This is an appeal from the judgment of Mr. Justice Coutts Trotter in a suit brought by the receiver appointed by the Negapatam Subordinate Judge's Court in execution of a decree obtained by one Tuljaram Row against one Swaminatha Sastri now deceased. In execution of that decree the Negapatam Court appointed a receiver of Swaminatha Sastri's estate to come here and prosecute a cause of action, which Swaminatha Sastri is alleged to have had against the present defendant Alagappa Chetty.
The first question which has been strenuously argued before us by Mr. Ananthakrishna Aiyar for the appellant is that the Negapatam Court had no jurisdiction to appoint a Receiver in execution to come and sue here. We are not in this case dealing with the propriety of appointing a receiver in a case like this. All we are dealing with is the question whether the Court had jurisdiction to appoint a receiver in the execution of its decree and we are unable to say the appointment was without jurisdiction. The new Code has made a difference in this respect; whereas under Sect. 503 of the old Code there was a general power to appoint receivers, among other things, for the realisation of property a receiver under that section could only be appointed in respect of property which was either “the subject matter of the suit, or under attachment.” Sect. 51 of the present Code prescribes that “the Court may…..order execution of the decree ……(d) by appointing a receiver” and in O. 40, R. 1, which corresponds to Sect. 503 of the old Code, the words of limitation as to property which was the subject matter of the suit, or under attachment, are omitted. Therefore neither in the body of the section nor in the rule is there any limitation such as there was in the old Code, and we are not now called upon to consider the question as to the operation of cl. (b) of Sect. 51, which is dealt with in Begg Dunlop & Co. v. Jagannath Marwari(1). Nor have we to decide whether the receiver ought not to have been appointed. This system of appointing receivers in execution is borrowed from the English procedure. The rule in England is that receivers will not be appointed except for special reasons. Therefore, it might have been better in this case, if a receiver had not been appointed. However, we cannot say that it was done, without jurisdiction and therefore we agree with the judgment of Mr. Justice Abdur Rahim an this point.
We have then to consider the appeal from the judgment of Mr. Justice Coutts Trotter, in favour of the plaintiff, the receiver, in this suit. The circumstances which give rise to the suit are these. One Tuljaram Row bought certain property from Swaminatha Sastri, on a promissory note for Rs. 18,500, in part payment of the consideration. The arrangement was that Swaminatha Sastri was not to assign the note, as there were various charges on the property, which the purchaser, Tuljaram Row, would have to discharge. Swaminatha Sastri in breach of his agreement assigned the promissory note to the present defendant who sued Tuljaram Row upon it and recovered under a compromise a sum of Rs. 6,750. Thereupon, Tuljaram Row brought a suit against Swaminatha Sastri in the Negapatam Subordinate Judge's Court for damages for the breach of his contract, not to assign the note and obtained a decree for the like sum of Rs. 6,750 and costs and it is in execution of that decree that the receiver has been appointed. The present suit is brought by the receiver on the footing that Tuljaram Row's promissory note for Rs. 18,500 was assigned to the defendant Alagappa Chetty for collection only, and the learned Judge has so found and has given judgment, apparently so far by agreement, for Rs. 6,750 and costs. Now the question is whether this was an assignment for collection only and it is for the receiver to show that. Much reliance was placed by the learned Judge on the terms of a certain Varthamanam, Ex. G, executed by Swaminatha Sastri in favour of one Subbier who arranged for the assignment by Swaminatha Sastri to the defendant. It is an agreement to pay Subbier Rs. 1000 for his services. The latter portion of it alone is material: “I will give you the one thousand rupees mentioned hereinafter the said business is finished, after the person who obtains the transfer sues for the said note amount and obtains a decree and after he realises the said sum and gives me the sum agreed to be paid to me.” Now what that suggests to us is that this was not a mere assignment for collection but that it was an agreement that the promissory note was to be assigned to the defendant that he was to sue for it and share the proceeds in some unstated proportion with Swaminatha Sastri. Swaminatha Sastri had at various times during his life time given various accounts according as his interests dictated. There is an admission by him that he received Rs. 1000 on this assignment. It is also proved and admitted that the defendant incurred a sum of Rs. 2,317-14-3, as costs of the litigation against Tuljaram Row. The defendant has come here with a clearly false case that he paid the full consideration of Rs. 18,000 for this promissory note and he has declined to tell us how far he was to be an agent for collection and how far he was to be accountable to Swaminatha Sastri for what he recovered. In these circumstances, the only course we can see is to give judgment against him for Rs. 6,750, less Rs. 1,000, which he has already paid and Rs. 2,317-14-3 which he spent in recovering that amount. The decree will be varied accordingly with proportionate costs throughout. There will be interest and counter interest.
The memorandum of objections is dismissed with costs.
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K.V.SDecree modified.