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2014 DIGILAW 967 (MAD)

M. R. Sheik Abdulla Alias Sheik Abdul Rahim v. P. Madurai

2014-04-23

M.JAICHANDREN, M.VENUGOPAL

body2014
Judgment : M. Venugopal, J. 1. The Appellants/Applicants/Plaintiffs have preferred the instant Original Side Appeal as against the order, dated 25.11.2011, in O.A.No.941 of 2010 in C.S.No.763 of 2010, passed by the Learned Single Judge. 2. The Learned Single Judge, while passing the order, on 25.11.2011, in O.A.No.941 of 2010 in C.S.No.763 of 2010 [filed by the Appellants/Applicants/Plaintiffs praying for appointment of an Advocate Receiver to take possession of the suit property and administer the same by receiving the rents from the respective tenants etc.], in paragraph Nos.6 to 9, has observed the following: "6. The property was thereafter sold by defendant No.10 to the plaintiff, who has now filed a suit for possession and damages. 7. The suit is contested by defendant Nos.1, 2 and 5, by challenging the sale by auctioneer to be not binding on their ownership rights. 8. Be that as it may, it is yet to be determined, as to what right the plaintiffs visa-a-vis defendants has. The plaintiffs have also claimed damages for use and occupation of the premises, which is yet to be determined after trial. The validity of auction in favour of defendant No.10 is also to be adjudicated in a suit filed by non applicant. 9. An Advocate receiver cannot be appointed to disturb the settled possession of the non applicant. By way of interim direction, this Court can maintain “status quo” but disputed questions are not to be decided in summary manner. The plaintiffs can always prove damages for use and occupation and recover it from defendant Nos.1, 2 and 5, in the event of success in the suit. The Advocate Receiver cannot be appointed on mere asking to disturb undisputed possession.” and resultantly, dismissed the Application without costs. 3. The Learned Counsel for the Appellants/Plaintiffs submits that an order of the Learned Single Judge, in dismissing the O.A.No.941 of 2010 in C.S.No.763 of 2010, seeking for Appointment of Receiver is contrary to law, weight of evidence and probabilities of the case. 4. According to the Learned Counsel for the Appellants/ Plaintiffs that the Learned Single Judge ought to have taken into consideration that the Appellants/Plaintiffs have prima facie case as purchasers from the 'Auction Purchasers' under Section 69 of the Transfer of Property Act, 1882 and further, the sale through Auctioneer by mortgage, which under normal circumstance, is an unimpeachable one. 5. According to the Learned Counsel for the Appellants/ Plaintiffs that the Learned Single Judge ought to have taken into consideration that the Appellants/Plaintiffs have prima facie case as purchasers from the 'Auction Purchasers' under Section 69 of the Transfer of Property Act, 1882 and further, the sale through Auctioneer by mortgage, which under normal circumstance, is an unimpeachable one. 5. The Learned Counsel for the Appellants/Plaintiffs urges before this Court that the Learned Single Judge failed to note that the claim by the daughters of late Ponnusamy is only in respect of a fractional share. 6. That apart, the Learned Counsel for the Appellants/ Plaintiffs contends that the Learned Single Judge ought to have taken into account an important fact that the tenants are in occupation of substantial portion of the suit property measuring a total extent of 3165 sq. ft. consisting of 3 portions. 7. Added further, it is the submission of the Learned Counsel for the Appellants/Plaintiffs that the Learned Single Judge should have taken into consideration that more than Rs.50,000/-is being received as rent per month and there is absolutely no security in the event of a Decree passed in favour of the Appellants/Plaintiffs. 8. The Learned Counsel for the Appellants/Plaintiffs projects an argument that the Appointment of Receiver need not necessarily and physically dispossess or otherwise disturb the occupation of tenant, but at the same time, it can also ensure to secure the claim of the Appellants/Plaintiffs for Damages. 9. The Learned Counsel for the Appellants/Plaintiffs takes a plea that the Learned Single Judge should have held that the Appellants/ Plaintiffs, being purchasers from the Auction Purchaser and the Auction having been held through an 'Auctioneer' and not directly by the Mortgagee, are entitled to legal possession which is sought to be delayed by the Heirs of the Mortgagor. 10. Lastly, it is the submission of the Learned Counsel for the Appellants that though there is no 'Landlord and Tenant' relationship between the Appellants/Plaintiffs and the 'Heirs of the Mortgagor', the third parties tenants should have been directed by the Learned Single Judge to pay the rent to a Receiver so that monthly rents are not received by the 'Heirs of the Mortgagor' as they have not established any security for the same in the event of decree being passed in favour of the Appellants/Plaintiffs. 11. 11. In the counter filed by the Respondents 1 and 2/Defendants 1 and 2 in O.A.No.941 of 2010 in C.S.No.763 of 2010, it is stated, inter alia, that their late father Ponnusamy Naicker, purchased the house, ground and premises bearing Door No.48, Ellaiamman Koil Street, Kottur, Chennai 600 085, comprised in Survey No.49, T.S.No.83, Block No.17 of Kottur Village, measuring a total extent of 5221 sq. ft., through two registered Sale Deeds dated 24.6.1963 and 17.5.1965 and later, their father sold a portion of the property measuring an extent of 2056 sq.ft. and retained the remaining extent of 3165 sq.ft. and was in peaceful possession and enjoyment of the same till his lifetime. Furthermore, their father Ponnusamy died intestate on 28.09.1998 leaving behind his wife Nagabushanam, his daughters Gangammal and Amsaveni (Respondents 3 and 4) and 3 sons viz., 1.Seeyalam (died) 2.Madurai 3.Marimuthu, to succeed his estate. The first son of Ponnusamy, viz., Seeyalam expired on 01.01.1999 leaving behind his wife S.Shanthi and four daughters viz., the Respondents 5 to 9. 12. In the counter, the plea taken by the Respondents 1 and 2/ Defendants 1 and 2 is that subsequent to the demise of their father Ponnusamy, they made payments towards the mortgage debt, but the 11th Respondent/Fund, without giving proper credit to the amounts paid, advertised the property for sale and the 1st Respondent/1st Defendant filed suit to stop the auction and sought for submission of proper accounts of the amounts paid. However, the 11th Respondent/Fund with the sole intent to sell their property for a song proceeded illegally under the guise of auctioning the property and created records as if one Sekar bid the property for highest price in auction and on his authorisation, the sale deed was executed in favour of the 10th Respondent which is highly illegal. Also that, the property was auctioned on 22.07.2006 for a sum of Rs.8,85,000/-and in fact, on the date of the auction, the property had a market value of Rs.85,00,000/-. But the 10th Respondent adopted illegal means and knocked the property for a song, by purchasing the property which is worth Rs.1,20,00,000/-. 13. The 3rd Respondent/3rd Defendant, in her counter, has, among other things, stated that in the suit schedule property, the Respondents 1 to 9 are having equal right and the same devolved on the property immediately on the demise of Ponnusamy Naicker and his son Seeyalan respectively. 13. The 3rd Respondent/3rd Defendant, in her counter, has, among other things, stated that in the suit schedule property, the Respondents 1 to 9 are having equal right and the same devolved on the property immediately on the demise of Ponnusamy Naicker and his son Seeyalan respectively. Moreover, the fraudulent sale deeds brought forth by the 11th Respondent, in favour of 10th Respondent by depriving the legitimate share of the Respondents 3 to 9 and without obtaining their signatures etc. and the same are non est, in the eye of law. 14. The prime stand taken by the 3rd Respondent/3rd Defendant is that when the 11th Respondent/Fund having known that the mortgagor Ponnusamy Naicker died and he has two daughters and three sons, the purported sale by the 11th Respondent in collusion with the 10th Respondent, without notice to them, is purely a fraudulent transfer and the same is liable to be set aside. Under these circumstances, the Application in O.A.No.941 of 2010 praying for appointment of Advocate Receiver to take possession of the suit property and administer the same is also per se not maintainable. 15. A perusal of the contents of counter filed by the 5th Respondent (for herself and on behalf of Respondents 6 to 9) by this Court unerringly point out that they have filed a suit in O.S.No.6843 of 2007 against the 10th & 11th Respondents on the file of the Learned XII Assistant Judge, City Civil Court, Chennai praying for declaration that the sale deed under which the 11th Respondent/Fund sold the property in favour of the 10th Respondent, is null and void and not binding on them in respect of 690 sq. ft. allotted to them under the deed of release dated 03.09.2003 registered as Doc.No.1863/2003 at SRO, Adyar and the same is pending. 16. The Appellants/Applicants/Plaintiffs have purchased the suit property from the 10th Respondent through sale deed dated 28.11.2007 registered as Document No.2161/2007 at SRO, Adyar and the sale is hit by the principles of 'Lis pendens'. 17. ft. allotted to them under the deed of release dated 03.09.2003 registered as Doc.No.1863/2003 at SRO, Adyar and the same is pending. 16. The Appellants/Applicants/Plaintiffs have purchased the suit property from the 10th Respondent through sale deed dated 28.11.2007 registered as Document No.2161/2007 at SRO, Adyar and the sale is hit by the principles of 'Lis pendens'. 17. The Appellants/Applicants/Plaintiffs, in their Common Reply to O.A.No.941 of 2010 have categorically stated that they are the 'Bona fide purchasers for value' and that the Respondents 1 to 9 are squatting on the property and receiving the rents from the tenants and further, the Respondents 1 to 9 cannot questioned the validity of the sale deed in favour of the 10th defendant which is true, valid and binding. In fact, it is understood that in the mortgage deed signatures of Ponnusamy Naicker's sons were taken by way of abundant caution as recited in the document and not in recognition of any right in their favour. 18. In effect, the plea of the Appellants/Applicants/Plaintiffs that the Respondents cannot be allowed to be in possession and received the rental amount from the tenants and if the Appellants finally succeed in the suit, they will not be in a position to recover any amount from them etc. 19. The Learned Counsel for the Appellants/Applicants/ Plaintiffs brings it to the notice of this Court that 12 portions are occupied by the tenants and that the dispute raised by the parties in two suits only relate to a portion of the suit property (viz., share) and that the affidavits of Respondents 1 and 2 dated 31.07.2013, affidavits of Respondents 3 and 4 dated 19.08.2013 and affidavits of 7th Respondent (filed for herself and on behalf of Respondents 5, 6, 8 & 9) dated 29.06.2013 filed before this Court do contain incomplete particulars. 20. The Learned Counsel for the Appellants seeks in aid of Section 69-A of the Transfer of Property Act, 1882 which speaks of 'Appointment of Receiver' submits that in O.A.No.941 of 2010 atleast an Advocate Commissioner may be appointed to receive the rents from the respective tenants and other income from the properties pending disposal of the main suit. 21. 20. The Learned Counsel for the Appellants seeks in aid of Section 69-A of the Transfer of Property Act, 1882 which speaks of 'Appointment of Receiver' submits that in O.A.No.941 of 2010 atleast an Advocate Commissioner may be appointed to receive the rents from the respective tenants and other income from the properties pending disposal of the main suit. 21. It is to be noted that the Appellants/Plaintiffs filed a suit in C.S.No.763 of 2010 on the file of this Court against the Respondents 1 to 11/Defendants 1 to 11 especially seeking a relief for (i) passing of a Decree against the Defendants 1 to 9 that they should quit and deliver vacant possession of the suit property to them morefully described in the schedule; (ii) directing the Defendants 1 to 9 to pay the Appellants/Plaintiffs a sum of Rs.15,50,000/-being the past damages for use and occupation for the period commencing from 28.11.2007 to 27.06.2010 in respect of the suit property and for costs. 22. It transpires that the 10th Defendant purchased the property in auction and after purchase, instituted rent control proceedings for eviction of Defendants 1, 2 and 5 by treating them as tenants. In the said proceedings, the relationship of 'Landlord and Tenant' was denied and ultimately, the Rent Control proceedings went against the 10th Respondent resulting in dismissal. The 10th Defendant, in view of the finding arrived at in one of the petitions, withdrew the other petitions. Subsequently, the 10th Defendant sold the property to the Appellants/Plaintiffs, who filed C.S.No.763 of 2010 on the file of this Court for possession and damages. Admittedly, whether the Plaintiffs are entitled to obtain possession from the Defendants 1 to 9 is yet to be decided in the pending trial of the main suit. 23. It is to be borne in mind that unless there be fraud the only remedy of the Mortgagor is by way of damages against the Mortgage who brings the property improperly to sale. If there is fraud, then, there may be a 'Cause of Action' against the Purchaser to have the sale declared void or to have it set aside on the ground of fraud. If there is fraud, then, there may be a 'Cause of Action' against the Purchaser to have the sale declared void or to have it set aside on the ground of fraud. If the Mortgagee exercises its/his/her power of sale bona fide for the purpose of realising the debt in question and without the collusion with the Purchaser, a Court of Law will not interfere even though the sale may be very disadvantageous, unless the price is so low as in itself to be evidence of fraud. 24. Continuing further, the Mortgagee exercising power of sale is under obligation to sell it under such conditions as reasonably an owner will sell it. Mortgagee should not look to his interest only nor he should put the property recklessly to sale. Furthermore, under the Transfer of Property Act, 1882, while exercising the power of sale, the Mortgagee does not act as a Trustee for the Mortgagor but becomes a Trustee only in regard to the surplus that may remain after discharge of the claim. 25. It is to be noted that under Order 40 Rule 1 of the Civil Procedure Code, the Court of Law may appoint a 'Receiver' if it appears just and convenient. Indeed, a Court of Law has power to appoint a Receiver, if the property is in jeopardy, or insufficient to pay the encumbrances, or if the interest is in arrears. A Court of Law has a discretionary power to appoint 'Receiver' whenever it appears to be just and convenient and this power may be exercised where the Plaintiff is seeking to recover land by a legal title. 26. It is a well settled principle that a Receiver appointed under Order 40 Rule 1 of Civil Procedure Code is an officer of Court who holds the property for the benefit of all parties and certainly, he is not the agent of the Mortgagor. His appointment is prima facie for the benefit of the Mortgagee. The power conferred under Section 69-A of the Transfer of Property Act is independent of the power of the sale recognised under Section 69; and the latter may be exercised even though a Receiver has been appointed under this Section. A Receiver appointed may also be removed by a Court of Law for just cause. 27. The power conferred under Section 69-A of the Transfer of Property Act is independent of the power of the sale recognised under Section 69; and the latter may be exercised even though a Receiver has been appointed under this Section. A Receiver appointed may also be removed by a Court of Law for just cause. 27. In this connection, it may not be out of place for this Court to make a significant mention that the exercise of jurisdiction to appoint a Receiver or not is not a matter 'Ex Debito Justitice' but one which is purely within the discretion of a Court of Law. A Court of Law, while exercising its discretion, should proceed with caution and be governed by a holistic view of entire facts and circumstances of the case. 28. When there is a bona fide defence taken on behalf of the Defendants and also when the title of property prima facie is disputed and the proposition of law is arguable and requires detail rumination then, it is not prudent/advisable to appoint an Advocate Receiver, in the considered opinion of this Court. Just because, there is difficulty in enforcing the legal remedies to compel the payment of rent due is not a sufficient reason for an appointment of an Receiver. 29. A Receiver is appointed for preservation of property, pending litigation by a Court which has to decide the rights of litigant parties. The words 'Just and convenient' seen in Order 40 Rule of the Civil Procedure Code cannot be construed to mean that a Court of Law has to appoint a Receiver simply because it thinks convenient. The order to appoint a Receiver or not is a discretionary power of a Court. But the said discretion is to be based on the sound judicial principles. 30. As far as the present case is concerned, this Court is of the considered view that the rights of the Appellants/Applicants/ Plaintiffs vis-a-vis the Defendants as on date have not been finally adjudicated by the concerned Courts especially the rights of parties have not yet been crystallised. To put it succinctly, the Appellants/Plaintiffs claim for damages, for use and occupation and recovery in C.S.No.763 of 2010 will have to be determined conclusively after trial. That apart, the validity of auction in favour of the 10th Defendant is also to be determined in a suit filed by the concerned party/parties. To put it succinctly, the Appellants/Plaintiffs claim for damages, for use and occupation and recovery in C.S.No.763 of 2010 will have to be determined conclusively after trial. That apart, the validity of auction in favour of the 10th Defendant is also to be determined in a suit filed by the concerned party/parties. In short, when the disputed factual and legal issues raised by the parties are to be decided in the pending, regular full fledged suit trial proceedings, before that, either the plea for appointment of Receiver to take possession of the suit property and administer the same by receiving the rents from the respective tenants etc. or the plea for appointment of an Advocate Commissioner cannot be acceded to in a summary procedure, in the considered opinion of this Court. Also, in the present case, there is no imminent danger to the subject matter of property in issue. However, in the instant case on hand, the Appellants/Applicants/ Plaintiffs have not made out a strong prima facie case to the subjective satisfaction of this Court either for appointment of an Advocate Receiver or an Advocate Commissioner based on the facts and circumstances of the present case on hand. Viewed in that perspective, the Original Side Appeal fails. 31. In the result, the Original Side Appeal is dismissed. No costs. The order passed by the Learned Single Judge, dated 25.11.2011, in O.A.No.941 of 2010 in C.s.No.763 of 2010, is confirmed by this Court, for the reasons assigned in this Appeal.