Baldeo Prasad v. Gopi Lal Gupta — 1990 DIGILAW 797 (ALL)

JUDGMENT K.P. Singh, J. - The above noted appeal has been preferred by the defendant-appellant- Baldeo Prasad Gupta against the order passed by the V. Additional District Judge, Kanpur (Nagar) on 24.8.1990 whereby receivers have been appointed and the defendant appellant has been disposed from the management of the oust property. 2. Shorn of unnecessary details it appears that an application for appointment of the receivers had been moved by the defendant Nos. 9 to 15 and on their move the impugned order has been passed by the Trial Court. 3. Order XL Rule 1 provides for appointment of the receivers on cogent reasons as below:- (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 realisation, management, protection preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rent and profits and execution of documents as the owner himself has, or such of those powers as the court thinks fit. 4. The bare perusal of the impugned order indicates that the Trial Court has not appreciated the provisions of Order XL Rule 1 C.P.C. mentioned above, The suit giving rise to this appeal has been filed against the removal of the defendant-appellant from the management of the trust property. Allegations and counter allegations have been made in the plaint and written statement. Defendant Nos. 9 to 15 applied for being impleaded in the suit and they were impleaded in the suit. The defendant appellant has been removed from the custody of the trust property through the impugned order without recording categorical finding needed before appointing receivers. In S.B. Industries, Freegunj and another v. United Bank of India and others, AIR 1978 All 189 a Division Bench of this Court has indicated in paragraph 7 of the judgment that order XL Rule 1 of the C.P.C. lays down that where it appears to the court to be just and convenient the court may by order appoint a receiver of any property, whether before or after a decree. In order to justify the appointment of receivers the plaintiff must establish a reasonable possibility that the plaintiff will ultimately succeed in obtaining the relief claimed in the suit. The requirement thus is that he must establish a good prima facie case. It may further be remembered that the appointment of a receiver is, as a general rule, discretionary, and not a matter of right. A court will make an appointment of a receiver with great caution and circumspection. In a case where the remedy of the appointment of a receiver seems necessary to prevent fraud, to protest and preserve the property against an imminent danger of loss or diminution in value, destruction, squandering, wastage or removal from jurisdiction, the court may appoint a receiver. It may further be stated in this connection that a court in exercise of its discretion to appoint or refuse as receiver must take into account all the circumstances and facts of the case, lire presence of conditions and grounds justifying the relief, ends of justice, the rights of all the parties interested in the subject matter and the adequacy of the other remedies. 5. In the present case we find that the Trial Court has not dealt with the claim of the defendant appellant. It also appears that the Trial Court has also not afforded reasonable opportunity to the defendant. It is also necessary to mention here that the Trial Court has passed the impugned order when he came to know that some transfer applications had been moved and here pending before the District Judge. The Trial Court has failed to consider whether the person moving application for appointment of a receiver had any right for the management and whether the other ingredients mentioned in the above ruling had been present so as to necessitate the appointment of receiver. Since the Trial Court has not applied its mind to the relevant provision and had failed to record necessary finding,we find that the impugned order suffers from mistake of law and deserves to be set aside. 6. It is note worthy that the defendant-appellant had applied for one month's, time to file objection against the application for appointment of a receiver. Annexure 6 attached with the stay application and affidavit indicates that the Trial Court did not act reasonably in dealing with the appellant's prayer for item. 6. It is note worthy that the defendant-appellant had applied for one month's, time to file objection against the application for appointment of a receiver. Annexure 6 attached with the stay application and affidavit indicates that the Trial Court did not act reasonably in dealing with the appellant's prayer for item. The order dated 22.5.1990 noted on Annexure 6 indicates that only one day's time was granted on that day. It appears that the defendant-appellant had moved a transfer application against the Trial Court and the comments were asked for by the district Judge and the impugned order has been passed by the Trial Court on 24.5.1990; we think that the Trial Court has failed to give proper a opportunity to the defendant appellant to oppose the application for appointment of receiver and on this ground alone. The impugned order deserves to be set aside. 7. The learned Counsel for the respondents 1 to 7 in the present appeal has tried to support the impugned order. According to him, the Trial Court could appoint a receiver sue-moto and that the Trial Court has given relevant findings to appoint the receiver in the facts and circumstances of this case. It has also been emphasised that the Trial Court had given proper opportunity to the defendant -appellant to file objection to the application for appointment of the receiver. 8. We have already indicated above that the Trial Court has not acted reasonably. In the facts and circumstances of the case it fails to give an opportunity to the defendant-appellant for filing objection to the application for appointment of receiver. We do not agree with the submission of the learned Counsel for the contesting respondents in this regard. 9. As regards the finding recorded by the Trial Court in the impugned order, it is sufficient to observe that the finding cannot be sustained as the defendant-appellant was not afforded reasonable opportunity to press his claim. It is also not very clear that the Trial Court has taken into account any affidavit in arriving at this finding. The bare perusal of the impugned order indicates that the allegations in the pleadings of the parties have been referred to. It is well known that these pleadings are not evidence in the case. It is also not very clear that the Trial Court has taken into account any affidavit in arriving at this finding. The bare perusal of the impugned order indicates that the allegations in the pleadings of the parties have been referred to. It is well known that these pleadings are not evidence in the case. Therefore, we are not satisfied with the submission of the learned Counsel of the contesting respondents that in view of the findings recorded by the Trial Court, the impugned order should be sustained. 10. Our attention has also been drawn to the ruling reported in A.I.R. 1965 Andhra Pradesh 143 and it has been emphasised that a receiver can be appointed in the interest of public Chartiable Trust. In the present case according to the learned Counsel for the respondents that the impugned order has been made with a view to safeguard in the interest of Public Charitable Trust. Admittedly, the defendant appellant was managing the trust property. Plaintiff respondents have filed the suit for removal of defendant appellant. The con testing respondents in this appeal had applied for being impleaded in the suit and on their impleadment they filed an application for appointment or receiver which has been dealt with in the impugned judgment. In the ends of justice, we think that the defendant-appellant should get an opportunity to put forward his claim and it is the duty of the Trial Court to consider the claims of all the parties concerned before appointing a receiver over the trust property. Looking from this angle, we find that the impugned order cannot be sustained. 11. Lastly, it has been emphasised by the learned Counsel for the contesting respondents in this appeal that the respondents 8 and 9 were not served. Therefore, the appeal cannot be decided on merits in their absence. In our opinion the respondents 8 and 9 would be proforma respondents in the present appeal. The impugned order have been passed at the instance of the contesting respondents 1 to 7 who were impleaded in the suit and one of the impleaded persons has been appointed as a receiver, Therefore, the appeal can be heard on merits and be finally disposed of even when the respondents 8 and 9 have not been properly served. 12. For the foregoing discussion, this appeal deserves to be allowed. The impugned order of the Trial Court dated 24.9.1990. 12. For the foregoing discussion, this appeal deserves to be allowed. The impugned order of the Trial Court dated 24.9.1990. appointing receiver in suit no. 5 of 1922, Kamal Narian Gupta and others v. Baldeo Prasad Gupta and others is hereby set aside and the Trial Court is directed to re-consider the application of the parties in the light of the observation made above. The Trial Court should also give an opportunity to the trustees to press their claim before dealing with the question of appointment of receivers. It would deal with the claims of the parties hereafter expeditiously preferably within three weeks from the date when a certified copy of this order is produced before him. 13. Parties are directed to bear their own costs.