Receiver under the Civil Procedure Code
Receiver under the Civil Procedure Code (CPC)
1. Meaning of Receiver
A Receiver is a person appointed by the court to take possession, manage, and preserve the property that is the subject of litigation during the pendency of the suit. The receiver acts as a neutral custodian to ensure that the property is maintained and not misused or wasted until the final adjudication.
2. Legal Provisions for Appointment of Receiver
The provisions regarding appointment of a receiver are mainly found in:
Order XL, Rules 1 to 6 of the CPC
Relevant provisions include:
Order XL, Rule 1: The court may appoint a receiver if it is just and convenient to do so.
Order XL, Rule 2: Specifies circumstances under which the receiver can be appointed.
Order XL, Rule 3: Provides for the powers and duties of the receiver.
Order XL, Rule 4: The receiver must give security for the due performance of his duties.
Order XL, Rule 6: The receiver must submit reports to the court.
3. When Can a Receiver be Appointed?
The court may appoint a receiver in the following situations:
When the property is in dispute and needs to be protected from damage, waste, or misuse.
Where the parties cannot agree on management or possession of the property.
When there is a risk of loss or deterioration of the property pending the suit.
To safeguard the interests of the parties and ensure fair enjoyment of the property.
In cases involving trust property, partnership property, rents, profits, or where administration of property is required.
4. Who Can Be Appointed as Receiver?
The receiver is usually a neutral person, like an independent third party.
The court may appoint a banker, solicitor, or a competent person familiar with the management of such property.
The receiver cannot be a party to the suit.
The court can also appoint one of the parties if it considers appropriate.
5. Powers and Duties of a Receiver
Powers
Take possession and management of the property.
Collect rents, profits, and income.
Preserve the property and prevent waste.
Maintain and manage the property as a prudent person would.
Sell the property only if authorized by the court.
Duties
Act as a fiduciary and impartial custodian.
Submit periodical reports to the court about the state and income of the property.
Keep accurate accounts and hand over possession as directed by the court.
Give security to ensure performance of duties (Order XL, Rule 4).
6. Procedure for Appointment
Any party can apply for appointment of a receiver by filing an application supported by affidavit.
The court may hold a hearing to decide the necessity.
If satisfied, the court passes an order appointing a receiver.
The court fixes the remuneration and duties.
The receiver submits reports periodically to the court.
7. Effect of Appointment of Receiver
The possession and control of the property vest in the receiver.
The parties cannot interfere with the receiver’s management.
Acts done by the receiver within authority are binding.
The receiver acts as an agent of the court, not of any party.
8. Important Case Law on Receiver
Case 1: Bhagwandas Goverdhandas Kedia v. Girdharilal Parshottamdas, AIR 1966 SC 543
The Supreme Court held that the appointment of a receiver is a discretionary power.
The court must consider whether the appointment is just and convenient.
The receiver is the agent of the court and must act impartially.
Case 2: Union of India v. Bombay High Court, AIR 1965 SC 745
The Court emphasized that the appointment of a receiver is an extraordinary power and should be exercised with caution.
The Court laid down that the receiver must render accounts and that the court supervises his acts.
Case 3: Krishna Ram Mahale v. M.C. Chockalingam, AIR 1958 SC 22
Held that once a receiver is appointed, the parties must not interfere with the receiver’s management.
Acts of the receiver in good faith are protected.
Case 4: Dalpat Kumar v. Prahlad Singh, AIR 1993 SC 276
Appointment of receiver is primarily to protect the property and ensure justice.
Receiver's appointment is to be done when there is a prima facie case for it.
9. When Receiver Cannot be Appointed
If there is no real necessity or urgency.
When appointment would cause unnecessary hardship or injustice.
When the suit is frivolous or vexatious.
Where the property is of a nature not requiring supervision or management.
10. Summary Table
| Aspect | Details |
|---|---|
| Legal Provision | Order XL, Rules 1-6 of CPC |
| Purpose | Protect/manage property in dispute pending suit |
| Who can be receiver | Neutral person, banker, solicitor, or competent person |
| Powers | Possession, collection of rents, management |
| Duties | Fiduciary, submit reports, keep accounts |
| Court’s Control | Supervises receiver, can revoke appointment |
| Parties' Role | No interference allowed once receiver appointed |
| Nature of Power | Discretionary and extraordinary |
Conclusion
The appointment of a Receiver under the CPC is a vital judicial tool to safeguard and manage property involved in litigation, ensuring that its value is preserved pending final disposal of the case. This power is discretionary and exercised carefully by the court to balance interests and prevent misuse or loss.
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