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Vythilinga Pandarasannadhi v. Board Of Control, Thiagarajaswami Devasthanam .
Factual and Procedural Background
The appeals arise under Section 47 of the CPC against orders of the Subordinate Judge of Negapatam in E.A. Nos. 11 and 84 of 1930 in O.S. 125 of 1921. The original suit sought framing of a scheme for the temple of Sri Thiagarajaswami at Tiruvarur. A scheme was framed by the High Court (before Spencer, J. and Ramesam, J.) containing Clauses 8, 13 and 16 governing budgets, receipts, custody and remittance of collections by trustee(s) to the treasurer and Board of Control. The Board of Control (through its President) applied for appointment of a receiver for properties under the control of the 12th defendant (trustee of Abisheka and Annadana kattalais) alleging persistent defaults in remittances and failure to produce accounts. The Subordinate Judge appointed a receiver; these appeals challenge that appointment.
Legal Issues Presented
- Whether the Board of Control can be treated as a decree-holder entitled to execute the scheme's directions though it was created by the decree and was not a party.
- Whether appointment of a receiver is a permissible mode of execution in the circumstances of non-remittance and failure to produce accounts, as opposed to attachment or arrest of the trustee.
- Whether the proviso to Order 40, Rule 1 (and Section 51 reference) precludes appointment of a receiver where the person in possession is not removable by the decree-holder.
Arguments of the Parties
Appellant's Arguments
- The Board of Control was not a party to the decree but a creature of it and therefore cannot be a decree-holder entitled to execute the decree.
- The proper remedies to compel the trustee were attachment of property or arrest, not appointment of a receiver.
- English authorities on equitable receivership show that appointment of a receiver cannot be justified in circumstances such as these.
Respondent / Court's Replies
- A decree-holder need not be a party; it suffices that the decree confers rights enforceable upon the person or body named (Board has the right to call for remittances).
- The object includes obtaining collections and production of accounts; appointment of a receiver is a recognised mode of execution under Section 51 CPC and Order 40, Rule 1 where "just and convenient."
- The proviso to Order 40, Rule 1 applies to third-party possession; where dispute is between parties to the suit a receiver may be appointed even if the person in possession is not removable.
- Given the trustee's persistent defaults (including admitted non-remittance of nearly Rs. 5,000 and failure to produce accounts), appointment of a receiver for collection and remittance was appropriate.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Thiagarajasivami Devastanam v. Balayee Ammal . A.I.R 1928 Mad. 61 | Clauses 8 and 13 of the scheme are executable and not merely declaratory. | Relied on to support that the scheme's directions could be executed by appropriate remedies. |
| Varadiah Chetty v. Narasimhulu Chetti . A.I.R 1932 Mad. 41 | A decree-holder need not be a party to the decree. | Applied to hold the Board of Control may be regarded as a decree-holder entitled to execute scheme directions. |
| Sivarama Dubai v. Raja gopala Misra . A.I.R 1930 Mad. 918 | Case concerned a different context and did not relate to execution. | Court held it did not assist the appellant's position. |
| Thyagarajaswami Devastanam v. Balayee Animal | Clauses of the scheme may be regarded as executable. | Used to reinforce executability of the scheme clauses (as stated in earlier judgment). |
| Ranganatha Thathachariar v. Krishnaswami Thathachariar . A.I.R 1924 Mad. 369 | Application in that case related not to matters in execution. | Distinguished from present case; not directly applicable. |
| Veerappa v. Padmanabha . A.I.R 1929 Mad. 625 | Application in that case related not to matters in execution. | Distinguished from present case; not directly applicable. |
| Kumaraswami Pillai v. S. Pasupathia Pillai . [1921] 61 I.C 605. | Proviso to Order 40, R.1 refers to third-party possession; receiver not to remove a person whom parties have no present right to remove. | Adopted to interpret proviso; where dispute is between parties a receiver may be appointed despite possessor not being removable. |
| Veeraraghavachariar v. Advocate-General Of Madras . A.I.R 1927 Mad. 1073 | Appointment of receiver to enforce duties was held intra vires. | Relied on to support that appointing a receiver to ensure compliance with scheme duties is permissible. |
| Krislmamurthi Aiyar v. Krishnavmrthi Aiyar . A.I.R 1927 P.C 139 | Receiver appointment to collect income where property belonged to a mutt and sale was undesirable. | Applied by analogy to justify appointment of a receiver to collect income and pay dues. |
| Mt. Sheoratni v. Munshi Lal . A.I.R 1926 Pat. 542 | Similar authority where receiver was appointed for collection of income. | Used to support permissibility of receiver appointment for collecting and remitting income. |
Court's Reasoning and Analysis
The Court examined the nature of the rights conferred by the decree and held that a decree-holder need not be an original party; it suffices that the decree confers enforceable rights on the person or body (Board of Control) to call for remittances. The Court treated Clauses 8 and 13 of the scheme as executable. It considered alternative remedies (attachment or arrest) but found appointment of a receiver appropriate because the object included securing the collections and ensuring production of accounts, not merely punishing or coercing the trustee.
The Court invoked Section 51 CPC and Order 40, Rule 1 CPC which permit appointment of a receiver where just and convenient, subject to the proviso which prevents removing a person in possession where no present right exists to do so. Interpreting the proviso (following Kumaraswami Pillai), the Court held it addresses third-party possession; where the dispute is between parties to the suit a receiver may be appointed even if the person in possession is not removable by the decree-holder.
The Court applied these principles to the facts: the Subordinate Judge found continuous and persistent defiance by the trustee, admitted non-remittance of substantial sums, failure to produce accounts and repeated defaults. Given these findings, appointing a receiver limited to collection and remittance duties was just and convenient. The appointment was characterized as temporary and not a removal from office; the trustee would continue to discharge other duties unaffected by the order. The Court imposed a temporal limit (initially two years) to avoid perpetual supervision, allowing discharge or extension by the Subordinate Judge depending on conduct or trustee removal.
Holding and Implications
APPEALS DISMISSED WITH COSTS.
Direct consequences: the Subordinate Judge's order appointing a receiver for the collection and remittance of income from the Abisheka and Annadana kattalais is upheld, subject to a temporal limitation (initially two years). The receiver's role is confined to attending to collections and remittances and ensuring production of accounts; the trustee remains in office for other duties. The Court did not order permanent dispossession and allowed for discharge or extension of the receiver's term by the Subordinate Judge depending on future conduct. The opinion does not purport to establish broader new law beyond applying and distinguishing cited authorities and confirming executability of the scheme clauses in this context.
Ramesam, J.:— These are appeals under Section 47 of the CPC, against the orders of the Subordinate Judge of Negapatam in E.A Nos. 11 and 84 of 1930 in O.S 125 of 1921, which was a suit filed for the framing of a scheme for the temple of Sri Thiagarajaswami at Tiruvarur in East Tanjore District. The matter came up to the High Court before Spencer, J., and myself and a scheme was framed. Under Cl. 8 of the scheme the trustee of each kattalai was directed to submit a budget to the treasurer of his expected receipts and expenditure and the treasurer was directed to consolidate the budgets of all the kattalais and place them before the Board for their approval and orders. Under Cl. 13 of the scheme the trustees of the respective kattalais were directed to hand over all the cash proceeds of their property to the treasurer who had to keep them in a safe within the temple premimises, enter them in a book to be kept with separate pages for each kattalai for that purpose and furnish the trustees with receipts for the same and be responsible for their safe custody, and the treasurer was directed to put the trustees in funds from the amounts in his hands to their respective credits whenever they apply for disbursements according to the budget.
2. In pursuance of the scheme the President of the Board of Control insisted on the trustees of the kattalais sending complete budgets of receipts and expenditure and on their failing to do so he applied for attachment of their property or their arrest. The Subordinate Judge dismissed the petition. There was an appeal to the High Court. That appeal came on before this very Bench and it was held on an objection that the decree in the original suit was not an executable one, that the directions in Cls. 8 and 13 of the scheme were executable and not merely declaratory. Our judgment was reported in Thiagarajasivami Devastanam v. Balayee Ammal . A.I.R 1928 Mad. 61. The present application is by the Board of Control acting through their President for the appointment of a receiver for the properties under the control of 12th defendant who is the trustee of Abisheka and Annadana kattalais for the purpose of carrying out the duties which the trustees have to perform under Cls. 8, 13 and 16 of the scheme alleging default on the part of the trustees in regard to their duties.
3. The petition were actually pressed before the Subordinate Judge in respect of only Cl. 13. The complaint made against the trustee if that he had persistently not been making remittances, nor sending accounts, showing collections from Fasli 1338 downwards. The Subordinate Judge found that the appellant was guilty of continuous and persistent defiance not only of the directions in the scheme to make remittances of money collections but also the orders of Court made from time to time and that he paid only a small portion of the money received by him. In para 6 of the judgment there is a table showing the actual income and remittances to the treasurer. The appellant admitted on 2nd September 1929 that he received a sum of nearly Rs. 5,000 between 29th March and 23rd August 1929 but did not remit it to the treasurer and spent it himself. Other defaults are mentioned by the Subordinate Judge in the same paragraph. Similar complaints were made in 1928 and also in 1929. Nothing further was done on the ground that an undertaking was given by him vide Exs. E and E-1. In the present petition he was required to produce all the accounts. He has not done so. The Board of Control made a rule that he should send monthly budgets, but this was not done. Accordingly the Subordinate Judge appointed a receiver. It is against this order that the present appeals are filed.
4. In appeal the point strenuously pressed is that the appointment of a receiver is not a proper remedy, on various technical grounds. First it is argued that the Board of Control was not a party to the decree; it was a creation of the decree itself and could not be a party; therefore it cannot be a decree-holder and cannot execute the decree. The reply to this argument is that a decree-holder need not be a party to the decree. It is enough if the decree confers some right enforceable under the decree upon some persons mentioned in it. The right of calling upon the trustees to remit the collections is conferred upon the Board of Control. The Board may therefore be regarded as a decree-holder: vide Varadiah Chetty v. Narasimhulu Chetti . A.I.R 1932 Mad. 41, and cases cited therein. The decision in Sivarama Dubai v. Raja gopala Misra . A.I.R 1930 Mad. 918, does not help the appellant, as it did not relate to a matter in execution. We have already held in Thyagarajaswami Devastanam v. Balayee Animal that these clauses of the scheme may be regarded as executable. The decisions in Ranganatha Thathachariar v. Krishnaswami Thathachariar . A.I.R 1924 Mad. 369, and Veerappa v. Padmanabha, A.I.R 1929 Mad. 625, are distinguishable as the applications in those cases related not to matters in execution but to other matters.
5. It is then argued that the proper method of compelling the trustee of Annadana and Abisheka kattalais to obey the directions in the scheme is by attaching the property or arresting him and not appointing a receiver. It may be that attachment of property and arrest of the judgment-debtor are two modes of enforcing obedience by the judgment-debtor to the directions in the decree. But in the present case the object of the application is not only to compel obedience on the part of the judgment-debtor, but also to obtain the collections made on behalf of the kattalais, and to ensure the production of accounts as regards collections. The learned advocate for the appellant argued that the appointment of a receiver is a mode of equitable execution under the English law and referred to English authorities to show that it cannot be justified in circumstances like these. We have nothing to do with those authorities. Even in England a wider discretion is conferred upon Courts by the Judicature Act; but in practice even under the Judilsature Act the Courts would appoint receivers only in cases where those could have been appointed prior to the Act. But under the Code of Civil Procedure we ire not restricted by considerations of this kind. According to Section 51 of the CPC, one of the modes of obtaining execution by the appointment of a receiver and under O. 40, R. 1 of the CPC, a receiver can be appointed wherever it is just and convenient; and it is provided that a receiver shall not be appointed so as
“to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove.”
6. This proviso clearly refers to a case where the person in possession is a third party and the parties to the suit have no present right to disturb him. This was the view taken by Sadasiva Ayyar, J., in Kumaraswami Pillai v. S. Pasupathia Pillai . [1921] 61 I.C 605.. We agree with that view. Where the dispute is between parties to the suit, if it is just and convenient for the purpose of enforcing or carrying out the directions in the decree, we think a receiver can be appointed even where the party in possession is not liable to be removed. It is true that in the present case the Board of Control has no right to remove the trustees. Their petition was not for the purpose of removing the trustees but for the purpose of compelling them to carry out the duties according to the scheme.
7. This has been held to be intra vires in Veeraraghavachariar v. Advocate-General Of Madras . A.I.R 1927 Mad. 1073. The effect of the present order of the Subordinate Judge is not the removal of the trustee. Defendant 12 who is trustee of Annadhanam and Abishekam kattalais will continue to discharge his duties as trustee in all other matters untouched by this order. He will settle the budgets, obtain disbursements from the treasurer and incur the expenditure necessary for the carrying out of the kattalais. Only in the matter of collecting the income and remitting the cash collections to the treasurer a receiver is appointed to attend to these duties. As will appear lower down, this order must necessarily be of a temporary character and does not amount to a permanent dispossession of the trustee. In a suit brought by a mortgagee against a mortgagor for the purpose of obtaining the mortgage amount where the property belongs to a mutt and a sale is considered not desirable, a receiver was appointed for the purpose of collecting the income of the mortgage property and paying the amount due to the mortgagee: Krislmamurthi Aiyar v. Krishnavmrthi Aiyar . A.I.R 1927 P.C 139. A similar order was passed in Mt. Sheoratni v. Munshi Lal . A.I.R 1926 Pat. 542. We do not see therefore any objection to the appointment of a receiver in this case for the purpose of ensuring remittances of the collections from the properties of the two, kattalais to the Board of Control. On the merits we do not see any reason why we should disturb the order of the Subordinate Judge having regard to the persistent conduct of the trustee in question.
8. As I have observed it is not desirable that a receiver should be appointed permanently. There should be some time limit; otherwise the Court will have perpetually to superintend the affairs of the kattalais. In the first instance we may limit the period to two years. If the Subordinate Judge is satisfied at the end of this period with the conduct of the trustees, or if the present trustee is removed, after his removal the receiver may be discharged, or the term of the receiver may be extended from time to time.
9. Subject to this modification the appeals are dismissed with costs.
P.R.S/B.V
10. Appeals dismissed.
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