- (1.) The background of the case, relevant to appreciate the point in controversy, may be, briefly, stated as under :-
(2.) By a notification the Punjab Government granted on April 24, 1935 a license for the supply of electricity to the town of Sirsa to the Lahore Electric Supply Company. The life of the said license was thirty years and the Government of Punjab had the option to purchase the electric supply undertaking after expiry of thirty years. The said license was purchased with the permission of the Governor of Punjab on December 10, 1945 by a Firm under the name and style of Sirsa Electric Supply Company (hereinafter called the Company) of which Shri Lal Chand Minda was a partner from the Lahore Electric Supply Company. Shri Minda continued to operate the license on behalf of the Company. By the Indian Electricity Amendment Act, 1959, the power to purchase was given by the Government of Punjab to the Punjab State Electricity Board and the said Board issued on December 24, 1963 notice under Section 6(1) (hereinafter called the notice) of the Indian Electricity Act 1910, intimating that it would purchase the undertaking and required the Company to sell the same on the expiry of the period of license i.e. on midnight falling between April 23/24, 1965. Shri Minda impeached the validity of the notice in a suit filed on April 15, 1965 and claimed declarations to the effect that the notice was invalid and ultra vires and that the license could be operated for another period of twenty years. He further sought injunction restraining the Punjab State Electricity Board form exercising the right to purchase the undertaking or to interfere with possession of the same by the Company. The suit was resisted by the Punjab Electricity Board and later on by Haryana State Electricity Board (hereinafter called the Board). In the aforesaid suit the trial Court appointed the Punjab Electricity Board as Receiver. Shri Minda questioned the appointment of the said Board as Receiver in appeal which was allowed by this Court on October 3, 1965. An appeal under Clause X of the Letters Patent Appeal was filed wherein Shri Minda was appointed as Receiver in place of the Punjab State Electricity Board and the suit had been transferred to this Court on the side of its original jurisdiction. Shri Minda continued to work as Receiver. The suit was dismissed on February 8, 1972 and the appointment of Shri Minda as Receiver also terminated with the dismissal of the suit. The Board then moved an application under Order 40, Rule 4 read with Section 151 of the Civil Procedure Code (hereinafter referred to as the Code) claiming Rs. 12,34,148,09 paise besides Rs. 92,576.63 paise lying in the banks and Municipal Committee, from Shri Minda on various and lengthy allegations, the gist of which is that he had caused loss to the estate to the extent of the said amount by wilful default and negligence. The aforesaid application was resisted by Shri Minda. Though the background of the case was admitted yet he controverted the allegations made by the Board charging him with the wilful default and negligence in causing loss to the estate and pleaded inter alia that the application made by the Board was not maintainable any by virtue of the conditions of the license the dispute should be referred to arbitration. Hence, the following issues were settled on September 25, 1973 : 1. Whether the present petition is no competent in view of the preliminary objections raised in the written statement of respondent 1 ? 2. Whether respondent No. 1 can claim arbitration with regard to the present dispute by virtue of any condition in the license ? 3. What amounts, if any, are due to the petitioner from respondent 1 ? 4. Whether respondent 1 maintained proper and regular accounts for the period during which he remained Receiver of the Company ? If not, to what effect ? 5. Relief. Later on, the following two issues were framed on August 30, 1974 : 1. Whether the relief prayed for in a petition under Order 40, Rule 3, Civil Procedure Code, cannot be properly adjudicated upon in this Court ? (Onus on the respondents). 2. Whether the respondent can claim that the dispute should be referred for arbitration ? (Onus on the respondents). and the same were treated preliminary and were decided against Shri Minda. Issue No. 1 framed on September 25, 1973.
(3.) This issue is identical with issue No. 1 which was framed on August 30, 1974 and had been decided against Shri Minda on February 14, 1975. Therefore, this issue should be deemed to have been decided against him. Otherwise too, Order 40, Rule 3 of the Code which relates to the duties of a Receiver provides in Clause (d) that he (Receiver) shall be responsible for any loss occasioned to the property by his wilful default or gross negligence, and Rule 4 of the said Order 40 provides in clause (c) that where a Receiver occasions loss to the property by his wilful default or gross negligence, the Court may direct his property to be attached and may sell such property, and may apply the proceeds to make good any amount found to be due from him or any loss occasioned by him. Therefore, the provisions contained in the said two rules of Order 40 of the Code, when read together, make it clear that the Court which appointed the Receiver is entitled to enquire into the question of the liability of the Receiver for his wilful default or gross negligence. Therefore, it cannot be maintained that a suit is the only remedy for determination of the aforesaid liability of the Receiver and, as such, the contention that this application is incompetent, is not well founded and deserves rejection. So, this issue is decided against Shri Minda. Issue No. 2 framed on September 25, 1973 :;