Sri. Samanth Vs Smt. Indira Sadananda Hegde

SMT. INDIRA SADANANDA HEGDE W/O LATE SADANANDA HEGDE D/O LATE K. NARAYANA RAO AGED ABOUT 47 YEARS R/AT G.P. ZACHARIADES CO. LTD., P.O. BOX. NO. 5632 KINGDOM OF BAHRAIN

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SMT. SHOBHA SUMEET W/O SUMEET D/O LATE K. NARAYANA RAO AGED ABOUT 43 YEARS PRESENTLY RESIDING AT

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E.K. 2 BUILDING, FLAT NO.140

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BLOCK MUHAINSNAH 4 DUBAI (U.A.E)

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SMT. RAMA GOVIND KAMATH W/O LATE GOVIND KAMATH D/O LATE K. NARAYANA RAO AGED ABOUT 41 YEARS ALSHARIF WATER PURIFICATION PLANT CO. WLL P.O. BOX 26002, ADLIYA KINGDOM OF BAHRAIN

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SMT. KALYANI, W/O LATE K. NARAYANA RAO AGED ABOUT 69 YEARS NO.28, 5^TH "A" MAIN ROAD OBLAPPA GARDEN, K.R.ROAD BANGALORE-560 070

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SMT. PRABHAVATHI W/O KATEEL RUKMAIAH DAS D/O LATE K. NARAYANA RAO AGED ABOUT 50 YEARS NO.28, 5^TH "A" MAIN ROAD OBLAPPA GARDEN, K.R.ROAD BANGALORE-560 070

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SRI. KAPU MAHESH S/O LATE K. NARAYANA RAO AGED ABOUT 45 YEARS NO.28, 5^TH "A" MAIN ROAD OBLAPPA GARDEN, K.R.ROAD BANGALORE-560 070

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…RESPONDENTS

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(BY SRI. K.V. SHYAMA PRASADA, ADVOCATE FOR R1 TO R3; RESPONDENT NO.4 SERVED AND UNREPRESENTED; VIDE ORDER DATED 29.09.2016 NOTICE TO R5 IS DISPENSED WITH; SRI. GOPAL, ADVOCATE FOR R6)

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THIS MFA IS FILED U/O 43, RULE 1(s) OF CPC, AGAINST THE ORDER DATED 2.4.2016 PASSED ON IA NO.5 IN O.S.NO.1050/2013 ON THE FILE OF THE 20^TH ADDITIONAL CITY CIVIL & SESSIONS JUDGE, BENGALURU CITY, ALLOWING IA NO.5 FILED U/O 40, RULE 1, R/W SEC 151 OF CPC.

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THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR

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ORAL JUDGMENT

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This Miscellaneous First Appeal is filed by the appellant, who is arrayed as Defendant No. 4 in O.S. No. 1050/2013 on the file of the 20th Additional City Civil and Sessions Judge, Bengaluru. The appellant is aggrieved by the impugned order dated 02.04.2016 passed by the Trial Court allowing I.A. No. 5 filed under Order XL Rule 1 of the Code of Civil Procedure, 1908, whereby a Receiver was appointed to collect rent in respect of the suit schedule property.

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The learned counsel appearing for the appellant

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submits that, the original suit, O.S. No. 1050/2013, was

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instituted by respondent Nos. 1 to 3 before the Trial Court

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seeking partition and separate possession of the suit schedule property to the extent of 1/7th share. During the pendency of the suit, Defendant No. 1, who is stated to be an illiterate woman incapable of reading and writing, filed an interlocutory application under Order XL Rule 1 CPC seeking appointment of a Receiver. The principal allegations made in the application were that, Defendant No. 4, the present appellant, was residing with Defendant No. 1 and was entrusted with the management of the suit property. It was further alleged that, Defendant No. 4 had taken advantage of the illiteracy and vulnerability of Defendant No. 1, had obtained her signature on blank papers under false pretenses, and had misused those papers for her personal and unlawful gain. It was also alleged that, the appellant was collecting rents and other income to the tune of Rs. 40,000/- per month from the suit property, while concealing the same from the co-owners and denying them their legitimate share.

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The said application was opposed by the appellant by filing a detailed statement of objections denying all the allegations made therein. It was categorically stated that, she had not received Rs. 40,000/- as alleged, nor had she committed any act of misrepresentation or misappropriation. The appellant contended that, the application was filed only to harass her and prevent her from enjoying her lawful share in the undivided property. It was submitted that, no prima facie case or urgency existed to warrant the appointment of a Receiver, and that such a drastic order was not only unjustified but also legally unsustainable.

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After hearing the rival contentions, the learned Trial Court proceeded to allow the application and appointed a Receiver. The Trial Court, while passing the order, observed that the property was still undivided and that there was no partition effected among the parties.

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The Court further observed that, in view of the apprehensions raised by Defendant No. 2 regarding the

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alleged mismanagement and misappropriation of property

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by Defendant No. 4, it would be appropriate and necessary to appoint a Court Receiver to safeguard the interests of the parties and to ensure proper management of the property during the pendency of the suit.

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In this context, it is essential to consider the statutory framework governing the appointment of a Court Receiver as laid down under Order XL of the Code of Civil Procedure, 1908, which reads as follows:

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"ORDER XL – APPOINTMENT OF RECEIVERS

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(1) Where it appears to the Court to be just and convenient, the Court may by order— (a) appoint a receiver of any property, whether before or after decree;

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(b) remove any person from the possession or custody of the property;

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(c) commit the same to the possession, custody or management of the receiver; and

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(d) 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,

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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 those powers as the Court thinks fit.

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(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."

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A meticulous reading of this provision reveals

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that while the Court is empowered to appoint a Receiver

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whenever it deems it ' just and convenient' , such discretion is not to be exercised arbitrarily or mechanically. The

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phrase “just and convenient” must be interpreted in a legally sound and equitable manner, keeping in view the broader consequences of such an order. The appointment of a Receiver is not a routine or procedural formality but

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an extraordinary and drastic remedy which has the effect of divesting parties from the possession and enjoyment of their property during the pendency of the suit. This power is intended to be invoked sparingly and only in cases where there is a clear and imminent danger of the

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property being wasted, misappropriated, or otherwise put to irretrievable harm. Furthermore, sub-rule (2) expressly prohibits the removal of any person from possession unless another party to the suit has a present and legal right to seek such removal.

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In the present case, the plaintiffs have instituted a suit for partition and separate possession of their alleged share in the suit schedule property and have also sought a direction for the determination and payment of mesne profits by Defendant Nos. 1, 2 and 4. The very fact that, an enquiry into mesne profits is sought clearly indicate that, the plaintiffs acknowledge the possession and enjoyment of the property by the defendants as cosharers. It is well settled that, until a partition is effected, every co-owner is entitled to be in possession and enjoy the common property. The plaintiffs have an efficacious remedy under law to claim their share of income, if any, through a proper mesne profits enquiry once their share is determined in a preliminary decree.

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It is trite law that, the mere allegation of

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mismanagement or the apprehension of loss does not automatically justify the appointment of a Receiver, unless supported by cogent evidence of fraud, waste, misappropriation, or the likelihood of irreparable injury. In

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the instant case, the applicant did not produce any documentary evidence or tangible material to substantiate her claim that Defendant No. 4 had abused her position or was siphoning off the income from the property. The allegations remain vague and unsubstantiated. The learned Trial Court, while allowing the application, has failed to record any findings or reasoning in support of the

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necessity or urgency of appointing a Receiver. The order under challenge thus suffers from non-application of mind and failure to appreciate the statutory limitations and judicial standards governing such appointments.

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It is also pertinent to note that, the applicant

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who had sought the appointment of a Receiver is no more,

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and no substitute has come forward with any fresh

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material or urgency for continuing such an arrangement. The appointment of a Receiver under these circumstances would only prejudice the enjoyment and possession of the co-owners and unnecessarily complicate the proceedings, especially when an alternative remedy in the form of mesne profits enquiry is already available and sought for in the suit itself.

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In light of the above discussion, this Court is of the considered opinion that, the impugned order passed by the learned Trial Court is legally unsustainable and calls for interference in appellate jurisdiction. However, the rights of the parties with respect to mesne profits and other reliefs claimed in the suit are left open to be adjudicated upon by the Trial Court.

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Accordingly, the following:

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ORDER

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(i) The Miscellaneous First Appeal is hereby allowed .

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(ii) The impugned order dated 02.04.2016 passed in O.S. No. 1050/2013 by the 20th Additional City Civil and Sessions Judge, Bengaluru, allowing I.A. No. 5 under Order XL Rule 1 of CPC is set aside.

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(iii) All pending interlocutory applications, if any, stand disposed of.

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(iv) Having regard to the fact that the suit is of the year 2013, the learned Trial Court is requested to dispose of the suit on a priority basis, preferably within an outer limit of six months from the date of receipt/production of certified copy of this judgment.

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(v) The parties to the suit are directed to co-operate with the Trial Court for the expeditious disposal of the suit and shall refrain from seeking unnecessary adjournments or causing delay in the proceedings.

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There shall be no order as to costs.

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Sd/(RAMACHANDRA D. HUDDAR) JUDGE

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SK, List No.: 1 Sl No.: 23

Sri. Samanth v. Smt. Indira Sadananda Hegde

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Sri. Samanth v. Smt. Indira Sadananda Hegde

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