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PETITIONER: KURAPATI VENKATA MALLAYYAAND ANOTHER

       Vs.

RESPONDENT: THONDEPU RAMASWAMI AND CO. AND ANOTHER

DATE OF JUDGMENT: 12/12/1962

BENCH: MUDHOLKAR, J.R. BENCH: MUDHOLKAR, J.R. IMAM, SYED JAFFER KAPUR, J.L. SUBBARAO, K.

CITATION:  1964 AIR  818            1963 SCR  Supl. (2) 995  CITATOR INFO :  F          1966 SC1707  (6)  R          1985 SC 520  (23)

ACT: Receiver-Appointment  by Court-If can sue in his  own  name- Interference--Concurrent  fnding of fad I  Practice-Code  of Civil Procedure, 1908 (V of 1908), O. 40, r. 1.

HEADNOTE: A  Receiver authorised and appointed by a Court  to  collect the debts due to the plaintiff-respondent instituted a  suit against the appellant-firm and its alleged partners for the recovery of the -price of tobacco and interest thereon.  The right  of the receiver to institute a suit in his  own  name was challenged by the appellant.  Thereupon the  respondent- firm  amended  the Plaint by describing  the  -plaintiff  as "M/s.   T. R. & Co., represented by I.  Surayanarayana  Garu receiver appoin. ted in O.S. 275 of 1948 on the file of  the District Munsiff’s Court    Guntur." The   appellant-firm  amended  the  written  statement   and contended  that the amendment of the plaint was  timebarred, that it did not cure the initial defect in the suit and that consequently, the suit was barred by limitation.  The  trial court  dismissed the suit on the ground  that  Suryanarayana was  not  entitled to institute a suit in  his  capacity  as Receiver,  that the amendment of the plaint was beyond  time and that the suit was therefore time barred.  On appeal  the High 996 Court  held that the Receiver was entitled to institute  the suit,  that  at the most there was a misdescription  of  the plaintifffirm in the cause title of the suit which could  be corrected  any time, that consequently the suit  was  within time and that the   plaintiff was entitled to a decree  with interest  from  the  date  of delivery  of  the  goods  till realization. Held,   that  a  Receiver  invested  with  full  powers   to administer  the property which is custodia legis or  who  is expressly  authorised by the court to institute a  suit  for

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collection of the assets is entitled to institute a suit  in his  own  name  provided he does so in  his  capacity  as  a Receiver.   His  function cannot be limited  merely  to  the preservation  of the property and it is open to a court,  if occasion demands, to confer upon him the power to take  such steps  including  instituting suits in the interest  of  the parties themselves.  The suit as originally instituted,  was thus perfectly competent. The  High Court rightly held, that where there is a case  of misdescription  of parties it is open to the court to  allow an  amendment of the plaint at any time and the question  of limitation would not arise in such a case. Jagat  Tarini  Dasi v. Naba Gopal Chaki (1907) r. L.  R.  34 Cal. 305, relied on. Held,  further that this court does not interfere  with  the concurrent  findings of the courts below on a pure  question of  fact,  unless  there are  exceptional  circumstances  or unusual  reasons  which induce it to re-examine  the  entire evidence. Srimati Bibhabati Devi v. Kumar Ramendra Narayan Boy, (1946) L. R. 73 1. A. 246 and Sriniwas Ram Kumar v. Mahabir Prasad, [1951] S. C. R. 277, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 339/60. Appeal from the judgment and decree dated November 17, 1955, of the Andhra Pradesh High Court in A. S. No. 51/1951. A.   Banganadham  Chetty, A. V. Rangam, A. Vedavalli and  K. R. Chaudhri. for the appellants. B.   Ganapathy  Iyer, R. Thiagarajan and G.  Gopalakrishnan, for the respondent No. I. 1962.   December  12.   The  judgment  of’  the  Court   was delivered by  997 MUDHOLKAR, J. This is an appeal by a certificate granted  by the  High Court of Andhra Pradesh under Art. 133 (1) (a)  of the Constitution. The relevant facts arc these The  plaintiff-respondent  Ramaswamy  &  Co  who  carry   on business in tobacco at Guntur instituted a suit against  the appellant-firm  which  also carries on similar  business  at that  place  and  its  alleged  partners  Kurapati   Venkata Mallayya  and  Mittapalli Abbayya, for the recovery  of  the price of 112 bales of DB tobacco strips (hereafter  referred to as DB strips) sold to them on June 5, 1946, amounting  to Rs. 14,099/- and interest thereon from the date of  purchase to  the  date  of suit.  In addition,  the  respondent  firm claimed  interest  from  the date of suit  to  the  date  of realization.   It  is the respondent firm’s  case  that  the tobacco  weighed 28,196 pounds and that the  appellant  firm purchased  it  by agreeing to pay its price at 8  annas  per pound.    Further  according  to  the  respondent-firm   the appellant  firm agreed to pay interest on the amount  at  9% per  annum.  The appellant-firm denied having purchased  112 bales  of tobacco from the respondent-firm and  denied  also having agreed to pay its price at annas per pound or at  any other rate.  They also denied the existence of any agreement to pay any interest. According  to the appellant-firm in May, 1946 it  secured  a contract to supply to the Russian Government 3,000 bales  of inferior  tobacco  at the rate of 8 annas  per  pound.   One Kottamasu  Venkateswarlu (who was distantly’related  to  the

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partners of the appellant firm) was managing partner of  the respondent  firm.  This firm had some inferior  tobacco  and Venketashswarlu pressed the appellant-firm to take over  112 bales  of the tobacco from it and tender them  towar-ds  the contract  with  the  Russian  Government  saying  that   the appellent-firm may deduct one 998 anna  per  pound from the price received  from  the  Russian Government  towards  their  expenses  and  commission.   The appellant-firm  had reluctantly agreed to this  request  and despatched 97 out of the 112 bales to Kakinada after getting Agmark certificate with respect to them, with the assistance of   Venkateswarlu   The  representative  of   the   Russian Government,  however, rejected the goods on the ground  that they  were of inferior quality.  Five bales out of these  97 bales  were  rejected by the Agmark  authorities  after  re- inspection  of  the  goods at Kakinada.   Those  bales  were returned  to  Guntur along with other rejected  bales  which belonged to the appellant-firm but they were consumed in  an accidental  fire in the godown of the a  pellant-firm.   The remaining  92  bales  are said to be apeal  lying  with  the shipping  agent  at Kakinada and that as the tobacco  is  of very  poor quality no purchaser had yet been found  for  it. Fifteen  bales out of the 112 bales which had not been  sent to Kakinada got damaged and had to be rebaled.  As a  result of the rebaling they were reduced to ten bales and these are still lying with the appellant-firm, which the appellantfirm was  willing to return to the respondent-firm on its  paying the godown charges. Thus,  the  main defence of the appellant-firm  is  that  it never  purchased 112 bales of tobacco from  the  respondent- firm  and, therefore, the respondent-firm could not  sue  it for  the  price of those bales.  It may  be  mentioned  that before  the  institution  of the suit a  Receiver  had  been appointed  in another suit for realization of the debts  due to  the’respondent-firm The court before which the suit  was pending  had made an order on June 22, 1949  permitting  the ]Receiver  to collect the debts due to  the  respondentfirm. In  pursuance  of  this  order  the  Receiver  Suryanarayana instituted  the  suit  out  of  which  this  appeal  arises, describing  himself thus in the plaint:  "’I,  Suryanarayana Garu, Receiver appointed ’in O.S.  999 275  of  1948 on the file of the  District  Munsif’s  Court, Guntur".   The  appellant-firm contended that the  suit  was untenable  because  a Receiver has no right to  institute  a suit  in his own name and further that the Receiver had  not been expressly authorised by the court to institute the suit in question.  The appellantfirm also contended that the suit was  barred-by  time.  It specifically  contended  that  the respondent-firm  was  not  entitled either  to  the  alleged -price  or  to  any interest.   The  appellant-firm  further contended that Mittapalli Abbayya ceased to be a Partner  of the  firm  since  the vear 1942 because as  a  result  of  a partition between Abbayya and his son-., Abbayya’s  interest in the appellant-firm fell to the share of one of his  sons, Kotilingam. In consequence of the plea taken by the appellant-firm  that the  suit  was not tenable the  respondentfirm  amended  the plaint  with the leave of the court on December 27, 1949  by describing the plaintiff as ""Messrs.  Thondepu Ramaswami  & Co.,  represented by  Suryanarayana Garu receiver  appointed in  O.S.  275 of 1948 on the file of the  District  Munsif’s Court,  Guntur" in place of the original "I.   Suryanarayana Garu, Receiver appointed in O.S. 275 of 1948 on the file  of

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the   District  Munsif’s  Court,  Guntur".   Thereupon   the appellant-firm  filed an amended written statement in  which it  contended  that the amendment was made  long  after  the period  of limitation and that it does not cure the  initial defect  in the suit of having been filed by a  person  other than  the one who was entitled to institute a suit and  that consequently the suit was barred by limita. tion. The   trial   court  held  that  the   respondent-firm   had established  the contract alleged by it but that it had  not established  that the appellant-firm had agreed to  pay  the price  at the rate of 8 annas per pound.  It, however,  held that the price of tobacco 1000 was Rs. 5,639-3-0, but it, dismissed the suit on the  ground that  I, Suryanarayana was not entitled to institute a  suit in  his capacity as Receiver in 0. S. 275 of 1948, that  the amendment  of  the  plaint was made  beyond  the  period  of limitation and that, therefore, the suit was barred by time. In appeal the High Court held that the Receiver was entitled to institute the suit having been authorised by the court to collect  the  debts  of  T. Ramaswami &  Co.,  that  at  the most’there was a misdescription of the plaintiff-firm in the cause  title of the suit which could be corrected  any  time and that consequently the suit was within time.  It  further held that the price of tobacco agreed to between the parties was 8 annas per pound and that the plaintiff was entitled to a  decree for Rs. 14,098/- and interest at 6% p.a. from  the date of delivery of the goods till realisation. The first point urged before us by Mr. Ranganadham Chetty on behalf  of  the appellant-firm is that the High’  Court,  as well as the Subordinate judge were in error in holding  that the  bales in question had been purchased by the  appellant- firm from the respondent-firm.  This, however, is a question of  fact and since the two courts below have  found  against the  appellant-firm  on  this point  this  court  would  not ordinarily  interfere with such a finding.  Mr.  Ranganadham Chetty, however, contended on the authority of the  decision in  Srimati Bibhabati Devi v. Kumur Ramendra Narayan  Roy(’) that  the practice of the court in appeals by special  leave is not a castiron one and that it, would, therefore, be open to  this  Court to depart from it in, an  appropriate  case. The  aforesaid  decision was referred to by  this  Court  in Srinivas Ram Kumar v. Mahabir Prasad (2 ) and it was pointed out  that  when  the  courts  below  have  given  concurrent findings  on  pure questions of fact, this court  would  not ordinarily interfere with them (1) (1946) L.R. 73 I.A. 246, 259.                  (2) (1951] S.C.R- 277,281.  1001 and review the evidence for the third time unless there  are exceptional  circumstances justifying a departure  from  the normal practice.  Learned counsel contended that this is  an unusual case because the reasons given by the High Court for holding that the transaction was a sale are quite  different from  those given by the trial court and in fact one of  the reasons  given  by the High Court proceeds on a view  of  an important piece of evidence-which is diametrically  opposite to  that  expressed  by the trial  court.   Mr.  Ringanadham ’Chetty  pointed  out  that  in support  of  its  claim  the respondent-firm relied upon two entries in its account books Exs.  A-13 and A-14, that these entries were not relied  tin by  the trial court, but the High Court has  without  giving any  reason for regarding them as genuine acted  upon  them. What the trial court has said in para 14 of its judgment  is as follows :

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"’In order to establish the sale of 122 bales of flue  cured virginia  tobacco  strips,,  Ramaswami  relies  on   certain entries  in the account books of his firm.  Exhibit A-13  is the katha on page 27 of the day book of Thondepu Ramaswami & Co.,  containing an entry in respect of 112  bales  weighing 28,  196 pounds at Re-0-8-0 per pound and debiting a sum  of Rs. 14,098/-.  The words "’Re. 0-8-0 per pound" are  contai- ned  in the third line of the entry.  The words  "112  bales weighing 28.,196 pounds at Re. 0-8-0 per pound" appear to be written closely.  The sum of Re. 14,098 appears in different ink.   Exhibit A-14 is the katha of the 1st  defendant  firm found  on page 111 of the corresponding, ledger of  Thondepu Ramaswami & Co. On 5-6-1964 a sum of Rs. 14,098 was  debited in  respect  of 112 bales of barn tobacco  weighing  28  196 pounds  at Re. 0-8-0 per pound.’ In the second line  of  the entry the price therefore (in Telugue) and the debit 1002 of  the  sum  of Rs. 14,098are found.On  21st  August,  1946 interest  of  Rs. 267-1-9 was added.  Exhibit  A-17  is  the interest Katha of Messrs.  Thoadepu Ramaswami & Co,  Exhibit A-16  is  the katha at page 41 of the day book  of  Thondepu Ramaswami  &  Co.  The  katha shows  that  on  21-8-1946  to balancing  entries  21-8-1946  two  balancing  entries   for interest  of  Rs. 267-13-6 were made in the day  book.   The entry  on  the  right  hand side has  been  scored  out  and Ramaswamy  has not been able to explain why and  under  what circumstances the entry happens to be scored out.  The entry on  the  left hand side however, was not  scored  out.   The totals  do  not  tally unless the sum  of  Rs.  267-13-6  is included  in  the aggegate sum mentioned on the  right  hand side  on  page 41.  It has been commented on behalf  of  the defendants that Ramaswamy himself has no personal  knowledge of the entries, that the clerks who made the entries in  the account books have not been examined and that Exhibits A-13, A-14 and A- 1 6 cannot be relied on in order to come to  the conclusion that the transaction relating to 112 bales was  a sale and only a sale.  Though Ramaswamy was not present when the entries were made in the several registers of his  firm, it is not disputed that the accounts have been maintained in the usual course of business." ling  with  the question of price the trial  court  has  ob- served:  "’Much  reliance  cannot  be  placed  on  the  rate mentioned in Exhibits A-13 and A-14 and the price has to  be determined independently having regard to the fact that  the price  of  tobacco depreciates gradually with its  age."  If will  thus  be seen -that the trial court has  not  rejected these  entries outright but only rejected them in so far  as they were intended to establish the price agreed to be  paid to the respondent-firm.  1003 Dealing with this matter the High Court has observed thus : "’Exhibit  A-  13 is the entry in the day book  of  Thondepu Ramaswami  &  Co. under date 5-6-1946 wherein a sum  of  Rs. 14,098  is debited to the defendant firm in respect  of  112 bales  of  tobacco  weighing 286196 pounds at  8  annas  per pound.   Though the figures "Rs. 14,098" were written  in  a different  ink  from  the rest of the entry this  is  not  a suspicious circumstance because the rest of the entry  which is  in the same ink and which is written in a normal  manner contains  reference to the sale of 28,196 pounds at 8  annas per pound.  The resultant total is entered in the column  on the  right  hand  side as Rs. 14,098.  It may  be  that  the figure of Rs. 14 098 was entered a: little later before  the accounts  for  the  day were closed.  Exhibit  A-14  is  the corresponding  ledger  of Thondepu Ramaswami & Co.  and  the

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entries  in  the  day  book are  duly  incorporated  in  the ledger." Then later on the High Court has observed "At the same time the entries in the regularly kept books of the  plaintiff firm cannot be thrown overboard  particularly when no challenge was made of their genuineness." The  High  Court  has also stated : ""It  is  apparent  from Exhibit  A-23  that  the defendant firm was shown  to  be  a debtor  not merely with respect to Rs. 14,098 the  price  of 28,196  pounds but also in respect of the interest due  upon the  sum,  and  the  plaintiff  firm  has  paid   income-tax thereon." toto  the  High  Court has given certain  reasons  and  even though  we  may not agree with them it cannot be  said  that there  is any unusual circumstance which would  warrant  our reviewing afresh the evidence on 1004 the  point as to whether the transaction in question  was  a sale or not. Mr. Ranganadham Chetty next contended that the courts  below have  not borne in mind the true significance of  the  words ""no price" occurring in the entry relating to the 112 bales in  question  in the verification register Ex.   A-28.   The Entry reads thus "5-6-46   For 112 bales of Baru tobacco no price at Re. 0-8- 0 per pound The entries were in Telugu and the actual words used are                      and according to Mr. Ranganadham  Chetty they mean that there was no  sale.   The Courts  below,  however,  which  were  conversant  with  the language,  have understood the entry to mean "no price"  and that is how the’ expression has been translated in the paper book  and  it is not open to Mr. Ranganadham Chetty  to  say that  the meaning is otherwise than this.  Mr.  Chetty  then contended that even accepting that the meaning is only  "’no price" the proper inference to be drawn is that there was no transaction  of sale and that the rate of 8 annas per  pound stated  in  the entry is given merely for  valuing  the  112 bales.   That may be so but it does not negative the  effect of the other entries which clearly point to the  transaction being a sale.  Some point was also sought to be made by  Mr. Ranganadham  Chetty  from  the  fact that  no  copy  of  the transport  permit required to be taken for the  transfer  of excisable articles from one bonded warehouse to another  was placed  on record.  We fail to see the significance of  this because the appellant-firm admits that 112 bales of  tobacco were  actually received by it from the respondent firm.   It will   thus   be  seen  that  there   are   no   exceptional circumstances  or unusual reasons which would induce  us  to re-examine the entire evidence on the point ourselves.   We, therefore, decline to do so.  1005 The next question is whether the suit was in proper form and was  within time.  Though the case of section for  the  suit arose  on  June 5, 1945, it is admitted before us  that  the courts were closed on June 5, 1949 and the suit was filed on the  day  on which they reopened.  It would,  therefore,  be within  time if it was properly constituted on the  date  on which  it  was filed.  In Jagat Parini Dasi  v.  Naba  Gopal Chaki (1) which is the leading case on the point it was held by  the  Calcutta High Court that a court must  authorise  a Receiver  to  sue  in his own name and  a  Receiver  who  is authorised to sue though not expressly in his own name,  may do so by virtue of his appointment with full powers under s. 503  of the Code of Civil Procedure (Act XIV of  1882).   In

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coming  to  this conclusion the learned judges  pointed  out that though, the object and purpose of the appointment of  a Receiver  may be generally stated to be the Preservation  of the  subject-matter  of  the  litigation  pending   judicial determination  of  the  rights of the parties  it  does  not necessarily  follow  that  if he is authorised  to  sue,  he cannot sue in his own name.  Then the learned judges pointed out :- ,,Though  he is in one sense a custodian of the property  of the person, whom in certain respects he is made to supplant, there seems to be no reason why his power should not be held to be co-extensive with his functions.  It is clear that  he cannot conveniently perform those functions, unless upon the theory that he has sufficient interest in the subject-matter committed to him, to enable him to sue in respect thereof by virtue of his office, in his own name. On  the  whole,  we  are disposed to  take  the  view  that, although a receiver is not the assignee or beneficial  owner of  the property entrusted to his care, it is an  incomplete and inaccurate statement of his relations to the property to say that (1)  (1907) I.L.R. 34 Cal. 305. 1006 he is merely its custodian, When a Court has taken  property into  its  own  charge  and  custody  for  the  purpose   of administration in accordance with the ultimate rights of the Parties  to  the litigation, it is in custodia  legis.   The title  of  the  property for the time  being,  and  for  the purposes of the administration, may, in a sense, be said  to be in the Court.  The receiver is appointed for the  benefit of all concerned; he is the representative of the Court, and of  all Parties interested in the litigation, wherein he  is appointed.   He is the rightarm of the Court  in  exercising the jurisdiction invoked in such cases for administering the property; the Court can only administer through a  receiver. For  this reason; all suits to collect obtain possession  of the  property  must be prosecuted by the receiver,  and  the proceeds received and controlled by him alone.  If the  suit has  to  be  nominally prosecuted in the name  of  the  true owners  of  the property, it is an inconvenient as  well  as useless form--inconvenient, because in many cases, the title of the owners may be the subject-matter of the litigation in which the receiver has been appointed -useless, because  the true owners have no discretion as to the institution of  the suit,  no control over its management, and no right  to  the possesion of the proceeds." (pp. 316-317) Later  the  learned judges pointed out, that  for  the  time being  and for the -purpose of administration of the  assets the real party interested in the litigation is the  Receiver and, therefore, there is no reason why the suit could not be instituted  in  his  own  name.   The  learned  Judges  then referred   to  a  number  of  cases  in  support  of   their conclusion.   It seems to us that the view of  the  Calcutta High Court that a Receiver who is appointed with full powers to administer the property which is Custodia legis or  1007 who is expressly authorised by the court to institute a suit for collection of the assets is entitled to institute a suit in  his own name provided he does so. in his capacity  as  a Receiver.   If  any  property  is  in  custodia  legis   the contesting  parties cannot deal with it in an  manner,  and, therefore,  there must be some authority competent  to  deal with  it,  in  the interest of the  parties  themselves.   A Receiver  who is placed in charge of the property on  behalf of  a court can be the only appropriate person who could  do

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so.    His  function  cannot  be  Limited  merely   to   the preservation  of the property and it is open to a  court  if occasion demands, to confer upon him the power to take  such steps  including  instituting suits in the interest  of  the parties themselves.  Here apparently the Receiver was not  a person with full powers but by its order dated June 26, 1949 the, court authorised him to collect debts, particularly  as some debts were liable to get barred by time.  The Receiver, therefore, had the right to institute the suit in  question. It  is,  however,  contended that the  order  does  not  say specifically  that  he  should institute  a  suit.   In  our opinion,  the authority given to the Receiver  ",to  collect the  debts" is wide enough to empower the Receiver  to  take such legal steps as he thought necessary for collecting  the debtsincluding  instituting a suit.  The suit as  originally instituted,  was thus perfectly competent.  The  High  Court has observed that even assuming that it would have been more appropriate for the Receiver to show in the cause title that it  was the firm which was the real plaintiff and  that  the firm  was  suing  through  him- it  was  merely  a  case  of misdescription  and that the plaint could be amended at  any time  for the purpose of showing the correct description  of the plaintiffs We agree with the High Court that where there is  a  case of misdescription of parties it is open  to  the court  to allow an amendment of the plaint at any  time  and the question of limitation would not arise in such a case. 1008 [His  Lordship then dealt with the point regarding the  rate of interest.] x      x      x     x     x     x     x     x      x Accordingly we set aside the decree of the High Court, allow the  appeal  in  part and pass a decree  in  favour  of  the respondent-firm  for Rs. 5,639/3/- with -interest at  6  per cent  per  annum  from  the date  of  the  transaction  till realization.   The respondent-firm will proportionate  costs throughout from the appellant-firm, which would bear its own costs.                   Appeal allowed in part.