Sailesh Chandra Dey v. Mahabir Finance Company and Ors.
1994-04-12
J.N.SARMA
body1994
DigiLaw.ai
This appeal has been filed against the order dated 22.7.93 passed by the learned Assistant District Judge No. 1 at Guwabati in Title Suit No. 165 of 1993 appointing one Dhan Chand Jain as receiver of the vehicle No. AMZ 5945. 2. The brief facts are as follows : The respondent No. 1- Mahabir Finance Company filed a title suit being TS No. 195 of 1993 for declaration and recovery of the suit vehicle. The prayers made in the plaint are as follows: "(i) Declaring that the plaintiff is the owner of bus as described in the schedule. (iii) Declaring that defendant No. 2 has acquired no ownership right over the suit vehicle on the basis of a fraudulent, illegal collusive and unauthorised transfer of ownership right of vehicle in question. (v) for recovery of possession of suit vehicle from defendants and to hand over the possession of suit vehicle to the plaintiff. (vi) for realisation of Rs. 1,10,000/- payable to the plaintiff by defendant No. 1 and 3 jointly and severally." 3. Along with the plaint, an application was also filed under Order 40 Rule 1 read with section 151 of the Code of Civil Procedure for appointment of the receiver to the vehicle (Bus) No. AMZ 5945. The case made out in the application, inter alia, is as follows : 1. That the petitioner is the owner of the vehicle which was let out on hire to defendant No. 1 under the Hire Purchase Agreement dated 2.4.93 on certain terms and conditions as enumerated in the Hire Purchase Agreement. 2. That the defendant No. 1 in spite of the clear conditions of Hire Purchase Agreement transferred the ownership of the vehicle in his own name and also has sold the vehicle to the defendant No. 2. Thus, violated the terms and conditions of lire Purchase agreement. 3. That the defendant No. 1 did not make any payment of the amount involved in the Hire Purchase Agreement rather threatened the plaintiff to break into pieces the Bus in question as well as to change the chassis and engine number with a view to destroy the identification of the Bus. 4.
3. That the defendant No. 1 did not make any payment of the amount involved in the Hire Purchase Agreement rather threatened the plaintiff to break into pieces the Bus in question as well as to change the chassis and engine number with a view to destroy the identification of the Bus. 4. If the receiver is not appointed the defendants will diminish the value of Bus by selling the parts of it and make it unfit for use and as such it has become necessary to appoint a receiver for preservation of suit vehicle. 5. That it is just and convenient to protect the legitimate right and interest of plaintiff by appointing a receiver in respect to the vehicle in question authorising him to take custody of the vehicle. 4. Annexure B to the Memo of Appeal shows that the plaintiff by executing a document dated 7.3.92, sold the vehicle to Shri Sajal Chanda, defendant No. 2. So, the defendant No. 2 became the owner of the vehicle and he being the owner of the vehicle in turn he sold it to defendant No. 1. The so called Hire Purchase Agreement is dated 2.4.92, i.e. after the sell of the vehicle by the plaintiff to defendant No. 1. The learned Judge passed the ex-parte order for appointment of receiver as indicated above. The learned Judge in the impugned order did not give any reason for the appointment of the receiver. He only noted the submissions of the learned Advocate and passed the ex-parte order of appointment of one Dhan Chand Jain of Fancy Bazar as receiver of the vehicle. 5. I have heard Mr. DN Choudhury, learned Advocate for the appellant and Mr. CK Sarma Baruah, learned Advocate for the respondent No. 1 and also Mr. PN Goswami, learned Advocate for the respondent No. 2. 6. Mr. Choudhury submits that the impugned order is absolutely arbitrary and the learned Judge in passing the order for the appointment of the receiver did not consider the requirements necessary for the appointment of the receiver. Mr. Choudhury in support of his submissions relies on the following decisions. 1. AIR 1955 Madras 430 (T. Krishnaswamy Chetty vs. C. Thangavelu Chetty & others); 2. (1984) 1 GLR 128 (Smti B. Chetarjee vs. SM Agarwall); 3. (1991) 1 GLR (NOC) 43: 1991 (1) GLJ 52 (AC Balo vs Smti Prava Das Roy); 4.
Mr. Choudhury in support of his submissions relies on the following decisions. 1. AIR 1955 Madras 430 (T. Krishnaswamy Chetty vs. C. Thangavelu Chetty & others); 2. (1984) 1 GLR 128 (Smti B. Chetarjee vs. SM Agarwall); 3. (1991) 1 GLR (NOC) 43: 1991 (1) GLJ 52 (AC Balo vs Smti Prava Das Roy); 4. AIR 1976 J&K 30 (Vijoy Kumar vs. BK Thapper); 5. ILR 15 Calcutta 818 (Sidheswari Dabi vs. Abhoyeswari Dabi). 7. Mr Choudhury further submits that the Hire Purchase Act has not been enforced in India as yet. So, the rights under the so called Hire Purchase Agreement shall flow from the provisions of the Contract Act and the clauses of the Agreement may not be enforceable as it is. For the purpose of this case, it is not necessary to decide this question and I leave it to be decided in an appropriate case. 8. Let us have a look at the decisions cited by Mr. Choudhury. 1. In ILR 15 Calcutta 818, a Division Bench of the Calcutta High Court pointed out as follows : "The appointment of a receiver is a matter resting in the discretion of the Court. The powers of appointing a receiver conferred by section 503 of the Code of Civil Procedure must be exercised with a sound discretion upon a view of the whole circumstances of the case, not merely the circumstances which might make the appointment expedient for the protection of the property, but all the circumstances connected with the right which is asserted and has to be established. The Court will not interfere by appointing a receiver where a right is asserted to property in the possession of a defendant claiming to hold it under a legal title, unless a strong case is made out." 2. In AIR 1955 Madras 430, the Madras High Court considered number of cases and the law laid down therein is as follows : "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 requirement embodied in the words "just and convenient" in Order 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." 9. In the judgment the Madras High Court summed up as follows by relying on two English decisions: "14. The high prerogative act of taking property out of the hands of one and putting it in pound 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." 10. In AIR 1976 J&K 30 , the Jammu & Kashmir High Court reiterated the same law. 11. The Division Bench of our High Court in (1984) 1 GLR 128 also laid down the five requirements as indicated in the Madras case. 12.
In AIR 1976 J&K 30 , the Jammu & Kashmir High Court reiterated the same law. 11. The Division Bench of our High Court in (1984) 1 GLR 128 also laid down the five requirements as indicated in the Madras case. 12. In (1991) 1 GLR (NOC) 43 [1991 (1) GLJ 52], the Single Bench of this Court pointed out that the power to appoint a receiver is discretionary and should be exercised judicially. Ordinarily the defendant should not be deprived of his possession over the property. 13. Now, in the aforesaid back ground let us have a look in the impugned order. The impugned order does not show that any of these principles required for passing the order for appointment of a receiver was considered by the Court. It is settled law even if when an ex-parte order is passed, the Court must not be oblivious to its duty to do justice and pass such order in accordance with law. The Court must be prima facie satisfied regarding the existence of the conditions required for passing such an order. A bare perusal of the order will show that the learned Judge simply enumerated the submissions of the learned Advocates. He did not give his own decision and/or findings in the matter. He simply after enumerating the submissions of the learned Advocate, straightway passed an order for the appointment of receiver. This can not be done by a Court and more so in a case regarding appointment of a receiver. The learned Judge gave a direction to the Officer-in charge, Manza Police Station to seize the vehicle and deliver it to the receiver. This also highly illegal. No doubt, the Court has the power to give a direction to the police to implement its order, but such an order must be given applying by its mind and in a cautious manner and not in hasty manner as done by the Court. 14. Accordingly, this appeal is allowed. The order dated 22.7.93 passed by the learned Assistant District Judge No. 1 at Guwahati in TS No. 165 of 1993 is quashed. The prayer for appointment of receiver stands rejected. Before I part with the record, I would like to refer to a submission made by Mr.
14. Accordingly, this appeal is allowed. The order dated 22.7.93 passed by the learned Assistant District Judge No. 1 at Guwahati in TS No. 165 of 1993 is quashed. The prayer for appointment of receiver stands rejected. Before I part with the record, I would like to refer to a submission made by Mr. CK Sarma Barua that if the order for appointment of a receiver is quashed, some directions as given in the case reported in (1984) 1 GLR 128 may be given to protect the interest of his client. Here is a case whether the possession of the vehicle is with defendant No.2, the present appellant, prima facie, has no relation with the plaintiff. So in the facts and circumstances, it is difficult to give any direction to defendant No. 2. But I leave the matter here itself and allow the plaintiff to approach the trial Court for appropriate direction in the matter as may be deemed fit and proper.