K RAGHAVAN Vs. K VENKTARAMA IYER

JUDGEMENT

(1.) THIS civil revision petition raised important question of law as to whether a receiver can claim from the estate amounts advanced and paid by him during the course of his administration, and claim contemporaneously a lien over the liquid assets of the estate, so as to take preference over the mortgage decree-holder at whose instance the estate was being administered by him, and whether by necessity the receiver should file a suit to realise such amounts advanced by him, even though the advancement of such moneys is not in question, and incidentally whether the claim would be barred by limitation.

(2.) THE petitioner who is the receiver appointed in the lower court, was so appointed at the instance of the plaintiff in the suit who had a mortgage security over a press known as the Rajah Power Press, Royapettah. The receiver was allowed certain remuneration for his management and running of the press. He was in actual management of the same between 15-4-1961 till 31-12-1963, and the final accounts relating to the same were passed on 1-2-1965. During such running of the press by him, he is said to have advanced moneys from and out of his own pocket for necessities of the business such as paying weekly wages of workmen, payment of rent to the owners, recasting of the types, recasting of the rollers, repairing the machines, payment into court to avert attachment of the press, payment of gratuity to workmen while retrenching them, purchase of papers and printing ink etc. The contention of the Receiver is that all these amounts were evidenced by receipt books and vouchers and are reflected in the day books and ledgers maintained by him in the usual course. After the passing of the final accounts, the press was directed to be sold as it was running at a loss. The receiver has come forward with this application for payment to him, as a preferential creditor to the estate, a sum of Rs. 7204-15 from and out of the sale proceeds of the press which is admittedly in court deposit.

(3.) THE plaintiff at whose instance the receiver was appointed, objects to such a payment on a Memo filed by the Receiver on the ground that the receiver did not obtain directions or sanction of court for the incurring of such expenditure. He also says that he has been objecting to such moneys being lent by the receiver without authority of court. He pleads that he is not aware of the passing of the receiver's accounts from time to time and even of the passing of the final account on 1-21965. In any event, he says he can rank himself only as a simple money creditor. The defendants who have apparently no interest in the claim of the receiver have also raised objections that the receiver ought to have obtained sanction of court and particularly when the press was working at a loss for five years, and that in any event the press having been sold free from encumbrances, it should be deemed to be free of the charges incurred by the receiver as well.