SRI RAJAH RAO VENKATAKUMARA MAHIPATHI SURYA RAO BAHADUR GARU, THE MAHARAJA OF PITTAPURAM Vs. GOKULDOSS GOVERDHANADOSS

JUDGEMENT

(1.) These two applications relate to the same subject-matter, that is, a sum of Rs. 6,218-14-3 standing to the credit of C.S. No. 229 of 1924 and representing the income from the mortgaged properties involved in that suit other than Misquith Buildings and Cathedral Gardens. In the one, the receiver is asked to deposit the amount in Court and in the other, that is, Application No. 244 of 1931, a request is made that the same sum may be paid over to the plaintiff in the suit, the Maharaja of Pittapuram, who is the petitioner in both the applications. The Official Assignee of Madras and the plaintiff in C. S. No. 622 of 1923 oppose these applications.

(2.) The facts necessary for the disposal of these applications may be stated very briefly as follows : One Gokuldoss, manager of a joint Hindu family, trading under the style of Murlidoss Ramdoss & Co., effected on behalf of the firm an equitable mortgage by depositing title-deeds of ten items of properties with the petitioner, the Maharaja of Pittapuram, and borrowed from him a sum of Rs. 3,85,000 in the year 1922. For the recovery of the principal and interets due under this mortgage the Maharaja filed a suit C.S. No. 229 of 1924 on 27 March, 1924. In the meanwhile, the 3 defendant in the suit, a minor, had already filed C.S. No. 622 of 1923 against the other members of the firm for partition of the joint family properties. For disposing of these applications it is not necessary to state any- thing about the contentions of the parties in these suits. The suits : were eventually decreed and appeals against the decrees are now pending in the Appellate Court. In C.S. No. 622 of 1923, the partition suit, Mr. E. R. Krishnan, an advocate of this Court, was appointed on 31 August, 1923, receiver of all the properties alleged to belong to the joint family of Messrs. Murlidoss Ramdoss & Co., including the properties mortgaged to the plaintiff in C.S. No. 229 of 1924. Subsequently the firm was adjudicated insolvents in 1924 and the Official Assignee was impleaded as its legal representative. The receiver appointed by the Court continued in possession of the properties. On 18 July, 1927, the petitioner (plaintiff in C.S. No. 229 of 1924) made an application for the appointment of an independent receiver for the properties mortgaged to him; but, it would appear, the learned Judge took the view that an independent receiver was unnecessary and that the plaintiff's interest could be safeguarded by directing the receiver in C.S. No. 622 of 1923 to keep a separate account of the income of the properties mortgaged to him and this was accordingly ordered on 25 July, 1928. The receiver was also directed that none of the income from these properties should be spent in giving the maintenance allowed to the plaintiff in C.S. No. 622 of 1923. The petitioner again filed on 23 April, 1929, another application (Application No. 1524 of 1929) for the appointment of a receiver for the properties mortgaged to him. Both the suits were tried together by Venkatasubba Rao, J. On 2nd May, 1929, a mortgage decree was passed in favour of the petitioner (plaintiff in C.S. No. 229 of 1924) for Rs. 7,00,000 and odd and for the sale of the items of mortgaged properties except Cathedral Gardens and Misquith Buildings; and on the same date the learned Judge appointed Mr. E. R. Krishnan (the receiver in C.S. No. 622 of 1923) and Mr. P. Kameswara Rao, an advocate, as joint receivers of the mortgaged properties for the sale of which the petitioner had established his right in the suit. The sum now in the hands of the receiver is stated to be the income from those properties realised subsequent to the date of the decree. The. mortgaged properties except Cathedral Gardens were sold and were purchased by the petitioner himself. The affidavits stated that only a sum of three lakhs and odd were realised by the sale.

(3.) The petitioner now claims that the income realised from the mortgaged properties should in law be treated as additional security for the amount found due to him under the mortgage, inasmuch as the receiver was appointed at his instance in his mortgage suit and, as such, the income from the. said properties should be considered to be ear-marked for his own use, it now having been found that his title to those properties has been established by the decree. His argument is that the possession of a receiver in a mortgage suit is prima facie for the benefit of the party who obtained the appointment, and on this principle he argues that the receiver who was appointed at his instance holds the property for his benefit and is bound to make over to him the entire income for the satisfaction of his dues. The Official Assignee, on the other hand, contends that with regard to this income the petitioner has no preferential rights and that his rights to it are only the same as those of the ordinary creditors. The question for decision is, which view is right. If the petitioner's contention is to be upheld, he will be entitled to an order for the payment of the sum in question to him.