Rostamji Dhanju Mehta vs Madan Mohan Choudhry

This appeal arises from the decision of the District Judge of Manbhum affirming the order of the Subordinate Judge, granting a decree to the plaintiff in this suit. The action is brought by the plaintiff in his own name; and it is stated that he is the Receiver of the estate of Banerjee Laike and others, and seeks to recover against the defendant rent for the period June 1909 to June 1914. It appears that the defendant held 27 bighas of land under a lease which he obtained on the 10th of July 1903 from the owners of this estate and the land of which the defendant is in possession is situated in Mouza Jayrampore. The estate of which the plaintiff is now alleged to be the Receiver was the property of Jadab Lal Banerjee and Makund Lall Laike and others. The two former carried on a partnership business, and eventually they became insolvent; and accordingly on the 28th of June 1911 the partnership business of Banerjee Laike was adjudicated insolvent. The other members of the family immediately on the insolvency of these persona were anxious to have their shares of the estate ascertained by a partition suit, and in paragraph 3 of the written statement it is stated who the insolvents were, namely, I believe, two brothers and a son. There are other co-sharers not affected by the insolvency proceedings and they are interested in the pending suit for partition. One thing is quite clear, and that is that upon the adjudication of persons as insolvents all their property vested in the Official Assignee appointed u/s 17 of the Act III of 1909 of the Presidency Towns Insolvency Act. It is quite impossible, therefore, that the property which vested in the Official Assignee could be controlled by any Court save and except with the sanction of the Official Assignee. The Banerjees instituted a suit for partition of the estate in which the defendant''s holding is situated. Matters proceeded until a compromise was arrived at. It is stated that in that partition suit the original insolvents were made parties and that the Official Assignee was described on the record as being their representative. Of course the original insolvents have no earthly interest in the property; and in order that the suit for partition may be binding on the Official Assignee so far as he represented the interest of the insolvent, it was incumbent upon the plaintiffs to make him a party; and unless he was made a party the partition suit would not be binding on that portion of the property in suit which had become vested in the Official Assignee. However, matters proceeded in that partition suit and in the month of May 1912 an application was made for the appointment of a Receiver. On the 17th of July it is stated that the plaintiff was appointed Receiver. By virtue of his authority under the appointment made in that matter the plaintiff now brings this suit for rent as against the defendant.

The position taken up by the defendant is this I do not deny my liability to pay rent for the period in suit; but I say that the plaintiff is not the Receiver in respect of the entire 16-annas proprietary interest in this village and, therefore, cannot give a valid and legal discharge for the full amount of the rent due. If the Receiver is willing to join with the Official Assignee and give me a receipt signed by them both I will pay up the full amount of the rest due."

The plaintiff''s somewhat extraordinary contention is that he represents the entire 16-annas interest in the village by reason of bis having appointed Receiver in the compromise matter to which the Official Assignee was thereby named as a party Therefore, in my opinion, it was a Vital matter in this case, having regard to the statement put forward on behalf of the defendant, to ascertain if the Official Assignee was a party to the compromise in the partition suit and if he was a party to that suit. If he was a party and if the compromise was made in the presence or with the consent of the Official Assignee then the power and authority would undoubtedly be vested in the present plaintiff to recover rent for the years in suit. Bat the defendant in his written statement has stated that the Official Assignee was not made a party in that suit and that his name as a party was added fraudulently.

The learned Judge appears to us not to have considered the vital issue in the case which was "Was the assignee of the insolvents a party to the original suit?" If he was, then he would be bound by the terms of the compromise, otherwise not. The learned Judge has, I think, fallen into error in considering the meaning of fraud as set out in paragraph 2 of the written statement namely that the Official Assignee''s name was fraudulently added to the record. No doubt there is a reference to fraud in the written statement, but I do not think that it was intended to convey dishonest or intentional fraud. The intention undoubtedly was to convey that the Official Assignee was made a party formally without being made a party in point of law in that suit. I think the learned Judge misdirected himself as to the consideration of the facts on the question as to how far fraud would be applicable to the case raised by the pleadings. He holds in one portion of his judgment that the record itself shows that the name of the Official Assignee had been inserted by way of addition, but he holds that this was not done dishonestly or with a dishonest or fraudulent motive, we think that this consideration is entirely irrelevant and that what the written statement did intend to convey was that the Official Assignee was added uniformly as a party; bat no summons was served on him and that he was in that sense not a party to the litigation and consequently was not bound by the compromise. The learned Judge does not appear to have considered this aspect of the case at all. He has merely dismissed the defendant''s contention on the ground that he has failed to prove that there had been any positive or actual fraud. We do not consider that it was at all necessary to prove positive fraud which was never alleged nor intended to be alleged. But as I have said it is quite sufficient that the defendant should establish that the Official Assignee was not properly represented in the suit and, therefore, was not bound by the compromise and that in consequence that portion of the proprietary interest in the village which had vested in the Official Assignee was not effected by the compromise, and the Receiver could not be said to be the Receiver in respect of the 16-annas interest in the village.

Therefore reluctantly we have to send this case back to the learned Judge for the purpose of determining and ascertaining if the Official Assignee was a party to the partition suit. If he was not a party to the partition suit then obviously the learned Judge ought to dismiss this action because the plaintiff alone cannot maintain any action for rent in respect of the entire 16-annas interest in the village, as no Court would have the power to appoint a Receiver in respect of the portion of the estate vested in the Official Assignee.

The result is that we remand this case for trial on the issue suggested by us and we direct that the plaintiff do pay to the defendant his costs of this appeal.