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Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5528     OF 2014 [Arising out of SLP(C) No.30298 of 2010]

Shree Ram Urban Infrastructure Ltd. (Formerly known as Shree Ram Mills Ltd.) ….. Appellant

:Versus:

The Court Receiver, High Court of Bombay …… Respondent

J U D G M E N T

Pinaki Chandra Ghose, J.

1. Leave granted.

2. This  appeal  has been preferred against the Judgment and  

order dated 16th September, 2010 passed by the High Court of  

Judicature at Bombay in Civil Revision Application No.452 of 2009,

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dismissing the Civil  Revision Application filed by the appellant-

tenant. The brief facts, necessary for the disposal of this appeal  

are  thus:  An  immovable  property  known as  “Dev Ashish”  is  a  

tenanted property situated at Padam Tekri, Peddar Road, Bombay  

(hereinafter referred to as the “suit property”). The respondent  

herein was appointed by the Bombay High Court to take charge of  

the suit property in Suit No.234 of 1987, which was filed on the  

original side of the Bombay High Court, in terms of prayer clause  

(a) of the Notice of Motion which reads as follows:  

“(a)  That pending the hearing and final disposal of  above suit, the Court Receiver, High Court, Bombay or  some other  fit  and proper  person be appointed as  a  Receiver  of  an  immovable  property  known  as  “Dev  Ashish” situate on Sub-Plot No.1 of Plot No.C.S.S.755 at  Padam Tekdi, Pedder Road, Bombay 400 026, with all  powers  under  Order  XL,  Rule  1  of  the  Code  of  Civil  Procedure,  1908,  including  the  owner  to  recover,  receive  and  collect  the  rent,  income  and  profits  thereof.”   

3. The respondent,  being the Court Receiver in the aforesaid  

suit, issued Notice dated July 26, 2001 to the appellant herein to  

pay compensation at the rate of RS.1,75,000/- per month from

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1.4.2000 and to vacate the suit premises. The appellant replied to  

the said notice of the respondent stating that the respondent has  

been appointed to control the suit premises and has no right and  

power to determine the tenancy of the appellant. Meanwhile, the  

appellant  was  declared  as  a  sick  company  under  the  Sick  

Industrial  Companies (Special  Provisions) Act,  1985 (hereinafter  

referred to as ‘the SICA’).   

4. The  respondent  instituted  a  suit  against  the  appellant-

defendant before the Court of Small Causes, Bombay which was  

decreed in favour of the respondent.  Being aggrieved by the said  

decree,  the  appellant-defendant  filed  an  appeal  before  the  

Appellate Bench of the Small Causes Court, being Appeal No.837  

of 2003. This appeal was dismissed by judgment and order dated  

June 12, 2009. The appellant-defendant, therefore, filed a revision  

petition before the High Court of Bombay under Section 115 of  

the  Code  of  Civil  Procedure,  being  Civil  Revision  Application  

No.452 of 2009. The said civil revision application was dismissed  

by the  Bombay High Court  vide  its  judgment  and order  dated  

16.9.2010.  Aggrieved  by  the  said  judgment  and  order  dated

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16.9.2010, this appeal, by special leave, has come up before this  

Court.   

5. Mr. Ranjit Kumar, learned senior counsel appearing on behalf  

of the appellant, challenged the order on the grounds, firstly, that  

the Court Receiver did not obtain leave of the court in filing the  

suit  and  without  such  leave,  the  eviction  suit  is  liable  to  be  

dismissed. Secondly, he contended that the notice was issued on  

July 26,  2001 asking the appellant to vacate the suit  premises  

immediately,  therefore, the notice was defective in view of the  

provisions of Section 106 of the Transfer of Property Act. On this  

ground also, he contended that the suit is liable to be dismissed.  

Thirdly, he contended that the suit is also bad since the owners  

are the trustees and are not made parties to the suit.

6. In support of his contention with regard to the first point that  

the suit was liable to be dismissed as it was filed by the Court  

Receiver without obtaining leave of the Court, he relied upon the  

decision of the courts in C.T. Davis & Ors. vs. Drobomoyi Gupta &

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Ors.1  He  also  relied  upon  the  decisions  in  Ram  Ranjan  

Chakravarti  vs.  A.B.  Miller2,  Everest  Coal  Company (P)  Ltd.  vs.   

State of Bihar & Ors.3, Anthony C. Leo vs. Nandlal Bal Krishnan &  

Ors.4,  Krishna Kumar Khemka vs. Grindlays Bank P.L.C. & Ors.5,  

Balkrishna Gupta & Ors. vs. Swadeshi Polytex Ltd. & Anr.6,  and  

Harinagar Sugar Mills  Ltd., vs. M.W. Pradhan7.

7. Lastly, Mr. Ranjit Kumar, learned senior counsel, contended  

that the Board for Industrial Financial Reconstruction (hereinafter  

referred to as ‘the BIFR’)  declared the appellant-company as a  

sick  company  under  the  SICA.  Therefore,  without  obtaining  

permission from the BIFR, the suit could not be proceeded with.  

Learned senior  counsel  further  pointed out  that  in  the case of  

Ram  Ranjan  Chakravarti  (supra),  it  has  been  held  that  the  

Receiver of the High Court does not represent the owner of an  

estate. He is an officer of the Court and as such, cannot sue or be  

sued  except  with  permission  of  the  Court.  In  Shyam  Lal  1  (1887) ILR 14 Cal 323 2  (1884) ILR 10 Cal 1014 3  (1978) 1 SCC 12 = 1958 SCR 333 4  1996 (11) SCC 376 5  1990 (3) SCC 669 6  1985 (2) SCC 167 7  1966 (3) SCR 948

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Gomatwala vs. Nand Lal & Ors.8,  it had been concluded by the  

Court  that  the  permission  of  the  Court  was  necessary  before  

institution of a suit by the Court Receiver.  

8. Mr.  Ranjit  Kumar, learned senior counsel,  also relied upon  

the  decisions  in  Mt.  Mahrana  Kunwar  vs.  E.V.  David,  Official   

Receiver9 and  C.T.  Davis  &  Ors.  vs.  Drobomoyi  Gupta  &  Ors.  

(supra) and contended that in the said decisions it has been held:  

firstly, that the action for ejectment from the suit property cannot  

be  maintained  by  only  some  of  the  owners  of  the  undivided  

estate; and secondly, it has been held that to authorize the Court  

Receiver  to  issue  Court  notices  determining  the  tenancy,  an  

authority has to be obtained from the Court. However, in the case  

of  Everest Coal Co.(P) Ltd.(supra), it has been held that when a  

court  puts  a  Receiver  in  possession  of  property,  the  property  

comes under the custody of the Court and the Receiver merely  

acts  as  an  agent  of  the  Court.  The  Court  Receiver  represents  

neither party, being an officer of the court, and for this reason  

ordinarily the court accords the permission to sue and failure to  8  AIR 1944 All 220 9  AIR 1924 All. 40

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secure such leave to sue till the end of lis may prove fatal. He also  

drew  our  attention  to  a  decision  reported  in  Shanta  Ram  

Hirachand  Danez  vs.  Narayan  Bapusa  Fulpagar10.  In  the  said  

decision the court held that filing of the suit  without obtaining  

leave of the court is an irregularity and can be cured in law and is  

not  fatal.  But  the  suit  filed  by  the  Court  Receiver  without  

obtaining permission does not render the proceedings in the suit  

ultra vires if leave is obtained even after filing of the suit by the  

Court Receiver. He tried to contend on the question of service of  

notice that  Section 106 is  restricted to  cases where the Court  

Receiver has let out the premises and further the Court Receiver  

cannot have the implied authority to sue a protected tenant in  

occupation and according to him, it is necessary to have the leave  

from the court before filing the suit and it can also be overcome  

only if the leave is obtained when the lis is pending.  

9. With regard to the trust property, his contention is that the  

trust property vests in all the trustees. It is, therefore, apparent  

that all the trustees have to decide whether or not the suit is to  

10  AIR 1999 Bom 16

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be  filed  on  behalf  of  the  trust.  In  the  present  case,  it  is  not  

disclosed anywhere that the notice of termination was served at  

the behest of all the trustees. He further pointed out that it is to  

be  noted  that  the  order  appointing  the  Receiver  as  already  

recorded by the court  that  prima facie there was a dispute in  

respect of appointment of trustees on the Trust and about dealing  

of the property by the Trust and in these circumstances, the court  

thought it fit to appoint a Court Receiver considering the facts and  

circumstances of this case.

10. Per  contra,  Mr.  Soli  Sorabjee,  learned  senior  counsel  

appearing on behalf of the respondent-Court Receiver, submitted  

that the Court Receiver has a right to take all steps in the matter  

since the Court Receiver has been appointed with full powers to  

administer the property which is  custodia legis and furthermore,  

he has acted in the matter in his capacity as a Receiver. He also  

drew  our  attention  to  Order  XL  Rule  1  of  the  Code  of  Civil  

Procedure, 1908, which is reproduced hereinbelow:

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“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 (d)  confer  upon  the  receiver  all  such  powers,  as  to   bringing  and  defending  suits  and  for  the  realization,   management,  protection,  preservation  and  improvement of the property, the collection of the rents   and profits thereof, the application and disposal of such   rents and profits, and the execution of documents as   the owner himself has, or such of those powers as the   court thinks fit….”

11. He pointed out that Order XL Rule 1(d) has specifically given  

all such powers as to bringing and defending the suits and for the  

realization,  management,  protection  and  preservation  of  the  

property  which  the  Receiver  held  on  behalf  of  the  court.  

According  to  Mr.  Sorabjee,  learned  senior  counsel,  the  Court  

Receiver should be able to take all steps necessary to preserve  

and  protect  the  property  as  a  prudent  owner  of  the  property  

would take. He also drew our attention to the order appointing the  

Receiver and contended that if a tenant is in arrears of rent or if

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the leased property after recovery of possession can fetch more  

income to the estate, the Court Receiver is entitled to take steps  

in the matter and can file a suit for recovery of possession. He  

further contended that in the instant case, the suit premises are  

outside the purview of the Rent Act. He also relied upon the old  

decisions in  Huri Dass Kundu vs. J.C. Macgregor, Receiver, High  

Court11 and submitted that the court held that the terms of the  

order appointing the Receiver are sufficient to confer on him the  

power  to  bring a suit  to  eject  a  tenant.  He also  relied on the  

decision in  Jagat Tarini  Dasi vs.  Naba Gopal Chaki12,  wherein it  

was held as follows:

“The  receiver,  as  an  officer  of  the  Court,  which  has  taken control of the property, is for the time being, and  for the purpose of the administration of the assets, the  real  party  interested  in  the  litigation;  there  is  no  substantial reason, therefore, why the suit should not  be instituted in his own name. We may further add that  there are numerous cases in the books, from which it  appears that a receiver, who has authority to sue, has  been allowed to do so in  his  own name without  any  objection  raised  on  that  ground;  see,  for  instance,  Shunmugam v. Moidin [(1884) ILR 8 Mad 229],  Gopala  Sami v. Sankara [(1885) ILR 8 Mad 418],  Sundaram v.  Sankara [(1886)  ILR  9  Mad  334],  Drobomoyi  Gupta  

11  (1891) ILR 18 Cal 478 12  (1907) ILR 34 Cal 305

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[318] v. C.T. Davis [(1887) ILR 14 Cal 323],  Huri Dass  Kundu v. J.C.  Macgregor [(1891) ILR 18 Cal  477] and  W.R.  Fink v.  Buldeo Dass [(1899) ILR 26 Cal  715].  It  follows,  therefore,  that  the  view,  that  a  Court  may  authorize a receiver to sue in his own name, and that a  receiver, who is authorized to sue, though not expressly  in  his  own  name,  may  do  so  by  virtue  of  his  appointment with full powers under section 503 of the  Civil  Procedure  Code,  is  supported  by  principle  and  authority, and is consistent with existing practice. We  must, consequently, hold that the second ground taken  on behalf of the appellant cannot be sustained.”  

12. A  Division  Bench  of  the  Calcutta  High  Court  in  Kassim  

Mamooji vs. K.B. Dutt & Anr.13,  has held that the present Code  

empowers the Court to confer upon a Receiver all such powers as  

to bringing and defending suits as the owner himself has. It would  

suffice to quote the following:

“Originally a Receiver could not sue; this is shown by  the  decision  of  Phear,  J.,  in  Wilkinson  v.  Gangadhar  Sirkar [1871  6  Beng.  LR  486].  That  decision  was  in  1871. In 1877, however, was passed the Civil Procedure  Code of that year; and in it was contained the provision  which now finds a place in O. 40 R. 1, of the present  Code (see S. 503 of the Code 1877). The present Code  empowers the Court to confer upon a Receiver all such  powers as to bringing and defending suits as the owner  himself has.”  

13  AIR 1916 Cal 51

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13. In the aforesaid decisions, it has been held that the words 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

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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.14, 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  14  AIR 1964 SC 818

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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

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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

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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

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was  about  the  residential  premises.  Therefore,  in  our  opinion,  

such point cannot have any substance at this stage.  

19. In these circumstances, we find that the reasoning given by  

the High Court does not warrant any interference by this Court.  

Accordingly,  we  find  no  merit  in  this  appeal  and  the  same  is  

hereby dismissed. However, there shall be no order as to costs.    

…………………..…………………J. (Chandramauli Kr. Prasad)

…………………..…………………J. (Pinaki Chandra Ghose)          

New Delhi; May 9, 2014.

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