This revision petition under section 439, Cr. P. C. Is directed against an order of Mr. Ali Tahir Zaidi, Magistrate 1st Class, Lahore, dated the 19th of August 1969, whereby on a complaint filed under section 145, Cr. P. C. The learned Magistrate, considering that a dispute likely to cause imminent breach of the peace concerning the Head Office of the Asian Mutual Insurance Company at 12 Link McLeod Road P. O. Gowalmandi, existed, invoked subsection (4) of section 145, Cr. P. C. And ordered its attachment forthwith with notice to the, parties for filing their written statements on or before the 29th August 1969 of their respective claim to its possession.
2. The facts of the case, briefly, are that there emerged two rival groups, one led by Raja Munawar Ahmad and the other by Rana Zafurallah, in the Asian Mutual Insurance Company, a Public Limited Company with its Branch Offices spread over different places in Pakistan. At first there was litigation in the Civil Courts which went right up to the Supreme Court and ultimately the matter came .Up before the learned Company Judge on a petition under section 79 (3) of the Companies Act (Civil Original No. 38/68) where it is still pending. By an application under Order XL, rule 7, C. P. C.
Dated the 27th of November 1968 (Civil Miscellaneous No., 133/L-68) Raja Munawwar Ahmad moved the learned Company Judge for the appointment of a receiver. The application was contested. The learned Company Judge, however, accepted it on 10th January 1969 making the following observa--tion about the state of affairs prevailing in the company: - "The two rival groups in this company are engaged in a serious litigation for supremacy. At present there are about 10 cases pending between them in different Courts at different places in West Pakistan and unfortunately there is no hope of an early decision finally resolving the controversy between them. There is a virtual diarchy in the company."
3. While appointing Qazi Muhammad Ashraf Advocate as a receiver, the learned Company Judge gave the following directions: - "The receiver is inducted into the affairs of this Company in order to supervise, protect, preserve and manage its' business and assets. He shall assume overall charge of the management of the company, as far as possible without causing unnecessary disruption of any of the two rival groups who shall continue to function under his supervision and control in the interest of the company. He shall be responsible to see that true, faithful and complete account of the dealings and the business of the company, and all its Branches are maintained in the name of the Asian Mutual Insurance Company Ltd. In the discharge of his duties, he shall take all necessary instructions required by him from this Court."
4. In this background of events Nasir Ahmad Khara reason--dent No. 1, claiming himself to be the Manager of the Asian Mutual Insurance Company, and to have been appointed on the 8th of August 1969 as the Chief Manager in place of Raja Bashir Ahmad, filed, on behalf of the Insurance Company, a complaint under section 145, Cr., P. C. On the 19th of August 1969. He alleged that under the decision of the Board of Directors the Head Office of the Insurance Company was being shifted from the disputed premises to its Headquarter Office 63, The Mall, Lahore, and while the company was in the constructive possession of the premises of the Head Office so vacated, the two respondents who belonged to dissatisfied section (Raja Munawwar Ahmad 1 Group) were trying to get forcible possession of the premises and were bringing pressure on the staff employed there. It was alleged that in the circumstances there was likelihood of a ' breach of peace and a request was made that the premises be attached and sealed in order to avoid any such likelihood. The statements of Nasir Ahmad Khara and his witness Raja Munawwar Ahmad, who claimed to be Managing Director of the Company,-- were recorded the same day. N o further evidence was brought on record and the learned Magistrate considering the material sufficient passed the impugned order of attachment of the Head Office of the company.
5. Aggrieved by this order the petitioner filed an application before the District Magistrate under section 435/439, Cr. P. C. The learned District Magistrate recorded an order on the margin of the same petition. It is dated 20th of August 1969 and is reproduced hereunder "Ilaqa Magistrate. Petitioner says that the proceedings are under section 145, Cr. P. C. And that he has not been given an opportunity to be heard. Would the learned Court hear the petitioner too and decide the case on merits."
It appears that this application was produced before the learned Magistrate who on 21st of August 1969 recorded an order on top of it "Place on the file".
6. In consequence, the petitioner on the 25th of August 1969 approached this Court under section 439, Cr. P. C. Sardar Sami Hayat, learned counsel for the petitioner, challenges the legality of the order of the learned Magistrate on the ground that a Receiver having been appointed and the dispute between the office-holders of the company including the parties to the present proceedings being already before the learned company Judge, the learned Magistrate had no jurisdiction to order the attachment of the property in proceedings under section 145, Cr. P. C. It is also submitted that the nature of the dispute was such that the learned Magistrate could not have taken cognizance of the matter under section 145, Cr. P. C. It is con--tended that both the parties to proceedings were claiming possession of the premises or rights therein not as individuals but on behalf, and for the benefit of, the same company, viz, Asian Mutual Insurance Company Ltd. In the circumstances the dispute was essentially for office and position in the company rather than concerning any premises as such. It is also pointed out that in the complaint under section ' 145, Cr.
P. C. Respondent No. 1 had claimed only constructive possession of the premises and not actual physical possession. As actual physical possession was not claimed and no dispossession alleged, the learned Magistrate had no jurisdiction to attach the premises under subsection (4) of section 145, Cr. P. C. Qazi Mohammad Ashraf, Receiver, appeared in this Court in response to a notice and supported the petition.
7. It is not seriously disputed that the mere pendency of the proceedings before the learned Company Judge was not by itself sufficient to oust the jurisdiction of the learned Magistrate under section 145, Cr. P. C. It is urged by the learned counsel for the petitioner that as the Court had appointed a Receiver of the property the disputed premises had, as envisaged under Order XL, rule 1, C. P. C., become custodia legis and was immune from all processes of the Court. In support of this contention the learned counsel for the petitioner has referred to Dil Baz Khan v. The State and another (1) where in a revision petition while examining the propriety of proceedings under section 145, Cr. P. C. When a civil suit in respect of the same property was pending and an ad interim injunction had issued restraining the other party from interfering with the possession, the learned Single Judge had observed that "the mere fact that a civil suit is filed in respect of the subject- matter of the dispute is by itself y not sufficient to oust the jurisdiction of the Magistrate: By the filing of the civil suit, the dispute between the parties does not cease to exist and the likelihood of a breach of peace is not in any way lessened." However, in concluding the learned Judge observed: "It is true that the final determination of the legal rights of the parties rests with the civil Court; but until the determination of such rights, I am inclined to hold that the jurisdiction of the Magistrate to take proceedings under t section 145, Cr. P. C. Is not ousted. It is a different matter altogether if the Civil Court appoints a Receiver or otherwise attaches the property because then the property passes into custodia legis and the contesting parties are prevented from making any attempt to take actual possession of the property and thus the danger of breach of the peace is removed."
8. The learned counsel for the petitioner has tried to emphasise his objection to the proceedings under section 145, Cr. P. C. Before the learned Magistrate by a reference to two cases from Indian Jurisdiction. In the case of Kanhaiyala: v. Dr. D. R. Banaji and others (2) a Receiver was appointed for a plot of land which was sold by public auction after attachment which proceedings were challenged by the Receiver and the Indian Supreme Court held: "It is also settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under Order XL, rule 1, C. P. C. Without the leave of that Court, are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of Court, and that the proceedings so held, do not affect the interest in the hands of the receiver who holds the property for the benefit of the party who ultimately may be adjudged by the Court to be entitled to the same". It was further observed. "The general rule that property in custodia legis through its duly appointed receiver is exempt from judicial processes except to the extent that the leave of that Court has been obtained, is based on a very sound reason of public policy, namely, that there should be no conflict of jurisdiction between
(1) PLD 1959 Lah. 264(2) AIR 1958 SC 725 different Courts. If a Court has exercised its power to appoint Receiver of a certain property, it has done so with a view to preserving the property for the benefit of the rightful owner as judicially determined. If other Courts or Tribunals of Co--ordinate or exclusive jurisdiction were to permit proceedings to go independently of the Court which has placed the custody of the property in the hand of the Receiver, there was a likelihood of confusion in the administration of justice and a possible conflict of jurisdiction. The Courts represent the majesty of law, and naturally, therefore, would not do anything to weaken the rule of law, or to permit any proceedings which may have the effect of putting any party in jeopardy for contempt of Court for taking recourse to unauthorised legal proceedings".
9. In the case of Jai Prekash Beni Pershad and others v. Ram Sarup and others (1), the proceedings were under section 3 of the Contempt of Courts Act. The Court had appointed joint Receivers who were required to carry on the business of partnership for the time being and to submit their reports as to its working. There was a complaint by the workers on which a Magistrate directed an enquiry under section 200, Cr. P. C. Followed by certain consequen--tial orders. The Court held: "It is a proposition which is well sustained by authorities, that when a Court having jurisdiction in the matter, appoints a receiver to take charge of the property forming subject-matter of the litigation, then no other Court of co-ordinate jurisdiction has any power or authority to interfere or meddle with the property in the bands of the Receiver. The Court appointing the Receiver must be left untrammelled in its administration of the property regardless of the fact whether the original appointment of the Receiver was erroneous or improvident, for otherwise orderly administration of justice cannot proceed".
10. The learned counsel for the respondents had urged that in company Jurisdiction the appointment of a Receiver; as such, or even of a Liquidator, has not the effect of nullifying all other proceedings under distinct laws for the enforcement of the rights and for the prevention of crime.
Reliance has been placed on the decision in S. N. Mukherjee v. Krishna Dassi and other) (2) wherein it was held that "It would hardly seem reasonable to suggest that a prohibition of that kind (under section 171 of the Companies Act, which provides that when a winding up order has been made no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court) is meant to override an express enactment in section 145, Cr. P. C. By which a Magistrate, if satisfied that a dispute likely to cause a breach of the peace exists is bound to call on the parties to attend his Court and put in their claim as regards actual possession". But the learned Judges proceeded to distinguish that by observing that "I am not satisfied that proceedings instituted in this manner can be said to be against the company. The party to the proceedings is not the company but the liquidator." Another fact noticed in that case was
(1) AIR 1958 Ply. 471(2) AIR 1953 Cal. 433 (2) that not only the other party but also "the Liquidator and his party went to the police. He is equally responsible for the proceedings being initiated and in effect invited the intervention of the police and the magisterial proceedings which followed".
11. There is one other reported case which has not been cited at the bar but after going through it, I find it quite relevant to the point under examination. It is A. M. Dunne v. Kumar Chandra Kishore (1).
In proceedings under section 145, Cr. P. C. Receiver had been made a party and forbidden by the Magistrate from disturbing the possession of the other party. The argument in support of that order proceeded on the basis that "to hold that the Receiver is excepted from the operation of section 145; Cr. P. C. Will be to read into the Statute an exception which is does not contain". The learned Judges held: "We think there would be no jurisdiction in the Magistrate to make any order on him under section 145, Cr. P. C. Without the sanction of the Court. The order directs that the Receiver shall not disturb the possession of the second party; in other words, the Magistrate in assuming a jurisdiction to interfere with the officer of this Court, as such, without the sanction of this Court, and it is well settled law that the Court will not without its leave, permit its officer to be interfered with".
12. In the case now before us, contentious litigation had been going on between persons interested in and anxious to manage the affairs of the Company. A Receiver leas been appointed under Order XL, rule 1, C. P. C. On the application of Raja Munawwar Ahmad, main witness in these proceedings.
The Receiver, under the orders of the company Judge was "to supervise, protect, preserve and manage its business and assets", and in the discharge of his duties he was to "take all necessary instructions required by him from this Court". It is quite clear from the record of the proceedings and the nature of the claim made by the parties that both were claiming the property, not in their individual and private capacity but as office-holders of the company. The matter was one which could appropriately be resolved by obtaining the orders of the learned Company Judge. In the larger interest of the administration of justice as such and to avoid direct conflict of jurisdiction, undoubtedly the more appropriate course for the learned Magistrate would have been not to embark on proceedings which could have interfered with the possession, whatever its nature, of the Receiver, and through him of the learned Company Judge.
13. In the circumstances, and for the foregoing reasons, I find that the learned Magistrate had no jurisdiction to proceed in the matter under section 145, Cr. P. C. The revision petition is accepted and the order of the learned Magistrate dated the 19th of August 1969 is set aside as the proceedings under section 145, Cr. P. C. Ace held to be without jurisdiction.