Chilukuri Visweswara Rao Vs Saripella Venkata Satyanarayana Raju

SARIPELLA VENKATA SATYANARAYANA RAJU, S/O AYYANNA RAJU. AGE 57 YEARS. BUSINESS, R/O DOOR NO.22-03-20/3, NEAR GEETHA THEATER. OPPOSITE HP PETROL BUNK, RAMACHANDRAPURAM MANDAL.

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SARIPELLA SUBRAHMANYA VARMA, S/O AYYANNA RAJU, AGE 51 YEAS. BUSINESS, R/O DOOR NO. 13-74/1 A, THYAGARAJA NAGAR, RAMACHANDRAPURAM, RAMACHANDRAPURAM MANDAL.

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SARIPELLA GANGA BHAVANI, W/O SUBRAHAMANYA VARMA AGE 46 YEARS. HOUSE WIFE, R/O DOOR NO. 13-7-4/1 A, THYAGARAJA NAGAR, RAMACHANDRAPURAM RAMACHANDRAPURAMMANDAL

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CHILIKURI KRISHNA RAO, S/O DASARADHA RAMA RAO AGE 58 YEARS, R/O DOOR NO. 2-89, KANDULAPALEM, RAMACHANDRAPURAM, RAMACHANDRAPURAM MANDAL.

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VYTIA LALITHA LAKHSMI KUMARI, W/O GOPALA RAO AGE 86 YEARS. LAND LADY, R/O DOOR NO. 13-1-28, THYAGARAJA NAGAR, RAMACHANDRAPURAM, RAMACHANDRAPURAM MANDAL. RESPONDENT/DEFENDANTS NO.5 AND 6

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SARIPALLI SATYAVATHI, W/O AYYANNA RAJU. AGE 73 YEARS HINDU, WIDOW, R/O DOOR NO.37-1-9, MADHYANAGAR, MUCHIMILLI, RAMACHANDRAPURAM, RAMACHANDRAPURAM MANDAL.

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...RESPONDENT(S):

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Appeal Under Section____ against orders Present Civil Misc. Appeal is filed against the order dt.10.05.2024passed in l.A.No. 1002 of 2023 in O.S.No.7 of 2023 on the file of the Civil Judge (Senior Division) Ramachandrapuram,

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IA NO: 1 OF 2024

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings in O.S.No. 7 of 2023 on the file of the Civil Judge (Senior Division) Ramachandrapuram pending disposal of the above CMA and pass

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IA NO: 2 OF 2024

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to order vacating the interim order Dt.01-07-2024 passed in lA No.1/2024 in CMA No.439/2024 and pass

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Counsel for the Appellant:

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A S C BOSE

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Counsel for the Respondent(S):

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1.GANTI SUBRAMANYA SARMA

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2.SRINIVASA RAO PAPPU

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The Court made the following:

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JUDGMENT:

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This Civil Miscellaneous Appeal is directed against the

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order passed by the learned Senior Civil Judge at

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Ramachandrapuram in I.A.No.1002 of 2023 in O.S.No.7 of 2023, whereby the appointment of a Receiver for management of the plaint schedule property till the disposal of the main suit was allowed.

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The appellant is the respondent No.1/defendant No.4 before the Trial Court. The respondent Nos.1 to 3 herein are the petitioners/defendant Nos.1 to 3 before the Trial Court who preferred the said application under Order XL Rule 1 of C.P.C. to appoint a Receiver/advocate commissioner to manage the suit schedule properties.

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For the sake of convenience, the parties hereinafter referred to as they arrayed before the Trial Court.

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The case of the petitioners/defendant Nos.1 to 3, in the application before the Trial Court, is that:

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The plaint schedule property is a commercial building comprising shops and a Kalyana Mandapam known as 'Balusu Kalyana Mandapam', located on the main road of Ramachandrapuram. The petitioners/defendant Nos.1 to 3 having 1/9^th share each in the said

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commercial building by virtue of registered sale deed, dated 11.06.1998 and 12.06.1998. It is alleged that respondent No.1/defendant No.4 has leased out the shops to third parties on a temporary basis and has been exclusively enjoying the rental income, without accounting for or distributing the petitioners’ rightful shares. Hence, the petitioners have sought the appointment of an Advocate Commissioner/Receiver for the proper management and administration of the said property.

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None of the respondents contested before the Trial Court to oppose the said application. During the course of enquiry, none were examined and no documents were exhibited on either side.

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On the material, the Trial Court, having come to the conclusion that there is necessity to appoint an advocate as Receiver for management of plaint schedule property in order to collect the rents in proper manner and to deposit the same into the court, thereby, appointed an Advocate as Receiver for

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management of plaint schedule property till the disposal of main suit in-order to collect Rents and to attend required repairs and to pay required tax to the concerned authorities by maintaining accounts from time to time and to remit the amounts into the account of the suit by filing proper accounts from time to time. 7. It is against the said order; the present appeal is preferred by the appellant/defendant No.4. 8. Heard Sri A.S.C.Bose, learned counsel for the appellant/defendant No.4 and Sri Pappu Srinivasa Rao, learned counsel for the respondent Nos.1 to 3/defendant Nos.1 to 3. 9. Sri A.S.C. Bose, learned counsel for the appellant/defendant No.4, vehemently contends that defendant Nos.1 to 3 failed to establish a prima facie case before the Trial Court to warrant the relief sought in the said application. He submits that the appointment of a Receiver cannot be made as a matter of routine and must be in accordance with the procedure prescribed under Order XL Rule 1 of the Code of Civil Procedure. He further submits that defendant Nos.1 to 3 did not satisfy the essential conditions required for such relief, as laid

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down by the Hon’ble Division Bench of this Court in the case of

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Chelikam Rajamma v. Padileti Venkataswami Reddy¹ .

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He also submits that the Trial Court failed to provide adequate opportunity to defendant No.4 to substantiate his case and disposed of the application in a hasty manner without due consideration of the material available on record. Accordingly, he prays to consider the present appeal. 11. Per contra, Sri Pappu Srinivasa Rao, learned counsel for respondent Nos.1 to 3/defendant Nos.1 to 3, strenuously contends that the Trial Court, after examining the entire material placed on record, rightly allowed the application by appointing an advocate as Receiver for the management of the suit schedule property. He submits that the appellant/defendant No.4 failed to effectively contest the application before the Trial Court. He further asserts that defendant Nos.1 to 3 had produced sufficient prima facie material justifying the appointment of a Receiver. He argues that no valid grounds have been raised by defendant No.4 to

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1 1993 (2) ALT 154 (D.B.).

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interfere with the well-reasoned order passed by the Trial Court

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and, therefore, prays for dismissal of the present appeal.

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In support of the above contentions, he relied upon a decision of the Hon’ble Supreme Court in Parmanand Patel v.

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Sudha A.Chowgule² .

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Now, the point that arises for determination is “whether the order passed by the Trial Court is sustainable under law? 14. POINT :

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In order to address the point in issue, firstly it is necessary to consider as to whether the appointment of a Receiver is justified in the absence of a prima facie case, emergent circumstances, or cogent evidentiary support, and secondly whether the procedural safeguards, particularly the requirement to afford an opportunity to the non-applicant are duly complied with by the Trial Court prior to passing the impugned order.

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At the outset, this Court deem it appropriate to refer to certain facts as gleaned from the record. A perusal of the

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2 2009 (4) Supreme 63

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application filed before the Trial Court reveals that defendant Nos.1 to 3 sought dual reliefs in a single application—namely, (i) a direction to defendant No.4 to deposit all rental income into the Court, and (ii) in the alternative, the appointment of a Receiver to take possession of the plaint schedule property for the purpose of management, including auction of the leasehold rights of the shops and deposit the proceeds to the credit of the suit, pending its disposal. Notably, the Trial Court did not raise any objection regarding the maintainability of multiple reliefs in one application and proceeded to dispose of the same in a mechanical manner. As per Rule 55 of the Civil Rules of Practice, no application asking for more than one relief based on separate and distinct grounds shall be allowed unless the reliefs prayed for are consequential to one another.

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Be that as it may, a detailed examination of the pleadings and material placed before the Trial Court reveal that the application under I.A.No.1002 of 2023 was premised primarily on general allegations of mismanagement and non-sharing of rental income by defendant No.4. However, there is a glaring

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absence of any documentary proof such as lease agreements with tenants, rent receipts, tax assessment records, or affidavits substantiating the alleged structural alterations or imminent loss to the property. The affidavit in support of the application merely reiterates grievances but fails to establish the urgency or necessity required for invoking the extraordinary remedy of appointing a Receiver. Furthermore, on perusal of proceedings before the Trial Court, when the matter was posted for counter of respondent No.1 under the caption “finally on costs”, since the respondent No.1/defendant No.4 did not file counter, the matter was listed directly for orders and delivered the impugned order on 10.05.2025.

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Admittedly, the respondent No.4/plaintiff reported no counter, thereby, it is evident from the record that the said order passed by the Trial Court is the result of non-contest by the respondents therein. While the Trial Court appears to have proceeded based on the non-filing of counter by defendant No.4, it did not examine whether the material placed met the threshold of Order XL Rule 1 CPC or satisfied the guiding

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principles laid down in Chelikam Rajamma case (referred to supra) . Specifically, the Court below did not address the following whether the property was in actively wasting by the appellant, whether the petitioners were in danger of suffering irreparable injury, and whether the Receiver’s appointment would amount to dispossession of a party in lawful control of the property.

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Besides, this Court noticed the Advocate-Receiver filed report, which has been examined by this Court, wherein, it is recorded that he had taken possession of the subject premises pursuant to the directions issued by this Court. However, on the following day, despite his specific request, the concerned individual refused to hand over the keys of the rooms. As a result, the Receiver secured the said eight rooms by locked with his own locks. Subsequently, on 08.06.2024, a legal notice was issued to the Receiver by the learned counsel for respondent No.1, Sri B. Radhakrishna, Advocate for appellant herein contending that the warrant issued by the Court did not expressly authorize the Receiver to take possession of the

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premises. It was further stated that the Receiver’s role was confined to the collection of rents and the rendering of accounts, and that the act of taking possession fell outside the scope of the warrant. These facts, as borne out by the record, constitute the basis for preferring the present appeal assailing the impugned order passed by the Trial Court.

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Apart from the aforementioned facts, this Court shall now consider the case put forth by defendant Nos.1 to 3, particularly with respect to the justification for appointing a Receiver to manage the suit schedule property. A perusal of the affidavit filed in support of the application before the Trial Court reveals that the primary contention of defendant Nos.1 to 3 that defendant No.4, with an intent to cause financial loss, was altering the structure of the building, thereby diminishing the value of the property. However, the Trial Court, while passing the impugned order, did not treat this allegation as a principal ground warranting the appointment of a Receiver.

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As per the specific observations made in the division Bench decision of this Court in Chelikam Rajamma case

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( referred to supra ), the defendant Nos.1 to 3 have to satisfy the five requirements to get the relief under Order 40 Rule 1 of the C.P.C., which are as follows:

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“(1) The appointment of receiver is a matter in the discretion of the court and the discretion shall not be exercised in an arbitrary or unsound manner;

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(2) The Court should not appoint a receiver except upon proof by the plaintiff that prima facie he has excellent chance of succeeding in the suit;

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(3) The plaintiff must show some emergency, danger, or loss demanding immediate action, and he should be clear about his right;

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(4) The receiver should not be appointed if such appointment has the effect of depriving a defendant of a 'de facto' possession since that might cause irreparable wrong. If the property is 'in medio', that is to say, in the enjoyment of no one, the court can appoint a receiver; and

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(5) If the conduct of the party seeking appointment of receiver is not free from blame, the court shall not appoint a receiver.”

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It is pertinent to note that the applicants, i.e., defendant Nos.1 to 4, have not placed any substantive or cogent material

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in support of their plea for appointment of a Receiver. The application filed before the Trial Court is primarily based on bald and unsubstantiated allegations, devoid of any supporting evidence to show imminent danger or mismanagement of the suit schedule property. In this regard, reliance placed by defendant Nos.1 to 3 on the judgment of the Hon’ble Supreme Court in Parmanand Patel v. Sudha A. Chowgule³ , is wholly misplaced. The Apex Court, while dealing with the scope of appointing a Receiver, has held as under:

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“Ordinarily, the Court would not appoint a Receiver save and except on a prima facie finding that the plaintiff has an excellent chance of success in the suit. It is also for the plaintiff not only to show a case of adverse and conflicting claims over the property, but also an element of emergency, danger or loss demanding immediate action.”

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Applying the above principle to the facts of the present case, it is evident that no such prima facie case has been made out by the applicants. There is no material on record to show

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3 [(2008) 1 SCC 416]

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that the suit schedule property is in peril, or that any irretrievable injury would be caused if a Receiver is not appointed.

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It is a settled principle that the power to appoint a Receiver is a discretionary and equitable remedy, to be exercised sparingly and only in exceptional circumstances. It cannot be invoked merely to settle private disputes or to coerce a party in possession of the property, particularly when no urgent necessity or irreparable loss is demonstrated. The record further indicates that the respondent No.1/defendant No.4 has been in possession and management of the property, and there is no credible evidence of abuse of such possession or threat to the rights of the other co-owners warranting judicial intervention through a Receiver.

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In view of the above facts and circumstances, settled law as enunciated supra, this Court has no hesitation to come to a conclusion that the Trial Court mechanically passed an order for appointment of Receiver in the absence of substantial material on record, which requires interference of this Court.

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Upon a careful examination of the material available on record and the rival contentions advanced by both parties, this Court is of the considered view that the appointment of a Receiver, as ordered by the Trial Court, is not sustainable under law. Thus, this point is answered accordingly.

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In the result, the Civil Miscellaneous Appeal is allowed setting aside the order dated 10.05.2024 in I.A.No.1002 of 2023 in O.S.No.7 of 2023 on the file of the Court of learned Senior Civil Judge at Ramachandrapuram.

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Interim orders granted earlier if any, stand vacated. Miscellaneous petitions pending if any, stand closed.

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______________________ JUSTICE V.SRINIVAS

Date: 06.08.2025 Krs

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THE HON’BLE SRI JUSTICE V.SRINIVAS