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HIGH COURT OF CALCUTTA
A. N. Ray
BENARAS ICE FACTORY LTD. - Appellant
Versus
SUKHLAL AMARCHAND VADNAGRA - Respondent
Suit 198 Of 1960
Decided On : MAY 18, 1960
RECEIVER - JURISDICTION - APPOINTMENT OF RECEIVER OUTSIDE THE STATE - EFFECTIVENESS OF ORDER - RES JUDICATA - CONSTRUCTIVE RES JUDICATA - DOCTRINE OF RES JUDICATA - EXECUTION PROCEEDINGS - WITHDRAWAL OF SUIT - FRESH SUIT - ORDER 23, RULE 1 OF THE CODE OF CIVIL PROCEDURE, 1908.
Fact of the Case:
The plaintiff, the Benaras Ice Factory Ltd. filed a suit against the defendant No. 2, New Beerbhum Coal Co. 'ltd. for the sum of Rs. 18,497-15-0. On December 5, 1955, there was a consent decree in favour of the defendant No. 2 against Benares Ice Factory Ltd. for the sum of Rs. 18,497-15-0 with interest thereon at 6 per Cent per annum from the date of the decree until realisation. Under the consent decree the decretal amount was payable in certain instalments. It was further provided in the decree that in default of payment of any one of the instalments the balance of the decretal amount would at once become payable and the defendant No. 2 would be entitled to put the decree in execution. Finally, by the consent decree a first charge was created upon the plans and machinery of the Ice Factory of the plaintiff lying and situate at Benares and the decree-holder was declared to be at liberty to execute the decree by sale of the properties charged by application in execution in this suit without being obliged to institute any suit in Benares Court. There was default in payment of the instalments. The defendant No. 2 applied for execution of the decree. By an order of this Court dated May 17, 1956, interim receiver was appointed of the plants and machinery of the said Ice Factory. By an order dated May 30, 1956, the appointment of the interim receiver was confirmed. The receiver was Mr. A. K. Sen (Jr.) a member of the Bar. The order dated May 30, 1956, further provided that "the receiver shall be at liberty to sell the said properties charged in favour of the plaintiff company either by private treaty or by public auction to the best purchaser or purchasers that can be got for the same".
Finding of the Court:
1. This Court has jurisdiction to appoint a receiver in respect of properties, movable or immoveable, outside the State of West Bengal. 2. The orders passed by this Court were not nullities and therefore there cannot be any res judicata. 3. The present suit was not the same as instituted in Varanashi Court. 4. The plaintiff is precluded from maintaining the suit by reason of the provisions contained in Order 23, Rule 1.
Issues: 1. Whether this Court has jurisdiction to appoint a receiver in respect of properties outside the jurisdiction of this Court? 2. Whether the orders passed by this Court were nullities? 3. Whether the present suit was barred by res judicata? 4. Whether the plaintiff was precluded from maintaining the suit by reason of the provisions contained in Order 23, Rule 1?
Ratio Decidendi: 1. The jurisdiction of the Court to appoint receivers outside the ordinary original jurisdiction is the same whether such appointment is in West Bengal or outside. 2. The question of res judicata has to be tested in the context of the events that transpired. 3. The present suit is different from the one instituted at Banaras. 4. The plaintiff is exposed to the peril of being precluded from maintaining the suit by reason of provisions contained in Order 23, Rule 1.
Final Decision: Suit dismissed with costs.
( 1 ) THE defendant No. 2 New Beerbhum Coal Co. 'ltd. instituted Suit No. 1024 of 1953 against the plaintiff, the Benaras Ice Factory Ltd. and the defendant No. 4, Jiban Krishna Mukherjee for the sum of Rs. 18,497-15-0. On December 5, 1955, there was a consent decree in favour of the defendant No. 2 against Benares Ice Factory Ltd. for the sum of Rs. 18,497-15-0 with interest thereon at 6 per Cent per annum from the date of the decree until realisation. Under the consent decree the decretal amount was payable in certain instalments. It was further provided in the decree that in default of payment of any one of the instalments the balance of the decretal amount would at once become payable and the defendant No. 2 would be entitled to put the decree in execution. Finally, by the consent decree a first charge was created upon the plans and machinery of the Ice Factory of the plaintiff lying and situate at Benares and the decree-holder was declared to be at liberty to execute the decree by sale of the properties charged by application in execution in this suit without being obliged to institute any suit in Benares Court. There was default in payment of the instalments. The defendant No. 2 applied for execution of the decree. By an order of this Court dated May 17, 1956, interim receiver was appointed of the plants and machinery of the said Ice Factory. By an order dated May 30, 1956, the appointment of the interim receiver was confirmed. The receiver was Mr. A. K. Sen (Jr.) a member of the Bar. The order dated May 30, 1956, further provided that "the receiver shall be at liberty to sell the said properties charged in favour of the plaintiff company either by private treaty or by public auction to the best purchaser or purchasers that can be got for the same".
( 2 ) ON March 10, 1958, the receiver entered into an agreement with the defendant No. 1 Sukhlal Amarchand Vadnagra for sale to the said defendant of certain goods including the plants and machinery for the sum of Rs. 30,000/ -. The said agreement was confirmed by this Court on May 9, 1958. By that order Benares Ice Factory was ordered to deposit within 3 weeks thereof the sum of Rs. 3000/- with Messrs. Sandersons and Morgans and the balance of the dues of Beerbhoom Coal Co. within 10 weeks thereof and in default of deposit of Rs. 3000/- and the balance of the dues the sale in execution of the decree to Vadnagra was confirmed.
( 3 ) THE plaintiff, the Benares Ice Factory Ltd. filed an application in this Court for cancellation of the said agreement and for extension of time for the plaintiff to pay as provided in the Order dated May 9, 1938. The said application was dismissed on July 29, 1958. On August 20, 1958, the plaintiff filed another application in this Court for leave to deposit the whole of the balance of the decree-holder's dues but the application was dismissed on September 4, 1958. Thereafter the plaintiff filed an appeal being Appeal No. 188 o! 1958. In the appeal upon an application being made an order was made staying delivery and/or possession of the plants and machinery to the defendant No. 1 upon the plaintiff furnishing security for the sum of Rs. 30,000/ -. The plaintiff furnished security to the satisfaction of the Registrar of this Court on or about September 11, 1958. The appeal was dismissed on April 29, 1959. Ultimately an appeal was preferred to the Supreme Court. The appeal was dismissed by the Supreme Court on November 10, 1959.
( 4 ) THE plaintiff's present case is that the sale of the plants and machinery by the receiver to the defendant No. 1 is illegal, void, without jurisdiction and does not confer any right, title or interest to the defendant No. 1. Various grounds are set out in paragraph 5 of the plaint. The grounds are, inter alia, first, that the properties sought to be sold under the agreement are permanently embedded to the earth and/or are immovable properties and are situated outside the jurisdiction of this Court an
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