PASUMARTHI PERRAJU ORS Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) These three civil miscellaneous appeals by the judgment debtors in three different suits O. S. Nos. 76/73, 74/73 and 75/73 on the file of the Subordinate Judge, Kakinada raise a common question of law and may be disposed of by a single judgment. The decree against the judgment debtors was obtained on the foot of a simple mortgage executed in favour of the plaintiff bank, respondent herein. The time for payment of the mortgage debt under the preliminary decree having expired and the judgment debtors having failed to pay even a single pie, final decree for sale of the mortgaged property was made. In E. P. Nos. 211, 212 and 213 of 1977 on the file of the Subordinate Judge, Kakinada a request for appointment of receiver of the mortgaged property was made by the decree holder. By the orders now under appeals the learned Subordinate Judge allowed the decree holders application and appointed a receiver of the mortgaged properties and directed the receiver to take possession of the land after getting the obstruction, if any, removed and sell the leasehold right thereof and deposit the proceeds into Court towards the decree debt till the satisfaction of the decree or until further orders.

(2.) amounts were advanced to the judgment debtors in June, 1970 and they have not paid any sum whatsoever either towards the principal or interest. So much so that now execution is levied for the realisation of a sum of Rs. 30,000 and odd in C. M. A. No. 127/79, another sum of Rs. 30,000 and odd in C. M. A. No. 136/79 and Rs. 50,000 and odd in C. M. A. No. 137/79. The judgment debtors inter alia resisted the appointment of the receiver on the ground that the mortgage was a simple mortgage and the direction under the final decree is to bring the mortgaged property to sale. The Court has no jurisdiction in execution of such a decree to appoint a receiver of the mortgaged properties and direct the realisation of the usufruct of the properties mortgaged properties and direct the realisation of the usufruct of the properties mortgaged towards the satisfaction of the decree. Such a direction would convert a simple mortgage to a usufructuary mortgage and that the Court has no jurisdiction to do. It was also pleaded that the judgment debtors had alienated the properties under an agreement of sale in favour of third parties and the mortgaged properties are in the possession of the tenants of the said third party and the court cannot appoint a receiver so as to dispossess the said tenants. The learned Subordinate Judge, on a consideration of all the facts and circumstances of the case found it just and convenient to appoint a receiver. He also came to the conclusion that the so called tenants of the third party are in fact set up by the judgment debtors themselves.

(3.) In these appeals Mr. Apparao, the learned counsel for the appellants judgment debtors contends that in view of sub rule (2) of O. 40. R. 1 and S. 51, C. P. C. the Court cannot appoint a receiver when it would result in the dispossession of a person who has right to be in possession of the property. According to him, inasmuch as under a simple mortgage executed by the judgment debtors on the foot of which the decree now under execution is obtained by the bank, the mortgagee bank has no right to possession of the properties, in the event of default, the right of the mortgagee bank is merely to obtain a decree for realisation of the mortgage debt and being the mortgaged properties to sale. Neither under the simple mortgage deed nor under the decree, the mortgagee bank has any present right to the possession of the mortgaged property. The decree itself only directs sale of the mortgaged property. As such a receiver cannot be appointed.