DAVID, E V Vs. JUDGE, SMALL CAUSE COURT

JUDGEMENT

(1.) This is a civil revision from an order made by the Court of Small Causes calling upon the Official Receiver to refund certain amounts which he had taken in the course of realising the assets of an insolvent. The insolvent's property was heavily mortgaged and the amount due to a mortgagee was Rs. 32.349. Under an arrangement with the mortgagee the receiver obtained his consent to sell the property free from the incumbrance and to pay him the mortgage money. The property fetched Rs. 33,000 free of the incumbrance. The receiver charged his commission at the rate of 5 per cent on the whole amount of the sale proceeds, namely, Rs. 33,000 and also charged expenses of administration in the form of salaries said to have been paid to the ministerial and clerical staff appointed by him. The mortgagee received Rupees 31,320, that is to say, the balance after 5 per cent on the gross amount as commission had been deducted from the sale proceeds together with an extra sum of Rs. 30 said to cover the expenses of administration. The mortgagee then applied to be entered as a scheduled creditor for his surplus amount of over Rs. 1,000; he was paid Rs. 65 as dividend.

(2.) The Court below has coma to the conclusion that the receiver was entitled to his commission on the equity of redemption, represented by Rs. 651, only and not on the entire sale proceeds. It has however held that inasmuch as the mortgagee took away another sum of Rs. 65 owing to a mistake of the receiver the latter should be called upon to refund this amount also. The Court has also come to the conclusion that the staff said to have been employed by the receiver had been employed without the previous sanction of the District Judge, and the receiver therefore was not entitled as of right to claim the whole costs of this establishment; but that if he satisfied the trial Court that the expenses had been incurred in good faith and were reasonable, he would be entitled to claim credit for them in connexion with the management of the estate. As regards an item of Rs. 6-3-0, the Court held that it was unaccounted for by the receiver and therefore he should refund it.

(3.) We cannot accept the contention of the applicant's learned Counsel that because the amount had been passed by the insolvency Court that cannot now be reopened. If on an examination of the accounts by an auditor certain mistakes and overcharges are pointed out, it is open to the Court to reopen the accounts and make the receiver refund what he has taken without justification.