What do you mean by Receiver? What are the consequence of the appointment of the Receiver? Can a Civil Court appoint Collector as Receiver?

Question: What do you mean by Receiver? What are the consequence of the appointment of the Receiver? Can a Civil Court appoint Collector as Receiver?

Find the answer to the mains question only on Legal Bites. [What do you mean by Receiver? What are the consequence of the appointment of the Receiver? Can a Civil Court appoint Collector as Receiver?]

Answer

Receiver means a person to whom anything is communicated by another or an officer of the court-appointed to collect rents etc. of the disputed property pending a suit in this respect.

Rule 1 of Order XL of C.P.C., 1908 deals with the appointment of receivers. According to which –

(1)“Where it appears to the court to be just and convenient, the court may order

1. Appoint a receiver of any property, whether before or after decree;
2. Remove any person from the possession or custody of the property.
3. Commit the same to the possession, custody, or management of the receiver; and
4. Confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the court think fits.

(2) Nothing in this rule shall authorize the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove.”

According to Rule 2 of Order XL of C.P.C., 1908, the Court may by general or special order fix the amount to be paid as remuneration for the services of the receiver.

Rule 3 of Order XL of C.P.C., 1908 deals with the duties of receivers. According to which –”Duties of Receivers“.-Every receiver so appointed shall –

1. Furnish such security (if any) as the Court thinks fit, duly to account for what he shall receive in respect of the property;
2. Submit his accounts at such periods and in such form as the Court directs;
3. Pay the amount due from him as the Court directs; and
4. Be responsible for any loss occasioned to the property by his wilful default or gross, negligence.”

For enforcement of receiver’s duties provisions have been made under Rule 4 of Order XL of C.P.C., 1908.

According to which, – “Enforcement of receiver’s duties.-Where a receiver

1. Fails to submit his accounts at such periods and in such form as the Court directs, or
2. Fails to pay the amount due from him as the Court directs, or
3. Occasions loss to the property by his wilful default or gross negligence, the Court may direct his property to be attached and may sell such property, and may apply the proceeds to make good any amount found to be due from him or any loss occasioned by him, and shall pay the balance (if any) to the receiver.”

Rule 5 of Order XL of C.P.C., 1908 provides for conditions in which a collector may be as a receiver. According to which-

“When Collector may be appointed receiver-Where the property is land deemed, and the Court considers that the interests of those concerned will be paying revenue to the Government, or land of which the revenue has been assigned or redeemed and the court considers that the interests of those concerned will be promoted by the management of the Collector, the Court, may, with the consent of the Collector appoint him to be receiver of such property.”

Object and purpose of appointment of a receiver

In Krishnaswamy v. Thangavelu [AIR 1955 Mad 430], it was held that the main object and purpose of the appointment of a receiver is to preserve the subject matter of litigation pending a judicial determination of the rights of the parties thereto when it does not seem reasonable to the court that either party should hold it.

In Jalal Mohd. v. Kakka Mohd., it was held that Rule 1 of Order XL of C.P.C., 1908 authorizes a court to appoint a receiver when it appears to it to be just and convenient to do so. The matter is left to the discretion of the court. But, such discretion must be exercised not arbitrarily, but cautiously, judicially and according to the legal principles after a consideration of the circumstances of the case.

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