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SUPREME COURT OF INDIA
Pamidighantam Sri Narasimha, Manoj Misra, JJ.
Hitesh Bhuralal Jain - Appellant
Versus
Rajpal Amarnath Yadav & Ors. - Respondents
Civil Appeal No(s). 12279 of 2024(@ SLP(C) No. of 2024 (@ Diary No. 51132 of 2023)
Decided On : 12-11-2024
Civil Procedure Code, 1908 – Order 40 Rule 1 – Appointment of Receiver with respect to suit scheduled property – Court would not appoint Receiver until and unless there are certain compelling reasons – Respondent has not indicated any special circumstance in notice of motion requiring need to appoint Receiver – City Civil Court having considered prayer for appointment of Receiver, has specifically rejected the same by holding that order of injunction is sufficient to protect the interests of respondent – High Court has not given any reason for extending relief of appointment of Court Receiver, which was specifically rejected by City Civil Court – Except for employing expression prima facie case and conduct, there is no indication whatsoever as to how property would deteriorate without intervention of Court Receiver – Mere recording of expressions ‘prima facia case’ and ‘conduct’ by themselves are not sufficient – Prima facie case as indicated by City Civil Court related only to grant of injunction and not about appointment of Receiver – Order passed by High Court appointing Court Receiver is not justified – Order passed by High Court set aside. (Paras 13, 14 and 15)
Facts of the case:
Short issue for consideration before us is whether High Court was justified in appointing Receiver with respect to suit scheduled property or not.
Findings of Court:
Commercial Suit No. 24 of 2022 shall be taken up and disposed of as expeditiously as possible. As proceedings from the other pending suits are not before Court, we leave it to parties to move appropriate application before court of competent jurisdiction.
Result : Appeal allowed.
Certainly. Based on the provided legal document, here are the key points:
The appointment of a court receiver requires compelling reasons; mere prima facie case and conduct are insufficient to justify such an appointment without specific circumstances indicating property deterioration or other urgent needs (!) (!) .
The court has emphasized that the order of injunction already in place is adequate to protect the interests of the respondent, and the specific rejection of the receiver appointment by the lower court was justified (!) (!) .
The High Court's order to appoint a receiver was found to be unjustified because it lacked sufficient reasoning and was based solely on general expressions of prima facie case and conduct, without clear indication of how the property would deteriorate or how intervention was necessary (!) .
The appellate court set aside the High Court's order appointing a receiver and restored the order of the lower court, which had rejected the receiver appointment, reaffirming that existing injunctions sufficiently safeguard the parties' interests pending the final disposal of the suit (!) .
The court directed that the pending suit should be expedited and clarified that parties may seek consolidation with other related suits through appropriate applications before the competent court (!) .
The appeal was allowed, and there was no order as to costs, with all pending applications to be disposed of accordingly (!) (!) .
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ORDER :
1. Delay condoned.
2. Leave granted.
3. This Civil Appeal by way of Special Leave Petition is against the order passed by the High Court in Commercial Appeal from Order No. 8 of 2023 in Notice of Motion No. 417 of 2022 in Commercial Suit No. 24 of 2022 dated 08.08.2023. The short issue for consideration before us is whether the High Court was justified in appointing a receiver with respect to the suit scheduled property or not.
4. The facts to the extent that are relevant for our consideration are that the appellant’s father is said to have established an HUF inter alia comprising the suit schedule property. Appellant’s father as karta entered into a development agreement with M/s Karmvir Intelligent Housing Pvt. Ltd. for the re-development and reconstruction of the suit schedule property.
5. The appellant contends that he filed a suit for declaration that he is entitled to 1/4th share in the suit schedule property. The suit is numbered as Suit No. 606 of 2016 and is pending disposal. The appellant also states that the High Court by order dated 10.12.2015 directed maintenance of status quo between the parties. It is necessary to mention at this very stage that the learned senior counsel appearing for the respondents, Mr. Devashish Bharuka, has objected to the existence of said interim order of status quo. However, we are not concerned with this issue for the purpose of the present proceedings.
6. The appellant further contends that his brother entered into an agreement with respondent no.1 for permanent alternative accommodation with respect to Shop No. 8 in the suit property. The appellant’s contention is that the said respondent is not a part of the declared tenants as indicated in the original development agreement dated 18.10.2017. The appellant also refers to the filing of a contempt petition as well as an application for depositing of rents before the court, which proceedings are also not relevant for our purpose.
7. It is in the above referred background that Respondent No. 1 filed a suit being Commercial Suit No. 24 of 2022, inter alia seeking a declaration of permanent alternative accommodation as per the agreement dated 18.10.2017. Pending disposal of the suit, the respondent no. 1 also moved a notice of motion inter alia seeking an order of injunction against alienating, transferring or encumbering the property and also for appointment of a court receiver.
8. By order dated 16.03.2022, the City Civil Court, Borivali, partly allowed the notice of motion and restrained the defendants from creating third party interest by selling or transferring Shop No. 8 pending disposal of the suit. All other prayers were specifically rejected by the City Civil Court.
9. Questioning the order of the City Civil Court, respondent no. 1 preferred a Commercial Appeal to the High Court and by the order impugned before us the High Court passed the following order:-
11. Additionally we find that there is no substance in the contention of Respondent No.4 that the Appellant is not entitled to the said shop, since the Appellant’s name does not figure in the list of tenants for three reasons viz. (a) the Trial Court has considered the documents including the Development Agreement and only thereafter came to a conclusion as to the Appellant’s prima facie entitlement; (b) the order of the Trial Court has not been challenged by Respondent No.4; and (c) that Respondent No. 2 and 3 are signatories to the said Permanent Alternate Accommodation Agreement. Hence, we find that would not lie in the mouth of the Respondents to, at thi
Appointment of Receiver – Court would not appoint Receiver until and unless there are certain compelling reasons.
The appointment of a Receiver requires a prima facie case, emergent circumstances, and cannot violate lawful possession rights, which were not established in this case.
The main legal point established in the judgment is the need to balance the legal principles regarding the appointment of a receiver, permissive possession, and the circumstances under which possessi....
The court ruled that a trial court may appoint a receiver in a suit for injunction to prevent potential chaos, especially when possession claims are contested, without requiring a specific applicatio....
The court clarified that a receiver can only be appointed if there is a prima facie case, immediate danger, and it does not deprive the defendant of possession.
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