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1916 Supreme(All) 45

ALLAHABAD HIGH COURT
HENRY RICHARDS, PRAMADA CHARAN BANERJI, JJ.
Jhunku Lal - Appellant
Versus
Piaru Lal & Ors. - Respondents
Decided On : 30-11-1916

JUDGMENT

Henry Richards, C.J. and Pramada Charan Banerji, J. - This appeal arises under the following circumstances. The defendant third party mortgaged a cotton ginning factory to the plaintiff on the 14th of May, 1908. The plaintiff obtained the usual mortgage decree on the 10th of November, 1910. The property was about to be sold when an application was made by the judgement-debtor pointing out that if the factory was sold he would be ruined and asking that instead of selling the factory, the court would be pleased to appoint either the plaintiff himself or some other person to be receiver over the factory. The decree-holder, apparently with some reluctance, agreed to a receiver being appointed, and the court appointed Babu Ishwar Das, a pleader, to be the receiver. Under the order the receiver's duty was to enter into possession of the factory, work the same and hold the profits for one year for the benefit of the decree-holder. It obviously was the intention of the Judge that if this plan proved a success, the appointment of the receiver would be extended over the crops for future years until the decree was discharged. The receiver duly entered into possession and worked the factory for two years or more, but no further order was obtained from the court. It may have been unfortunate for the decree-holder; nevertheless, in our opinion, the order only operated to entitle the receiver to possession for one year, and it would have required some further order to entitle him to remain in possession after the expiration of that period. The judgement-debtors were adjudged insolvent on the 11th of March, 1914. The factory was sold in execution of the plaintiff's decree on the 10th of April, 1914, and was purchased by the decree-holder, he being allowed to set off his decree pro tanto against the purchase-money. It appears that there is an association in Hathras called the West Patent Press Company, Hathras Combine. The object of this association of cotton ginning factory owners is, apparently, to prevent cutting of rates and to regulate the charges of the several owners so as to keep them at a common level. The practice is to send the whole, or a portion, of the earnings of each factory to the agency, who at stated periods adjust the accounts and distribute the profits amongst the various factories. In this way, after the appointment of the receiver, a considerable sum of money was with the agency to the credit of this particular factory. Had no receiver been appointed, the judgement-debtors would undoubtedly have been entitled to receive the profits standing to their credit with the agency. Just in the same way after the receiver was appointed, he was undoubtedly entitled to receive the money standing to his credit with, the agency had there been no other creditors. It appears, however, that after the appointment of the receiver and his taking possession of the factory, certain other creditors (simple money decree-holders) attached the money which was with the agency and standing to the credit of this factory. This money was rateably distributed between the simple money judgement-creditors of the insolvent, and the present suit has been instituted by the plaintiff claiming that he is entitled to the money which was earned by the factory after the appointment of the receiver. He is opposed by those judgement-debtors who have obtained the money and also by the receiver in the insolvency matter. The court below was of opinion that the plaintiff was entitled to the profits for one season, but, inasmuch as he had not given evidence which would enable the court to say what those profits were, the court dismissed the suit altogether.

2. The plaintiff comes here in appeal and contends that he was entitled to all the money earned while the receiver was in possession. He contends that, notwithstanding that the receiver was only appointed for one crop, he nevertheless remained in possession without objection by the judgement-debtors. Lastly,

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