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Appointment of receiver Definition: The term Receiver has not been defined in the Code of Civil Procedure and

the Specific relief Act. According to Kerr, he is an impartial person appointed by the court to collect and receive, pending the proceeding, the rents, issues and profit of land or personal estate, which it does not seem reasonable to the court that either party should collect or receive, or for enabling the same to be distributed among the persons entitled. In other words, he is an indifferent person between the parties to a cause, appointed by the court to receive and preserve the property or fund in litigation pendente lite when it does not seem reasonable to the court that either party should hold it.

Case: Thomas vs. Indian Bank, 1984, AIR

Appointment of receiver

According to section-44 of the S R Act the appointment of a receiver pending a suit is a matter resting in the discretion of the Court. Reference to Code of Civil Procedure- The mode and effect of his appointment, and his rights, powers duties and liabilities, are regulated by the Code of Civil Procedure, 1908. In a suit for a declaration and permanent injunction, a civil court is competent to appoint a receiver. But this power should not be used only in exceptional case. Section 44 declares that the appointment of a receiver pending a suit rests in the discretion of the court and makes a reference to the civil procedure court for the mode and effect of his appointment and for his rights, powers, duties and liabilities.

According to Order-40 Rules-1 to 2 of the CPC 1. a) where it appears to the court to be just and convenient, the court may be orderedappoint a receiver of any property, whether before or after decree;

b) removing person from the possession or custody of the property; c) commit the same to the possession, custody or management of the receiver; and

d) confer upon the receiver all such power as to bringing and depending 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 such owner himself has, or such of those power as the court thinks fit. 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.

The receiver is appointed on the basis of the following principles: i) the appointment of a receiver is a discretionary power of the court

ii) It is a protective relief the object is preservation of the property in dispute pending a judicial determination of the rights of the parties to it. iii) A receiver should not be appointed unless the plaintiff prima facie Proves that he has very excellent chance of succeeding in the suit. iv) It is one of the harshest remedies which the law provides from the enforcement of the rights, and therefore should not be lightly restored to. Since it deprives the opposite party the possession of property before a final judgement is pronounced, it should only be granted for the prevention of manifest wrong or injury. A court will never appoint receiver merely on the ground that it will never do any harm. v) Generally, an order appointing a receiver will not be made where it has the effect of depriving the defendant of a defector possession, since that might cause irreparable loss to him. But if the property shown to be in medio, that is to say in enjoyment of no one, it will be in the common interest of all the parties to appoint the receiver. vi) The court should look at the conduct of the party who makes an application for appointment of a receiver. He must come with clean hands and should not have disentitle himself to this equitable relief by laches, delay or acquiescence. Case: S.B Industries vs United bank of India AIR 1978.

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