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Judgment Summary — Tripathi, J. (Appeal from order dated 6-9-1960)

Factual and Procedural Background

Smt. Sudama Devi (plaintiff) instituted a suit in forma pauperis against the defendant-appellant claiming possession of properties said to have been left by her deceased brother Ram Samujh. She alleged she was the only daughter and sole heir and sought possession and pauper status. The plaint listed immovable and movable properties (a pukka house valued at Rs. 6,000 and moveables/ornaments valued at about Rs. 22,000).

On the same day she applied under Or. XXXIX, R. 7 read with Or. XL, R. 1, C.P.C. for a Commissioner to inventory and preserve the listed articles on the ground that the opposite party might remove or convert them. A Commissioner (a lawyer) was appointed but he could not prepare a list. The defendant-appellant was found to be in possession; his counsel before the appellate court conceded that the list in the plaint was substantially correct and the items were in the defendant's possession.

While pauper proceedings were pending, the plaintiff filed a separate application (6-8-1960) for appointment of a Receiver alleging apprehension that the defendant would remove or convert the articles. An affidavit by the plaintiff's next friend reiterated the same apprehension. The defendant objected, admitting he was in possession and denying the plaintiff's relationship and title, asserting that the properties belonged to a joint family and that he was sole surviving coparcener. In his objection before the trial court he did not specifically counter the allegation of risk of removal or conversion.

The learned Civil Judge of Faizabad, by order dated 6-9-1960 in miscellaneous case No. 25 of 1960, appointed the defendant himself as Receiver of the property in suit and directed him to furnish security of Rs. 15,000 for accounting and to make good any loss in case of a decree against him. The defendant appealed from that order; Tripathi, J. heard the appeal and delivered the opinion summarized here.

Legal Issues Presented

  1. Whether the Civil Judge had jurisdiction to appoint a Receiver under Or. XL, R. 1 of the Code of Civil Procedure while proceedings for permission to sue in forma pauperis were still pending and before the suit was formally registered.
  2. Whether, on the merits, the appointment of a Receiver (and the appointment of the defendant himself as Receiver) was appropriate given that the defendant was in possession and there was no specific allegation of misappropriation or malversation by him.
  3. Whether the requirement that the defendant furnish security of Rs. 15,000 for accounting and making good any loss was excessive or improper in the circumstances of the case.

Arguments of the Parties

Plaintiff's Arguments

  • The plaintiff sought to be declared a pauper and to sue in forma pauperis; she contended that the defendant, upon learning of her pauper application, would remove, conceal or convert the listed articles, causing irreparable loss so that even if a decree were later obtained she would not recover the properties.
  • She therefore applied for a Commissioner to inventory and preserve the articles and, subsequently, for a Receiver to be appointed to prevent removal or conversion during pendency of proceedings.

Defendant-Appellant's Arguments

  • The Civil Judge lacked jurisdiction to appoint a Receiver because, on the date of the order, the plaintiff had not yet been declared a pauper, her application for pauper status was still pending, and the suit had not been formally registered.
  • On merits, this was not a fit case for appointing a Receiver: the defendant was already in possession of the properties and there were no allegations of misappropriation or malversation by him.
  • The security of Rs. 15,000 ordered by the trial court to be furnished by the defendant was excessive and unjustified.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bai Sakri v. Bai Dhani, A.I.R. 1948 Bom. 139 The omission (in Or. XL, R. 1) of the words "the subject of a suit or attachment" makes the rule general and permits appointment of a receiver in proceedings before the court other than a suit (including an application to sue as a pauper), provided there is a proceeding before the court. The Court expressed respectful agreement with this decision and relied on it to hold that a Receiver could be appointed pending a decision on an application to sue as a pauper under Or. XL, R. 1.
Mohammad Ali Khan v. Ahmad Ali Khan, I.L.R. 1945 All. 818 (Full Bench) Jurisdiction to protect property pending ascertainment of rights is inherent in any court that has cognizance of a dispute involving administration of assets; such a court may and should appoint a receiver in proceedings other than suits to safeguard property. The Court cited this Full Bench decision and agreed that a receiver can be appointed in proceedings other than suits; it supported the proposition that courts have jurisdiction to protect property pending the resolution of rights.

Court's Reasoning and Analysis

The court's analysis proceeded in distinct steps, each grounded in statutory text, legislative amendment history, and precedent cited in the opinion:

  1. Textual interpretation of Or. XL, R. 1, C.P.C.: The court examined the rule which authorizes the court, "where it appears to the court to be just and convenient," to appoint a Receiver, remove persons from possession, or commit custody to a Receiver. The court found nothing in the language of the rule limiting its application only to already-registered suits.
  2. Legislative history and comparison with the earlier Sec. 503 of the old Code: The opinion noted that Sec. 503 previously limited receiver appointments to property "the subject of a suit or attachment." The legislature deleted those limiting words in the amendment; the court treated that deletion as significant, indicating an intent to remove the previous restraint.
  3. Reliance on precedent: The court discussed and expressly agreed with the Bombay High Court decision in Bai Sakri v. Bai Dhani, which held that the omission rendered Or. XL, R. 1 general and permitted appointment of a Receiver in proceedings other than suits (including pauper applications). The Full Bench decision in Mohammad Ali Khan v. Ahmad Ali Khan was also cited for the proposition that courts have inherent jurisdiction and duty to protect property pending ascertainment of rights and that a Receiver can be appointed in proceedings other than suits.
  4. Characterization of pauper application as a proceeding akin to plaint: The court observed that an application for permission to sue as a pauper must contain particulars akin to a plaint (Or. XXXIII, R. 2) and is signed and verified like pleadings; once permission is granted the application is deemed a plaint (Or. XXXIII, R. 8). The court noted that the defendant's counsel informed it that the plaintiff had subsequently been allowed to sue as a pauper, meaning the application could be treated as the plaint of a suit pending on the date of the receiver order.
  5. Assessment of merits for appointment of Receiver: The court considered facts: the total value of properties (about Rs. 28,000), substantial moveable portion (about Rs. 22,000), the plaintiff being a minor living elsewhere with a next friend, the defendant being in possession, and plaintiff's allegation (supported by affidavit) of a real apprehension of removal or conversion. Given the movable-heavy nature of the subject-matter and the risk of dissipation, the court found the apprehension not wholly without foundation and held that it was just and convenient to appoint a Receiver to preserve status quo.
  6. Decision on the identity of Receiver and conditions imposed: The trial court had appointed the defendant himself as Receiver without dispossessing him. The appellate court noted that the defendant had not been deprived of possession and that during pendency of the appeal he gave an undertaking not to alienate or damage the immovable property and the moveables in his possession and furnished a list to the trial court. The appellate court considered that no onerous condition had been imposed.
  7. Assessment of security amount: Given the valuation of the properties and the plaintiff's claim to the whole, the appellate court held that the security of Rs. 15,000 ordered by the trial court for accounting and to make good any loss was not excessive. The court clarified that security could be furnished in cash or by other property to the satisfaction of the trial court within six weeks from the date of the appellate order.
  8. Practical directions: The court confirmed the trial court's order subject to the security requirement and provided that if security was not furnished within the time allowed, the trial court could take steps it deemed proper to preserve the properties. The court made no order as to costs because no one appeared for the respondent and directed the record to be sent down expeditiously.

Holding and Implications

APPEAL DISMISSED; the order of the learned Civil Judge dated 6-9-1960 appointing the defendant as Receiver is confirmed.

Direct consequences for the parties (as stated in the opinion):

  • The defendant-appellant must furnish security of Rs. 15,000 for accounting and for making good any loss to the estate during his receivership. The security may be furnished in cash or by other property acceptable to the trial court within six weeks of the appellate order.
  • If no security is furnished within the prescribed period, it will be open to the learned Civil Judge to take steps he deems proper in consonance with his earlier order to preserve the properties during the pendency of the suit.
  • No order as to costs was made because no one appeared for the respondent.

Broader legal implication: The court expressly followed existing precedent and statutory interpretation to permit appointment of a Receiver in proceedings such as an application to sue as a pauper; the opinion does not announce any new legal principle beyond its application of statute and precedent to the facts before it.

    Ram Khelawan v. Sudama Devi

    Tripathi, J.:— This first appeal from order is directed against an order passed by the learned Civil Judge of Faizabad on 6-9-1960 in miscellaneous case No. 25 of 1960 appointing the defendant-appellant Receiver of the property in suit and directing him to furnish security for Rs. 15,000/- for accounting and for making good any loss to the estate in case a decree was passed against him.

    2. One Smt. Sudama Devi filed a suit in forma pauperis against the defendant-appellant in which she, claimed a decree for possession over the properties detailed in the plaint, inter alia, on the ground that she was the only daughter and sole heir of Ram Samujh, the deceased brother of defendant-appellant, that all the properties, which were subject matter of the suit, were properties left by deceased Ram Samujh, that the defendant had no right to possess them and she should be put in possession of the same. She also prayed for being declared a pauper and being allowed to sue in formal pauperis. On the same date she also made an application under Or. XXXIX, R. 7 read with Or. XL, R. 1, (C.P.C) in which she alleged that the opp. party, on hearing about the application to sue as a pauper, will try to remove the articles so that the applicant may get nothing, and will, thus put the applicant to irreparable loss by their removal, concealment or conversion and, therefore, she prayed that the court may be pleased to appoint a Commissioner to inspect and prepare a list of the articles mentioned in the plaint and to preserve the same, till the disposal of the application or the suit. In this application she gave a list of the properties which consisted of a pukka house valued at Rs. 6,000/- and a large number of ornaments and other moveables valued at about Rs. 22,000.

    3. It appears from the record, that, on this application, the court was pleased to appoint one Sri Ram Samujh Pandey, a lawyer, to prepare an inventory of the properties which were the subject-matter of the suit, but did not pass any order regarding her other prayer. It also appears from the record that the Commissioner could not prepare a list of the properties. However, the learned counsel for the defendant-appellant conceded before us that the list of the properties given in the plaint were substantially correct and were found in possession of the defendant.

    4. During the pendency of the proceedings for declaring the plaintiff-respondent a pauper, another application was presented by her on 6-8-1960 in which she alleged that the opposite party was anxious to defeat the claim of the applicant by removing the articles found inside the house and if the articles are removed she will never get back the properties even if a decree is passed in her favour. Consequently she prayed that a receiver be appointed of the properties in suit which had been found with the defendant. In support of her application, an affidavit was also filed on the same day by her next friend Jokhan Ram in which similar allegations were made that in case Receiver is not appointed there is great apprehension of the properties being removed or converted beyond recognition.

    5. The defendant objected to the appointment of a Receiver before the trial court on the ground that he was in possession of the properties and as such the appointment of a Receiver was uncalled for. He admitted that Ram Samujh deceased was a brother of the defendant but he denied that the plaintiff was his daughter. He further alleged that Ram Samujh had died as a member of a joint Hindu family leaving the defendant as sole surviving coparcener, and the plaintiff had no right to lay any claim on the properties in suit. It is significant to note that, in his objection filed before the trial court, the defendant, though he contested the right of the plaintiff to file the suit, did not specifically meet her allegation that there was danger of the properties being removed in case a Receiver was not appointed for the same.

    6. The learned Civil Judge, after hearing the parties, passed an order appointing the defendant himself as a Receiver of the suit property on the conditions referred to above.

    7. Learned counsel appearing for the defendant-appellant has contended before us that as the forma pauperis proceedings were still pending, and the plaintiff had not been declared a pauper on the date of the order, and as the suit-had not been registered, the Civil Judge had no jurisdiction to pass an order appointing a Receiver. His further contention is that this was not a fit case in which the learned Civil Judge should have appointed a Receiver in view of the fact that the defendant had been in possession of the properties and there was no allegation of any misappropriation, or malversation, on his part, of the properties in suit.

    8. As regards the first point raised by the learned counsel for the appellant we do not find anything in Or. XL, Rule 1, C.P.C to warrant such a proposition.

    Or. XL, Rule 1, C.P.C runs as follows:—

    “Where it appears to the court to be just and convenient, the court may by order—

    (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;……”

    9. A careful perusal of this rule makes it abundantly clear that there is no warrant for the suggestion that, except in a suit, the court has no authority to appoint a Receiver even if it is satisfied that it is just and convenient to do so.

    10. This becomes apparent when a comparison is made between the phraseology used in Or. XL, R. 1 and the words of Sec. 503 of the old Code. Sec. 503 provided as follows:—

    “Where it appears to the Court to be necessary for the realization, preservation or better custody or management of property, movable or immovable, the subject of a suit or attachment.” Thus according to Sec. 503, C.P.C, as it stood, the court could appoint a Receiver only in respect of the subject of a suit or attachment. When the provisions of the Code were amended the words “subject of a suit or attachment” were deleted by the Legislature. This is significant. This shows that the legislature thought it fit to remove the restraint which formerly existed in respect of the power, of the court to appoint a Receiver only in respect of properties which were the subject-matter of a suit or attachment.

    11. The question arose before a Division Bench of the Bombay High Court consisting of Maclkin and Gajendragadkar, JJ. in the case of Bai Sakri v. Bai Dhani A.I.R 1948 Bom. 139., wherein their Lordships were pleased to hold that:—

    “The omission of the words “the subject of a suit or attachment” leaves the rule in extremely general terms and so far as sub-Rule (1) is concerned there is nothing-whatever in the rule to suggest that a receiver could not be appointed in any proceeding that was before the court. It is, of course, necessary that there should be some proceeding before the court, and a person who has no other business in the court at all cannot come to the court and ask the court to appoint the receiver and then go away. But so far as sub-R. (1) is concerned there is nothing to suggest that an application to sue as pauper is not the sort of proceeding in which receiver could be appointed. It is true that sub-R. (2) refers to parties to the suit, but we do not think that these words in sub-R. (2) can be allowed to control the general terms of sub-R. (1) in view of the fact that there has been a deliberate amendment of the old rule and the principal part of the amendment was to omit the only words which would limit proceedings before the court to suits or attachment,”

    12. Their Lordships, therefore, held that where an application has been made for leave to sue in forma pauperis, a Receiver could be appointed under Or. XL, R. 1 pending decision of the application.

    13. We are in respectful agreement with the decision of the Bombay High Court in the above noted case. The question also came up for Consideration in another connection before a Full Bench of this Court in the case of Mohammad Ali Khan v. Ahmad Ali Khan I.L.R 1945 All. 818. The majority of the learned Judges constituting the Full Bench were pleased to hold that:—

    “Jurisdiction to protect property pending the ascertainment of rights is inherent in any court which once has cognizance in any form of a dispute involving the execution of a truse or the administration of assets, and the court has, not merely jurisdiction, but a duty to safeguard them. This being so a receiver can be appointed in proceedings other than suits.”

    14. The question can be considered from another standpoint. An application for permission to sue in forma pauperis is in the nature of a plaint. It contains a recital of the facts constituting the cause of action, the subject-matter of the claim and the reliefs prayed for in that regard. In fact, Rule 2 of Or. XXXIII provides that:—

    “Every application for permission to sue as a pauper shall contain the particulars required in regard to plaints in suits ……. and it shall be signed and verified in the manner prescribed for the signing and verification of pleadings.”

    15. The proceedings for determining the question as to whether the plaintiff should be declared a pauper and thus made exempt from payment of court fees or not then commences and, in the very nature of things, it takes some time, before the court is in a position to come to a definite conclusion in that connection. However, once the plaintiff or the applicant is declared a pauper, the application is deemed to be the plaint in the suit as provided under R. 8 of Or. XXXIII of the Code of Civil Procedure. The learned counsel for the defendant-appellant has informed us that the plaintiff had been allowed subsequently to sue as a pauper in this case. Therefore, the result that can follow under the law, on her having been granted permission to sue as a pauper is that the application which she presented asking for permission will be considered as a plaint in her suit, and her suit will be deemed to have been filed on the date when she presented the application. Therefore, by virtue of the subsequent order of the court granting her permission to sue as a pauper, we must now proceed on the assumption that the suit which has been registered, was also pending before the learned Civil Judge on the date on which the order of appointment of a Receiver was made.

    16. The learned counsel for the appellant also contended that this was not a fit case on merits in which a Receiver should have been appointed. We do not find ourselves in agreement with this contention. The properties involved in the suit are of the value of Rs. 28,000/- out of which moveables are of the value of Rs. 22,000/-. The plaintiff, when she instituted the suit, was a minor living with her next friend in a different village. The defendant is in possession of the properties, and there was an allegation by the plaintiff that there was great apprehension of the properties being removed or converted beyond recognition during the pendency of the suit. In view of the fact that a large portion of the subject-matter of the suit consisted of moveables, we cannot hold that the apprehension expressed by the plaintiff in her application in this regard is wholly without any foundation. On the other hand, in view of the nature of the properties, it was but natural on the part of the plaintiff to seek the assistance of the court for their due preservation, and for the maintenance of status quo during the pendency of the trial. We are, therefore, of the opinion that it was just and convenient, in the circumstances of the case, to have appointed a Receiver in order to maintain the status quo in respect of the properties in suit. We also find that the learned Civil Judge has appointed defendant himself as the Receiver of the properties, and has not dispossessed him of the properties in suit during the pendency of the trial. We are unable to understand that justifiable grievance he can make when he has not been dispossessed of the properties. It may be mentioned here that, during the pendency of this appeal, an undertaking was given on behalf of the defendant that he will not alienate or damage or destroy the immoveable property and such moveables in dispute as were in his possession of which he also furnished a list to the trial court. In view of this, we do not find that any onerous condition has been imposed on the defendant by the order under appeal.

    17. The learned counsel for the appellant further contended that the learned Civil Judge was not justified in asking the defendant to furnish security of Rs. 15,000/- for accounting and for making good any loss to the estate during his receivership. It may be noted here that properties involved in the suit are of the value of Rs. 28,000/- as referred to above. The plaintiff claims the entire properties as her own. The amount of Security demanded by the trial court from the defendant to enforce liability to make good any loss to the properties occasioned by him during the pendency of the suit therefore cannot be held to be excessive. However, we must make it clear that the security for Rs. 15,000/- demanded by the trial court can be furnished by the appellant either in cash, or in the shape of any other property to the satisfaction of the trial court, within a period of 6 weeks from the date of this order.

    18. This appeal, therefore, has no force and must be dismissed.

    19. We, therefore, confirm the order of the learned Civil Judge dated 6-9-1960 appointing the defendant Receiver of the properties on his furnishing security for Rs. 15,000, either in cash, or in the shape of any other property to the satisfaction of the court below, and dismiss this appeal.

    20. If no security is furnished within the period allowed by us it will be open to the learned Civil Judge to take whatever steps he deems proper, in Consonance with the order under appeal, for the preservation of the properties during the pendency of the suit. As nobody has appeared for the respondent we make no order as to costs.

    21. Let the record of this case be sent to the court below as expeditiously as possible.

    22. Appeal dismissed.

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    Comments

    Ram Khelawan v. Sudama Devi
    (Oct 11, 1963)