LOHITHAN Vs. MADHAVAN

JUDGEMENT

(1.) The suit that has led to this appeal by the additional first plaintiff, was instituted by the original plaintiff as the manager of a private school, to compel the defendant respondent to render accounts and to realise a sura of over Rs. 3000, alleged to have been misappropriated by him when he was managing the school of which he was the receiver appointed by a Magistrate under S.128 of the Travancore Criminal Procedure Code of 1067. In or about the year 1114, disputes arose between the proprietors of the school, as to its possession, which led to the proceedings before the Magistrate; afterwards, they settled their differences and the proceedings were dropped. The original plaintiff was then elected as the manager of the school. It appears that before the suit was filed, the Magistrate had passed the accounts of the receiver and had ordered his discharge. At the trial, the respondent took the objection, that the suit would not lie against him without the leave of the Court which appointed him receiver and after the accounts had been passed. The subordinate Judge who tried the suit, dismissed it on this objection, without addressing himself to the merits of the case. I am of the opinion, that his view cannot be supported.

(2.) The first question to consider, is whether leave of the Court is necessary for a suit against a receiver who has been discharged. This requirement as to leave is not a condition imposed by any statute, but is founded on the principle, that a receiver while functioning as such, is an officer of the Court and acts as its agent, and that no party can be permitted to interfere with his action, without the knowledge and permission of the Court. The principle can have no application, pnce he is discharged from office and he ceases to function as such. A Division Bench of the Calcutta High Court in Balai Lal Sen v. Pramatha Nath Sen (AIR 1959 Calcutta 71) has accordingly ruled, that no leave of the Court is necessary to sustain a suit against a receiver after his discharge. The Court also relied on the dictum of Ross, J., in Dinshaw v. Amrit Lal & Co. (AIR 1931 Patna 298) which however was brushed aside by the Subordinate Judge with the observation, that no reason had been adduced in support of the dictum. I am of the view, that this requirement of leave of the Court is not a condition for instituting a suit against a receiver who had been discharged.

(3.) The second question is, whether the suit is maintainable against the receiver after his discharge and after his accounts had been passed. It was provided by the Travancore Criminal Procedure Code, 1067, under which the receivership came into being and was terminated, that a receiver appointed thereunder had all the powers of a receiver appointed under the Code of Civil Procedure. The Travancore Civil Procedure Code which was in force at the material time bad only provided generally by Order XXXVIII, R.4, that where a receiver fails to submit his accounts or to pay the amount due from him or occasions loss by wilful default or gross negligence the Court may direct his property to be attached and sold, and though an enquiry, whatever be its nature, may be implied in this, had not prescribed a set procedure for holding the enquiry. This has now been achieved in this State, by the provision in Order XL, R.4. CPC. by which all parties to the suit or proceedings are to be parties to the enquiry who have therefore to be heard and in proper cases may be referred to a regular suit. It was not pretended, that in the present case, notice of the passing of the accounts had issued to the parties interested in the proceedings before the Magistrate or that any enquiry had been held in their presence before the accounts were passed. When afterwards the original plaintiff raised objections to the accounts, his locus standi was denied. Being of a civil nature, a suit lies to compel the rendition of accounts and to recover amounts alleged to be misappropriated, unless its cognizance is either expressly or impliedly barred. S.11 of the Civil Procedure Code being inapplicable, and there being no other similar provision which can be considered to be relevant, cognizance is not expressly barred. In the absence of a notice of enquiry into the accounts, it cannot fairly be contended, that the parties interested were bound to intervene and set up their objections to the passing of the accounts. On Order XL, R.4, CPC. as it is today prescribing the procedure for an enquiry, the view may perhaps be taken, that it is only an enabling provision and does not take away the right of suit; but as to this however, it is unnecessary to express any opinion. There is nothing from which an implied bar can be raised. Even before discharge, leave of the Court to sue is the only condition precedent.