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1999 Supreme(SC) 955

G.B.PATTANAIK, UMESH C.BANERJEE
Industrial Credit And Investment Corporation Of India LTD. – Appellant
Versus
Karnataka Ball Bearings Corporation LTD. – Respondent


Judgement Key Points

The provided judgment primarily addresses the scope of the court's powers under Order 40 of the Civil Procedure Code, specifically the court's authority to appoint a receiver and to direct the sale of immovable property prior to the passing of a decree. It emphasizes that the language of Order 40 Rule 1 is of the widest possible import and that the court's powers to appoint a receiver and to order sale are unfettered, provided the court considers it just and convenient in the circumstances of the case (!) (!) .

However, the judgment does not explicitly discuss or provide a definitive ruling on the specific scenario where the maintainability of a suit is challenged through a stay application, and the court remains undecided on that issue. The focus remains on the general principles governing the exercise of the court's powers under Order 40, without addressing procedural or jurisdictional questions that arise when the maintainability of the suit itself is in question and remains unresolved.

In essence, the judgment does not directly answer whether a civil court can appoint a receiver when the maintainability of the suit is challenged and the matter is kept undecided. It underscores the broad discretion of courts to appoint receivers and to order sales based on the circumstances, but it does not extend this discretion to procedural issues about the maintainability of the suit itself or the impact of stay applications on such powers.

Therefore, based on the content of this judgment, it does not explicitly resolve the question of whether a receiver can be appointed in a situation where the suit's maintainability is under challenge and remains undecided.


Judgment

Banerjee, J.-Leave granted.

2. Authority of Receivers to effect sale of immovable properties prior to the passing of the decree is the focal point for consideration in this appeal, by the grant of special leave being directed against the Bench decision of the Bombay High Court. The Bench in deciding the issue however did rely upon the decision of an earlier. Full Bench judgment in the case of State Bank of India v. Trade Aid Paper & Allied Products (India) Ltd. & Ors.1 .

3. Mr. R.F. Nariman, Senior Advocate, appearing in support of the appeal very strongly contended that the Full Bench decision in State Bank of India’s case (supra) cannot be said to have laid down the law in a correct perspective and as such it would be convenient at this juncture to note the observations of the Full Bench pertaining there­to. The Full Bench observed :

“10. As mentioned hereinabove, the decisions referred to in the judgment as regards the ambit of power of the court to appoint Receiver under Order 40 Rule 1 of the Code of Civil Procedure were recorded in suit filed by the individuals to recover the loans or to enforce the mortgages. The economic policy of the Government and the Nationalised Ba























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