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SUPREME COURT OF INDIA
B.P. SINHA, JAFER IMAM AND K. SUBBA RAO, JJ.
Kanhaiyalal, Appellant
Versus
Dr. D. R. Banaji and others, Respondents.
Civil Appeal NO. 128 of 1954.
31st March 1958.
Advocates appeared
Mr. Radhey Lal, Advocate for Appellant; Mr. P.N. Bhagwati, Advocate & M/s. J. B. Dadachanji, S. N. Andley and Rameshwar Nath, Advocates of M/s. R. H. Dhebar, Advocate, for Respondent No. 2.
-where the matters do not fall within the jurisdiction of Revenue and Rent Courts constituted under the various State Acts, the jurisdiction of Civil Courts are not ousted - Kanhiyalal v. Dr. D.R. Banaji, AIR 1958 SC 725, Magiti Sasamal v. Tholu, AIR 1963 SC 361; Jyotish v. Tarakant, AIR 1963 SC 605; Abdul v. Bhawani, AIR 1966 SC 1718, Sonawati v. Sri Ram, AIR 1968 SC 466; Musamia Imam v. Rabari Govindbhai, AIR 1969 SC 439; Dewji v. Ganpatlal, AIR 1969 SC 560; Dayaram v. Dawalshah, AIR 1971 SC 681.
-it is also settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under this Rule, without leave of the Court are illegal in the sense that the party proceeding against the property, without leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held, do not effect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the Court to be entitled to the same
-when a Court puts a Receiver in possession of property, the property comes under Court custody, the Receiver being merely an officer or agent of the Court. Any obstruction or interference with the Court’s possession sounds in contempt of that Court. Any legal action in respect of that property is in a sense such an interference and invites the contempt penalty of likely invalidation of the suit or other proceedings. But, if either before starting the action of during its continuance, the party takes the leave of the Court, the sin is absolved and the proceeding may continue to a conclusion on the merits. In the ordinary course, no court is so prestige - conscious that it will stand in the way of a legitimate legal proceedings for redressal or relief against its receiver unless the action is totally meritless, frivolous or vexatious or otherwise vitiated by any sinister factor. Grant of leave is the rule, refusal the exception. After all, the Court is not, in the usual run of cases, affected by a litigation which settles the rights of the parties and the receiver represents neither party, being an officer of the court. For this reason, ordinarily the Court accords permission to sue, or to continue. The jurisdiction to grant leave is undoubted and inherent, but not based on black letter law in the sense of enacted law. Any litigative disturbance of the Court’s possession without its permission amounts to contempt of its authority, and the wages of contempt of court in this jurisdiction may well be voidability of the whole proceeding. Equally clearly, prior permission of the court appointing the receiver is not a condition precedent to the enforcement of the cause of action. Nor is it so grave a vice that later leave sought and got before the decree has been passed will not purge it. If, before the suit terminates, the relevant court is moved and permission to sue or to prosecute further is granted, the requirement of law is fulfilled. Of course, failure to secure such leave till the end of the lis may prove fatal -
-this Rule requires that where the property is in the custody of any court or public officer, attachment shall be made by a notice to such court or officer. But the observe of such a notice would not render the sale void ab initio because the jurisdiction of the court or the authority ordering the sale, does not depend upon the issue of the notice of attachment. It is also settled law that proceedings taken in respect of a property which is in possession and management of a Receiver appointed by Court under Order 40, Rule 1 of the Code without the leave of the Court, are illegal in the sense that the party proceeding against the property without the leave of the court concerned, is liable to be committed for contempt of the court and that the proceedings so held, do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the court to be entitled to the same. The general rule that property in custodian legist through its duly appointed Receiver is exempt from judicial process except to the extent that the leave of that court has been obtained, is based on a very sound reason of public policy, namely, that there should be no conflict of jurisdiction between different courts. If a Court has exercised its power to appoint a Receiver of a certain property, it has done so with a view to preserving the property for the benefit of the rightful owner as judicially determined -
Key Points: - The sale of property in custodia legis without leave of the court or notice to the Receiver is examined for its legality, with the Court noting such sales are not void ab initio but may be voidable or illegal depending on circumstances (!) (!) - The Berar Land Revenue Code establishes a paramount charge for land revenue and provides a summary recovery mechanism; it does not contemplate interposition of a Receiver by the Civil Courts in respect of government revenue, affecting analysis of rights in custodia legis (!) (!) - Section 157(1) bars suits on grounds of irregularity or mistake; the present suit was found not to fall within 157(1), 157(2), or 155, and thus not barred by these provisions (!) (!) (!) - Section 192(1) bars civil Court jurisdiction over matters the Revenue or a Revenue Officer is empowered to determine; the Court held the present suit not within the specific enumerations of 192, and not barred by 192, because it seeks a declaration and possession relief not within those listed matters (!) (!) (!) - The High Court’s conclusion that the auction-sale was illegal was upheld, and the appeal was dismissed with costs in favor of the Receiver (!) (!)
Judgment
B. P. SINHA, J.: The main question in controversy in this appeal on a certificate of fitness granted by the High Court of Judicature at Nagpur (as it then was), is whether the provisions of the Berar Land Revenue Code, 1928, (which will hereinafter be referred to as the Code), bar the suit out of which this appeal arises.
2. In order to appreciate the points in controversy in this appeal, it is necessary to state the following facts: One Bhagchand Jairamdas was the occupant of a plot, situated in the District town of Yeotmal in what was then called the Province of Central Provinces and Berar, measuring 1,91,664 square feet in area, on which stood a ginning factory and its appurtenant buildings. Bhagchand aforesaid had executed a mortgage-bond in favour of one Abubakar. The mortgagee aforesaid instituted a suit on the original side of the Bombay High Court, being Civil Suit No. 1543 of 1934, to enforce the said mortgage. A Receiver was appointed on 20th October 1936, during the pendency of the suit in respect of the mortgaged properties including the plot described above. The land and the buildings and the factory, have been valued by the Courts below at about Rupees 70,000. The revenue payable in respect of the plot in question, at the rate of Rs. 129 per year, appears to have remained in arrears for two years, namely, 1936-37 and 1937-38. The Sub-Divisional Officer of Yeotmal, functioning as the Deputy Commissioner under the Code, sold at auction the plot in question, free of all encumbrances, on 17th December 1937, without impleading or giving notice to the Receiver who was in charge of the estate of Bhagchand, as aforesaid. At that auction, Kanhaiyalal, the appellant, purchased the property for Rs. 270 only. The sale in his favour was confirmed on 26th January 1938, but in appears that the then Receiver had sent Rs. 275 by a cheque to the Sub-Divisional Officer concerned, in full payment of the arrears of land revenue, and thus, to have the sale set aside. But it was received two days after the confirmation of the sale. Before the confirmation of the sale, the Receiver had made an application on 19th 1938, to the Sub-Divisional Officer, offering to pay the arrears, but it appears that through some bungling in the office, the attention of the Sub-Divisional Officer was not drawn to the application until after the confirmation of the sale. The Receiver then applied for a review of the order confirming the sale, and the Sub-Divisional Officer allowed the application and set aside the sale. The Deputy Commissioner, Yeotmal, and the Commissioner, Berar, also upheld the order setting aside the sale. Thereupon, the auction-purchaser, Kanhaiyalal, moved in revision the Financial Commissioner who was then the highest Revenue authority under the Code, against the order of the Commissioner, and ultimately, the order setting aside the sale, was vacated by the Financial Commissioner on the ground that there was no application under S. 155 or S. 156 of the Code.
3. The then Receiver, having ultimately failed in having the sale of the valuable properties by the revenue authorities, set aside, instituted the suit out of which this appeal arises, impleading the Provincial Government of Central Provinces and Berar, as the first defendant, Kanhaiyalal, the auction-purchaser, as the second defendant, and Duli Chand Bhagchand as the third defendant. He prayed for a declaration that the auction sale held on 17th December 1937, was void, on a number of grounds including the grounds that no notice of demand had been sent to the Receiver who was in charge of the property; that the attachment and sale proclamation had not been effected according to law, and that though the revenue authorities were aware of the appointment of Receiver of the property, by the Bombay High Court, they did not implead the Court Receiver. This suit was contested on the preliminary ground that it was barred by the provisions of Ss. 157 and 192 of the Code. That plea
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