1998 Supreme(Bom) 403

IN THE HIGH COURT OF BOMBAY
D.G. Deshpande, J.
Atul D. Sohni another ..... Plaintiffs.
Versus
B.M. Choksey others .... Defendants.
Advocates appeared:
S.G. Anney with S.G. Surana i/b Niranjan Co., for the applicant.
S.U. Kamdar with Ms. B. Malhotra, for defendant No. 2.

Headnote:Order XL, Rule 1-Bombay High Court Original Side Rules, 1957, Rules 591, 992 and 594-Automatic discharge of receiver-Parties to the suit carry initial burden of managing their property but once they approach the Court and seek appointment of receiver, the burden shifts to him, till a final decision is arrived, therefore, merely on discharge of receiver, it can not be said that he ceases to be a receiver.-It is necessary to refer to the relevant provisions regarding Receiver in the Code of Civil Procedure and in the Original Side Rules of this Court. Order XL of the Code of Civil Procedure is about appointment of Receivers. In this Order there are only five rules. First rule is regarding Appointment of Receiver for the purpose of realisation, management, protection, preservation and improvement of the property, the collection of rents and profits thereof, the application and disposal of such rents and profits and the execution of documents as the owner himself has or such of those powers as the Court thinks fit. There is nothing in Order XL and Rules therein which speaks about the discharge of the receiver and the effect of the order of discharge at the time when the discharge order shall be effective.

       Rule 592 empowers the Court Receiver to charge to the suits, estates of matters under his management a sum which in his discretion he considers proper towards the expenses of his office etc. Rule 593 requires the Court Receiver to invest the amount standing to the credit of the suit or matter, which is not immediately required for current expenses, in Government security etc. As per Rule 594(b) the Court Receiver has to file in the Office of the Commissioner his accounts from the date of his appointment to the end of the next calendar year i.e. within three months from the expiry of the said calender year. It is further provided that if the Court Receiver is discharged after the end of the calendar year and before the account is filed, he may file his account upto the date of his discharge.

       Even after going through all the aforesaid parts of the Book on Receiver, Court does not find any specific provision as to when the office of the Court Receiver should be deemed to have ceases to function i.e. whether from the date of the discharge order or whether on any subsequent date or event. Chapter XVII regarding discharge of the Receiver also does not clarify this position even though it states under Note 1 duration of Receivership, is limited by the Court. However,. it is repeatedly held that there is no automatic discharge of Receiver merely because the proceedings have ended and Note No. 6 of the same Chapter also provides that the termination of the suit will not ipso facto discharge the Receiver.

       If the object of appointment of Receiver, the duties of the Court Receiver and the obligations cast upon the Court Receiver are considered along with the aforesaid observations of the author on judgment. and the Original Side Rules quoted above, it becomes clear that an order of discharge of the Receiver by the Court does not in itself bring an end to the office of the Court Receiver vis-a-vis the suit property and the parties to the suit. But the Court Receiver stands discharged only after he puts the property to its status quo anti position unless otherwise directed by the Court or unless the Receiver was required to do something a new in respect of the property and unless and until the Receiver has submitted his accounts and they have been approved by the Commission for accounts.

       If the Receiver is to cease the function in any manner whatsoever from the date of his discharge, then all the work undertaken by him will come to a standstill and even he will not be able to give effect to the order of his discharge. He will also not be in a position to put back the property to the status quo ante that was in existence on the date of his appointment as Receiver and his taking charge of the property and, therefore, if the argument of Mr. Anney is accepted then all the parties to the suit in which Receiver is appointed will suffer.

       It can also be said that even after order of discharge the Receiver continues as such till all of his liabilities vis-a-vis property and vis-a-vis the parties to the suit and third parties are disburdened by him, shifted by him or released by him. A judicial order of discharge does not automatically result in dis-burdening the liability of the receiver or shifting his liabilities or relieving him from his liabilities. The order of appointment of Receiver casts a burden on the Receiver and gives him certain rights to carry that burden, whereas, the order of discharge starts the process of unloading or unburdening the Receiver. In other words it can be said that parties to the suit or litigants carry the initial burden of managing or looking after their property but when they come to the Court and seek appointment of Receiver then such burden or load is shifted to the Receiver and when the Receiver is discharged, he must again pass on his burden or load to the parties and till this is done he will be directly concerned with the property or with the parties to the suit or the third parties. Therefore, the contention of Mr. Anney that a Receiver ceases to be a Receiver on and from the date of his discharge cannot be accepted.

       In the instant case, Receiver came to be discharged by order dated 26.11.1992 but, thereafter he filed his report, which has not yet been accepted and he has also to submit the accounts to the Commissioner for Taking Accounts, as per the rules of the Original Side quoted above, and, therefore, his liabilities as Receiver continues. Court, therefore, hold that even after order dated 26.11.1992, the Receiver in this case did not cease to have control over the property.