PONNU CHETTIAR Vs. SAMBASIVA AIYAR

JUDGEMENT

(1.) This appeal raises a question as regards the effect of the appointment of a receiver in a suit to enforce a simple mortgage. The appellant obtained a money decree against one Ganapathia Pillai in O.S. No. 78 of 1923 (District Munsif's Court, Mayavaram) and in execution, of that decree attached certain properties. To enforce a mortgage executed by the aforesaid Ganapathia Pillai, the respondent filed O.S. No. 55 of 1924 (Mayavaram Sub-Court) and obtained an appointment of receiver over the mortgaged properties, which included those already attached. Thereupon, the appellant applied in the mortgage suit for leave to execute his decree against the receiver. Not only was that request complied with, but leave was also granted to him to implead the receiver as a party to the execution proceedings. Thereafter, in execution of the money decree, the attached properties were put up for sale and purchased by the decree-holder himself, that is, the appellant. The sale was in due course confirmed. The appellant attempted to take possession and the respondents then made several applications to the Court, one being to restrain the appellant from taking possession; the second, to implead him as a party to their mortgage suit and the third, to continue the receiver as against him, after so making him a party. All the applications were granted. The appellant took the matters to the High Court but without success. Pausing here for a moment, the effect of the High Court's order was to negative the appellant's right to possession. The rest of the story may be briefly told. The respondents obtained in their suit a mortgage decree, brought the mortgaged properties to sale, and some third party purchased them. Till the date of this sale, the receiver had realised a certain amount as income from the properties and paid the amount into Court. As I have said, some of these properties the appellant had previously purchased. He applied to the Lower- Court for payment out to him of that part of the amount paid by the receiver into Court, attributable to the properties purchased by him, on the ground that the ownership of the income is incidental to the ownership of the property. When he made this application, the sale in favour of the third party referred to above had not been confirmed and the receiver's appointment was still in force. The Lower Court having rejected his application, he has filed the present appeal.

(2.) A preliminary point has been taken that no appeal lies. This objection cannot, in our opinion, prevail. The appellant was, as I shall show, impleaded as a party to the mortgage suit. The question of substance is, to whom does the fund in Court belong, to the respondents or to the appellant? If the appellant were a stranger, it would have been open to him to assert his title to the money by a claim proceeding under Order 21, Rule 58,. but he having been a party, the question would be one under Section 47, Civil Procedure Code and the preliminary objection must on that ground be overruled.

(3.) Now coming to the merits, on the facts that I have stated, the point to be decided lies in a very small compass. What was the state of affairs on the date the appellant purchased the properties? The effect of the order appointing the receiver was to deprive the mortgagor of his right to deal with the income. It was in order to safeguard the respondent's position that the receiver was appointed. The mortgagor could not defeat the order by assigning the profits to a third party-Could he have, for instance, by private transfer, assigned the income to the appellant ? Of course not. What the appellant purchased was no more than the right, title and interest of the mortgagor. But the latter himself had no right to dispose of the income. The order operated to take away that right, which, otherwise, he would have possessed. The order appointing a receiver operates as an injunction to restrain the judgment- debtor from himself receiving the moneys over which the receiver is appointed.