PATNA HIGH COURT
S.K.Das and C.P.Sinha JJ.
Rudreshwari Pd.Sinha
Versus
Ramabati Devi
Appeal From Original Order No. 159 of 1950 ;
Decided On : MAY 11, 1951
MORTGAGE - APPOINTMENT OF RECEIVER - ORDER 40, RULE 1, SUB-CLAUSE (2) OF THE CIVIL P. C. - WHETHER BARS APPOINTMENT OF RECEIVER IN A MORTGAGE ACTION ON THE FOOT OF A SIMPLE MORTGAGE BOND - WHETHER A RECEIVER CAN BE ASKED TO PAY INTEREST ON THE MORTGAGE FROM OUT OF THE RENTS AND PROFITS OF THE PROPERTIES.
Fact of the Case:
The judgment-debtor had executed a simple mortgage bond to secure a sum of Rs. 1,10,000/-. A mortgage suit was instituted and a preliminary decree was obtained on 23-4-1943 and the final decree was passed for a sum of Rs. 2,12,068/14/- on the 12th of November 1946, and execution of the decree was taken out in the year 1947. The judgment-debtor having taken objection that the properties were not saleable, the matter came to this Court and is now pending decision by the Supreme Court. As there was delay in bringing the properties to sale, an application was made on the 10th April, 1947, on behalf of the decree-holders for the appointment of a receiver till the decretal amount was fully realised by the sale of the mortgaged properties.
Finding of the Court:
The Court held that in a suit on a simple mortgage for sale the Court has jurisdiction to appoint a receiver to take possession of the mortgaged property and to realise the rents, issues and profits of the property. But this does not necessarily lead to the conclusion that a receiver may be claimed by the mortgagee in a suit on a simple mortgage as a matter of right and as a matter of course. Ordinarily, a Court of justice should be disinclined to take the mortgaged property out of the possession of the mortgagor who is entitled to continue in possession of the same until ownership has passed out of his hands by a sale held in execution of the final decree in the action. A receiver in such a suit, or in execution proceedings resulting from a decree in such a suit, can only be appointed in exceptional circumstances when a special case is made out for putting the property in charge of an officer of the Court.
Issues: 1. Whether Order 40, Rule 1, Sub-clause (2) of the Civil P. C. bars the appointment of a receiver in a mortgage action on the foot of a simple mortgage bond? 2. Whether a receiver can be asked to pay interest on the mortgage from out of the rents and profits of the properties?
Ratio Decidendi: 1. Order 40, Rule 1, Sub-clause (2) of the Civil P. C. does not bar the appointment of a receiver in a mortgage action on the foot of a simple mortgage bond. A receiver can be appointed in such a suit, or in execution proceedings resulting from a decree in such a suit, only in exceptional circumstances when a special case is made out for putting the property in charge of an officer of the Court. 2. A receiver cannot be asked to pay interest on the mortgage from out of the rents and profits of the properties because the decree-holder in execution of a simple mortgage decree is only entitled to realise his dues, both principal and interest, from the sale proceeds of the mortgaged properties after they have been brought to sale.
Final Decision: The appeal was allowed, and the judgment-debtor was appointed as the Receiver of the properties in execution until those properties are brought to sale in execution of the final decree in the mortgage action.
C.P.Sinha, J.
1. This appeal has been preferred by the judgment-debtor against an order of the learned Subordinate Judge of Bhagalpur dated the 1st of May 1950, by which one Mr. Shakil, pleader, has been appointed receiver of the properties which have been directed by the final decree in a mortgage action to be sold.
2. The Court below has pleased to direct by its order dated the 16th of July 1949 that a receiver be appointed till the properties were brought to sale. No appeal was preferred against that order which became final. The judgment-debtor wanted that he should himself be appointed as receiver. The Court below allowed him opportunities to deposit certain sums of money and observed that, if the money were deposited within the time, allowed by the Court, the Court would consider the desirability of appointing the judgment-debtor as receiver. The judgment-debtor having failed to deposit the entire amount, the Court below has appointed the aforesaid pleader as receiver.
3. The facts can be briefly stated as follows: The judgment-debtor had executed a simple mortgage bond dated the 1st of April 1937 to secure a sum of Rs. 1,10,000/-. A mortgage suit No. 27 of 1941 was instituted and a preliminary decree was obtained on 23-4-1943 and the final decree was passed for a sum of Rs. 2,12,068/14/- on the 12th of November 1946, and execution of the decree was taken out in the year 1947. The judgment-debtor having taken objection that the properties were not saleable, the matter came to this Court and is now pending decision by the Supreme Court. As there was delay in bringing the properties to sale, an application was made on the 10th April, 1947, on behalf of the decree-holders for the appointment of a receiver till the decretal amount was fully realised by the sale of the mortgaged properties. The decree-holders happened to be the landlords of the properties in question and they were entitled to rent, and the Court by its order dated the 16th of July, 1949, had directed the payment of all the arrears of rent, and, as I have mentioned already, the entire amount of arrears not having been paid within the time allowed, a receiver has been appointed.
4. An application was made on the 19th of April, 1950, under Sec.11 of the Bihar Money Lenders (Regulation of Transactions) Act (VII of 1939) inpayment of the decree by instalments. That application is still undisposed of and the proceeding for valuation of the properties under Sec.13 of the said Act is also pending before the Court.
5. The learned Advocate General on behalf of the appellant has urged that, because of the provisions contained in Order 40, Rule 1, Sub-clause (2) of the Civil P. C., no receiver can be appointed in a mortgage action on the foot of a simple mortgage bond so as to remove from possession of the property the mortgagor who is entitled to remain in possession of the properties until they are brought to sale as provided by the decree and that a receiver cannot be asked to pay interest on the mortgage from out of the rents and profits of the properties because the decree-holder in execution of a simple mortgage decree is only entitled to realise his dues, both principal and interest, from the sale proceeds of the mortgaged properties after they have been brought to sale.
6. Order 40, Rule 1, Sub-clause (2) runs as follows: "Nothing in this rule shall authorize the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove."
7. If the question were res integra, it would be necessary for this Court to consider the authorities bearing upon that point; but this contention of the learned Advocate General is concluded by the authorities of this Court in the cases of HARGOPAL NANDY V/s. DEONITI PRASAD, 24 Pat 282 and AMABNATH V/s. ABHOY KUMAR, 27 Pat 534.
8. In HARGOPAL NANDY V/s. DEONITI PRASAD, 24 Pat 282, a receiver was sought to be appointed during execution proceedings and summing up
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