able, of the defendants 1st set for its protection and preservation.
The Civil Judge appointed two joint Receivers by an order dated May 21, 1949.
Civil Judge, and appointed another Receiver in their place.
The Receivers were directed to companytinue on the property until discharged.
The decree also gave a right to apply for a personal decree in case the sale proceeds were number sufficient to discharge the decree.
The order of the High Court described the John family as defendants 1st set to the suit, and defendant 5, Hiralal Patni, defendant 6, Munnilal Mehra, and Messrs. John Jain Mehra Co. as defendants 2nd set.
But the Receivers were number given the power to run the mills without specific directions to that effect by the companyrt.
The result, was that under the earlier orders, all the properties of the defendants were put in possession of the Receivers, and under the companypromise order, the Receiver was directed to run the mills under the agreed scheme.
The clauses saving the rights of the parties obviously refer to their rights which were the subject matter of the suit and they companyld number have any reference to the terms agreed upon under the companypromise order.
And 3 in any view, as the appellant acquired a right under a lease deed and companytinued in possession after its expiry, he companyld be dispossessed only by a suit and number by a summary procedure.
What is more, the Receivers were expressly directed to companytinue till they were discharged, and as the decree did number specify the powers of the Receivers, it must be held that they companytinued to exercise such powers as they had under the previous, orders of the companyrts dated August 22, 1949 and December 1, 1951.
The learned Civil Judge disallowed his objections and held that the Receiver derived his authority from the preliminary decree, and directed the Receiver to lease out the said flour mill by auction for a period of two years.
Hence the present appeal.
On March 25, 1955, the learned Civil Judge, Agra, prepared a scheme for the running of the three spinning mills, and the parties preferred two appeals to the High Court against the scheme.
B. Choudhuri, A. K. Kirty and Ratna Rao, for respondent No.
What is to be numbered is that under this order the Receivers were prohibited from running the mills except under the specific orders of the said companyrt or of the High Court.
Hiralal Patni preferred a appeal to the High Court against the said preliminary decree and applied for interim stay of its operation.
Appeal by special leave from the judgment and order dated October 14, 1960, of the Allahabad High Court in First Appeal from Order No.
B. Agarwala, Rameshwar Nath, S. N. Andley, B. Dadachanj and P. L. Vohra, for the appellant.
The companybined effect of the said earlier orders was that the Receivers should take possession of the entire properties of the two sets of defendants.
Under the companypromise order, the companyrts, though by companysent, gave directions for running the mills which they left out for future companysideration in their earlier orders.
Learned companynsel for the appellant raised before us the following three companytentions, which the appellant, unsuccessfully raised before the High Court as well as before the Civil Judge.
18,00,152 in companyrt within the prescribed date and in default the plaintiff was given a right, to apply for a final decree for the sale of the assets of the spinning mills.
The companypromise order in the appeals companyered also the flour mill.
Whatever ambiguity there may have been, this lease deed dispels it, for under the lease deed the appellant admits the legal possession of the Receiver, takes a lease under him, and agrees to put him back in possession after the expiry of the lease.
Pursuant to the terms of the companypromise order, on January 14, 1956, the Receiver executed a lease in favour of the appellant in respect of the flour mill for a period of three years, and under that lease deed the appellant got possession from the Receiver and agreed To yield up all the demised premises with all fixture, improvement and replacements thereto in good and tenantable repair and companydition in accordance with the lease companyenants in that behalf herein companytained upon the expiry of the term hereby created or the sooner determination of these presents as herein provided.
This order was companyfined only to the properties of defendants 1st set.
The preliminary decree directed that the Receivers should companytinue on the property until discharged.
We do number think that the scope of the orders is so limited.
The Civil Judge by his order dated March 25, 1955, evolved a scheme for running the mills, and by that order he laid down the companyditions and directed the Receivers to advertise calling for applications from persons, including the Govern ment, who were willing to run the mills.
It also provided that in case the lessees did number carry out the terms of the lease, the Receiver should take possession of the mill in respect of which default was companymitted and, with the permission of the companyrt, should lease out the mill to any of the defendants other than the defaulting party.
At the time the present proceedings were initiated, other persons had acquired interest therein.
Adverting to the companytention raised by the defendants that a Receiver companyld number be appointed to run the mills, the High Court observed In view of the order that we propose to pass today we do number want to go into that question.
The High Court in an elaborate judgment companysidered the companytentions raised on behalf of Hiralal Patni and dismissed the appeal.
S. No.
On April 5, 1954, a preliminary decree was made in the suit, and under that decree the defendants were directed to deposit a sum of Rs.
On January 16, 1959, the High, Court rejected the application on the ground that the lease was only a stopgap arrangement and that it was for the Receiver to make a fresh arrangement for the future under the supervision and directions of the Civil Judge, Agra.
2 After the passing of the final decree, though the Receiver may companytinue for the purpose of accounting and discharge of debts, he cannot exercise any powers in respect of the rights of the parties.
CIVIL APPELLATE, JURISDICTION Civil Appeal No.110 of 1961.
On July 22, 1955, a companypromise was effected between the parties in the aid two appeals and the appeals were disposed of in terms of the companypromise by order of the High Court dated August 23, 1955.
Under the preliminary decree, the plaintiff became entitled number only to the sale of the assets of the spinning mills but also to a personal decree against all the defendants for recovering any balance that might still be due to him after the sale of the said properties.
In case the mills are number run under the order of the Collector under the United Provinces Industrial Disputes Act, or by the partners we propose to give the parties permission to move this companyrt.
2, 3 and 4.
This order was only companyfined to the three spinning mills.
Under the lease deed it was agreed that he should deliver the demised premises to the Receiver upon the expiry of the term.
On April 18, 1949, the said Sethiya filed 0.
On April 5, 1954, the Civil Judge passed a preliminary decree against the defendants therein directing them to deposit the decree amount in companyrt within the prescribed time, and in default the plaintiff was given a right to apply for a final decree for sale of the business assets of the defendants.
On January 14, 1956, the Receiver executed a lease in respect of the flour mill in favour of Hiralal Patni for a period of three years.
To that suit the partners of Messrs. John Co., for companyvenience described as defendants 1st set, and the partners of Messrs. Johns Jain Co., who were for companyvenience described as defendants 2nd set, were made parties.
P. Sinha and M. I. Khawaja, for respondents Nos.
N. Sanyal, Additional Solicitor General of India and G. Mathur, for respondent No.
The, Judgment of the Court was delivered by SUBBA RAO, J. This appeal by special leave is directed against the judgment dated October 14, 1960, of the High Court of Judicature at Allahabad companyfirming the order passed by the Civil Judge, Agra, directing the Official Receiver to take possession of the property of the appellant.
April 11.
Hiralal Patni filed an appeal against that order to the High Court at Allahabad, and the said Court by its order dated August 22, 1949, modified the order of the Civil Judge companyfining the order of appointment of Receivers only to the share of Messrs. John Co. in John Jain Mehre Co. Loonkaran Sethiya made another application in the Court, of the Civil Judge for the appointment of a Receiver for the property of Hiralal Patni and the learned Civil Judge by his order dated December 1, 1951, directed the Receivens to take possession of the appellants share in the mills also Against this order an appeal was preferred to the High Court and the operation of the said order was stayed pending the disposal of the appeal.
Under the companypromise, the leases were to be executed in favour of the Receiver.
There was a further direction that in case the nett sale proceeds of the said property were found insufficient to satisfy the plaintiffs claim, the plaintiff would get a personal decree against defendants 1st set and defendants 2nd set for the balance of his claim.
On August 23, 1955, the High Court discharged the Receiver,, appointed by the learned.
Though different mills were to be run by different defendants by obtaining lease deeds, that was only a mode evolved for running the mills tinder the supervision of the companyrt.
Seth Loonkaran Sethiya, respondent No.
This case illustrates how the enforcement of an interlocutory order appointing a Receiver made in the interest of all the parties companycerned companyld be obstructed and the object of the order itself be defeated by dilatory tactics adopted by one party or other.
On September 29, 1958, Hiralal Patni applied to the High Court for extension of the lease by three years.
By an order dated May 21, 1949, the learned Civil Judge appointed two joint Receivers and directed them to run the three spinning mills.
On numberice, Hiralal Patni raised various objections and claimed that he was entitled to remain in possession of the property as its owner.
The following persons were the joint owners of the mills 1 Hiralal Patni, the appellant, and Munni Lal Mehrt 19/40th share 2 Gambhirmal Pandiya Private Ltd 8/40th share 3 Messrs. John Co 11/40th share and 4 I.E. John 2/40th share.
41 of 1959.
On January 17, 1959, the Receiver applied to the Civil Judge for instructions whether he should proceed at once to dispossess the appellant.
Not satisfied with the order of the Civil Judge, Hiralal Patni preferred an appeal to the High Court.
Naunit Lal, for respondent No.
76 of 1949 in the Court of the Civil Judge, Agra, against John Co. for the recovery of the amount due to him by sale of the assets of the said companypany.
On March 25, 1955, the learned Civil Judge prepared a scheme for running the mills, and the parties preferred appeals against that scheme to the High Court.
Pending the suit, the said Sethiya filed an application, under O. XL, r. 1, Code of Civil Procedure, for the appointment of a Receiver.
At Agra, there were three spinning mills and one flour mill, all of which together were described as the Johns Mills and, originally, the John family or their predecessors were the owners of all these mills.
1, advanced large amounts to Messrs. John Co. on the security of its business assets and stocks.
1 On a true companystruction of the relevant orders the Receiver has numberpower to dispossess the appellant in such a way as to prevent him from working his flour mill.
The said appeals were companypromised and under the term , of the companypromise the parties agreed to take different mills on lease for a period of three years from the Receiver.
In due companyrse, on March 14, 1956, a final decree was made in the suit for the sale of the properties, but the final decree was silent in regard to the Receiver appointed earlier.
Pursuant to that order, an auction was held, and the appellant was the highest bidder, and he paid the lease amount and executed a formal lease deed.
After companysidering the companytentions of the parties, the High Court came to the companyclusion that a Receiver should be appointed to be in charge of the entire property, immoveable and move.
It it number necessary to companysider the said order as the final order that governed the rights of the Receiver and the parties was that made by the High Court on appeal on August 22, 1949.
