A Receiver will not be appointed for a running concern unless the plaintiff can establish a prima facie case that there is an imminent danger or waste to the property.

This is an application filed under O. 14, R. 8 of the Original Side Rules read with Order 40, Rule 1, Clause(d)of the Civil procedure Code, seeking the relief of appointment of a Receiver to manage and take charge of the daily collections of the theatre complex, Sathyam, Shantham and Sub-ham, at No. 16, Whites Road, Royapettah, Madras-600 014, pending disposal of the suit.

2. The short facts of the plaintiff/applicants case is as follows:

The plaintiff is carrying on financial business and in such capacity, he advanced moneys to the first respondent which is a firm and the respondents-2 to 12 are the partners of the same and that in respect of the said advances made to the first respondent firm, represented by the 3rd respondent herein who is the Managing Partner and in such capacity, executed an equitable mortgage in favour of the applicant/plaintiff by depositing the M/s. A.S. Chandrasekaran, and T.V. Ramanujam C. Manishankar Applicants/Paintiffs, for Respondents/Defendants.

M/s. S.C.A.S. Sundaram, B. Giridhar Rao and S. Raghunathan for title deeds of the property situated at No. 16, whites Road, Madras-600 014 as security with an intent to create a mortgage of the said property towards the due repayment of the amounts advanced to him by the applicant, and that on executing the said equitable mortgage, the first respondent obtained further advances as loan and that the 3rd respondent as the Joint Managing Partner, executed several Demand Promissory Notes on 21- 5-1988 and 17-7-1988 to the extent of Rs. 6,50,000/- and that except a sum of Rs. 27,500/- paid towards the said loan on 21-7-1988 and Rs, 7,500/- on 17-10-1988 made towards the interest, no amount was paid by the first respondent and that therefore, for the balance of the amount including the principal and interest outstanding to the extent of Rs. 11,81,216/- has since not been paid, the present suit was filed by the plaintiff against the first respondent firm and the respondents-2 12 who are the partners of the said to firm, for the recovery of the said amount.

3. The further case of the applicant/plaintiff was that though the first respondent firm is doing business in running the theatre complex under the name and style of Sathyam, Shantham and Sub-ham and collecting the rents, several loans ob tained by the firm have not been paid and the collections being derived from the running of the theatre are taken by the respondents and that as such, the respondentsare heavily indebted and not in a position to make the payments to various creditors and that further, the respondents had no property except the daily collections being derived from the theatre complex and that without paying the debts, due to various creditors, they are continuing to incur more debts and liabilities and that in fact, the first respondent firm has suspended making payments through its creditors and that therefore, the applicant is contemplating suitable insolvency proceedings and that because of the said position, it has become imperative that the Receiver be appointed to safeguard the interest of the applicant as he apprehended that he would not be able to realise his moneys the respondents, if they are allowed to run their business as they are doing so now and not able to pay any of the creditors. It was further avered tnat apart from this, the respondents are frittering and secreting away the moneys received by way of collection, with a view to delay and defeat their creditors which is evident from the fact that the equitable mortgage created in favour of the plaintiff, is still subsistmg and that due to the default, the interest and principal alone will come to the extent of one crore of rupees by the respondents for which the plaintiff is contemplating separate action. It was further averred that in the event of a decree being passed in this favour, he will not be able to realise any amount from the respondents, if they are allowed to run the three theatres and have the collections