- (1.) THIS application under Order 40 Rule 1 C. P. C. has been filed on 17. 8. 2000 by and on behalf of the appellant for appointment of receiver in respect of the property and business of the firm M/s. Modern Auto Services, Bharatpur.
(2.) BRIEFLY stated, the relevant fact are that the appellants- plaintiffs instituted a suit for dissolution of partnership firm and rendition of accounts which was decreed by the trial court vide judgment and decree dated 13. 8. 1997 directing appointment of the receiver. The appeal filed by respondent No. 1 Khubi Ram was allowed on 23. 5. 2000 and the aforesaid judgment and decree passed by the trial court was setaside. So, the present second appeal was filed which has been admitted on 25. 8. 2000. It has been stated in the application that the appellant partner is a in the firm M/s. Modern Auto Service, Bharatpur and is, therefore, entitled to look after and manage its business, assets and affairs, Respondent No. 1 has stopped giving him accounts of the firm and has started to bring up hurdles in his taking part in the activities of the firm. He served him with a notice to furnish account s of the firm, but to no avail. Instead, he falsely alleged in the reply to the notice that the appellant had retired from the firm. He claimed himself to be the sole proprietor of the business of the firm. The trial court disbelieved the case of the respondents No. 1 and held that he never retired from the partner-ship firm and continued to be its partner with respondent No. 1 having right to take accounts, shares, profits and manage its affairs. The suit was accordingly decreed directing appointment of receiver. But the first appellate court has wrongly refersed the said judgment and decree. It has been further stated that respondent No. 1 had not given him the accounts of the business and assets of the firm for his own use. In order to protect his interests, appointment of receiver is necessary. There is danger of the property being wasted, damaged and alienated by him. he has reasonable apprehension that he may mis-appropriate the property and profits o the firm and this would not only seriously prejudice his interests, but also would cause him irreparable injury. He has, therefore, prayed that the receiver may be appointed during the pendency of the appeal on such terms as may be deemed proper by the court. Respondent No. 1 has reply strongly opposed the application. According to him the appellant has no present right to take accounts of the firm because after family settlement arrived at on 23. 4. 1985 he has become sole proprietor of the firm M/s. Modern Auto Services, Bharatpur. The dealer-ship was granted to him as is evidence from the letters Ex. A-4 to A-9 addressed to him by indian Oil Corporation Ltd. The land on which the petrol pump was installed was exclusively purchased by him through registered sale-deed as permission to install the petrol pump was also granted to him vide judgment Ex. A-10 of the Collector, Bharatpur. He has been running the petrol pump for over 17 years. He has refutted the allegations that the property and assets of the firm are in the danger of being wasted, damaged or alienated. According to him, no receiver can be and ought to be appointed specially on a running business. There is no equity in his favour. The business of the petrol pump is being run since 1985 in profits. He has, therefore, prayed for dismissal of the application. I have heard at length the learned counsel for the parties and have also perused the record as well as the authorities cited at the bar. It is an admitted fact that the partnership between the parties was at Will. The firm M/s. Modern Auto Services, Bharatpur was established in 1965 as an HUF firm with Inder Narain as its `karta'. On 1. 4. 1969 a partner-ship, firm was created with five partners namely; Inder Narain, Charan lal, Khubi Ram, Prahlad Sharma, Vasudev and Girish Chandra. It was reconstituted w. e. f. 1. 4. 1977 vide a deed of partner-ship dated 29. 10. 1977 with four partners. Vasudev was dropped from partner- ship firm and Girish Chandra was made a sleeping partner. The partnership firm was reconstituted w. e. f. 1. 4. 1983 vide partnership deed dated 28. 9. 1983 and with plaintiff and the respondent as its partners having 50:50 share. It is not in dispute that respondent No. 1 has been in possession of the business of the firm and has been running the petrol pump in question for last over 17 years. As per the audited accounts submitted by him for last 3 years in compliance of the orders of this court, the business is shown to be running in profits. The appellant-applicant has not given any particulars of the property of the firm being in danger of being wasted, damaged, transferred or alienated. It is also a patent fact that the appellant filed a similar application under Order 40 Rule 1 R/w Order 39 Rule 1 and 2 and Section 151 C. P. C. before the trial court alongwith his suit for appointment of receiver which was after hearing the parties dismissed by the trial court (ADJ No. 1, Bharatpur) on 7. 12. 1989. It appears that the suit was thereafter transferred to the court of Addl. Civil Judge (SD) cum Addl. Chief Judicial Magistrate No. 1 Bharatpur.
(3.) IT would be pertinent and useful to extract here the provisions of Rule 1 of Order 40 C. P. C. which reads as under:- 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. (2) Nothing in this rule shall authorize the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove. The contention of the learned counsel is that the second appeal having been admitted and the object and purpose of appointment of receiver is to protect and preserve the subject matter of the lis for the benefit of the parties who may ultimately be found in possession for in part or in whole and the judgment and decree passed by the first appellate court having been stated. the appellant primafacie continues to be a partner in the firm as has been held by the learned trial court and is entitled to look after and manage its affairs and to share its profit. According to him the appellant has been wrongly and unjustifiably excluded to run the business of the firm and, therefore, it is a fit case for appointment of receiver during the pendency of the second appeal. In this regard, he has placed reliance on the case of Yusuf vs. Hamidulla (1), Moti Lal vs. Badri Nath & Ors. (2), K. G. Srinivas & Ors. vs. K. G. Venkatesh & Ors. (3), Prem Prakash Kapoor vs. Gobind Ram Kapoor and Others (4) and Sudhansu Kanta vs. Manindra Nath Learned counsel for the respondent has vehemently opposed the contentions of the learned counsel and has submitted that the similar application of the appellant-plaintiff was rejected by the trial court vide order dated 7. 12. 1989 holding that he had not been able to make out a case for appointment of receiver. He has also submitted that the judgment of the learned trial court having been setaside by the learned first appellate court, it cannot be said that there is excellent primafacie case in his favour so as to justify appointment of receiver. The land on which petrol pump is installed was purchased by respondent No. 1 and the dealership was also issued to him and admittedly he was been running the business for 17 years. Admittedly, the partnership was at Will and the same stood dissolved with the family settlement dated 23. 4. 1985. He has also submitted that it is discretionary with the court to appoint a receiver and the receiver cannot be appointed on a running business. According to him the business is running in profit and there is no material to show that the respondent No. 1 has ever tried to dissipate of mis-appropriate the property of the firm. At best respondent No. 1 may be required to furnish periodical statement of accounts before this court so as to ensure that the business of the firm is being run profitably. ;