Devi Chand Mutsaddi Lal vs Rati Ram and Others

Kapur, J.—This judgment will dispose of two appeals against two orders passed in execution by the learned Senior Subordinate Judge, Simla. They are E.F.A. No. 147 of 1949 and E.F.A. No. 160 of 1949 as a matter of fact the final order in E.F.A. No. 160 of 1949 and that is the only appealable order.

The facts which have given rise to these appeals may shortly be stated as follows. On 21-3-1934, a personal decree under Order 34, Rule 6, Code of Civil Procedure, for recovery of Rs. 4,917-10-0 was passed against Anant Ram personally and against Rati Ram as legal representative of Sham Das to the extent of the property of the judgment-debtor in his possession. Proceedings went on in execution and on 3-7-1941 the decree-holder applied for appointment of a receiver of property situate in Keonthal State and the appointment was made on 10-11-1941 but the receiver failed to get possession and on 17-4-1943 the executing Court discharged the order of appointment of the receiver but on appeal to the High Court on 22-5-1945 the order was reinstated by a very exhaustive judgment of Mahajan J. The learned Judge observed:

The Court acting in personam against the judgment-debtors can order them to realise the rents and profits themselves and to hand over the rents and profits to the receiver along with an account of these rents and profits. Nothing in law prevents the Court from limiting the receivership to the mere receipt of the rents and profits of tho properties situated in Keonthal State and ordering the judgment-debtors, who are actually in possession of those properties and are in receipt of tho rents and profits of those properties, to hand over those rents and profits to the receiver with an account of those rents and profits.

* * * * In my opinion, the learned lower Court was in error when it held that nothing further could be done in the case and that the judgment-debtors should be allowed to escape from payment of the debts due from the estate and at the same time retain the properties belonging to the estate in their hand.

The learned Judge went on to say:

The appointment of a receiver is an equitable execution of the decree and when admittedly the properties, belonging to the estate of the deceased are in the hands of the judgment-debtors they are accountable in respect of those properties which are liable to be taken in execution of the decree from their possession and those properties can be attached and sold in execution of the decree. Persons in possession can be ordered by the Court to hand over possession of those properties to the receiver or to give an account of the rents and profits of those properties to him.

Further the learned Judge said:

It was open to the Court to make an order in personam against the judgment-debtors asking them cither to hand over the management of the properties in the Keonthal State to the receiver or to hand over the rents and profits of those properties to the receiver after realising them with a statement of the account of those rents and profits. It is open to the Court to appoint the judgment-debtors themselves receivers of this property.

It is unfortunate that in spite of a very clear exposition of the law applicable to a case of this kind the learned Judges of the executing Court do not seem to have proceeded as they should have. On 22-2-1946 a. notice was issued to the judgment-debtors to deliver possession of the property but Rati Ram instead of handing over possession to the receiver filed objections on 5-4-1946. On 14-6-1946 Rati Ram withdrew his objections and filed fresh objections.

For some unknown reasons, the Court ordered a fresh application for execution to be filed on 19-7-1946 which was filed on 24th of July. It prayed that the judgment-debtors be compelled to hand over possession to the receiver, that the property of the judgment-debtors be attached and sold, that injunction be issued and that accounts be taken of the incomes of the properties inherited by the judgment-debtors from the original judgment-debtors. On 6-9-1946, Rati Ram withdrew the new objections that he had filed and filed fresh objections but Mr. Bhatia, who was then the executing Judge, ordered the Official Receiver who had been appointed the receiver to carry out the orders of the High Court. On 17-9-1946 the Official Receiver wrote to the judgment-debtors to hand over possession. On 1-10-1946 Rati Ram replied asking the receiver to stay his hands as ho was going to appeal but if he could not wait ho was at liberty to take possession but it does not appear that any possession was taken.

On 22-11-1946, the decree-holder made a request that Rati Ram be appointed a receiver, whether he was to be appointed in place of the Official Receiver or in addition to him is not quite clear. Rati Ram, however, filed written objections against this saying that he was a peon and it was difficult for him to manage the property and that the property was under mortgage with possession and he prayed for discharging of the receiver but it does not appear that the receiver was discharged. On 20-12-1946 the decree-holder made an application that Rati Ram as legal representative of Sham Das and Shiv Ram and Moti Ram should be called upon to render accounts of the in-come of the property received u/s 60, Code of Civil Procedure, and further that this order be enforced by arrest and detention of the judgment-debtors. After arguments it was ordered that as the judgment-debtor was prepared to file accounts, he should do so and on 18-4-1947 did file some accounts which were ordered to ho be checked by the office, why by the office has not been made clear to me. On 26-6-1947 the decree-holder made a statement that he did not want to proceed against the -sons of Moti Ram but the execution should proceed against the legal representatives of Anant Ram and against Rati Ram. An order-was passed that accounts filed by Rati Ram were incomplete and he was ordered to file complete accounts by 26th of September but no accounts were filed although the case was ad-journed for two hearings and finally on 10-10-1947 Rati Ram filed objections that the property being in an Indian State, the Court could not take accounts, that he had agreed to file accounts for one year only, that being a peon ho could not give any accounts, that he had alienated major part of his property to his wife and had kept no accounts, that the property was not alienable being ancestral and that under custom he could not be asked to render accounts and therefore he prayed that the order directing accounts to be taken should be discharged and the decree-holder be ordered -to take out a transfer certificate. Several issues were raised but on different dates. It appears that on 21-5-1948 the execution was dismissed in default but was restored on 7- 8-1948 and during the interval on 9-6-1948 the judgment-debtor mortgaged the property in dispute to one Budhi Singh. The deed is Ex. J.D.W. 2/A. On 4-10-1948 the decree-holder applied that Rati Ham should be made personally responsible and on 12-7-1949 the Court passed an order which is the subject-matter of appeal in E.F.A. No. 147of 1949. It held that there was no custom presenting accounts to be taken, that the decree had not become time-barrod and the judgment-debtor could not raise this plea on the ground of rex judicata, that the judgment-debtor had not disobeyed the orders of the Court and therefore no proceedings for contempt etc., could be taken, that the property of which a receiver was sought to be appointed had already been mortgaged to Budhi Singh and that receiver should not be appointed as the total yearly income of the property was Rs. 80 and the decree was for Rs. 7,000 but it made no order on the prayer whether the accounts should be taken or not. On the other hand, it ordered the decree-holder to take a transfer certificate and execute his decree in the Himachal Pradesh.

On 30-7-1949 the decree-holder applied that he could not be-compelled to take a transfer certificate, that Himachal Pradesh was not a Province of India and that ho had asked for Arrest and detention of the judgment-debtors and for taking of accounts of Anant Ram''s sons but by an order dated 30-7-1949 this application was dismissed because the decree-holder had not deposited lie. 1 for the transfer certificate and Rati Ram as legal representative could not be arrested and detained as there was nothing to show that he was contumaciously withholding the property belonging to the real judgment-debtors but it did not say anything with regard to the taking of accounts. Against this order an appeal has been brought to this Court which is E.F.A. No. 160 of 1949.

I cannot help remarking that the executing Court in this case does not seem to have applied its mind to the matter in controversy and in spite of the judgment of the High Court so lucidly put by Mahajan J., the learned Judges of the executing Court do not seem to have directed their minds towards it at all. On 10-11-1941, a receiver was appointed. No doubt in April 1943 he was discharged hut by the order of Mahajan J., dated 22-5-1945, this order - of discharge was set aside and the appointment of the receiver must take effect from the date of the original appointment and if from that the date onwards Rati Ram has successfully evaded the carrying out of the orders of the Court or giving possession to the receiver, it shows that the Courts have failed in enforcing their own orders.

The first submission of the Appellant is that it is not for the Court to say what action the decree-holder should take in order to realise Ids decretal amount. If the law allows him a particular remedy, he cannot be forced to have recourse to another and in the present it was not for the executing Court to order that the decree-holdor should take a transfer certificate and proceed with his execution elsewhere. If he could enforce his rights in the Court in Simla, it was open to him to do so.

It was then submitted by the Appellant that although in the judgment of Mahajan J. it was held that the judgment-debtors were accountable in respect of the properties which they had inherited from the original judgment-debtors, nothing had been done to enforce the getting of accounts from them. There is a great deal of force in this submission. I find that the executing Court had itself ordered Rati Ram to file accounts and he did file some kind of accounts also but since then nothing seems to have been done in order to enforce the taking of accounts. In my opinion, the decree-holdor is entitled to ask that the present judgment-debtors, the legal representatives of Sham Das as well as of Anant Ram, can be made to render accounts of all that they have received from the original judgment-debtors and therefore I direct that the legal representatives of Sham Das as well as of Anant Ram should render accounts showing what amounts they have received from out of the estate of the deceased and how they have expended them and if on the taking of accounts any sum is due, they are bound to pay that to the decree-holdor and if they do not pay, it will be for the executing Court to take such action as the law allows and which the decree-holdor wishes the executing Court to take. As a mutter of fact, the decree-holder had already applied for the arrest and detention of the judgment-debtors and if a proper case is made out by them the executing Court, I have no doubt, will give the proper relief.

The receiver had been appointed by the Court as long ago as 1941. He had not ceased to function although there was an interval in which due to an erroneous order of the executing Court he ceased to exist but by the order of Mahajan J., it must be held that he continued to exist. There is no reason why the receiver should not be allowed to function. Whether the income is small or big is not a point which is to be considered in this case. The judgment-debtors have successfully evaded the law to take its course. Therefore, in my opinion, the receiver should function and if by any reason he has been removed, I would appoint the Official Receiver to be the receiver in this case. He would receive the rents and profits of the properties of the original judgment debtors in the hands of the present legal representatives wherever those properties may be situate. I order the judgment-debtors that if the receiver so requires that to do they may realise the rents and profits and hand them over to the receiver in accordance with the judgment of Mahajan J. This order will apply to, the property in the hands of Rati Ram as well as tho property in the hands of tho legal representatives of Anant Ram.

Another submission made by the Appellant was that the alienation made by the judgment-debtors during tho period that the executing Court''s proceedings had been dismissed in default and before they were restored is void and would not affect his rights. The learned executing Judge came to the conclusion that the mortgage in favour of Budhi Singh was in payment of a decretal amount due from the father of Rati Ram to Budhi Singh. It is not clear from the judgment what the date of the decree is and how much tho decree was for and whether it was subsisting or not. In any case, the receiver having boon appointed of the property in dispute and execution proceedings having been restored, this question will have to be decided as to whether or not the mortgage could be validly made. I would like to make it clear that the more appointment of a receiver does not invalidate a mortgage by a judgment-debtor. Whether u/s 53, T.P. Act, it is a fraudulent transaction or not is a matter to be decided on the evidence and it is open to the executing Court to decide this matter but on tho material now before me it is not possible to give any decision. I, therefore, direct that this question should be decided on proper evidence being taken and if the Court comes to the conclusion that the mortgage is improper tho property will be available for tho decree-holder to realise his decretal money from it.

I would like to point out to tho learned executing Court that this case has been unduly delayed and applications of the decree-holder for some reason or another have not been disposed of with the promptitude that one would expect. I have no doubt that the learned Judge will give priority to this case and dispose it of in accordance with the observations made above.

In the result these appeals succeed and must be allowed. The Appellant will have his costs in this Court as well as in the Courts- below.