High Court Of Calcutta
SUDHENDU NATH MALLICK
TAPAN TANAY HALDER - Appellant
Versus
STATE - Respondent
C. O. 1712 Of 1994
Decided On : 08/28/1997
RECEIVER - REMOVAL AND APPOINTMENT - [ORDER XL, RULE 4 OF THE CODE OF CIVIL PROCEDURE] - WHERE A RECEIVER OCCASIONS LOSS TO THE PROPERTY BY HIS WILFUL DEFAULT OR GROSS NEGLIGENCE, THE COURT MAY DIRECT HIS PROPERTY TO BE ATTACHED AND MAY SELL SUCH PROPERTY, AND MAY APPLY THE PROCEEDS TO MAKE GOOD ANY AMOUNT FOUND TO BE DUE FROM HIM OR ANY LOSS OCCASIONED BY HIM, AND SHALL PAY THE BALANCE (IF ANY) TO THE RECEIVER.
Fact of the Case:
After the abatement of a suit for dissolution of partnership and accounts, the trial court appointed an Advocate-Receiver to control and supervise the partnership business left in charge of the party Receivers. The Advocate-Receiver was discharged after submitting his accounts. Subsequently, one of the defendants filed an application under Order 40, Rule 4 of the Code of Civil Procedure, alleging that the Advocate-Receiver had caused a loss of Rs. 5 crores to him due to wilful default or gross negligence in respect of a property that was not the subject matter of the suit and was never in the charge of the Advocate-Receiver. The trial court allowed the application and removed the Advocate-Receiver, appointing two other defendants as Receivers in his place. On appeal, the District Judge set aside the trial court's order, holding that there was no scope for appointing a new Receiver since the original suit had abated and the Advocate-Receiver had been discharged.
Finding of the Court:
The High Court dismissed the revision petitions filed by the defendants challenging the District Judge's order. It held that the application under Order 40, Rule 4 of the Code of Civil Procedure was misconceived as there was no finding of wilful default or gross negligence on the part of the Advocate-Receiver in respect of the property in question. The High Court also noted that the property was never the subject matter of the suit and was never in the charge of the Advocate-Receiver.
Issues: 1. Whether the trial court erred in allowing the application under Order 40, Rule 4 of the Code of Civil Procedure and removing the Advocate-Receiver without finding any wilful default or gross negligence on his part. 2. Whether the District Judge erred in setting aside the trial court's order and holding that there was no scope for appointing a new Receiver since the original suit had abated and the Advocate-Receiver had been discharged.
Ratio Decidendi: 1. Order 40, Rule 4 of the Code of Civil Procedure allows the court to remove a Receiver and sell his property to make good any loss occasioned by his wilful default or gross negligence. However, in the present case, there was no finding of wilful default or gross negligence on the part of the Advocate-Receiver. 2. Since the original suit had abated and the Advocate-Receiver had been discharged, there was no scope for appointing a new Receiver.
Final Decision: The High Court dismissed the revision petitions filed by the defendants challenging the District Judge's order.
( 1 ) THESE two revisional applications heard analogously have been preferred by the respective defendants-petitioners viz. , Tapan Tanay Halder and Mukunda Chandra Halder under Section 115 of the Code of Civil Procedure against the order dated 24-5-1994 passed by the learned District Judge, 2nd Court, Alipore in Misc. Appeal Nos. 77, 78 and 98 of 1994 (heard analogously) reversing the order dated 11-2-94 passed by the learned Assistant District Judge, 7th Court at Alipore in Title Suit No. 169 of 1987 allowing an application under Order XL, Rule 4 of the Code of Civil Procedure preferred by the petitioner Mukunda Chandra Halder of C. O. No. 2652 of 1994.
( 2 ) IT may be mentioned here that the original number of the Title Suit No. 169 of 1987 was Title Suit No. 44 of 1971 filed in the 10th Court of the Subordinate Judge at Alipore which was successively transferred to different Courts and ultimately re-numbered as Title Suit No. 169 of 1987 of the 7th Court of the Assistant District Judge at Alipore. The aforesaid suit was filed on 17-9-71 by one Sri Hara Lal Halder since deceased against the present two petitioners and others for dissolution of partnership and for accounts etc. , in respect of the assets of the partnership business as detailed in the plaint-schedule. It was the plaint case that the partnership was created by a registered Deed executed by the parties on 14-2-68. It may also be noted that the aforesaid suit abated on the death of the original plaintiff whose heirs were not substituted according to law. The trial Court by order No. 211, dated 25-4-75 ordered the suit to abate.
( 3 ) BUT the trouble started since the abatement of the suit due to infight among the defendants over a property of the deceased-plaintiff being premises No. 91, Mahatma Gandhi Road, P. S. Budge Budge. The records of the said dead suit have become a strange labyrinth of indiscriminate papers, application and orders passed by the trial Court and the Appellate Courts at different points of time. However, it would be necessary to note the undisputed or admitted facts on record for the purpose of appreciating the scope of the present two revisional applications and to pass appropriate orders on the same.
( 4 ) AFTER the filing of the suit and during the lifetime of the original plaintiff, the parties to the suit were appointed as Receiver over the plaint-schedule properties as per direction of the learned Appellate Court vide Order No. 76, dated 31-7-72. The Appellate Court's order was passed by the learned Additional District Judge, 2nd Court at Alipore in Misc. Appeal No. 198 of 1972 on 18-7-72. This High Court in its revisional jurisdiction modified the aforesaid order of the First Appeal Court and directed as follows in C. R. No. 2392 of 1972 by Order dated 4-4-72 :-"all the parties before us agree preferably practising lawyer of the Alipore Court should be appointed Receiver. We think that the parties who were appointed Receivers of the different businesses by the Court of Appeal below should be left in-charge of the said business, but under the control and supervision of the Receiver to be appointed by the Trial Court". On the basis of the aforesaid order, the Trial Court passed Order No. 87, dated 2-6-73 appointing one Mr. Dipen Dey, a practising Advocate of Alipore Court as supervisory Receiver. The said Mr. Dey is the O. P. No. 6 in both the revisional applications before this Court. Abatement of the suit was recorded by the Trial Court by its Order No. 211, dated 25-4-75. By the same order, the Trial Court directed Mr. Dey to return the writ issued to him together with the accounts by 7-5-75 and further stated that Mr. Dey will be discharged from the post of the Receiver subject to the passing of the accounts. By Order No. 212 of the same date, the Trial Court further indicated that in view of the abatement of the suit, the Court was no longer seisin of the same and as such all pending applications stoo
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