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Radha Kanta Pal Vs. Benode Behari Pal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1934Cal444
AppellantRadha Kanta Pal
RespondentBenode Behari Pal and ors.
Cases ReferredMathura Chakrabarti v. Lal Mohan Chakarbarti
Excerpt:
- .....this case for the proper management of the firms mentioned in the schedule below, you are hereby appointed receiver of the said property under order 40, rule 1, civil p. c., 1908, with full powers under the provisions of that order.2. we shall have to say something hereafter with regard- to- the form of the writ which was issued on the receiver. the plaintiff made an application for the appointment of a receiver on 3rd} may 1933 having filed his plaint on 10th april 1933. the subordinate judge was' of opinion that a case had been made out for the appointment of a receiver and that it was just and convenient in the interests of the firms, the dissolution of which was sought for in the suit, that a receiver should be appointed for the realisation of the assets and for management of the.....
Judgment:

Mitter, J.

1. This is an appeal by the plaintiff against an order of the Subordinate Judge of Bakargunge, dated 2nd June 1933, by which he appointed defendant 2 as receiver in a suit commenced by the plaintiff for dissolution of partnership. The writ which was issued in pursuance of the order appointing the receiver is in the following terms:

Whereas it has bean found necessary that a receiver should be appointed in this case for the proper management of the Firms mentioned in the schedule below, you are hereby appointed receiver of the said property under Order 40, Rule 1, Civil P. C., 1908, with full powers under the provisions of that order.

2. We shall have to say something hereafter with regard- to- the form of the writ which was issued on the receiver. The plaintiff made an application for the appointment of a receiver on 3rd} May 1933 having filed his plaint on 10th April 1933. The Subordinate Judge was' of opinion that a case had been made out for the appointment of a receiver and that it was just and convenient in the interests of the Firms, the dissolution of which was sought for in the suit, that a receiver should be appointed for the realisation of the assets and for management of the Firms and for protection of the properties and that the receiver should be one of the partners of the Firm, namely defendant 2. This order has been challenged in appeal by the learned Advocate-General who appears for the plaintiff and he contends that the order appointing one of the parties to the suit without the consent of the other parties and in particular of his client the plaintiff, is contrary to the principles on which the jurisdiction of the Court to appoint a receiver is founded. He contends that on the face of the plaint the partnership, the dissolution of which is sought for is a part-nership-at-will and that the very institution of the suit operates as dissolution. In support of this contention he refers to para. 1 of the plaint from which it appears that the plaintiff is an outsider and has no connection with the family of the defendants, his case being that there was a karbar in the name of Ganga Prosad Pal, predeoessor-in-interest of the principal defendants and of Sonatan Pal, the predecessor-in-interest of the plaintiff in Jhalakati popularly called Maharajganj Bandar, and he contends that in appointing defendant 2 as receiver for the purpose of carrying on the business of the Firms, the Subordinate Judge evidently missed sight of the fact that this was a partnership-at-will and that the institution of the suit operated as its dissolution. As against this contention Mr. Chakrabarti, who appears for the respondents, contends that this was really a joint family business and as such could not be regarded as a part-nership-at-will.

3. There is however no foundation for this contention, in view of the case which is made in the plaint from which it appears clear that Ganga Prosad Pal and Sonatan Pal were two persons not connected with each other as members of a joint Hindu family but were carrying on the karbar separately, each havIng a share to the extent of nine annas and seven annas respectively in the said business. If this fact had been brought to the attention of the Subordinate Judge or if he had noted the true implication of this statement in the plaint he would not have proceeded to pass the order in the form in which the writ was drawn up and which is in accordance with the portion of the order which has already been quoted that the receiver was to carry on the business or the management of the Firms. In all eases of partnership the true rule is that a receiver is generally appointed for the purpose of realising the assets of the karbar with a view to its winding up and for such purpose, namely, with a view to the winding up of such business to carry on the business in so far as is [necessary as incidental to such winding up. There is no warrant whatever for an order in the form in which it has been made by the Subordinate Judge, namely, that the receiver was to carry on the proper management of the firms mentioned in the schedules to the plaint.

4. The Court does not interfere in the management of a partnership except as lincidental to the object of the action to wind up the concern and divide the assets, for, as was observed by Lord Eldon in an early case, if the Court were not to adopt such a rule, it might be called upon to make itself the manager of every trade in the kingdom: Goodman v. Whitcomb (1820) 1 Jac & W 589. It may be mentioned here that besides his firm at Jhalkati there are several other branch firms in respect of which dissolution has been sought for. The effect of the order appealed against has been that defendant 2 has bean actually purchasing commodities with the sum realized from the assets of the karbar. If one refers to p. 146 of the paper book one will find from the entry with reference to Rs. 6,000 that the sum of Rs. 6,000 which was sent to Calcutta was used for the purpose of purchasing commodities for the Jhalakati Firm.

5. It is next contended by the learned Advocate-General that the ordinary rule, that no party is appointed as a receiver except by consent, has been departed from only in exceptional cases, as for instance, in a case of partnership where there are no allegations of fraud and where the carrying on of the business-depends on the personal credit of one of the members of the firm, as for instance, a firm of brokers, and he has referred us, as an illustration of this proposition to the case of Sargant v. Bead (1875) 1 Ch D 600, where in those circumstances, namely, that there being no charge of fraud and the business being the business of a broker one of the partners of the business was appointed a receiver. He contends that the present case does not fall within the exception. Mr. Chakrabarti has drawn our attention to an unreported decision of this Court in the case of Mathura Chakrabarti v. Lal Mohan Chakarbarti, Appeal No. 61 of 1927, where this Court set aside the order of the Subordinate Judge appointing two strangers in respect of partnership business and appointed one of the partners as the receiver and his contention is that in partnership cases, in order that the business might not be ruined, it is extremely convenient that one of the partners should be appointed a receiver. This argument takes no note of the fact that this is a partnership-at-will and the institution of the suit operates as a dissolution of the karbar. If the facts of the unreported case, which was cited by Mr. Chakrabarti, are examined it will be found that there was a dispute with regard to the plaintiffs' title in the partnership. That was a matter in issue and in such a case where plain-tiff's title to the partnership sought to be dissolved is challenged it is easy to understand why a partner should more conveniently be appointed a receiver if the contention of such partner is that he wants to carry on the business which may eventually be determined to belong to him and not to the plaintiff as the final result of the suit. But we are not confronted with such a position in the present case. Apparently the plaintiff's title to a 7-annas share of the karbar or to a share of the karbar, whatever the extent of that may be, (for Mr. Chakra-barti in the course of his argument said that his contention was that it was 4-annas odd gandas) is admitted.

6. The next contention of the learned Advocate-General was that from the events which happened subsequent to the passing of the order appointing the receiver it is clear that defendant) 2 cannot be trusted and that the plaintiff has lost all confidence in him. As a matter of fact, the Subordinate Judge's finding is, as we read it, that defendant 2 is guilty of misconduct but he is not guilty of such misconduct as to have rendered it unsafe to trust him. Our attention has been drawn to the sharp practice of defendant 2 in that he went on 8th June to the Court and got his security accepted ex parte in the absence of the present plaintiff. It furthr appears that there is prima facie evidence subsequent to the date of the order of appointment from which the inference follows that the conduct of defendant 2 is not above board. It appears that he did really secrete two books which contained entries of sums of money which have been entered as having been received on behalf of the Ejmali Firm in the said books but which have not been entered, at any rate not shown to have been entered, in the ordinary 'jamakharch' book of the firm. At any rate, this is the allegation which the plaintiff has made. The books are not before us. They have not been sent to us by the learned Subordinate Judge on the objection raised on behalf of the defendants and it is not possible for us to determine the truth of the allegation made by the plaintiff in this behalf. The fact remains that when the Pleader Commissioner went on the 20th June and made an inventory he found the following state of things as appears from his report dated 30th June 1933 which is to be found at p. 134 of the paper-book. The Commissioner says this:

On 20th June 1933 from 7-30 a.m. I commenced making an inventory of the papers found in the iron safe of the first floor of the joint Gadighar of the parties. At 9-30 a.m., on the suggestion of the parties and their pleaders, I went to the ground floor and the parties opened the double locks of the iron almirah. Some khatas and papers were found in the drawers of the iron almirah.

7. The Commissioner proceeds further and says thus:

I beg further to add that the above two khatas contain some items of daily cash money obtained by selling articles of Krishna Chandra Sonatan Mohim Chandra Rajani Kanta Paul of Maharajganj and various other cash money received from the branch firm as well as miscellaneous Income which have not been entered in other account books of the Tahabil.

8. Apparently the defendant did not like this remark made by the Commissioner against him and in the subsequent petition the defendant alleged that the Commissioner was rather partial. We have however before us this report of the Receiver for the purpose of the present proceedings, namely, whether a stranger receiver should or should not be appointed; it will be sufficient to proceed on the report made by the Commissioner and the defendant admits in his petition dated, 15th July 1933, in para. 5 that the whole of the amount of money of the two khatas referred to in paras. 6 and 7 of the plaintiff's petition is, in fact, the additional income of the Ijmali Karbar belonging to the plaintiff and the defendants. He proceeds to explain that the same money is invested in the karbar of the plaintiff, and the defendants for their own interest, on crediting the same for some reasons in this khata and in some places on debiting the said money which is the money of the said Tehbil in the names of the plaintiff and the defendants and in the names of their relatives and kinsmen and of fictitious persons in consultation with the executors under the will of the plaintiff's father. The learned Advocate-General has argued with great force that this really gives us an indication of the unscrupulousness of the defendant. He does not scruple to prepare fictitious entries in the name of fictitious persons. We are of opinion that a prima facie case has been made out which would go to show that there is some ground for the plaintiff's suspecting the honesty of defendant 2. That is a question which requires to be considered in determining whether one of the partners should be appointed a Receiver or not. Defendant 2 has apparently forfeited the confidence of the present plaintiff and in such circumstances the order of the Subordinate Judge appointing defendant 2 as Receiver-must be set aside.

9. We direct that the Subordinate Judge should proceed to appoint one pleader of his own Court whom he may consider fit as Receiver for the purpose of winding up the several businesses mentioned in schedule ka of the plaint, except Firms Nos. 5, 9 and 10, and for collecting the assets of the said firms. The Receiver will be put in possession of all the firms of schedule ka of the plaint, except Firms Nos. 5, 9 and 10. The renuneration and establishment expenses of the Receiver must be determined by the Subordinate Judge in view of all the circumstances of the case. Let the records be sent down to the lower Court as speedily as possible. On receipt of the records the Subordinate Judge will proceed to appoint a pleader Receiver expeditiously. After it is done the present Receiver, namely defendant 2, will make over possession to the Receiver who will be so appointed and he will have his accounts passed later. The appeal is allowed accordingly. There will be no order as to costs.

McNair, J.

10. I agree.


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