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CASE NO.: Appeal (civil)  357-358 of 1999

PETITIONER: U.P. State Sugar Corporation and another

RESPONDENT: M/s Mahalchand M. Kothari and others

DATE OF JUDGMENT: 29/10/2004

BENCH: M. Dharmadhikari & P. P. Naolekar

JUDGMENT: J U D G M E N T

Dharmadhikari J.

       By Uttar Pradesh Sugar Undertakings (Acquisition) Ordinance,  1971 which later became an Act No. 23 of the same name [hereinafter  referred to shortly as the ’Ordinance/Act’], M/s Maheshwari Khetan  Sugar Mill Pvt. Ltd., [Respondent No. 2 herein] at Ramkola, District  Deoria in the State of Uttar Pradesh, was acquired by the appellant  U.P. State Sugar Corporation [shortly referred to as ’the Corporation’].  

       On the date of coming into force of the Ordinance,  the Sugar  Mill was under management of Receiver appointed on 04.3.1970 by  the Collector for recovery of dues of cane-growers as arrears of land  revenue in accordance with section 279(1)(g) read with Section 286A  of the U.P. Zamindari Abolition and Land Reforms Act, 1950 [shortly  referred to as ’the Act of 1950’].

M/s Mahalchand M. Kothari which is a partnership firm carrying  on trade in Guwahati in the State of Assam filed two suits in the Court  of Assistatnt District Judge, Guwahati for recovery of damages caused  to it as a result of non-supply of sugar under the contract entered into  by the plaintiff firm with the Receiver who was managing the Sugar  Mill.  The orders were placed by the plaintiff for supply of different  quantities of sugar in the year 1979 and advance money was paid to  the Receiver for timely supply.   The prices of sugar having gone up in  the period of supply under the contract, the Receiver neither sent the  quantity of sugar nor returned the advance price paid by the plaintiff.   Both the suits Nos. 11 & 27 were filed in the year 1982.  The erstwhile  Mill owner and the appellant Corporation were made defendants to the  suits because by that time, Sugar Mill already stood transferred to,  vested in and been in actual possession of the Corporation in  accordance with section 3 of the Act.  

       The Corporation repudiated the claims made in the two suits  pleading inter alia  that there was no privity of contract between the  plaintiff and the Corporation; the Receiver was managing the Sugar  Mill on the date of alleged non-supply of quantity of sugar; the  erstwhile owner of the Sugar Mill had filed writ petition in the High  Court of  Allahabad challenging the constitutional validity of the Uttar  Pradesh Sugar Undertakings (Acquisition) Ordinance, 1971 in which  operation of the Ordinance was stayed and the possession of the  Sugar Mill was restored to the erstwhile owner on specified terms and  conditions of the order of stay.

       The Assistant District Judge, Guwahati by two separate  judgements, decreed both the suits holding  inter alia that the  Corporation cannot avoid its liability towards the claims of the plaintiff  as the Sugar Mill stood transferred to and vested in it from the

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’appointed day’  i.e. 3.7.1971 under Section 3 of the Act.  

The Corporation had preferred two appeals to the High Court of  Guwahati which were allowed on 26.6.1996 solely on the ground that  the suits were not maintainable as the plaintiff was not a registered  partnership firm and was, therefore, incompetent to sue as a firm. The  plaintiff then had approached this Court by Civil Appeal Nos. 3057 and  3058 of 1997 which were allowed on 25.7.1997 as it was pointed out  that original certificate showing registration of the firm had been  produced before the trial court. This Court, therefore, remitted the  appeals to the High Court for their decision on merits.  

       The Division Bench of the High Court by the impugned judgment  dated 16.7.1998 dismissed both the appeals of the Corporation and  confirmed the decrees granted by the trial court in the two suits in  favour of the respondent/plaintiff.  

       The Corporation, therefore, after seeking leave is before this  Court in these two appeals.  

       Learned counsel appearing for the Corporation has taken us  through the relevant dates and proceedings of the Allahabad High  Court in the writ petition which was filed challenging the  Ordinance/Act. It is strenuously urged that there was no privity of  contract between plaintiff and the Corporation.  The Corporation,  therefore, could not be held liable towards the losses and damages  caused to the plaintiff by alleged breach of contract committed by the  Receiver in not supplying the sugar for which orders had been placed  by the plaintiff.  It is submitted that for transferring and vesting of  Sugar Mill in the Corporation,  the ’appointed day’ fixed under Section  3 of the Ordinance/Act was 3.7.1971 but the erstwhile owner of the  Sugar Mill challenged the validity of the Ordinance in the Allahabad  High Court and obtained a stay order on 09.7.1971 whereunder the  Receiver, who was already managing the Sugar Mill as a nominee of  the Collector under section 279(1)(g) read with Section 286A of the  Act of 1950, continued in the management of the Sugar Mill for and on  behalf of the erstwhile owner. It is contended by the counsel on behalf  of the Corporation that when two orders for supply of sugar were  alleged to have been placed on 02.2.1979 and 09.2.1979 by the  plaintiff, the Receiver was in possession and management of the sugar  mill.  He was acting not for the Corporation but for and on behalf of  the erstwhile owner of the mill who was in de jure possession of the  mill as an effect of the order of stay dated 09.7.1971 obtained in Writ  Petition No. 4193 of 1971 filed in the Allahabad High Court challenging  the constitutional validity of the Ordinance.  Under the terms of the  order of stay, operation of the Ordinance was stayed and possession of  the mill was restored to the erstwhile owner.  

       Learned counsel appearing for the respondent plaintiff heavily  relied on the photocopies of the order-sheets of the writ petition No.  4193 of 1971 filed in the Allahabad High Court.  An attempt has been  made to show that the order obtained by the erstwhile owner of the  Sugar Mill on 09.7.1971 staying operation of the Ordinance had been  vacated by the High Court on 29.7.1974 on the application of the  Receiver who was experiencing various difficulties in managing and  running the Sugar Mill. The learned counsel for the respondent plaintiff  contended that as the stay against Ordinance/Act passed on 09.7.1971  stood vacated on 29.7.1974, the Sugar Mill would be deemed to have  stood transferred to and vested in the Corporation on the ’appointed  day’ 03.7.1971. The orders for supply of sugar were placed on  02.2.1979 and 09.2.1979 by the plaintiff after the stay against  Ordinance had been vacated by the High Court on 29.7.1974. On  behalf of the respondent plaintiff, it is,  therefore, submitted that for  the acts and omissions of the Receiver the Corporation, in whom the  Sugar Mill stood vested, could not have been allowed to repudiate its

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liability towards the breach of contract committed by the Receiver.                   At the outset, it is necessary to put straight the factual position  which is discernible on a careful perusal of the proceedings of the writ  petition in the High Court in which the constitutional  validity of the  Act/Ordinance was challenged.  

       On behalf of the respondent plaintiff, an attempt was made to  project that the order dated 09.7.1971 granting stay against the  Ordinance/Act, stood vacated on 27.9.1974 on the application of the    Receiver who prayed for unfettered right to manage the Sugar Mill.  In  the additional documents filed by the parties before us, a copy of the  application filed by the receiver seeking vacation of stay and   photocopies of the order-sheets of the High Court in the writ petition  have been produced.  The Receiver had filed an affidavit on 16.5.1974  in the High Court of Allahabad in which prayer was made to vacate the  interim order of stay.

On behalf of respondent plaintiff, reliance is placed on the  order-sheet recorded in the writ petition on 29.7.1974.  It reads thus:-  

’Hon. Gulati J. 29.7.1974.               ’Application dated 17.3.1974 allowed.  List the writ for hearing on 16.9.1974.’  

Learned counsel for the respondent submitted that in the above  quoted order, the date of the application mentioned as 17.3.1974  should be correctly read as 17.5.1974 as according to him the hand-  written figure 3 showing the month should be read as 5. We find that  nothing turns on the fact whether the application which was allowed on  29.7.1974 was of date 17.3.1974 or 17.5.1974.  After 29.7.1974, the  writ petition stood adjourned to several dates for hearing. The order- sheet of 22.5.1976 reads thus :-           

’Hon. Sapru J.,

22.5.1976 ’An application to vacate the stay order has been  filed on 10.5.1976. A counter affidavit has been filed  within three weeks. The rejoinder affidavit may be filed  by 07th of July, 1976. List it for orders on 08.7.1976.’  

Office Report dated 07.07.1976 reads thus :- Misc. 5657/76 dated 10.5.76 (to vacate stay)

In compliance of court’s order dated 20.5.1976, neither counter nor  rejoinder affidavit has been filed. Put up for further orders.                  

On 08.7.1976, as directed earlier, the case was listed before  the Division Bench which recorded the following order :- ’Hon. Yashoda Nandan J., Hon. H. N. Seth J.,  

8.7.1976 ’We are informed that the application for vacating the stay  order is part-heard before a Bench consisting of Hon. C.P.S. Singh and  Hon. Mahrotra JJ. List this application before the bench concerned at  an early date.’

       From the above quoted subsequent orders, it appears that the  parties were repeatedly taking time to file additional pleadings and  counters but no orders on application for vacating stay was passed.  The writ petition was placed before various benches between July,  1997 to April, 1979. The writ petition challenging the validity of the  Ordinance/Act was dismissed on 3.5.1979 which can be said to be the

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event whereupon the interim order of stay of the Ordinance/Act  passed on 09.7.1971 stood automatically vacated.  

From the resume of the above facts gathered out from the  photocopies of the proceedings of the writ petition, the fact which  conclusively emerges is that the conditional interim stay granted on  9.7.1971 in the writ petition challenging constitutional validity of the  Ordinance/Act stood vacated only on the final dismissal of the writ  petition on 03.5.1979. As is sought to be projected on behalf of the  respondent, the stay was not vacated on 29.7.1974. On that date,  some other application dated 17.3.1974 (details of which are not clear  from the proceedings of the writ petition) happened to be allowed. The  further proceedings in the writ petition clearly go to show that the  application for vacating stay remained pending on 22.5.1976 and  08.7.1976.  It was never decided during pendency of the writ petition.  The stay order stood vacated only when judgment was delivered on  03.5.1979 and the writ petition questioning the validity of the  Ordinance/Act was dismissed.  

       On these facts culled out from the proceedings of the writ  petition, it is clear that Receiver entered into alleged contract for  Supply of agreed quantities of sugar to the plaintiff respondent on  2.2.1979 and 9.2.1979 when stay order dated 9-7-1971 passed in the  writ petition was in operation.  

       Next, we have to consider what is the legal effect of the order of  stay passed by the High Court in the writ petition on 09.7.1971. To  ascertain the legal effect of the stay order passed in writ petition, it is  necessary to reproduce its contents and examine it critically.  

O R D E R

Issue notice.  

Till further orders of this Court, the operation of U.P.  Ordinance No. 13 of  1971 shall remain stayed so far as the  Receiver is concerned. The status quo, as on July 2, 1971, shall  be restored and the petitioner company which admittedly, was  running the mills on that date, will be put back in possession.  This order will, however, not affect any other proceedings pending  and any other orders that may be passed by any competent  court or authority hereafter. This order will be further subject to  the following condition:-  

1.      The Receiver shall made arrangements for the off season  repairs of the machinery etc. and if he takes advances from  Bank for this purpose, final orders regarding repayment of the  same would be passed at the time of the final disposal of the  writ petition.  

2.      The amount of money to be spent on the repairs shall not  exceed the average amount spent in the last three years.  

3.      The Receiver  is restrained from removing or disposing of any  property of the undertaking other than sugar, molasses  and waste products.  

4.      The  Receiver shall maintain the plant and machinery in good  repairs to ensure the satisfactory running of the factory in the  coming crushing season. The Collector, Deoria, shall, however,  have free access to the factory and will  be consulted by the   receiver in matters of management. It will be open to the  Collector to prepare such inventory as he desires. If an  inventory is prepared, the Collector shall supply a copy thereof  to the Receiver.

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5.      The Receiver shall not create any long term or unduly heavy  liabilities on the property including the mortgage of fixed  assets; any loans that he may raise shall be only for the  purpose of capital investment or working capital of the  undertaking concerned.  

6.      The Receiver shall make no changes in the terms and  conditions of any employee, except with the previous  permission of this Court.  

       Copies of this order may be supplied to the counsel for the  parties on payment of usual charges.                                                              [Emphasis supplied]

       From the terms and conditions of the above quoted order of stay  passed on 9-7-1971, what seems to us is that the operation of the  impugned Ordinance/Act was partially stayed on specified conditions to  regulate the power of the Receiver which was already managing the  Sugar Mill under section 279(1)(g) read with section 286A of the Act of  1950. The legal effect of the order of stay (quoted above) was that the  Receiver which was appointed under the Act of 1950, was to continue  in management of the Mill on the conditions imposed by the High  Court.  From term no. 3 in the stay order, it is clear that the  Receiver  had only power to carry on day-to-day business of the Sugar Mill  and  for that purpose, to sell sugar, molasses and waste products.  The  Receiver, when  entered into the alleged contract in February, 1979 to  supply sugar to the plaintiff respondent was acting as a statutory  Receiver  who was allowed with added conditions to continue in  management of the Sugar Mill by the High Court in accordance with  section 279(1)(g) and Section 286-A of the Act of 1950.  Under the  terms of the stay order, the status-quo as existing on 2.7.1971 i.e. a  day before the ’appointed day’ was restored and the erstwhile owner  was directed to be put back in possession of the Sugar Mill. The de  jure possession of the Sugar Mill was thus restored to the erstwhile  owner but de facto possession on terms and conditions contained in  the order of stay was allowed to be retained by the  Receiver with right  to  manage the Sugar Mill.           The next legal question that arises is:  what is the legal effect of  vacation of the order of stay on ultimate dismissal of the writ petition  on 3.5.1979?  

       The other related question is : what was the position of the  Receiver who was managing the Sugar Mill? Whether he was  representing the erstwhile owner or the Corporation or he was  representing none of them but was representing the Collector who had  appointed him under the Act of 1950? For the aforesaid questions, a  brief survey of the provisions of the Ordinance/Act and the Act of 1950  would be necessary.  

       The Act of 1950 prescribes appointment of Receiver on the  property of the defaulter as one of the modes of recovery of dues as  arrears of land revenue.  Section 279 (1)(g) reads as under :-  "Section 279.  Procedure for recovery of an arrear of land revenue.- (1) An arrear of land revenue may be recovered by any one or more of  the following processes : .............. .............. (g) by appointing a receiver of any property, moveable or immovable  of the defaulter.  

       Section 286A of the Act of 1950 is the other relevant Section  which empowers the Collector to appoint a Receiver for recovery of

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dues as arrears of land. It reads as under :-  "Section 286-A. Appointment of Receiver.-(1) Notwithstanding  anything in this Act when [an arrears of revenue or any other sum  recoverable as an arrear of revenue] is due, the Collector, may in  addition to or instead of any of the processes hereinbefore specified,  by order \026  

a)      appoint, for such period as he may deem fit, a receiver  of any  moveable or immovable property of the defaulter;

b)      remove any person from the possession or custody of the  property;

c)      commit the same to the possession, custody of management of  the receiver ;  

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 defaulter himself has or such of those  powers as the Collector thinks fit."  

As the Statement of Objects and Reasons of the  Ordinance/Act indicates that the legislation is brought into force by the  State to acquire such Sugar Mills where because of the  mismanagement of the Mills, serious problems are faced by the cane- growers and the labour with consequential adverse impact on the  general economy of the area where the mills are situated. Under the  Act, the scheduled Sugar Mills or undertakings are acquired by the  State which stand transferred to and vested in the Corporation from  the ’appointed day’.   Section 2(a) & (c) of the Act define ’appointed  day’ and ’Corporation’ respectively.  Section 2(a) & (c) and section 3 of  the Act read as under:-  Section 2. Definition. \026 In this Act, unless the context otherwise  requires \026  

(a)     ’appointed day’ in relation to the undertakings specified in  Schedule I means July 3, 1971 and in relation to the  undertakings specified in Schedule II means October 28, 1984.  (b)     ................. (c)     "Corporation" means the Uttar Pradesh State Sugar Corporation  Limited, a Government Company within the meaning of section  617 of the Companies Act, 1956 (Act I of 1956).  (d)     .....................

Section 3. Vesting. \026 On the appointed day, every scheduled  undertaking shall, by virtue of this Act, stand and be deemed to have  stood transferred to and vest and be deemed to have vested in the  Corporation free from any debt, mortgage, charge or other  encumbrance or lien, trust or similar obligation (excepting any lien or  other obligation in respect of any advance on the security of any sugar  stock or other stock-in-trade) attaching to the undertaking :  

Provided that any such debt, mortgage charge or other encumbrance  or lien, trust or similar obligation shall attach to the compensation  referred to in section 7, in accordance with the provisions of that  section, in substitution  for the undertaking :

Provided further that a debt, mortgage, charge or other encumbrance  or lien, trust or similar obligation created after the scheduled  undertaking or any property or asset comprised therein had been  attached, or a receiver appointed over it, in any proceedings for

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realization of any tax or cess or other dues recoverable as arrears of  revenue shall be void as against all claims for dues recoverable as  arrears of revenue.  

       One of the consequences of vesting of the sugar mill in the  Corporation under section 3 of the Act, as provided in section 4(a), is  that any receiver appointed by the court on the scheduled  undertaking/Sugar Mill shall cease to function from the appointed day.  Section 4(a) of the Act reads thus :-    

"Section 4. Certain consequences of vesting. \026 Notwithstanding  anything contained in any other law for the time being in force, and  save as otherwise provided in this Act, on and from the appointed  day\026  

(a)     every appointment of  Receiver over any scheduled  undertaking by any court shall cease;   (b)     --------------------" [Emphasis supplied]

       The aforesaid provision refers to any  ’Receiver appointed by any  the court’ and not a  Receiver appointed by the Collector under the  provisions of the Act of 1950. The mode of delivery of possession of  the acquired Sugar Mill is contained in section 5. It provides first  delivery of possession of the Sugar Mill by the owner to the Collector  who shall prepare inventory of property, assets, books of accounts,  registers etc., and thereupon shall deliver the possession of the  undertaking/Sugar Mill to the Corporation. Section 5 of the Act reads  thus :-  "Section 5. Duty to deliver possession. (1) Where any scheduled  undertaking has vested in the Corporation under section 3, every  person in whose possession or custody or under whose control any  property or asset, book of account, register or other document  comprised in that undertaking may be, shall forthwith deliver the same  to the Collector.  

(2)     The Collector may take all necessary steps for securing  possession of any such property or asset, book of account, register or  document, and in particular, may use or cause to be used such force  as may be necessary.  

(3)     The Collector shall prepare an inventory of all properties,  assets, books of account, registers and documents taken possession of  under this section, so far as practicable in the presence of the occupier  or his authorized representative.  

(4)     Deliver of possession to the Collector under this section shall  amount to delivery of possession to the Corporation.  

(5)     Without prejudice to the provisions of the foregoing sub- sections, any person referred to in sub-section (1) shall be liable to  account to the corporation for any such property or asset, book of  account, register or document which he has failed to deliver to the  Collector.  

       The entry at Serial No. 4 in Column Nos. 2 & 3 of  Schedule I  attached to the Act, shows the Sugar Mill named  Maheshwari Khetan  Sugar Mills (Pvt.) Ltd., Ramkola, District Deoria stands acquired and  vested in the Corporation on the appointed day on payment of fixed  compensation of Rs. 11,00,000/-.  

       From the aforesaid provisions of the Act of 1950 and the  Ordinance/Act, it is clear that the Receiver who was in the  management of the Sugar Mill on the ’appointed day’ was not a  

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Receiver appointed by any Court. He was a Receiver appointed by the  Collector under the Act of 1950 and on the vesting of the Sugar Mill on  the appointed date 3.7.1971, was in possession and management of  the Sugar Mill not as an agent either of the erstwhile Sugar Mill owner  or the corporation. He was a statutory Receiver appointed under  section 279(1)(g) read with section 286-A of the Act of 1950 for the  purpose of recovery of dues of the cane-growers in the manner as  arrears of land revenue.  He was allowed to continue in management  of the Sugar Mill by the High Court on the terms and conditions  imposed in the order of stay passed during pendency of the writ  petition.

       The liabilities incurred by a statutory Receiver in the course of  management of the Sugar Mill are liabilities attached to assets or  properties of the Sugar Mill because neither the erstwhile owner nor  the Corporation, which later acquired the Sugar Mill, was responsible  for the alleged losses or damages caused to the plaintiff by the alleged  breach of contract committed by the receiver in non-supply of the  quantity of sugar.  

The general rule is that a  receiver takes the rights, causes, and  remedies which were in the individual or estate whose  receiver he is,  or which were available to those whose interests he was appointed to  represent. Ordinarily none of the parties to the suit in which a   receiver was appointed is personally responsible for losses and  liabilities incurred in the administration of the receivership, but, except  as the  receiver may be personally liable therefor, such losses and  liabilities fall on the estate. [See statement of law in Corpus Juris Secundum  Vol.75 Articles 325 & 187 at pages 833 and 1000, respectively]

       In the present suit, the  Receiver has not been impleaded as a  party-defendant and there is  no claim against him for any misconduct  committed by him in management of the Sugar Mill.  He is not alleged  to be personally liable for the alleged breach of contract.  The liability,  therefore, towards the alleged loss or damage arising from  breach of  contract attaches to the Sugar Mill and can be allowed to  be realized  from the person in whom the title of Sugar Mill stands vested.

A  statutory Receiver is merely the legal representative of the  property placed in his hands as such.  In determining his liability the  court will only determine the liability of the property.  It is not material  whether the liability existed before or has accrued since his  appointment.  A contractual liability arising against the receiver during  the course of management of the property for acts or omissions  committed by him for the benefit of the property, is not merely   enforceable against the receiver but is a liability attached to the  property in his receivership, which can be recovered from the property  and through the person in whom the property vests. [See Statement of  law in Words and Phrases, Permanent Edition Vol.36 at page 742 from the Heading \026  Representative of property]                  As is the admitted position, on the coming into force of the  Ordinance, the Sugar Mill stood transferred to and vested in the  Corporation on the appointed date 3.7.1971. On that date, the  Receiver appointed by the Collector under the provisions of 1950 Act  was already holding custody of the Sugar Mill and was managing the  same.   During course of the Writ Petition filed by the owner of the  Sugar Mill in which the constitutional validity of the ordinance/Act was  challenged, a stay order, on the limited terms and conditions, was  passed on 9.7.1971.  The terms and conditions of the order  reproduced above, restored the de jure possession of the Sugar Mill to  the erstwhile owner but de facto possession and management of the  Sugar Mill was allowed to remain undisturbed with the receiver  although with limited powers to him. The Receiver was specifically

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allowed in accordance with term No.3 of the stay order to sell sugar,  molasses and other waste products.  By virtue of the order of stay  passed by the High Court, during pendency of the writ petition, the  Receiver appointed under the Act of 1950, continued to manage the  Sugar Mill subject to the ultimate result of the writ petition.  The Writ  Petition ultimately came to be dismissed on 3.5.1979 and the stay  order containing the terms and conditions (quoted above) passed on  9.7.1971 stood automatically vacated. The natural consequence was  restoration of full operation of the provisions of the ordinance/Act as  was originally passed. In accordance with Section 3 of the Act, the  Sugar Mill stood transferred and vested in the Corporation from the  appointed date 3.7.1971.  On vacation of the stay order with effect  from the appointed day-3.7.1971, the operation of the Ordinance/Act  was revived.  The liability arising from breach of contract committed  by the Receiver was not of the Corporation. It was an obligation  attached to the property of the Sugar Mill which was under the  management of the  Receiver, initially under  the 1950 Act and  continued under the order of stay passed by the High Court.  Since the  liability towards breach of contract was attached to the sugar mill  under the management of the Receiver, the Corporation in whom title  of the sugar mill stands  vested  under  Section  3  of  the                Act cannot avoid the liability - it being a burden on the said property  and recoverable from it.  

       It is of no importance or consequence that actual or de facto  possession of the property was received by the Corporation under a  formal order of Collector, Deoria on 23.5.1979, only after dismissal of  the Writ Petition on 3.5.1979 and consequent discharge of the  Receiver.

       The Ordinance was stayed by the High Court to restore status  quo ante existing on 2.7.1971 that is a day prior to appointed date  3.7.1971. But on the dismissal of writ petition and automatic vacation  of the stay order of the High Court, the operation of the Ordinance/Act  with all legal consequences flowing from the said law stood restored  from the appointed date. The trial court and the High Court are  perfectly right in holding in their judgments that the order of stay  passed in writ petition could have no effect of postponing the  ’appointed day; statutorily fixed under section 3 of the Ordinance/Act.  

       The argument advanced on behalf of the corporation cannot be  accepted that the Sugar Mill came to be transferred to the Corporation  only when its actual possession was formally obtained from the  Collector, Deoria on 23.5.1979 after dismissal of the writ petition.  

       The legal status and position of a receiver appointed by the  Court and a Receiver appointed under in a Statute are different. In the  instant case, the receiver appointed under the Act of 1950 and  continued by the High Court on terms and conditions contained in the  stay order during pendency of the writ petition, was a statutory  receiver and his rights and liabilities were attached to the property for  the management of which he was appointed. The receiver was not an  agent of either of the parties.  For his acts and omissions, a third party  could raise a claim against the party in whom the property stood  vested and to which the liability was attached.  

The suits were filed by the plaintiff claiming losses and damages  for breach of contract committed by the receiver within the prescribed  period of limitation. On the date of filing of the suits, the receiver was  not in possession of the Sugar Mill as the actual possession of the  Sugar Mill had been restored to the Corporation. It was, therefore, not  necessary for the plaintiff to implead the receiver as a party to the  suits. The Receiver could not be made personally liable for his acts and  omissions in the course of management of the Sugar Mill and which  are not alleged to be mala fide.  

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       Our conclusion, therefore, is that as none of the parties i.e. the  erstwhile owner or the Corporation is personally liable for the breach of  contract committed by the receiver in the course of management of  the Sugar Mill, the contractual liability of the receiver towards the  plaintiff is recoverable from the property of the Sugar Mill, and  therefore, through the Corporation in whom the property stands  vested under the Act.

       As a result of the detailed discussion of facts and law as above,  both the appeals stand dismissed with costs and the decrees granted  by the trial court are hereby confirmed.