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1990 DIGILAW 65 (PAT)

Pan Kumari Devi v. Braj Kishore Shrivastava Bachha Babu

1990-02-15

U.P.SINGH

body1990
Judgment U. P. Singh, J. 1. - The plaintiff - O. P. brought a suit in the court of subordinate Judge, Bagaha which is still pending. Therein, it was alleged that the Cinema house in question is a joint Hindu family property. The declaration sought in the Title Suit was that the plaintiff has been managing cinema business since the year 1964 and the defendants-petitioners have no right to cause any disturbance or interference with the management of the said cinema business and, further, that the defendants be restrained by an order of permanent injunction from causing any obstruction in the plaintiffs right of such management of the cinema business. The defendants-petitioners being aggrieved with the mis-conduct of the plaintiff moved an application under Order XL, Rule 1 of the Code of Civil procedure, for appointment of a receiver which was rejected by the sub-ordinate Judge by his order dated 1-9-1988 and the Miscellaneous apival before the District Judge was also dismissed. Now this revision application has been preferred against that. 2. In the Misc. Appeal preferred by the petitioners-defendants 3 and 4, it was prayed that the management of the cinema business be taken away from the hands of the plaintiff O. P. and handed over to these defendants or to any other person to act as a receiver for proper management of the cinema business In their rejoinder, the plaintiff-O. P. alleged that surendra Prasad Srivastava died in the year 1964 and since then the cinema business is being managed by them. They further prayed for temporary injunction restraining the defendants-petitioners from interfering with the said business till the disposal of the suit. After hearing the parties the injunction was allowed and the same was even upheld by the appellate court as also by this Court. Certain conditions were imposed stating that the accounts must be maintained and the defendants-petitioners must be permitted to inspect the account of the cinema business on the last date of each month with an intimation to the court below. It is not disputed that such inspections were carried out by the defendants-petitioners without any objection raised by the plaintiffs but even then an application for receivership was filed. 3. It is not disputed that such inspections were carried out by the defendants-petitioners without any objection raised by the plaintiffs but even then an application for receivership was filed. 3. There is no controversy that both the parties have interest in the cinema business and there is also no dispute that after the death of their father Surendra Prasad Srivastava in the year 1964, the sole plaintiff Braj kishore Srivastava is the manager of the cinema business. The controversy started only in relation to the management of the cinema business and a point was raised whether it is a joint family business under the Hindu Law or a partnership. The plaintiff had obtained an injunction restraining the defendants-petitioners from interfering with the right of management of the cinema business. Defendant Nos.3 and 4 contended that the profit of the cinema business is wiped out by the plaintiff O, P. and mis-appropriated through mis-management and they are ready to give guarantee, warranty and surety for Rs.6,000/- as profit per month from the cinema business. This allegation wag based on a chart given by an employee bhola which showed the income of Rs.353.05 P. whereas the chart of the plaintiff-O. P. showed an income of Rs.233.85 p. Earlier, the income during the period from 1966 to 1969 showed Rs.6,000/- but the mismanagement started after the year 1972. 4. There is no allegation either that the plaintiff-O. P. did not submit the account in accordance with the injunction order or that they put any impediment in inspection of the management by the petitioners. The courts below have rightly rejected the chart produced by an employee. It appears that P. Ws.11 and 12 were employees and during cross-examination when their attention was drawn to those papers on which reliance was being placed by the defendants-petitioners, they denied it. Further, there is no specific allegation of any type of mis-management. The courts below have rightly rejected the chart produced by an employee. It appears that P. Ws.11 and 12 were employees and during cross-examination when their attention was drawn to those papers on which reliance was being placed by the defendants-petitioners, they denied it. Further, there is no specific allegation of any type of mis-management. The mere desire expressed by the defendants-petitioners that they would bring the income at Rs 6.000/- per month would not itself be sufficient for the court to exercise its discretion in the appointment of a receiver and that would not justify the shifting of the management from the hands of the plaintiff o. P. , when the suit itself was for the management of the cinema business by the plaintiff-O. P. The injunction order imposed certain conditions safeguarding the interest of the parties inasmuch as that the defendants-petitioners were given facility to inspect the cinema business every month and the account to be checked up by them every month. Thus, the order of injunction was a composite one. As earlier stated, no such allegation has been made about mis-management showing improper income and there is no allegation that they were prevented either from making any inspection in respect of the income of management of the cinema business as directed by the court below. 5. My attention has been drawn to the two earlier orders passed on 17-6-1987 and 25-9-1987 and in the order dated 17-6-1987 the Subordinate judge laid down certain criteria for inspection of accounts in accordante with the order of injunction : (a) The inspection of account should take place on the last date of each month. (b) The defendant first party and other defendants desirable to inspect the account should apply before the court a week before for the inspection of the accounts. A copy of the petition will be served on the plaintiffs lawyer. (c) In presence of the plaintiff and the defendant-first party and other defendants, if they like, and their lawyers respectively, inspection of the account will take place on the scheduled date. On their consent the time will be fixed for such inspection. 6. A copy of the petition will be served on the plaintiffs lawyer. (c) In presence of the plaintiff and the defendant-first party and other defendants, if they like, and their lawyers respectively, inspection of the account will take place on the scheduled date. On their consent the time will be fixed for such inspection. 6. Again on an application submitted by defendants 3 and 4 (the petitioners herein) the Subordinate Judge by his order dated 25-9-1987 allowed them to check the number oi tickets sold in each show and also to check the number of visitors attending cinema in each show before and after the intervals. The plaintiffs were also directed not to cause any hindrance. Thus, a complete safeguard was introduced in the order of injunction as also in the subsequent orders passed by the Subordinate judge on 17-6-1987 and 25-9-1987. The petitioners have failed to point out as to in what manner the mis-management was found to have been caused by the plaintiff-O. P. There is no complain that any such hindrance was put in their way of inspection of the cinema business. 7. The courts while exercising equity jurisdiction in appointing receivers have to keep in mind the five principles and the same has been very succinctly pointed out in the case of T. Krishnaswamy Chetty V/s. C. Thangavelu Chetty and others, AIR 1955 Madras 430 : - (a) The appointment of a receiver pending a suit is a matter resting in the discretion of the court. The diseretion is not arbitrary or absolute ; it is a sound and judicial discretion, taking into account all the circumstances of the case, exercised for the purpose of permitting the ends of justice, and protecting the rights of all parties interested in the controversy and the subject-matter and based upon the fact that there is no other adequate remedy or means of accomplishing the desired objects of the judicial proceeding. Here, in the present case, the suit is pending and uptil now the plaintiff has produced practically all the witnesses during heare ing of the suit itself except that the plaintiff is now being cross-examined and the cross-examination is not yet concluded. Thus, it appears that the plaintiff is not negligent in prosecuting the suit with promptness and it is not on his account that the suit is being prolonged. Thus, it appears that the plaintiff is not negligent in prosecuting the suit with promptness and it is not on his account that the suit is being prolonged. On the other hand, it appears that the conduct of the petitioners-defendants is not fair, inasmuch as that now for nearly 8 months the suit has not been allowed to proceed any further even after sufficient safeguards were provided concurrently by the courts below in its several orders. (b) The courts should not appoint a receiver except upon proof by the plaintiff that prima facie he has very excellent chance of succeeding in the suit. (c) 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 bis own right he must be reasonably clear and free from doubt. The element of danger is an important consideration. A Court will not act on possible danger alone. The danger must be great and imminent demanding immediate relief. It has been truly said that a court will not appoint a receiver merely on the ground that it will do not harm. (d) An order appointing a receiver will not be made where it has the effect of depriving a defendant of a de facto possession since it might cause irreparable loss. If the dispute is as to title only, the court very reluctantly disturbs possession by receiver, but if the property is exposed to danger and loss and the person in possession has obtained it through fraud or force the court will interpose by receiver for the security of the property. In other words, a receiver should not be appointed in supersession of a bona fide possessor of property in controversy and bona fides have to be presumed until the contrary is established or can be indubitably inferred. (e) The court, on the application of a receiver, looks to the conduct of the party who makes the application and will usually refuse to interfere unless his conduct is free from blame. He must come to court with clean hands and should not have disentitled himself to the equitable relief by laches, delay, acquiescence etc. 8. (e) The court, on the application of a receiver, looks to the conduct of the party who makes the application and will usually refuse to interfere unless his conduct is free from blame. He must come to court with clean hands and should not have disentitled himself to the equitable relief by laches, delay, acquiescence etc. 8. Here in the present case, the defendants had the full knowledge about the orders passed by the Subordinate court on 17-6-1987 and 25-9-1987 whereby further safeguard were provided in accordance with the earlier order of injunction granted in favour of the plaintiff. The suit was proceeding and witnesses were being examined and cross-examined "even then the litigation was dragged to this Court and the trial was sufficiently delayed by filing applications one after the other for appointment of receiver. Neither in the courts below, nor before this Court it has been pointed out that they carried out the inspection every month and found mis-management or mis-appropriation at the hands of the plaintiffs. It has also not been pointed out that any hindrance was ever put in carrying out those inspections. It thus appears that the conduct of the defendants was not fair and they are not entitled to the discretion of the court. To sum up it may be stated that the high prerogative act of taking property out of the hands of one and putting it in pount, under the order of the judge ought not to be taken except to prevent manifest wrong imminently impending. 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 creditors is exposed to manifest peril. 9. Bearing these principles in mind, and on examination of the facts of this case as set out above in the contentions of the respective parties, i find that none of the requirements for granting appointment of a receiver is made out in this application. It is, accordingly, dismissed but there will be no order as to costs. Appeal dismissed.