Murahari Reddi (deceased) and Others vs Chenraya Goundan and Others

Madhavan Nair, J.—The ninth defendant is the appellant. The facts of the case are clearly stated in the judgment of the lower Appellate

Court and need not be re-stated.

The appeal relates to that part of the decree of the Subordinate Judge which directed the Receiver to hand over possession of the property to

defendants 1 to 3. The ninth defendant is the purchaser of the property in execution of the decree in O.S. No. 672 of 1921 which he obtained

against the present 3rd and other defendants on the foot of a mortgage. In execution of that decree he purchased the property and symbolical

delivery of possession was made over to him. But before he purchased the property in execution a Receiver had been appointed in the partition

suit in which the present order; which is the subject-matter of the appeal had been passed. The"" Receiver had obtained possession of the property

from defendants 1 to 3. The Subordinate Judge dismissed the partition suit giving a declaration that the plaintiffs will be entitled to one-sixth share

of the items of property in B and C schedules as are not validly alienated as may be determined in a suit properly framed for partition. As part of

the order he also said that the Receiver will hand over possession of the properties to defendants 1 to 3. It is this latter order that is now objected

to by the 9th defendant. His case is that he has become the purchaser of the property in a mortgage suit as against the third and other defendants

and that the lower Court was wrong in ordering that possession should be delivered to defendants 1 to 3.;

Two decisions were relied on in support of the contention, Bhagwan Das Marwari v. Manindra Chandra Nandi AIR 1927 Pat. 397 and

Metropolitan Amalgamated Estates, Limited, In re (1912) 2 Ch. 497 followed in the first mentioned decision. In Bhagwandas Marwari v.

Manindra Chandra Nandi AIR 1927 Pat. 397 the application for delivery of possession in a case in which the properties were in the possession of

the Receiver was made by a usufructuary mortgagee entitled to remain in possession of the properties. His right as a usufructuary mortgagee being

in existence before the appointment of the Receiver, he said that his properties should be exempted from the order delivering possession of the

properties to the Receiver. The learned Judge followed the law as stated in Kerr on Receivers, 8th> Edn., page 195, where the following principle

was enunciated ''if persons with paramount rights who are not parties to the action are actually in possession of those rights, the appointment of a

Receiver does not prejudice them in the enjoyment of those rights. But if they are not actually in possession, then after a receiver has been

appointed, they must come to the Court for leave to exercise those rights, in which case their application cannot be refused''. It is the latter part of

the principle above stated that is relied on by the learned Counsel for the appellant. But it must be observed that the principle relates to the rights of

a usufructuary mortgagee. A usufructuary mortgagee is not at all affected by the order appointing a Receiver, but, if he is not actually in possession,

then the latter portion of the extract says that he can come to Court and say that the Receiver application with respect to his property should be

refused. The point to be noticed is that the rights are asserted by a person whose right to be in possession of the property existed before the

Receiver was appointed, the person being a usufructuary mortgagee. It may be that he was in possession at the time the order was passed or it

may be that though entitled to remain in possession he was not in actual possession. Both kinds of cases are dealt with in the above extract. In the

English case which was relied on the position was exactly the same. The application was made by the first mortgagee in an action by the second

mortgagee, the first mortgagee being entitled to remain in possession. The two cases relied on are not applicable to the present case because, as

already stated, at the time when the Receiver took possession of the properties the ninth defendant had not obtained the title to remain in

possession of the properties. The sale and delivery was after possession was delivered over to the Receiver. These two cases being inapplicable, it

should be held that the order of the lower Court that possession should be delivered to the defendant 1 to 3 from whom possession was taken by

the Receiver cannot be interfered with.

Mr. Somayya, relied upon a decision of the Calcutta High Court reported in Jogendra Nath Gossain v. Debendra Nath Gossain I.L.R.(1898)

26 Cal. 127 and a few other cases which show that a purchaser in a mortgage action of properties which had already been ordered to be

delivered into the possession of a Receiver in another suit gets a valid title to the properties and a sale to the purchaser is not necessarily void. It

may be avoided by the * Receiver in justifiable circumstances. These cases have no application to the present case, because here we are not

concerned with the validity of the sale at all. The only question we are concerned with is whether the lower Court''s order that possession should

be given back to the persons from whom it was taken is right or wrong. The decisions in Bhagwan Das Marwari v. Manindra Chandra Nandi AIR

1927 Pat. 397 and Metropolitan Amalgamated Estates, Ltd., In re (1912) 2 Ch. 497 being inapplicable, as already pointed out, I hold that the

lower Court''s order is right.

The result is the second appeal fails and is dismissed with costs.