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1989 Supreme(Ker) 120

Judges : VARGHESE KALLIATH,PAREED PILLAY
ARUN AGENCIES - Appellant
Versus
ST.ANTONYS OIL MILL - Respondent
Case No : C.M.A. No. 96 of 1988
Decided On : 03/16/1989
Advocates Appeared :
A. Antony; A. Antony; K. Sreekumar; For Appellant Mathews P. Mathew; K.P. Vijayan; P.K. Alexander; Cyriac Joseph; For Respondents

The main legal point established in the judgment is that the court has the power to appoint a receiver in a money suit under Order 40 Rule 1 of the Civil Procedure Code, particularly in extraordinary cases where it is necessary to render just and meaningful relief.

Headnote:

Receiver - Money Suit - The court has the power to appoint a receiver in a money suit under Order 40 Rule 1 of the Civil Procedure Code, particularly in extraordinary cases where it is necessary to render just and meaningful relief. The court must consider whether it is just and convenient to appoint a receiver, and mere convenience will not suffice. The appointment of a receiver is to secure the ends of justice and ensure that any decree obtained by the plaintiff is useful and fruitful.

Fact of the Case:

The plaintiff appealed the trial court's refusal to appoint a receiver in a money recovery suit. The plaintiff claimed that the 1st and 2nd defendants owed a total amount of Rs. 2,41,454.94 due to an overpayment made by the plaintiff. The 3rd defendant stated that he was liable to pay the amount and was willing to do so.

Finding of the Court:

The court found that there was no just and proper reason for appointing a receiver in a money suit. However, it issued an order of injunction restraining the defendants from removing any machinery or articles from the oil mill of the 2nd defendant, and the 2nd defendant from putting the mill in the possession of any stranger.

Issues: The main issue was whether the court had the power to appoint a receiver in a money suit under Order 40 Rule 1 of the Civil Procedure Code.

Ratio Decidendi: The court held that the power granted under Order 40 Rule 1 of the Civil Procedure Code is wide enough to enable the court to appoint a receiver in appropriate cases, particularly in extraordinary circumstances where it is necessary to render just and meaningful relief. The court emphasized that the appointment of a receiver is to secure the ends of justice and ensure that any decree obtained by the plaintiff is useful and fruitful.

Final Decision: The Court of Appeal disposed of the appeal and directed the trial court to ensure expeditious disposal of the case, while also issuing an order of injunction to secure the ends of justice.

Judgment :-

1. This is an appeal by the plaintiff. Plaintiff challenges the order of the trial court refusing to appoint a receiver. The suit is one for recovery of money. The plaintiff has got a serious case that the 1st and 2nd defendants are liable to pay a total amount of Rs. 2,41,454.94. According to him he is entitled to this amount since the amount is due to him on account of an over payment made by the plaintiff to 1st and 2nd defendants. The 3rd defendant has filed a written statement stating that at the time of transaction he was running the oil mill and that he is the person who is liable to pay the amount and he is willing to pay the amount received by way of over payment.

2. The court below found that there is no just and proper reason for appointing a receiver, particularly in a money suit.

3. Learned counsel submitted that extra-ordinary circumstances are existent in this case which would enable proper justification for this Court to appoint a receiver in the case. The plaintiff has attached certain immovable properties and the mill and the articles belonging to the 2nd defendant in the mill. This circumstance is also taken into account by the court below.

4. One of the questions is whether the court has got power under 0.40 R.1 C. P. C. to appoint a receiver in a money suit where there is no suit property. This Court feels that the power granted under 0.40 R.1 C. P. C. is wide enough to enable this Court in appropriate cases to appoint a receiver. After all the main devoir of the court is to render Justice to the suitors. The procedure prescribed by the Code of Civil Procedure is only for the purpose of enabling the court to reach the ultimate end; doing justice to suitors in the cause they submit before court. With this background if we understand the scope and content of 0.40 R.1 we are of opinion that in circumstances where it is necessary to render just and meaningful relief the court can appoint a receiver even in a money suit. This view has been taken by a Division Bench of the Madras High Court in the decision reported in A.I.R.1952 Madras 411 (Rajalakshmi Ammal v. Muthusami Gounder and another). Panchapakesa Ayyar, J. considering the power under O.40 R.1 observed thus:

"Wide powers have been given to Courts under 0.40, R.1 and in very extraordinary cases the court will have jurisdiction to appoint a receiver even in a simple money suit, before decree, and not merely in execution, under S.51 (2). The court will, of course, even then consider whether it is just and convenient to appoint a receiver. Mere convenience will not do. It must also be just. But such extraordinary jurisdiction will not show that a court trying a money suit has ordinary jurisdiction to appoint a receiver while the suit is pending, and before a decree is got, especially when other remedies like attachment before judgment, are open to the plaintiff and are in fact the normal remedies he is expected to pursue. It is something like the extraordinary original jurisdiction of the High Court."

But in the above case the Division Bench found that no extra-ordinary circumstances are proved for the appointment of a receiver in a simple money suit.

5. Of course, there are certain circumstances in this case which have been highlighted by the counsel for the appellant justifying the appointment of a receiver in this case. We are not quite confident that those circumstances are sufficient for considering them as extra-ordinary circumstances inviting our power under 0.40 R.1 to appoint a receiver in a simple money suit. But we feel that some safety provisions have to be made to secure the ends of justice in this case, particularly to see that in case the plaintiff gets a decree it must be a useful and fruitful one.

6. In the circumstances we feel that we should pass an order of injunction restraining the defendants in the suit till the disposal of the suit, from removing any of the machineries or articles excluding the stock in trade in the oil mill of

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