Smt. Yashodamma Vs Smt. Vidyalatha

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NC: 2025:KHC:26407 MFA No. 6573 of 2024

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16^TH DAY OF JULY, 2025

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BEFORE

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R

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THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR MISCELLANEOUS FIRST APPEAL NO. 6573 OF 2024 (CPC) BETWEEN:

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SMT. YASHODAMMA W/O LATE SHANKARAPPA H AGED ABOUT 74 YEARS R/AT FLAT NO.141/21, 2^ND FLOOR RIGHT WING, 4^TH CROSS 7^TH MAIN, NEAR ASHOKA PILLAR 2^ND BLOCK, JAYANAGAR BENGALURU-560 041

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…APPELLANT

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Digitally signed by ANJALI M Location: High Court of Karnataka

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(BY SRI. SRIHARI A.V, ADVOCATE)

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AND:

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SMT. VIDYALATHA D/O LATE SHANKARAPPA H W/O NEELAKANTESHWARA SWAMY AGED ABOUT 52 YEARS R/AT NO.53, 18^TH CROSS 21^ST MAIN, VIJAYNAGAR BENGALURU-560 040

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SMT. GEETHA.S D/O LATE SHANKARAPPA H W/O SOMASHEKAR AGED ABOUT 53 YEARS R/AT NO.29, 'BANASHANKARI NILAYA' 1^ST CROSS, 1^ST MAIN SUDHAMANAGAR BENGALURU-560 027

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NC: 2025:KHC:26407 MFA No. 6573 of 2024

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HC-KAR

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SRI. S. GURUPRASAD S/O LATE SHANKARAPPA H AGED ABOUT 48 YEARS R/AT NO.20, 3^RD CROSS BEHIND HALASURUGATE POLICE STATION, CUBBONPET BENGALURU-560 002

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AND ALSO RESIDING AT FLAT NO.141/21, 2^ND FLOOR RIGHT WING 4^TH CROSS, 7^TH MAIN ROAD NEAR ASHOKA PILLAR, 2^ND BLOCK JAYANAGAR, BENGALURU-560 041

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…RESPONDENTS

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(BY SRI.ADINARAYAN, ADVOCATE FOR R1; VIDE ORDER DTD.16.10.2024 NOTICE TO R2 IS DISPENSED WITH; SRI. SHARATH S. GOWDA, ADVOCATE FOR R3)

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THIS MFA IS FILED U/O.43 RULE 1(s) OF THE CPC, AGAINST THE ORDER DT.31.08.2024 PASSED ON IA NO.2 IN O.S.NO.6314/2023 ON THE FILE OF THE VI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CITY, (CCH-11), PARTLY ALLOWING IA NO.2 FILED U/O.41 RULE 1(1)(a) TO (d) 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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HC-KAR

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ORAL JUDGMENT

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The present Miscellaneous First Appeal has been preferred by the appellant, Smt. Yashodamma, being aggrieved by the order dated 31.08.2024 passed by the learned VI Additional City Civil and Sessions Judge, Bengaluru (CCH-11), in O.S. No. 6314/2023, whereby the trial Court partly allowed I.A. No. 2 filed under Order XL Rule 1 of the Code of Civil Procedure, 1908, by appointing a Court Receiver to collect the rents derived from the suit schedule properties A, B, and C and to deposit the same before the Court till the disposal of the suit. The appellant, who is defendant no. 1 in the original suit, has challenged the said order primarily on the ground, 'that the trial Court erred in exercising its discretion to appoint a receiver without there being any compelling circumstances or prima facie case made out by the plaintiff to warrant such an extraordinary relief'.

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The factual matrix leading to the present appeal is, that the respondent no. 1, Smt. Vidyalatha, filed a suit

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for partition and separate possession claiming 1/4th share

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in the suit schedule properties A, B, and C, which she alleged were the self-acquired properties of her late father, Shankarappa. According to the plaintiff, after the demise of her father on 02.05.2021, the defendants, including the appellant, were collecting rents from the suit schedule properties without sharing the same with her, despite she being one of the legal heirs entitled to a share in the properties. In the said suit, the plaintiff filed I.A. No. 2 under Order XL Rule 1 of CPC seeking appointment of a Court Receiver to collect the rents, which were alleged to be more than Rs.6,50,000/- per month, and to deposit the same before the Court till the disposal of the suit. The trial Court, after hearing both sides, allowed the said application, which has led to the filing of the present appeal by defendant no. 1.

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HC-KAR

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The learned counsel for the appellant

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vehemently argued that the trial Court committed a grave error in appointing a receiver without there being any prima facie case or compelling circumstances to justify such an order. It was contended that, the plaintiff failed to demonstrate any imminent danger or loss to the suit properties or that the defendants were mismanaging the properties or misappropriating the rents. The counsel placed heavy reliance on the judgment of the Hon’ble Supreme Court in Dairy No. 51132/2023 (Hitesh Bhuralal Jain v. Rajpal Amarnath Yadav & Ors. ), decided on 12.11.2024, wherein it was held that, "the Court would not appoint a receiver unless there are compelling reasons and special circumstances warranting such an order". It was further argued that, the plaintiff had an alternative remedy to seek mesne profits and

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accounts in the final decree proceedings under Order XX Rule 12 of CPC, and hence, the appointment of a receiver at this stage was premature and unwarranted.

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NC: 2025:KHC:26407 MFA No. 6573 of 2024

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Additionally, the appellant’s counsel relied upon

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the judgment of the Telangana High Court in T. Krishnaswamy Chetty v. C. Thangavelu Chetty (1954 SCC OnLine Mad 374), wherein the Court had culled out five cardinal principles, termed as the ‘Panch Sadachara’, governing the appointment of receivers.

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These principles mandate that, the plaintiff must show a strong prima facie case, imminent danger or loss to the property, and that the plaintiff’s conduct must be free from blame. It was argued that, the plaintiff failed

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to satisfy any of these conditions, and hence, the trial

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Court’s order was liable to be set aside.

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On the other hand, the learned counsel for respondent no. 1 (plaintiff) strenuously opposed the appeal and supported the impugned order. It was contended that, the plaintiff had made out a strong prima facie case for partition, and the defendants, particularly defendant no. 3, is collecting rents from the suit properties without sharing the same with the plaintiff, despite her

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being entitled to 1/4^th share. It was argued that the appointment of a receiver was necessary to protect the plaintiff’s interests and to ensure that the rents were duly accounted for and preserved till the final adjudication of the suit. The counsel further submitted that, the trial Court had rightly exercised its discretion under Order XL Rule 1 of CPC, and no interference is called for in the appellate jurisdiction.

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So far as appointment of receiver is concerned, Order 40 Rule 1 of CPC speaks with regard to appointment of receiver. The said provision of law reads as under:

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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—

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(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, 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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Having heard the learned counsel for both sides

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and perused the material on record, this Court is of the considered opinion that the impugned order appointing a receiver cannot be sustained in law. The power to appoint a receiver under Order XL Rule 1 of CPC is a discretionary power vested in the Court, but such discretion must be exercised judiciously and not arbitrarily. The settled legal position, as reiterated in the judgment of the Telangana

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High Court in T. Krishnaswamy Chetty (supra), is that the Court should not appoint a receiver unless the plaintiff establishes a strong prima facie case, imminent danger or loss to the property, and that the plaintiff’s conduct is free

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from blame. They are termed as the 5 principles which can be described as the 'Panch Sadachara of our Courts exercising equity jurisdiction in appointing receivers. For better appreciation, they read as under:

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" (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.

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(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 S. suit.

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(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

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must be great and imminent demanding immediate relief. It has been truly said that a Court will never appoint a receiver merely on the ground that it will do no harm.

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(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 disturbs 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. Otherwise a receiver should not be appointed in supersession of a bone fide possessor of property in controversy and

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bona fides have to be presumed until the contrary is established or can be indubitably inferred.

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(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".

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Thus, it is settled that, while considering an

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application seeking an appointment of Court Receiver, it is the duty of a Court to see that the rights of the parties are not jeopardized and ends of justice not defeated. This rule 1 of Order XL of CPC authorizes a Court to appoint a Receiver whenever it appears to it to be just and convenient to do so. Thus, the matter is left to the discretion of the Court. The object and purpose of the appointment of Receiver may generally be stated to be the preservation of the subject matter of the litigation pending a judicial determination of the rights of the parties thereto.

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Evidently, it is suit for partition. The rights of

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the parties are yet to be decided. Therefore, there are certain settled principles which have to be satisfied before a receiver is appointed, firstly, the applicant has to show that he has a strong case and a prima facie title to the property: secondly, the applicant has to show that the property in dispute is in danger of being wasted away or damaged: thirdly, appointment is a matter of judicial discretion intended to safe guard the rights of the parties and the ends of justice are not defeated.

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It is also settled that, the plaintiff applying for appointment of receiver must show a prima facie factors i.e.., he has a strong case and good title to the property, a special equity in his favour, that the property in hands of the defendant is in danger of being wasted, the property in the hands of defendant if transferred constituting a danger to the reversionary interests.

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Here in this case, the learned trial Court has

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not appreciated regarding the proof of the aforesaid legal requirements and has not satisfied as to the proof of factum of alleged wastage and mismanagement of property in the hands of the defendants. Such order is not at all tenable in the eyes of law. Generally the Court will not appoint a receiver in suits between members of Joint Hindu Family especially where a family consists of immovable property as in every inch, every coparcener has got a share.

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The parties seeking appointment of receiver in a suit for partition has to show the special circumstances necessitating interference by the Court in appointing the Commissioner. But, in this case, no such necessity is shown that means, the applicant has to come up with some specific act of misappropriation or mismanagement when he is seeking appointment of receiver. These factual features are missing in the instant case.

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In the present case, the plaintiff’s application

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for appointment of a receiver was based solely on the allegation that, defendant no. 3 is collecting rents from the suit properties without sharing the same with her. However, the plaintiff failed to demonstrate any imminent danger or loss to the properties or that the defendant no.3 was/is mismanaging the rents collected on the properties. The mere fact that, one of the defendants is collecting rents, without more, cannot be a ground to appoint a receiver, as it would amount to dispossessing a person in lawful possession without just cause.

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The Hon’ble Supreme Court in Hitesh Bhuralal

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Jain supra has categorically held that, the appointment of a receiver is an extraordinary relief and should not be granted unless there are compelling reasons and special circumstances warranting such interference. The relevant para reads as under -

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"13. It is a well settled principle that the Court would not appoint a receiver until and unless there

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are certain compelling reasons. Respondent No.1 has not indicated any special circumstance in the notice of motion requiring the need to appoint a receiver. In fact the City Civil Court having considered the prayer for appointment of a receiver, has specifically rejected the same by holding that an order of injunction is sufficient to protect the interests of the respondent no. 1.

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14. The High Court has not given any reason for extending the relief of appointment of a Court receiver, which was specifically rejected by the City Civil Court. In para 12 of the order impugned before us, the High Court merely states that, “a strong prima facie case has indeed been made out by the Appellant for appointment of Court Receiver. We find that the respondent(s) conduct in dealing 5 with the property in the manner which has been done would certainly prejudice the rights of the appellant.” Except for employing the expression prima facie case and conduct, there is no indication whatsoever as to how the property would deteriorate without the intervention of the Court receiver. Needless to say, that mere recording of the expressions ‘prima facie case’ and ‘conduct’ by themselves are not sufficient. Further, the prima facie case as indicated by the City Civil Court related only to the grant of injunction and not about the appointment of a receiver".

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Moreover, the plaintiff has already sought the

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relief of mesne profits and accounts in the main suit, which can be adequately addressed in the final decree proceedings under Order XX Rule 12 of CPC. The appointment of a receiver at this stage is, therefore, premature and unwarranted. The trial Court failed to appreciate these aspects and proceeded to appoint a receiver merely on the bald allegation that, defendant no. 3 was collecting rents, without any finding as to mismanagement or imminent danger to the properties.

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In view of the foregoing discussion, the appeal deserves to be allowed, and the impugned order appointing a receiver is liable to be set aside. However, rights of the plaintiff to claims mesne profits amount if any is kept open.

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NC: 2025:KHC:26407 MFA No. 6573 of 2024

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ORDER

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(i) Accordingly, the appeal is allowed .

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(ii) The order dated 31.08.2024 passed by the learned VI Additional City Civil and Sessions Judge, Bengaluru (CCH-11), in O.S. No. 6314/2023, appointing a Court Receiver to collect the rents from the suit schedule properties A, B, and C, is hereby set aside.

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(iii) However, a right of plaintiff to claim mesne profits and accounts is kept open.

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(iv) The trial Court is directed to expedite the disposal of the suit as early as possible, preferably within one year from the date of receipt/production of a copy of this judgment if possible.

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(v) The parties are directed to cooperate with the trial Court for early disposal of the suit.

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(vi) No order as to costs.

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Sd/(RAMACHANDRA D. HUDDAR) JUDGE

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Sk/-, List No.: 1 Sl No.: 25

Smt. Yashodamma v. Smt. Vidyalatha

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Smt. Yashodamma v. Smt. Vidyalatha

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