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2002 DIGILAW 52 (MAD)

Inderchand D. Kochar v. Puratchidasan

2002-01-31

K.SAMPATH

body2002
ORDER :- The prayer in O.A. No. 1110/2000 is for the appointment of an advocate Receiver to take charge of the property bearing Door No. 17, North Boag Road, T. Nagar Chennai-600 017 and to administer the Kalyana Mandapam, being run there, pending disposal of the suit. 2. A. No. 5746/2001 is for dismissal of the suit, which according to the applicant, on the face of it is barred by limitation. 3. The suit itself is for a decree and judgment against the defendants for Rs. 43,79,775/- together with further interest at 30% per annum on the said amount till the date of realisation and in the event of the defendants not paying the decree amount permitting the plaintiff to sell the property mortgaged as set out in the schedule, which was offered as security for the entire loan and appropriate the sale proceeds through the Court. 4. The case of the plaintiff is as follows : After receiving money from him under a registered agreement for sale on 17-10-1989 and also subsequently receiving moneys and endorsing the same, the defendants not wanting to sell the property, the parties agreed that the transaction was intended to be a mortgage by deposit of title deeds and the respondents agreed to repay together with interest at 30% per annum. The respondents were constructing a Kalyana Mandapam in the property. They wanted to approach the Egmore Benefit Society for Rs. 30 lakhs as loan and felt that the rate of interest with the society worked out to be lower than the plaintiff, indicated in the loan application form of the society, that the plaintiff was pressing for repayment. The defendants showed the plaintiffs name in the encumbrance column in the loan application and stated that the mortgage was created on 17-10-1989 itself that to discharge subsequent loans availed to an extent of Rs. 13 lakhs and to complete the construction of the Kalyana Mandapam they wanted a loan from the society for Rs. 30 Lakhs. Though the defendants had completed the construction and marriages are being celebrated, they have not chosen to repay the loan taken from the plaintiff. 13 lakhs and to complete the construction of the Kalyana Mandapam they wanted a loan from the society for Rs. 30 Lakhs. Though the defendants had completed the construction and marriages are being celebrated, they have not chosen to repay the loan taken from the plaintiff. The plaintiff has been deprived of the moneys due to him lawfully receivable for a long time and he has to realise the dues either in one lump sum or by seeking an appointment of a Receiver, who may be directed to collect the amounts from the public and pay the plaintiff month after month after meeting the incidental expenses, so that the plaintiffs money can be realised. If this course is adopted, the defendants can save the property and continue to be the owners. If the Receiver is appointed, the plaintiff may see the colour of the coin every month or once in three months, so that the debt due to him may get reduced or even be wiped out. By appointing a Receiver, no prejudice will be caused to the defendants. In these circumstances, the appointment of Receiver is sought for. 5. The first respondent has filed a counter for both the respondents and the allegations are as follows : The suit as well as the application are all mere abuse of process of law and only a blackmailing attempt on the part of the applicant. The suit itself is not maintainable as it is barred by limitation. It is falsely alleged as if there is an equitable mortgage in respect of the suit property. There is no mortgage much less equitable mortgage created by the defendants in favour of the plaintiff. The first defendant wanted a loan of Rs. 9 lakhs over the suit property. The plaintiff agreed to advance the said sum, provided the first defendant executed and registered an agreement for sale in respect of the suit property. Since the first defendant was badly in need of money, he bowed down to the plaintiff’s illegal demand and also handed over the original documents. On execution and registration of the sale agreement dated 17-10-1989, the plaintiff advanced a sum of Rs. one lakh and promised to pay the balance then and there and subsequently, on 21-10-1989, 10-11-1989 and 5-12-1989 the plaintiff paid Rs. 50,000/- each, totalling in all Rs. 2,50,000/- and neglected to pay any further amount. On execution and registration of the sale agreement dated 17-10-1989, the plaintiff advanced a sum of Rs. one lakh and promised to pay the balance then and there and subsequently, on 21-10-1989, 10-11-1989 and 5-12-1989 the plaintiff paid Rs. 50,000/- each, totalling in all Rs. 2,50,000/- and neglected to pay any further amount. All these payments were endorsed on the reverse of the agreement of sale as demanded by the plaintiff. The loan was to be repaid within a period of one year and a clause to that effect that sale had to be completed within a year is found in the agreement. At the time of entering into the agreement of sale, the respondent obtained from the first defendant signed blank pronotes, cheque leaves, blank signed stamp papers, green bond papers, etc. as a condition precedent for advancing the loan and now he had misused the same to lend colour to his false case. The plaintiff had advanced only Rs. 2,50,000/- at 24% per annum interest and he misused the blank documents and made a claim for Rs. 43,79,775/-. On 1-8-1995 the plaintiff had issued a legal notice based on the sale agreement calling upon the first defendant to specify a date for execution and registration of sale deed as per the agreement dated 17-10-1989, for which the first defendant sent a detailed reply setting out all the aforesaid facts and circumstances. Therefore, the plaintiff kept quiet for a long time and only on 8-3-1998 he issued another legal notice claiming a sum of Rs. 15,46,000/- threatening to take legal action to attach the property. He had not come forward with the case of equitable mortgage anywhere in the notice and only for the first time, with a view to maintain the suit somehow or other and to bring the suit within the period of limitation with distorted facts. He cannot be allowed to change his colours and it is a mere abuse of process of law. Since the plaintiff failed to advance more than Rs. 2,50,000/- the first defendant had no alternative other than to approach Egmore Benefit Society for a loan of Rs. 30 lakhs and at that time, since the original documents were with the plaintiff, he demanded Rs. 13 lakhs for handing over the same and as it was a blackmailing, he did not agree for the same and the transaction did not materialise. 30 lakhs and at that time, since the original documents were with the plaintiff, he demanded Rs. 13 lakhs for handing over the same and as it was a blackmailing, he did not agree for the same and the transaction did not materialise. The second defendant has nothing to do with the transaction. He is an unnecessary party to the suit. The prayer for seeking appointment of Receiver cannot be entertained, as there is no prima facie case established by the plaintiff. Admittedly, the suit property is worth more than the suit claim and in case the applicant established his case during trial that there is an equitable mortgage, his interest could be well protected. The application deserves to be dismissed. 6. In the affidavit in support of the application for dismissing the suit, which, according to the first defendant, is on the face of it barred by limitation, the contents of the counter in the O.A. are repeated. It is further stated that the transaction between the parties is purely a loan transaction and only as a security the plaintiff demanded the execution of the sale agreement and as at that time the plaintiff had obtained various pronotes, cheque leaves and blank signed bond papers, the first defendant had no other go but to execute the same and those papers have been misused. The plaintiff has not stated anywhere in his notice as to what according to him was the principal amount but merely stated that any sale/mortgage or transfer was subject to the agreement for sale and would only be subject to commitment to sell the property. It was also not mentioned about the deposit of the title deeds regarding the suit property in his favour anywhere in the agreement. No claim with regard to the alleged deposit of title deeds had been made. Only in the suit it had been raised. The alleged mortgage deed dated 18-10-1989 which had been created under a blank signed paper obtained from the first defendant cannot create any equitable mortgage and if the document is perused by this Court, it will come to light and it is nothing but an abuse of law. Several letters have been cooked up by the plaintiff. The letters said to have been executed will not fulfil the requirement of equitable mortgage as contemplated under law. Several letters have been cooked up by the plaintiff. The letters said to have been executed will not fulfil the requirement of equitable mortgage as contemplated under law. There is no cause of action and the claim is barred by limitation. The suit is liable to be dismissed. 7. A counter has been filed by the plaintiff disputing the various allegations. 8. In the application for appointment of Receiver, this Court passed an order on 31-10-2001 requiring the first defendant to bring Rs. 10 lakhs and four weeks time was granted. A fixed deposit receipt was produced on the adjourned date for Rs. 5 Lakhs only. Time was sought to comply with the order and this Court directed the first defendant to bring a demand draft for Rs. 10 lakhs in favour of the plaintiff on 10-12-2001. In the meantime the present application has been taken out. Though originally there was a registered agreement of sale, the first defendant required periodical loans and wanted it to be treated as a mortgage in law, viz. deposit of title deeds and the original documents are with the plaintiff. If it were to be a simple loan or an agreement of sale, the plaintiff would have completed it within the period of limitation. Time and again, the first defendant had the loan treated to be a mortgage loan and even in his Advocate’s reply he had stated so and this was adverted to at the time of the argument and considering all that and taking note of the date of the agreement on 17-10-1989, this Court required and passed an equitable order requiring the first defendant to bring Rs. 10 lakhs. The plaintiff was also called upon to produce the original documents, which he was willing to do. But the original documents cannot be handed over until the entire loan amount is discharged. The plaintiff is willing to deposit the documents in Court if there is an order to that effect and the same may be held by the Court till the disposal of the suit for which he has no objection. The application has been taken out to drag on the matter without obeying the orders of this Court. Only after compliance of the order of this Court, the first defendant can agitate his grievance. The application has therefore to be dismissed. 9. The application has been taken out to drag on the matter without obeying the orders of this Court. Only after compliance of the order of this Court, the first defendant can agitate his grievance. The application has therefore to be dismissed. 9. The provisions relating to appointment of receivers in the Code of Civil Procedure are found in Ss. 51, 94 and Order 40 Rule1. Section 51 relates to powers of Court to enforce execution. The Court under this provision can order execution of the decree among other methods by appointing a receiver. Section 94 dealing with supplemental proceedings, provides that in order to prevent the ends of justice from being defeated the Court may, if it is so prescribed appoint a receiver of any property and enforce the performance of its duties by attaching and selling its property. Under Order 40, Rule 1, the Court may, (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 realisation, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits and the execution of documents as the owner himself has, or such of those powers as the Courts think fit." These things the Courts can do if it appears to them to be just and convenient. 10. “Appointment of a receiver by the Court in a pending suit does not determine the ultimate rights of the parties and does not even effect them except in so far as it preserves and retains control of the property to answer to the rights of the parties as they may be finally determined...... The appointment of a receiver is not an equitable right, but as equitable remedy.’ That is to say, the appointment of a receiver is not a cause of action in itself, but an act of Court ancillary to the cause of action for the establishment of some rights. Law of Receivers by P. S. Atchuthen Pillai and P. M. Krishna Nauru." 11. Law of Receivers by P. S. Atchuthen Pillai and P. M. Krishna Nauru." 11. In Sivagnanathammal v. Aruna-chellum Pillai21 MLJ 821 the law is stated by a Division Bench of this Court in the following manner : “A bona fide possessor should not ordinarily be displaced from any of the just rights attached to his title unless there be some equitable ground for interference. To justify the appointment of an ad interim receiver in a suit against a Hindu widow who is in bona fide possession of the property, in virtue of her legal title to it, and which possession she would be admittedly entitled to for the life even if plaintiff succeed in the suit (the suit being one for declaring an alleged Will of the last male owner a forgery) there should be some equitable ground for such appointment and a Court will be acting wrongly in appointing a receiver on bare grounds of expediency in the absence of specific proof of waste, etc." 12. In Sreemati Mathurai Debya v. Shib Dayal Singh Hazari (1909-14 CWN 252) it has been stated that, “the Courts in India have the fullest jurisdiction to appoint as well as to remove a receiver in the exercise of a sound judicial discretion. Each case has to be decided on its own merits." 13. As observed in one of the English cases, “the plaintiffs are the masters of the litigation. If in addition to that advantage, we were to anticipate their success in the present action, we should be placing the defendant in a position in which the circumstances of this case do not justify us in placing her." 14. In Manindra Chander Ray Chaudhury v. Suniti Bala Debi, AIR 1926 Calcutta 1006 dealing with appointment of receiver in a mortgage suit, a Division Bench of the Calcutta High Court held as follows : “It is settled law in this country that the Court may appoint a receiver at the instance of a mortgagee, where the action is either for foreclosure or sale if there is reason to suspect that the security is insufficient or if the interest is in arrears.......... The right of the mortgagee to ask for a receiver is not affected by the fact that a decree for sale has been passed because the suit cannot be said to have terminated till the property is sold or the mortgage money paid." 15. In R. E. Muhammad Qasim Ravuther v. R. G. Nagaraja Moopanar, AIR 1998 Madras 813 it has been held by a Division Bench of this Court as follows (at page 814): “The essential point for the Court to consider, in order to appoint a receiver pending suit, is whether the plaintiff has shown prima facie that he has a strong case and a good title to the property." 16. In K. S. Ethirajalu Chetty v. A. P. Rajagopalachari AIR 1929 Madras 138 a learned single Judge of this Court after referring to a number of authorities on the subject held as follows : “While Courts would not ordinarily deprive the mortgagor of his possession in cases where the mortgage is a simple mortgage, there may be circumstances created either by the conduct of the mortgagor or connected with the state of the property which may render it necessary in the interests of justice and for the protection of the mortgagee that a receiver should be appointed. It is impossible to lay down a hard and fast rule laying down under what circumstances the Court will appoint a receiver. It is impossible to lay down a hard and fast rule laying down under what circumstances the Court will appoint a receiver. But ordinarily there should be some loss or detriment not foreseen by the mortgagee at the time when he chose to take a simple mortgage and allow possession to remain with the mortgagor, which loss could not be compensated except by the appointment of a receiver." The learned Judge referred to the decisions of the Calcutta and Lahore High Courts in Ghanashyam Misser v. Gobinda Moni Dasi (1903-7 CWN 452) and Parab Ram v. Puran Mal Ditta Mal (AIR 1925 Lahore 590) respectively and observed as follows : “There is nothing in Order 40 Rule 1, Civil Procedure Code, which excludes mortgage suits from its operation and a receiver can be appointed in a mortgage suit, that the Code gives the widest power to the Court to appoint a receiver when it appears to the Court to be just and convenient and that the right to recover the rents and profits is not necessary to enable the plaintiff to obtain a receiver ......A receiver can be appointed if the security was insufficient for the realisation of the decree amount by the sale of the mortgaged property." 17. In Gobind Rani v. Brinda Rani, (1916-23 CLJ 440 : 34 IC 405) it was held that, “where a mortgagee applies for the appointment of a receiver, the proper question for consideration is what steps should be taken to protect the mortgagee." 18. In Rameshwar Singh v. Chuni Lal Saha (1920) ILR 47 Calcutta 418 : 56 IC 839 a Full Bench of the Calcutta High Court held as follows : “There is no foundation for the contention that a mortgagee who is not entitled to possession of the mortgaged properties is not entitled to ask for the appointment of a receiver. Whether the mortgagee is or is not entitled to possession, he may invite the Court to appoint a receiver, if the demands of justice require that the mortgagor should be deprived of possession." 19. In Hopkins v. Worcester Canal, 1868-6 Eq 437 it was held that, “a creditor whose principal has become due and who has given notice of demand is entitled to a receiver ex debito justice." 20. In In re Crompton and Co. Ltd., Player and Co. Ltd., 1914-1 Ch. In Hopkins v. Worcester Canal, 1868-6 Eq 437 it was held that, “a creditor whose principal has become due and who has given notice of demand is entitled to a receiver ex debito justice." 20. In In re Crompton and Co. Ltd., Player and Co. Ltd., 1914-1 Ch. 954 it has been observed as follows : “I think the right to the appointment of a receiver is one of the ordinary rights which accrue to a mortgagee, and especially to an equitable mortgagee who has no means of taking possession and to whom security has become realisable as one of the steps in such realisation. The fact that he is not entitled to have possession of the properties which was urged as an objection against his claim to the appointment of a receiver cannot be considered as of any importance having regard to the reasons for the appointment of a receiver. If the demands of justice require that the mortgagor should be deprived of possession, a receiver can be appointed." 21. In Venkata Kumar Mahipathi Surya Rao Bahadur Garu v. Gokuldoss Goverdhan-dass, AIR 1931 Madras 626 it has been held that (at page 627) : “a mortgagee who is not entitled to possession of the mortgaged properties is entitled to ask for the appointment of a receiver. Whether the mortgagee is or is not entitled to possession, be may invite the Court to appoint a receiver if the demand of justice require that the mortgagor should be deprived of possession." 22. In M. Paramasivan Pillai v. A.V.R.M.S.P.S. Ramasami Chettiar, AIR 1933 Madras 570 a Full Bench of this Court decided that (at page 575) : “a simple mortgagee is not disentitled to obtain the appointment of a receiver if the other circumstances are such as to justify it merely on the ground that no personal remedy subsists to proceed against the other properties of the mortgagor. The appointment of a receiver is only a mode of execution to be used with caution and sound judicial discretion." In page 575 in the judgment by Ramesam, J. who presided over the Bench, it is stated as follows : “But where a person in the position of defendant 3 in this case has not paid any amount for several years towards the mortgage debt....... that would be a fit case for the appointment of a receiver." In the judgment by Anantakrishna Ayyar it is stated as follows : “Where on account of circumstances created either by the conduct of the mortgagor or connected with the state of the property, the mortgagee is likely to sustain losses not foreseen by him at the time he took the simple mortgage the Court will have jurisdiction to appoint a receiver to take possession of the property for the benefit of the mortgagee." K. S. Ethirajulu Chetti v. Rajagopala Chari, AIR 1929 Madras 138 : “Under the present Code, the Court could appoint a receiver if it appears to it to be just and convenient to do so. No doubt, the Court could not order the removal from the possession or custody of the property any person whom any party to the suit has not a present right so to remove. But the jurisdiction of the Court to appoint a receiver under the present Code is very wide. That discretion, though very wide, should be exercised on well established principles of law and not simply according to the whim and caprice of individual Judges." At page 578 of the judgment it is stated as follows : “No doubt, a simple mortgagee is not entitled to possession. His only right is to have a sale of the mortgage properties, but when the object of the suit is to have sale of the mortgage properties but owing to inevitable delay in litigation the same could not be ordered at once, and the other circumstances such as those found in the present case exist, it does not follow that the Court could not order the appointment of a receiver in such a case if it considered it just and proper to do so. It is only regarding the property which was mortgaged to the plaintiff that the Court appoint a receiver in such a case. The circumstances that the right of the mortgagee to have personal relief against the mortgagor and his other properties has been given up or has become barred by limitation or does not exist in particular cases is no ground, by itself to held that the Court has no jurisdiction to appoint a receiver in such cases. The circumstances that the right of the mortgagee to have personal relief against the mortgagor and his other properties has been given up or has become barred by limitation or does not exist in particular cases is no ground, by itself to held that the Court has no jurisdiction to appoint a receiver in such cases. The order appointing a receiver affects only the mortgage property which is the subject of the suit and not any other property of the mortgagor. The delay in litigation could not always be imputed to the plaintiff; it is well known that defendants also in several cases contribute to the delay in the disposal of the suit. ..........In discussing the question, we must keep separate two questions : (1) Whether the Court has jurisdiction and (2) Whether the Court should in a particular case appoint a receiver in the exercise of its jurisdiction." Prima facie, if the Court could appoint a receiver over the mortgage property in some cases in a suit on a simple mortgage, it would surely indicate that the Court has jurisdiction to appoint a receiver over the mortgage property as such; and the other question whether in a particular case it would make the order or not would be one dependent entirely on the particular circumstances of that case. We should not mix the two questions especially when one of them relates to the very existence of jurisdiction in such a suit in certain circumstances.......... ..........If it is proved to the Court’s satisfaction that it is just and convenient to appoint a receiver, there is nothing in any provision of law to which our attention was drawn, nor any decision binding on us that prevents the Court from making such an order....... ........It has been held that a Court has jurisdiction, in a suit filed by an equitable mortgagee in India to recover money due on the equitable mortgage, to appoint a receiver over the mortgage property. An equitable mortgagee in India has no right to possession of the mortgage property. If the Court has jurisdiction in the case of an equitable mortgage to appoint a receiver over the mortgage property it should surely have jurisdiction to appoint such a receiver in the suit of a simple mortgagee in India. An equitable mortgagee in India has no right to possession of the mortgage property. If the Court has jurisdiction in the case of an equitable mortgage to appoint a receiver over the mortgage property it should surely have jurisdiction to appoint such a receiver in the suit of a simple mortgagee in India. The Court has complete jurisdiction over the subject matter of the suit and if the Court could sell the mortgage property, it should also have jurisdiction to appoint a receiver over the same." In the judgment of Cornish, J. Order 40, Rule 1 is expressed in general terms. It has been held that, “It empowers the Court to appoint a receiver of any property whenever it appears to the Court to be just and convenient. If the question has to be decided simple on the language of Order 40, Rule 1, I would say that if the Court was satisfied that justice and convenience required the appointment of a receiver for the benefit of a simple mortgagee the rule was sufficiently wide to sanction the appointment. There is a considerable weight of authority on the side of this interpretation." 23. In S. A. Subramaniam Chettiar v. K. G. Ethirajulu Chettiar (AIR 1938 Madras 325) it has been held as follows (at page 326): “As a Receiver can be appointed on behalf of a simple mortgagee, it is a necessary concomitant of his office that he should be able to lease the property and that if he is obstructed by the mortgagor he can seek the aid of the Court to remove him." 24. In Damodar Moreshwar Phadke v. Radhabai Damodar Ranade (AIR 1939 Bombay 54), AIR 1933 Madras 570 has been relied on (at page 577) : “The Court has jurisdiction to appoint a receiver in the case of a simple mortgage whether before or after a preliminary decree......... The Court, when it appoints a receiver, merely takes charge of the property which is the subject matter of the suit in order to protect it until it is decided who is entitled thereto." 25. The Court, when it appoints a receiver, merely takes charge of the property which is the subject matter of the suit in order to protect it until it is decided who is entitled thereto." 25. In Kishenlal v. Rathan Singh, AIR 1954 Mysore 162 in a suit on a simple mortgage the mortgagee plaintiff applied for appointment of a receiver nearly two years after the institution of the suit when he came to know that a prior mortgagee had obtained a decree and was proceeding against the mortgaged property. The prior encumbrance was suppressed by the mortgagor from the knowledge of the mortgagee. No interest was paid on the mortgage since the date of its execution. The property was not fetching a fair amount due to improper management of the mortgagor and the security had been rendered insufficient due to the prior mortgage. It has been held that, “In the circumstances it was thoroughly just, reasonable and convenient to appoint a Receiver in the suit. The circumstance that the plaintiff had made an application for the appointment of a Receiver some time after the suit was filed and not immediately but after the prior mortgagee had obtained decree and started to proceed against the mortgaged property was indicative of bona fides and an anxiety to safeguard his own interest rather than otherwise." 26. In Rajalakshmi Ammal v. Muthusami Gounder, AIR 1958 Madras 411 a Division Bench of this Court has held as follows (at page 412) : “Wide powers have been given to Courts under Order 40, Rule 1 and in very extraordinary cases the Court will have jurisdiction to appoint a receiver even in a simple money suit, before decree, and not merely in execution, under S. 51(2). The Court will, of course, even then consider whether it is just and convenient to appoint a receiver. Mere convenience will not do. It must also be just. But such extraordinary jurisdiction will not show that a Court trying a money suit has ordinary jurisdiction to appoint a receiver while the suit is pending, and before a decree is got, especially when other remedies like attachment before judgment, are open to the plaintiff and are in fact the normal remedies he is expected to pursue. It is something like the extraordinary original jurisdiction of the High Court." 27. It is something like the extraordinary original jurisdiction of the High Court." 27. In Muniammal v. Pagadala Guru-vayya Naidu AIR 1960 Madras 195 It has been held that (at page 196), “Where a proper cause is shown and the relevant circumstances justify, a receiver can be appointed even with regard to properties covered by a simple mortgage, at the instance of the mortgagee." AIR 1933 Madras 570 (FB), followed. 28. In Arun Agencies, Mattancherry v. M/s. St. Antony’s Oil Mill (AIR 1989 Kerala 312) it has been held as follows (at page 313): “The power granted under O. 40, R. 1, CPC. Is wide enough to enable the High Court in appropriate cases to appoint a receiver. After all the main devoir of the Court is to render justice to the suitors. The procedure prescribed by the Code of Civil Procedure is only for the purpose of enabling the Court to reach the ultimate and, doing justice to suitors in the cause they submit before Court. With this background if we understand the scope and content of O. 40, R. 1 in the circumstances where it is necessary to render just and meaningful relief the Court can appoint a receiver even in a money suit where there is no suit property." AIR 1958 Madras 411 was relied on. In a recent decision Kalpana Kothari v. Sudha Yadav ( 2002 (1) SCC 203 : ( AIR 2002 SC 404 ), the Supreme Court has observed that interest of both parties must be balanced when deciding whether it is desirable to appoint a receiver. 29. From the foregoing, it would be clear that under Order 40, Rule 1 and Section 94 of the Code of Civil Procedure, the Court has ample powers when it is found just and convenient to appoint a receiver. The Full Bench in Paramasivan Pillai v. Ramasami Chettiar, (AIR 1933 Madras 570) observed that it is settled position of law that a receiver can be appointed in cases of equitable mortgages. 30. What we have therefore to see in the present case whether it is just and convenient. In finding out whether it would be just and convenient, it is open to the Court to take into consideration the conduct of the parties and in particular, the conduct of the mortgagor. 30. What we have therefore to see in the present case whether it is just and convenient. In finding out whether it would be just and convenient, it is open to the Court to take into consideration the conduct of the parties and in particular, the conduct of the mortgagor. No doubt, as pointed out in several decisions referred to above, the Court would be reluctant to disturb the possession of a party of property in respect of which, he has a right to be in possession. But, then if his conduct warrants the appointment of a receiver, the Court can very well make such an appointment. 31. In the present case, let us have a look at the conduct of the parties. In the year 1989, there was an agreement for sale entered into between parties. But, even on his own showing, the first defendant had meant it to be only a sort of security for repayment of the amounts borrowed by him from the plaintiff. Subsequent thereto, the first defendant had been borrowing amounts and executing promissory notes and letters confirming the borrowings. It is also on record that the defendants have deposited the title deeds with the plaintiff as collateral security. There are very many documents to show that the defendants had meant to create an equitable mortgage by deposit of title deeds. 32. The learned counsel for the defendants placed considerable reliance on a notice issued in the year 1995 on behalf of the plaintiff calling upon the defendants to execute a sale deed in respect of the property. Indeed, as pointed out by the learned counsel Mr. Chidambaram, the Court cannot rely on the weakness of defence, but must go only by the pleadings in the case. May be in 1995, the plaintiff had taken a stand that it was an agreement for sale and that he was entitled to specific performance. But, in my view, that by itself cannot clinch the issue. It is not open to the defendants to say that the stand of the defendants cannot be taken into consideration. May be in 1995, the plaintiff had taken a stand that it was an agreement for sale and that he was entitled to specific performance. But, in my view, that by itself cannot clinch the issue. It is not open to the defendants to say that the stand of the defendants cannot be taken into consideration. In fact, the trend of decisions is to the effect that the principle that a party should stand or fall on the strength of its own case will not apply to cases where the party does not seek relief on the basis of the plea of the other party, but only on the facts established on record though they are at variance with the pleading.-Subramania Mudaliar v. Ammapet Co-Operative weavers Production and Sales Society 1960 (2) MLJ 477 , Madhavan v. Kannammal 1990 (2) LW 274 and Rajeswari v. Dhanammal ( 1994 (1) MLJ 401 . 33. The documents in the present case show that the defendants had deposited the title deeds relating to the property as a collateral security for due repayment of the amounts advanced by the plaintiff. There is a vital admission in the reply notice, sent on behalf of the defendants on 20-10-1995. It is also on record that the defendants had applied to the Egmore Benefit Society for facility of a loan and in the application, copy of which has been marked to the plaintiff, it is stated that the plaintiff was pressing for repayment and the defendants indicated the plaintiff’s name in the encumbrance column and stated that a mortgage was created on 17-10-1989 itself and to discharge subsequent loans availed to an extent of Rs. 13 lakhs, the defendants wanted a loan from the said society for Rs. 30 lakhs. The loan was also required to complete the construction work of the Kalyana Mandapam. This is dated 23-6-1993. The Egmore Benefit Society addressed a letter to the plaintiff stating that the first defendant had applied to the society for a loan to redeem his property at No. 17 North Boag Road, T. Nagar, Madras-17 under mortgage to the plaintiff. The loan was also required to complete the construction work of the Kalyana Mandapam. This is dated 23-6-1993. The Egmore Benefit Society addressed a letter to the plaintiff stating that the first defendant had applied to the society for a loan to redeem his property at No. 17 North Boag Road, T. Nagar, Madras-17 under mortgage to the plaintiff. The communication requested the plaintiff to forward to the society all the papers connected with the said property mentioning the amount due to the plaintiff by the first defendant upto 30-9-1993 as well as the date of the mortgage deed, or pronotes executed in favour of the plaintiff and the amounts for which they were executed. In the loan application, in the questionnaire, item No. 6(b) to the query “If the property encumbered or mortgaged to anyone?". If so, to whom and what is the amount now due? Or does it stand as surety for anybody? If so, give particulars of such mortgagee?, the name of the plaintiff is given and the amount due as on the date of application is given as Rs. 13 lakhs and the date of the mortgage is given as 17-10-1989. This Court cannot ignore this vital admission by the first defendant in his own application to Egmore Benefit Society. It cannot pin the plaintiff to the notice in the year 1995. The records clearly show that the defendants, the first defendant in particular had admitted to the creation of an equitable mortgage in favour of the plaintiff as early as 1989 and that in 1993, there was a sum of Rs. 13 lakhs due and payable to the plaintiff. This apparently takes into consideration the various amounts received by the defendant from the plaintiff subsequent to 1989. In a way, the defendants have admitted to the subsequent borrowing on the security of the property from the plaintiff. In fact, in one of the letters by the defendants, it had been admitted that the plaintiff would be entitled to the payment of the principal with interest at 24%. 34. While the hearing was in progress, I called upon the learned counsel for the defendants, to work out the interest on the principal of Rs. 2,50,000/- in 1989 and asked the defendants to produce a pay order for Rs. 10 lakhs on the adjourned date, the learned counsel condescended to produce some fixed deposits receipts. 34. While the hearing was in progress, I called upon the learned counsel for the defendants, to work out the interest on the principal of Rs. 2,50,000/- in 1989 and asked the defendants to produce a pay order for Rs. 10 lakhs on the adjourned date, the learned counsel condescended to produce some fixed deposits receipts. There was a direction once against to produce the pay order favouring the plaintiff for Rs. 10 lakhs. Suddenly, the defendants became wise and an application for dismissing the suit as barred by limitation came to be filed. 35. The attitude of the defendants, to say the least is abhorrent. In 1993, the liability of the defendants had swelled to Rs. 13 lakhs, even according to them. In the year 2001, after completing the construction and getting enormous returns from the property wherein a Kalyana Mandampam has been put up and being let out, the claim of the plaintiff is sought to be defeated by relying on a stand alleged to have been taken in the year 1993. Admittedly, the defendants have not paid to the plaintiff ever since 1989 though they are realising huge income from the property. The conduct of the defendants impels me to invoke the provisions of Order 40, Rule 1 and Section 94 of the Code of Civil Procedure to appoint an Advocate-Receiver to take charge of the property. The situation here is rather extraordinary and by adopting this course not only will the plaintiff be benefited, in the ultimate event of his success in the suit, the defendants will also be benefited by the property being preserved and only the income being collected and kept in deposit. A case has been made out for the appointment of a receiver. Even if we take the original loan at Rs. 2 lakhs in 1989 at 24% interest, the amount due as on date would far exceed Rs. 20 lakhs. The principal would double in five years and it is very unfortunate that the plaintiff has been deprived of the benefit of the amounts advanced by him. 36. The proper course in the circumstances, in my view is to direct the defendants to deposit a decent amount in case they want to ward off the appointment of an Advocate-Receiver within a stated time, failing which to appoint a Receiver to takeover the property. 37. 36. The proper course in the circumstances, in my view is to direct the defendants to deposit a decent amount in case they want to ward off the appointment of an Advocate-Receiver within a stated time, failing which to appoint a Receiver to takeover the property. 37. Consequently, I direct the defendants to deposit into this Court a sum of Rs. 20 lakhs within six weeks from today, failing which an Advocate-Receiver will be appointed. Call after six weeks. 38. So far as the application for dismissing the suit as barred by limitation is concerned, I satisfied that on the defendants own showing the suit is not barred by limitation. However, I direct the application to be posted along with the suit.