IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 07TH DAY OF JANUARY, 2019 BEFORE THE HON’BLE MR.JUSTICE K.SOMASHEKAR MISCELLANEOUS FIRST APPEAL NO.3648 OF 2016 (CPC) BETWEEN:
1. GULABI T SHETTY AGED ABOUT 93 YEARS, W/O K THIMMAPPA SHETTY R/AT GULABI SADANA, HARDALLI MANDALLI VILLAGE, KUNDAPURA TALUK, POST HARDALLI MANDALLI UDUPI DISTRICT – 576 101.
2. H VENKATARAMANA SHETTY AGED ABOUT 55 YEARS, S/O K THIMMAPPA SHETTY R/AT ANASUYA SALIKERI OF VARAMBALLI VILLAGE, POST VARAMBALLI, UDUPI DISTRICT – 576 101. ...APPELLANTS (BY SRI SAMPAT ANAND SHETTY, ADVOCATE) AND:
1. MOHINI S SHETTY AGED ABOUT 54 YEARS, W/O H SHEKAR SHETTY , 2. SHAMITHA S SHETTY AGED ABOUT 29 YEARS, D/O H SHEKAR SHETTY 3. SHABARI S SHETTY AGED ABOUT 20 YEARS, S/O H SHEKAR SHETTY 4. SHISHIR S SHETTY AGED ABOUT 20 YEARS, S/O H SHEKAR SHETTY RESPONDENTS NO.1 TO 4 ARE RESIDING AT BRAHMAVARA OF CHANTHAR VILLAGE, UDUPI TALUK, POST BRAHMAVARA, UDUPI DISTRICT – 576 101. ...RESPONDENTS (BY SRI PRASANNA.V.R., ADVOCATE FOR R1 & R4;
R2 & R3 are served) THIS MFA FILED U/S 104 R/W ORDER 43 RULE 1(s) OF CPC, AGAINST THE ORDER DATED 16.01.2016 PASSED ON I.A.NO.6 IN O.S.NO.5/2008 ON THE FILE OF THE PRINCIPAL SENIOR CIVIL JUDGE, UDUPI, DISMISSING I.A.NO.6 FOR APPOINTMENT OF RECEIVER.
THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
J U D G M E N T Heard the learned counsel for the appellants and the learned counsel for the respondents.
2. This appeal has been preferred by the appellants against the order dated 16.01.2016 passed by the Court of Principal Senior Civil Judge, Udupi on I.A.No.6 in O.S.No.5 of 2008, wherein the trial court refused to entertain the application filed by the appellants under Sections 94(b), 151 and Order XL, Rule 1 of the Code of Civil Procedure, 1908 seeking appointment of receiver relating to plaint ‘A’ schedule properties depicted therein.
3. The suit is filed by the plaintiffs against the defendants in respect of the suit schedule properties. The first plaintiff is the land owner and the second plaintiff is a land owner and a hotelier. The first plaintiff is residing at ‘Gulabi Sadana’, Hardalli-Mandalli Village, Kundapura Taluk, Udupi District. The second plaintiff is residing at ‘Anasuya’ in Salikeri of Varamballi Village, Udupi Taluk and District. The subject matter of the suit is that one H.Shekhar Shetty, husband of the first defendant and father of the other defendants, son of the first plaintiff and the elder brother of the second plaintiff died intestate on 25.01.2007 leaving behind the first plaintiff and the defendants as his Class I heirs under the provisions of the Hindu Succession Act, 1956. It is further the case of the plaintiffs that the deceased and the second plaintiff were running a partnership firm under the name and style of ‘Kubera Bar and Restaurant’ in Brahmavara of Chanthar Village, Udupi Taluk from 01.08.1986 till 25.01.2007 when the aforesaid deceased died. On that day, the said partnership firm became dissolved by operation of law. It is further stated in the plaint that right from the beginning, the business of the firm was running at a profit, the daily turnover being around Rs.3,000/- initially. It is further stated that the plaintiffs before purchasing the aforesaid property under the registered sale deed dated 14.10.1996, the deceased had acquired Sy.No.131/4 measuring 43 cents of Chanthar Village of Udupi Taluk with a building standing thereon with the funds of the partnership and for its benefit under the registered sale deed dated 13.01.1993 executed in his favour by one Mrs.Elizabeth Mascarenhas and her children. The deceased is also said purchased some immovable properties in Chanthar Village, Udupi Taluk for the benefit of and with funds of the firm in the name of his wife Mohini S. Shetty / first defendant, under registered sale deeds dated 13.04.1989 and 11.05.1990 for consideration of Rs.35,000/- and Rs.15,000/- respectively. They are said to be contiguous properties with a tiled building standing thereon. It is stated that in the year 1992, the partnership firm had opened a shop in the said building under the name and style of ‘Kubera Enterprises’ dealing with Naveen Ceramic Tiles, Cuddapah stones, granite stones, glass, plywood, sunmica, etc. and that right from the beginning, the licence of the said business which is said to be an extension of ‘Kubera Bar and Restaurant’ is and has been standing in the name of the second plaintiff.
4. In the suit in O.S.No.5/2008, the plaintiffs / appellants filed an application under Order XL, Rule 1 of CPC seeking to appoint a Receiver of the property comprised in plaint ‘A’ schedule properties and to commit the same to the possession, custody and management of the said Receiver. However, the court below proceeded to dismiss the said application I.A.No.VI. Aggrieved by the said order, the present appeal has been preferred by the plaintiffs / appellants seeking to set aside the judgment and order dated 16.01.2016 passed by the Prl. Senior Civil Judge, Udupi on I.A.No.VI in O.S.No.5/2008 and consequently to allow the appeal.
5. In the background of the suit filed by the plaintiffs against the defendants, the counsel for the appellants has taken me through the reasons assigned in I.A.No.VI filed by the plaintiffs seeking appointment of receiver for the property referred to in the plaint ‘A’ schedule property for proper management, or direct the defendant to deposit Rs.50,000/- every month relating to the schedule ‘D’ properties depicted in the suit schedule, that is ‘Kubera Bar and Restaurant’, till the final disposal of the suit.
The learned counsel for the appellant contends that the court below has failed to appreciate the contentions of the second appellant / second plaintiff in the affidavit filed by him in support of the application seeking appointment of receiver. Though the second appellant had invested a sum of Rs.25,000/- as initial capital along with deceased Shekhar Shetty by mutually agreeing amongst them to share the profits of the firm in equal share, the said fact has been simply overlooked and ignored by the court below.
Though the second appellant had an equal right in the said ‘Kubera Bar and Restaurant’ in view of an oral partnership entered into with his brother Shekar Shetty, the court below has erred in rejecting his claim. Merely because the defendants had disputed the existence of partnership firm in her written statement, the same cannot by itself have a bearing on the consideration of the appointment of a receiver. On all these grounds, the learned counsel for the appellant seeks to allow the appeal and set aside the order dated 16.01.2016 passed on I.A.No.VI in O.S.No.5/2008.
6. The learned counsel for the respondent contends that the second defendant had filed a counter to the application filed by the appellant / plaintiff seeking appointment of a receiver relating to ‘Kubera Bar and Restaurant’ contending that the second plaintiff was not in any way related to the said bar and restaurant and as such, there was no oral partnership between the two brothers. In fact, the second plaintiff’s marriage took place on 20.04.1986 and after his marriage, he had gone over to Baroda to work along with his brother-in-law Bhaskara Shetty. After one year he came back to the village and was assisting his father in cultivating their agricultural till the year 1994. Then in the year 1994, he had started granite stone business in the name and style of “Kubera Enterprises” with monetary assistance from his brother Shekar Shetty to a tune of Rs.4,00,000/- and the property standing in the name of the first respondent was also given to the second plaintiff on a nominal rent of Rs.100/- per month. That as on 1.8.1986, the second plaintiff did not have any income to enter into a partnership with the deceased Shekhar Shetty. But Shekhar Shetty had started the said business with the financial assistance of the first respondent’s father. Hence, at no point of time, the second plaintiff was a partner of deceased Shekhar Shetty and ‘Kubera Bar and Restaurant’ was never a partnership firm. All the properties which were purchased in the name of the first respondent were self- acquired properties and hence, there is no question of appointment of a receiver to manage the said ‘Kubera Bar and Restaurant’.
In view of these facts, the learned counsel submits that the Trial Court has rightly dismissed the application of the plaintiffs in view of the fact that a partnership never existed between the parties and hence, the order of the court below rejecting I.A.VI for appointment of a receiver to manage the property, does not require any interference by this court.
7. On hearing the learned counsel for the parties and on perusing the records, I find that as pointed out by the court below, there never existed a partnership between the brothers namely deceased Shekhar Shetty and H. Venkataramana Shetty. There is not a piece of evidence available before court to prove the fact that a partnership existed between the brothers.
A co-ordinate bench of this Court, in the case in SREENIVAS LAD vs. EKANATH AND OTHERS (AIR 2005 KAR 405), while dealing with the power to appoint receiver, has opined thus:
“The power to appoint a Receiver is discretionary and the discretion has to be used in accordance with the principles on which judicial discretion must be exercised. The phrase “just and convenient” appearing in Order XL Rule 1 CPC means that the Court should appoint a receiver for the protection of the property or the prevention of injury, according to legal principles and not because the court simply thinks convenient to do so. The phrase would denote what is practicable and what the interests of justice require. The discretion exercised should be sound and reasonable. Powers of the Court under Order XL Rule 1 of the CPC is to be exercised to advance the cause of justice and what is “just and convenient” depends upon the nature of the claim and the surrounding circumstances, and in a manner with care, caution and restrain so as to subserve the ends of justice.”
Further, the Apex Court in the case of S. SALEEMA BI vs. S. PYARI BEGUM AND ANOTHER ((2000) 9 SCC 560) in a similar case seeking appointment of receiver, has opined thus:
“3. We have heard learned counsel and perused the judgment. We find that the defendant is in physical possession of the property in dispute. The receiver can only be appointed when it is just and convenient and also when there is a prima facie case in favour of the plaintiff – respondent and the case calls for taking of urgent measure like appointment of receiver…. ”
As opined by the Apex Court and this court as well, I do not find any prima facie case in favour of the plaintiffs / appellants calling for appointment of receiver in the case on hand. Hence, I find that the order passed by the court below dismissing I.A.No.VI seeking appointment of receiver, does not call for any interference.
However, the Trial Court while dismissing I.A.No.VI, has directed the first defendant / first respondent to maintain proper account of the business from the date of the suit till the disposal of the suit for verification through an auditor.
Hence, this appeal is disposed of with the observation that the plaintiffs / appellants have recourse to filing an application under Order 20 Rule 12 CPC before the Trial Court for mesne profits, if they so desire. However, the observations made in this appeal will not come in the way of the Trial Court while disposing of the main appeal, i.e., O.S.No.5/2008 on merits.
SD/- JUDGE DH/ KS