KANHAIYAJI, J.

(1.) The writ application under Article 227 of the Constitution and the civil revision application under Section 115 of the Code of Civil Procedure, both filed by the petitioners, arise put of the same proceeding before the District Judge, Darbhanga, under Section 30 of the Industrial Finance Corporation Act (XV of 1948), hereinafter called the Act, read with Order 40, Rule 1 and Section 151 of the Code of Civil Procedure, hereinafter called the Code.

(2.) M/s. Thakur Paper Mills Ltd., respondent-opposite party No. 1, hereinafter referred to as the Company, applied for, and requested the petitioner, the Industrial Finance Corporation, of India, hereinafter referred to as the Corporation, for, lending and advancing a sum of Rs. 20 lakhs, to which the Corporation agreed- The company executed a registered deed of English mortgage in favour of the Corporation on the 28th June, 1962, mortgaging its entire assets in favour of the Corporation, and the Corporation advanced a sum of Rs. 18,76,000/- in various instalments. The Company failed to make the payments as stipulated in the aforesaid mortgage. The Corporation filed a case under Section 30 of the Act before the District Judge of Darbhanga for realisation of the entire dues, then amounting to Rupees 19,61,476.36 paise by sale of the mortgaged properties. The case was registered as Miscellaneous Case No. 33 of 1967 of that court.

(3.) It is stated in the applications that the General Manager, the Chief Technical Officer and the Branch Manager of Calcutta, all of the Corporation, made a local inspection of the factory site of the Company situated at Samastipur and found that the plant and machineries were not properly maintained. It is also stated in the applications that as a result of the inspection and enquiries, it became known that the Company had leased out the buildings and structures, being parts of the mortgaged properties, to various persons without the consent of the Corporation- The application filed for appointment of a receiver also contained statement that under Clause 5 (10) of the mortgage, the Company was precluded from exercising its powers of granting lease in respect of any part of the mortgaged property without the prior consent in writing of the Corporation. It was further stated in the applications that due to the deteriorating condition of the plant and machineries, there was imminent danger of rapid diminution in their value, and, as such, the Corporation was entitled to have a receiver appointed by the Company under Section 69-A of the Transfer of Property Act and under Clause 5 (7) of the mortgage deed. It was claimed that in the case of an English mortgage the mortgagee was entitled to sell the property for default of payment of interest and so the appointment of a receiver should be made almost as a matter of course. The Company, on the other hand, objected that the Act did not contain any provision for appointment of a receiver, nor had the case for appointment of a receiver been made out.

(4.) The Act was passed to establish the Industrial Finance Corporation of India for the purpose of making medium and long-term credits more readily available to industrial concerns in India, particularly in circumstances where normal banking accommodation was inappropriate. The object was to advance loan to industrial concerns for industrial development. This was followed by the State Government where also another Act known as the State Financial Corporation Act containing similar provisions was passed. In this case, the Corporation and the State Financial Corporation had made advances to the Company on the same security. Subsequently, there was default in payment of the loan amount. Both these mortgagees prayed for ad interim injunction. In view of the fact that the subject-matter was the same, injunction was granted in the case filed by the State Financial Corporation, and there was no objection by the Corporation. Thereafter, both the mortgagees filed applications for appointment of a receiver on the grounds stated above.

(5.) The learned District Judge, after hearing the parties, found that the prayer for the appointment of a receiver was not just and proper for the reasons given in his order, and, consequently, he rejected both the applications for appointment of the receiver. The petitioners have filed the two applications, as stated above, against the order passed by the District Judge, challenging its legality.

(6.) Mr. Ray Paras Nath, appearing for the Corporation, submitted that the District Judge has failed to exercise the jurisdiction vested in him in this case. His submission was that a receiver should have been appointed in the case as a matter of course. Mr. Shreenath Singh, appearing for the Company, on. the other hand, submitted by way of a preliminary objection that the District Judge had no power to appoint a Receiver in a proceeding under Section 30 of the Act. His submission was that there being no provision for appointment of a receiver in the Act which is a complete code by itself, the District Judge could not have taken the aid of the provisions of the Code for appointment of a receiver.

(7.) I would, therefore, first consider the point whether the District Judge, while acting under Section 30 of the Act, had the power to order for| the appointment of a receiver or not. Section 30 of the Act contains special provisions for enforcement of claims by the Corporation. Section 30 (1) of the Act provides as under:

"Where an industrial concern, in breach of any agreement, makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to comply with the terms of its agreement with the Corporation or where the Corporation requires an industrial concern to make immediate repayment of any loan or advance under Section 29 and the industrial concern fails to make such repayment, then, without prejudice to the provisions of Section 28 of this Act and of Section 69 of the Transfer of Property Act, 1882 (IV of 1882), any officer of the Corporation generally or especially authorised by the Board in this behalf may apply to the District Judge within the local limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of its business for one or more of the following reliefs namely:--

(a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Corporation as security for the loan or advance, or (b) for transferring the management of the industrial concern to the Corporation, or (c) for an ad interim injunction where there is apprehension of the machinery or the equipment being removed from the premises of the industrial concern without the permission of the Board."

Under Section 141 of the Code, the procedure provided in the Civil Procedure Code in regard to suits shall be followed, as far as it can be made applicable, in all proceedings in any court of civil jurisdiction; and, the proceedings spoken of in this section refer to original matters in the nature of suits, such as proceedings in probate, guardianship or so forth. The procedure provided in the Code has been construed to mean independent proceedings in the nature of a suit., The question, therefore, that arises for our consideration, is whether the proceedings under Section 30 of the Act are the proceedings contemplated by Section 141 of the Code. In the proceeding under Section 30 of the Act. the Corporation in the circumstances mentioned therein has to apply to the District Judge for the relief or reliefs stated above. In a suit also, a party has to make out a cause of action and has to claim a certain relief and, after the trial, the court passes a decree in favour of the plaintiff or dismisses the suit. Therefore, the special provisions for enforcement of claims by the Corporation are very similar to the proceedings in the nature of the suit. I am, therefore, of opinion that a proceeding under this section is a proceeding of the kind contemplated by Section 141 of the Code, and as such, the District Judge, while acting under that section, had the power to appoint a receiver under Order 40, Rule 1 of the Code.

(8.) Reliance was placed by Mr. Shreenath Singh on a decision of the Punjab High Court in Swaya Mal Sant Ram v. The Punjab Financial Corporation, AIR 1963 Punj 555. In that case, in a proceeding for investigation of the claim of the Corporation under the provisions of the State Financial Corporation Act, the debtor concerned, while resisting the petition, made an application that the Punjab National Bank and some others should be impleaded as parties. The application was rejected by the District Judge. In revision before the High Court, it was contended that the District Judge should have taken into account Rule 4 of Order 34 of the Code. Shamsher Bahadur, J., held that the application to have other parties impleaded could not be said to form a claim of the industrial concern, and, therefore, the provisions of Order 34, Rule 4 of the Code were not applicable. The learned Judge also observed that the Civil Procedure Code was not generally applicable to any application made by a party against whom claim was made. The court was not considering whether an application for appointment of a receiver was a proceeding within the meaning of Section 141 of the Code. There is nothing in Section 30 of the Act to say that the procedure laid down in Order 40 of the Code is not applicable to a claim proceeding under the Act. Therefore, we have got to follow the procedure provided in the Code as far as it can be made applicable to a proceeding under Section 30 of the Act.

(9.) The power of the court to appoint a receiver under Order 40 of the Code is to be exercised for pre- venting the ends of justice from being defeated. The court can appoint a receiver if it is just and convenient. In the matter of appointment of a receiver of the property in dispute, the court has a wide discretion; but it will not appoint a receiver unless from the materials brought to its notice it is satisfied that it is lust and convenient to do so. Before coming to the merit of the application, it is better to refer to some of the provisions of the Act Section 28 provides that,

"Where any industrial concern which is under a liability to the Corporation under an agreement makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to comply with the terms of its agreement with the Corporation, the Corporation shall have the right to take over the management of the concern, as well as the right to transfer by way of lease or sale".

The Corporation has not exercised its powers under Section 28 of the Act.

(10.) In this connection, some provisions of the Transfer of Property Act may also be noticed where English mortgagees are given special powers. A mortgagee (English mortgagee) in the cases provided under Section 69 of the Transfer of Property Act has, subject to the provisions of the section, power to sell or concur in selling the mortgaged property, or any part thereof, in default of payment of the mortgage-money, without the intervention of the Court. Section 69-A (1) of the Transfer of Property Act further provides that,

"a mortgagee having the right to exercise a power of sale under Section 69 shall, subject to the provisions of Sub-section (2), be entitled to appoint, by writing signed by him or on his behalf, a receiver of the income of the mortgaged property or any part thereof".

Sub-section (2) of Section 69-A provides the procedure for such appointment. The notion that a mortgagee can appoint a private receiver has been borrowed from the English law. The Corporation did not proceed under these provisions, rather it preferred to approach the court for enforcement of its claims under the special provisions of Section 30 of the Act. It was urged on behalf of the Company that when the Corporation has neglected to enforce its rights which were conferred on it without the intervention of the court, it should be held that it was not just and convenient to appoint a receiver. It was also pointed out that the Corporation could have filed a suit for realisation of its dues under the ordinary jurisdiction; but having chosen the special provisions of the Act, the Corporation has forfeited its right to have a receiver appointed. In my opinion, there is no merit in this objection. It is true that different courses were open to the Corporation for realisation of its dues; but it does not lose its right to get a receiver appointed if it chooses to follow in its own discretion one of the modes prescribed by law.

(11.) Mr. Ray Paras Nath submitted that in the circumstances the court should have appointed the receiver as a matter of course; and having not done so, it has failed to exercise the jurisdiction vested in it by law. Reliance was placed on some English as well as Indian decisions. In Tillett v. Nixon, (1884) 25 Ch. D. 238, it has been held that although the mortgagee might, under the Conveyancing Act, 1881, appoint a receiver without coming to the Court, it was more desirable, where an action was pending, that the appointment should be made by the Court under the Judicature Act, 1873. It is not necessary to go into the details of this case, because the receiver was appointed under the Judicature Act, 1873, of England. In Crompton and Co. Ltd.. Player v. Crompton and Co. Ltd., (1914) 1 Ch. D. 954, it was held that when the security became enforceable, the plaintiffs were entitled to the appointment of a receiver. It was a case of equitable mortgage, and, in that connection, it was observed that the right to the appointment of a receiver is one of the ordinary rights which accrue to a mortgagee, and especially to an equitable mortgagee who has no means of taking possession and whose security has become realizable as one of the steps in such realization. In Jaikissondas Gangadas v. Zenabai and Kazi Mahomed Miya Dada Miya, (1890) ILR 14 Bom 431, Sargent, C.J., observed :--

"No doubt under the old practice of the Court of Chancery it was not usual to do so. except under very special circumstances. But in England it appears that the practice has been altered since the passing of the Judicature Acts ............ The words are: A mandamus or an injunction may be granted or a receiver appointed by an interlocutory order of the Court in all cases in which it shall appear to the Court to be just or convenient that such order should be made, and any such order may be made either unconditionally or upon such terms and conditions as the Court shall think just. "

Thus, it is manifest that the principle of just and convenient should be the guiding factor for appointment of a receiver. In Weatherall v. Eastern Mortgage Agency Co., (1911) 13 Cal LJ 495, it was held that the appointment of a receiver was a matter entirely within the discretion of the court, in the exercise of which it would be guided by a consideration of the circumstances of the particular case. The same view has been accepted in the Eastern Mortgage and Agency Co. Ltd. v. Fakuruddin Mohammed Chowdhury, (1913) 17 Cal WN 16. In my opinion, it is now settled that the court should appoint a receiver in a mortgage suit as in a suit of any other nature when it is just and convenient to do so.

(12.) The application for appointment of receiver in the court below was mainly based on the ground that the machineries would decay since they were not properly maintained. It was urged that there was a danger of the property being dissipated as they were not being properly maintained. There was also a danger of irreparable mischief to the property. The learned District Judge in this connection has observed that "there is no allegation that the opposite party are removing the machineries, nor can there be any cause for such complaint on account of the fact that ad interim injunction has already been granted in favour of the Industrial Corporation".

(13.) It cannot be disputed that when the machineries are left idle, they must be properly looked after otherwise they would get rusted. It has been submitted on behalf of the Company that experts are in its employment and they are looking after the machineries properly. In Miscellaneous Case No. 34 of 1967 by the State Financial Corporation, an ad interim injunction has been issued, and it is already stated in the order of the District Judge that the petitioner was satisfied with the said order. In the circumstances, it is apparent that the machineries are not being wasted, because they are properly maintained by the experts. The appointment of the receiver will only increase the cost and disturb the present arrangement.

(14.) It has also been contended on behalf of the petitioner that the Company has committed breach of the agreement by granting lease in respect of part of the mortgaged property without the prior consent in writing of the Corporation. In the counter-affidavit filed on behalf of the Company, it is stated that the alleged lease made by the Company was of a very temporary nature which was created simply to raise fund for meeting the recurring expenses of the factory in its upkeep. As such, the lease was not prohibited by the terms of the mortgage bond. Thus, there had been no breach of the stipulation made in the mortgage bond. In this situation, it is not possible to decide a disputed question of fact raised by the parties. In my opinion, the District Judge, in the circumstances of the case, has rightly come to the conclusion that it was not just and proper to appoint a receiver in the case.

(15.) For the reasons stated above, I find no merit in the applications. As a result, both the applications fail, and they are dismissed; but, in the circumstances of the case, there will be no order for costs.