Simla Banking and Industrial Co., Ltd. vs Abdul Ghafoor and others

Kapur, J.—This is a glaring case of the proverbial law''s delays particularly in regard to execution matters. A preliminary decree for sale for the realisation of Rs. 30,382 with interest and costs was passed against one Abdul Ahad on 9th July 1924 and on 3rd March 1925 a final decree was passed. Abdul Ahad having died on 13th May 1928, a personal decree was obtained against his legal representatives to the extent of the estate in their possession some time later in 1928

Several applications for execution were filed but they do not seem to have resulted in the decree-holder being able to realise anything and the last application was made on 1st March 1937. In the course of these execution proceedings, an application was filed on 20th September 1937 for accounts of rents of two houses situate in Saniauli. This application was dismissed but on appeal Dalip Singh J. held on 5th May 1939 that a Receiver could be appointed. He relied on a judgment of AIR 1938 93 (Lahore) in which the appointment of a Receiver to take possession of property in an Indian State was held to be intra vires because the Court was acting in the exercise of its jurisdiction in personam over the defendant and could order the defendant to hand over the possession to the Receiver.

On 21st March 1941, an application was made for the appointment of a Receiver in the executing Court. Although it wag granted by one learned Senior Subordinate Judge on 2nd May 1941 it was rejected by his successor. This order was upheld by Din Muhammad J. on 11th June 1944 but a Division Bench in Letters Patent appeal reversing this judgment directed the appointment of a Receiver : see L. P. A NO. 135 of 1944, decided by Harries C. J. and Abdul Rahman J. On the case coming back the learned Senior Subordinate Judge, Simla, has again refused to appoint a Receiver on the ground that the property is in the possession of the custodian who can refuse to hand over the rents and profits to the person appointed Receiver. Against this order the decree-holder has come up in appeal.

In my opinion, this appeal must succeed. The custodian is a party to these proceedings and any judgment passed against him is binding on him and he is bound to obey it. Under S. 8, Administration of Evacuee Property Act, Act XXXI [31] of 1950, property declared to be evacuee property under S. 7 is deemed to have vested in the Custodian for the State and any person in possession thereof is deemed to be holding it on behalf of the custodian. Under S. 9 of the Act, the custodian can take actual physical possession of the property if the person in possession refuses to surrender possession thereof to the custodian. Section 10 of the Act gives the powers and duties of the custodian generally. Sub-section (2) of S. 10 provides :

Without prejudice to the generality of the provisions, contained in sub-s. (1), the custodian may, for any of the purposes aforesaid :

(m) incur any expenditure, including the payment of taxes, duties, cesses and rates to Government......or of any debt due by the evacuee to any person.

He has under this section power to transfer the evacuee property, to sell it with the previous approval of the Custodian-General and can delegate any of his functions under this Act to such officers or persons as he thinks fit. Under S. 17 any property which has vested in the custodian becomes not liable to attachment, distress or sale in execution of an order of a Court or of any other authority, and no injunction in respect of any such property can be granted by any Court or other authority. Section 46 of the Act bars the jurisdiction of civil Courts in certain matters and the respondent custodian relies on sub-cl. (d) which says :

(d) in respect of any matter which the Custodian-General or the custodian is empowered by or under this Act to determine.

The submission is that the property having vested in the Receiver he has the power to determine certain things under S. 10 and, therefore, the jurisdiction of this Court is barred under S. 46 and also that execution by way of appointment of a Receiver amounts to equitable attachment within the provisions of S. 17 of this Act. I am unable to agree.

Under S. 51, Civil P. C., a Court has the power to enforce execution by five different methods and sub-cl. (d) provides by appointment of a Receiver. Attachment and sale are dealt with in sub-cl. (b). I cannot agree in spite of a judgment of the Full Bench in Surendra Prosad Singh and Another Vs. Tekait Singh and Others, that execution by appointment of a Receiver amounts to equitable attachment. Their Lordships of the Privy Council in AIR 1925 176 (Privy Council) a case under S. 60, Civil P. C., where the right of maintenance was the subject matter of dispute held that the proper remedy lies, in a fitting case, in the appointment of a Receiver for realising the rents and profits of the property paying out of the same a sufficient and adequate sum for the maintenance of the judgment debtor, and his family, and applying the balance, if any, to the liquidation of the judgment-creditor''s debt. In cases under S. 18, Punjab Colonization of Government Lands Act, 1912, it was held that a Receiver can be appointed under S. 51, Civil P. C., to liquidate a decree from the profits of the land by granting a lease, although the interest in the land of the judgment-debtor cannot be attached or sold by reason of S. 18, AIR 1942 126 (Lahore) 126: (I. L. R. (1943) Lah. 179) and AIR 1938 458 (Lahore) I am, therefore, of the opinion that (1) in spite of S. 17 of (the Act execution under S. 51, Civil P. C., by means of appointment of a Receiver is allowable and (2) the appointment of a Receiver under S. 51 (d), Civil P. C., is not equitable attachment and is, therefore, not barred by S. 17 of the Act. The submission that by virtue of S. 4 of the Act, S. 51, Civil P. C., stands repealed pro tanto is, in my opinion, devoid of any force. Section 4 provides:

The provisions of this Act and of the rules and orders nude thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any such law.

I cannot see any inconsistency between the provisions of this Act and S. 51 (d), Civil P. C. The Legislature must have known of the interpretation which was put on similar words of S. 60, Civil P. C., by their Lordships of the Privy Council in AIR 1925 176 (Privy Council) and I have no doubt that they were also aware of the view taken by the learned Judges of the Lahore High Court in the ruling that I have mentioned above and if in spite of these cases the wording of S. 17 of the Act has only prohibited attachment, distress or sale in execution of an order of a Court I must conclude that it was never intended that this method of execution (by appointment of a Receiver) is pro tanto repealed.

The learned Senior Subordinate Judge disallowed the application for appointment of a Receiver on the ground that the property was situate in another province. I do not think that that is any ground for disallowing this petition, particularly when the Custodian is a party to these proceedings. But that difficulty does not arise now because the property of which a Receiver is sought to be appointed is now within the province of the Punjab and is within the jurisdiction of the Senior Subordinate Judge, Simla. I am satisfied that a proper case has been made out for proceeding with execution by means of appointing a Receiver under S. 51 (d), Civil P. C.

IN the circumstances of the case, therefore, I must order that a Receiver be appointed for the realisation of rents and profits of the two houses mentioned in the application and on their realisation the monies should be paid to the decree-holder. The Receiver will be appointed by the learned Senior Subordinate Judge and I have no doubt that any order passed by the learned Judge or any lawful direction given will be obeyed by the respondent.

In the result, this appeal is allowed and the decree.holder will have his costs in this Court as well as in the Court below. The parties have been directed to appear in the Court of the learned Senior Subordinate Judge, Simla, on 12th June 1950.