SANWARMAL SARAF Vs. LALU RAM AGARWALLA

JUDGEMENT

(1.) This is a defendant's appeal arising out of a suit for declaration that a partnership business, in which he was the working and managing partner, was already dissolved and, if not dissolved, for dissolution of the same. The suit was valued at Rs. 10,000, at which the two plaintiffs claimed tentatively their dues out of the winding or dissolution of the partnership business. The defendant appellant had made an application under Section 20 of the Arbitration Act for reference to arbitration of the dispute that arose between the parties, and under Section 34 of that Act he made an application to the trial Court for stay of the suit till the disposal of the application under Section 20 of the Act. That however, was not granted. The defendant was ultimately appointed as a receiver in regard to the partnership business, which is the subject-matter of the suit. That order was passed on 4th of September, 1967, the suit having been tiled on 20th of June, 1967. At that time the Court thought that the defendant by his experience and skill, was the most competent person to manage the business during the pendency of the suit, as otherwise, without him, the business was bound to be closed down. He was asked to furnish accounts monthly of the income and expenditure in Court and also to give a complete list of the partnership property by the 11th of September. 1967. The next order on the 12th of February. 1968 gives an impression that whatever accounts were filed by the defendant receiver did not satisfy the Court, and the Court thought that he had not conducted himself as a prudent business man. But the Court did not decide at that time to remove him from receivership. He was asked to notify, by 17th of February, 1968. his consent to certain conditions which the Court indicated to be imposed upon him in case his receivership was to continue. The presiding officer of the Court appears to have been transferred after that order. The defendant appellant made an application to that Court for a review of the order passed on the 12th of February, 1968. But that was rejected by the order passed on the 19th of May. 1968. In that order, however, the succeeding presiding officer thought that the previous order of the Court of the 12th of February. 1968 in regard to the proposed conditions to be imposed upon the receiver was rather vague and required clarification and preciseness He also asked the receiver to submit all the accounts up to date and asked the plaintiffs to file their objections to the accounts, if any, by the 23rd of May, 1968. The case was fixed for 24th of May. 1968, for hearing in the matter of the continuance of the receivership and the conditions to be imposed in that connection as also the accounts submitted by the defendant receiver. On the 23rd of May the plaintiffs filed their objections to the accounts given by the receiver and on the 24th of May to which date the interlocutory matters were fixed for hearing, the receiver made an application for time to file a rejoinder to the objections raised by the plaintiffs in respect of the accounts submitted by him. No time appears to have been granted to him on that application though, I find from the order passed on that day, by consent of the parties the receivership matter was posted for hearing to the 20th of May. The appellant as defendant had also ask-ed for time for filing the written statement and that prayer was allowed subject to payment of a cost of Rs. 40/-, and he was required to file the written statement by the 30th of May. On that date (30th of May) the appellant -- both as 8 defendant as well as receiver -- made several applications to the Court, the sum total of which was to gain some time before the receivership matter was considered finally. All his applications were rejected, and at that stage, it appears, the defendant's lawyer withdrew from the Court and intimated the Court that he intended to file an application before the District Judge for transfer of the case from the file of the Subordinate Judge. The result was that the Court proceeded to hear ex parte from the plaintiffs' side in respect of the accounts that had been filed by the receiver. He did not have the advantage of hearing the receiver's explanation or comments on the objections raised by the plaintiffs. After such ex parte hearing, the Court posted the matter to the 6th of June. 1968 for orders.

(2.) In the meanwhile, the receiver moved the District Judge for transfer of the case and obtained an order of stay of further proceedings in the case, from him on the 4th of June. 1968. That stay order was given, at the request of the appellant, to him to be delivered to the Court by hand. That stay order was given to the Seristedar of the Subordinate Judge'8 Court at 7 a. m. in the morning of the 6th of June, 1968, as stated on affidavit by the appellant in this Court as well as before the Subordinate Judge on the 7th of June when he applied for expunging the impugned order of the 6th of June. Now the controversy between the parties starts, with which we are concerned in this appeal

(3.) On the 6th of June, the Court made its order about the matters which it had heard on the 30th of May, 1968 and signed the same. By that order, the subordinate Judge cancelled the appointment of the defendant appellant as receiver and appointed a lawyer to be the interim receiver, pending the final selection of a suitable person as receiver in consultation with the parties in the suit. It is that order which is under challenge in this appeal.