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1977 Supreme(Pat) 161

PATNA HIGH COURT
Nagendra Prasad Singh and P.S.Sahay JJ.
Ram Kishore Das
Versus
Balram Sah
Appeal From Original Order No. 68 of 1974 ;
Decided On : AUGUST 31, 1977

The court should appoint a receiver only after being satisfied that the plaintiff has a prima facie chance of success in the suit, there is some emergency or danger to the property demanding immediate action, and the conduct of the party seeking the appointment is free from blame.

Headnote:

RECEIVER - APPOINTMENT - ORDER 40 RULE 1 CPC - SUMMARY OF LEGAL FRAMEWORK APPLIED BY THE COURT IN REACHING ITS DECISION.

Fact of the Case:

Plaintiff filed a suit for declaration as the legally appointed Mahanth of the Pipradadan math and sought recovery of possession of the properties. During the pendency of the suit, he applied for the appointment of a receiver, alleging that the defendant was misappropriating and wasting the income of the Math.

Finding of the Court:

The court held that the learned subordinate judge erred in rejecting the application for appointment of a receiver without considering the relevant factors and guidelines laid down by various courts.

Issues: Whether the learned subordinate judge erred in rejecting the application for appointment of a receiver without considering the relevant factors and guidelines laid down by various courts.

Ratio Decidendi: The court held that the appointment of a receiver is a matter resting in the discretion of the court and should be made only after being satisfied that the plaintiff has a prima facie chance of success in the suit, there is some emergency or danger to the property demanding immediate action, and the conduct of the party seeking the appointment is free from blame.

Final Decision: The court allowed the appeal, set aside the order of the learned subordinate judge, and directed him to hear the parties afresh and pass an order in accordance with law and the observations made by the court.

Judgment

NAGENDRA PRASAD SINGH, J.

1. The plaintiff is the appellant in this appeal which arises out of an order passed by the learned Subordinate Judge rejecting the prayer of the plaintiff to appoint a receiver in respect of the subject-matter of the suit. It appears that the plaintiff had filed the suit in question for declaration that he is the legally appointed Mahanth of the Pipradadan math and as such entitled to manage the properties of that Math. A prayer for recovery of possession of the properties in question was also made. During the pendency of the suit an application for appointment of receiver was made, saying that although the defendant had no right to be in possession of the properties of the math, being in such possession he was misappropriating the income of the Math and wasting the same. According to the plaintiff, it was just and proper that a receiver be appointed in respect of the properties in suit. A show cause to that application was filed on behalf of the defendant-respondent. As already stated, the learned Subordinate Judge dismissed the said application.

2. Learned counsel appealing on behalf of the appellant has submitted that the learned subordinate judge has not considered the different aspects of the matter and the materials on record before rejecting the application for appointment of receiver. In support of the aforesaid submission the learned counsel has placed the order under appeal. From the order it appears that the learned subordinate judge has observed that from the facts pleaded in the plaint "it is clear that the defendant has practically removed the plaintiff from Math and all the properties of the Math are in possession of the defendant for which the plaintiff seeks recovery of possession." Then, he has stated in the order that a receiver cannot be appointed "in order to put a person in possession of the properties". Really, we are not able to appreciate as to what actually the learned subordinate judge meant by the observations referred to above. Whenever an application for receiver is made, it is generally an admitted position that the other side is in possession of the properties over which a receiver is sought to be appointed. As such, it cannot be held as a proposition of law that a receiver cannot be appointed when one of the parties to the suit is found to be in peaceful possession of the properties in question.

3. Order 40, Rule 1 of the Code of Civil Procedure itself vests power in the court, whenever it considers it just and convenient, to

(a) appoint a receiver of any property,

(b) remove any person from the possession or custody of the property;

(c) commit the same to the possession, custody or management of the receiver; and

(d) confer upon the receiver all such powers for management and protection of the property in suit. R. 1 of O. 40 simply says that whenever it is just and convenient, a receiver can be appointed by the court for the management of the properties in suit. The words just and convenient have been interpreted by different courts, and in that connection certain guidelines have been laid down which have to be borne in mind at the time of appointing a receiver. Ramaswami, J. of the Madras High Court in the case of T. Krishnaswamy Chetty V/s. C. Thangavelu Chetty, AIR 1955 Mad 430, after referring to different cases on the point, has observed :-

(i) The appointment of a receiver pending a suit is a matter resting in the discretion of the court.

(ii) The court should not appoint a receiver except upon proof by the plaintiff that prima facie he has a very excellent chance of succeeding in the suit.

(iii) Not only must the plaintiff show a case of adverse and conflicting claims to property, but, he must show some emergency or danger or loss demanding immediate action and of his own right he must be reasonably clear and free from doubt. The element of danger is an important consideration.

(iv) An order appointing a receiver will not be made where it has the effec





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