SATYANARAYANA RICE MILL Vs. ANDHRA BANK

JUDGEMENT

(1.) This revision has been filed against an order passed by the Subordinate Judge, Tanuku dated 27th September, 1999. The learned Judge was deciding an application filed under Order 40, Rule 1 of CPC. Many arguments have been raised at the Bar but those arguments need not be gone into in view of what is to be stated by this Court herein below. A preliminary decree was granted in favour of the Bank on 30th March, 1994. Prior to that, in I.A.No. 500 of 1992 on 7-8-1992 the Court had appointed a Receiver and had authorised him to conduct auction of lease hold rights of rice mill. He was further directed to deposit the lease amount into the Court. Thereafter another order was passed by the trial Court on 4-7-1994 directing the Receiver to hand over the rice mill to the owners who are petitioners in this petition. This order had been necessitated on the ground that the lessee had relinquished the property as he had not found it profitable. The Receiver issued notice to the petitioners on 13th December, 1994 and asked them to take delivery of possession of the rice mill on the appointed date. Thereafter, the Receiver received a Memo from petitioners' Advocate Sri G. Bhaskaramurthy stating that his clients could not take possession of the rice mill in the present condition. The Advocate requested the Court to direct the Receiver to hand over possession of the rice mill to the Bank. Thereafter, the Receiver filed a Memo before the Court and the Bank also filed a petition before the Court. The refusal of the present petitioners to take back the possession of the property necessitated the order of auction of the property. This case was heard earlier when it was found that Sri Tatineni Rama Rao who was purchaser in the auction was not party, then he was arrayed as party and the case was heard again.

(2.) Receiver was appointed which was not disputed by the petitioners. Thereafter, the property was given on lease, it was also not disputed by the petitioners. The lessee gave up the property as he did not find it profitable, the petitioners were asked to take back the property, they refused and thereafter sale was ordered. The petitioners did not complain, but it is only after confirmation of the sale that a grievance is being agitated. When the Receiver was appointed the petitioners did not agitate that it was violative of Order 34, Rules 4 and 5 of CPC. When the Court ordered the petitioners to take back the property they refused. Therefore, it can be safely said that the petitioners had no grievance to the appointment of the Receiver and property to be retained by the Bank. Therefore, it will not lie in their mouth at this stage to complain that the order of appointment of Receiver and auction was contrary to Rules 4 and 5 of Order 34 CPC. In the revision the only ground taken is that there was collusion between the Bank and one Tatineni Rama Rao who was the purchaser. Suit was for recovery of money. Even otherwise Order 40 of Civil Procedure Code would empower the trial Court to order sale even before passing of a decree as is laid down by Judgment of Supreme Court in Industrial Credit and Investment Corporation of India Ltd. vs. Karanataka Ball Bearings Corporation Ltd., paras 6 and 7 of the judgment are relevant and they are reproduced:

(3.) If one goes by the law laid down by the Supreme Court, it becomes clear that the discretion in this case has been exercised rightly. By keeping the property as it is both the parties would be suffering loss. The petitioners themselves are not ready to take back the property. The property is loosing its value. On the other hand, the interest is mounting up against the petitioners. Therefore, it would be in their interest also if the amount fetched from the sale is adjusted against their loan account.