: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3479 OF 2004 IN SUIT NO.1212 OF 1991 Narayan Manik Patil & Ors. ....Plaintiffs V/s. Jaywant J. Patil & Ors. ....Defendants And Bafna Charitable Trust ....Applicants And Court Receiver, High Court & Anr. ....Respondents Mr.N.K. Mudnaney for the Plaintiffs. Ms.Rajani Iyer, Senior Counsel with Mr.A.L.N. Khatri i/b A.L.N. Khatri & Co. for Defendant No.1. Mr.G.N. Salunke for Defendant Nos.11, 45 and 46. Mr.Virag V. Tulzapurkar, Senior Counsel with Mr.Vineet Naik and Mr.Vivek Kantawala i/b Kantawala & Co. for the Applicants. CORAM : S.J. VAZIFDAR, J. DATED : 1ST AUGUST, 2008. ORAL JUDGMENT : 1. Bafna Charitable Trust, the Applicants, have taken out this Notice of Motion for deleting the lands bearing Survey Nos.151-A and 77 of the village Nahur from the plaint and for discharge of the Court Receiver appointed inter-alia in respect of the said lands by an order dated 20.4.1995 passed by the Division Bench. : 2 : 2. At the out set, I must mention that I have decided not to express any opinion on the merits of the contentions of the parties including the Applicants in respect of the suit properties. The order I intend passing is based on the fact that the Applicants are vitally affected by the appointment of the Court Receiver. That the Applicants claim the ownership and to be in possession of the said properties is expressly admitted in the plaint. It has also been expressly admitted by the Defendants in other proceedings, which I will refer to shortly. Despite the same, the Applicants were not impleaded in the above suit. The Court Receiver was therefore appointed without affording the Applicants an opportunity of defending themselves. 3. The suit is filed for a declaration that the properties described in Exhibit "A" to the plaint form part of the properties of the joint and undivided family consisting of the Plaintiffs and Defendant Nos.1 to 11 ; that Defendant No.1 is not the absolute owner of the said properties and therefore, not entitled to deal with the same and for a declaration that each of the Plaintiffs and Defendant Nos.1 to 11 and/or the branch represented by them has an undivided share to the extent mentioned in Exhibit "A" to the : 3 : plaint. The Plaintiffs have also sought partition of the said properties and for possession of their respective share therein. . Defendant Nos.12 to 19 are persons with whom Defendant No.1 is alleged to have entered into an arrangement for sharing the profits in respect of the said properties. Defendant Nos.20 and 21 are the husbands of Defendant Nos.12 and 13 and they are alleged to be dealing with the said properties. Defendant Nos.22 to 25 claim to be enjoying the benefits from the arrangement surreptitiously entered into by Defendant No.1 with them in respect of some of the suit properties. 4. Before stating the Applicants case, it is necessary to note that in paragraph 13 of the plaint, the Plaintiffs have expressly referred to the Applicants’ claim. The Plaintiffs have made submissions in respect of and contesting the said claim. All this without impleading the Applicants. Curiously however, the Plaintiffs state that they have not impleaded the Applicants in order not to cause misjoinder of causes of action and/or parties and particularly because Defendant No.1 has filed a suit being Suit No.8031 of 1984 against the Applicants and others in the Bombay City Civil Court for various : 4 : reliefs. It is necessary to set out paragraph 13 of the plaint, which reads as under :- "13. The Plaintiffs say that it is the allegation of the said Bafna that by a Deed of settlement dated 14th Jan,1971 made between Rattansey Karsandas and others (viz. Khat of Bhandup/Bhandup Estate) the said Khats gifted the proportion mentioned in the statement Ex."F" hereto to the Bafna Charitable Trust. The Plaintiffs submit that the purported gift is void ab-initio as the said Khots/Inamdars had no subsisting rights in respect of the said properties, which are part of the properties described in Ex."E" hereto. The Plaintiffs say that in the present suit, they have not joined the said Bafna as a party. The Defendant in order not to cause a misjoinder of the causes of action and/or parties, particularly because the Defendant No.1 has filed a suit bearing Suit No.8031 of 1984 against the said Bafna and others in the City Civil Court for the following reliefs :- (i). For a declaration that the suit lands described in exhibit "A" to the Plaint were Sutidary/occupancy lands. (ii). For a declaration that the Petitioner is the sole exclusive owner/occupant of the suit lands, described in Exhibit "A" to the Plaint and has been in peaceful and uninterrupted possession, enjoyment and vehivat thereof since the time of his predecessor-in-title ; (iii). For a declaration that the said Decree dated 7th February,1984 made by the Hon’ble Bombay City Civil Court in the said Suit No.9360 of 1972 filed by me and Respondent Nos.6 and 7 initially against the said Haji Kasam Noormahomed Adenwala was null and void and of no effect and not binding upon or operative against him and did not effect his right, title and interest in the said : 5 : lands. (iv). For a declaration that the said Deed of Settlement dated 14th January 1971 executed by the said Rattansey Karsondas and others, the then proprietors of Nahur village in favour of Respondent Nos.6 and 7 and late Shri Nishrimal Hemaji Bafna, as the trustees of the said Bafna Charitable Trust, in respect of the properties under the said Deed was void and of no effect and was not binding upon him so far as the lands, the subject matter of the suit were concerned. The Plaintiffs say and submit Rattansey Karsandas and officers viz. Bhandup Estate had no subsisting right in them and the purported Deed of Settlement dated 14th Jan.1971 and all the actions and proceedings in pursuance thereof are void ab-initio and do not affect the rights of the parties inter-section involved in this suit. The Plaintiffs shall in due course take and proceedings to join as parties to the said suit." . Indeed in view of the above averments in the plaint, it would not really be necessary to even set out the Applicants claim in respect of the suit properties. This is in view of the fact that it is admitted by the parties in the suit themselves that the Applicants have in fact made more than just a serious claim to the properties. However, in view of certain contentions raised before me, it is necessary to set out the facts only briefly. At the cost of repetition, I must clarify that the facts have been set out only for the purpose of indicating the Applicants’ claim without expressing any opinion on : 6 : the rival contentions in respect thereof. 5. The Applicants case is that they are the owners of the suit properties by virtue of a registered deed of Settlement dated 14.1.1971 conveying the same to the Applicant - Trust. The Applicants were put in possession of the suit properties. . Thereafter a change report was filed before the Charity Commissioner bearing change report No.440 of 1971 notifying the acquisition of the said land by an order dated 28.6.1971. The same was included in the Public Trust Register as trust properties. . The Applicants name was brought on the record in the record of rights as "Kabjedars". The inclusion of the name of the Applicants has not been challenged. 6. The Applicants had asserted their right in respect of the said properties. For instance they filed Suit No.10129 of 1972 in the Bombay City Civil Court against certain tres-passers for possession which was decreed. Upon commencement of the Urban Land Ceiling Act, 1976, the Applicants on 30.7.1977 sought exemption in respect of the said lands under Section 19(i)(iv) of the U.L.C. Act. : 7 : 7. The original owners were the Khots of Bhandup Estate. In accordance with the provisions of The Bombay Personal Inam Abolition Act, 1952, the Mamlatdar, Borivali instituted certain enquiries in order to determine the status of several cultivators in respect of the said lands. The enquiries were concluded by an order dated 2.9.1968 passed by the Commissioner, Bombay Division. It was held that Nahur village in which the lands are situated was surveyed and settled and the record of rights were already introduced prior to the abolition of Inam and the rights of the persons had been recorded and that none of the cultivators had the status of inferior holders and as such were not entitled to be declared as occupants under the provisions of the said Act. It was therefore, held that it would not be necessary to make enquiries as to whether the tenants were inferior holders paying assessment. Accordingly the authorities were directed to cancel all mutation entries which were effected earlier. . A Revision Application filed by Defendant No.1 on 10.2.1972 before the State Government challenging this order, was dismissed by an order dated 10.11.1981 passed by the Officer on Special Duty, Revenue Department. Defendant No.1 challenged : 8 : the orders dated 12.9.1968 and 10.11.1981 by filing a Writ Petition bearing Writ Petition No.717 of 1982 in this Court. The said Writ Petition was subsequently withdrawn. 8(A). On 20.12.1984, Defendant No.1 filed Suit No.8031 of 1984 in the Bombay City Civil Court against inter-alia the original owners, namely the Khots Bhandup Estate and the Applicants. The Plaintiffs and the other Defendants to the present suit were not impleaded as Defendant No.1 claimed and claims to have an independent and exclusive right in respect of the suit properties. (B). The Application taken out by Defendant No.1 in that suit for interim reliefs was rejected. (C). Defendant No.1 took out Chamber Summons No.125 of 1985 in Suit No.8031 of 1984 for amendment by seeking to add to the schedule of the properties. The Chamber Summons was withdrawn. (D). Defendant No.1 had taken out Chamber Summons No.1022 of 1986 in the said Suit No.8031 of 1984 for including inter-alia the said properties. The Chamber Summons was dismissed by an order dated 9.2.1987. : 9 : (E)(i). Defendant No.1 took out a third Chamber Summons being Chamber Summons No.249 of 1987 for amending the plaint in the similar manner. The Chamber Summons was dismissed by the trial Court by an order dated 28.6.1987. (ii). Defendant No.1 filed Civil Revision Application No.67 of 1988 in this Court against the said order which was also dismissed by this Court. (iii). The Supreme Court by an order dated 4.4.1989 in Special Leave Petition (Civil) No.7270 of 1988 did not reverse the order of this Court but observed that the reliefs claimed in the plaint should be read in the light of various pleas contained in the plaint, in particular paragraphs 10 and 11 of the plaint, and that it will be open to the trial Court to determine which are the parcels of land covered by those reliefs having regard to the pleas set forth in the plaint. 9. In 1988-1989 the Applicants took various steps for developing the suit properties. A lay-out was approved and an I.O.D. and C.C. were issued in favour of the Applicants. 10. The above facts alone clearly indicate two things. Firstly, the Applicants are vitally : 10 : interested in the suit properties. In fact the Applicants have taken various steps in respect of the suit properties. Secondly, the parties themselves acknowledge the fact that the Applicants were claiming an independent and exclusive right in respect of the suit properties. 11. It is now necessary to state what transpired in this Court as the order sought to be varied/modified was passed by a Division Bench. The first question that occurred to me was whether it is open to me to consider the reliefs claimed in the Notice of Motion in view of the order sought to be modified having been passed by a Division Bench. (A)(i). The above suit was filed on 4.4.1991. The Plaintiffs took out Notice of Motion No.932 of 1991 inter-alia for appointment of a Court Receiver and for an injunction. The Applicants were not impleaded either in the suit or in the Notice of Motion. The Notice of Motion was dismissed by an order dated 4.1.1994. (ii). The Plaintiffs filed Appeal No.69 of 1994 against the said order. By an order dated 20.4.1995, the Division Bench allowed the Appeal and granted reliefs in terms of prayer clause (a). The Court : 11 : Receiver was appointed inter-alia in respect of the said two properties. The order no doubt made it clear that the Court Receiver would not dispossess any party in possession but would allow them to remain in occupation as agents of the Court Receiver. The Special Leave Petition against the said order was dismissed. (B)(i). On coming to know about the appointment of a Court Receiver, the Applicants filed the above Notice of Motion. By an ad-interim order dated 17.2.2005, the learned single Judge restrained the Court Receiver and any other authorities including the City Survey Officer from entering upon the said properties for any purpose including taking over possession thereof in any manner. (ii). The Plaintiffs filed an appeal bearing Appeal No.572 of 2005 against the said order. The Appeal was disposed of by an order dated 8.8.2005 in terms of the minutes of the order. Without prejudice to the rights and contentions of the parties it was directed that the above Notice of Motion be disposed of expeditiously. (iii). By an order dated 28.10.2005 the above Notice of Motion was allowed to be withdrawn with liberty to : 12 : adopt appropriate proceedings. (C). Thereafter the Applicants took out Notice of Motion No.3423 of 2005 in the said Appeal No.69 of 1994 for the same reliefs. The Notice of Motion was disposed of by an order dated 22.12.2005 by the Division Bench. The Division Bench permitted the Applicants to withdraw the statement recorded in the order dated 28.10.2005 withdrawing the present Notice of Motion ; ordered the above Notice of Motion to be restored ; restored the order dated 17.2.2005 and directed the learned single Judge to hear the Notice of Motion. 12. It is in these circumstances that the above Notice of Motion was heard by me. 13. Orders, interlocutory or final operate against and bind only the parties to the proceedings and cannot and do not affect the rights of third parties. Thus even if a decree is passed in the present suit, it would not affect the rights, if any, of third parties including the Applicants. 14. Property is placed in custodia legis by the appointment of a Court Receiver. When a Court Receiver is appointed it affects the rights of all : 13 : parties including third parties who have any right, title or interest in, to, upon or in respect of the said properties. Even a third party may not deal with the property in any manner otherwise than as permitted by the Court or the Court Receiver. For instance in the present case the Applicants otherwise than remaining in possession, cannot deal with the property including by selling or developing the same. A third party aggrieved by the appointment of a Court Receiver must approach the Court and not interfere with the possession of the Court Receiver. 15. It is open to a party who claims to have any right or interest in the property in respect of which the Court Receiver has been appointed to approach the Court and have the Court Receiver discharged. If the Court finds that a party has a better title or a higher right than the parties to the proceedings it is always open to the Court to pass suitable orders including discharging the Court Receiver. 16. This may be done in more than one way. The third party may make an application in the very proceeding. This course, however is normally adopted when the facts are not complicated. Such proceedings are normally summary in nature. The proceeding being summary in nature, the third party would normally not : 14 : be precluded from adopting independent substantive proceeding to establish its right even if it did not succeed in such an application. If, however, the facts are complicated and require evidence, it is open to the Court to leave the third party to file a suit or other appropriate proceeding for the purpose of establishing its right. 17. Order 40 Rule 1 of the Code of Civil Procedure reads as under :- "1. Appointment of receivers. - (1) Where it appears to the Court to be just and convenient, the Court may by order - (a) appoint a receiver of any property, whether before or after decree; (b) remove any person from the possession or custody of the property ; (c) commit the same to the possession custody or management of the receiver ; and 2. Nothing in this rule shall authorise the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove." 18. Sub-rule 2 would entitle a third party to seek the discharge of a Court Receiver or a modification of an order appointing a Court Receiver. The C.P.C. however does not prescribe or limit the : 15 : procedure for adjudication of such a right. Decided cases have held that in case the possession of a third party is interfered with by the appointment of a Court Receiver, he has two remedies open to him to redress his grievance, viz. either to place his case before the Court which has appointed the Receiver for his examination pro-interesse suo, or to institute a regular suit by making the Court Receiver a party after obtaining the leave of the Court that appointed the Court Receiver. . These options have been recognised in various judgments. (i). Prahlad Pd. Modi and another v. Tikaitni Faldani Kumari and another, AIR 1956 Patna 233, (ii) Bank of Commerce Ltd. (In Liquidation) v. Arun Kumar Chowdhury and others, AIR 1965 Calcutta 333, (iii) Central Bank of India v. Srish Chandra Guha and another, AIR 1972 Calcutta 345 and (iv) Aduvathu Poyil Thamasikkum Thazha Narukkoth Raghavan Nair and another v. Kalliani Pallikkaramma’s Children Kallangadi Edathil Appu Kaidavu and others, AIR 1980 Kerala 4. 19. The power of a Court to do justice to a third party who is adversely affected by an order passed without affording him an opportunity of being heard could in any event be traced to Section 151 of the : 16 : Code of Civil Procedure. 20. However to my mind there is yet another option open to the Court. It would in certain cases be open to the Court to discharge the Court Receiver and direct the parties to the action to adopt proceedings against the third party wherein they may apply for the appointment of a Court Receiver. Where the Court finds that any order appointing the Court Receiver affects the rights of a third party and the circumstances disclose that such third party ought to have been impleaded or proceeded against in accordance with law before affecting its rights, it is open to the Court to discharge the Court Receiver and to leave it to the parties to the proceedings to adopt appropriate proceedings against the third party and to apply therein for interlocutory reliefs against such third party including by appointment of a Court Receiver. If a third party is found reasonably to assert a right proprietary, possessary or otherwise which may be affected by another only by due course of law its rights cannot possibly be affected by others adopting proceedings without impleading such third party and obtaining orders including a drastic order appointing a Court Receiver. 21. It was contended on behalf of all the parties : 17 : to the suit that even in such cases the third party ought to be directed to adopt independent proceedings to establish its right and till such time the order appointing the Court Receiver ought to continue. I do not agree. Such a view could lead to enormous hardship to genuine third parties. For instance, in a collusive suit the parties could, without impleading the third party succeed in having a Court Receive appointed. It would be a travesty of justice to direct the third party to then establish its right in independent proceedings. . This would be even if the parties to the proceeding genuinely believe that it is they who have a legitimate right in the property and that the third party has no right therein and its claim is unfounded. This is for the obvious reason that it is for the concerned Courts, Tribunals or authorities and not the parties to determine the validity of their rights. The determination of the validity of a persons right requires, under our jurisprudence, the party concerned being given an opportunity of asserting its own case. I see no reason why the third course referred to by me is not open either in principle or on authority. 22. In the present case the Applicants have asserted their title to the property by virtue of the : 18 : registered deed and they are in possession of the property. If any of the parties to the suit wanted to affect either of these rights in any manner, it would have been necessary for them to take recourse to due process of law by filing an action against the Applicants. They cannot possibly be placed in a more advantageous position by filing a suit against each other without impleading the Applicants and obtaining the drastic order of appointment of a Court Receiver which materially affects the Applicants’ rights. In such cases, the only course according to me is to discharge the Court Receiver, set-aside the order appointing the Court Receiver and leave it to the parties to adopt proceedings in accordance with law against the Applicants. 23. Even as a matter of practice, the Courts refuse to pass interlocutory orders which would adversely affect a third party in matters where it is brought to the notice of the Court that third party rights have been created and are in existence. It is not unknown that in such cases, the Courts decline to pass any interlocutory orders which would have the effect of affecting the rights of the third parties unless they are impleaded or given notice or proceeded against in accordance with law. : 19 : 24. There may be cases where a third party in possession may not be prejudiced by the appointment of a Court Receiver who is directed to take merely formal possession or even physical possession but continuing the third party in possession as an agent without security or royalty. For instance in a title suit or a partition suit a Court Receiver could be appointed in respect of the premises although a third party is in possession thereof where such third party is but a tenant or a licensee with the direction that the third party is not to be dispossessed. The right of such a person in any event is only to reside in/occupy the premises. The tenant or licensee would have no right, subject to a contract to the contrary to otherwise deal with or dispose of the property in any event. 25. Mr.Salunke, the learned counsel appearing on behalf of Defendant Nos.11, 45 and 46 contended that even in the present case, the rights of the Applicants are not affected in any manner. I do not agree. Mr.Tulzapurkar rightly submitted that in the present case, the rights of the Applicants are affected substantially and materially. Merely because the Applicants possession has not been interfered with, it does not necessarily follow that other rights