P L D 1959 Supreme Court (Pak (PLP)

MUHAMMAD MUNIR, C. J.‑These two appeals are by Khan Bahadur Haji Badi Ahmad Chowdhury against the United Bank of India Ltd., the Patiya Tea Company Ltd., and Kiran Kumar Roy and Manindra Krishan Das Burman, Joint Receivers, from a judgment of the High Court of East Pakistan at Dacca, dismissing the appellant's claim to present possession of the Patiya Tea Estate as against the High Court's decree directing delivery of possession to the Joint Receivers. The Bank instituted against the Company two suits for sale, Nos. 10 and 30 of 1952, on the basis of two mortgage deeds. Both the suits ended in final decrees, the decree in suit No. 10 directing the mortgaged property to be sold if a sum of Rs. 46,135‑2‑0 was not paid and that in suit No. 30 ordering sale in default of payment of Rs. 92,157‑13‑0 by a fixed date. The suits were defended by the appellant who had been appointed by the Company as its Director‑in‑Charge by a resolution dated the 13th March, 1953, which ran as follows "It is resolved that: ‑ Khan Bahadur Badi Ahmad Chowdhury, Char Chaktai. Chittagong, is hereby appointed Director‑in‑Charge of the Company at Chittagong, East Pakistan, in connection with the management of Patiya Tea Estate owned by the Company under the following terms and conditions I.‑Powers and Duties :‑ (1) To make necessary arrangements for carrying on garden work, including production, manufacture and sale of tea ; (2) To collect rents from tenants and to take all the necessary steps for recovering possession of any land belonging to the Estate, including Khas lands from persons in unlawful posses sion; (3) To conduct and to take all steps in connection with the two suits, labs. 10 and 30 of 1952, as filed‑ against the Company by the United Bank of India Ltd., in the Court of the 2nd Subordinate Judge, Chittagong, with power to file written statements, papers and petitions necessary for the same; (4) To conduct and to defend all necessary proceedings now pending in connection with the Income‑Tax, Agricultural Income‑Tax and Central Excise etc., and (5) To perform such other duties as may be delegated to him from time to time. II

‑Special Conditions. The above appointment is made with the powers and duties enumerated above under the undertaking given by the Director -in‑Charge that he will secure necessary funds for the performance of the above duties to the best of his ability and that he will not call upon the Board of Directors to supply him with any funds (1) the Board of Directors will, from time to, time, execute in favour of the Director‑in‑Charge, such powers, deed and instruments as may be required by him in discharge of the duties and powers enumerated above ; (2) that Director‑in‑Charge will submit a monthly report of his work to the Board of Directors and abide by the direction as may be given to him by the Board from time to time ; (3) the present appointment is made for two years ending 31st day of March 1955, ,subject to further extension on satis factory service rendered by the Director‑in‑Charge and earlier termination on gross violation of the terms hereof as may be decided by the Board of Directors". During the pendency of the suits the appellant was also appointed receiver of the property till the disposal of the suits by an order of the Subordinate Judge dated 6th November 1954, on the terms stated therein. The Bank applied for the execution of the decrees, but the appellant, on behalf of the Company, applied for stay under Ss. 69 and 70 of the East Bengal State Acquisition and Tenancy Act. The objection to execution was upheld but the. Bank appealed to the High Court. While the appeal was pending, the Board of Directors by a resolution dated the 19th January, 1955, terminated the services of the appellant as Director‑in‑Charge with effect from the 11th January, 1955. In the resolution several reasons were given for the termination, including the allegation that the appellant had been guilty of negligence in the performance of his duties and had set up a hostile title to the Tea Estate. While the appeal was pending in the High Court, the Bank and the Company submitted a joint application for the recording of a compromise and on the 30th August, 1956, the High Court accepted the compromise and passed the following order: ‑ "This appeal is disposed of in terms of the petition of compromise signed by the parties and filed in Court today. The petition of compromise will form part of the decree of this Court, The executing Court is directed to issue writs to the Joint Receivers". The formal order drawn up on the 1st September, 1956, ran as follows: ‑ "It being represented to the Court by the learned Advocates on both sides that the parties have amicably settled the matter in dispute out of which this appeal arise, between them out of Court and in proof thereof a joint petition of compromise signed by the Advocates of both sides and containing the terms on which the said settlement has been arrived at, having been filed in Court and praying among other things that a decree be drawn up in terms thereof, it is ordered, by and with the consent of the parties that this appeal be disposed of in terms of the petition of compromise ; that the said petition of compromise (which is annexed hereto and marked with letter `A') be kept as of record and be made part of the decree ; and that the parties do give effect to and be bound by the terms thereof. And it is further ordered that the Executing Court do issue writs to the Joint Receivers". By the compromise the decree for sale was replaced by the arrangement that the execution of the decree shall be by way of appointment of two joint receivers viz., Babu Manindra Krishna Das Burman, the local Managing Director of the Company at Chittagong, and Babu Kirma Kumar Roy, Chittagong Agent of tie Bank, who shall pay the decretal dues, including the costs and interest out of the income of the properties of the Company. In compliance with this order of the High Court the Bank applied to the Executing Court for delivery of possession of the Tea Estate to the Joint Receivers, but the appellant objected to the issuance of the writs and submitted an application purporting to be under section 47 of the Civil Procedure Code. In the application the writs were resisted on a large number of grounds, which it is unnecessary to mention here. The application was, however, dismissed and the appellant appealed to the High Court. Before the High Court he pressed his right to continue in possession as against the Joint Receivers on the following grounds: ‑ (1) That as Director‑in‑Charge of the Company he was in possession of the property as an agent of the Company and that since he had expended large sums of money in the discharge of his duties as agent he was entitled to a lien on the property ; (2) That he had also been appointed a Receiver of the property by the Subordinate Judge in both the suits and that since he had incurred some expenditure as such Receiver he was entitled to a lien on the property until his dues as Receiver were paid ; (3) That his appointment as a Receiver by the Court was to terminate only on the final disposal of the suits and that since the final decrees had not yet been drawn up he bad a right to continue in possession, and (4) That the order of the High Court sanctioning the compromise had been obtained by fraud and was thus a nullity. The High Court dismissed the appeal as being incompetent on the ground that it did not fall within the terms of S. 47 of the Civil Procedure Code. The Court further held that the Executing Court was bound to give effect to the High Court's order and the appellant was not entitled to resist the execution. In the appeal before us Mr. Hamid‑ul‑Huq Chowdhury who has appeared for the appellant has confined his arguments to two questions. He contends that the application before the Executing Court was governed by S. 47 of the Code of Civil Procedure and that the appellant was entitled to resist the delivery of possession to the Joint Receivers because he had a lien both as a Director‑in‑Charge and as a Court Receiver in respect of the money lie had spent. It is unnecessary for us to decide the question of competency of the appeal before the High Court in view of the fact that that Court has also considered the appeal on the merits and we have no doubt as to the order to be made in this appeal. In so far as the appellant's claim to a lien on the property as a Receiver is concerned, it is sufficient to state that the High Court should riot have permitted this point to be raised because the appellant in his application did not claim any such lien. We have been taken through that application several times and Mr. Hamid‑ul‑Huq Chowdhury has endeavoured to spell a claim to lien out of the following two paragraphs of the application "Unless I am reimbursed of all the moneys that I have spent out of my own funds for the improvement of the garden no one can raise any objection or lay claim on that; It is, therefore, prayed that until the final decree is drawn up and unless adequate security is furnished by the Receivers and they establish their right and title in the Patiya Tea Garden in my possession, it be ordered that they shall not enter into the Patiya Tea Garden under my possession." The order appointing him as Receiver did not permit the appellant to make improvements and to the reference in this part of the application to "improvement of the garden" can only relate to the allegation which prominently occurs in the other parts of the application that he had spent large sums of money as Director‑in‑Charge in improving the Estate. The claim to a lien as Receiver is nowhere to be found in the application and the only place where he refers to his appointment as a Receiver is where he says that he could not be dispossessed because he had been appointed as a Receiver until the disposal of the suit and that the final decree in the suit had still not been signed. The Subordinate Judge who decided the application makes no reference in his order to any lien as a Receiver. Similarly the grounds of appeal to the High Court make no mention of any such lien. In these circumstances we consider that the High Court was not right in allowing this ground to be raised and we have not permitted Mr. Chowdhury to raise it before us. ''As regards the appellant's lien in respect of the money he alleges to have spent in preserving and improving the property, it came to an end on the 6th November, 1954, when the appellant was appointed by the Subordinate Judge as Receiver of the property. After that date his position was purely that of a Receiver and not of an Agent of the Company. If he intended to adhere to that lien, he should have refused to accept possession as Receiver and insisted on keeping his lien alive as Director‑in‑Charge of the Company. In the circumstances the obvious remedy for the appellant is to establish by a separate suit his claim to be reimbursed by the Company and not to resist the delivery of possession to the Joint Receivers. As a Director‑in‑Charge of the Company in his individual capacity and claiming adversely to the Company he is an utter stranger to the suit in which the decree was made and as such S. 47 of the Civil Procedure Code is not at all attracted. Order XXI, rule 99 is also not applicable to him because his present position is that of a Receiver and no Receiver can set up the claim that he holds the property of which he was put in possession by the Court, in his own right and not on behalf of the Court. We, accordingly, held that the appellant's claim to resist the delivery of possession on the ground of his alleged lien against the company as Director‑in‑Charge is not sustainable and that the proper course for him is to recover the amount, if .he has spent any on the preservation and improvement of the property within the scope of the authority given to him by the Directors' resolution, by a regular suit. When any such claim is made it will be for the Court dealing with it to determine whether the decree, if he obtains one, can be enforced against the property which is held by the joint receivers to satisfy out of its usufruct a decree on an earlier mortgage. If for the reasons we have just stated we dismiss the appeal and leave this case with the finding that no claim for a lien as a Receiver was in fact made, it will not preclude the appellant from making a fresh claim and to raise the question that his lien prevails against the Joint Receivers who have been charged with the duty to satisfy the decree. This will lead to further litigation and make the position more uncertain for the parties. In view of the law as to which there can be no manner of doubt, that a Receiver is entitled to a lien for the amounts due to him, we order that the appellant, within a period of three weeks from the date on which this order is announced, shall put in a claim, if he has any, for the sum that may be due to trim for the period commencing from 6th November 1954, upto the 20th June 1955, the date on which his appointment as Receiver was terminated by the final decree, supported by books of accounts and vouchers, together with a statement of income and expen diture in re of the property in his possession from the date of his appointment up to the date on which he relinquishes the possession. The Executing Court will then determine whether 'tinder the terms of his appointment or as quantum meruit any sum is due to him as a Receiver, after deducting unauthorised expenditure or income which he fails to account for the amount so determined will be paid by the Joint Receivers and will be a charge on the property. The appellant wilt surrender possession to the Joint Receivers immediately. The appeal, therefore, partially succeeds and in the circumstances of the case we order the parties to bear their own costs. K. B. A./A. H. Appeal partly accepted.