The court should consider the competence of a company to act as a receiver and the terms of appointment should be fixed to protect the interest of both parties.

S. C. MOHAPATRA, J.

( 1 ) APPOINTMENT of plaintiff 1 as receiver by the appellate Court reversing decision of the trial Court appointing defendant 1 as receiver is assailed in these two Civil Revisions by defendant 1.

( 2 ) BOTH the plaintiffs and defendant 1 made applications in the trial Court for appointment of a receiver. Taking into consideration the fact that (i) in a previous proceeding under the Arbitration Act defendant 1 was appointed as receiver by the trial Court and it was continuing in possession of the disputed property, and (ii) plaintiffs have been restrained in O. S. No. 1 of 1985 of the Court of District Munsiff Palasa in respect of the suit properties, trial Court appointed defendant 1 as receiver. Thus, application for appointment of receiver by the plaintiffs was dismissed and that of defendant 1 was allowed. Plaintiffs preferred two appeals. Appellate Court held that defendant 1 did not render accounts to Court while he was receiver in the arbitration proceeding and it did not pay the amounts due to the plaintiffs as per direction by the Court in the said proceeding under the Arbitration Act. It further held that the findings of the trial Court that defendant 1 was continuing in possession is not correct. Justification for apprehension of the plaintiffs that out of vindictiveness defendant 1 may act in a manner detrimental to the term of the leases with the Union Government to have the effect. On these findings appellate Court appointed plaintiff 1 as receiver.

( 3 ) AT the outset, I must express concern that both the Courts have unnecessarily delved into the principle of appointment of a receiver when both the parties are at one that a receiver to be appointed. The only question which was to be considered was the person to be appointed as receiver. Thus, both the forums have exercised jurisdiction with material irregularity in laying too much importance to the principle of Appointment of a receiver which was academic.

( 4 ) IT is not in dispute that in respect of the disputed property defendant 1 and the plaintiffs entered into an agreement in the year 1970 in which both parties had the right to determine the agreement on condition laid down therein. A perusal of the agreement would show that defendant 1 was to take up the manufacture of salt in the disputed property although the business of manufacture of salt would be of plaintiffs and defendant 1. Thus, legally both are to be treated to be in possession. Factually, however, defendant 1 was in possession of the disputed properties and plaintiffs were entitled to some amount annually. Added to it, defendant 1 was appointed as receiver by the trial Court in an earlier proceeding under the Arbitration Act. The arbitration proceeding was held not to be maintainable. Even if the receivership is held to have come to an end, the property has not been taken out of possession of defendant 1 which continues in its hands factually. Added to it, plaintiffs have been restrained by the Palasa Court from interfering with the possession of defendant 1. No material has been produced before me that the said order of restraint has been varied. Order of restraint by a Court is to be given due respect by other Courts, so that there would be up conflicting decisions. This principle would not be applicable where the order is a nullity and as such is void. In the present case, no such submission has been made by either party. Therefore, appointment of any of the plaintiffs as receiver would be in conflict with the order of Palasa Court. On this short ground, order of the appellate Court cannot be sustained.

( 5 ) NORMALLY, a party to the suit should be preferred to be appointed as a receiver unless Court is of the opinion that it is incompetent or that Court cannot have effective control over such party receiver. Defendant 1 is a company subject to the control over the Companies Act. Trial Court ought to have taken into consideration whether a company which would be subj