Magni Ram Bungar and Others vs Sridhar Choudhury and Others

Dawson Miller, C.J.—This is an application for leave to appeal to His Majesty in Council from a decision of this Court setting aside an order of the Subordinate Judge of Dhanbad appointing a Receiver of the properties, the subject of the suit.

The suit was a mortgage suit instituted by the petitioner against Nil Money Choudhury and the mortgage which was to secure an advance of eight lakhs of rupees hypothecated certain property for that purpose. Amongst other terms in the mortgage-deed it is provided that if default shall be made in payment of any instalment of interest or if the mortgagor should make any breach of any of the covenants and conditions to be performed by him, the mortgagee shall be entitled to call in the whole of the principal and interest, not with standing the fact that the date of re payment shall not have arrived, and in the event of a suit being filed it shall be lawful for the mortgagees without any further consent on the part of the mortgagor to apply for the appointment of a Receiver to take possession of the mortgaged property. The property in this case was certain coal lands and collieries. In the plaint the plaintiffs claimed in addition to their ordinary remedies in a mortgage suit that a Receiver should be appointed. Before the suit came on it appears that the mortgagor Nil Money Choudhury and his brother Sridhar Choudhury (the latter not being a party to the, mortgage bond) had instituted a suit in the Calcutta High Court for dissolution of partnership, it being contended that they were in partnership and that the mortgaged property (the subject of the present suit) was part of the partnership assets. In that suit a Receiver was appointed and put in charge of the partnership assets.

The learned Subordinate Judge of Dhanbad, before whom the mortgage suit came for trial, in a preliminary application asking for the appointment of a Receiver, after discussing at some length the questions raised in that application, ordered a Receiver to be appointed. It should be mentioned that before the present suit was instituted the plaintiff had obtained leave from the Calcutta High Court to add the Receiver appointed by that Court as a party to the suit. In the result the Receiver Mr. R.N. Mitter, who had been appointed in the proceedings in the Calcutta High Court, was appointed Receiver on behalf of the mortgagee in the mortgage suit by the Subordinate Judge of Dhanbad.

From that decision Sridhar Choudhury, the brother of the mortgagor, appealed to the High Court at Patna. The appeal was heard before a Bench of two Judges who overruled the decision of the lower Court and set aside the order appointing a Receiver. One of the grounds, if not the main ground, for that decision was that a Receiver having been appointed by the Calcutta High Court there would be a conflict of jurisdiction if this High Court were to appoint another Receiver or even the same Receiver in the interests of other parties.

From that decision we are asked for leave to appeal to His Majesty in Council.

In my opinion this was not a final order within the meaning of Section 109(a) of the Civil Procedure Code. The appointment of a Receiver is in no way a matter which finally determines the rights of the parties. It was pointed out, however, that in the present case the appointment of a Receiver was one of the remedies which the mortgagee was entitled to in certain events, and that his right to such appointment was a substantive part of the claim in the mortgage suit. I do not take this view. In the clause which deals with the matter in the mortgage bond, the right, that is given to the mortgagee in certain events, seems to me to be practically no more than a right he would have without such a clause. The only right he is given is, in the event of a suit being filed to apply for the appointment of a Receiver, to take possession of the coal land and it stipulates that he may do that without any further consent on the part of the mortgagor. But in any event it is always for the Court to say in its discretion whether it will appoint a Receiver or not. But for the complications which have arisen by the appointment of a Receiver by the Calcutta High Court in this case I have no doubt whatever that upon an application being made on the mortgage suit being filed the Court would have appointed a Receiver forthwith. The matter, however, is one entirely for the discretion of the Court and whichever way the Court decided it certainly does not, to my mind, finally determine any of the rights of the parties which have arisen out of a mortgage bond. For these reason I do not think that the case falls u/s 109(a) of the Civil Procedure Code.

We have been asked to say, however, that the case is of such importance that we ought to exercise our jurisdiction in granting leave u/s 109(c) and certify that this is a fit case for appeal to His Majesty in Council. It is true that a question arises in this case as to what is to be done where there would be apparently a conflict of jurisdiction between two different Courts if the order were acceded to. I do not think, however, that this is in itself any sufficient ground for allowing an appeal to be carried to His Majesty in Council. It seems to me that in the existing circumstances the Receiver, who is now fully aware of the claims of the mortgagee, will he acting at his peril if he deals with the property in any way contrary to his interests. Moreover, it is always open to the mortgagor to apply in the proceedings now going on in the Calcutta High Court, if he considers that his interests are in any way being jeopardised. In the, only cases which have been drawn to our attention in which, this matter has been considered, namely, the cases of Chundi Dutt Jha v. Pudmanund Singh Bahadur 22 C. 928 : 11 Ind. Dec. (N.S.) 614 and Muhammad Musaji. Saleji v. Ahmed Musaji Saleji 10 Ind. Cas. 139 : 13 C.L.J. 507 it was laid down on both occasions that an application, such as this, asking for leave to appeal, to His Majesty in Council from an order refusing or granting the appointment of a Receiver was hot such an order as fell within the provisions of Section 109. It may be that, the present case is somewhat, unusual and raises questions which have not been determined on a previous occasion, but at the same, time I do not think the matter is one of such importance that we, ought to exercise our powers u/s 109 and grant this application. The application should be dismissed with costs. Hearing fee five gold mohurs.

Foster, J.

I agree.