HARIHAR MUKERJI Vs. HARENDRA NATH MUKERJI

JUDGEMENT

(1.) The question of law raised in this appeal is one of some novelty and relates to the right of a Receiver to take possession of the subject-matter of the litigation in which he has been appointed, without a Succession Certificate from the proper Court. The circumstances under which the question arises for decision are not the subject of controversy before us. One Debendra Nath Mukerjee, a wealthy Hindu, governed by the Dayabhaga law and resident of Kidderpore in the suburbs of this city, died intestate on the 16 July 1907. He left a widow, three sons and five daughters. Shortly after his death, on the 9 December 1907, a suit was commenced by his eldest son, Harendra Nath, for partition of the family properties. On the 4th December 1908, Harendra Nath was appointed Receiver of the subject-matter of the litigation. Part of the estate of Debendra Nath, which had been inherited by his sons, consisted of Government securities of the value of Rs. 20,000, cash to the extent of Rs. 25,000, in deposit in current account with the Bank of Bengal, and also other Government securities which had been endorsed in favour of the Bank with a view to meet any possible overdraft. It became necessary upon the appointment of Harendra as Receiver that he should take possession of these funds, and on the 4 May 1908 he applied to the Court that a letter might be sent to the Bank with a view to their deposit in Court. On the 11 November 1908, the Court directed him to draw the moneys and negotiate the Government promissory notes after he had taken out a certificate from the proper Court. On the 11 February 1909 the defendants in the suit, who were the infant brothers of Harendra Nath, preferred the present appeal against the portion of the order which directed the Receiver to take out a Succession Certificate. When the appeal came to be heard, the Receiver, who was the respondent, intimated to the Court that he would not oppose the appeal, because it was quite as much his interest as that of his brothers to have the order modified, in so far as it made a Succession Certificate an essential pre-requisite to the withdrawal of the money and the negotiation of the Government promissory notes. As the question involved in the appeal was one of great importance and not altogether free from difficulty, and as our decision might affect the Government revenue, we directed notice of the appeal to be served on the learned Government pleader. Subsequently, the appeal was re-argued by the learned vakil for the appellants on one side and the learned Government pleader on the other. After careful consideration of the arguments which have been addressed to us, we are of opinion that the appellants are entitled to succeed.

(2.) Section 4 of the Succession Certificate Act, 1889--we quote so much only of the section as may have any possible application to the case before us--provides that no Court shall pass a decree against a debtor of a deceased person for payment of his debt to a person claiming to be entitled to the effects of the deceased person, or to any part thereof, except on the production by the person so claiming of a probate or letters of administration, evidencing the grant to him of administration to the estate of the deceased, or a certificate granted under this Act and having the debt specified therein. Let us assume for a moment that a sum in deposit in current account with a Bank is a debt within the meaning of this Act. Let us also assume that the sum advanced by way of loan under a Government promissory note is also a debt within the meaning of the section. The question arises, whether a Receiver appointed by a Court can be properly described as a person claiming to be entitled to the effects of the deceased person. The answer to this question must depend upon the true position of a Receiver appointed to take charge of the subject-matter of a litigation. It has been suggested by the learned Government pleader that the position of a Receiver is precisely the same as that of the person who ultimately turns out to be the true owner, and that, as such person cannot enforce his rights in respect of a debt due to the deceased person to whose effects he claims to be entitled, without the production of a Succession Certificate, the Receiver is in no better position: and that, if a contrary view were adopted, the State would be deprived of a source of revenue which was clearly within the contemplation of the Legislature when Section 4 of the Succession Certificate Act was framed. In our opinion, there is no foundation for this contention. It is well settled that a Receiver by his appointment does not become the representative of the parties, but is an officer and representative of the Court which appoints him. The effect of the appointment of a Receiver is to bring the subject-matter of the litigation in custodia legis, and the Court can effectively manage the property only through its officer, who is the Receiver. In other words, the Receiver ordinarily is not the representative or agent of either party in the administration of the trust, but his appointment is for the benefit of all parties, and he holds the property for the benefit of those ultimately found to be the rightful owners: see Jagat Tarini Dasi V/s. Naba Gopal Chaki (1907) I.L.R. 34 Calc. 305, where it is pointed out that the Receiver is the representative of the Court and may, by a fiction of law, be deemed the right arm of the Court in exercising the jurisdiction invoked in such cases for administering the property, because the Court can only administer through a Receiver: see also Corporation of Bacup V/s. Smith (1890) 44 Ch. D. 395 and Portman V/s. Mill (1839) 3 Jurist 356. No doubt, in some cases, the expression is used that the Receiver may be considered as a representative of the parties to the suit; but this is only in the sense that, as against an adverse claimant, his title does not stand higher than that of the parties to the litigation--a doctrine which is recognized in the Civil Procedure Code of 1908, Order XL, Rule 1, Sub-rule (2). It cannot, therefore, be affirmed that a Receiver, when he seeks to take possession of the subject-matter of the litigation, "claims to be entitled to the effects of the deceased person." His position in this respect is analogous to that of a curator appointed under the Succession (Property Protection) Act (XIX of 1841), as regards whom it has been held in Babasab v. Narsappa (1895) I.L.R. 20 Bom. 437 that he is not a person claiming to be entitled to the effects of the deceased person whose estate he is appointed to manage. A Receiver, quite as much as a curator, is in no sense a representative of the deceased person; he is merely entrusted by the Court with certain powers over the estate for a temporary purpose. It has been suggested, however, by the learned Government pleader that, if this view is adopted, not only may the State lose its revenue, but the protection which is intended to be afforded to debtors by the Succession Certificate Act may be completely lost. In our opinion, there is no foundation for any such apprehension. When a Court takes possession of the subject-matter in dispute, and subsequently makes over the property to the person who is adjudged to be the true owner, no question can possibly arise as to the protection to be afforded to parties who pay their debts, because the sum paid by the debtors finds its way into the hands of the person who is judicially determined to be entitled thereto; in such a contingency, it may well be assumed that the Legislature did not intend that recourse should be had to the provisions of the Succession Certificate Act. The substance of the contention of the learned Government pleader is that no one ought to be entitled to realise debts due to a deceased person who has not established his representative character in a Court of competent jurisdiction. The policy of the Legislature, however, so far as may be gathered from the statutory provisions upon the subject, points to a contrary conclusion. It is well-known that, although Section 190 of the Indian Succession Act, 1865, provides that no right to the property of an intestate can be established unless administration has been previously granted by a competent Court, this section was not incorporated either in the Hindu Wills Act, 1870, or in the Probate and Administration Act, 1881. If a provision of this description had found a place in either of the later statutes, the result would have been that, in the case before us, the parties would not have been entitled to put forward any claim to the estate of their father till they had taken out letters of administration. In the absence of any such provision, we must hold that the Receiver is competent to take possession of the securities and moneys in the hands of the Bank of Bengal without a certificate under Section 4 of the Succession Certificate Act, the provisions of which are clearly inapplicable. In this view it is unnecessary to discuss whether the expression "debt" is not comprehensive enough to include the securities and moneys in question. But it may be pointed out that the provisions of the Indian Securities Act, 1886, and those of Section 3, Sub-section (2), Section 6, Sub-section (1), Clause (f), and section. 8, Clause (c) of the Succession Certificate Act, indicate that a Succession Certificate would be needed for the purpose, if a suit was brought to establish a title to these funds by right of inheritance.

(3.) The result, therefore, is that this appeal must be allowed, and the order of the Court below varied. The Receiver will be entitled to draw the moneys in deposit and negotiate the Government promissory notes without a Succession Certificate. There will be no order as to costs.