1979 Supreme(AP) 296
Andhra Pradesh High Court
Judges : K.MADHAVA REDDY, V.MADHAVA RAO
Pasumarthi Perraju - Appellant
Versus
Central Bank of India - Respondent
A.A.O. Nos. 127,136 & 137/79
Decided On : 08-27-79
Advocates Appeared :
Mr. C. Appa Rao,Mr. G. Bhaskara Rao
Headnote:Civil Procedure Code Section 51 or Or. 40, Rule 1(2)-Decree obtained on the foot of a simple mortgage-Final decree for sale of the mortgaged property made by the Court-Application in execution filed by the decree holder for appointment of Receiver of the mortgaged property-Tenants of Mortgagor in possession of the property-Court can appoint a Receiver from taking actual possession.
Held : Receiver can be appointed of the properties directed to be sold under a simple mortgage decree. Sub-rule 2 rule 1 of Order 40 does not prevent a Receiver from dispossessing a party to a proceeding. It only restricts his power to dispossess a person other than a party to the suit himself could not have been dispossessed. While the Court may in exercise of the powers conferred on it under Or. 40 Rule 1 (a), (b), (c), (4) confer on the Receiver the authority to take possession and manage the properties and realise the rents etc., that power of the Court does extend so as to enable it to direct the removal of any person from the possession or custody of the property "whom any party to the suit has not a present right so to remove." Merely because the decree is one for sale of the mortgaged property, there is nothing in Order 40 rule 1 C. P. C. which restricts the power of the Court to appoint a Receiver. Sec. 51 C. P. C. which deals with execution proceedings expressly authorises the executive Court to order execution of a decree by appointing a Receiver. That power of the Court is "Subject to such conditions and limitations as may the prescribed". No such condition or limitation is prescribed which prohibits the Court from appointing a Receiver in respect of properties directed to be sold under a preliminary decree passed on the foot of a simple mortgage. In the absence of any rule restricting the right of the Court to appoint a Receiver in such contingencies there is no reason to curtail the wide ambit of Or. 40 Rule 1 C.P.C. which authorises the Court to appoint a Receiver even after the decree which necessarily takes in execution proceedings.
A. I. R. 1933 Mad. 570 (F. S.) relied on.
A. I. R. 1936 Allahabad 495 (F. S.) not followed.
( 1 ) THESE three civil miscellaneous appeals by the judgment debtors in three different suits O. S. Nos. 76/73, 74/73 and 75/73 on the file of the Subordinate Judge, Kakinada raise a common question of law and may be disposed of by a single judgment. The decree against the judgment debtors was obtained on the foot of a simple mortgage executed in favour of the plaintiff bank, respondent herein. The time for payment of the mortgage debt under the preliminary decree having expired and the judgment debtors having failed to pay even a single pie, final decree for sale of the mortgaged property was made. In E. P. Nos. 211, 212 and 213 of 1977 on the file of the Subordinate Judge, Kakinada a request for appointment of receiver of the mortgaged property was made by the decree holder. By the orders now under appeals the learned Subordinate Judge allowed the decree holders application and appointed a receiver of the mortgaged properties and directed the receiver to take possession of the land after getting the obstruction, if any, removed and sell the leasehold right thereof and deposit the proceeds into Court towards the decree debt till the satisfaction of the decree or until further orders.
( 2 ) AMOUNTS were advanced to the judgment debtors in June, 1970 and they have not paid any sum whatsoever either towards the principal or interest. So much so that now execution is levied for the realisation of a sum of Rs. 30,000 and odd in C. M. A. No. 127/79, another sum of Rs. 30,000 and odd in C. M. A. No. 136/79 and Rs. 50,000 and odd in C. M. A. No. 137/79. The judgment debtors inter alia resisted the appointment of the receiver on the ground that the mortgage was a simple mortgage and the direction under the final decree is to bring the mortgaged property to sale. The Court has no jurisdiction in execution of such a decree to appoint a receiver of the mortgaged properties and direct the realisation of the usufruct of the properties mortgaged properties and direct the realisation of the usufruct of the properties mortgaged towards the satisfaction of the decree. Such a direction would convert a simple mortgage to a usufructuary mortgage and that the Court has no jurisdiction to do. It was also pleaded that the judgment debtors had alienated the properties under an agreement of sale in favour of third parties and the mortgaged properties are in the possession of the tenants of the said third party and the court cannot appoint a receiver so as to dispossess the said tenants. The learned Subordinate Judge, on a consideration of all the facts and circumstances of the case found it just and convenient to appoint a receiver. He also came to the conclusion that the so called tenants of the third party are in fact set up by the judgment debtors themselves.
( 3 ) IN these appeals Mr. Apparao, the learned counsel for the appellants judgment debtors contends that in view of sub rule (2) of O. 40. R. 1 and S. 51, C. P. C. the Court cannot appoint a receiver when it would result in the dispossession of a person who has right to be in possession of the property. According to him, inasmuch as under a simple mortgage executed by the judgment debtors on the foot of which the decree now under execution is obtained by the bank, the mortgagee bank has no right to possession of the properties, in the event of default, the right of the mortgagee bank is merely to obtain a decree for realisation of the mortgage debt and being the mortgaged properties to sale. Neither under the simple mortgage deed nor under the decree, the mortgagee bank has any present right to the possession of the mortgaged property. The decree itself only directs sale of the mortgaged property. As such a receiver cannot be appointed.
( 4 ) THE power of the Court to appoint a receiver has to be judged in the light of O. 40, R. 1, C. P. C. The power of the Court to appoint a receiver in execution proceedings in particular has to be ascertained having regard to S. 51, C. P.