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1984 DIGILAW 994 (ALL)

Banshidhar v. Shiv Ram

1984-11-27

K.N.MISRA

body1984
JUDGMENT K.N. Misra, J. 1. This first appeal from order under Order 43, Rule 1 (8) of the Code of Civil Procedure (for short 'the Code') is directed against the order dated 18. 4. 1984 passed by Sri Murendra Kumar, Xth Additional District Judge, Sitapur allowing the application of the plaintiff for appointment of Receiver of the trust property in suit filed under Section 92 of the Code. Briefly stated, the facts of the case are as follows : 2. In a suit filed under Section 92 of the Code, for the removal of the trustees, an application was moved by the plaintiff on 3. 4. 1984 under Order 40, Rule 1 of the Code for the appointment of Receiver in respect of the standing crop situate on the land bearing Khasra Nos. 9, 26 and 43 of village Niyamatpur Labraha, Pargana and Tehsil Mahmoodabad, District Sitapur. It was also prayed that the Receiver be directed to sell the standing crop and deposit the amount thereof in court, with which management and Pooja etc. of the deity and the temple be made. Defendant Banshidhar, who is, admittedly, the sarvarakar (managementtrustee) filed an objection opposing the said application wherein it was asserted that the standing crop, which was grown on the said plots, has already been harvested, and, as such, the application has become infructuous. It was further averred that the defendantobjector has been properly looking after the temple and its upkeep and managing the property appropriately. Ram Navmi festival and akhand path of Ramayan etc. are duly performed and celebrated. There is also a permanent Poojari in the temple. It was, thus, prayed that the application for Receiver be rejected. The learned Additional District Judge by order dated 19. 4. 1984 appointed Sri D. C. Srivastava, Advocate, as Receiver to manage the trust property till further orders. It was also ordered that the Receiver shall take possession of the property, dispossessing the defendant therefrom. He shall take the accounts of the last harvested crop from the defendant. It was also ordered that the Receiver shall manage the property either by leasing out the land at proper rate, by public auction or in any suitable manner, after due permission from the court. He was, however, not required to take any permission in case he chooses to lease out the land on yearly or half yearly basis. It was also ordered that the Receiver shall manage the property either by leasing out the land at proper rate, by public auction or in any suitable manner, after due permission from the court. He was, however, not required to take any permission in case he chooses to lease out the land on yearly or half yearly basis. The Receiver was directed to submit his report together with account of the last crop harvested by the defendant, within fifteen days. Aggrieved by this order, the defendantappellant Banshidhar preferred this appeal. This Court, vide order dated 3. 5. 1984, directed that notice be issued to the opposite parties to show cause why the appeal should not be admitted. In the meantime, the operation of the order dated 19. 4. 1984 under appeal was ordered to remain stayed unless already implemented. An application was moved on 19. 10. 1984 by the opposite party No. 4 for the vacation of the said interim order dated 3. 5. 1984 wherein it was asserted that the Receiver had taken possession of the trust property on 25. 4. 1984 when he had visited the spot and by open public auction he leased out the temple land on an annual income of Rs. 2.000/ to Sri Mool Chand, Ghulam Waris, Mohd. Rafi and Mazid Shah and took a sum of Rs. 550/ as advance, which he deposited in court. The report of the Receiver dated 4. 5. 1984 has also been annexed as Annexure C2. Appellant Banshidhar filed rejoinder affidavit in which he asserted that he is still in possession over the land in question and has given the same on Batai to Mashooq Ali, Thakur Prasad and Sohan Lal who have sown Paddy and Arhar crop. The Paddy crop is ready for harvesting and the Arhar crop will be harvested in the month of MarchApril. It has further been averred in para 19 of the rejoinder affidavit that after passing of the stay order by this Court, which was served on the court below within time, the opposite party No. 5 has moved this application for vacation of the interim order passed by this court. The appellant has annexed along with the rejoinder affidavit true copies of affidavits which were filed by Ghulam Waris and Abdul Mazid in the court below, to whom the Receiver is said to have leased out the said land. The appellant has annexed along with the rejoinder affidavit true copies of affidavits which were filed by Ghulam Waris and Abdul Mazid in the court below, to whom the Receiver is said to have leased out the said land. Referring to these affidavits it has been asserted that in none of the affidavits, said persons have averred that they have sown the crop over the land in question. The appellant has also annexed to the rejoinder affidavit, the affidavits of Mashooq Ali and Sohan Lal wherein they have averred that they are the Bataidars on behalf of the appellant and have sown the crops over the land in question and are in possession over the same. The appellant has further asserted that the Receiver has not taken possession of the land in question nor he has validly leased out the land. It has also been asserted that the said Receiver has acted illegally in auctioning the land of the trust without giving notice to the appellant. No proclamation was done in accordance with law and the auction done by the Receiver is illegal, It bus been asserted that the appellant is still in possession and his Bataidars have sown the standing crop on the aforesaid plots. 3. Arguments were heard on the application of interim relief as well as the application for vacation of stay order filed by opposite party No. 5 Balgovind. Learned counsel for the parties, however, agreed that instead of disposing of these applications the appeal, which is ready for hearing, may itself be finally heard and disposed of. Thus, with the consent of the parties, arguments in the appeal were heard at some length. 4. Learned counsel for the appellant had urged that the appellant is admittedly the Sarvarakar (Managing trustee) and he is looking after the temple and is in possession over the endowed property, namely, plot Nos. 9, 26 and 43 situate in village Niyamatpur Labraha. Learned counsel for the appellant, thus, urged that since the appellant is in possession over the land in question and is managing the trust property, and, as such, he could not be dispossessed in the manner as has been done in the present case by appointment of a Receiver. His contention was that since no case was made out for appointment of Receiver, the impugned order deserves to be set aside. His contention was that since no case was made out for appointment of Receiver, the impugned order deserves to be set aside. Learned counsel pointed out that the court below has not recorded any finding on the material question as to whether the property is being mismanaged, destroyed or damaged, and, as such, 10 the absence of affirmative finding to that effect, no order of appointment of receiver could be passed. He referred to the passage in the order passed by the court below to exhibit that no finding on the aforesaid material point has been recorded. I have perused the order and I find that the learned lower court has merely observed that, for the preservation of the trust property itself and also for preventing the injury to the rights of the parties, if any, it is just and convenient that receiver should be appointed to manage the trust property. The learned lower court has, thus, not recorded any finding as to whether the property is being mismanaged or damaged or there is likelihood of (its) being destroyed illegally by the defendantappellant in any manner whatsoever. 5. In reply, learned counsel for the respondents had urged that the defendantappellant, who has been looking after the cultivation of the land in question, has not even paid the land revenue and a sum of Rs. 44165 Paise are due as arrear of land revenue in respect of said land. His further contention was that the temple is being mismanaged and the upkeep of the deity and other religious functions are not properly performed. Learned counsel further contended that the defendantappellant has pleaded that there is no income from the trust property, which, according to the learned counsel, is per se wrong assertion. He, thus, urged that the learned lower court has correctly appointed a Receiver in order to save the endowed property from being mismanaged and misappropriated by the defendantappellant. 6. Learned counsel for the appellant, in reply, urged that the aforesaid contention of the learned counsel for the respondent is absolutely wrong. He further contended that the learned trial court also wrongly based its finding on said mistaken construction of pleading of the defendant in the written statement. Learned counsel placed the written statement and urged that it has not at all been pleaded by the defendant that there is no income from the property. He further contended that the learned trial court also wrongly based its finding on said mistaken construction of pleading of the defendant in the written statement. Learned counsel placed the written statement and urged that it has not at all been pleaded by the defendant that there is no income from the property. He, thus, contended that the impugned order being based on misstatement of fact deserves to be set aside on this ground as well. Learned counsel urged that since the defendantappellant has been in continuous possession over the land in question, and, as such, in view of his above submissions, the order passed by the learned lower court appointing the Receiver deserves to be set aside. 7. Having heard the learned counsel for the parties and having perused the impugned order very carefully, I find that there is much substance in what has been urged by the learned counsel for the appellant and the impugned order deserves to be set aside. It is well settled that in order to justify the appointment of receiver, the plaintiff must establish a reasonable possibility that the plaintiff will ultimately succeed in obtaining the relief claimed in the suit. The requirement thus is that he must establish a good prima facie case. It may further be remembered that the appointment of a receiver is, as a general rule, discretionary, and not a matter of right. Court will make an appointment of a receiver with great caution and circumspection. In a case where the remedy of the appointment of a receiver seems necessary to prevent fraud, to protect and preserve the property against an imminent danger of loss or diminution in value, destruction, squandering, wastage or removal from jurisdiction, the court may appoint a receiver. A court, in exercise of its discretion to appoint or refuse to appoint a receiver, must take into account all the circumstances and facts of the case, the presence of conditions and grounds justifying the relief, ends of justice, the rights of all the parties interested in the subjectmatter and the adequacy of other remedies. (See S. B. Industries, Freegunj and another v. United Bank of India and others AIR 1978 Allh. 189). In T. Krishnaswamy Chetty v. C. Thangavely Chetty and others (AIR 1955 Madras 430), Ramaswami, J. has indicated the requirements under which a receiver may be appointed. (See S. B. Industries, Freegunj and another v. United Bank of India and others AIR 1978 Allh. 189). In T. Krishnaswamy Chetty v. C. Thangavely Chetty and others (AIR 1955 Madras 430), Ramaswami, J. has indicated the requirements under which a receiver may be appointed. It has been observed that: The appointment of a receiver is recognised as one of the harshest remedies which the law provides for the enforcement of rights and is allowable only in extreme cases and in circumstances where the interest of the person seeking the appointment of a receiver is exposed to manifest peril. Therefore, this exceedingly delicate and responsible duty has to be discharged by the Court with the utmost caution and only when the five requirements embodied in the words just and convenient in 0.40, Rule 1 are fulfilled by the facts of the case under consideration. These five requirements are : (1) The appointment of a receiver pending a suit is a matter resting in the discretion of the court. (2) The court should not appoint a receiver except upon proof by the plaintiff that prima facie he has a very excellent chance of succeeding in the suit. (3) Not only must the plaintiff show a case of adverse and conflicting claims to property but he must show some emergency or danger or loss demanding immediate action and of his own right he must be reasonably clear and free from doubt. The element of danger is an important consideration. (4) An order appointing a receiver will not be made where it has the effect of depriving a defendant of a 'de facto' possession since that might cause irreparable wrong. It would be different where the property is shown to be 'in medio', that is to say, in the enjoyment of no one. And, (5) The court, on the application made for the appointment of a receiver looks to the conduct of the party who makes the application and will usually refuse to interfere unless his conduct has been free from blame. 8. In Institute IndoPortuguese and others v. Dr. And, (5) The court, on the application made for the appointment of a receiver looks to the conduct of the party who makes the application and will usually refuse to interfere unless his conduct has been free from blame. 8. In Institute IndoPortuguese and others v. Dr. Teotonio Borges and others (AIR 1959 Bombay 275) it was observed that : Where in a suit for removal of certain trustees and appointment of new trustees in respect of a public trust registered under the Bombay Public Trusts Act, an application for appointment of an interim receiver is made, all that the Court is concerned with is to consider whether there has been any occasion for the Court to appoint a Receiver for the management of the trust, during the pendency of the suit. If the court finds that the affairs of the trust have been brought to a standstill, particularly for the reason that there has been no constituted managing committee to undertake the responsibility of discharging its duties under the constitution, then whatever may be the reliefs claimed in the suit, and whether those reliefs could be granted to the plaintiffs or not at the time of final hearing of the suit, the court would be entitled to appoint the receiver for the proper management of the property during the pendency of the suit before it. 9. In view of the above, I find that where the management of the temple and endowed property is looked after by the managing trustee (Sarvarakar)and a suit is filed for his removal and removal of other trustees as well, the court will consider the application for appointment of a receiver with great care so as to find out whether prima facie case is made out or not. It has to scrutinize with great care all facts and circumstances in order to find out whether the Sarvarakar is guilty of mismanaging or misappropriating the endowed property and that there is danger of its being lost, damaged, squandered away or misappropriated by the Sarvarakar. The court must exercise judicial discretion in making or refusing to make appointment of a receiver with great care and caution, before parsing the order. The court must exercise judicial discretion in making or refusing to make appointment of a receiver with great care and caution, before parsing the order. The test to appoint a receiver is to see whether it is just and convenient and the discretion exercised in appointing the receiver should not be exercised arbitrarily, but after taking into consideration all facts and circumstances of the case and after recording a finding as to whether the managing trustee (Sarvarakar) is guilty of mismanaging or misappropriating the endowed property or not. In the present case, I find that the impugned order of appointment is based on misstatement of fact and misconstruing pleading of the defendant. The defendantappellant has nowhere pleaded that there is no income from the property. The other trustees, who have been arrayed as defendants, have pleaded in support of the managing trustee. Thus, in the absence of any positive finding on record to the effect that the defendantappellant has not been managing the trust property properly and has not been looking after the management of the temple in appropriate |manner, it can hardly be said that a case for appointment of receiver has been made out. The learned lower Court has observed that for the preservation of the trust property itself and also for preventing the injury to the rights of the parties, if any, it is just and convenient that receiver should be appointed to manage the trust property. Such an order cannot be sustained. The learned lower court has not recorded any finding to the effect that the property is in the danger of being damaged or destroyed by the Sarvarakar. No finding has been recorded to the effect that the management of the temple and the Pooja Path etc. and performance of religious functions in the temple are not being done properly by the Sarvarakar. The defendantappellant, who is the managing trustee/Sarvarakar has asserted that there is a Poojari in the temple and the trust property is being looked after by him and he has let* out the property in question to Bataidars. If the allegation be that he is not spending the income received from the agricultural land on the upkeep of the temple and its maintenance etc., the learned lower court could ask the defendantappellant to submit a detailed account regarding income and expenditure. If the allegation be that he is not spending the income received from the agricultural land on the upkeep of the temple and its maintenance etc., the learned lower court could ask the defendantappellant to submit a detailed account regarding income and expenditure. So, merely on the allegation of mismanagement and misappropriation of the endowed property, no receiver could be appointed without recording an affirmative finding on the said material grounds. In my opinion, the facts so far disclosed do not justify dispossession of defendantappellant from the endowed property which he is managing as Sarvarakar. 10. The provisions of Order 40, Rule 1 of the Code are not mandatory but the same would be attracted and invoked only in appropriate cases. Where a certain property is dedicated to the deity under the terms of Deed of Endowment and it is being managed by the managing trustee (Sarvarakar) who is enjoined to perform certain religious duties, it would not be just and convenient to appoint a receiver of such property unless a further finding is recorded to the effect that the managing trustee is not duly performing his duties regarding maintenance of the temple and is negligent in performing the religious duties which he is enjoined to perform. No finding has been recorded by the learned lower court that the defendantappellant is guilty of mismanagement of the temple property and is not performing the religious duties and has not made any arrangement with regard to Pooja Path etc. of the deity installed in the temple. No order of dispossession, therefore, could be passed merely on the ground on which the impugned order is based. It is no doubt correct to say that a receiver could be appointed for preservation of the trust property, but the learned lower court has not recorded a finding that the appellantdefendant is guilty of damaging or misappropriating the trust property. In the absence of such finding the appointment of receiver cannot be said to be just and convenient and I find that the facts, and circumstances of the case do not warrant appointment of a receiver for the management of the trust property. 11. The other ground on which the order is said to be based is to prevent injury to the parties. 11. The other ground on which the order is said to be based is to prevent injury to the parties. The learned lower court has not indicated as to what are these rights for the preservation of which he has passed the order of appointment of receiver. The learned lower court appears to be itself not very sure about all that because it has merely observed that, for the preservation of the trust property itself and also for preventing the injury to the rights of the parties, if any, it is just and convenient that receiver should be appointed to manage the trust property. The words if any clearly indicate that the learned lower court has not recorded any categorical finding on those points and still he has passed the order regarding appointment of receiver to manage the trust property. Such an order cannot be legally justified. 12. Learned counsel for the respondents had urged that since the question of appointment of receiver is discretionary, and, as such, no interference should be made with the impugned order which has been passed for the preservation of the trust property. I am unable to agree with this contention firstly, because no case is made out for holding that the defendantappellant is misappropriating the endowed property or that it is in danger of being alienated or destroyed, and, secondly, I find that although appointment of receiver is a discretionary matter, but this discretion must be exercised on sound judicial principles indicated above and if the discretion is not exercised on those lines, the appellate court, should interfere with the order of appointment. 13. Learned counsel for the respondents had further contended that a receiver could be appointed in respect of the property in question even in a suit filed under Section 92 of the Code, and, as such, the appointment of receiver in respect of the endowed property cannot be said to be suffering from lack of jurisdiction. In support of his contention he had referred to decision in C. Kuppuswami Mudaliar and others Vs. Y. Subramaniam Chettiar and others (AIR 1923 Mad. 224) T.A. Balkrishna Odayar and another Vs. Chakravarthy V. Jagannada Chariar and others (AIR 1925 Madras 820) and K A. Veeranaghva Tathachariar and others Vs. R. KrishnaSwami Thatha Chariar and others (VII Indian Cases 900). In support of his contention he had referred to decision in C. Kuppuswami Mudaliar and others Vs. Y. Subramaniam Chettiar and others (AIR 1923 Mad. 224) T.A. Balkrishna Odayar and another Vs. Chakravarthy V. Jagannada Chariar and others (AIR 1925 Madras 820) and K A. Veeranaghva Tathachariar and others Vs. R. KrishnaSwami Thatha Chariar and others (VII Indian Cases 900). No doubt it is correct to say in a suit filed under Sec. 92 of the Code the Court can appoint a receiver in respect of the endowed property. But in every suit filed under Sec. 92 of the Code a receiver is not necessary to be appointed. A receiver can be appointed only when a case is made out for making appointment of a receiver for managing the trust property. In the present case, as already observed above, there appears to be no justification for making appointment of the receiver. Thus, although the impugned order cannot be said to be suffering from the vice of lack of jurisdiction, but it is not sustainable in view of what has been said above. 14. Learned counsel for the appellant had also contended that the suit is not maintainable under Section 92 because it is not a public trust, and, as such, no order could be passed for making appointment of receiver because the suit itself was not maintainable. Since, in view of what has been said above, I have held that the impugned order cannot be sustained and deserves to be set aside, I do not want to express any opinion on this argument urged by the learned counsel for the appellant. The question regarding maintainability of the suit will be gone into by the learned trial court as no opinion has been expressed on that question in the impugned order. 15. Before parting with the case it appears necessary to determine the question as to whether the receiver in pursuance of the impugned order had taken possession of the plots in question and he had leased out the same or not. 15. Before parting with the case it appears necessary to determine the question as to whether the receiver in pursuance of the impugned order had taken possession of the plots in question and he had leased out the same or not. The present appeal was filed on 351984 and the adinterim order of stay was passed staying the operation of the impugned order dated 1941984 unless already Implemented Learned counsel for the appellant urged that a copy of the stay order was filed in the court below on 451984 and on that very day the learned receiver submitted his report in court, which according to the learned counsel, contains wrong statement of facts. Learned counsel urged that no auction of the land was made by the receiver. He further contended that no notice was admittedly given to the defendantappellant by the receiver before taking steps for leasing out the land in question. No proclamation for making auction of the leaserights was made nor any date was fixed by him in advance for that purpose. Learned counsel pointed out that the report of the receiver indicates that he is said to have visited the spot on 2541984 and on that date, after alleged Mushtahari by beating of drums in the village, he is said to have taken possession of the plots in question and had given Theka on yearly basis to certain persons named in the report. Learned counsel pointed out that since the defendantappellant was admittedly not present at the time when the receiver is said to have reached the village, and, as such, without serving any notice on him the learned receiver could not take possession of the land and his alleged taking of possession merely by Mushtahari done by beating of drum in the village cannot be taken to be a valid proceeding regarding ejectment of the defendantappellant and of taking possession by the learned receiver. Besides that the learned counsel urged that the receiver should have fixed a date for leasing out the land in question and after due proclamation the land could be letout by him, if at all. Besides that the learned counsel urged that the receiver should have fixed a date for leasing out the land in question and after due proclamation the land could be letout by him, if at all. Learned counsel, thus, urged that the entire proceedings regarding taking over of possession and letting out of the land to the persons named in the report of the receiver are illegal and fictitious and the report is based on altogether wrong facts submitted by the receiver, at the instance of the vendee. Learned counsel further urged that the defendantappellant, who had been in possession over the land in question, being the managing trustee (Sarvarakar), has letout it on Batai to certain persons whose affidavits were also filed, a reference of which has already been made above. Learned counsel further urged that the persons to whom the defendant appellant has let out the land have sown the present standing crop on the land in question. In reply, learned counsel for the respondents urged that the receiver had rightly leased out the land to the persons named in his report, a copy of which has been annexed as annexure C2. He further contended that those persons have sown the present standing Paddy and Arhar crop on the land in question. In reply, the learned counsel for the defendantappellant urged that in their affidavits Ghulam Waris and Abdul Mazid, to whom the receiver is said to have leased out the land, have not averred that they have sown the present standing Paddy and Arhar crop. Annexure2 to the rejoinder Affidavit is a true copy of the affidavit of Ghulam Waris and Annexurc3 is the affidavit of Abdul Mazid. A perusal of these affidavits indicates that they have not at all averred that the present standing crop of Paddy and Arhar was sown by them. On the other hand the affidavits of Mashooq Ali and Sohan Lal, copies of which have been filed as Annexures 6 and 7 to the rejoinder affidavit, indicate that they were let out the land in question by Banshidhar on Batai and they have sown the Kharif crop on the plots in question. 16. On the other hand the affidavits of Mashooq Ali and Sohan Lal, copies of which have been filed as Annexures 6 and 7 to the rejoinder affidavit, indicate that they were let out the land in question by Banshidhar on Batai and they have sown the Kharif crop on the plots in question. 16. Having heard learned counsel for the parties at some length on this question as to which person has sown the present standing crop I find that it would not be just and appropriate to record a finding on said matter without giving opportunity of hearing to those persons. The alleged lessees are not parties to this appeal. In these circumstances I find that it would not be equitable, just and proper to pass an order on the said question as to which party has sown the standing crop and would be entitled to harvest the same. This question would, therefore, be considered by the learned lower court itself after giving notice and opportunity of bearing to those persons who claim to have sown the present standing Paddy and Arhar crop as lessees either from the Receiver or from the defendantappellant. 17. In the result, this appeal succeeds and is hereby allowed. The impugned order dated 1941984 passed by the Xth Additional District Judge, Sitapur appointing receiver of the trust property in question is hereby set aside. The receiver will cease to hold and manage the trust property and the arrangement, if any, made by him for the cultivation of the land in question will cease to be operative and status quo as regards possession and management of the endowed property of the temple as it existed prior to the date of passing of the impugned order, i.e. 1941984, shall be maintained. Since the Paddy crop is ready for harvest and the learned court below will, certainly, take some time to determine as to which persons have sown the crop, 1 direct that the defendant appellant, who is managing trustee/Sarvarakar of the trust property, would get the crop harvested in presence of the claimants to it and in presence of the Pradhan of the village and he would retain it in his possession after its harvesting, thrashing and due weighment being done in presence of the aforesaid persons. Learned court below will issue necessary order regarding harvesting of the standing paddy crop by the defendantappellant Banshidhar, fixing a date for the same and intimating to the aforesaid persons through processserver so that they may be present at the time of harvesting the crop by the defendantappellant and witness its thrashing and weighment etc. The local police authority be also intimated of the order, if a request is made by the defendantappellant seeking police assistance in the matter in order to avoid any untoward incident. The defendantappellant would furnish the account of the harvested crop to the court below and would abide by the order which may be passed by the court below after considering the question as to which of the claimant had in fact sown the crop and would be entitled to it. Since, in my opinion no case has been made out for the appointment of receiver of the trust property, the same would be continued to be looked after and managed by the defendantappellant in future, till the disposal of the suit, as a managing trustee thereof and he would file in court below periodical accounts of income and expenditure incurred in managing the trust property and in maintenance of the temple, PoojaPath and seva of the deity in the temple and celebrating other religious festivals etc., in the temple. He would follow the directions of the court, if any, in that behalf. 18. The costs of this appeal will be borne by the parties. (Appeal allowed)