G GURUMURTHI AIYAR Vs. RAMASWAMI CHETTIAR

JUDGEMENT

(1.) This appeal relates to the receivership of the property of one Nagappa Chetty, who died in February, 1926. On his death one of his two widows adopted plaintiff 1 in the suit and then with plaintiff 1 instituted a suit against the other widow and. the other widow's daughters for a declaration that the adoption of plaintiff 1 was valid and alternatively for a partition of Nagappa Chetty's properties between her and the other widow. Pending that suit, a Receiver of all Nagappa Chetty's estate was appointed. Eventually the suit was compromised in October, 1928, and the Receiver's appointment was terminated in April, 1929. After that plaintiff 1 made an, application to the Subordinate Judge alleging that the Receiver was responsible for great loss to the estate. The Subordinate Judge held an inquiry into the matter and found that the Receiver had caused loss to the estate to the extent of Rs. 500 by failing to execute in a proper way a decree for money, which Nagappa Chetty had obtained. On that he made an order that the Receiver should pay into Court Rs. 500 on account of the loss which he had caused to the estate and that, if he failed to do so, plaintiff 1 should realise the amount from property given by the Receiver as security for the performance of his duties. Against that order the Receiver appeals,

(2.) A preliminary objection has been raised that no appeal lies in this case. Under the Civil P. C. as now framed an appeal is allowed against an order made under Rule 4 of Order 40. But it is contended for plaintiff 1, the respondent here, that this order, made by the learned Subordinate Judge, was not one under that rule. Under that rule an order can be made that a Receiver's property be attached and sold to recover compensation for loss caused by him; but in this case, as I have mentioned, the order was not for attachment of the Receiver's property. It is, therefore, contended for plaintiff 1 that this was not an order under Rule 4 and so not an order against which any appeal is provided in the Code. In support of that contention three cases have been quoted; but before discussing them I think it will be better to set out the rates with which we are concerned. Rule 1 of Order 40 provides for the appointment of Receivers. Rule 2 provides for the fixing of their remuneration. Rule 3 prescribes their duties or some of their duties and lays down that every Receiver shall furnish security to the extent the Court thinks fit, shall submit his accounts at such periods and in such form as the Court directs, shall pay the amount due from him as the Court directs and shall be responsible for any loss occasioned to the property by his wilful default or gross neglect. The provisions of that mile make it clear that a Receiver has certain duties and that he is responsible to the Court for those duties. He cannot say that he is appointed to look after the interests of the parties and is responsible only to the parties. Then we come to Rule 4, which provides for the enforcement of the Receiver's duties and for making good any loss caused by his wilful default or gross negligence. There is an appeal provided against orders made under Rule 4; but there is no appeal provided against any order made under Rule 3, the explanation of that being that Rule 3 does not provide for any order being made, as it is concerned with prescribing the Receiver's duties. Now part of the ordinary duties of a Receiver is to pay into Court or to some one else, as the Court may direct, amounts which he has in his hands or has collected. That would include periodical payments which he is directed to make or amounts which on investigation of his accounts he is directed to pay. Amounts which he is directed to pay in, connection with his accounts may include amounts which those accounts show he has in his hands, amounts which those accounts show should have been in his hands and amounts which his accounts, if properly kept, would have shewn he ought to have in his hands. The payment of those amounts into Court or into a bank or otherwise, as the Court directs, is all part of the ordinary duties of the Receiver as laid down in Rule 3, and he has to pay those amounts under the ordinary control of the Court, which can direct the general conduct and administration of the estate. The Code has provided no appeal against any of the ordinary directions which a judge may give a Receiver in the course of his administration and no appeal against an order that such amounts as he has or are found due from him on investigation of his accounts should be paid into Court or elsewhere. That is the stage, I think, to which the cases referred to by Mr. Rajah Aiyar in support of his preliminary objection really relate.

(3.) The Madras case he quoted is Palaniappa Chetty V/s. Palani-appa Chetty (1921) M.W.N. 806. In that case there had been, it appears, some investigation of the Receiver's accounts by the Subordinate Judge; but the inquiry into the accounts had not been completed and the accounts had not been settled. But at that intermediate stage the Subordinate Judge found that in any case Rs. 31,000 was due from the Receiver, and he said "Pay it into Court." The Receiver, who was one of the parties to the suit, tried to appeal to this Court; but the learned Judges before whom the appeal came said that it was incompetent, that he had no right to appeal against such an order. That decision, if I may say so with respect, appears to me to be quite correct, and it also appears to me to be of no avail to plaintiff 1 in this case. In another of the cases quoted, Ganesh Lal V/s. Kumar Satya Narayan Singh (1919) 4 Pat. L.J. 636, Receiver's accounts were investigated and the result was that he was found liable to pay a certain amount to the estate. He was directed apparently to pay that amount into Court. The learned Judges held that there was no appeal against such an order, which they said did not amount to an order under Rule 4 of Order 40. The other case quoted was L.A.R. Arunachellam Chettiar V/s. U Po Lu. (1925) I.L.R. 3 R. 318 There a Receiver was ordered to pay Rs. 4,760 after inquiry into his accounts. One of the parties to the suit appealed to the High Court urging that the Receiver ought to be ordered to pay a larger amount. The decision was that no appeal lay against that order. The learned Judges say that there was no order made "under the operative part of the section," by which I understand them to mean that no order was made under Rule 4 enforcing the direction to the Receiver. All those cases appear to me to relate only to the stage when in the ordinary course of administration or at the close of administration the Court in the exercise of its control over the Receiver directs him to pay into Court or to somebody else an amount which it is found he has or ought to have in his hands. But a Receiver may not obey that order either because he is dissatisfied with it or for some other reason. Then Rule 4 provides that, if he does not do so, the order may be enforced by attaching his property and selling it if necessary. Against such an order of attachment the Code provides an appeal; and, if the Receiver appealed against the order of attachment, no doubt he could then dispute the grounds upon which the order was made. But Rule 4 also provides for quite a different case, the case with which we are concerned, where there is no money found due from the Receiver on investigation of any accounts, but it is found that he has caused loss to the estate by wilful default or gross negligence. If the Court finds that, it is obvious from the rule that the amount of the loss must be estimated and fixed by the Court, and then the rule provides that that amount may be recovered by the attachment and sale of the Receiver's property. Against that the Code provides an appeal. The cases quoted by Mr. Rajah Aiyar have no application to such orders as that; and it is not necessary for the appellant in this case to dispute the correctness of those decisions, which do not apply to him.