WHO MAY APPLY FOR APPOINTMENT OF RECEIVER?  POWERS OF THE COURT IN APPOINTING A RECEIVER:  FUNCTIONS AND AUTHORITY OF A RECEIVER:

INTRODUCTION:

The appointment of a receiver is an equitable remedy and a form of specific relief that falls under the supervisory jurisdiction of the civil court. It serves as a protective measure to preserve property during the pendency of litigation. Order XL Rule 1 of the Civil Procedure Code, 1908 empowers the court to appoint a receiver when it is deemed "just and convenient." The court, while exercising this discretion, ensures that the rights and interests of the parties to the suit are protected, and the subject property is not wasted, mismanaged, or destroyed during litigation.

RELEVANT PROVISIONS:

i. Order XL of the Code of Civil Procedure, 1908
ii. Sections 5 and 44 of the Specific Relief Act, 1877

WHO IS A RECEIVER?

A receiver is a neutral person appointed by a court to take charge of and manage property or business in dispute. This includes collecting rents and profits, preserving the asset, and acting under the court’s instructions until the rights of the parties are finally adjudicated.

WHO MAY BE APPOINTED AS A RECEIVER? (Order XL Rules 1 & 5)

The appointment of a receiver is a discretionary power of the court. Any suitable person may be appointed, including:

• Any individual the court deems fit based on the circumstances;

• The Collector (with his consent) may be appointed as receiver, particularly where:

  • The property is land paying revenue to the Government; or

  • The land’s revenue has been assigned or redeemed; and

  • The court considers that the interest of those concerned will be promoted by the management of the Collector.

WHO MAY APPLY FOR APPOINTMENT OF RECEIVER?

A court may appoint a receiver:

• Suo moto (on its own motion),

• On the application of a party to the suit,

• On the application of a third party with a legitimate interest in the preservation of the property.

PRINCIPLES GOVERNING APPOINTMENT OF A RECEIVER:

In deciding whether to appoint a receiver, courts are guided by these principles:

i. The appointment must be just and convenient;
ii. The property must be in danger of being wasted, misused, or misappropriated;
iii. There must be a strong prima facie case in favour of the applicant.

POWERS OF THE COURT IN APPOINTING A RECEIVER:

Under Rule 1 of Order XL, the court may:

• Appoint a receiver before or after passing a decree;

• Remove any person from possession or custody of the property (except where a party to the suit has no present right to do so);

• Commit the property to the custody or management of the receiver;

• Confer upon the receiver such powers as may be necessary.

FUNCTIONS AND AUTHORITY OF A RECEIVER:

1. Powers of the Receiver (Rule 1(1)(d)):

The court may empower the receiver to:

• Bring and defend legal proceedings;

• Realize, protect, and preserve the property;

• Improve, collect rents and profits, and manage property;

• Execute documents as if he were the owner;

• Exercise other powers as the court deems necessary.

2. Duties and Liabilities of a Receiver (Rule 3):

The receiver must:

• Furnish security, if required, to account for received assets;

• Submit accounts periodically in the form directed by the court;

• Pay dues as ordered by the court;

• Be responsible for any loss caused by willful default or gross negligence.

Failure to Perform Duties (Rule 4):
If the receiver fails to perform his duties, the court may:

• Attach and sell his personal property;

• Use the proceeds to recover the loss or due amount;

• Pay any remaining balance to the receiver.

REMOVAL AND DURATION:

• The court may remove the receiver at any time if found unsuitable or upon completion of his duties.

• Unless a specific period is fixed, the receiver holds office until formally discharged by the court.

REMUNERATION OF RECEIVER: Rule 2

The court may, by general or special order, fix the remuneration for the services rendered by the receiver.

CONCLUSION:

The appointment of a receiver is a powerful tool in the hands of the court to ensure that disputed property is preserved and not misused during the pendency of litigation. It is a discretionary and equitable remedy rooted in the principles of justice and fairness. The role of a receiver is fiduciary in nature and must be performed with transparency, integrity, and accountability. Courts exercise caution in granting such relief, keeping in mind that it interferes with the possession and control of property. Thus, only in situations where there is an imminent threat to the subject property, and where no other remedy would be effective, will the court resort to appointing a receiver