and one of the parties appealed. The point was taken that no appeal lay but the Bench held that the order was an order made under Order 40, Rule 1 of the Civil P. C. and that an appeal lay.

14. Mr. S. C. Mitter has tried to distinguish the present case from the earlier Bench decision to which I have made reference. He has suggested that the present appeal is an appeal from an order made under Order 40, Rule 2, that is an order fixing the remuneration. Admittedly no appeal lies from an order made under Order 40, Rule 2, but clearly the present appeal is not an appeal from such an order. It is true that the remuneration of the Receiver is in question in these proceedings but this is not an appeal from the order fixing that remuneration. The order fixing the remuneration is final and no appeal could be preferred from it. In these proceedings all that the Court was concerned with was the true interpretation and meaning of the order fixing the remuneration. The remuneration had been fixed and had not been challenged. The only issue in these proceedings was-what was the remuneration which the learned Judge fixed? There was no challenge of the amount so fixed. That being so quite clearly this appeal is not an appeal from an order made under Order 40, Rule 2. It is an appeal from an order disallowing certain objections to an account submitted by a Receiver. The earlier Bench case it appears to me is precisely in point and we are bound by that decision and therefore must hold that an appeal does lie in the present case. I would therefore overrule Mr. Mitter's preliminary objection.

15. On the merits I am satisfied that the decision of the learned Single. Judge cannot be sustained. It is difficult to believe that a Court in the circumstances of this case would give a Receiver five per cent on the value of the corpus of the property. As I have stated the property consisted of jewellery and shares. The property was in the hands of a previous Receiver and the heirs of that Receiver were directed to hand over the property to the incoming Receiver namely the respondent. In short the respondent was not under any obligation to do anything to collect the corpus. By the very order that appointed him the heirs of the previous Receiver were directed to hand over the property to him and all he had to do was to accept it. In those circumstances it would be very strange if a Court allowed by way of remuneration five per cent on the value of the property which the Receiver would receive by reason of the direction made by the Court on the heirs of an earlier Receiver.

16. It appears to me however that on a construction of the order it is impossible to hold that the Receiver was entitled to five per cent on the value of the corpus. It is provided that Mr. Bon Bihari Das is appointed:

'on a remuneration of five per cent on all collections to be made by him the Receiver of the said property with power to him to get in and collect the outstanding debts and claims due in respect of the said property.'

He is to be given five per cent on all collections and the word 'collections' is usually used in respect of rents and profits or income. It is true that it could be used with regard to corpus but it appears to me that it is clear that it is only used in this order with respect to income. He is given a right to five per cent on all collections to be made by him and further 'power is given to him to get in and collect the outstanding debts and claims'. The word 'collect' there is limited to any outstanding debts and claims. If the phrase 'all collections' used previously covered all the corpus or capital then it would be unnecessary to give him power to get in and collect outstanding debts and claims.

17. Later it is made clear that 'collection' refers to profits and income for it is provided that 'the said incoming Receiver do take possession of the said property and do collect the issues and profits thereof.' The collection is confined to issues and profits. He is not ordered to collect the property. He is ordered to take possession of the same. It appears to me therefore that it is clear from the order that the word 'collect' is used in relation to rents profits or income and that the phrase 'all collections' must mean income or profits obtained by the Receiver due to his exertions. 'All collections' does not include the corpus or capital of the estate.

18. It was suggested before Sen ,T. that the views taken by the Receiver found support in a decision of this Court in 'In the goods of Court on', 25 Cal 65. In that case the question arose ns to what was the meaning of the phrase 'collection of assets' in the Administrator General's Act (Act VII of 1855). At p. 73 Sale J. observed:

'What then is meant by 'collection of assets'. This question was considered by the Madras High Court in the case of 'In the goods of Simpson' 1 Mad HC 171. The view of Scotland C. J. was that the words 'collection of assets' as used in Sections 26 and 29 of the Administrator General's Act (VII of .1855) did not necessarily mean realization by sale or by actual receipt or possession yet on the other hand they implied the doing of some act in connection with the assets whereby the Administrator General incurred trouble or expense or responsibility.'

19. I do not think that this case is of any assistance to the Receiver because what had to be construed was the phrase 'collection of assets'. That is not the phrase which we have to construe in this case. What we have to construe is the true meaning of the term 'all collections'. In any event it appears to me that the meaning given to the phrase 'collection of assets' by Scotland C. J. does not assist the Receiver because the learned Chief Justice appeared to have thought that there was no collection without the Receiver incurring some trouble or doing some work in connection with receiving assets. As I have said in the present case the Court directed the assets to be mads over to him by the heirs of an earlier Receiver and really he had nothing to do except to accept what was handed to him and presumably give a receipt. It could not be said that he had collected the assets and certainly it does not appear to me that this act of receiving the property and taking possession thereof can be regarded as a collection upon which he was entitled to a remuneration of five per cent.

20. As I have stated earlier a Bench of this Court of which I was a member did consider this order in a judgment delivered by Mukherjea J. in which I concurred on April 21, 1948. It is true that in that appeal the Receiver Mr. Bon Bihari Das was not a party. But the views of Mukherjea J. are entitled to considerable weight because he was construing the provisions relating to the Receiver's remuneration. It has been argued that the premia should be paid out of the corpus of the estate because the remuneration payable to the Receiver was so small that it would be unfair to ask him to bear the burden of these premia. Mukherjea J. in the judgment observed:

'As regards premiums to be paid to the Guarantee Society which has stood surety for the Receiver it may be as Mr. Sen has argued that such costs should not be paid out of the estate when the Receiver is not acting without any salary. In the present case however no fixed salary has been allowed to the Receiver and he has been given five per cent upon the receipt or realizations. It is concerned that so long as any property which is the subject-matter of the suit is not sold in the course of administration and the sale proceeds are not collected by the Receiver the remuneration earned by the Receiver upon the income which accrues on the property year after year would be a small sum of money and would not certainly cover the premium of Rs. 2700/-which is payable on account of the fidelity bond.'

21. It is clear from these observations that Mukherjea J. construed the words 'all collections' as meaning collections of income. The whole decision proceeds on the basis that the premia should be paid out of the funds of the estate because the remuneration payable to the Receiver until sale of the property was so small that he could not be expected to pay the premia himself. If the Receiver was entitled to five per cent on the corpus of the property he would be entitled to between Rs. 20,000/- and Rs. 25,000/- and I feel sure that Mukherjea J. would never have regarded that as inadequate remuneration. In fact the learned Judge expressly says that in his view remuneration is payable purely on the income. As I have said this judgment is not res judicata. But it is a valuable precedent and I think the construction given by Mukherjea J. should be followed.

22. That being so, I am bound to hold that on a true construction of the order appointing Mr. Bon Bihari Das he was not entitled to remuneration of five per cent on the value of the corpus. The decision of Sen J. must therefore be set aside.

23. I would therefore allow this appeal set aside the order of Sen J. and allow the objection of the appellants to the accounts. The Receiver is only entitled to five per cent on the income collected during the accounting period as remuneration and the accounts can only be approved on that footing.

24. The appellants are entitled to their costs of this appeal and of the proceedings in the Court below as against the Receiver. There will be only one set of costs. Certified for one Counsel.

Banerjee, J.

25. I agree.


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