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Alla Subbareddi v. Lankireddi Narayanaswami Reddi And Others.

Madras High Court
Jul 13, 1948
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Comprehensive Summary of the Opinion — C.M P. No. 3369 of 1948

Factual and Procedural Background

Plaintiffs 1 and 2 instituted O.S. No. 354 of 1947 in the District Munsif's Court, Bezwada, seeking a permanent injunction to restrain defendant 1 (the zamindar) from disturbing their possession of certain lanka lands of about 150 acres. The plaintiffs alleged continuous possession for about eight years and that the last leases in their favour expired on 30 June 1947. They alleged that the zamindar was attempting to lease the lands to others and thereby disturb their possession.

An interim ex parte injunction was ordered on 21 June 1947 (I.A. No. 1057 of 1947). Before service, the zamindar died (24 June 1947) and his legal representatives were subsequently impleaded as defendants 2 and 3. The zamindar had, after the suit was filed (4 July 1947), purportedly leased the property to defendants 4 and 5.

Plaintiffs obtained an ex parte order under Section 144, Criminal P.C., in M.C. No. 67 of 1947 restraining defendants 4 and 5 temporarily; a commissioner reported that plaintiffs were in possession. Plaintiffs then invoked Section 145, Criminal P.C., by filing M.C. No. 18 of 1948 and a preliminary order was passed on 8 March 1948; the Tahsildar of Bezwada was appointed by the criminal Court as receiver to auction crops raised on the lands.

Plaintiff 2 filed C.M.P. No. 3369 of 1948 (in O.S. No. 354/1947) seeking transfer of the suit to the High Court and interlocutory relief; C.M.P. No. 3370 of 1948 sought appointment of the Tahsildar (or another proper person) as receiver for the suit properties. These petitions were heard in vacation and came on for orders on 19 May 1948. The High Court ordered the Tahsildar to continue as receiver and allowed him liberty to lease the suit properties by public auction.

Pursuant to that order, the Tahsildar auctioned the leasehold on 25 June 1948; Janga Ramireddi was the highest bidder at Rs. 7,900. Defendant 4 filed C.M.P. No. 3627 of 1948 seeking to vacate appointment of the interim receiver and to set aside the sale on grounds including absence of notice and alleged irregularities; defendants 2 and 3 filed C.M.P. No. 3691 of 1948 for similar relief.

When the petitions were listed before Govinda Menon J., he queried the High Court's power to appoint an ex parte receiver prior to service of notice and final orders on the transfer petition, and referred the matter to the presiding Judge for determination. The central issues were considered and an order confirming the receiver appointment and retransferring the suit to the District Munsif's Court, Bezwada, was made.

Legal Issues Presented

  1. Whether this Court (High Court) has jurisdiction to appoint an ex parte interim receiver before the transfer of the suit is finally ordered, that is, while the application for transfer is pending and after notice on the petition for transfer has been ordered.
  2. Whether plaintiff 2 made out a case for appointment (and continuation) of a receiver in the circumstances of the dispute over possession.
  3. Whether the sale held by the receiver (auction of leasehold cultivation rights) is valid.

Arguments of the Parties

Plaintiffs' (Applicants') Position and Actions

  • Plaintiffs asserted long and continuous possession (about eight years) and claimed occupancy rights in the lanka lands; they contended the zamindar was attempting to disturb their possession by leasing to others.
  • They sought interim relief (ex parte injunction) and later sought transfer of the suit to the High Court together with an order appointing the Tahsildar as receiver, concerned that the receiver placed by the criminal Court might vacate possession.
  • Plaintiffs also pursued summary/criminal preventive remedies under Section 144 and Section 145, Criminal P.C., and obtained interim/criminal orders and a commissioner’s report indicating plaintiffs’ possession. They relied on these developments to justify the civil receiver and transfer application.

Defendants' (Respondents') Principal Arguments

  • Defendant 4 petitioned to vacate the interim receiver and to set aside the sale, alleging absence of notice of the order appointing the receiver to him and that the sale was vitiated by various irregularities.
  • Defendant 4 further asserted that one Section Basavayya was prepared to bid Rs. 12,000 for the cultivation right if given an opportunity to bid, implying prejudice or unfairness in the sale process.
  • Defendants 2 and 3 (the zamindar’s legal representatives) advanced similar relief challenging appointment of receiver and the sale.
  • It was not seriously contested before the Court that the High Court had jurisdiction to appoint an ex parte receiver — counsel for the zamindar (Mr. Somasundaram) and for defendant 4 (Mr. Chandra Reddi) did not press an objection to jurisdiction at the hearing before the presiding Judge.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Jumna Bai v. Ramanathan Chettiar, A.I.R. (16) 1929 Mad. 29 Recognised that when a suit is instituted in a mofussil Court and that Court is closed for summer recess the High Court can transfer the suit under Clause 13, Letters Patent, and pass interim orders; such application should be made on the original side and may include interlocutory relief before retransferring proceedings. The Court relied on this decision to support the proposition that interlocutory orders (including appointment of receiver) can be made by the High Court in the context of transfer applications prior to final retransfer.
Krishna v. Sabapathi, A.I.R. (32) 1945 Mad. 69 (Full Bench) Held that when a suit is withdrawn under Clause 13, Letters Patent, for trial on the original side the High Court has no power to retransfer it to the withdrawing Court; power to retransfer exists under Section 24, Civil P.C., and should be exercised only after notice to parties. The Court noted the Full Bench's statement and used it to distinguish the point about retransfer under Clause 13 versus Section 24; it observed that the Full Bench did not deal with powers of the Court pending disposal of transfer applications and did not dissent from Jumna Bai.
Asadali Chowdry v. Mahamed Hossain Chowdry, A.I.R. (3) 1916 Cal. 427 Held that proceedings under Section 93, Bengal Tenancy Act for appointment of a common manager were in the nature of an original proceeding under Section 141, Civil P.C., and thus the procedure under Order 40 Rule 1 (appointment of receiver) applied; Court may even pass an ex parte order appointing a receiver in emergencies. The Court invoked this authority to support the proposition that proceedings of the character before it (i.e., transfer application under Section 24/Section 141) are original proceedings attracting Order 40 Rule 1 and permitting ex parte receivers in suitable cases.
Nandakishore Singh v. Ram, Gulam Sahu, 40 Cal. 955 Recognised that the High Court had inherent power to stay execution of its own decree even before an application for special leave to appeal to His Majesty in Council was filed. The Court cited this precedent to illustrate the High Court's inherent jurisdiction to grant interim reliefs and to situate its power to grant interlocutory reliefs like receivership pending other proceedings.

Court's Reasoning and Analysis

The Court approached the central jurisdictional question by examining whether an application for transfer under Section 24, Civil P.C., where notice is ordered, is in the nature of an "original proceeding" within the meaning of Section 141, Civil P.C. The Court reasoned as follows:

  1. Procedural Character: When a transfer application under Section 24 is made and notice is ordered, the proceeding is "in the nature of an original proceeding" under Section 141, Civil P.C., and thus the procedural safeguards and powers available in suits apply to such proceedings.
  2. Applicability of Order 40 Rule 1: Because Section 141 attracts the procedure for suits, Order 40 Rule 1 (which empowers courts to appoint receivers in suits) becomes applicable to proceedings incidental to or in the nature of original proceedings — thereby enabling the High Court to appoint a receiver in suitable cases while the transfer petition is pending.
  3. Precedential Support: The Court relied on Jumna Bai v. Ramanathan Chettiar to show that interlocutory relief before transfer has been recognised, on Asadali Chowdry to demonstrate that original proceedings under Section 141 can attract Order 40 Rule 1 (including ex parte receivers in emergencies), and on Nandakishore Singh to illustrate the High Court's inherent jurisdiction to grant interim relief. The Full Bench decision in Krishna v. Sabapathi was noted for principles about retransfer under Clause 13 and for the role of Section 24 but was not held to contradict the view that interlocutory orders pending disposal of transfer applications are competent.
  4. Conclusion on Jurisdiction: The Court concluded that it had the power to pass interlocutory orders (including appointing a receiver or granting injunctions) during the pendency of a transfer petition under Section 24/Section 141 and that such powers could be exercised even before a final order of transfer was made.
  5. Merits of Receiver Continuation: On the facts, the Court observed there was a "scramble for possession," the criminal Court had previously appointed a receiver to sell crops, and defendants 4 and 5 had been restrained under Section 144, Criminal P.C., because of fear of breach of the peace. With proceedings under (the text refers to) Section 146 pending and a revision petition to quash them also pending, the Court considered it necessary to continue the receiver to make arrangements for cultivation of extensive lanka lands.
  6. Sale Validity Deferred: Although various objections were raised to the regularity and validity of the auction sale (including an independent report and affidavits), the Court declined to decide the detailed validity of the sale at that stage. The Court limited itself to determining whether the appointment of the receiver and his power to sell the leasehold right was proper; having found that it was proper, the Court confirmed its earlier order appointing the receiver and authorising sale.

Holding and Implications

Core Ruling:

The High Court confirmed the order appointing the Tahsildar as interim receiver and empowering him to sell/lease the leasehold right of the suit properties; the petition for transfer was allowed and the suit was retransferred to the District Munsif's Court, Bezwada.

Direct consequences and practical implications for the parties:

  • The Tahsildar of Bezwada is to continue as receiver of the suit properties and was confirmed as having been properly empowered to lease out the suit properties by public auction (as per the earlier order).
  • The sale/auction effected (highest bidder Janga Ramireddi at Rs. 7,900) remains subject to separate proceedings: the Court noted that defendant 2 has already filed an application questioning the validity of the sale. The District Munsif was directed to take necessary evidence and dispose of that petition at an early date before the cultivation season commences.
  • No order as to costs was made in the High Court for these applications.
  • On legal principle, the Court held that while a transfer petition under Section 24/Section 141 is pending, the High Court has jurisdiction to pass interlocutory orders (including ex parte receivers) in appropriate cases; the Court relied on cited precedents to justify this power.

Note: The Court did not adjudicate the detailed objections to the validity of the auction sale in the present proceedings; that issue was left to the District Munsif to resolve on evidence.

Show all summary ...

1. C.M P. No. 3369 of 1948 was filed by plaintiff 2 in O.S. No. 354 of 1947 on the file of the Court of the District Munsif of Bezwada for transfer of the suit to this Court and for passing interlocutory orders and for retransferring the same. Along with this application he also filed C.M.P. No. 3370 of 1948 to appoint the Tahsildar of Bezwada or any other proper person as receiver for the properties involved in the suit O.S. No. 354 of 1947. Those applications were moved before me in the vacation Court and came up for orders on 19th May 1948.

2. Plaintiffs 1 and 2 instituted O.S. No. 354 of 1947 for a permanent injunction restraining defendant 1, the zamindar, from disturbing their possession of certain lanka lands of the extent of 150 acres. Their case was that these lankas were in their possession for a continuous period of about 8 years, the last of the leases in their favour expiring by 30th June 1947, and that the zamindar notwithstanding the fact that they had acquired occupancy rights in the lankas was attempting to lease the properties to others and was seeking to disturb their possession. In the first instance only the zamindar was impleaded as the sole defendant. They also applied along with the suit, in I.A. No. 1057 of 1947 for an interim injunction against the defendants and an ex parte order was passed on 2lst June 1947. Before the order could be served on the zammdar, he died on-24th June 1947, and subsequently his legal representatives were impleaded as defendants 2 and 3. By a further application the injunction was extended to the legal representatives also. Meanwhile, the zamindar seems to have leased the property to defendants 4 and 5 on 4th July 1947, that is, after the institution of the suit by the plaintiffs which was filed on 19th June 1947. As the plaintiffs apprehended disturbance of possession by defendants 4 and 6 they took proceedings under Section 144, Criminal P.C., in M.C. No. 67 of 1947 on the file of the Sub-Divisional Magistrate's Court, Bezwada, and obtained an ex parte order again9t defendants 4 and 5 which was current for a period of one month. A commissioner was appointed in I.A. No. 1694 of 1947 to inspect and report as to who was in possession of the property, and he submitted a report that the plaintiffs were in possession. When the order under Section 144, Criminal P.C., was about to expire the plaintiffs seem to have moved the Minister for extension of the order, and the Government seems to have directed the District Collector to go into the matter. The District Collector seems to have suggested proceedings under Section 145, Criminal P.C., and the plaintiffs filed M.C. No. 18 of 1948 under Section 145, Criminal P.C., and a preliminary order was passed on 8th March 1948. Pending these proceedings, the Tahsildar of Bezwada was appointed receiver to auction the crops on the lands which were claimed to have been raised by both the parties. On their own application defendants 4 and 5 were impleaded as parties to the suit. On 17th May 1948, while the receiver was in possession of the property defendants 4 and 5 filed Ori. R.C. No. 586 of 1948 before the Vacation Judge to quash the proceedings under Section 145, Criminal P.C. On 18th May 1948, Yahya Ali J. passed the following order in Ori. M.P. No. 1162 of 1948:

Further proceedings in M.C. No. 18 of 1948 will be stayed. This does not amount to disturbing the possession of the receiver appointed by the Magistrate.

Apprehending that the receiver appointed by the criminal Court would vacate possession of the property plaintiff 2 moved for transfer of the suit to this Court and for an interim Order As I have already said, these petitions came before me on 19th May. On the transfer petition I ordered notice, and on the petition for an interim order I passed the following order on that date:

The Tahsildar of Bezwada is to continue as receiver in respect of the suit properties pending further orders in the civil miscellaneous petition. He is at liberty to lease out the suit properties by public auction.

In pursuance of this order the Tahsildar seems to have auctioned the leasehold right on 25th June 1948, and one Janga Ramireddi became the highest bidder for the cultivation right of this fasli for a sum of Rs. 7900.

3. Defendant 4 filed C.M.P. No. 3627 of 1948 to vacate the order appointing interim receiver and to set aside the sale held by him on the ground that there was no notice of the order appointing receiver to him, and that the sale was vitiated by various irregularities. He also alleges that one Section Basavayya was prepared to bid for Rs. 12,000 provided he was given an opportunity to bid. C.M.P. No. 3691 of 1948 was filed on behalf of the zamindars, defendants 2 and 3, also for similar relief.

4. When these petitions came up for hearing before Govinda Menon J. he felt some difficulty regarding the power of this Court to pass an interim order appointing a receiver before notice in the transfer petition was served and the transfer of the suit was ordered. He therefore directed the petitions to be posted before me.

5. In these petitions the questions that have been raised are, (1) Whether this Court has jurisdiction to appoint an ex parte receiver before the transfer of the suit was ordered after notice on the petition for transfer was served on the defendants; (2) Has plaintiff 2 made out a case for the appointment of a receiver, and (3) Whether the sale by the receiver is valid. First as regards the question of the jurisdiction of this Court to appoint an interim receiver: In Jumna Bai v. Ramanathan Chettiar A.I.R. (16) 1929 Mad. 29 Ramesam J. was of opinion that when a suit was instituted in an inferior Court in the mofussil and that Court was closed for summer recess the High Court bad power to transfer the suit under clause 13, Letters Patent, and pass interim orders but that such application should be made on the original side of the High Court and should also ask for an injunction or other interlocutory relief and a further application should be made for re-transferring all the proceedings to the original Court. The power to pass an interlocutory order either granting injunction or some other relief before the suit was transferred was recognised at p. 55 of the report. It was however pointed out by the Full Bench in Krishna v. Sabapathi A.I.R. (32) 1945 Mad. 69 (F.B.) that if a suit was withdrawn under Clause 13, Letters Patent, from a mofussil Court to the original side for trial and determination, this Court has no power to retransfer it to the Court from which it was withdrawn. There is, however, according to the Full Bench such power under Section 24, Civil P.C. It was pointed out that such power of transfer under Section 24 should be exercised only after notice to the parties and after giving them an opportunity to beheard. The Full Bench, however, does not deal with the powers of this Court pending the disposal of the application for transfer; nor does it dissent from the View expressed by Ramesam J. in Jumna Bai v. Ramanathan Chettiar A.I.R. (16) 1929 May. 29. Even apart from this, I think that when an application for transfer of a suit to this Court is "made under Section 24, Civil P.C., and notice is ordered it is in the nature of an original proceeding within the meaning of Section 141, Civil P.C., and the procedure provided under the Code in regard to suits becomes applicable. Order 40, Rule 1, therefore, is attracted by Section 141, Civil P.C, to such proceedings, and the Court would have power to appoint a receiver.

6. In Asadali Chowdry v. Mahamed Hossain Chowdry A.I.R. (3) 1916 cal. 427 the Calcutta High Court had to consider the applicability of the provisions of Order 40 Rule 1 to proceedings for the appointment of a common manager under Section 93, Bengal Tenancy Act. The learned Judges were of opinion that the proceeding was in the nature of an original proceeding contemplated by Section 141, Civil P.C , that therefore the procedure under Order 40 Rule 1 was attracted and that in such a case the Court had jurisdiction to appoint a receiver provided a case for the appointment was made out. It was also pointed out in that case that there is power in the Court to pass even an ex parte order appointing a receiver. At p. 988 it is observed:

Than as regards the question of notice, although an order is generally made by a civil Court upon notice to the parties concerned, there may be cases in which the issue of notice may so delay the proceedings as to defeat the object of the order made, and the Court has to pass an order without previous notice in oases of emergency, leaving the party aggrieved to object to it either in Court making the order or by way of appeal to a higher Court.

It has been pointed out in Nandakishore Singh v. Ram, Gulam Sahu 40 Cal. 955 that even before an application for special leave to appeal to His Majesty in Council was filed the High Court had inherent power to stay the execution of its own decree.

7. Mr. Somasundaram, the learned advocate appearing for the zamindar and Mr. Chandra Reddi, the learned advocate appearing for defendant 4 did not seriously contest before me the jurisdiction of this Court to pass an ex parte order appointing a receiver; but as a doubt has been felt by my learned brother Govinda Menon J., I had to deal with it somewhat fully. I am therefore of opinion that even before a final order transferring the suit is passed and when the application for transfer is pending disposal the Court has power to pass an interlocutory order either granting an injunction or appointing a receiver or grant such other relief pending disposal of the transfer petition as the proceeding is an original proceeding within the meaning of Section 141 and all the powers which the Court possesses for passing interlocutory orders in the case of a suit can be exercised during the pen-1 dency of such proceedings.

8. It is not seriously contested before me that this is not a proper case in which the receiver should continue. There was already a scramble for possession and the criminal Court thought fit to appoint a receiver for the sale of the crops. Defendants 4 and 5 were restrained by an order under Section 144, Criminal P.C., from interfering with the possession of the property, as the authorities feared that there would be breach of the peace. The proceedings under Section 146 are pending, and the revision petition for quashing them is also pending in this Court. It is therefore necessary to continue the receiver and make arrangements for the cultivation of the extensive lanka lands.

9. The only serious objection is as regards the validity of the sale. Various objections have been raised in the counter. affidavit and in the affidavits on behalf of the zamindar and on behalf of defendant 4, and there is also the report of the Topsider of Bezwada, who was appointed receiver. I am, however, not going into that matter, as the only question now before me is whether the order appointing receiver and empowering him to sell the leasehold right of the property is proper or not, and as I have come to the conclusion that it is proper, the order passed by me in C.M.P. No. 3370 of 1948 has to be confirmed The petition for transfer is ordered, and the suit is retransferred to the District Munsif's Court, Bezwada.

10. I understand that there is already an application filed by defendant 2 raising the question of the validity of the sale. The learned District Munaif will after taking the necessary evidence dispose of that petition at an early date before the cultivation season commences.

11. There will be no order as to costs in these applications in this Court.