SULAIMAN v. CHUNAKARA S. M. JAMA ATH — 1982 DIGILAW 219 (KER)

Judgment :- 1. A question of general importance arises in the Civil Miscellaneous Appeal. It relates to the power of a court to appoint a receiver, in proceedings in relation to a Trust under S.92 of the Civil Procedure Code, at a stage before leave to institute the suit is granted. 2. The court below declined to consider a Receiving application at such a stage, as it felt that it had no jurisdiction to deal with such a prayer at a stage before permission is granted by the court and before the proceedings assumed the form of a regular suit. In taking that view, the court below felt bound by the observations of this Court in the decision reported in Achuthan Pillai v. Mohanan Unnithan, 1979 KLT. Short Notes 53 (Case No. 116). The correctness of the view taken by the court below is challenged in the appeal. 3. The skeletal facts necessary for the determination of this legal issue are as follows: The Original Petition, O.P. No. 98 of 1979 was filed seeking leave under S.92 CPC., for instituting a suit against the counter-petitioners, of whom the first is a public Trust of a religious nature. Counter petitioners 2 to 6 are the present office bearers of the Trust It was alleged that the office bearers, except counter-petitioner No.6 were not managing the Trust properly and that they were guilty of condemnable conduct in relation to the affairs of the Trust. 4. Notice on the petition bad been ordered on 27-7-1979. Respondents Nos.1 to 6 appeared through counsel and the case was thereafter posted to 21-8-1979. Requests for time for filing the objections appear to have been granted on various occasions, till ultimately they were filed on 10-10-1979. For over one year, thereafter, the application had been drifting, without any effective action thereon. On 27-4-1980, it was represented that evidence was required and the case was adjourned for that purpose. However, no evidence was attempted by either side Ultimately on 5-2-1982, the court recorded that there was no evidence for both sides. 5. In the meanwhile the application for the appointment of a receiver was filed. It was heard ultimately on 20-2-1982. By order dated 26-2-1982 that application was dismissed. The Revision Petition was filed against the above order. The records appear to have been transmitted to this Court shortly thereafter. 5. In the meanwhile the application for the appointment of a receiver was filed. It was heard ultimately on 20-2-1982. By order dated 26-2-1982 that application was dismissed. The Revision Petition was filed against the above order. The records appear to have been transmitted to this Court shortly thereafter. The resultant situation is that no final orders have been passed so far on the main petition. 6. S.92 of the CPC under which leave has been sought, for the institution of a suit against the Trust, opens with the following wording: "92. Public Charities: (1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature, or where the direction of the court is deemed necessary for the administration of any such trust, the Advocate-General, or two or more persons having an interest in the trust and having obtained the leave of the court, may institute a suit, whether contentious or not, in the principal Civil Court of original jurisdiction or in any other Court, empowered in that behalf by the State Government within the local limits of whose jurisdiction the whole or any part of the subject-matter of the trust is situate, to obtain a decree (emphasis supplied) (The matters on which decree could be obtained are not material for the purpose of this case and are therefore omitted.) It has been held that while deciding the question whether leave should be granted or not, it is not obligatory that the respondent should be notified about the same or beard in the matter It is optional for the court, however, to hear the respondents also before it decides whether leave should be granted or not. 7. 7. The interlocutory application which has been filed in the case even before the question relating to the grant of leave remained undecided, is an application for the appointment of a receiver filed under 0.40 R.1 of the C.P.C. In as much as the wording of the statutory provision under which this interlocutory petition is made is relevant for the decision in the case, it is desirable that the relevant portion is also extracted, with due emphasis indicated therein: "Appointment of Receivers: (1) Where it appears to the Court to be just and convenient, the court may by order (a) appoint a receiver of any property, whether before or after decree; (b) remove any person from the possession or custody of the property; (c) commit the same to the possession, custody or management of the receiver; and (d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits and the execution of document as the owner himself has. or such of those powers as the Court thinks fit." 8. The present provision is the result of an amendment which the earlier version as contained in S.503 of the Old Code of Civil Procedure underwent. The legislative history and the impact of the change have been succinctly stated in the following passage in the decision of the Allahabad High Court reported in Ram Khelawan v. Sudama Devi, AIR.1964 Allahabad 366: "This becomes apparent when a comparison is made between the phraseology used in Or. XL R.1 and the words of S.503 of the old Code. S.503 provided as follows: "Where it appears to the court to be necessary for the realization, preservation or better custody or management of property, movable or immoveable, the subject of a suit or attachment" Thus according to S.503 CPC., as it stood, the court could appoint a Receiver only in respect of the subject of a suit or attachment. When the provisions of the Code were amended the words "subject of a suit or attachment" were deleted by the Legislature. This is significant. When the provisions of the Code were amended the words "subject of a suit or attachment" were deleted by the Legislature. This is significant. This shows that the legislature thought it fit to remove the restraint which formerly existed in respect of the power of the court to appoint a Receiver only in respect of properties which were the subject-matter of a suit or attachment." (vide Para.11 of the judgment) 9. As stated earlier, the court below rejected the application even at the very threshold, for, it thought that no interlocutory application, whatever be its nature, could be entertained before the leave question is settled. The observation of this court in Achuthan Pillai v. Mohanan Unnithan,1979 KLT. S N. 53, particularly the following sentence with an apparently wide amplitude, appeared to it to be of a compulsive character: "No interlocutory order can be passed until a suit is instituted and S.92 requires leave to be obtained for institution of a suit." (emphasis supplied) 10. A deep scrutiny of the decision would, however, reveal that no such absolute rule had been intended to be laid down by the learned judge. The observation occurs in a case wherein this court dismissed in limine a revision petition directed against an order by which the court below declined to issue a commission, at a time when the application for leave under S.92 had not been decided. The question which arose for consideration by this court was whether such an order was amenable to revisional jurisdiction. It must be remembered that the prayer for the issue of a commission stands on a footing entirely different from an application for the appointment of a receiver. The wording in 0.26 R.1 of the CPC. is: 1. Cases in which court may issue commission to examine witness: A court may in any suit issue a commission for. It (emphasis supplied) Mark the word "suit" occurring in 0.26 R.1 of the CPC. It is therefore clear from the language of the statutory provision itself, that an application for the issue of a commission could be conceived of only in a suit. And therefore until leave is granted under S 92, an application under S 92 does not ripen into a suit. It is therefore clear from the language of the statutory provision itself, that an application for the issue of a commission could be conceived of only in a suit. And therefore until leave is granted under S 92, an application under S 92 does not ripen into a suit. In that view of the matter, to the extent it has been held that an application for the issue of a commission is incompetent before leave is granted under S.92, the decision is perfectly correct. The opening sentence in the decision in 1979 KLT. SN. 53 has to be understood in the background of the facts of that case So understood, there is absolutely no difficulty in following that decision as a proper guide in relation to the exercise of the power of issuing a commission, in proceedings under S.92 of the CPC. The acceptance of the view by the learned single judge in a later decision of the Division Bench in Mathew v. Thomas, 1982 KLT 493, is equally understandable in that light. 11. One of the questions which arose before the Division Bench related to the legality of a court granting 'interim leave' in proceedings under S.92 of the Code of Civil Procedure. The Division Bench held that "the court below was not right in granting interim leave". However.it was further observed that such a flaw did not vitiate the orders under appeal before the Division Bench, under which the court below had passed an order appointing a receiver and ordered attachment before judgment. The reason was that those orders of appointment of receiver and attachment before judgment were "made only subsequent to the order of 'final leave' although passed on same day, as disclosed by the order on I. A. No. 626 of 1981". It is in the course of the discussion on the propriety of granting interim leave that the Division Bench formulated the procedure for the grant of leave by the court and incidentally referred to the judgment in 1979 KLT. SN. 53 and expressed agreement with that decision. That, however, does not mean that the Division Bench had intended to decide that no interlocutory order whatever, could be passed in proceedings under S.92 of the CPC. till leave is granted by the court. 12. SN. 53 and expressed agreement with that decision. That, however, does not mean that the Division Bench had intended to decide that no interlocutory order whatever, could be passed in proceedings under S.92 of the CPC. till leave is granted by the court. 12. As noted earlier, unlike 0.26 Rule I of the CPC., provisions of 0.40 R.1 do not posit the existence of a suit for a receiving order to be issued. There are analogous situations, where there is no suit, but where an application for the appointment of a receiver could be moved before court. The question whether 0.40 R.1 of the CPC. would enable the court to appoint a receiver even in such proceedings,had been the subject-matter of decisions from early times. It has been held that in such proceedings, an application for the appointment of Receiver is maintainable and that courts could deal with such applications even before leave is granted and before proceedings result in a regular suit. One of those early decisions is the one rendered by the Allahabad High Court in Mohammed Ali v. Ahmad Ali, AIR. 1945 Allahabad 261. A decision of the Bombay High Court reported in Bai Sakri v. Bai Dhani, AIR. 1948 Bombay 139 also takes a similar view. The question was whether in proceedings in forma pauperis, the court was competent to appoint a receiver. The following observation at page 267 of the judgment in AIR. 1945 All. 261 is apposite: "in the end I find myself in agreement with the views of my brother Braund J., when he says: "Jurisdiction to protect property pending the ascertainment of rights is inherent in any Court which once has cognisance in any form of a dispute involving the execution of a trust or the administration of assets; and I think the Court has, not merely jurisdiction, but a duty to safeguard them." It is clear from 0.40 R.I, Civil P. C., that a Receiver can be appointed in proceedings other than suits. Thus, it has been held that a Receiver may be appointed during the course of the proceedings for the appointment of a guardian under the Guardians and Wards Act: vide AIR. 1925 Lah. 489 and AIR. 1929 Nag. 119." 13. Thus, it has been held that a Receiver may be appointed during the course of the proceedings for the appointment of a guardian under the Guardians and Wards Act: vide AIR. 1925 Lah. 489 and AIR. 1929 Nag. 119." 13. The result of the above discussion is that unlike an application for the issue of a commission, which contemplates the existence of a suit for passing an order under 0.26 R.1, an application for the appointment of a Receiver does not, in terms of 0.40 R.1 C.P.C., contemplate an already registered suit for the exercise of the power thereunder. The decision of the Allahabad High Court in AIR. 1964 Allahabad 366 referred to above also takes the same view. Even while proceedings for leave under S.92 are pending, and the question of leave remains undecided, it will be open to the court to entertain an application for the appointment of a receiver, and deal with and dispose of the same in accordance with law. 14. Counsel for the respondents submits that anomalous results may follow, if, before the court makes up the mind on the question of leave, an application for the appointment of a receiver is entertained, and as a matter of fact, a receiver is appointed. The object of insulating a Trust from harassment by unnecessary legal proceedings by an insistence on leave being obtained from a court before hand, was strongly relied on in that connection. There is some force in this contention. However, it must also be borne in mind that due to a variety of reasons, the proceedings under S.92 of the CPC. can have, as has happened in the present case, a protracted course. Though not obligatory always, it is optional for a court to issue notice to the respondents. Adequate opportunities to file objections and to establish the contentions of the rival parties, may all entail delay in the disposal of the "leave question". Should the court be a mute spectator in relation to the affairs of a public Trust even if circumstances are such that a Receiving Order in relation to the Trust is eminently justified, for the only reason that the decision on the 'leave question' gets protracted either in that court or in superior courts? Should the court be a mute spectator in relation to the affairs of a public Trust even if circumstances are such that a Receiving Order in relation to the Trust is eminently justified, for the only reason that the decision on the 'leave question' gets protracted either in that court or in superior courts? If the provisions of 0.40 R.1 enable the court to issue a receiving order only in a suit, the result, however hard, would have to be suffered. But the statutory provisions, as they now stand do not have any such rigour. If that be so, it is not necessary to constrict the powers of a court in the matter of exercise of its discretion for the preservation of the interests of a Trust, if circumstances otherwise justify and compel it. On a plain reading of the section, it is clear that there is no such interdict in the matter of entertaining an application for the appointment of a receiver, in relation to a Trust, even when the question of leave under S.92 remains undecided by the court. It is a well known principle that courts always lean to that interpretation which keeps the jurisdiction and authority of a court as wide as is possible. 15. In the light of the conclusion reached above, it is obvious that the order of the court below is erroneous. I therefore set aside the order to the extent it has held that the application for the appointment of a receiver cannot be entertained before a final decision is made on the question whether leave should be granted in the proceedings under S.92 of the CPC. The court below will deal with and dispose of the application in accordance with law and in the light of the observations contained herein. 16. In view of lapse of time after the institution of the proceedings in O.P. No. 98 of 1979, it is also desirable that the question of leave itself is decided without further delay. The Civil Miscellaneous Appeal is disposed of as above. I direct the parties to bear their costs. Allowed.