U.P.
State Sugar Corporation and Another Vs. M/S Mahalchand M. Kothari & Ors [2004]
Insc 662 (29 October 2004)
M. Dharmadhikari & P. P. Naolekar 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 '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 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 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.
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 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 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. In this Act, unless the context
otherwise requires (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. 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 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. 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 (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 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
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 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.
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.
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