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Andhra Pradesh High Court
Judges : K.JAYACHANDRA REDDY, P.KODANDA RAMAYYA
Mohd.Ghulam Ghouse Khan - Appellant
Versus
Anantha Rao Deshmukh - Respondent
Decided On : 11-21-83
RECEIVER - SUIT AGAINST - LEAVE OF COURT - DECREE WITHOUT LEAVE - VALIDITY - JURISDICTION - CONTEMPT OF COURT - ORDER 40, RULE 1 (2), C. P. C. - A decree obtained against a receiver appointed by the Court without leave is not a nullity but is voidable. The Court which appointed the receiver can either restrain the further proceedings in the suit or if a decree is already passed it can order stay of the execution proceedings. The Court is bound to either enquire into the rights of the third party or grant leave to agitate his rights in a separate suit.
Fact of the Case:
The appellant filed a suit for permanent injunction against the receiver appointed by the Court, restraining him from interfering with his possession of a plot of land. The receiver raised the plea that the suit was not maintainable as leave from the Court which appointed him was not obtained. The trial Court passed an ex parte decree in favor of the appellant. The receiver filed an application to set aside the ex parte decree and also filed an application under Section 151 and Order 40, Rule 1, C. P. C. requesting the Court to remove the encroachment by the appellant and also for demolishing the compound wall raised by him. The learned single Judge allowed the application and directed demolition of the construction of the compound wall.
Finding of the Court:
The Court held that the decree obtained against the receiver without leave from the Court is not a nullity but is voidable. The Court which appointed the receiver can either restrain the further proceedings in the suit or if a decree is already passed it can order stay of the execution proceedings. The Court is bound to either enquire into the rights of the third party or grant leave to agitate his rights in a separate suit. The Court also held that the appointment of the new receiver in place of the previous receiver constitutes devolution of interest within the meaning of O. 22, Rule 10, C. P. C. and there is no abatement of the proceedings and the new receiver can continue the proceedings with the leave of the Court and the decree passed without substituting the new receiver cannot be treated as a nullity.
Issues: 1. Whether a decree obtained against a receiver appointed by the Court without leave is a nullity? 2. Whether the appointment of a new receiver in place of the previous receiver constitutes devolution of interest within the meaning of O. 22, Rule 10, C. P. C.?
Ratio Decidendi: 1. A decree obtained against a receiver appointed by the Court without leave is not a nullity but is voidable. The Court which appointed the receiver can either restrain the further proceedings in the suit or if a decree is already passed it can order stay of the execution proceedings. The Court is bound to either enquire into the rights of the third party or grant leave to agitate his rights in a separate suit. 2. The appointment of a new receiver in place of the previous receiver constitutes devolution of interest within the meaning of O. 22, Rule 10, C. P. C. and there is no abatement of the proceedings and the new receiver can continue the proceedings with the leave of the Court and the decree passed without substituting the new receiver cannot be treated as a nullity.
Final Decision: The Court allowed the appeal in part and directed the parties to bear their own costs. The Court also directed the receiver to prosecute the application to set aside the ex parte decree expeditiously. The plaintiff in O. S. No. 2818/78 was granted leave to prosecute the suit after the ex parte decree is set aside. However, any interim order of injunction or any decree passed finally against the Receiver cannot be enforced against him without further leave from the Court trying C. S. number 14/58.
( 1 ) THIS appeal raises an important question of law namely, whether a receiver appointed by Court can be sued without leave by the Court which appointed him and whether such a decree passed against him is a nullity.
( 2 ) THIS Court in exercise of its original jurisdiction in C. S. No. 14/58 allotted to different shareholders item 29 of Schedule IV of plaint schedule situated in Zamistanpur bearing survey No. 179 as per allotment order dated 29-1-1971. Final decree proceedings have not yet been passed (and) the receiver is in possession of the property. The appellant in this appeal who is residing adjacent to plot No. 3 the paigh land in the said item 29 filed a suit on 27-8-1978 for permanent injunction in O. S. No. 2818/78 on the file of VII Assistant Judge, City Civil Court, Hyderabad against the Receiver, the respondent herein restraining him from interfering with his possession claiming that the dispute plot No. 3 forms part of the land of his residential house 1-7-13. A plea was raised by the receiver that the suit is not maintainable as leave from this Court which appointed him was not obtained. Subsequently the said receiver Sri P. Narayanarao who was a party in that suit was discharged on 23-6-1982 and a new receiver Sri Ananatarao Deshmukh was appointed on the same day. But the plaintiff-the present appellant did not bring on record the new receiver but proceeded with the trial of the suit and no one represented the receiver. Pending the suit the plaintiff obtained a temporary injunction and constructed a compound wall over plot No. 3 and ultimately obtained an ex parte decree on 23-8-1982. The present respondent in this appeal, the new receiver filed an application to set aside the said ex parte decree on 15-6-1983. When the above application was pending he filed the present application No. 88/83/in C. S. No. 14/58 on the file of this Court on 7-7-1983 under Section 151 and Order 40, Rule 1, C. P. C. requesting this Court to remove the encroachment by the appellant and also for demolishing the compound wall raised by him stating, that the decree obtained against the previous receiver is a nullity on the ground that no leave was obtained from this court and also new receiver was not substituted when the previous receiver was discharged from office. The learned single Judge Sri Justice Rama Rao allowed the application holding that the decree in O. S. No. 2818/78 is a nullity as no leave was obtained from this Court. He also accepted the contention that the decree obtained against the previous receiver without substituting the new receiver is void. Accordingly he allowed the application and directed demolition of the construction of the compound wall over plot No. 3 of the Zamistanpur land bearing survey No. 179 adjacent to the house No. 1-7-13 of the appellant herein with a direction that the receiver is entitled to take the Police aid at the time of the demolition. Against the said order the present appeal is filed.
( 3 ) THE learned counsel for the appellant raised three contentions. (1) The decree obtained against the receiver without leave from this Court is not a nullity and the remedy of the receiver is to get that decree set aside and till then he is bound to obey the said decree. (2) The interest of the previous receiver devolves on the new receiver and the decree obtained against the previous receiver is valid and no abatement taken place. (3) The learned Judge having held the decree as a nullity should have decided the claim of the appellant himself and the Court has no power to dispossess any third party in the suit who has got a paramount title as envisaged by O. Rule (1) (2), C. P. C.
( 4 ) WE have to examine the true effect of the decree obtained by the appellant against the receiver without leave from this Court and the remedy of the receiver under the circumstances of the case. This can be examined under three parts. (I) The rule requiring the leave to sue the receiver and the r
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