K.L. Krishna Ayyar vs T. Balakrishna Iyer

Pakenham Walsh, J.—The Plaintiff, Counter-Petitioner, sued the Petitioner for the recovery of Rs. 2,111-6-3 as due on settlement of

accounts in the purchase of silk sarees from the Plaintiff from 24th April, 1931.

He put in an application for the appointment of a Receiver and at the same time he asked for an order that the defendant should produce the

account books of his own sales of silk sarees, etc., into Court on the ground that if he were allowed to collect the amounts he would (para. 6 of

affidavit) keep ""them in cash to cheat the Plaintiff "" and further that (para. 8) ""it is quite likely that the defendant is trying to keep false accounts and

unless the account books are brought into the Court and a Receiver is appointed to collect the amounts due, there will be no way of realizing the

money thereafter, after the decree is passed"".

Admittedly the account books in question have nothing directly to say to the suit accounts on which the suit is brought. The Court ordered the

defendant to produce these accounts into Court. His advocate refused to produce them. Wherefrom the Court passed the order in question in

which it says:

Under Section 151, I have the power to compel the production of account books. I hereby direct the defendant to produce the account books in

Court on Monday, the 7th instant, failing which, a complaint will be laid against him for disobedience of this Court''s orders. The question as to

whether plaintiff will be permitted to see the account books will be considered after the books are produced into Court.

Against his order the present Revision Petition is filed on the ground that it is beyond the jurisdiction of the Court.

The learned advocate for the Petitioner states before me that a further reason was also given for the non-production of the accounts, that they

were in Mysore. This does not appear on the records in the suit, and as I think that the order is clearly ultra vires, I do not consider it necessary to

go into this matter. The petition for a Receiver was made, as stated above, in the same application as that in which the production of accounts was

asked for. Although no section is quoted in the petition, that for a Receiver would of course be under Order 40, Rule 1 and there is no difficulty as

regards that part. The question is whether, before the appointment of a Receiver, and in this case in the very application for a Receiver, when

notice has not yet gone to the defendant, the Plaintiff can ask or the Court can compel the defendant to produce accounts, which are not

connected with the suit, simply in order that the Plaintiff, if he gets a decree, may be in a better position to realise his decree debt.

From the order of the Court itself it is clear that it was asked to exercise this power and did so under its inherent powers u/s 151. It is well

established that where there is a prescribed remedy the Court cannot go beyond this remedy by using its inherent powers u/s 151. Now the object

of appointing a Receiver is to provide a machinery by which the Court can take charge of the general property of the defendant during the trial.

That is the suitable remedy in a case like this and it is the object with which the Plaintiff asks for a Receiver to be appointed. If the Court can,

without any notice to the defendant and, without appointing any Receiver, directly take charge of the defendant''s property, the whole procedure of

appointing a Receiver, and the well-known principles which should govern the discretion of the Court in doing so, vanish; for by this short cut they

are all avoided. There is no proviso at all in the CPC in the Order about appointing a Receiver that, pending the appointment of a Receiver, the

Court can exercise these powers. The learned advocate for the Counter-Petitioner made a feeble attempt to justify the order under Order 16, Rule

10 and Rule 16 and also under the Injunction Rules Order 39, Rule 1(6).

Order 16, Rules 10 and 16 do not determine the powers of the Court to call for documents but only the procedure to be followed when they

are called for. They are irrelevant to the present question.

In my opinion Order 39, Rule 1 cannot possibly be extended to'' cover a case of this kind. R. (1) (a) is inapplicable because the account books

are neither the property in the suit nor connected with it. They are the accounts of defendant''s trade, and Plaintiff only wants them in order that if

he gets a decree he may get all that defendant has really collected in his own business. Rule 1(b) is, I consider, also inapplicable to the

circumstances of this case. It states that

Where in any suit it is proved by affidavit or otherwise ... that the defendant threatens, or intends to remove or dispose of his property, with a view

to defraud his creditors, the Court may by order grant a temporary injunction to restrain such act or make such other order for the purpose of

staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property as the Court thinks fit, until the disposal of the

suit or until further orders.

Now the allegation in para. 6 of the affidavit is that "" defendant is collecting the amounts due from his customers and keeping them in cash to

cheat the Plaintiff and other creditors"". It is not even stated that he is going to dispose of this cash and it is indeed difficult to see how he is going to

collect the amounts from his creditors in most cases except in cash. If Petitioner therefore really wants anything under this paragraph it would be an

order to prevent the defendant from collecting his dues in cash. That would be a very unreasonable order and, so far from preventing waste of the

property, would be much more likely to cause it by creating bad and time-barred debts; in any case it is not the relief which has been asked for or

granted. Para. 7 of the affidavit says that ""after the amounts are collected, there will be no use of any decree being got against the defendant unless

the sums are got into the Court"". That is the justification, if it can be made out, for appointing a Receiver but not for taking a short cut by ordering

the defendant to produce all his cash or property into Court at once. Now it is not alleged that the defendant is going to "" waste, damage, alienate

or sell "" his account books. There remains therefore the question whether the words "" removal or disposition of the property "" can authorise the

order passed. The only allegation on this point is that ""It is quite likely that the defendant is trying to keep false accounts"". Now the property which

Plaintiff wants to realize is not the defendant''s accounts which are useless per se to him, but the money which defendant may collect by realizing

dues on the basis of his accounts. In my opinion he cannot by injunction be ordered at this stage to produce those accounts into Court. Even if

Order 39, Rule 1(b) could in terms apply it is clearly overridden by the special provisions of another Order and Rule.

This is Order 21, Rule 41, and it comes into effect only after a decree has been passed. Then the decree-holder may apply for an order to the

Court that the judgment-debtor ""be orally examined as to whether any or what debts are owing to the judgment-debtor, and whether the

judgment-debtor has any and what other property or means of satisfying the decree; and the Court may make an order for the attendance and

examination of such judgment-debtor,"" and ""for the production of any books or documents"". This Order and Rule which definitely restricts the

rights of the party to call for such accounts till after a decree is obtained will, on the principle that a more particular overrides a more general

provision, limit the application of Order 39, Rule 1(b) even if the latter is in its terms applicable, nor can the inherent powers of the Court be

invoked to justify the issue of such an order at an earlier stage and thereby completely nullify the restriction laid down in Order 21, Rule 41. It may

be noted that nobody seems to have contended before the Lower Court that the order sought for could be regarded as an injunction under Order

39, Rule 1(a) or (b). The Court states expressly that it is passing the order in virtue of its inherent power u/s 151. I am clearly of opinion that this

section does not authorize it to extend the provisions of Order 21, Rule 41.

The learned advocate for the Respondent did not in fact base his chief argument on the CPC at all, but fell back on, or rather put in the

forefront, Section 165 of the Evidence Act.

This section runs:

The Judge may, in order to discover or to obtain proper proof of relevant facts, ask any question he pleases, in any form, at any time of any

witness, or of the parties about any fact relevant or irrelevant; and may order the production of any document or thing; and neither the parties nor

their agents shall be entitled to make any objection to any such question or order, nor, without the leave of the Court, to cross-examine any witness

upon any answer given in reply to any such question.

Then follow certain provisos which admittedly do not apply to the present case.

From this the learned advocate argues that, the Court can order the production by a party of any document or thing, no matter, how irrelevant,

into Court. This is indeed a startling doctrine, and if correct would authorize the Court, to say to the defendant, in a simple money suit "" Although

they are not of the slightest relevance to the suit you must bring your entire possessions into Court on a certain date and if you do not, you will be

criminally prosecuted"". In fact on this reading the defendant might be asked to bring into Court something that did not belong to him at all, or which

was absolutely unobtainable.

These grotesque results arise from overlooking the plain proviso at the beginning of the section by which the whole is governed that the

direction must be ""in order to discover or to obtain proper proof of relevant facts"". The commentaries show clearly that the object of allowing the

Judge to ask irrelevant questions'' under this section is to obtain "" indicative evidence "" which may lead to the discovery of relevant evidence. It is

not alleged in this case that the object of the order is to discover or obtain proof of any relevant fact in any matter then before the Judge. The stage

at which these accounts would be relevant facts so as to enable the Court to order their production is after decree under Order 21, Rule 41. If the

meaning put on this section by the learned advocate for the Counter-Petitioner be correct, there is no need at all for any rules about appointment of

Receivers, or discovery of documents. In fact a Court has absolute power to lay a criminal complaint against a party, and get him convicted for

disobedience to any arbitrary demand to produce any property whether his own or not, if it cannot be brought under Sections 120 to 130 of the

Evidence Act and roost properly does not fall under these sections.

I cannot accept the argument raised under this section. The order I consider is plainly without jurisdiction and must be set aside. The Petition is

allowed with costs in both Courts. (Fee Rs. 50.)