Sibeswar Samanta v. Amarnath Samanta — 1979 DIGILAW 364 (CAL)

Judgment This Rule is directed against an order dated March 17, 1979 passed by the learned Additional District Judge, Second Court, Hooghly in Misc. Appeal No. 186 of 1978 reversing the order No. 43 dated September 26, 1978 and order No. 47 dated September 30, 1978 passed by the learned Munsif Second Court, Hooghly in Title Suit No. 83 of 1978. The plaintiff is the petitioner in the instant revisional application and the said plaintiff instituted title suit No. 83 of 1978 in the Second Court of the learned Munsif at Hooghly initially against the opposite parties nos. 1 and 2 for declaration that the plaintiff and the husband of the defendant No. 2 had 12 annas and 4 annas shares respectively in a partnership business of Husking Machine and structures, other machineries and accessories in plot no. 142 appertaining to R.S. Khatian No. 252 of Mouza Mayurari and also for a declaration that the opposite party No. 1 was the benamdar of the plaintiff in respect of the said 12 annas share in the business belonging to the plaintiff. A prayer for permanent injunction restraining the said opposite party No. 1 from entering into the suit premises and from disturbing the peaceful possession of the petitioner in respect of the said partnership business was also made. The plaintiff petitioner contended that the plaintiff was the partner of one Shri Lalmohan Dey namely the opposite party No. 3 in the instant revisional application in a business of Husking paddy, wheat and other grains at village Satikhal and the petitioner and the said Lalmohan Dey developed and improved the said business at Satikhal. Thereafter the said petitioner and the said Shri Lal Mohan Dey purchased. 27 acres of land along with a structure thereon and installed a machine and started business and the petitioner had 12 annas share and the said Shri Lal Mohan Dey had 4 annas share. Thereafter the said petitioner and the said Shri Lal Mohan Dey purchased. 27 acres of land along with a structure thereon and installed a machine and started business and the petitioner had 12 annas share and the said Shri Lal Mohan Dey had 4 annas share. As it was difficult to procure licence in the name of the petitioner and the said Lal Mohan Dey because the authorities concerned were not willing to give two licences to the said two persons and application for licence was made in the name of the defendant opposite party No.1 who is the brother of the plaintiff and the defendant opposite party No.2 who is the wife of the said Shri Lal Mohan Dey and both the said brother and the wife of Shri Lal Mohan Dey were benamdars respectively of the petitioner and the said Lal Mohan Dey. But as the opposite party No.1 started interfering with the said partnership business and had been demanding accounts for the business the aforesaid suit for declaration had to be instituted. 2. It appears that after institution of the said suit the petitioner made an application for interim injunction under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure for restraining the defendant opposite party No.1 from interferring with the said partnership business of the plaintiff and the said Shri Lal Mohan Dey. It appears that by the order dated May 10, 1978 the learned Munshif issued an interim order directing the parties to maintain status quo. It further appears that in terms of order No. 2 dated May 10, 1978 one Shri Panchu Gopal Dutta, an Advocate was appointed Commissioner for holding local inspection and to report and the said Commissioner submitted his report on July 3, 1978 and it appears from the said report that the plaintiff petitioner and the said Shri Lal Mohan Dey the husband of the opposite party No.2 could be found in the premises of the business. It further appears from the report of the learned Advocate Commissioner that he found some other persons named therein on the suit plot and on an enquiry from the said persons it transpired that none of the said persons had seen the defendant No. 1 on any occasion. It further appears from the report of the learned Advocate Commissioner that he found some other persons named therein on the suit plot and on an enquiry from the said persons it transpired that none of the said persons had seen the defendant No. 1 on any occasion. It appears that the plaintiff made an application under Order 40 Rule I read with Section 151 of the Code of Civil procedure for appointment of a Receiver on an allegation that the interim order directing the parties to maintain status quo could not solve the problem and taking advantage of the said interim order the defendant opposite party No. 1 on an allegation that he was the owner and had been running the said business continued to interfere with the running of the business and had been constantly threatening to dispossess the petitioner and to get control of the business on the plea of checking accounts. It may be stated in this connection that the defendants Nos.2 and 3 filed written statement inter alia admitting the claim of the plaintiff that the plaintiff and the said Sri Lal Mohan Dey were partners of the said business and the brother of the plaintiff and the wife of the said Lal Mohan Dey were only benamdars. The opposite party No.1 however denied the allegations made in the plaint by filing a separate written statement and the opposite party No.1 contended that the said Shri Lal Mohan Dey and the other partner of the !aid defendant No. 1 had been colluding with the plaintiff. It appears that during the hearing of the application for appointment of the Receiver at the instance of the defendant opposite party No.1 the records relating to the Husking Mill was called for and such records were produced by the Office of the District Controller of Food and Supplies Chinsurah through one office Assistant namely, Sri Krishna Chandra Lahiri. It appears from the deposition of the said Shri Krishna Chandra Lahiri that in the office of the District Controller of Chinsurah, an application for licence of the Husking Mill in question was filed by the plaintiff, the opposite party No.1 and the said Shri Lal Mohan Dey. It appears from the deposition of the said Shri Krishna Chandra Lahiri that in the office of the District Controller of Chinsurah, an application for licence of the Husking Mill in question was filed by the plaintiff, the opposite party No.1 and the said Shri Lal Mohan Dey. The learned Munsif after considering the evidence adduced by the parties and the documents filed by the respective parties for the purpose of hearing of the said application for appointment Receiver allowed the said application for appointment of Receiver by his Order No.43 dated September 26, 1978 and an Advocate of the Trial Court was appointed as Receiver in respect of the said business of Husking Mill. The learned Munsif inter alia held in the said order dated September 26, 1978 that admittedly there was enmity between the opposite parties Nos. 1 and 2 and in the interest of the business, co-operation between the partners was essential and in the absence of such co-operation, it was necessary to appoint a Receiver. The learned Munsif also held that in old account books most of the accounts had been written by the plaintiff and such accounts had been checked by the Inspector of Food and Supplies and the accounts had been maintained regularly and it appeared that the plaintiff had concern in the suit business. The learned Munsif also noted the fact that during the local inspection the defendant No. 1, the brother of the plaintiff, could not be found in the said premises. It appears that on the very same date the application for injunction was also taken up but in view of the appointment of Receiver no other order was passed on the said application for injunction. In terms of the direction passed by the trial court the plaintiff also deposited a sum of Rs.100/- towards the Receiver's fee and one Shri Chittaranjan Ganguly, learned Advocate of the Trial Court was appointed the Receiver by the learned Munsif and the court directed him to immediately take charge of the said business. 3. The defendant No.1 thereafter preferred the said Misc. 3. The defendant No.1 thereafter preferred the said Misc. Appeal No. 186 of 1978 in the Court of the learned Additional District Judge, Hooghly and on an application made by the said defendant No. 1 the learned Additional District Judge granted interim stay of operation of the said order of appointment of Receiver and the subsequent order appointing the said Shri Ganguly to take charge as Receiver of the said business. The learned Additional District Judge Second Court, Hooghly who ultimately heard the said Misc. Appeal allowed the said Misc. Appeal on contest and set aside the aforesaid order Nos. 43 and 47 passed by the learned Munsif and the appointment of the Receiver was thereby cancelled. The learned Court of Appeal below came to the finding that the motive for applying for licence for the said business in the name of the brother of the plaintiff and the wife of the said Shri Lal Mohan Dey did not appear to be convincing and there was no paper on the side of the plaintiff to show that the plaintiff had paid money for starting the business in question. The learned Additional District Judge also held that although the plaintiff filed a Nadabipatra inter alia showing that the defendant No. 1 namely, the brother of the plaintiff, had admitted that the said business was a business belonging to the plaintiff and the said brother was only a benamdar but it was contended by the defendant No. 1 namely, the brother that the said document was manufactured for the purpose of the suit and unless on evidence it is decided that the said paper was not manufactured for the purpose of the suit no notice could be taken of the said document. As aforesaid, against the said order passed by the learned Additional District Judge dismissing the said appointment of the Receiver in respect of the said business, the plaintiff moved a revisional application under section 115 of the Code procedure and the instant rule was issued. 4. Mr. Mukherjee, the learned Counsel appearing for the petitioner, contended that the appeal Court had not taken into consideration the real scope of the suit and the pleading of the plaintiff and the Court of Appeal below also filed to take into consideration the document and the oral evidence adduced in the proceeding. Mr. 4. Mr. Mukherjee, the learned Counsel appearing for the petitioner, contended that the appeal Court had not taken into consideration the real scope of the suit and the pleading of the plaintiff and the Court of Appeal below also filed to take into consideration the document and the oral evidence adduced in the proceeding. Mr. Mukherjee further submitted that the Court of Appeal below did not consider the reasonings of the Trial Court for exercising the discretion of the Court to appoint a Receiver and the said appellate judgment was not a proper judgment of reversal. Mr. Mukherjee contended that Receiver is not to be appointed casually and the court must exercise must discretion with utmost care and caution and must ensure that by appointment of Receiver unnecessary hardship is not caused to either of the parties to the suit but in appropriate cases the appointment of Receiver should be made and in a partnership business such appointment of Receive, should be made there the partnership is alleged on the one side and denied on the other side and a motion is made for appointment of Receiver, Mr. Mukhujee contended that if a partner is excluded from carrying on the said partnership business it is a fit case to appoint a Receiver for the purpose of preservation of property. Mr. Mukherjee contended that in the instant case the plaintiff contended that the defendant No. 1 was not at all a partner but simply was a benamdar of the plaintiff and the said contention of the plaintiff was admitted in the written statement filed by the defendant. Nos. 2 and 3 namely, the said Shri Lal Mohan Dey the other Partner and his benamdar namely the wife of the said Shri Lal Mohan Dey, Mr. Mukherjee also contended that although the plaintiff was a partner but he was being prevented from acting as partner by the illegal intervention of the defendant No. 1 who is only a benamdar of the plaintiff and in such circumstances it must be held that the disputed property namely, the said partnership business and the assests of the said business were in medio and a fit case for appointment of Receiver has been made. Mr. Mr. Mukherjee contended that accounts of the said business for a number of years had been filed and it will appear that the said accounts had been maintained in the regular course of the business and the Inspector of Food and Supplies contersigned the said account books as it was necessary under the Rice Milling Industry (Regulation and Development) Act to inspect the said records by such officer and it will transpire from the said record that the accounts had been maintained by the plaintiff and not by the defendant No. 1 at any point of time. Mr. Mukherjee also contended that admittedly the land and the structure wherein the said Husking Mill was situate did not belong to the defendant No.1 but the same belonged to the plaintiff and the said Shri Lal Mohan Dey and on the face of a clear admission made by the other partner and/or the said Lal Mohan Dey in their written statements that the plaintiff was the partner of the business and not the defendant No. 1, there were sufficient prima facie materials for holding that the plaintiff was the real partner and the defendant No.1 was only a benamdar. But the said defendant No. 1 taking the advantage of the said benami transaction had been attempting to interfere with the, said partnership business and had been trying to exclude the partner namely the plaintiff from the said business and accordingly it is a fit case for appointment of a Receiver. In this connection, Mr. Mukherjee referred to a decision made in the case of (1) G. Rum Chandrayya v. Nethi Iswarayya reported in A.I.R. 1952 Hyderabad, page 139. A case for appointment of a Receiver in a partnership business was considered in the said decision and it was held that if there was exclusion of a partner, then reasonable basis for appointment of Receiver was made out. Mr. Mukherjee also referred to a decision made in the case of (2) Nihalchand L. Jai Narain & Ors. v. Ram Niwas Munna Lal and Ors., reported in A.I.R. 1968 Punjab and Haryana, page 523. In that case, it was held by Tekchand, J. that where the partner was excluded from a partnership business, for the preservation of property an appointment of Receiver was justified. Mr. Mukherjee also referred to an observation of Lindley on Partnership (13th Edition, page 557). In that case, it was held by Tekchand, J. that where the partner was excluded from a partnership business, for the preservation of property an appointment of Receiver was justified. Mr. Mukherjee also referred to an observation of Lindley on Partnership (13th Edition, page 557). While dealing with a case of a disputed partnership, it was noted in the said treatise that when partnership is alleged on one side and denied on the other and a motion is made for appointment of Receiver, the Court is not debarred from such appointing if a strong case is made out for so doing. Mr. Mukherjee also referred to Kerr on Receiver (15th Edition) at page 65. Similar view was also expressed by the learned Author while dealing with the question of appointment of Receiver in a partnership business. It was observed that partnership is a continuing one, and may continue and in such circumstances the court is always placed in a position of very great difficulty: if it grants the motion, the effect of it is to put an end to the partnership, which one of the parties claims a right to have continued; while if it refuses the motion, it leaves the defendant at liberty to go on with the partnership business at the risk, and probably to the great loss and prejudice, of the dissenting party. Between these difficulties it is not very easy to select the course which is best to be taken, but the court is under the necessity of adopting some mode of proceeding to protect, according to the best view it can take of the matter, the interests of both parties. Relying on the aforesaid observation of the learned author, Mr. Mukherjee contended that the plaintiff's allegation is that the defendant No.1 is only a banamdar and he has no interest in the Partnership business and if he is allowed to carry on the partnership business, there is a great risk in the business itself and in such circumstances the trial court was quite justified in appointing Receiver in the best view of protecting the interest of both the parties. Mr. Mukherjee also referred to the observation made in the treatise, Clark on Receiver, Volume III, 3rd Edition, at page 1683. Mr. Mukherjee also referred to the observation made in the treatise, Clark on Receiver, Volume III, 3rd Edition, at page 1683. It was observed in the said treaties that when cases arise that show that there is danger of the property being wasted or destroyed if left in the hands of the partner or partners during the litigation, then under certain circumstances the Court will appoint a Receiver. Mr. Mukherjee submitted that the plaintiff being a real partner will have the liability if any loss is suffered by the partnership business by being run by the defendant No.1 who is only a name lender and there is inherent danger of the property being wasted or damaged if it is allowed to be run by a namelender having no concern in the partnership business. In such circumstances, to protect the partnership business itself and to protect the interest of both the parties, an appointment of Receiver was quite justified and the Court of appeal below acted illegally and with material irregularity in not taking into consideration the reasonings given by the trial court in exercising the discretion of the court for appointment of Receiver in the facts and circumstances of the case. In the aforesaid facts Mr. Mukherjee submitted that appointment of Receiver was the only just thing and the trial court by giving cogent reasons appointed such Receiver and the Court of appeal below without considering the reasons of the trial court and on extraneous considerations passed the impugned order and as such an interference in revision is called for. Mr. Banerjee, the learned Counsel appearing for the defendant No. 1 opposite party, however, contended that considerations for an order of interim injunction and an order for appointment of Receiver are different. Mr. Banerjee submitted that if triable case is made out by a party and the court is of opinion that balance of convenience and inconvenience lies in passing the impugned order, an order of injunction may be passed but a court will be quite slow in appointing a Receiver until and unless the court is prima facie of the view that the party asking for Receiver has established a good case and has reasonable chance of success in the proceeding. For this contention Mr. Banerjee referred to the decision made in the case of (3) Chandidat Jha v. Padmanand Singh Bahadur reported in I.L.R. 22 Cal. 459. Mr. For this contention Mr. Banerjee referred to the decision made in the case of (3) Chandidat Jha v. Padmanand Singh Bahadur reported in I.L.R. 22 Cal. 459. Mr. Banerjee also referred to a Bench decision of this Court made in the case of (4) Bhupendra Nath Mukherjee v. Monohar Mukherjee reported in 28 C.W.N. page 86 and relying on the said decisions contended that ordinarily a person in possession should not be dispossessed and by dispossessing a person in lawful possession there is every likelyhood that irreparable loss will ensue. Mr. Banerjee submitted that the court has certainly a discretion in the matter of appointment of Receiver but such discretion is to be exercised not only judicially but with extreme caution and until and unless the property is in danger and the court feels that the person claiming for appointment of Receiver has not established a prima facie title, the Court should not exercise its discretion for appointment of Receiver. Mr. Banerjee also referred to the decision of the Madras High Court made in the case of (5) T. Krishnaswamy Chetty v. C. Thangavelu Chetty reported in A.I.R. 1955 Madras 430. It was held in the said decision that appointment of Receiver is one of the harshest remedies which the law provides for enforcement of the rights and such remedy is allowable only in extreme cases and in circumstances where the interest of the person seeking appointment of Receiver is exposed to manifest peril. Mr. Benerjee contended that in the application for appointment of Receiver no allegation for waste or damage of the property was made and in the facts and circumstances of the case, there was no question that the plaintiff was exposed to any manifest peril. In the aforesaid circumstances this harsh remedy of appointment of receiver was not at all justified and the Court of appeal below on cogent reasons held that the case for appointment of Receiver was not made out and interference in revision is not called for. Mr. Benerjee also contended that prima facie title was not established by the plaintiff. He submitted that the onus of proving the benami is on the person who makes the allegation of benami and such onus is not on the person who has been allowed to be a namelender. For this contention Mr. Mr. Benerjee also contended that prima facie title was not established by the plaintiff. He submitted that the onus of proving the benami is on the person who makes the allegation of benami and such onus is not on the person who has been allowed to be a namelender. For this contention Mr. Banerjee referred to a decision of the Federal Court made in the case of (6) Ayyar v. Subramania Sastrival reported in AIR 1949 F.C. 88. Mr. Banerjee submitted that in the instant case an allegation of benami has been made by the plaintiff and whenever there is an allegation of benami, there is a very little scope for prima facie title because the presumption is that what is apparent is real and the contrary is required to be proved. Accordingly, the plaintiff will have to prove his case of benami by giving positive evidence only at the conclusion of the trial and so long the case is not established beyond all reasonable doubt the presumption would be that the defendant No. 1 in whole name the partnership business stands is the real owner and as such there was no occasion for any presumption of title in the facts and circumstances of the case. Mr. Banerjee also submitted that in a case for benami, payment of the consideration money is very important and the defendant No. 1 established prima facie that the defendant No.1 had paternal property yielding sufficient income and such income formed the nucleus of the defendant's partnership business. In such circumstances, the Court of appeal below was quite justified in referring the prayer for appointment of Receiver made by the plaintiff and even assuming that the court of appeal below failed to properly appreciate the facts and circumstances of the case and made an erroneous finding for basing its decision, interference in revisions is not called for because there was no error in the exercise of jurisdiction of the court of appeal below. Accordingly, Mr. Benerjee contended that the revisional application must fail and the Rule should be discharged with costs. 5. Mr. Mukherjee, the learned Counsel in reply to the aforesaid contention of Mr. Accordingly, Mr. Benerjee contended that the revisional application must fail and the Rule should be discharged with costs. 5. Mr. Mukherjee, the learned Counsel in reply to the aforesaid contention of Mr. Banerjee contended that it is true that appointment of Receiver should not be casually made by the Court and the discretion of the court in the matter of appointment of Receiver should be exercised not only judicially but with utmost care and caution after taking into account all the facts and circumstances of the case but Mr. Mukharjee submitted that it will be a very wild proposition if it is contended that since there is an allegation of benami, made by the plaintiff, there is no presumption of existence of any title in favour of the plaintiff and the plaintiff can succeed only at the conclusion of the trial and as such no appointment of Receiver can be made if there is an allegation of benami. Mr. Mukherjee submitted that in the instant case admittedly the land and the building where the partnership business is situate belong to the plaintiff and the said Shri Lal Mohan Dey and the books of accounts for a number of years kept in the regular course of business were produced before the court which clearly established that it was the plaintiff who kept the accounts of the business all through. The aforesaid facts were taken into consideration by the trial court in the matter of exercising the discretion of the court for appointment of Receiver. Mr. Mukherji submitted that the Court of appeal below had held that if the defendant No. 1 was not allowed to run the said partnership business as a licensee of the plaintiff and owner of the property where the partnership business is situate, the plaintiff would not have asked the defendant No.1 to put it in writing or at least would not have insisted on him for not claiming any title to the land which he had purchased in May, 1962. Mr. Mukherjee submits that the aforesaid observation of the Court of appeal below clearly establishes that the Court of appeal below misconceived the facts and circumstances of the case. Mr. Mukherjee submits that the aforesaid observation of the Court of appeal below clearly establishes that the Court of appeal below misconceived the facts and circumstances of the case. There was no material warranting the finding that the plaintiff had asked the defendant No.1 to put it in writing that the defendant No.1 would not insist for claiming any title to the land where the partnership business was allowed to continue. On the other hand, a declaration in favour of the plaintiff was filed on behalf of the plaintiff wherein the defendant No. 1 admitted that he was only a benamdar of the business. Mr. Mukherjee submitted that it is true that there was allegation made on behalf of the defendant No.1 that the said document was not genuine but for a prima facie finding the said document had certainly an important bearing. Mr. Mukherji also submitted that in the written statements made by the defendants Nos. 2 and 3, the case of benami made out by the plaintiff was admitted but this important aspect was not at all taken into consideration by the court of appeal below in disposing of the application for appointment of Receiver. 6. After hearing the learned Counsel appearing for the parties and considering the facts and circumstances of the case it appears to me that the plaintiff has produced materials which prima facie indicate a case for benami and in such circumstances there might be an inherent danger in allowing the defendant No.1 to run the partnership business and in the special facts and circumstances of the case the appointment of Receiver made by the trial court was quite justified. It appears to me that the court of appeal below based its decision in not taking into consideration all the materials germane for consideration in a case for appointment of Receiver and Mr. Mukherji is justified in contending that the court of appeal below was also labouring under some confusion in making a finding that the plaintiff had asked the defendant No.1 to put it in writing that the defendant No. 1 would not claim any title to the property. It also appears to me that the Court of appeal below failed to consider the reasonings which weighed with the trial court in passing the order for appointment of Receiver. It also appears to me that the Court of appeal below failed to consider the reasonings which weighed with the trial court in passing the order for appointment of Receiver. It is true that the court of appeal below being an appellate authority could take a contrary view but it was the duty of the court of appeal below to advert to the reasonings given by the trial court and to take into consideration the reasoning of the trial court which induced the trial court to exercise the discretion of the court to appoint a Receiver. In the instant case it appears to me that such reasonings were not taken into consideration properly by the court of appeal below. Accordingly, this Rule succeeds and is made absolute. The impugned order of the court of appeal below is set aside and the order passed by the trial court for appointment of Receiver is upheld but in the facts and circumstances of the case there will be no order as to costs. It may be noted that the learned Counsel for the petitioner had also submitted that the plaintiff had no objection if the defendant No.1 and Lal Mohan Dey, the defendant No.3 are appointed joint Receivers because in that event there will be surveillance by the court and defendant No.1 will be prevented from committing any wanton act of damages to the partnership business but the learned Counsel for the defendant No. 1, on instruction from his client, did not agree to such appointment of joint Receivers or any Receiver. The learned Counsel for the opposite party No.1 prays for a stay of the operation of the order passed today. The prayer is opposed by the learned Counsel for the petitioner and other opposite party and in the facts and circumstances of the case the said prayer is disallowed.