When a Civil Court appoint can appoint a receiver? Explain the power and duties of a Receiver?
In simple words, the receiver means an impartial person appointed by the court to collect and receive, the rents, issues and profits of land, or personal estate. In other words, an independent person between the parties to a cause, appointed by the court to receive and preserve the property when it does not seem reasonable to the court that either party should hold it.
Meaning of receiver
The term receiver has not been defined in the Code of the Civil Procedure.
In simple words, the receiver means an impartial person appointed by the court to collect and receive, the rents, issues and profits of land, or personal estate. In other words, an independent person between the parties to a cause, appointed by the court to receive and preserve the property when it does not seem reasonable to the court that either party should hold it.
The object of appointing the receiver
it is considered very necessary to protect the disputed property until the finalization of the case. In the absence of property, there is no meaning of judicial proceeding. Therefore, it is necessary that no party shall destroy the property or to take unfair advantage of the property.
The primary object of appointment of a receiver is to protect, preserve and manage the property during the pendency of the litigation.
The purpose of the appointment of the receiver is to preserve the suit property and safeguard the interests of both the parties to the suit.
When a receiver can be appointed
a receiver can be appointed when it appears to the court to be just and convenient to appoint the receiver for the parties to the suit. The appointment of the receiver is at the discretion of the court. But, it must be sound and judicial discretion and must be exercised cautiously, judicially and after taking into account all the circumstances of the case for the purpose of serving the end of justice.
Who may Apply?
Generally, an application for appointment of the receiver is made by the plaintiff but a defendant may also apply for the appointment of a receiver if it is just and convenient. A third party cannot apply for the appointment of the receiver but if he is interested in realization, management, protection of the property, he may also apply
Example – A has taken a loan from a bank and mortgage his house to the bank for the loan. Later on, B has filed a case in the court that the house belongs to him. Now the bank can file an application for the appointment of the receiver because the bank also has an interest in the property.
Who may be appointed as receiver?
A person who is independent, impartial and totally disinterested should normally be appointed as receiver. But in exceptional circumstances or for specific reasons, a party to a suit or proceeding can also be appointed as receiver.
Remuneration of Receiver
Under Rule2, Order 40 of the Code, the remuneration of the receiver is fixed by general or specific order of the court.
No agreement can be made outside the court for the remuneration of the receiver (Manik lal Vs Surat Kumari)
The power of the Receiver
Under Rule 1(d), Order 40 of Civil Procedure Code, 1908 the receiver can be assigned powers regarding the following
• To Institute and defend suits
• To realize, manage, protect, preserve and improve the property
• To collect, apply and dispose of the rents and profits
• To execute documents
• Such of these power as it thinks fit
Duties of Receiver
Under rule 3, Order 40 of CPC duties of receiver have been mentioned.
The following are the duties of the receiver
(1) He has to submit accounts for such period and in such forms as the court directs.
(2) The receiver has to pay the money which he got from the property
(3) The receiver will be responsible for the intentional errors and carelessness.
(4) A receiver has to furnish such security, as the court thinks fit.
Liabilities of Receiver
Under Rule 4, Order 40 Liabilities of the receiver has been given
If the receiver fails to submit accounts or fails to pay the amount due or cause loss to the property by his wilful default or negligence, the court may direct his property to be attached and sold and make good any amount found to be due from him.