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Ryru Nair v. Govindan Nair .

Kerala High Court
Aug 12, 1960
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Summary of Opinion (Raghavan, J.) — Civil Revision Petition

Factual and Procedural Background

This Civil Revision Petition raised two principal questions: (i) whether Ext. A3 should be interpreted as an order appointing a receiver, and (ii) whether an appeal lies against an order refusing to remove a receiver. The trial court held that Ext. A3 was not an order appointing a receiver but only allowed the petitioner to continue in possession of the properties on certain terms, and, on that view, dismissed the respondent's application to remove the petitioner from receivership. The respondent appealed to the lower appellate court, which reversed the trial court and directed the discharge of the receiver. The present Civil Revision Petition was filed by the petitioner (who was the respondent in the lower appellate court) challenging that outcome.

Legal Issues Presented

  1. Whether Ext. A3 is an order appointing the petitioner as receiver.
  2. Whether an appeal to the lower appellate court is competent/maintainable against a trial court order refusing to remove a receiver (i.e., the appealability of an order refusing to discharge a receiver).

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kutoor Vengayil Rayarappan Nayanar v. Kuttoor Vengayil Valia Madhavi Amma (A.I.R 1950 F.C. 140) Interpreted Section 16 of the General Clauses Act to mean that the power to appoint includes the power to remove; therefore an order removing (discharging) a receiver falls under Order 40, Rule 1 of the Code of Civil Procedure and is appealable. The court relied on this Federal Court reasoning as covering the question of appealability of orders that remove a receiver, and used its logic to conclude that an order refusing to discharge a receiver is the obverse/reverse of the same matter and thus also falls under Order 40, Rule 1 and is appealable.
Skaria Kuruvilla v. Mathai Avira (1954 K.L.T. 981) Held that an order refusing to remove a receiver was not covered by the Federal Court decision and therefore not appealable (earlier Travancore-Cochin Division Bench view). Noted as a conflicting Travancore-Cochin High Court decision; the court considered its reasoning but concluded it was not binding and disagreed with its restrictive reading of the Federal Court decision.
Velayudhan Narayanan v. Mathevan Narayani (1954 K.L.T. 791) Divisional Bench view contrary to Skaria Kuruvilla: held that an appeal from an order dismissing an application for discharge of a receiver was maintainable. Listed as the contrary Travancore-Cochin decision and considered persuasive but not binding; the court observed the conflicting positions and resolved the issue by reference to higher authority.
Surendra Nath Sarkar v. Nagar Chand Goenka (A.I.R. 1947 Patna 418) Held by a Division Bench that an order refusing to discharge a receiver was not appealable. Referred to as a precedent considered before the Federal Court; the Federal Court did not expressly overrule it. The present court regarded that decision as no longer good law in view of the Federal Court reasoning.
Lakshmikutty Amma v. Madhavan Pillai (A.I.R. 1958 Kerala 111; 1957 K.L.J. 1119) Contains an observation that decisions of the Travancore and Cochin High Courts have only persuasive effect on judges of the Travancore-Cochin High Court and the Kerala High Court. Used to support the conclusion that the judges of the Kerala High Court are not bound by the decisions of the former Travancore-Cochin High Court (i.e., those decisions are only persuasive).
M. Subbarayudu v. The State (A.I.R. 1955 Andhra 87) Full Bench discussion that the binding nature of decisions of one High Court on another depends on whether the courts are courts of co-ordinate jurisdiction; noted that Andhra was in a sense a successor to Madras for relevant territories. Adopted as authority for the proposition that whether one High Court is bound by another depends on historical/jurisdictional succession; used to reason that Kerala High Court is not a successor bound by Travancore-Cochin or Madras decisions.
Basappa v. The State (A.I.R. 1959 Mysore 1) Full Bench held that the Mysore High Court constituted after re-organisation was not bound by decisions of the former Chief Court/High Court of Mysore (post re-organisation court is a new High Court). Relied upon to show that a High Court constituted after States re-organisation (like Kerala) is a new High Court and not bound by prior regional High Court decisions; applied to justify that Travancore-Cochin decisions are only persuasive.
Kochu Kumari… v. Krishnan Janardhanan… (referenced) Earlier single-judge Travancore-Cochin decision followed by Subramonia Iyer J. (details in the opinion are limited). Mentioned as one of the prior Travancore-Cochin decisions which influenced earlier Bench rulings; used contextually in discussing the Travancore-Cochin authorities but without elaboration.

Court's Reasoning and Analysis

The court's analysis unfolded in two main stages corresponding to the two issues raised.

1. Whether Ext. A3 is an order appointing a receiver

  • The learned judge who passed Ext. A3 had expressed that there were no sufficient grounds to oust the petitioner from possession or to appoint a third party as receiver, but, towards the end of the order, used the language: “In my opinion the interests of justice would be sufficiently met if the plaintiff is put on terms and directed to be in possession and management of the properties as receiver.”
  • The court read this language as a clear direction that the plaintiff (the petitioner in the revision) was to be “in possession and management of the properties as receiver.”
  • The court also relied on the fact that the order was taken up in appeal (Ext. A2 is the decree passed in appeal) and that the final judgment (Ext. A4) recorded that the plaintiff was appointed receiver. These categorical observations reinforced the conclusion that Ext. A3 operated as an order appointing the petitioner as receiver.

2. Whether an appeal against an order refusing to discharge a receiver is competent

  • The court identified conflicting Division Bench decisions of the Travancore-Cochin High Court: Skaria Kuruvilla (holding refusal to remove a receiver not appealable) and Velayudhan Narayanan (holding such an appeal was maintainable).
  • The judge assessed whether those Travancore-Cochin decisions were binding. Relying on Full Bench authorities (Lakshmikutty Amma, M. Subbarayudu, Basappa), the court concluded that the Kerala High Court, constituted after the States Re-organisation Act, is a new High Court and is not a successor to the Travancore-Cochin or Madras High Courts; therefore, the Travancore-Cochin decisions are only persuasive and not binding on the Kerala High Court.
  • Turning to the Federal Court decision in Kutoor Vengayil Rayarappan Nayanar v. Valia Madhavi Amma, the court noted that the Federal Court relied on Section 16 of the General Clauses Act to hold that the power to appoint includes power to remove, and therefore an order removing a receiver is an order under Order 40, Rule 1 and is appealable. Although the Federal Court had not specifically decided the appealability of an order refusing to remove a receiver, the court treated the reasoning as applicable.
  • The court reasoned that an order discharging a receiver and an order refusing to discharge a receiver are “the obverse and the reverse of the same coin,” and if one falls under Order 40, Rule 1 (and is appealable), the other must equally fall under it. Since orders under Order 40, Rule 1 are appealable via Order 43, Rule 1(s), the court concluded that an appeal against an order refusing to discharge a receiver is competent.

Holding and Implications

Holding: The court dismissed the Civil Revision Petition. The core rulings were:

  • Ext. A3 is an order appointing the petitioner as receiver.
  • The appeal to the lower appellate court against the trial court's order refusing to discharge the petitioner from receivership was competent (i.e., appealable).
  • The Civil Revision Petition is dismissed, and the dismissal was ordered without costs, in view of the apparent uncertainty in the legal position.

Implications (as stated in the opinion):

  • The direct effect on the parties is that the appellate court's competence to hear the respondent's appeal (which resulted in the discharge of the receiver) was upheld as being properly maintainable; accordingly the Civil Revision seeking to upset that appellate decision was dismissed.
  • The court concluded that the decisions of the former Travancore-Cochin High Court are only of persuasive value on the Kerala High Court (constituted after State re-organisation) and are not binding on it; this informed the court's freedom to follow the Federal Court reasoning rather than the earlier Travancore-Cochin Division Bench holdings.
  • The opinion does not purport to leave any additional rule as a novel precedent beyond applying the Federal Court's reasoning to the question of refusal to discharge a receiver; the court explicitly dismissed the petition without costs because of the "apparent uncertainty of the legal position."

Source constraint note: This summary is strictly limited to the content of the provided opinion and does not introduce material or conclusions that do not appear in the text.

Show all summary ...

Raghavan, J.:— Two questions are raised in this Civil Revision Petition, one regarding the interpretation of an order, Ext. A3, as to whether it is an order appointing a receiver and the other regarding the appealability of an order refusing to remove a receiver. The trial court held that Ext. A3 was not an order appointing a receiver, but the order only allowed the petitioner herein to continue in possession of the properties on certain terms and in that view it dismissed the application filed by the respondent herein to remove the petitioner from receivership. The respondent herein filed an appeal before the lower appellate court, which reversed the decision of the trial court and directed the discharge of the receiver. The petitioner, who was respondent in the lower appellate court and who was directed to be removed from receivership, has filed the present Civil Revision Petition and, as I have already indicated, two contentions have been urged before me, one regarding the interpretation of Ext. A3 and the other regarding the maintainability of the appeal before the lower appellate court against the order of the trial court refusing to remove the petitioner herein from receivership.

2. I shall first consider whether Ext. A3 is an order appointing the petitioner as receiver. In the course of the discussion, the learned Judge, who passed the order Ext. A3, expressed the opinion that there were no sufficient grounds to oust the petitioner herein from possession of the properties and to have a third party appointed as receiver.

3. At any rate, towards the end of the order he said:

“In my opinion the interests of justice would be sufficiently met if the plaintiff is put on terms and directed to be in possession and management of the properties as receiver”.

4. Whatever might have been the grounds for passing this order, the order is clear that the plaintiff, i.e, the petitioner herein, was directed to be in possession and management of the properties as receiver. Therefore there is no force in the contention that Ext. A3 is not an order appointing the petitioner as receiver, but it only directed him to continue in possession on terms. This order was taken up in appeal and Ext. A2 is the decree passed in appeal. This also indicates that the order of the lower court was treated as an order appointing the plaintiff in the suit as receiver. The suit itself was finally disposed of by the judgment evidenced by Ext. A4 and there also the learned Judge observes that the plaintiff was appointed receiver. In view of these categorical observations, I am inclined to hold that Ext. A3 is an order appointing the present petitioner as receiver. This leads me on to the consideration of the next question, whether the appeal to the lower appellate court against the order of the trial court refusing to discharge the petitioner from receivership was competent.

5. Mr. Kelu Nambiar, the learned advocate of the petitioner, has carefully placed before me all the relevant decisions on this question. I shall deal with only three or four of them, because, according to me, the question is practically covered by a decision of the Federal Court in Kutoor Vengayil Rayarappan Nayanar v. Kuttoor Vengayil Valia Madhavi Amma (A.I.R 1950 F.C 140). Before I consider this decision, I shall refer to two decisions of the Travancore-Cochin High Court on this question. The earlier of these two decisions is Skaria Kuruvilla v. Mathai Avira (1954 K.L.T 981). The Division Bench which decided this case took the view that an order refusing to remove a receiver was not covered by the decision of the Federal Court in Rayarappan Nayanar's case and therefore held that such an order was not appealable. In a later Divisional Court ruling of the same court in Velayudhan Narayanan v. Mathevan Narayani (1954 K.L.T 791) a contrary view was taken. This Bench held that an appeal from an order dismissing the application for the discharge of a receiver was maintainable. I may at this stage mention that the earlier decision in Skaria Kuruvilla v. Mathai Avira (1954 K.L.T 981) had not been brought to the notice of the later Bench. But both the decisions had discussed the Federal Court decision in Rayarappan Nayanar's case and had interpreted this decision. According to the earlier decision, the Federal Court decision was no authority for the proposition that an appeal lay against an order refusing to discharge a receiver, but according to the later decision the reasoning in the same Federal Court decision supported the view that an appeal lay against an order of refusal to discharge a receiver. Thus these two decisions are directly in conflict.

6. Now the question arises as to what I should do in the above circumstances. If I am bound by a Bench decision of the Travancore-Cochin High Court, then the course open to me is to see that the present case before me is placed before a Full Bench, so that the conflicting views expressed in the two Bench decisions referred to above are either reconciled or one of those views is over-ruled. If on the other hand I am not bound by the Bench decisions of the Travancore-Cochin High Court and those decisions have only pursuasive value, then I am free to interpret the Federal Court decision and am bound to follow it if it covers the question before me.

7. I am of the opinion that, sitting as a judge of the Kerala High Court, I am not bound by the decisions of the Travancore-Cochin High Court. The binding nature of the decisions of one High Court on the judges of another High Court has been considered in a few cases and Mr. Kelu Nambiar has placed before me three Full Bench decisions on this question. The first is Lakshmikutty Amma v. Madhavan Pillai (A.I.R 1958 Kerala 111 : 1957 K.L.J 1119) where an observation appears to the effect that to the judges of the Travancore-Cochin High Court and the Kerala High Court the decisions of the Travancore and Cochin High Courts have only a persuasive effect. No further discussion regarding the question obtains in this judgment. Another illuminating judgment on this question is a Full Bench decision of the Andhra High Court in M. Subbarayudu v. The State (A.I.R 1955 Andhra 87). In that case Subba Rao, C.J discusses the binding nature of the precedents of one court on another and the learned Chief Justice observes that such binding nature depends upon the fact whether such courts are courts of co-ordinate jurisdiction and his Lordship further considers the connotation of the word “co-ordination” and expresses the view that this term does not mean the same as the words “concurrence or simultaneity”. Proceeding further, the learned Chief Justice comes to the conclusion that the decisions of the Madras High Court were binding on the Andhra High Court, because the Andhra High Court was in a real sense, an off-shoot of the Madras High Court exercising the same jurisdiction and administering the same laws which the Madras High Court had exercised prior to 5th July, 1954 in the territories included in the Andhra State. According to the learned Chief Justice, and I most respectfully agree with this view, the Andhra High Court may be treated as one succeeding to the High Court of Madras and exercising all the powers and administering the same law which the Madras High Court exercised for the territories comprised in the Andhra State. In other words the High Courts of Andhra and Madras were courts of co-ordinate jurisdiction. The third Full Bench decision brought to my notice by Mr. Kelu Nambiar is Basappa v. The State (A.I.R 1959 Mysore 1). The Full Bench held in that case that the Mysore High Court as constituted after the re-organisation of States on 1st November, 1956 was not bound by the decisions of the former Chief Court of Mysore and of the former High Court of Mysore. The High Court of Mysore, which was established after the re-organisation of States, was by no means the representative of the High Court of the former State of Mysore. Nor is the present High Court of Mysore a court of co-ordinate jurisdiction with the former Mysore High Court, because, as a result of the re-organisation of States, different parts of different States have been combined to form the new State of Mysore and the Mysore High Court, which was established after such re-organisation, is a new High Court and by the States Re-organisation Act, the former High Court of Mysore was abolished. These decisions clearly indicate that the High Court of Kerala constituted after the States Re-organisation Act is a new High Court, not co-ordinate in jurisdiction either with the former Travancore-Cochin High Court or with the High Court of Madras. The Kerala State was constituted taking portions of the territories of the former State of Travancore-Cochin and the former State of Madras and the Kerala High Court was constituted for this new State. Therefore the High Court is not a successor of either the Travancore-Cochin High Court or the Madras High Court and in that view the judges of the Kerala High Court are not bound by the decisions of either of the said High Courts.

8. In the light of the above discussion the course that I have to follow, regarding the two conflicting Division Bench rulings of the Travancore-Cochin High Court referred to above, is clear. The views expressed in both those decisions have only persuasive value on me and therefore I am free to follow either of those views or neither of them. The reasoning of Mahajan J. who delivered the judgment of the Federal Court in Rayarappan Nayanar v. Valia Madhavi Amma (A.I.R 1950 F.C 140) is as follows. Under Section 16 of the General Clauses Act, the power to appoint includes the power to remove or to dismiss. Therefore the power to appoint a receiver under Order 40, Rule I of the Code of Civil Procedure includes the power to remove the receiver also and hence an order discharging a receiver is equally an order under Order 40, Rule I as an order appointing a receiver. Before the Federal Court, the question for consideration was-whether such an order removing a receiver was appealable and Their Lordships of the Federal Court held that it was. The question whether an order refusing to remove a receiver was appealable was not specifically before the Federal Court in that case. Such a question arose in Surendra Nath Sarkar v. Nagar Chand Goenka (A.I.R 1947 Patna 418) and Fazl Ali C.J delivering the judgment of the Division Bench, held that an order refusing to discharge a receiver was not appealable. This case was cited before the Federal Court and Their Lordships did not specifically over-rule this decision, as the question before them was only the removal of a receiver and not the refusal to remove. Basing on this and the following passage appearing in the judgment of the Federal Court.

“There the order appealed against was one refusing to remove a person from his position as receiver. This distinction, however, does not materially affect the question. In this case also no reference was made to Section 16, General Clauses Act.”,

9. Subramonia Iyer J. who delivered the judgment of the court in Skaria Kuruvilla v. Mathai Avira (1954 K.L.T 981) expressed the opinion that observation of the Federal Court must be understood as confined to the specific question that arose in the particular case which Their Lordships were dealing. With all respect to the learned judge, I find it difficult to agree with this reasoning. Subramonia Iyer J. followed another previous decision in Kochu Kumari… v. Krishnan Janardhanan…Counter Petitioner. 139) which was decided by the same learned Judge sitting alone. In the other decision of the Travancore-Cochin High Court in Velayudhan Narayanan v. Mathevan Narayani (1954 K.L.T 791) Joseph J. who delivered the judgment of the Bench observed that in view of the decision of the Federal Court in Rayarappan Nayanar's case (1950 F.C 140) the decision of the Patna High Court in Surendra Nath Sarkar v. Nagar Chand Goenka (A.I.R 1947 Patna 418) could no longer be considered good law and I respectfully agree with this view.

10. Now I shall give my reasons for the above view. The order refusing to appoint a receiver is only a counter-part, if I may use that expression, of an order appointing a receiver. Therefore, such an order refusing to appoint a receiver will fall under Order 40, Rule I equally as an order appointing a receiver and I do not think that there will be any dispute to this position. Similarly to my mind it is clear that an order discharging a receiver and an order refusing to discharge a receiver are but the obverse and the reverse of the same coin and if the former falls under Order 40, Rule I under the Federal Court Ruling, I fail to understand how the latter does not fall under the same Order 40, Rule I. If the order of refusal falls under Order 40, Rule I, naturally that order becomes appealable, because all orders under Order, 40 Rule I are appealable under Order 43, Rule 1(s).

11. The foregoing reasoning makes it clear that the appeal to the lower appellate court in the present case was competent and this Civil Revision Petition is liable to be rejected. I, therefore, dismiss the Civil Revision Petition, but, in view of the apparent uncertainty of the legal position, without costs.