RAJASTHAN HIGH COURT
Arun Bhansali, J.
Govindnarayan Agarwal - Appellant
Versus
Manhorlal Laddha & Ors. - Respondents
Civil Misc. Appeal No. 34/2018 and Civil Misc. Appeal No. 703/2018
Decided On : 09-07-2021
Receiver - Appointment of Receiver - Order XL Rule 1 CPC - The court emphasized that the appointment of a receiver requires proof of a prima facie case, immediate danger, and should not deprive the defendant of possession.
Fact of the Case:
The appellant filed suits for cancellation of allotment and possession of shops, alleging fraud by the defendants who were in possession of the shops. The appellant sought the appointment of a receiver to safeguard the properties during the litigation.
Finding of the Court:
The court found that the defendants were in possession of the shops and that the appellant failed to demonstrate the necessary conditions for appointing a receiver, leading to the dismissal of the applications.
Issues: Whether the trial court erred in denying the appointment of a receiver under Order XL Rule 1 CPC despite the appellant's claims of potential fraud and loss of property.
Ratio Decidendi: The court held that the appointment of a receiver is discretionary and requires a prima facie case, immediate danger, and should not deprive the defendant of possession, which the appellant failed to establish.
Result: The appeals are dismissed.
ORDER
Arun Bhansali, J. - These appeals have been filed by the appellant aggrieved against the orders dated 30.8.2017 passed by the trial court, whereby, the applications filed by the appellant under Order XL Rule 1 read with Section 151 CPC for appointment of receiver on the suit properties (shops) have been dismissed.
2. The appellant ? plaintiff filed suits for cancellation of allotment, possession of shops No.J-1/17 and H-II/4 situated at Rajmata Vijiya Raje Scindia Krishi Upaj Mandi, Jodhpur. It was alleged by the appellant that the suit properties were allotted to the appellant and he was in possession of the suit properties, however, in the year 1998 on account of his physical condition, he went to Maharashtra and before going to Maharashtra, he handed over the keys of the shops to defendants No.1 in both the suits for the purpose of storing their goods.
3. It is claimed that in the year 2012, when the plaintiff returned back and came to know that the shops were being given on lease by the Mandi for a period of 99 years and the appellant wanted to take the said shops on lease, he came to know that the defendants committing fraud and by way of preparing fraudulent seals and signatures of the appellant got the same allotted in their name. Based on the said allegations, the relief of cancellation of allotment and possession of the shops in question was sought in both the suits.
4.During pendency of the suits, applications were filed under Order XL Rule 1 CPC seeking appointment of receiver on the suit shops inter alia with the submissions that as the defendants were bent upon in letting out / transferring the shops in question to other traders, it was necessary that for the purpose of safeguarding the suit shops and to avoid any future complications, receiver be appointed on the suit shops.
5. It was also claimed with reference to the area of the shops that the same can fetch huge rent and, therefore, in the alternative, the applicant be awarded amount to the tune of Rs.20,000/- for each shop and / or the same be deposited with the court. It was prayed that either the receiver be appointed or the defendants be directed to deposit the amount with the trial court.
6. The applications were contested by the defendants denying the averments made therein.
7. The trial court after hearing the parties by the impugned orders came to the conclusion that admittedly the defendants were in possession of the suit shops, the receiver can be appointed only in case there is immediate danger to the suit property being dissipated or demolished, however, as the prayer made pertains to the fact that same may be transferred or let out, no case was made out for appointment of receiver by depriving the defendants of the possession of the suit shops and that in case the receiver is appointed, the same would result in the Mandi suffering loss for lack of the rental and consequently, rejected the applications.
8. The appellant ? Govind Narayan Agarwal present in person made vehement submissions that the trial court was not justified in rejecting the applications, inasmuch as, the respondents by their fraudulent conduct have deprived the appellant of the shops in question and that they are in the process of transferring and/or letting out the shops in question, which would result in complications in the pending suits.
9. Further submissions were made that the trial court was not justified in coming to the conclusion that in case the receiver was appointed, the same would result in the Mandi suffering loss of rental and as such the orders impugned deserve to be set aside and the receiver be appointed.
10. Learned counsel appearing for the respondents supported the orders impugned passed by the trial court. It was submitted that the respondents were in possession pursuant to the lease deed executed by the Mandi in their favour and as such no case is made out for appoint of receiver and, therefore, the appeals deserve to be dismissed.
11. I have considered the sub
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.
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 appointment of a Receiver requires a prima facie case, emergent circumstances, and cannot violate lawful possession rights, which were not established in this case.
Appointment of Receiver – Court would not appoint Receiver until and unless there are certain compelling reasons.
Equitable considerations and impact on running business influenced the court's decision to decline the appointment of a Receiver under Order 40 Rule 1 CPC.
The appointment of a receiver requires clear evidence of mismanagement and an element of urgency, which was not established in this case.
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....
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.