Case: Shree Ram Urban Infras.Ld.Forml.S.R.Mill Vs. Court Receiver,High Court Of Mumbai

of Order XL Rule 1 cannot give any narrower construction for holding that the Code does not empower the Receiver to bring a suit for recovery of possession of immovable property. In support, he has relied on all the aforesaid decisions. 14. After considering and analyzing all the decisions, in our opinion, we cannot give a narrower construction with regard to the rights/authority given to the Receiver under Order XL Rule 1(d). We have also considered the appointment order in the present case. In our opinion, the Receiver was given full powers under the provision of Order XL Rule 1(d) as rightly shown by Mr. Sorabjee, learned senior counsel and, therefore, the ruling relied upon by Mr. Ranjit Kumar, learned senior counsel for the appellant, cannot be of any help to him and, accordingly, we reject such contention of Mr. Ranjit Kumar, learned senior counsel, and hold that in the facts and circumstances of this case, the Receiver has acted in the matter for the purpose of administering the property. Even we have seen that the Supreme Court in Harinagar Sugar Mills Co. Ltd. (supra) has held that a Receiver was appointed pending a suit for partition and the Receiver filed a winding-up petition for realization of debt. It was contended that the Receiver had no power to institute a petition for winding-up of a company. The Supreme Court conceding that winding-up order is not a normal alternative to sue but held that it is a form of equitable execution covered by clause (d) of Rule 1(1) of Order XL of the Code and as such steps could be taken by the Receiver. It is also to be noted that the power must be conferred on the Receiver by the Court either expressly or by necessary implication, as the case may be. In the facts of this case, the Receiver acted to safeguard the interest of the trustees for preserving the estate. We also feel that the Receiver acted in the matter as ought to have been done by the trustees to preserve the estate.15. In Kurapati Venkata Mallayya & Anr. vs. Thondepu Ramaswami & Co. & Anr. [AIR 1964 SC 818 ], a four-Judge Bench of this Court held that the Receiver has a right to institute a suit when the authority has been given to the Receiver to preserve the estate. Such authority is wide enough to empower the Receiver, as he thought necessary, for preserving the estate and such authority, in our opinion, includes to institute a suit. as has been held by this Court.16. We have considered all the points which have been urged by Mr. Ranjit Kumar, learned senior counsel appearing on behalf of the appellant. We are not able to accept his contention that the Receiver without leave of the court, cannot file a suit in the factual matrix of this case. We have also taken into account that obtaining of leave of the court before filing of the suit cannot be fatal and the same can be cured in law and is merely an irregularity. We have also considered the decision of this Court in Kurapati Venkata Mallayya & Anr. (supra) and find that when authority has been given to the Receiver to preserve the estate, it empowers the Receiver, i.e., for preserving the estate, he has a right to institute the suit and, accordingly, in the light of the said judgment, we express our opinion and accept the reasoning given by the High Court that the Receiver had the authority to institute a suit for preserving the estate. Therefore, we do not accept the contention of Mr. Ranjit Kumar, learned senior counsel, on such question. The second point urged by Mr. Ranjit Kumar, learned senior counsel, is that the suit is bad with regard to Section 106 of the Transfer of Property Act. We have duly considered the said question, and we find that the suit was filed after six months from the date of the notice issued under Section 106 of the Transfer of Property Act, by the Receiver and furthermore, after the amendment of Section 106(3) which reads as follows: “(3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section.” We have noticed that the High Court duly considered the question of notice and correctly came to the conclusion that the Legislature wanted to plug the loopholes and to redress the mischief by making a change in the law. Therefore, if the notice is short of the period specified in sub-section (1) but the suit or proceeding is filed after the expiry of the period mentioned in sub-section (1), the notice shall not be deemed to be invalid. Clearly, in this matter, the notice was issued on July 26, 2001 and the suit was actually filed on February 6, 2002 – after six months and, therefore, the notice cannot be declared or deemed to be invalid.17. The third question which is tried to be urged before us, in our opinion, has no substance since the Court Receiver is holding the properties as custodia legis and has acted in the matter as reasonable prudent trustees used to do in this matter and such action on the part of the Court Receiver is nothing but for preservation of the property in question, therefore, the contention of Mr. Ranjit Kumar on that ground also, cannot have any substance. [See Harinagar Sugar Mills Co. Ltd. (supra)].18. Although the point tried to be taken by Mr. Ranjit Kumar, learned senior counsel, is that the appellant is a sick company but we do not find that such point was ever urged before the High Court and, furthermore, it appears that admittedly the tenancy was about the residential premises. Therefore, in our opinion, such point cannot have any substance at this stage.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]14. After considering and analyzing all the decisions, in our opinion, we cannot give a narrower construction with regard to the rights/authority given to the Receiver under Order XL Rule 1(d). We have also considered the appointment order in the present case. In our opinion, the Receiver was given full powers under the provision of Order XL Rule 1(d) as rightly shown by Mr. Sorabjee, learned senior counsel and, therefore, the ruling relied upon by Mr. Ranjit Kumar, learned senior counsel for the appellant, cannot be of any help to him and, accordingly, we reject such contention of Mr. Ranjit Kumar, learned senior counsel, and hold that in the facts and circumstances of this case, the Receiver has acted in the matter for the purpose of administering the property. Even we have seen that the Supreme Court in Harinagar Sugar Mills Co. Ltd. (supra) has held that a Receiver was appointed pending a suit for partition and the Receiver filed a winding-up petition for realization of debt. It was contended that the Receiver had no power to institute a petition for winding-up of a company. The Supreme Court conceding that winding-up order is not a normal alternative to sue but held that it is a form of equitable execution covered by clause (d) of Rule 1(1) of Order XL of the Code and as such steps could be taken by the Receiver. It is also to be noted that the power must be conferred on the Receiver by the Court either expressly or by necessary implication, as the case may be. In the facts of this case, the Receiver acted to safeguard the interest of the trustees for preserving the estate. We also feel that the Receiver acted in the matter as ought to have been done by the trustees to preserve the estate.15. In Kurapati Venkata Mallayya & Anr. vs. Thondepu Ramaswami & Co. & Anr. [AIR 1964 SC 818 ], a four-Judge Bench of this Court held that the Receiver has a right to institute a suit when the authority has been given to the Receiver to preserve the estate. Such authority is wide enough to empower the Receiver, as he thought necessary, for preserving the estate and such authority, in our opinion, includes to institute a suit. as has been held by this Court.16. We have considered all the points which have been urged by Mr. Ranjit Kumar, learned senior counsel appearing on behalf of the appellant. We are not able to accept his contention that the Receiver without leave of the court, cannot file a suit in the factual matrix of this case. We have also taken into account that obtaining of leave of the court before filing of the suit cannot be fatal and the same can be cured in law and is merely an irregularity. We have also considered the decision of this Court in Kurapati Venkata Mallayya & Anr. (supra) and find that when authority has been given to the Receiver to preserve the estate, it empowers the Receiver, i.e., for preserving the estate, he has a right to institute the suit and, accordingly, in the light of the said judgment, we express our opinion and accept the reasoning given by the High Court that the Receiver had the authority to institute a suit for preserving the estate. Therefore, we do not accept the contention of Mr. Ranjit Kumar, learned senior counsel, on such question. The second point urged by Mr. Ranjit Kumar, learned senior counsel, is that the suit is bad with regard to Section 106 of the Transfer of Property Act. We have duly considered the said question, and we find that the suit was filed after six months from the date of the notice issued under Section 106 of the Transfer of Property Act, by the Receiver and furthermore, after the amendment of Section 106(3) which reads asA notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in thathave noticed that the High Court duly considered the question of notice and correctly came to the conclusion that the Legislature wanted to plug the loopholes and to redress the mischief by making a change in the law. Therefore, if the notice is short of the period specified in sub-section (1) but the suit or proceeding is filed after the expiry of the period mentioned in sub-section (1), the notice shall not be deemed to be invalid. Clearly, in this matter, the notice was issued on July 26, 2001 and the suit was actually filed on February 6, 2002 – after six months and, therefore, the notice cannot be declared or deemed to be invalid.17. The third question which is tried to be urged before us, in our opinion, has no substance since the Court Receiver is holding the properties as custodia legis and has acted in the matter as reasonable prudent trustees used to do in this matter and such action on the part of the Court Receiver is nothing but for preservation of the property in question, therefore, the contention of Mr. Ranjit Kumar on that ground also, cannot have any substance. [See Harinagar Sugar Mills Co. Ltd. (supra)].18. Although the point tried to be taken by Mr. Ranjit Kumar, learned senior counsel, is that the appellant is a sick company but we do not find that such point was ever urged before the High Court and, furthermore, it appears that admittedly the tenancy was about the residential premises. Therefore, in our opinion, such point cannot have any substance at this stage.