• Appointment of receiver

The applicant filed an application for the appointment of receiver. The same was allowed by appointing contesting defendants as receivers as they are in possession running the partnership firm.
 The applicant filed another application before the same court seeking amendment in the order to the extent that the defendants appointed as receivers be replaced by any other defendant (who have supported the application for the appointment of receiver) or by an administative officer. Simultaneously, an appeal was filed by one of the supporting defendants praying for identical relief.
The application for amendment by the original plaintiff came to be dismissed. Now, the appeal by the supporting defendant is pending. The questions are-
1. Whether the appeal filed by the defendant is maintainable considering the fact that he never opposed the plaintiff's application for the appointment of receiver!
2. The contesting defendants having contested the issue in the amendment application will again have to again face the brunt of litigation on the same issue by the defendant (supporting) who had already participated in the application for amendment!
3. what should be our defence!
Asked 11 months ago in Civil Law from Rupnagar, Punjab
1) since application by applicant has been dismissed  by trail court  similar appeal by supporting defendant my also be dismissed by appellate court .in addition they never opposed application filed by applicant  for appointment of receiver  enclose copy of order passed by trial court

2) it is necessary to peruse applications and orders passed by trail court to advise further . further grounds taken in filing appeal have to be perused to advise 
Ajay Sethi
Advocate, Mumbai
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AIR 1955 madras 430 krshna swamy chetty v/s C T chetty 

he appointment is made to preserve property pending litigation to decide the rights of the parties, or to prevent a scramble among these entitled, as where a receiver is appointed pending a grant of probate or administration, or to preserve property of persons under disability, or where there is danger of the property being damaged or dissipated by these with the legal title, such as executors or trustees, or tenants for life, or by persons with a partial interest, such as partners, or by the persons in control, as where directors of a company with equal powers are at variance."

In all these cases, it is necessary to allege and prove some peril to the property; the appointment then rests on the sound discretion of the Court.

"In exercising its discretion the Court proceeds with caution, and is governed by a view of all the circumstances. No positive or unvarying rule can be laid down as to whether the Court will or will not interfere by this kind of interim protection of the property. Where, indeed, the property is as it were 'in medio', in the enjoyment of no one, it is the common interest of all parties that the Court should prevent a scramble, and a receiver will readily be appointed: as, for instance, over the property of a deceased person pending a litigation as to the right to probate or administration. But where the object of the plaintiff is to assert a right to property of which the defendant is in enjoyment, the case presents more difficulty; The Court by taking possession at the instance of the plaintiff may be doing a wrong to the defendant; in some cases an irreparable wrong. If the plaintiff should eventually fail in establishing his right against the defendant, the Court may by its interim interference have caused mischief to the defendant for which the subsequent restoration of the property may afford no adequate compensation. (See -- 'Marshall v. Charteris', 1920-1 Ch 520 (I)). Where the evidence on which the Court is to act is very clear in favour of the plaintiff, then the risk of eventual injury to the defendant is very small, and the Court does not hesitate to interfere. Where there is more of doubt, there is, of course, more of difficulty. The question is one of degree, as to which, therefore, it is impossible to lay down any precise or unvarying rule. (-- 'Owen v. Roman', (1853) 4 HLC 997 at p. 1032 (J), per Lord Cranworth,) If the Court is satisfied upon the materials it has before it that the party who makes the application has established a good prima facie title, and that the property the subject-matter of the proceedings will be in danger if left the trial in the possession or under the control (-- 'Cummins v. Perkins', (1899) 1 Ch 16 (K); -- 'Leney & Sons, Ltd. v. Callingham', (1908) 1 KB 79 (L) of the party against whom the receiver is asked for (-- 'Evans v. Coventry', (1854) 5 Do G M & G 911 at p. 918 (M)) or, at least, that there is reason to apprehend that the party who makes the application will be in a worse situation if the appointment of a receier be delayed (-- 'Aberdeen v. Chitty', (1838) 3 Y & C 379 at p. 382 (N); -- 'Thomas v. Davies, (1847) 11 Beav 29 (O) ), the appointment of a receiver is almost a matter of course (See -- "Middleton v. Dodswell', (1800) 13 Ves Jun 260 (P); -- 'Old-field v. Cobbett', (1835) 4 LJ Ch 271 (Q); --'Heal and Personal Advance Co. v. Macarthy, (1879) 27 WR 706 (R)). If there is no danger to the property, and no fact is in evidence to show the necessity or expediency of appointing a receiver, a receiver will not be appointed, unless there be some other urgent reason for making the appointment (See -- 'Whitworth v. Whyddon', (1850) 2 Mac & G 52 (S); -- 'Wright v. Vernon', (1855) 3 Drew 112 (T); -- 'Micklethwait v. Micklethwait', (1S57) 1 De G & J 504 (U)) "The duty of the Court upon a motion for a receiver is merely to protect the property for the benefit of the person or persons to whom the Court, when it has all the materials necessary for a determination, shall think it properly belongs (-- 'Blakeney v. Dufaur', (1851) 15 Beav 40 (V)). On a motion for a receiver the Court will not prejudice the action (-- 'Huguenin v. Baseley', (1806) 13 Ves Jun 105 at p. 107 (W)), or say what view it will take at: the trial (--'Fripp v. Chard. Rly. Co., (1853) 11 Hare 241 at p. 264 (X); -- 'Skinners' Co. v. Irish Society', (1836) 1 My & Cr 162 at p. 164 (Y)). Indeed, the Court will not appoint a receiver at the instance of a person whose right is disputed, where the effect of the order would be to establish the right, even if the Court be satisfied that the person against whom the demand is made is fencing off the claim (-- 'Greville v. Fleming", (1845; 2 Jo & Lat 335 (Z); (1920) 1 Ch 520 (1)). Nor will the appointment be made where it might affect legal rights; a receiver will not, for instance, be appointed merely to prevent an executor exercising his right of retainer (-- 'Re. Wells Molony v. Brooke', (1890) 45 Ch D 569 (Z1))"

The Court, on the application for a receiver, always 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 (See -- 'Baxter v. West', (1858) 28 LJ Ch 169 (Z2); -- 'Cf. Wood . Hitchings', (1840) 2 Beav 289 at p. 297 (Z3)). Parties who have acquiesced in property being enjoyed against their own alleged rights cannot except in special circumstances come to the Court for a receiver (-- 'Gray v. Chaplin', (1826) 2. Russ 126 at p. 147 (Z4); (1836) 1 My & Cr 162 (Y)) (Kerr on Receivers 12th edition pp. 5 to 7)".
Ajay Sethi
Advocate, Mumbai
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The separate appeal prefered by the defendant is maintainable even though he did not oppose the plaintiff's application which had an identical prayer. The relief sought by the supporting defendant is that the contesting defendants should not be appointed as receivers, so the fact that he did not oppose the application filed by the plaintiff for the appointment of receiver does not preclude him from now applying to the court for change of receivers. There is no nexus between his not opposing the application and seeking change of receivers.
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
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The case can be contested only on merits. It appears to be an illegal order in the first place to appoint contesting defendants as the receivers.
Ashish Davessar
Advocate, Jaipur
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446 Consultations
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Hi, The appeal filed by the defendant is maintainable because he  being the aggrieved party.

2. When the appeal is filed by the defendant in appellate court you have to argue the matter and there is no question of repetition of litigation.
Pradeep Bharathipura
Advocate, Bangalore
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133 Consultations
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1.The Defendant's petition will not be dismissed solely on the ground that he never opposed the appeal filed by the Plaintiff. However, you have stated that the Defendant has filed the appeal on identical ground. Does it mean that he also appealed for replacing the Receiver by another Defendant? If yes, then this appeal also may be dismissed on identical ground,

2. Yes, but this time the arguments will be referential basically,

3.Your ground should be that similar appeal has already been dismissed and this appeal also deserve identical judgement.
Krishna Kishore Ganguly
Advocate, Kolkata
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228 Consultations
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1. The Court is likely to pass the same order dismissing the appeal filed by the Plaintiff for replacing the Receiver with another Defendant,

2. Your line of argument should base on the fact that the order passed against the appeal filed by one should also be the same when filed by another in the same matter.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
1. Firstly you shall have to drive home that an order on the same matter has already been passed by the Court which is applicable on this appeal also,

2. You should also argue that once dispossessed you will have irreparable losses and damages which can never be mitigated later on, if the case is ordered in your favour.
Krishna Kishore Ganguly
Advocate, Kolkata
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228 Consultations
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1. The court has already appointed the occupying Defendants as the Receivers keeping in mind that in this case the occupants will not be dispossessed,

2. During the arguments, the fact that the receivers are also the occupants  shall have to be reminded to the Court.
Krishna Kishore Ganguly
Advocate, Kolkata
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228 Consultations
5.0 on 5.0
1. Every case is unique in nature,

2. I am not aware of any Court Order blanketly banning dispossession of the Defendant even if the Court feels that the occupation is prima facies illegal,

3. The Court has taken in to account all the angles and rightly appointed the occupying Defendants as the Receivers and also dismissed the appeal for replacing the Receivers with the supporting Defendant.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0
1. Whether the appeal filed by the defendant is maintainable considering the fact that he never opposed the plaintiff's application for the appointment of receiver!
The appeal filed by the defendant, if he was a party to the application filed and decided against him shall be maintainable because he belongs to the aggrieved side.


2. The contesting defendants having contested the issue in the amendment application will again have to again face the brunt of litigation on the same issue by the defendant (supporting) who had already participated in the application for amendment!
The contesting defendant, if aggrieved by the decision by the lower court, he ha full rights to contest the decision which went against him, so he may wait for the outcome of the appeal.




3. what should be our defence!
If you are the original applicant whose subsequent application was dismissed, you too can represent the matter on the portions where you were already denied the privilege hence if the present appeal filed by the respondent is allowed, your subject matter may be prejudiced. You can take a defence this way.

T Kalaiselvan
Advocate, Vellore
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How to strategise the line of defence as we are the contesting defendants in possession of the firm/property!
If you were aggrieved by the appeal preferred by the opposite party against the decision of the lower court  upholding your privilege now being contested by the opposite party, you can project your cause  properly and ensure the appeal is dismissed.



How to convince the court that persons in possesion running the firm cannot be dispossesed!
T Kalaiselvan
Advocate, Vellore
13943 Answers
127 Consultations
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