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PATNA HIGH COURT
H.Mahapatra and A.B.N.Sinha JJ.
Sudhansu Kanta
Versus
Manindra Nath
Appeal From Original Order No. 203 of 1964 ;
Decided On : OCTOBER 05, 1964
RECEIVER - APPOINTMENT - PARTNERSHIP - DISSOLUTION - LEASEHOLD PROPERTY - TRANSFER - VALIDITY - RULE 37 OF THE MINERAL CONCESSION RULES, 1960 - SEC.19 OF THE MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT, 1957 - INTERPRETATION - VOID OR VOIDABLE - PUBLIC POLICY - ESTOPPEL - RATIFICATION - DOCTRINE OF PARTI DELICTO POTIOR EST CONDITIO POSSIDENTIS - APPLICATION.
Fact of the Case:
The plaintiff and the defendant were partners in a coal mining business. The partnership agreement was executed on 12th June 1957. The suit property, a 500 bighas of coal mining area, was acquired by the plaintiff and the defendant as co-lessees from the Jharkhand Mines and Industries, Ltd. by a registered indenture on 8th June 1951 for 99 years. The plaintiff filed a suit for a declaration that by the deed of release which was executed by him on 1st July 1961 his interest in the partnership firm or his interest as a lessee in the suit property was not affected in any way. He also prayed for dissolution of the partnership business and for accounts of the firm and the mines from the defendant. Before the written statement was filed by the defendant, the plaintiff made an application for appointment of a receiver alleging therein several acts of waste, negligence, damage, loss committed by the defendant in respect of the suit property. The defendant filed his answer to that application and the Court below refused to appoint a receiver. Against that the plaintiff has brought this appeal to this Court.
Finding of the Court:
The Court held that the plaintiff had made out a strong prima facie case and that the defendant was in jeopardy to the plaintiff's interest in the leasehold property. The Court also held that the defendant should be appointed as the receiver of the suit property both in regard to the leasehold as well as the partnership assets subject to the control of the trial court.
Issues: 1. Whether the plaintiff had made out a strong prima facie case? 2. Whether the defendant was in jeopardy to the plaintiff's interest in the leasehold property? 3. Whether the defendant should be appointed as the receiver of the suit property?
Ratio Decidendi: 1. A receiver can be appointed as a matter of course when a partnership is dissolved under the orders of a court, or if the partnership has already been dissolved and any of the parties has come to the court for seeking his reliefs due to him as an ex-partner. 2. A receiver can also be appointed to take charge of the partnership assets, collect the same and convert it into cash, if necessary, and to discharge the debts of the firm and thereafter divide the surplus between the partners. 3. In a suit for dissolution of a partnership a receiver can also be appointed before the final adjudication if the circumstances of the case justify such a measure. 4. The plaintiff had made out a strong prima facie case in his favour in the present suit. 5. The defendant was in jeopardy to the plaintiff's interest in the leasehold property. 6. The defendant should be appointed as the receiver of the suit property both in regard to the leasehold as well as the partnership assets subject to the control of the trial court.
Final Decision: The appeal was allowed, and the order of the court below was set aside. The defendant was appointed as the receiver of the suit property both in regard to the leasehold as well as the partnership assets subject to the control of the trial court. The defendant was directed to furnish security for Rs. 50,000.00 to the satisfaction of the court below within six weeks from the date of the order. If he failed to do so, the trial court was directed to appoint another person as receiver and direct the defendant to make over charge to him. The appointment of the defendant as a receiver was to take effect from the next day.
Mahapatra, J.
1. This appeal by the plaintiff is directed against an order of the 1st Additional District Judge, Hazaribagh, refusing to appoint a receiver in respect of suit property which is 500 bighas of coal mining area in village Topa, police station Mandu in the district of Hazaribhagh. The appellant and the defendant-respondent were two partners of a partnership firm on the 12th of June 1957 when a registered instrument incorporating the agreement of partnership was executed by both of them for purposes of carrying on coal mining business. Plaintiff filed a suit on the 6th of September, 1962 for a declaration that by the deed of release which was executed by him on the 1st of July 1961 his interest in the partnership firm Topa colliery or his interest as a lessee in the suit property was not affected in any way. The other reliefs asked by him are the dissolution of the partnership business and for accounts of the firm and the mines from the defendant. Before the written statement was filed by the defendant, the plaintiff made an application on the 14th of August 1963 for appointment of a receiver alleging therein several acts of waste, negligence, damage, loss committed by the defendant in respect of the suit property. The defendant filed his answer to that application and the Court below on hearing both sides refused to appoint a receiver. Against that the plaintiff has brought this appeal to this Court.
2. The point involved in this appeal is simple and straight: Has the plaintiff made out a strong prima facie case? Neither party adduced any evidence. The written statement has been filed by the defendant since the impugned order was passed in the trial court. One has to judge if the plaintiff has any fair chance of success in his case. In other words, whether he had made out a prima facie strong case in his favour so that the question of appointment of a receiver may be decided on that basis. It is well known that a receiver is to be appointed as a matter of course when a partnership is dissolved under the orders of a court, or if the partnership has already been dissolved and any of the parties has come to the court for seeking his reliefs due to him as an ex-partner. A receiver can be appointed to take charge of the partnership assets, collect the same and convert it into cash, if necessary, and to discharge the debts of the firm and thereafter divide the surplus between the partners. In a suit for dissolution of a partnership a receiver can also be appointed before the final adjudication if the circumstances of the case justify such a measure. In the present suit, apart from the dissolution of partnership and accounts, the plaintiff has asked for a declaration that his interest as a lessee In the suit leasehold mining land still subsists and has not been affected by the impugned deed of release which he alleged to have been taken from him under wrong and fraudulent representation by the defendant. This part of the case constitutes a separate cause of action in one way and has to be kept in view for determining if it will be just and convenient to appoint a receiver for the suit property at this stage.
3. It appears from the order under appeal that both the sides conceded before the court below that if the plaintiffs interest in the partnership assets (meaning thereby the suit mining area) continued after the execution of the deed of release a receiver should be appointed in this case in view of the nature of the suit and the reliefs sought therein. On this concession both parties asked the court not to go into the allegations of waste, negligence, damage, loss etc. made in the plaint against the defendant. Neither party desires, as it has been stated in the judgment, that the partnership should continue any further (see paragraph 21 of the order under appeal).
4. Before the plaintiff can have a receiver appointed, he has to satisfy the court that he has an interest in the property involved in the suit and t
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