Appointment Of Receiver Not A Matter Of Right, But Discretionary Relief Which May Be Ordered When Court Deems It 'Just And Convenient': Telangana HC

The Telangana High Court has reiterated that the appointment of 'Receiver' under Order XL Rule 1 is not a matter of right, but a discretionary relief that may be ordered by the Court, where the Court deems it to be 'just and convenient.'

The order was passed by a Division Bench comprising Justice Moushumi Bhattacharya and Justice Nagesh Bheemapaka in a Civil Miscellaneous Appeal, filed by the appellant (plaintiff in the original suit) challenging the order of the trial court, declining to appoint a receiver, in the suit for partition.

The Court emphasized that although Order XL stipulates 4 situations wherein a Receiver may be appointed, such appointment is thoroughly subject to the discretion of the Court. Referencing to Order XL Rule 1(1) the Bench held:

“Order XL Rule 1(1) begins with “Where it appears to the Court to be just and convenient, the Court may by order …..”. The provision makes it clear that appointment of Receivers is not granted as a matter of course but only where the Court deems it fit to make such appointment on being convinced that the conditions under Order XL Rule 11(1)(a)–(d) exist and 7 warrant appointment of a Receiver. The conditions cannot be said to be exhaustive since the Court preserves its power to refuse appointment of Receiver even where all the conditions exist. The Court's discretion is reinforced by the words “just and convenient” which the Court may construe and assess under this Section.”

Background:

In 2013, a suit for partition was initiated by the appellant herein in respect of the property left behind by his late grandfather, against his grandmother, father, aunts, and cousins. Along with the suit, an interim relief for injunction was sought against the alienation of the suit property.

The trial Court dismissed this interlocutory application in 2015 and the appellant/plaintiff preferred a CMA against the said order. In 2018, a division bench of the High Court while upholding the order, directed the grandmother of the appellant/plaintiff to deposit a 5% share of the rents received by her through the disputed property, as was also directed by the Trial Court.

In 2022, the appellant/plaintiff filed a second IA, for the appointment of a receiver, stating that his grandmother failed to comply with the directions of the Coordinate Bench. It was argued that the respondent (grandmother) had no defence against non-compliance with the orders passed by the Trial Court and the High Court.

The application was dismissed in 2022, giving rise to the present Miscellaneous Appeal.

Firstly, the Court noted, that appointing a Receiver is a discretion of the Court. Moreover, it was noted that even otherwise, in an application seeking to appoint a receiver, it is not merely sufficient to prove that the applicant has right to the disputed property, but should be able to prove an an adverse claim or imminent danger to the property calling for immediate action. It said:

“The Court would not also ordinarily appoint a Receiver except on a prima facie finding that the plaintiff has an excellent chance of success in the Suit. The plaintiff must show an adverse claim being made to the property as well as some imminent danger to the property or loss to the plaintiff calling for immediate action. The imminent risk of loss must clearly be spelt out and be sufficient to prod the Court into invoking its discretionary jurisdiction for appointing a Receiver.”

Lastly, the Bench noted that although the High Court had directed for a deposit of 5% rent received by the grandmother of the appellant; the appellant under the guise of the order sought to appoint a receiver of the entire property.

With that observation, the Appeal was dismissed.

C.M.A. No.426 OF 2022

Prateek Patny vs Smt. Tara Devi Patny and 23 Others

Counsel for appellant: V V N Narayana Rao

Counsel for respondents: D Pramada

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