1983 PLP 1,381 (CLC)

Muhammad Nawaz Kasuri for the Judgment‑Debtor. Date of hearing : 1st June, 1983. The Muslim Insurance Limited now known as State Life Insurance Corporation and henceforward called Insurance Company filed an application No. 35‑L(81 under section 106 of Insurance Act, 1938 against Dr. Mohammad Sharif Muttaqi claiming a sum of Rs. 16,61,532‑1‑1 on the allegation that he had committed misfeasance and misappropriated the money of the company. A learned Single Judge vide judgment dated 21st July, 1962 found Dr. Mohammad Sharif Muttaqi liable for Rs. 15,62,074‑12‑1 and allowed interest relevantly at the rate of 7 per cent per annum with half‑yearly rest. On the appeal of Dr. Mohammad Sharif Muttaqi, the principal amount was reduced to Rs. 13,91,241‑7‑10 and the rate of interest to 6 per cent. This is vide judgment of the learned Supreme Court of Pakistan dated 15th June, 1970. It is reported as P L D 1971 S C 8.

2. The decree‑holder, the Insurance Company filed the afore titled application for execution on 26th September, 1972. It is stated that the assets of Dr. Mohammad Sharif Muttaqi were already attached when on 19th October, 1972, Major Nazar Mohammad Mufti, Advocate, was appointed as Official Receiver of the properties of Dr. Mutaqqi by the High Court. The Official Receiver collected various sums, sold shares and received sale‑price of properties of the judgment‑debtor, Dr. Mohammad Sharif Muttaqi which were deposited in the Savings Bank Account, invested in Khas Deposit Certificates etc. from time to time under the orders of the Court.

3. On 7th April, 1982, the learned Judge dealing with the matter observed that "the only question left to be decided would be whether the Official Receiver was acting as an agent of the insurance company, the judgment‑debtor or the Court and whether the interest that has accrued on these amounts in the hands of the Official Receiver should go to the judgment‑debtor or the decree‑holder. This is a question for arguments."

4. It has come up today for arguments. The admitted position is that the principal amounts in hands of the Official Receiver or paid to the Insurance Company, fully meet the decretal amount alongwith the interest thereon.

5. Learned counsel appearing for the decree‑holder has submitted that though the money involved is not much but the question is one of principle. He has very assiduously argued that the amounts coming into the hands of the Official Receiver from time to time which he de posited in the Saving Bank Account or invested in Khas Deposit Certi ficate etc. under the orders of the Court, were for the benefit of the decree‑holder and if some accretion comes about by way of interest etc., the decree‑holder is entitled thereto because the amounts were for the benefit of the decree‑holder for the satisfaction of the decree ; and if the amounts had been paid straightaway to the decree‑holder, the latter would have invested those and earned profit. The fact that the amounts were withheld from the decree‑holder should not in any manner adversely affect its interest. He has referred to P. Laxmi Reddy v. L. Laxmi Reddy(P L D 1957 S C (Ind.) 251) and submitted that the possession of a Receiver during the pendency of a suit is for the benefit of the successful .party. More so it should be in the case of a decree‑holder because it is already recognised by the decree of a Court that he is entitled to the property and therefore the possession thereof with the Official Receiver will be for his benefit and consequently accretion or addition to the property will be the good luck of the decree‑bolder. He submitted that, for example, in a case of immovable property like land on which sapling of fruit trees were plant ed, if that is put in the hands of the Official Receiver, then, on the success of the suit and execution proceedings‑which process usually takes many years, the successful party would obviously be entitled to the land alongwith ready‑made garden so why not it should take benefit of the accretion on the funds in the hands of the Official Receiver ?

6. Learned counsel for the heirs of the judgment‑debtor has submitted that the rights of the decree‑holder are determined by the decree and if it is laid down that the decree‑holder shall be entitled to so much amount and until that is paid, he shall further be entitled to the interest thereon, that is that. The only rights of the decree‑holder are the decretal amount plus the interest. He has no concern whatsoever with the property of the judgment‑debtor in the hands of the Official Receiver because the Official Receiver is not an agent of the decree‑holder but is an Officer of the Court appointed by it to safeguard the interest of all the parties. If the property in the hands of the Official Receiver increases in its value or some accretion comes about, after payment of the decretal amount and the interest, the balance will go to the owner of the property, the judgment‑debtor, as obviously the decree‑holder would not be satisfied if some loss were to come about and he would still insist for satisfaction of his decree.

7. I have heard the learned counsel for the parties at length. There are two points involved in the question formulated by the learned Judge on 7th April, 1982 as quoted in para. 2 ante. First whether "the Official Receiver was acting as agent of the insurance company (decree holder), the judgment‑debtor or the Court" Official Receiver is appointed by Court and is answerable to it. He acts for the Court. He has nothing to do with either party. He is agent of neither. Even the judgment quoted by the learned counsel for the decree‑holder makes quite clear at page 259 of the report when it was observed that "In Woodroffe on the Law relating to Receiver's (4th Edition) at page 63 the legal possession is stated as follows: "The Receiver being the Officer of the Court from which he derives his appointment, his possession is exclusively the possession of the Court, the property being regarded as in the custody of the law, in gemologist, for the benefit of whoever may be ultimately determined to be entitl ed". The learned counsel however argued that when the title to the pro perty is determined and a decree is granted to the decree‑holder, then, the property should be deemed in the hands of the official Receiver to be that of the decree‑holder and any accretion thereto will be that of the decree holder. The argument is specious but it all depends upon the nature of the claim and character of the decree granted. It may hold true in the case of the example he gave quoted above‑saplings and fruit trees, if the decree be declaratory of title. But not so when the claim is for money and decree grants the principal alongwith interest. Here the fruits are provided in the form of interest allowed on the principal. For the propo sition that an Official Receiver is not the representative of any party to the suit but is an Officer of the Court, there are many decided cases is but only some may be referred to: Satyanarayan Banerji and others v'. Kalani Prosad Singh Deo Bahadur (A I R 1945 Cal. 387), Kahan Singh v. Mohan Lai and an other (A I R 1916 Lah. 80). Kalyan Mul Mathur v. Emperor (A I R 1936 Pat. 577), Gopaldas Khettry v. Phul chand Purshottamdas and another (A I R 1946 Cal. 357), N. Abdul Rahim v. Lingappa Vaijappa and another (A I It 1943 Born. 273) and Kanhaiyalal v. Dr. D. R. Banaji (A I R 1958 S C 725). A Full Bench of the Madras High Court in an elaborate judgment reported as Collector, Tiruchirapali v. Trinity Bank Ltd. (A I R 1962 Mad. 59) considered a large number of cases and observed on the point at page 70 that "the right to levy execution by the appointment of a receiver cannot alter the substantive rights governing the parties to the suit. The rights of the decree‑holder are primarily regulated by the terms of the decree and neither the fact: that he has obtained a decree nor the fact that he is permitted to have a receiver appointed as a mode of execution of the decree can clothe him with better rights than what the law otherwise affords him. Delay in the proceedings of Courts is perhaps inevitable and no suitor, however, just his claim in the suit may be, can invoke the aid of the Court for reliefs to which he will not be entitled under the substantive law, in anticipation, of any prejudice that he may suffer in consequence of a delayed adjudication in his favour." This will also answer the second limb of the question formulated by the learned Judge quoted above: "Whether the interest that has accrued on those amounts should go to the judgment debtor or the decree‑holder"? The substantive rights governing the parties are not altered by appointment of a receiver and the rights of the decree‑holder are primarily regulated by the terms of the decree. The rights of the decree‑holder in the case in hand have ‑been determined in terms of the principal amount and interest thereon. The argument of the learned counsel for the decree‑holder that if the amounts as received by the Official Receiver were handed over to the decree‑holder, the latter might have made profit thereon loses sight of the risk of loss which inheres in money matters. Moreover, the Official Receiver could not pay without the orders of the Court and attention has not been invited to) any such direction which has not been complied with, nor, to any order of the Court whereby it was directed that the amounts received by the Official Receiver were allocated or apportioned to the decree‑holder.) The rights of the decree‑holder were determined by the decree itself and the decree‑holder is entitled to no more nor less. The amounts de posited or investments made by the Official Receiver were under the orders of the Court and any accretions which have come about cannot be claimed by the decree‑holder because if those investments had failed or gone down in their value, it is obvious that the decree‑holder would not have come forward to share the loss and would have obviously continued to press for the satisfaction of the decree. If it could not suffer the loss, it cannot claim the profit. In the absence of any order of the Court, and nature of the claim and character of the decree it terms of money with. interest thereon which is admittedly satisfiable or satisfied from the amounts of the judgment‑debtor in the hands of the Official Receiver the decree‑holder cannot claim more either in law or equity. There fore, after satisfaction of decree by payment of the decretal amount an" interest thereon, the balance‑including interest on any deposits or in. vestments made by the Official Receiver and the orders of the Court shall go to the judgment‑debtor in accordance with law. The matter in hand is thus disposed of. M. Z. M.