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1982 Supreme(Ori) 136

High Court Of Orissa
R. C. Patnaik, J.
SARADA DEI - Appellant
Versus
KHIROD KUMAR SAHU - Respondent
Civil Revn.  335  Of  1982
Decided On : 10/12/1982

Advocates Appeared:
B.DAGARA, M.Patra, MAHADEV MISHRA, P.C.MISHRA, R.K.MOHAPATRA, S.LATIFF, S.P.Misra, S.S.DAS

The appointment of a receiver and grant of temporary injunction are extraordinary remedies that require a strong prima facie case, possession, and balance of convenience. A compromise decree is valid and effective until set aside, and alienations made pursuant to it are not null and void based on mere allegations.

Headnote:

RECEIVER - APPOINTMENT - PRINCIPLES - PROPERTY IN MEDIO - PROPERTY IN POSSESSION OF DEFENDANT - INJUNCTION - TEMPORARY - REQUIREMENTS - COMPROMISE DECREE - VALIDITY - CHALLENGING - GROUNDS.

Fact of the Case:

Plaintiffs filed a suit for declaration of title, invalidation of transfers, confirmation of joint possession, and permanent injunction. The compromise decree in Title Suit No. 26 of 1972 was challenged on grounds of absence of due execution and violation of terms. Plaintiffs sought appointment of receiver and temporary injunction.

Finding of the Court:

The court held that the plaintiffs did not have a prima facie case, possession, or balance of convenience to justify the appointment of a receiver or grant of temporary injunction. The compromise decree was valid and effective until set aside. The alienations made by the defendants were not null and void based on mere allegations in the plaint.

Issues: 1. Whether the plaintiffs had a prima facie case to justify the appointment of a receiver and grant of temporary injunction? 2. Whether the compromise decree in Title Suit No. 26 of 1972 was valid and effective? 3. Whether the alienations made by the defendants were null and void?

Ratio Decidendi: 1. The principles for appointment of a receiver require the plaintiff to show a prima facie case, danger or loss demanding immediate action, and a clear and free right. The property in possession of the defendants cannot be disturbed without strong and compelling reasons. 2. A compromise decree is a solemn transaction and cannot be set aside by mere allegations. The plaintiffs had not established any violation of terms of the compromise. 3. The alienations made by the defendants were not null and void based on vague allegations in the plaint.

Final Decision: The court dismissed the appeals and disposed of the revision petition. It directed the appointment of an Advocate receiver to collect rent from tenants and deposit the same in court for the benefit of the ultimately successful party.

R. C. PATNAIK, J.

( 1 ) THE two appeals and the revision arise out of interlocutory proceedings in Title Suit No. 328 of 1978 pending in the court of the Subordinate Judge, First Court, Cuttack.

( 2 ) THE suit has been filed by Sarada Dei and her mother Kholia Dei, since deceased, for declaration of their title in respect of the property described in Schedules A to A/4, for invalidating the transfers effected by Krushna Chandra Behera, defendant No. 16 in favour of defendants Nos. 1 to 15, for confirmation of joint possession with defendants Nos. 16 to 24 or alternatively for recovery of possession and for permanent injunction restraining the alienees defendants 1 to 15 from interfering with the possession of the plaintiffs and defendants 16 to 20 etc. Defendants 25 to 29 as pendente lite purchasers have subsequently been added as defendants.

( 3 ) THE burden of the story of the plaintiffs appears to be that the compromise effected in Title Suit No. 26 of 1972 of the Court of the Subordinate Judge, Cuttack, is not legal, valid and binding, It is stated in the plaint that the compromise petition was prepared by defendant No. 16, the son of deceased plaintiff No. 1 and brother of plaintiff No. 2, and the younger brothers and the plaintiffs were compelled to sign the document and admit the compromise and the compromise was not equitable. The terms of the compromise were not explained to the plaintiffs and without understanding the terms, the same was executed. In gist, the allegation is one of absence of due execution. They have alleged that defendant No. 16 virtually got the entire property and contrary to the terms contained in the compromise have been alienating the property.

( 4 ) THE alienees have contested the matter stating that the compromise was admitted in the court and recorded whereupon the decree in Title Suit no. 26 of 1972 was drawn up. The transfers are valid and in pursuance of the transfers the alienees are in possession. So, the prayer for appointment of receiver or for grant of temporary injunction is misconceived.

( 5 ) THE requirements for the appointment of receiver have been lucidly stated by Ramaswami, J. in the oft cited decision of T. Krishnaswamy Chetty v. C. Thangavelu Chetty, AIR 1955 Mad 430. After an exhaustive consideration of the authorities, the learned Judge stated the principles as under:-

"the five principles which can be described as the 'panch sadachar' of our Courts exercising equity jurisdiction in appointing receivers are as follows: (1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court. The discretion is not arbitrary or absolute; it is a sound and judicial discretion, taking into account all the circumstances of the case, exercised for the purpose of permitting the ends of justice, and protecting the rights of all parties interested in the controversy and the subject-matter and based upon the fact that there is no other adequate remedy or means of accomplishing the desired objects of the judicial proceeding. (2) The Court should not appoint a receiver except upon proof by the plaintiff that prima facie he has very excellent chance of succeeding in the suit. (3) 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. A Court will not act on possible danger only the danger must be great and imminent demanding immediate relief. It has been truly said that a Court will never appoint a receiver merely en the ground that it will do no harm. (4) An order appointing a receiver will not be made where it has the effect of depriving a defendant of a 'de facto' possession since that might cause irreparable wrong. If the dispute is as to title only, the Court very reluctantly disturb possession by receiver, but if the pro






















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