Venkateswarulu vs Krishna Murthy and Others

Iyyapu Panduranga Rao, J.—This Revision petition is directed against the order dated 28th March, 1991, allowing the I.A.493/89 in O.S.21/75 on the file of the learned Subordinate Judge, Madanapalli, The circumstances which lead for the filing of I.A.493 of 1989 are the following:

The revision petitioner and R-1 to R-6 are the owners of a Cinema Hall known as Jyothi'' theatre, situated at Madanapalli. In view of the disputes between the parties, the revision petitioner filed O.S.21/75 on the file of the learned Subordinate Judge, Madanapalli, for partition and separate possession of his 7/30th share in the properties including the Joythi theatre. Admittedly, the first respondent who is the 6th defendant in the suit is having a half share in the said property. In the suit in I.A.294/75 Sri R.Sreenivasa Sastry an advocate was appointed as Receiver to manage the entire estate. The said Receiver took possession of the Cinema Hall on 1-5-86 and in the auction held the 6th respondent figured as the highest bidder at Rs. 25,001-00 per month for the Jyothi theatre. Clause 17 of the conditions of lease permits the auction purchaser to spend certain amounts towards Projectors etc., and alleging that he spent Rs. 1,94,896-56 ps. the first respondent laid claim before the Receiver. The Receiver having examined the matter, approved a sum of Rs. 91,775-40 ps. and has not approved the balance. Aggrieved by the action of the Receiver in not approving the balance of the amount, the first respondent herein filed I.A.493/89 to ratify the entire expenditure made by him for improving the Cinema Hall in question. Having considered the matter, the learned Subordinate Judge allowed the application ratifying the total expenditure said to have been incurred by the first respondent, and held that he was entitled to recover the said amount with interest thereon at 18% per annum and permitted him to adjust the said amount out of the lease amount payable by him towards the theatre. Aggrieved by the said orders, the revision petitioner has filed this petition.

At the outset it is to be noted that the contention of the learned Counsel for the petitioner is that in the event of the first respondent seeking ratification of the amounts spent by him, he has to come up with a separate suit This submission is not correct In O.S.21/75 Sri R. Sreenivas Sastry was appointed as Receiver. He auctioned the leasehold rights so far as the cinema hall was concerned and the first respondent herein figured as the highest bidder. As per Clause 17 of the conditions of tease, the first respondent is permitted to spend some amount and adjust the said amount towards the rental payable by him. So, in the event of there being any dispute regarding the same, that is a matter to be considered in the same suit and there is no necessity to file a separate suit for the said purpose.

A careful perusal of the impugned order shows that the Receiver approved Rs. 91,775-40 ps. as the amount spent towards the items covered by condition No. 17 of the conditions of lease. (The said condition is incorrectly quoted as condition No. 16) and the rest was not covered by the said condition. But still the learned Subordinate Judge ratified, the expenditure for the remaining expenditure also observing as follows:

"Thus when the estate is benefited by his acts, though the improvements were made without permission of the court, the court feels he is entitled to be reimbursed."

Thus the lower court opined that-though the expenditure was not covered by the terms of Clause 17, but still holding that the estate was benefited by the expenditure, the balance of the expenditure was also approved by the lower court.

Mr. Narayana, the learned Counsel for the revision petitioner submits that the relevant material is not placed on record to show that in fact Rs. 1,94,896-56 ps. was spent by the first respondent on the theatre. On the contrary Sri Somakonda Reddy, learned Counsel appearing for the first respondent relies upon the receipt dated 1-6-88 of the Receiver showing that the Receiver received photo-stat copies of vouchers and bills from the first respondent herein evidencing the said expenditure and the said receipts further show that the Receiver was satisfied that the first respondent infact incurred the expenditure totaling Rs. 1,94,806-56 ps.

When the matter came up for hearing the learned Counsel appearing for the first respondent submits that though the Receiver as well as the lower court held that out of the total amount spent by his client, only Rs. 91,775-40 ps. was approved, as per Clause 7 of the conditions of lease, the other amount also has to be taken as the amount spent for the maintenance and repairs of the theatre in question and consequently the said amount also has to be approved. Hence, it is relevant to extract Clauses 7 and 17 of the Conditions of Lease.

Clause 7: Maintenance of Theatre Annually viz. Repairs to building or electrical fittings etc to be met by successful party to the extent of Rs. 1,000/- every year and balance if any will be met from the estate. Clause 17: If successful bidder spends towards projectors and purchase of generator (projector and the other equipment in the cabin) including sound system, he is entitled to adjust rent towards money spent by him with interest at 18% till it is wiped out after, amount realised by Receiver is adjusted.

It is to be seen that neither before the Receiver nor before the lower court it was contended by the first respondent that the rest of the expenditure, namely, Rs. 1,03,031-14 ps. can rightly be incurred as per Clause 7 of the conditions of lease and as rightly submitted by Mr. Narayana the learned Counsel for the petitioner, this contention was raised for the first time in this court. It is also to be seen that though the receipt dated 1-6-88 of the Receiver speaks of Photostat copies of vouchers and bills, no material is placed on record to show that the same was placed before the lower court. In addition to that it is to be seen that respondents 4, 5 and 6 were set ex parte since their advocates requested the advocate appearing for the first respondent to take notice to the parties. In view of these circumstances, I find that it is desirable that the matter be examined afresh by the lower court.

Hence, the order dated 28th March, 1991 in I.A.493/91 is set aside and the matter is remitted to the learned Subordinate Judge, Madanapalli, for fresh enquiry as per the observation made above and in accordance with law. If necessary, the learned Subordinate Judge shall call for the original copies of vouchers, bills etc., covering the expenditure of Rs. 1,94,896-54 ps. and give a clear finding as to whether the said amount was in fact incurred by the first respondent. Thus he shall further examine whether the said expenditure is covered by either Clause 7 or 17 of the Conditions of Lease. Since the suit has to be decided only from the material on record and other documents to be filed into court, the lower court shall dispose of the case within two months from the date of receipt of this order.

Mr. Somakohda Reddy submits that the impugned order directs his client to adjust the amount payable to the other sharers towards the amount spent by him and since the said order was set aside, his client may be permitted to pay the amount payable to the other sharers including the revision petitioner in reasonable instalments. The first respondent is permitted to pay the amount payable so far in 4 equal monthly instalments.

The C.R.P. is accordingly allowed. Each party shall bear, their own costs.