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2009 DIGILAW 485 (GUJ)

Harishbhai Kantilal Shah v. Ismalbhai Dadabhai Patel

2009-07-21

ABHILASHA KUMARI

body2009
Judgment Smt. Abhilasha Kumari, J.—Rule. Mr. Shital R. Patel, learned Counsel for the Respondent No. 1,who is the main contesting respondent, waives service of notice of Rule for the Respondent No. 1. In the facts and circumstances of the case, this petition is being heard and decided today. 2. This petition has been filed under Article 226 and 227 of the Constitution of India with a prayer to quash and set aside order dated 7-7-2009, passed below application at Exh.19, in Civil Misc. Appeal No. 101 of 2009, whereby the learned Presiding Officer, Fast Track Court No. 2, Vadodara has set aside the order dated 5-6-2009, rendered by the trial Court under application Exh.6 in Special Civil Suit No. 326 of 2009, for appointment of a Receiver. 3. The brief facts of the case, as emerging from the material on record, are that the petitioner (original plaintiff) filed Special Civil Suit No. 326 of 2009, inter alia with a prayer for grant of declaration and permanent injunction. The Respondent No. 1 is the original defendant No. 1 in the suit. The petitioner filed an application at Exh.5, for grant of temporary injunction. Along with the said application, an Application at Exh.6, under the provisions of Order 40 Rule 1 of the Code of Civil Procedure, for appointment of Receiver, was filed. By order dated 05.06.009, the trial Court granted the prayers made in the application under Exh.6 and ordered the appointment of a Court Commissioner, who was directed to submit the report on, or before, 15.06.2009. This order was challenged by the Respondent No. 1 by filing Civil Misc. Appeal No. 101 of 2009. The Appellate Court below has set aside the order of the trial Court by passing the impugned order, hence the petition. 4. Ms. Nisha M. Parikh, learned Counsel for the petitioner has submitted: (a) That the impugned order of the Appellate Court below is erroneous, as it has wrongly set aside the order of the Trial Court, ordering appointment of a Receiver. (b) That the appointment of a Receiver, pending Suit, is a matter of discretion and in this case the trial Court has rightly exercised discretion, while allowing the application of the petitioner. (c) The petitioner has a very good prima facie case and is likely to succeed in the suit. (b) That the appointment of a Receiver, pending Suit, is a matter of discretion and in this case the trial Court has rightly exercised discretion, while allowing the application of the petitioner. (c) The petitioner has a very good prima facie case and is likely to succeed in the suit. (d) That the trail court has also granted ex-parte injunction in favour of the petitioner and as the respondents have filed a false affidavit before the Collector, there is justification in filing the application for appointment of a Receiver and the above aspects have been ignored by the court below. (e) That the judgments cited by the petitioners have not been considered by the courts below in their proper perspective. (f) That though the respondents are in physical possession of the property, the petitioner has the paper possession, and as the appointment of a Receiver is necessary, in order to secure the interests of the petitioner, the impugned order, being erroneous and unsustainable in law, ought to be quashed and set aside. 5. On the other hand, Mr. Shital R. Patel, learned Counsel for the Respondent No. 1, while opposing the prayers made in the petition, has submitted: (a) That the application under Exh.6 filed by the petitioner for appointment of a Receiver does not contain a single reason to show why the appointment of a Receiver is necessary. Similarly, the order of the trial Court dated 5-6-2009, has been passed without issuance of notice to the respondents, who have not been heard before the application was allowed. (b) The order of the trial Court is cryptic, and contains no reasons whatsoever, for appointment of a Receiver. As such, it is dehors the settled principles of law, as appointment of a Receiver is one of the harshest remedies available in law and can only be resorted to in extreme cases. (c) That the provisions of Order 40 Rule 1 can be invoked where it appears to the court that the appointment of a Receiver is “just and convenient” and in the present case, no compelling circumstances have been shown by the petitioner to necessitate the appointment of a Receiver and the trial Court has failed to record reasons for ordering such appointment. (d) That the impugned order of the Appellate Court below is just, proper and well-founded, and does not require to be interfered with. (d) That the impugned order of the Appellate Court below is just, proper and well-founded, and does not require to be interfered with. (e) That the Appellate Court has rightly set- aside the order of the trial Court by giving clear and cogent reasons, which are in consonance with the settled principles of law and, therefore, the petition may be dismissed. 6. I have heard learned Counsel for the respective parties, perused the contents of the impugned order and other documents on record. From a perusal thereof, it is clear that the application at Exh.6 filed by the petitioner in Special Civil Suit No. 326 of 2009, for appointment of Receiver, does not contain any reason why the appointment of a Receiver has become necessary, during the pendency of the Suit. The order dated 05.06.2009 of the Trial Court, whereby the said application has been allowed, is not only brief and cryptic but bereft of reasons. It is apparent that the said order has been passed without issuing notice to the respondents or giving them an opportunity of being heard. These aspects have been noticed, and have weighed with, the Appellate Court while setting aside the said order. 7. Contrary to the submissions made by the learned Counsel for the petitioner, a perusal of the impugned order reveals that the judgments cited at the Bar by the respective parties have been taken note of and considered by the Appellate Court below. 8. The provisions of Order 40 Rule 1 provide for appointment of a Receiver where it appears to the court to be “just and convenient”. As the appointment of a Receiver is one of the harshest measures available in law which is resorted to in unavoidable circumstances, it must also be reflected from the record that there are urgent circumstances prevailing, that necessitate the appointment of a Receiver. The discretion vested in the Court must be exercised in consonance with the provisions of law, where it appears that the appointment of a Receiver is ‘just and convenient’ and such circumstances should normally be reflected in the order. In other words, the facts and circumstances of the case should justify the appointment of a receiver. In the present case, admittedly the de facto possession is with the respondents, and the petitioner has only a ‘paper possession’. In other words, the facts and circumstances of the case should justify the appointment of a receiver. In the present case, admittedly the de facto possession is with the respondents, and the petitioner has only a ‘paper possession’. The Trail Court has not indicated that the petitioner has a strong prima facie case or that there are urgent and compelling circumstances for appointment of a Receiver. In fact, the said order has not taken into consideration any aspect of the matter and has allowed the application of the petitioner in a routine and casual manner. In the above circumstances, no fault can be found in the order of the Appellate Court below, for setting aside the said order. In this regard, it will be fruitful to refer to S. Saleema Bi vs. S. Pyari Begum, (2000) 9 SCC 560 ,wherein it has been held as under: “3. We have heard learned Counsel and perused the judgment. We find that the defendant is in physical possession of the property in dispute. The receiver can only be appointed when it is just and convenient and also when there is a prima facie case in favour of the plaintiff-respondent and the case calls for taking of urgent measure like appointment of a receiver. The High Court has not gone into these questions while appointing receiver for the property in dispute. We, therefore, find that the appointment of the receiver was not legally justified. We, accordingly, set aside the order of the High Court.” 9. While dealing with a similar issue, the Madras High Court in T. Krishnaswamy Chetty V.C. Thangavelu Chetty, AIR 1955 Madras 430 held as under. “The appointment of a receiver is recognised as one of the harshest remedies which the law provides for the enforcement of rights and is allowable only in extreme cases and in circumstances where the interest of the person seeking the appointment of a receiver is exposed to manifest peril. Therefore, this exceedingly delicate and responsible duty has to be discharged by the Court with the utmost caution and only when the five requirements embodied in the words “just and convenient” in Order 40, Rule1 are fulfilled by the facts of the case under consideration. These five requirements are: (1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court. These five requirements are: (1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court. (2) The Court should not appoint a receiver except upon proof by the plaintiff that prima face he has a 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. (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. It would be different where the property is shown to be ‘in medio’, that is to say, in the enjoyment of no one. And (5) The Court, on the application made for the appointment of a receiver, looks to the conduct of the party who makes the application and will usually refuse to interfere unless his conduct has been free from blame.” 10. The above judgment, cited by the petitioner, has been taken note of by the Appellate Court below while passing the impugned order and the principles culled out in the said judgment do not help the case of the petitioner, rather, lend support to the view taken by the Appellate Court below which, in the considered opinion of this Court, is just, proper and in accordance with law. 11. The Appellate Court below has taken into consideration all relevant legal and factual aspects of the matter before setting aside the appointment of the Receiver. The impugned order contains clear and cogent reasons and does not suffer from any legal infirmity or jurisdictional error, so as to warrant interference. 12. The petition is devoid of merit and deserves to be dismissed. It is, accordingly, dismissed. Rule is discharged. P P P P P