TaxTMI 
TaxTMI 
1977 (9) TMI 121
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.... law for the sake of certainty, we have chosen to make a short speaking order. The neat little legal point that arises is this : Can the court appointing a receiver to take charge of properties, grant leave to continue a suit against him when a third. party wants to prosecute such action initiated without such permission ? If so, what are the guidelines for grant of such leave ? The appellant is the plaintiff in a suit instituted by him against respondent 1 (defendant in the suit) who is a receiver appointed by the court under O.40,, r. 1 C.P.C. Briefly set out, the case of the plaintiff is that he had entered into a contract with the Receiver defendant relating to a coal mine which had come within his Receivership. While he was working ....
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....ed, the prayer fog permission to continue the same does not arise as it is infructuous ... Rejected. A revision to the High Court did not improve matters because the application was dismissed in limine, with the rather innocuously wise statement : "The law will have its own course and if in law the petitioner need not have taken the permission of the court for continuance of the title suit, no observation made by the learned Subordinate Judge can arm the petitioner." In our view, when any proceeding comes before the court for adjudication it is desirable to decide the point instead of mystyfying the situation by avoiding a clear-cut disposal. A stitch in time saves nine. The laconic affirmance by the High Court of the trial cour....
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....tion to grant leave is undoubted and inherent, but not based on blackletter law in the sense of enacted law. Any litigative disturbance of the court's. possession without its permission amounts to contempt of its authority; and the wages of contempt of court in this jurisdiction may well be voidability of the whole proceeding. Equally clearly, prior permission of the court appointing the Receiver is not a condition precedent to the enforcement of the cause of action. Nor is it so grave a vice that later leave sought and got before the decree has been passed will not purge it. If, before the suit terminates the relevant court is moved and permission to sue or to prosecute further is granted, the requirement of law is fulfilled. Of course....
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....requires a party to take the leave of the Court to sue a receiver. The rule has come down to us as a part of the rules of equity, binding upon all courts of Justice in this country. It is a rule based upon public policy which requires that when the Court has assumed possession of a property in the interest of the litigants before it, the authority of the Court is not to be obstructed by suits designed to disturb the possession of the Court. The institution of such suits is in the eye of the law a contempt of the authority of the Court, and therefore, the party contemplating such a suit is required to take the leave of the Court so as to absolve himself from that charge. The grant of such leave is made not in exercise of any power conferred ....
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....as cured by subsequent leave." (Mulla, Vol. 11, pp. 1533-34, 13th Edn. CPC) Since the principle is based on contempt of court, statutory follow up. actions are carved out as exceptions (suits under 0.21, 0.63). Likewise, where no relief is claimed against the receiver. Similarly, whether the receiver was appointed in a collusive suit or the order, itself was unjustified are beside the point. The property being in custodian legis, the court's leave, liberally granted is needed. It is the court appointing the receiver that can grant leave. If a suit prosecuted without such leave culminates in a decree it is liable to be set aside. Once the jurisprudential root of the law is grasped, that the rule is merely to prevent contempt, the many....