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2007 Supreme(AP) 170
Andhra Pradesh High Court
Judges : P.S.NARAYANA
Putta Venkata Chalapathi Rao - Appellant
Versus
Vysya Bank Ltd. Muppavaram - Respondent
Decided On : 02/13/2007
Case No : C.M.A.No.3459 of 2002
Headnote:
Code of Civil Procedure - Order 41 - Rule 1 - possession of the mortgaged property - learned Counsel representing the appellant had taken this Court through the impugned order and would maintain that the appointment of Receiver being a harsh remedy, the learned Judge totally erred in making such an order and hence the same is liable to be set aside. The learned Counsel also had taken this Court through the contents of the order - 1st respondent would contend that the 1st respondent is Bank Limited and taking into consideration the peculiar facts and circumstances the order was made and it being a just and reasonable order, the same need not be disturbed - 1st respondent, Bank Limited as Decree-holder filed E.P. in O.S. praying for appointment of a Receiver to take possession of the mortgaged property shown in the E.P. Schedule and to auction the leasehold interest therein from year to year with or without crops, as the case may be, and to deposit the said amount to the credit of the E.P. till the debt is fully realized under Order 41 Rule 1 of the Code of Civil Procedure, hereinafter in short referred to as “Code” for the purpose of convenience - 2nd Judgment Debtor/2nd respondent in the present Civil Miscellaneous Appeal remained exparte. The appellant herein/1st Judgment Debtor filed a counter taking a stand that the E.P. is not maintainable for appointment of a Receiver to take possession of the E.P. Schedule property and to put the leasehold rights to auction including the standing crop. Further stand had been taken that the E.P. Schedule property is mortgaged property and hence the Decree-holder cannot bring the said property to sale to recover the amount and thus the remedy is not available to the 1st respondent/Decree-holder – Held decisions referred to in the judgment as regards the ambit of power of the Court to appoint Receiver under Order 40, Rule 1 of the Code of Civil Procedure were recorded in suits filed by the individuals to recover the loans or to enforce the mortgages - Economic policy of the Government and the Nationalized banks has opened new vistas and requires the banks and the financial institutions to advance loans in many areas, which were earlier unknown. The benefit available to the citizens of securing loans from Banks and financial institutions cannot be misused by refusal to repay the amount and then indulge in time-consuming litigation. Indeed, it is the duty and function of the Court entertaining the suit instituted by Banks and financial institutions to ensure that efforts are made to dispose of the suits as early as possible and even during the pendency of the suits ensure that not only the properties are protected but the defendant is made to repay the amount - learned Judge recorded reasons and ultimately was inclined to appoint Advocate, as Receiver who was directed to take possession of the E.P. Schedule property and conduct auction of the leasehold rights by way of public auction and to deposit the proceeds to the credit of the E.P. till the decretal amount was fully realized. The 1st respondent/Decree-holder had adopted this method instead of bringing the mortgaged property to sale in pursuance of the final decree. In the light of the reasons which had been recorded by the learned Judge and further in view of the fact that the power of the Court to make such appointment of Receiver in the facts and circumstances cannot be doubted in any way, this Court does not see any legal infirmity to interfere with the order made by the learned Judge - Civil Miscellaneous Appeal shall stand dismissed.
1. Heard Sri Adinarayana, Counsel for appellant and Ms.Karuna, Counsel for 1st respondent.
2. Sri Adinarayana, the learned Counsel representing the appellant had taken this Court through the impugned order and would maintain that the appointment of Receiver being a harsh remedy, the learned Judge totally erred in making such an order and hence the same is liable to be set aside. The learned Counsel also had taken this Court through the contents of the order.
3. Per contra, Ms.Karuna, the learned Counsel representing the 1st respondent would contend that the 1st respondent is the Vysya Bank Limited, Muppavaram, and taking into consideration the peculiar facts and circumstances the order was made and it being a just and reasonable order, the same need not be disturbed.
4. The 1st respondent, Vysya Bank Limited, Muppavaram, as Decree-holder filed E.P.No.88/98 in O.S.No.38/91 praying for appointment of a Receiver to take possession of the mortgaged property shown in the E.P. Schedule and to auction the leasehold interest therein from year to year with or without crops, as the case may be, and to deposit the said amount to the credit of the E.P. till the debt is fully realized under Order 41 Rule 1 of the Code of Civil Procedure, hereinafter in short referred to as “Code” for the purpose of convenience.
5. The 2nd Judgment Debtor/2nd respondent in the present Civil Miscellaneous Appeal remained exparte. The appellant herein/1st Judgment Debtor filed a counter taking a stand that the E.P. is not maintainable for appointment of a Receiver to take possession of the E.P. Schedule property and to put the leasehold rights to auction including the standing crop. Further stand had been taken that the E.P. Schedule property is mortgaged property and hence the Decree-holder cannot bring the said property to sale to recover the amount and thus the remedy is not available to the 1st respondent/Decree-holder.
6. The learned Senior Civil Judge, Addanki, framed the following Point for consideration:
Whether the receiver can be appointed for conducting the auction of leasehold rights of the mortgaged property?
The learned Judge recorded reasons in paras 3, 4 and 5 of the order impugned and ultimately came to the conclusion that the application to be allowed and accordingly allowed the same. Aggrieved by the same, the present Civil Miscellaneous Appeal had been preferred.
7. The 1st respondent/Decree-holder obtained a preliminary Decree against the appellant/1st Judgment Debtor and the 2nd respondent/2nd Judgment Debtor as well for an amount of Rs.75,165/- on 6-10-1994 with the date of redemption as 5-1-1995 and as the Judgment Debtors failed to redeem the mortgaged property on or before the date specified supra, the 1st respondent herein/Decree-holder filed a petition for passing of final Decree and obtained the same on 26-6-1996 and as per the final decree the 1st respondent/Decree-holder is entitled to bring the mortgaged property to sale.
8. Section 51 of the Code deals with Powers of Court to enforce execution. Section 51(d) of the Code specifies:
“Subject to such conditions and limitations as may be prescribed, the Court may on the application of the Decree-holder order execution of the Decree by appointing a receiver”.
Likewise, Section 51(e) of the Code also specifies:
“… In such manner as the nature of the relief granted may require.”
It is needless to say that in the light of the aforesaid provisions of the Code, in execution of the decree, a Receiver may be appointed. However, the main contention advanced by the Counsel for appellant/1st Judgment Debtor is that Order XL Rule 1 of the Code dealing with Appointment of receivers specifies “Where it appears to the Court to be just and convenient..” and would contend that in the facts and circumstances it is not just and convenient to appoint a Receiver.
9. In the present case, the 1st respondent/Decree-holder-Bank already had obtained final decree on the strength of the preliminary decree
