Patna High Court
Maharajadhiraj Sir Rameshwar Singh ... vs Hitendra Singh on 31 March, 1921
Equivalent citations: 62IND. CAS.469, AIR 1921 PATNA 131
JUDGMENT Das, J.
1. This was an application by the respondent decree-holder for discharge of a Receiver appointed by a consent order on the 9th April 1910 and for leave to proceed with the sale of the mortgaged properties in execution of his mortgage decrees. The learned Subordinate Judge has made an order favourable to the respondent. We are in this appeal concerned with the correctness of the order passed by the learned Subordinate Judge.
2. It will appear that the Receiver was appointed on the application of the judgment-debtors in a proceeding for execution of a decree obtained by certain creditors against the judgment-debtors. On the 2nd February 1910, the date of the application of the judgment-debtors, the position was this; numerous decrees obtained by the respondent and certain other persons against the appellants were under execution, in consequence whereof the appellants experienced great difficulties in making collections and, therefore, in paying off the decretal amounts. And it was in order to ensure successful collection of the rents due to the judgment-debtors, and the gradual payment of the debts through the Receiver that the judgment debtors with the consent of the respondent, applied on the 2nd February 1910 for the appointment of a Receiver. The object which the judgment debtors had in view in making the application for the appointment for a Receiver was clearly stated in the petition. The second paragraph of the petition stated that, owing to the execution cases, they experienced great difficulties in making the collections and in paying off the decretal amounts, but that, if some arrangement could be made, the amount due under the decrees could be paid off gradually, The fourth paragraph of the petition stated that there was no way to save the properties of the petitioners except by appointing a Receiver. The fifth paragragh ran as follows:
For the reasons submitted above, it is prayed that a Receiver may be appointed by the Court for the entire estate of your petitioners, and the legal deb's may be paid gradually through the Receiver.
3. In my view, there can be no doubt that the whole object of the petition was to ensure the payment of the debts gradually from the income, so that it might be possible to prevent the sale of any portion of the mortgaged properties. That the decree-holder himself understood that to be the object of the petition will clearly appear from the third paragraph of a petition presented by him to the Calcutta High Court in a proceeding under Section 115 of the Code. That paragraph ran as follows:
That on the 2nd February 1919 the debtors applied to the Subordinate Judge that a Receiver might be appointed over their attached properties and that such Receiver, instead of selling the properties, might manage them and from the rents and profits, after deduction of management expenses and after payment of some small allowances to the debtors for their main tenance, might pay up the decree debts according to the decrees. The application presumably was made under Order XL, Rule 1, read with Order XXI, Rule 83.
4. It is idle, in my opinion, to suggest, as has been suggested in the judgment of the Court below, that the parties did not understand that the whole object of the appointment of a Receiver was to ensure the gradual payment of the debt from the income of the properties-.
5. If the matter stood where it did on the 9th April 1910, I apprehend that the decree-holder would be entitled to present an application for execution of the decree. Whether the appointment of a Receiver is equivalent to execution and, therefore, to a delivery in execution is a matter of some doubt : but I apprehend that there is nothing to prevent the judgment creditor from saying, "the procedure which I have adopted is unproductive. I claim the right to pursue the other remedies which I have under the Code." It has teen held that an order appointing a Receiver dees not operate as a stay of execution so as to disentitle the judgment-creditor from obtaining an older to issue a bankruptcy notice in respect of the same debt [Bond, In re, Capital and Counties Bank, Ex parte (1911), 2 K.B. 988 : 81 L.J.K.B. 112 : 19 Manson 22], I, therefore, agree with the learned Subordinate Judge that the mere fact that the decree-holder consented to the appointment of a Receiver does not estop him from now seeking to enforce his decree by execution.
6. I have now to consider whether any subsequent events have taken away from the decree-holder the right to proceed with the execution of his decrees.
7. On the 15th September 1910, the decree-holder applied for discharge of the Receiver. The decree-holder took the view that the presence of the Receiver was a legal impediment to execution, and the ground he assigned for the discharge of the Receiver was "that without the sale of the bulk of the properties, the decrees of your petitioner cannot he satisfied." That was the specific ground put forward by the decree-holder for the discharge of the Receiver, and the issue which the Court had to try in dealing with this application was whether the consent order for the appointment of a Receiver operated so as to take away from the decree holder the right to proceed with the sale of the mortgaged properties. The Court tried this issue and held that it was known to the decree holder, when the petition for appointment of a Receiver was presented, that it would take a considerable time to satisfy his dues. In the result, the Court rejected the petition for discharge of the Receiver. From this order an appeal was carried to the Calcutta High Court, and, as there was some doubt whether an appeal lay from' the order passed by the Subordinate Judge, the decree holder presented a petition for revision of the order under Section 115 of the Code. In his grounds of appeal, the decree-holder specifically asked that the order of the Sub-Judge should be set aside and that the execution cases proceeded with in the usual way. In his petition for revision, he asked for a Rule on the judgment-debtors to show cause why the Receiver should not be discharged and the properties attached in the several execution cases sold to satisfy the decrees. 1 have thought it necessary to refer to the relief sought in the grounds of appeal and in the petition for revision, as it has been suggested that the question whether the decree-holder was entitled to proceed with the sale of the properties in execution of his decree was pot an issue in these proceedings. In my opinion, there can be no doubt whatever that that was the only point in issue in these proceedings, the decree-holder seeking to have the Receiver discharged, as, in his opinion, he could not proceed with the sale of the properties so long as the Receiver was in possession of the properties.
8. On the 7th June 1911, the Calcutta High Court dealt with the appeal, but not, it seems, with the revision petition and passed the following order by consent of the parties:
By consent of parties the order of the Court below is varied in the manner following, namely, the Government revenue and cesses and other outgoings, as per scheme framed by Court, and the budget of the Receiver are to be paid first, and then the decrees which do not carry any interest and then the decrees which carry interest. This order is made subject to the payment of allowances to the judgment debtors. There will be no order an to the costs of this Court. The Receiver will continue as before.
9. It will appear on a reference to the petition for revision that the decree-holder raised three distinct points, first, that the Receiver should bo discharged and the properties attached in execution of his decrees cold to satisfy his decrees, secondly, that, in any event, the decrees carrying no interest should be satisfied by sale of the properties, and, thirdly, that the Receiver should be directed to pay to him the current demand for revenue and cesses. In order to understand the last point, I ought to state that the properties of the judgment-debtors are bobuana properties granted to them by the heed of the family and that, under an arrangement between them, the Government revenue and cesses payable in respect of these properties are recoverable from them by the Maharaja of Darbhanga; and one of the grievances of the respondent was that the Receiver did not pay to him the current demands for revenue and cases. The current order passed by the Calcutta High Court met two of the points raised by the decree holder, but said nothing at all unto the most important point raised by the decree holder. Had the order of the High Court been passed in invitum, it could not be argued for one moment that the relief specifically claimed by the decree holder, and not granted by the High Court, should not be deemed to have been refused. Does it make any difference that the order passed by the High Court was a consent order? In my view, the position taken up by the decree holder in opposed both to principle and authority, On principle, I cannot understand how it is open to the decree-holder to raise a question which he gave up in the High Court when, as a result of that giving up, ha scoured certain advantages which were denied to him by the Court of first instance. The judgment-debtors say as follows, and I can see no answer to the argument: It is because the decree-holder gave up the first point raised by him in the High Court, that we conceded the other points as to which he had a grievance, it is not open to him now to go bisk upon the representation which ha must be held to have made to us, on the faith of which we acted and charged our position to our detriment," As regards authorities, it has been held that the principle of law underlying Section 10 of the Code applies to interlocutory orders Munyul Pershad v. Grija Kant Lahiri 8 I.A. 123 : 8 C. 51 : 11 C.L.R. 118 : 4 Sar. P.C.J. 249 : 4 Ind. Dec. (N.S.) 32 and that a consent order raisen an estoppel as much as a decree passed in invitum Nicholas v. Asphar 24 C. 216 : 12 Ind. Dee. (N.S.) 810; Lakshmisankar v. Vishnuram 24 B. 77 : 1 Bom. L.R. 534 : 12 Ind. Dec. (N.S.) 588; Bhaiishankar v. Mvrarji 12 Ind. Cas. 635 : 36 B. 283 : 13 Bom. L.R. 950 and humara Venkata Perumal v. Thatha Ramaiwny Chetiy 9 Ind. Cas. 875 : 35 M. 75 : (1911) 1 M.W.N. 290 : 9 M.L.T. 487 : 21 M.L.J. 709 and that so long as a consent order stands, it is not open to either party thereto to give the go-bye to it, even if it contains clauses bad in law Cowasji v. Kisindas 11 Ind. Cas. 984 : 35 B. 371 : 13 Bom, L.R. 649. I hold that the consent order pissed by the Calcutta High Court on the 7th June 1911 must operate, so as to estop the decree-holder from putting forward the contention that he is entitled to have the Receiver discharged and the properties sold in execution of his decree. He is, in my opinion, bound by the schema as framed by the Court, which is specifically referred to in the consent order, and, so long an the Receiver adheres to the scheme and gives effect to that scheme, the decree-holder is not entitled to pat forward fresh grievances as grounds for the discharge of the Receiver and for proceeding with his execution eases.
11. The difficulty of the decree holder does not end here. On the 25th July 1914, the decree-holder made his first attempt to go behind the consent order. He applied before the Subordinate Judge for on order on the Receiver to pay him off either by sale or mortgage of the properties belonging to the judgment debtors and, in default, for the discharge of the Receiver. The petition presented by the decree-holder on the 25th July 1914 has not been printed in the paper book, but its purport has been stated by the decree-holder in the 23rd paragraph of his petition in the present proceedings. The Subordinate Judge dealing with the application came to the conclusion that the question of the sale of the properties could not be considered in view of the consent order passed by the Calcutta High Court. The order of the Subordinate Judge was passed on the 6th July 1915, and the decree-holder acquiesced in the order so completely that he did not challenge the correctness of the order by an appeal to the High Court This was an order passed in invitum and must, in my judgment, operate as res judicata on principles analogous to those underlying Section 11 of the Code.
12. On the 26th January 1917, the decree-holder made his second attempt to get rid of the consent order. On that date, be presented an application for the discharge of the Receiver, and the grounds which he assigned for the application were identically those which he had put forward in the preceding application. the judgment debtor contested the application on the ground that both the consent order parsed by the Calcutta High Court on the 7th June 1911 and the order passed by the Subordinate Judge on the 6th July 1916 were impediments to the maintainability of the application. The Subordinate Judge dealt with the application on the 21st April 1917, and, giving effect to the plea put forward on behalf of the judgment debtors, refused the application. There was an appeal to this Court from the order parsed by the Subordinate Judge. On the 20th June 1918 this court dismissed the appeal presented on behalf of the decree-holder, bur, in go doing, made the following observations:
But the real dispute goes deeper and the matters which were incidentally raised before the Subordinate judge will, as the learned Vakil for the appellant states, have to be determined in the near future, He desires that we should not go into these disputes.
I thick it would not be proper for us to go into matters which the judgment debtors at all events have not come prepared to litigate here and that the proper course will be for the decree holder, if he so chooses, to raise these matters in the first instance in the Executing Court.
It is his contention that he has a right to re-open the saheme which was prepared and to ask the Subordinate Judge either to discharge the Receiver and to bring the properties to sale or to discharge the Receiver and to direct him to tell either part or the whole of the properties. We are not concerned at this stage to express an opinion on this matter.
13. It is quite clear that the learned Judges dealing with the appeal did not express any opinion on the question whether the decree-holder was entitled to have the Receiver discharged, with a view to have the scheme re-opened and to have the properties belonging to the judgment-debtors sold. The learned Judges took the view that the decree-holder could, if he chose, raise the matter by an application to the Executing Court. Encouraged by these observations, the decree-holder made another attempt, his third attempt, to get rid of the consent order. And this time he succeeded.
14. In my view, the learned Subordinate Judge should have refused the application, on the ground that there were at least two orders which took awey from the decree bolder the right to make the present application--the consent order passed on the 7tb June 1611, and the order passed by the learned Subordinate Judge on the 6th July 1916. the present application is an application by the decree holder for an order that "He may be allowed to proceed with the sale of the properties mortgaged in execution of his mortgage decree and with the execution of his decrees generally" and for the discharge of the Receiver. That was identically his application which resulted in the concent order on the 7th June 1911. That again was his application which resulted in the order passed on the 6th July 1916. I do not for a moment doubt that the consent order or the order passed by the Court on the 6th July 1916 will not stand in the way of the decree-holder, if the judgment-debtors depart from the terms of the consent order; but there is no suggestion that the terms of the consent order are not scrupulously adhered to. The only suggestion is that it will take many years, under the present scheme, to satisfy the decrees held by the decree-holder. That argument, in my view, is not admissible, since the decree-holder must presumably have taken that argument into consideration when be first consented to the appointment of the Receiver, and then to the order passed on the 7th June 1911.
15. In this connection I must not omit to consider one argument, indeed the main argument, employed by" the Subordinate Judge. He says that there is not a word in the petition of the judgment-debtors for the appointment of a Receiver to suggest that it was intended to satisfy the decrees out of the income of the estate, and he concludes that "the interpretations which are sought to be put on these petitions did rot enter the minds of the parties," It is sufficient to refer the learned Subordinate Judge to the third paragraph of the petition presented by the decree-holder in the Calcutta High Court, in which the decree-holder puts his own interpretation of the petition, and to respectfully ask the learned Subordinate Judge how he reconciles the clear admission made by the decree-holder in that petition with the conclusion at which he has arrived. That paragraph runs as follows:
That on the 2nd February 1910 the debtors applied to the Subordinate Judge that a Receiver might be appointed over their attached properties and that such Receiver, instead of selling the properties, might manage them and from the rents and profits, after deduction of management expenses and after payment of some small allowances to the debtors for their maintenance, might pay up the decree debts according to the decrees. The application presumably was made under Order XL, Rule 1, read with Order XXI, Rule 83.
16. In the next place, the learned Subordinate Judge has throughout assumed that the decree-holder was not in a position to have any idea of the income of the properties belonging to the judgment-debtors, and that, therefore, he could not have known, when he gave his consent to the appointment of the Receiver, that it would take twenty-five years to discharge the debts due to the decree-holder. The learned Subordinate Judge has omitted to mention that the judgment-debtors are the members of a younger branch of the Darbhanga Raj family, of which the decree-holder is the present head, and that the properties with which we are concerned are Raj properties which formed the subject-matter of a babuana grant in favour of an ancestor of the judgment debtors. There is no reason whatever to doubt that the Raj Officials have a clear idea of the exact income derivable from those properties and that they entered into the transaction with full knowledge of all relevant facts. When we are seeking for an explanation for the unbusinesslike conduct of the decree-holder in consenting to the appointment of a Receiver on terms which are undoubtedly bard on him, it is more reasonable to take the view that the decree-holder as the head of the family was moved by an impulse to save the properties belonging to his own relatives without serious injury to him than that he was misled by these relatives.
17. But, in truth, the questions dealt with by the learned Subordinate Judge do not at all arise. They are undoubtedly matters of prejudice, but are wholly irrelevant when we are considering whether the decree-holder, having consented to the order of the 7th June 1911, and having submitted without challenge to the order of the 6th July 1916, ought to be permitted to raise the question for the third time that he is entitled to proceed with the sale of the properties in execution of his decrees against the judgment-debtors. In my opinion, he ought not be permitted to raise the question again. I must allow this appeal, set aside the order passed by the learned Subordinate Judge and refuse the application with costs throughout.
18. The judgment-debtors will be entitled to have the actual costs incurred by them in these proceedings both in the Court of first instance and in this Court out of the estate and the Receiver will be at liberty to pay the same to the judgment-debtors or to their agent on a receipt signed by them or by their agent.