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Sarada Dei Vs. Khirod Kumar Sahu and ors., Etc. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtOrissa High Court
Decided On
Case NumberMisc. Appeal Nos. 204 and 205 of 1981 and Civil Revn. No. 335 of 1982
Judge
Reported inAIR1983Ori155
ActsCode of Civil Procedure (CPC) , 1908 - Order 40, Rule 1
AppellantSarada Dei
RespondentKhirod Kumar Sahu and ors., Etc.
Appellant AdvocateP.C. Misra, ;S.P. Misra and ;S.Latiff, Advs.
Respondent AdvocateMahadev Mishra, ;R.K. Mohapatra, ;M. Patra, ;S.S. Das and ;B. Dagra, Advs.
DispositionAppeals dismissed
Cases ReferredVijay Kumar v. S.K. Thappar
Excerpt:
.....duty of the court to interpose and appoint a receiver at the instance of the party having legal title to possession irrespective of the fact whether the possessor is guilty of waste, dissipation, or malversation or the fact that damages are recoverable from such possessor for use and occupation. --if a right was asserted to property in the possession of the defendant claiming to hold under a legal title, the courts did not interfere by appointing a receiver unless a very strong case was made out. the court of chancery would not at the instance of a person alleging a mere legal title against another party who was in possession of real estate and who also claimed to hold by a like legal title, disturb that possession by appointing a receiver, but left the claimant to his remedy at law..........and compelling ground for such interference. where there is no apprehension of waste or danger a receiver will not be appointed merely on the ground that the applicant apprehends difficulty in obtaining possession of the property in the event of success or in realising mesne profits or the opposite party is poor or woman......... violently stated vague allegations constitute no substitute for vacuum of facts. thirdly, an application for the appointment of a receiver should always be made promptly and delay in making it is a circumstance unfavourable to such an appointment. but of course the matter should be considered judicially in all its aspects before being disposed of as there may be legitimate reasons for preferring an application after delay...' in rasi dei v. bikal.....
Judgment:

R.C. Patnaik, J.

1. The two appeals and the revision arise out of interlocutory proceedings in Title Suit No. 328 of 1978 pending in the court of the Subordinate Judge, First Court, Cuttack.

2. The suit has been filed by Sarada Dei and her mother Kholia Dei, since deceased, for declaration of their title in respect of the property described in Schedules A to A/4, for invalidating the transfers effected by Krushna Chandra Behera, defendant No. 16 in favour of defendants Nos. 1 to 15, for confirmation of joint possession with defendants Nos. 16 to 24 or alternatively for recovery of possession and for permanent injunction restraining the alienees defendants 1 to 15 from interfering with the possession of the plaintiffs and defendants 16 to 20 etc. Defendants 25 to29 as pendente lite purchasers have subsequently been added as defendants.

3. The burden of the story of the plaintiffs appears to be that the compromise effected in Title Suit No. 26 of 1972 of the Court of the Subordinate Judge, Cuttack, is not legal, valid and binding, It is stated in the plaint that the compromise petition was prepared by defendant No. 16, the son of deceased plaintiff No. 1 and brother of plaintiff No. 2, and the younger brothers and the plaintiffs were compelled to sign the document and admit the compromise and the compromise was not equitable. The terms of the compromise were not explained to the plaintiffs and without understanding the terms, the same was executed. In gist, the allegation is one of absence of due execution. They have alleged that defendant No. 16 virtually got the entire property and contrary to the terms contained in the compromise have been alienating the property.

4. The alienees have contested the matter stating that the compromise was admitted in the court and recorded whereupon the decree in Title Suit no. 26 of 1972 was drawn up. The transfers are valid and in pursuance of the transfers the alienees are in possession. So, the prayer for appointment of receiver or for grant of temporary injunction is misconceived.

5. The requirements for the appointment of receiver have been lucidly stated by Ramaswami, J. in the oft cited decision of T. Krishnaswamy Chetty v. C. Thangavelu Chetty, AIR 1955 Mad 430. After an exhaustive consideration of the authorities, the learned Judge stated the principles as under:--

'The five principles which can be described as the 'panch sadachar' of our Courts exercising equity jurisdiction in appointing receivers are as follows:

(1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court. The discretion is not arbitrary or absolute; it is a sound and judicial discretion, taking into account all the circumstances of the case, exercised for the purpose of permitting the ends of justice, and protecting the rights of all parties interested in the controversy and the subject-matter and based upon the fact that there is no other adequate remedy or means of accomplishing the desired objects of the judicial proceeding.

(2) The Court should not appoint a receiver except upon proof by the plaintiff that prima facie he has 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. A Court will not act on possible danger only the danger must be great and imminent demanding immediate relief. It has been truly said that a Court will never appoint a receiver merely en the ground that it will do no harm.

(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. If the dispute is as to title only, the Court very reluctantly disturb possession by receiver, but if the property is exposed to danger and loss and the person in possession has obtained it through fraud or force the Court will interpose by receiver for the security of the property. It would be different where the property is shown to be 'in medio', that is to say, in the enjoyment of no one, as the Court can hardly do wrong in taking possession: it will then be the common interest of all the parties that the Court should prevent a scramble as no one seems to be in actual lawful enjoyment of the property and no harm can be done to anyone by taking it and preserving it for the benefit of the legitimate who may prove successful. Therefore, even if there is no allegation of waste and mismanagement the fact that the property is more or less 'in medio' is sufficient to vest a Court with jurisdiction to appoint a receiver.

(5) The Court on the application 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. He must come to Court with clean hands and should not have disentitled himself to the equitable relief by laches, delay, acquiescence etc.'

The learned Judge thereafter quoted the law laid down in Crawford v. Boss, 39 Ga 44 (228):

'The high prerogative act of taking property out of the hands of one and putting it in pound under the order of the Judge ought not to be taken except to prevent manifest wrong imminently impending.'

and the observations of Atkinson, J. in Dozier v. Logon, 101 Ga 173 (229):

'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 creditors is exposed to manifest peril.'

and observed:--

'Therefore, this exceedingly delicate and responsible duty will be discharged with the utmost caution and only when the 'panch sadachar' or five requirements embodied in the words just and convenient (Order 40, Rule 1) are fulfilled by the facts of the case under consideration.'

In Muniammal v. Ranganatha Nayagar, AIR 1955 Mad 571, the same learned Judge reiterated the principles as here under:--

'.........First of all, a plaintiff applying for the appointment of a Receiver must show prima facie that he has a strong case and good title to the property or a special equity in his favour and that the property in the hands of the defendant is in danger of being wasted, it is not enough for the plaintiff to show that he has a fair question to raise as to the extent of the right alleged as in the case of a temporary injunction, but he must an further and make out that he has a good 'prima facie' title requiring Court's protection and safeguarding pending litigation...... Secondly, where the property is in medio that is to say, in the possession of no one, a Receiver can readily be appointed. But where any one is in possession under a legal claim strong and compelling reasons are necessary for interfering with such possession...... Thus, the bonafide purchaser of the property--'bona fides' have to be presumed unless and until the contrary can be inferred--in dispute should not be disturbed by the appointment of a Receiver unless there is some substantial and compelling ground for such interference.

Where there is no apprehension of waste or danger a Receiver will not be appointed merely on the ground that the applicant apprehends difficulty in obtaining possession of the property in the event of success or in realising mesne profits or the opposite party is poor or woman......... Violently stated vague allegations constitute no substitute for vacuum of facts.

Thirdly, an application for the appointment of a Receiver should always be made promptly and delay in making it is a circumstance unfavourable to such an appointment. But of course the matter should be considered judicially in all its aspects before being disposed of as there may be legitimate reasons for preferring an application after delay...'

In Rasi Dei v. Bikal Maharana, AIR 1965 Orissa 20, Barman, J. had in mind the observations of Ramaswami, J. when the learned Judge observed:--

'The appointment of 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. The principles to be followed for appointment of receiver as laid down are these: Not only must the plaintiff show a case of adverse and conflicting claim 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. 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. The high prerogative act of taking property out of the hands of one and putting it in pound under the order of the Judge ought not to be taken except to prevent manifest wrong imminently impending.

Hence the Court should not appoint a receiver of property in the possession of the defendant who claim it by legal title, unless the plaintiff can show prima facie that he has a strong case and good title to the property. The Court must consider whether special interference with the possession of defendant is required, there being well founded fear that the property in question will be disputed or other irreparable mischief may be done unless the court gives protection. The mere circumstance that the appointment of a receiver will do no harm to anyone is no ground for appointing a receiver.'

6. The law relating to injunction and receiver in India is practically the same as in England and was neatly stated by Lord Cranworth L. C. in Owen v. Homan, (1853) 4 HL Cas 997 at p. 1032 as follows:--

'Where indeed, the property is, as it were, in medio, in the enjoyment of no one, the court can hardly do wrong In taking possession. It is the common interest of all parties that the court should prevent a scramble......... But where the object of the plaintiff is to assert a right to property of which the defendant is in the enjoyment, the case is necessarily involved in further questions. The court, by taking possession at the instance of the plaintiff may be doing a wrong to the defendant, in some cases an irreparable wrong, if the plaintiff should eventually fail in establishing his right against the defendant, the court may, by its interim interference, have caused mischief to the defendant for which the subsequent restoration of the property may afford no adequate compensation.'

7. It will be seen that the courts have drawn distinction while formulating the principles between the property which is 'in medio' and the property which is in possession of the defendants. Where the property is in medio, the appointment of a receiver affects no party's possession and is in their interest. The consideration, however, is different where the property is in possession of the defendants, the appointment of receiver has the effect of dispossessing the person in actual possession. In order therefore to justify the appointment of receiver in the latter category of cases, the applicant has to satisfy by strong and compelling reasons, such as, dissipation of, danger or injury to the property in dispute. (See Chandrasekhar Satyanarayan Patnaik v. Nidadavolu Lakshmi (C. R. No. 382/68) disposed of on 26-9-1969 by A. Misra, J.).

8. Mr. M. Patra, the learned counsel for the alienees, drew my attention to Vijay Kumar v. S.K. Thappar, AIR 1976 J & K 30 (at p. 33). It has been said therein:--

'A Court will not appoint a receiver against a bona fide possessor with legal title save in exceptional circumstances as, for instance, when the property is in danger of being wasted, destroyed or lost. But where he has no legal right to possession as, for example, when he is a mere trespasser or one whose original entry was lawful and of right but whose right to the possession, has terminated, and he has refused or failed to quit despite demand, it is the duty of the court to interpose and appoint a receiver at the instance of the party having legal title to possession irrespective of the fact whether the possessor is guilty of waste, dissipation, or malversation or the fact that damages are recoverable from such possessor for use and occupation.'

Woodroffe has stated the law in England in his classic 'The Law Relating to Receivers'' as follows:--

'If a right was asserted to property in the possession of the defendant claiming to hold under a legal title, the Courts did not interfere by appointing a receiver unless a very strong case was made out.

The Court of chancery would not at the instance of a person alleging a mere legal title against another party who was in possession of real estate and who also claimed to hold by a like legal title, disturb that possession by appointing a receiver, but left the claimant to his remedy at law to have his title declared. The Court would not interfere with a legal title unless there was some equity, and unless in cases of absolute destruction, waste and imminent danger, or where the contest lay between a person having a clear title and one without any reasonable appearance of title and the like.'

9. Coming to the facts of the case, it is seen that the compromise was effected by the parties in Title Suit No. 26 of 1972. Sarada and her late mother were also executants. The same was presented in court, admitted by the parties and a decree was drawn up in terms thereof on 8-11-73. This suit has been filed in 1979. There have been alienations before the institution of the suit and in course of it. The compromise is a solemn transaction and is not set at naught by mere allegations. Sarada no doubt, has made some allegations in the suit; but those are yet to be established. Until then the compromise remains effective and operative. Whether defendant No. 16 violated any of the terms is a question to be decided. Sarada, therefore, does not have a prima facie case nor does she have possession. The alienees acting on the compromise have entered into transactions which cannot be described as null because of 'violently stated vague allegations' (in the words of Ramaswami, J.) in the plaint. A receiver is not to be appointed merely because it is expedient or convenient to one of the parties to do so or because it will do no harm to do so. The appointment of receiver would, in this case, have the effect of dispossessing the alienees and that i not the object of Order 40, Rule 1 of the Code of Civil Procedure.

10. The reasonings aforesaid a fortiori apply to the question of temporary injunction. As is well known, the requirements which should be satisfied before temporary injunction can issue are: (a) prima facie case, (b) possession and (c) balance of convenience or irreparable injury. The plaintiffs have not been able to satisfy any of these. The compromise decree stares at their face. There is no material to indicate their present possession nor can it be said that the balance of convenience is in their favour. Nor would irreparable injury be suffered by them in the event of refusal of interim injunction.

11. Considering from any angle, the applications filed by the plaintiffs for temporary injunction and for appointment of a receiver are misconceived and the learned trial Judge rightly rejected the same.

12. Civil Revision No. 335 of 1982 arises out of an order passed by the learned Subordinate Judge rejecting to stay further proceedings in Miscellaneous Case No. 378 of 1981 filed by the alienees. The alienees filed the application alleging that they purchased the properties under a registered sale deed dated 18-1-1980 and sought that a receiver may be appointed to collect the rent from the houses under occupation of tenants and deposit the same in court. The substance of their prayer is safeguarding the interest of the parties. Rent collectible from the tenants is an income from the suit property which should be preserved for the benefit of the ultimately successful party. Inasmuch as I have gone into the matter in depth in the other two appeals, I direct that an Advocate receiver may be appointed by the learned Subordinate Judge who would collect the rent from the tenants every month and deposit the same in court. The said amount should lie in deposit for the benefit of the party who would be ultimately successful in the litigation.

13. In the result, the orders of the learned Subordinate judge are confirmed and the Miscellaneous Appeals are dismissed and Civil Revision No. 335 of 1982 is disposed of. In the facts and circumstances of the ease, there would be no order as to costs.


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