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HIGH COURT OF CALCUTTA
P. B. Mukharji
ALI ISMAIL DOODHA - Appellant
Versus
MOMIN BIBI - Respondent
Suit 119 Of 1927
Decided On : MAY 25, 1953
RECEIVER'S LIEN - POSSESSION - COURT'S CUSTODIA LEGIS - PAYMENT OF ALLOWED EXPENDITURE - LIMITATION - COURT'S MACHINERY AND PROCEDURE - PAST RECEIVER'S APPLICATION - COURT'S INDEMNITY - COURT'S APPROVAL AND SANCTION OF LOANS - COURT'S ORDER FOR PAYMENT - COMMON LAW LIEN - CO-EXISTING WITH POSSESSION - COURT'S POSSESSION - RECEIVER'S APPLICATION FOR PAYMENT - CONDITIONS - PAYMENT OF ALLOWED SUMS - TAXED COSTS - SALE OF SECURITIES - CANCELLATION OF BOND - DISCHARGE OF SURETIES - COSTS OUT OF ESTATE.
Fact of the Case:
A past Receiver of an estate applied for an order directing the present Receiver to pay him the sum of Rs. 11,423/- due to him and the costs under the orders dated 8-12-1947 and 22-4-1952 when taxed out of the said estate. The applicant also asked that the bond furnished by him jointly with his sureties, the Bharat Fire and General Insurance Co., Ltd., do stand cancelled, and for the discharge of the sureties.
Finding of the Court:
The Court held that a past receiver can apply to the Court for payment of moneys which the Court itself has allowed merely on the ground that he has been discharged from his office as receiver. The Court further held that the remedies against a past and present receiver are the same and that the law does not make any difference between them. The Court also held that a past receiver can apply pro interesse suo in these circumstances. The Court further held that the Court's lien belongs to the Court and the Receiver is only the human agency through which it operates. The Court also held that so long as the Court retains possession the individuality of the receiver is to my mind an irrelevant consideration. The Court also held that when the Court passes the account on the basis of which the Receiver asks to be paid, a past receiver in my judgment can apply to be paid such sums as have been allowed on his passing of accounts.
Issues: 1. Whether a past receiver can apply to the Court for payment of moneys which the Court itself has allowed merely on the ground that he has been discharged from his office as receiver? 2. Whether the remedies against a past and present receiver are the same? 3. Whether a past receiver can apply pro interesse suo in these circumstances? 4. Whether the Court's lien belongs to the Court and the Receiver is only the human agency through which it operates? 5. Whether so long as the Court retains possession the individuality of the receiver is to my mind an irrelevant consideration? 6. Whether when the Court passes the account on the basis of which the Receiver asks to be paid, a past receiver in my judgment can apply to be paid such sums as have been allowed on his passing of accounts?
Ratio Decidendi: 1. The Court held that a past receiver can apply to the Court for payment of moneys which the Court itself has allowed merely on the ground that he has been discharged from his office as receiver because the possession of the Receiver is always the possession of the Court and while the estate is in possession of the Court, it is difficult to see why Court's own officer, as Receiver, should not be entitled to apply for payment of moneys which the Court itself has allowed. 2. The Court held that the remedies against a past and present receiver are the same because the law does not make any difference between them. 3. The Court held that a past receiver can apply pro interesse suo in these circumstances because the claim put forward in the application arises out of his administration as receiver on the basis of his accounts as receiver duly passed by the Court. 4. The Court held that the Court's lien belongs to the Court and the Receiver is only the human agency through which it operates because the possession of the Receiver is always the possession of the Court. 5. The Court held that so long as the Court retains possession the individuality of the receiver is to my mind an irrelevant consideration because Receivers may come and go, but so long as there is a receiver and so long as the Court possesses the estate in its 'custodia legis', it cannot in my view be said that this lien of a receiver is lost by one individual receiver parting with the possession but replaced by another receiver. 6. The Court held that when the Court passes the account on the basis of which the Receiver asks to be paid, a past receiver in my judgment can apply to be paid such sums as have been allowed on his passing of accounts because the Court by passing the accounts authorised and sanctioned the loans in this case and the receiver therefore is entitled to be indemnified out of the estate to the extent of such loans.
Final Decision: The Court directed that the present receiver do pay in terms of Clause (a) of the Summons the sum of Rs. 11,423/- to the applicant and when the other two orders are taxed, the present receiver will also pay the taxed costs there under within a fortnight of being served with a letter of demand from the applicant stating the taxed costs. It is agreed by all parties also, that securities in the hands of the present receiver will be sold only to the extent of the satisfying the sums sanctioned in Clause (a) of the Summons and the costs of this application. There will also be an order for canceling the Bond and discharging the sureties in terms of Clause (b) of the Summons. The costs of all parties appearing in this application including those of the applicant will come out of the estate.
( 1 ) THIS Chamber Summons raises an important question on the nature and character of Receiver's lien and possession.
( 2 ) THE application is made by Mohammad Azim Mohammad Saleji a past Receiver of the estate of Ariff Bham deceased, for an order directing the present Receiver in this suit to pay him the sum of Rs. 11,4237- due to the applicant and also the costs under the orders dated 8-12-1947 and 22-4-1952 when taxed out of the said estate. The applicant also asks that the bond furnished by the applicant jointly with his sureties, the Bharat Fire and General Insurance Co. , Ltd. , do stand cancelled, and for the discharge of the sureties.
( 3 ) ON 5-7-1927 the applicant's father was appointed Receiver of the estate. He died in July 1943. By an order dated 31-8-1944, the applicant was appointed Receiver subject to his furnishing security to the satisfaction of the Registrar. He furnished security with Bharat Fire and General Insurance Co. , Ltd. , and the bond was signed on 2-8-1946. By another order dated 8-12-1947 the applicant was discharged from further acting as such Receiver and was directed to pass his final accounts. By the said order Mr. Bonbehari Das was appointed the Receiver.
( 4 ) NOW the accounts were filed by the applicant as Receiver on 4-9-1951 for the period from 7-7-1943 to 8-12-1947, showing a total sum of Rs. 16,423/- as loan by the applicant to the estate. It will be noticed here that the accounts were passed long after the applicant had been discharged from his office as Receiver. On 22-4-1952 the accounts came up before me on Receiver's passing of accounts when by consent of all parties appearing it was ordered that out of the total expenditure incurred by the applicant as Receiver and as shown in the accounts the sum of Rs. 5,000/- was disallowed and the rest of such expenditure, that is, the sum of Rs. 11,423/- was allowed. The order passing accounts, as settled, reads as follows :"it is ordered by and with the consent of the parties appearing as aforesaid that out of the total expenditure incurred by the said Receiver as shown in the said accounts, the sum of Rs. 5,000/- be and the same is hereby disallowed and that the rest of such expenditure be and the same is hereby allowed. "this consent order was made on 22-4-1952 and filed on 12-6-1952.
( 5 ) THE point of the present summons is that the applicant now wants this sum of Rs. 11,423/- allowed under that order to be paid to him by the present Receiver. Although the accounts were passed and although the order passing such accounts was by consent of parties appearing, it is unfortunate that there is now opposition to the payment of this sum of money to the former Receiver. The objections when analysed are more technical than meritorious.
( 6 ) THE first objection is that a discharged Receiver is not entitled to apply to this Court for such payment but must bring a regular suit. The second objection which follows from this is that the applicant was discharged in 1947 and he was basing now his claim on accounts which are more than 3 years old and although passed would be barred by limitation today if a suit were filed. For this purpose Article 61, Limitation Act is invoked.
( 7 ) THE estate is still in the hands of the Receiver and the Court is still administering the estate through the Receiver although it is a new receiver. The possession of the Receiver, as I understand, is always the possession of the Court. While the estate is in possession of the Court, it is difficult to see why Court's own officer, as Receiver, should not be entitled to apply for payment of moneys which the Court itself has allowed merely on the ground that he has been discharged from his office as receiver. If a present Receiver can apply for direction, so can a past Receiver. Receiver is only an emblem and agency of the Court, and from that point of view the Court continues its possession irrespective of the personality of an individual Receiver.
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