Q.
Order XL read as:
(1) Appointment of receivers.--
(1) Where it appears to the Court to be just and convenient the Court may by order--
(a) appoint a receiver of any property, whether before or after decree;
(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, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the 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.
(2) Nothing in this rule shall authorise the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove.
This rule authorises a Court to appoint a receiver whenever it appears to be just and convenient. The matter is left to the discretion of the Court such discretion must be, however, exercised not arbitrarily but judicially.
A receiver can only be appointed when just and convenient and when there is a prima facie case in favour of the plaintiff calling for taking an urgent measure.
It does not necessarily holds that an application to be made in this regard but the Court can also appoint a receiver suo motu and also can do so on the application of third party who is interested in preservation of the property.
In case of Krishna Kumar v. Grindlays Bank, AIR 1991 SC 889: (1991) 1 Cal LT 13 (SC): JT 1990 (3) SC 58: MANU/SC/0200/1991 : (1990) 3 SCC 669: (1990) 2 SCR 961: 1990
(2) UJ 128 (SC), it was observed, following principles must be borne in mind before a receiver is appointed by the Court:
(a) that the appointment is on the discretion of the Court;
(b) the basic object of this appointment is the preservation of property in dispute pending judicial determination of rights of party to it;
(c) a receiver should not be appointed unless the plaintiff prima facie proves that he has a very excellent chance of succeeding in the suit; and
(d) since appointment of receiver deprives the opposite party from the possession of property before the final judgment is pronounced, it should only be granted for preservation of manifest injury or wrong.
In Parmanand Patel v. Sudha A. Chowgule, MANU/SC/0377/2009 : AIR 2009 SC 1593, it was observed that a receiver having regard to the provisions contained in Order XL, rule 1 of the Code of Civil Procedure, is appointed only when it is found to be just and convenient to do so.
Appointment of a receiver pending suit is a matter which is within the discretionary jurisdiction of the Court. Ordinarily the Court would not appoint a receiver save and except on a prima facie finding that the plaintiff has an excellent chance of success in the suit. It is also for the plaintiff not only to show a case of adverse and conflict claims of property but also emergency, danger or loss demanding immediate action. Element of danger is an important consideration. Ordinarily, a receiver would not be appointed unless a case has been made out which may deprive the defendant of a de facto possession. For the said purpose, conduct of the parties would also be relevant.
Again in case of H.S. Mills Co. v. M.W. Pardhan, MANU/SC/0269/1966 : AIR 1966 SC 1707: (1996) 36 Comp Cas 426 (SC): (1966) MANU/SC/0269/1966 : 60 ITR 508 (SC): (1966) 3 SCR 948, it has held by the Supreme Court that where a receiver is appointed, clothed with all powers under clause 1(d) for the realisation of debts due from a company, he becomes a creditor of the company and can maintain proceedings for the winding-up of the company for the realisation of debts, though it may not be ordinary procedure for realisation of debts."
No hard and fast rule can be laid down for the Court to exercise power under this rule. This power (under the rules) depends upon facts and circumstances of each cases. A Court may appoint a receiver not as a matter of course/procedure but as a matter of prudence having regard to the justice of the situation.
In Issar Das Lulla v. Hari, MANU/TN/0228/1962 : AIR 1962 Mad 458, it was held that "appointment of the receiver is in the discretion of the Court. A receiver should not be appointed when there is a bona fide possession of the property, unless there is some cogent reason /grounds for interference. The main object and purpose of appointment of receivers is the preservation of the subject-matter of the litigation pending a judicial determination of the rights of the parties thereto."
According to the provision of Order XL, rule 1 of the Code of Civil Procedure, 1908, a Court can appoint a receiver in case where there is no application from the party concerned but if it is satisfied that it be just and convenient to do so. It is not necessary that the appointment only should be made when there is an application for that."
In Hiralal Patni v. Loonkaran Sethiya, MANU/SC/0015/1961 : AIR 1962 SC 21 on the issue of "position of a receiver" the Court held that "a receiver is an officer of the Court. He is also a public servant within the meaning of section 2, clause (17) of the Code of Civil Procedure, 1908."
Duration: In cases of Hiralal Patni v. Loonkaran Sethiya, MANU/SC/0015/1961 : AIR 1962 SC 21 (27): (1962) 1 SCR 868 and Hindustan Petroleum Corp. Ltd. v. Ram Chandra, MANU/SC/0087/1994 : AIR 1994 SC 478, the Supreme Court has summarised the law regarding the terms of the office of receivership. The Court held that:
(a) if a receiver is appointed in a suit until judgment, the appointment is brought to an end by the judgment, in the action;
(b) if the receiver is appointed in a suit without his tenure being expressly defined, he will continue to be receiver till he is discharged;
(c) although after the final disposal of the suit as between the parries to the litigation, the receiver's functions are terminated, he would still be answerable to the Court as its officer till he is finally discharged;
(d) the Court has ample power(s) to continue the receiver even after the final decree if the exigencies of the case so require.
A receiver cannot be appointed in execution of a decree in respect of a compulsory deposit in a provident fund to the judgment-debtor as held by the Supreme Court in Union of India v. Heera Devi, MANU/SC/0003/1952 : AIR 1952 SC 227: (1952) 1 SCR 765.
in this case the decree-holder, a lady, had obtained a money decree against one Ram Grahit Singh, a retired head clerk in the dead letter office. In 1949, a receiver was appointed for collecting the monies standing to the credit of the judgment-debtor in the Provident Fund with the postal authorities. The Union of India intervened for setting aside the order of appointment of receiver and the Hon'ble Supreme Court allowing the appeal of Union of India held that no receiver can be appointed and such a deposit cannot be assigned or charged and is not liable to any attachment.
It has been held in several cases that a receiver can be appointed even where the mortgage is a simple mortgage, but the Hon'ble High Courts of Allahabad and Patna have taken a contrary view.
The view in Charan Nandi Chaudhary v. Ranjit Prasad, MANU/BH/0039/1932 : AIR 1932 Pat 360, appears to be correct in view of sub-rule (2) of rule 1 of Order XL of the Code of Civil Procedure, 1908 which lays down that "nothing in this rule shall authorise the Court to remove............". In the case of simple mortgage the plaintiff gets a decree for sale and he has no present right to be in possession of the property and, therefore, the defendant's possession cannot be taken away by the appointment of receiver.
Order XL, rule 4 read as: Where a receiver--
(a) fails to submit his accounts at such periods and in such form as the Court directs, or
(b) fails to pay the amount due from him as the Court directs;
(c) occasions loss to the property by his wilful defaults or gross negligence.
The Court may direct his property to be attached and may sell such property, and may apply the proceeds to make good any amount found to be due from him or any loss occasioned by him, and shall pay the balance (if any) to the receiver.
So, above stated provisions are clear that if there is any default on the part of receiver in performance of his duties, Courts are at liberty to proceed against him according to the laws.
Q.
Sections 75-78 and Order XXVI of the Code of Civil Procedure, 1908 are the provisions for appointment of commissions. Clauses (e) to (g) appended to section 75 have been added by the amending Act of 1978. It was felt that the Court should be authorised to issue commissions for technical and expert investigation. The power of the Court to issue commission is discretionary in nature and not right of matter. The Court has also been empowered to appoint commissions to hold sales otherwise than in execution, as also is issue commissions for the performance of ministerial act.
Section 75 reads as: Subject to such conditions as may be prescribed, the Court may issue a commission--
(a) to examine any person;
(b) to make or local investigation;
(c) to examine a adjust accounts; or
(d) to make a partition;
(e) to hold a scientific, technical or expert investigation;
(f) to conduct sale of property which is subject to speedy and natural decay and which is in the custody of the Court pending the determination of the suit; and
(g) to perform any ministerial act.
While Order XXVI, rule 1 deals with the cases in which the Court may issue commission to examine witnesses. It provides that any Court in any suit issue a commission for the examination on interrogatories or otherwise of any person resident within the local limits of its jurisdiction who is exempted under this Code of Civil Procedure from attending the Court or who is due to sickness or infirming unable to attend it:
Provided that a commission for examination on interrogatories shall not be issued unless the Court, for reasons to be recorded, thinks it necessary so to do.
In R. Ramakrishna Reddy v. M. Kamala Devi, MANU/AP/0425/2004 : AIR 2004 AP 484, the Commissioner is appointed by the Trial Court only to propose a scheme of partition in terms of the preliminary decree. On the proposal made by the Commissioner, the Court would either draw lots or would itself allot the shares to the parties. Thus, it is held that it does not mean that the proposal made by the Commissioner would be binding on the parties. Since the order under Revision only directs the Commissioner to propose a scheme for partition of the properties covered by the preliminary decree, no prejudice can be said to have been caused to the revision petitioner by that order.
Section 76 is a unique provision where the Code of Civil Procedure has provided for issuance of commission to another Court in warranting circumstances. It reads as:
(1) A commission for examination of any person may be issued to any Court (not being a High Court) situated in a State other than the State in which the Court of issue situated and having jurisdiction in the place in the person to be examined resides.
(2) Enemy Court receiving a commission for the examination of any person under sub-section (1) shall examine him to be examined pursuant thereto, and the commission(s), when it has been duly executed, shall be returned together with the evidence taken under it to the Court from which it was issued, unless the order for issuing the commission has otherwise directed, in which case the commission shall be returned in terms of such order.
Again, in section 78 where the execution of commissions issued by Foreign Courts is followed.
Rule 4 of Order XXVI of the Code of Civil Procedure further lays down that any Court may in any suit issue a commission for the examination on interrogatories or otherwise of:
(a) any person resident beyond the local limits of its jurisdiction;
(b) any person who is about to leave such limits before the date on which he is required to be examined; and
(c) any person in the service of the Government who cannot in the opinion of the Court attend without detriment to the public services.
In case of Filmistan (Pvt.) Ltd., Bombay v. Bhagwandas, MANU/SC/0019/1970 : AIR 1971 SC 61: (1970) 3 SCC 258, on the provision or Order XXVI, the Supreme Court observed that:
"This rule provides for the examination on commission of any person residing within jurisdiction in certain circumstances. The basis of this rule is that the evidence of a witness should be given in public Court and tested by cross-examination. And the issue of a commission is of discretionary nature in the satisfaction of the concerned Court."
The provisions under this order do not detract against inherent power of Supreme Court to appoint commission for making inquiries into the facts relating to violation of fundamental rights.
Rule 9 of Order XXVI of the Code of Civil Procedure, 1908 deals with the commission to make local investigation. It provides in general that in any suit in which the Court deems a local investigation to be requisite or proper for the purpose of elucidating any matter in dispute, or of ascertaining the market value of any property, or the amount of any mesne profits or damages or annual net profits, the Court may issue a commission to such person as it thinks fit directing him to make such investigation and to report thereon to the Court.
Rule 5 of Order XXVI is a provision where a commission or request to examine a witness could be made who is not within the local limits of India.
Rule 10 is about the procedure and reports and depositions of the commission, which are to be used in evidence.
While rule 10A is for the commissions for scientific investigation, rule 10B of Order XXVI deals with the commission for performance of ministerial act. Rule 10A provides that where any question arising in a suit involves any scientific investigation which cannot, in opinion of the Court, be conveniently concluded before the Court, may, if it thinks it necessary or expedient in the interest of justice so to do, issue a commission to such person as it thinks fit, directing him to enquire into such questions and report therein.
In case of T.K. Bose v. Savitri Devi, AIR 1996 SC 2752: 1996 VIAD (SC) 97: (1997) 1 Cal LT 49 (SC): JT 1996 (7) SC 480: (1996) 5 SCALE 574: (1996) 10 SCC 96: (1996) Supp 4 SCR 17 the Court held that--
"non-consideration of the report of the special officer, appointed so, and surveyor appointed with the consent of both the parties, that too after rejection of the objection filed in respect of the report, vitiates the ultimate conclusion.
Rule 10B provides for (that) where any question arising in a suit involves the performance of any ministerial act, which cannot, in the opinion of the Court, be conveniently performed before the Court, the Court may, if, for the reasons to be recorded, is of the opinion that it is necessary or expedient in the interest of justice so to do, issue a commission to such person as it thinks fit, directing him to perform that ministerial act and report thereon.
Order XXVI, rule 11 lays that "in any suit in which an examination or adjustment of accounts is necessary, the Court may issue a commission to such person as it thinks fit, directing him to make such adjustment or examination."
But in case of Padma Sen v. State of Uttar Pradesh, MANU/SC/0065/1960 : AIR 1961 SC 218: 1961 Cr LJ 322: (1961) 1 SCR 884 the Supreme Court held that "the Code does not make any provision for the appointment of commissioner who may seize the account books which are in the possession of the plaintiff on the ground of the defendant's apprehension that the plaintiff might have tampered with them. It was further held that the Court's inherent power cannot be invoked for such purposes."
A Court has no inherent power under section 151 of the Code of Civil Procedure, 1908 to appoint a commissioner because inherent powers do not extend over the substantive rights.
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