BAIKUNTHANATH SAHU v. GANGADHAR SAHU — 1994 DIGILAW 212 (ORI)

R. K. PATRA, J. ( 1 ) THIS revision is directed against the judgment of the learned Ist Additional District Judge, Puri affirming the order of the learned Subordinate Judge in removing the petitioner from the office of receiver. ( 2 ) THE petitioner and opposite parties 1 to 4 are brothers and have constituted a partnership firm by name Durga Wood Works. The firm is engaged in timber business and owns a saw mill at Nayagarh. Alleging that the opposite party No. 2 and the petitioner have been misutilising the assets of the firm and misappropriating its funds and have commenced another rival partnership firm by name M/s. Kalinga Wood Works which is also engaged in timber business, the opposite party No. 1 has filed T. S. No. 188 of 1986 in the court of the learned subordinate Judge, Nayagarh for dissolution of the partnership firm Durga Wood Works and for rendition of accounts. The case of the contesting defendants is that the plaintiff has ceased to be a partner of the firm since March, 1985 after taking retirement from the firm by receiving Rs. 50,000 / - from the defendants and as such, he has no locus standi to file the suit. ( 3 ) DURING the pendency of the suit, the plaintiff opposite party No. 1 filed three petitions for appointment of receiver, for injunction and for preparation of inventory of the assets of the firm. Those three petitions having been rejected, he filed M. A. No. 67 of 1987, M. A. No. 94 of 1987 and C. R. No. 29 of 1987 in this Court. All those three matters were disposed of by this Court on 13-12-1990 by appointing the petitioner (defendant No. 3) as receiver of the properties and assets of the firm and also its running business. It is relevant to quote the operative part of the order:";baikunthanath Sahu shall be receiver of the properties and assets of the firm and also its running business. He shall render accounts of the income of the firm to the trial court by the end of April every year commencing from the year 1991. It is relevant to quote the operative part of the order:";baikunthanath Sahu shall be receiver of the properties and assets of the firm and also its running business. He shall render accounts of the income of the firm to the trial court by the end of April every year commencing from the year 1991. The defendants are injuncted from removing and/ or utilising any of the machineries or other assets of the partnership firm Durga Wood Works for/ in connection with the business of the firm Kalinga Wood Works Ltd. Since a receiver has been appointed, there is no necessity to prepare inventory of the properties of the firm";. ( 4 ) ON 30-8-1993 the opposite party No. 1 (plaintiff) filed a petition in the trial Court praying to remove the petitioner as receiver on the ground that he was not submitting the accounts as per the direction of this Court and he has also violated the terms of the injunction order by which he was restrained from utilising the machineries of Durga Wood Works in connection with the business of the rival firm Kalinga Wood Works. The learned trial Judge after hearing the parties held that although the receiver has technically violated the order of injunction, it cannot be a ground for his removal. He, however, accepted the allegation that the receiver has not submitted the accounts as per the directions of this court and accordingly removed him from the office of receiver and further directed him to deliver charge of the running business and assets and properties of the firm Durga Wood Works to the plaintiff by 30-10-1993 who would thereafter act as receiver on the same terms and conditions imposed by this Court while appointing the petitioner as receiver. The petitioner challenged the said order in appeal which came to be disposed of by the learned Ist Additional District Judge who in the impugned judgment has held that the petitioner having not submitted the accounts of the years 1991-92 and 1992-93 before the trial court by the end of April, there is justification for his removal from the office of receiver and accordingly declined to interfere with the order of the learned Subordinate Judge. ( 5 ) SHRI Deepak Misra, learned counsel for the petitioner, contended that the receiver having been appointed by this Court, the learned Subordinate Judge was not competent to entertain the application for removal of receiver far less jurisdiction to remove him. He also submitted that in obedience to the direction of this Court accounts were submitted by the petitioner and the delay, if any, was not so fatal so as to remove the receiver. Shri S. P. Misra, learned counsel for the contesting opposite party submitted that there was adequate grounds for removal of the petitioner from the office of receiver and the learned Subordinate Judge was competent to remove him. In this connection, he relied upon a judgment of the Supreme Court in Ramankutty Guptan v. Avara, 1994 AIR SCW 1533. ( 6 ) THE moot point that arises for consideration is that this Court having appointed the petitioner as receiver, whether the learned Subordinate Judge has competence to remove him from the office. In Behari Lal v. Ram Swarup, AIR 1949 All 265, a Division Bench of the Allahabad High Court observed that the receiver having been appointed by the lower court, the order of discharge should be passed by that Court. In Kuar Jagadish Bahadur v. Ganesh Prasad, AIR 1953 Patna 253, the question as to whether the application for discharge of receiver can be entertained by the lower court when the appellate court passed by the order appointing the receiver came up for consideration. In that case, during the pendency of the suit for partition, the Subordinate Judge passed an order for appointment of receiver but did not name a particular person for such appointment. The said order was appealed against and in the High Court the matter was compromised and while disposing of the case, the High Court appointed Ganesh Prasad as receiver in respect of the disputed properties. The operative portion of the order stated that the receiver will be deemed to have been appointed by the court below and will be subject to the direction of that court in the management of the properties put in his charge as receiver";. An application was filed in the High Court to discharge the receiver. The operative portion of the order stated that the receiver will be deemed to have been appointed by the court below and will be subject to the direction of that court in the management of the properties put in his charge as receiver";. An application was filed in the High Court to discharge the receiver. The Division Bench while rejecting the said application observed that the receiver having been deemed to have been appointed by the court below, any application for his discharge must be made to the Subordinate court. The facts of that case would reveal that as a matter of fact the Subordinate Judge had appointed the receiver but did not name any particular person and in the High Court Ganesh Prasad was nominated and the High Court had clarified by stating that the receiver would be deemed to have been appointed by the Subordinate Judge. In view of that order obviously the application for removal of receiver could not have been filed in the High Court. In Dinesh Kumar v. Tilak Rai, AIR 1984 Him Pra 8, the Court observed that the receiver is removable by the very court which had made such appointment. In that case, the High Court had appointed the receiver. When the matter came to the Supreme Court on special leave petition, the apex court ordered appointment of co-receiver. As the receiver did not comply with certain directions, applications for removal of receiver was made in the High Court. The same was rejected on the ground that since the order of the High Court was modified by the Supreme Court, it is the Supreme Court alone that has got jurisdiction to entertain the application for removal of receiver. A direct case similar to the case at hand is Surendra Nath Bhattacharjee v. Narendra Nath Bhattacharjee, (1975) 79 Cal WN 81. A Division Bench of the Calcutta High Court in paragraph 19 has observed:"it is, however, well-settled that when a receiver is appointed by the appellate court the ower to remove or discharge such receiver unless there is specific direction given to the trial court in this behalf, will be with the court of appeal and not with the trial court. A Division Bench of the Calcutta High Court in paragraph 19 has observed:"it is, however, well-settled that when a receiver is appointed by the appellate court the ower to remove or discharge such receiver unless there is specific direction given to the trial court in this behalf, will be with the court of appeal and not with the trial court. This principle extends to a case where even when the appeal is no longer pending, such receiver must be regarded as receiver of the property of which he has been put in possession until he is finally discharged and the appellate court has jurisdiction to deal with matters relating to the receiver. It follows that the appellate court even where no appeal is pending retains its jurisdiction over the matters relating to receiver and can review its own order by discharge of the receiver or by appointment of another receiver or joint receivers in its direction unless the original appointment of the receiver by the Court of appeal was either for a limited purpose or for a fixed period" ( 7 ) LET me examine if the case of Ramankutty Guptan, (supra) relied on by Shri S. P. Misra would be of any assistance to him. What happened in that case was that the judgment-debtor filed a petition in the executing court to rescind the contract on the allegation that the plaintiff committed default in depositing the balance consideration amount within one month from the date specified by the appellate decree. The executing court dismissed the said application on the ground that it was not maintainable on the execution side. Meanwhile against the original decree dismissing the suit, appeal was preferred which had granted one month's time to the plaintiff to deposit the balance consideration but the deposit was made after the time fixed by the appellate court. The Supreme Court after considering the definition of the expression ";court which passed the decree"; as mentioned in Section 37 of the Code of Civil Procedure held that after passing the decree for specific performance a court does not cease to have any jurisdiction and it retains control over the decree even after the decree was passed. Accordingly it would be open to the court to exercise power either for extension of time or for rescinding the contract as claimed for. Accordingly it would be open to the court to exercise power either for extension of time or for rescinding the contract as claimed for. As the execution application was filed in the same court in which the original suit was filed, the same should have been dealt with according to law. In my view, the ratio of that case has absolutely no bearing on the point at issue. ( 8 ) IT is trite law that the power to terminate a service is a necessary adjunct of the powers of appointment which is exercised as an incidence to or consequence of that power. The power to terminate flows naturally and as a necessary consequence from the power to create. As a necessary corollary it further follows that the power to terminate inheres in the authority who has made the order of appointment. ( 9 ) IN view of the legal position, as indicated above, it follows that this court appointed the petitioner as receiver, the learned Subordinate Judge is incompetent to remove him from the office of receiver. The order of this Court extracted above, would clearly show that the receiver was to render accounts of the income of the firm before the learned Subordinate Judge by a specified date. Submission or non-submission of accounts before the learned Subordinate Judge would not clothe him with the power to remove the petitioner from the office of receiver. No leave or authority was granted by this Court to the learned Subordinate Judge in the matter except that the receiver would submit accounts before him. The impugned order of the learned Subordinate Judge shows that after removing the petitioner from the office of receiver, he has appointed in his place the plaintiff as the receiver. It is a clear case where he has transgressed his jurisdiction not only by removing the petitioner from the office of receiver but also by appointing the plaintiff in his place. ( 10 ) FOR the reasons stated above, the impugned judgments cannot be sustained in law which I hereby set aside. The revision is accordingly allowed. ( 11 ) THERE is no dispute that the petitioner submitted accounts for the year 1990-91 timely, i. e. , on 30-4-1991. Accounts for the year 1991-92 were submitted on 1-5-1992 causing a delay of one day. The revision is accordingly allowed. ( 11 ) THERE is no dispute that the petitioner submitted accounts for the year 1990-91 timely, i. e. , on 30-4-1991. Accounts for the year 1991-92 were submitted on 1-5-1992 causing a delay of one day. Accounts for the year 1992-93 were submitted on 5-6-1993 where there was delay of about one month and five days. In the application for removal of receiver there is no grievance by the plaintiff about the delay in submitting the accounts. The gravamen of the grievance appears to be that the accounts submitted by the receiver are defective and do not present the true state of affairs of the business of the firm. In the circumstances, I hereby direct the learned Subordinate Judge to hear the parties afresh as to whether the accounts submitted would be accepted. He would consider the matter without being obsessed by the delay in filing the accounts which, in the circumstances, cannot be said to be fatal. The parties are directed to appear before the learned Subordinate Judge on 17th of August, 1994. Lower Court records may be sent back forthwith. Order accordingly. .