M/S SHERALI KHAN MOHAMED MANEKIA Vs. STATE OF MAHARASHTRA & ORS.

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 2475-2476 of 2015, Judgment Date: Feb 27, 2015

• The short question, therefore, that falls for consideration is  as  to
  whether after the  disposal   of  the  appeal,  the  Court  Receiver  stands
  discharged or whether he continues in his office till an order of  discharge
  is passed by the Court?

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                    CIVIL APPEAL NOs. 2475-2476  OF 2015
            (Arising out of SLP (Civil) Nos.22705-22706 of 2013)


M/s. Sherali Khan Mohamed Manekia                            ...Appellant(s)

                                  versus


The State of Maharashtra
and others                                                  ...Respondent(s)


                                  JUDGMENT

M.Y. Eqbal, J.:

Leave granted.
2.    In the instant appeals by special leave  the  appellant  assailed  the
order dated 14th January, 2013 passed by the learned  Single  Judge  of  the
Bombay High Court in Court Receiver's Report No.25 of  2007  and  Additional
Report No. 383 of 2012, whereby  the  High  Court  while  disposing  of  the
Report of the Court Receiver held that after the disposal  of  First  Appeal
No. 767 of 1998 and dismissal of the special leave  petition,  the  Receiver
deemed to have been discharged.

3.    It appears that the suit property was  declared  as  evacuee  property
and the same was purchased by the appellant in an auction sale as  far  back
as on 15.6.1964.  In the year 1980, the appellant filed a suit  being  Civil
Suit No. 37 of 1980 before the District Judge, Thane Court seeking  specific
performance of the sale of the property and possession  and  interim  relief
of injunction restraining the defendants therein from  carrying  on  further
construction on the suit property. The appellant further made a  prayer  for
appointment of Receiver.

4.    The trial court rejected the prayer for  appointment  of  Receiver  by
order dated 3.5.1980 and against that, appellant moved  the  High  Court  in
First Appeal, which was finally heard and order dated 22.7.1980  was  passed
appointing the Court Receiver.  The High Court while making  appointment  of
the Receiver directed to take possession  of  the  suit  property.  All  the
persons who were in actual possession of any part of the suit property  were
continued to remain in possession.  The Receiver  was  directed  to  collect
rent and compensation as the case may be from  all  the  persons  in  actual
possession after verifying from  them  their  present  right  to  remain  in
possession. The High Court further directed that the  Receiver  should  take
suitable  direction  from  the  court  if  he  was  presented  with      any
particular difficulty.

5.    Indisputably, the suit was finally disposed  of  on  4.2.1998.   While
disposing the suit, the trial court gave liberty to the  plaintiff-appellant
to move the High Court for directions for  taking  possession  of  the  suit
property from the Court Receiver so appointed by the High Court.

6.    As against the judgment and decree of the trial  court,  First  Appeal
was filed being F.A. No.767 of 1988, which was finally heard  and  dismissed
by the High  Court  vide  judgment  dated  22.12.2004.   The  special  leave
petition filed against the judgment of the High Court was also dismissed  on
19.2.2007.

7.    It further  reveals  from  the  record  that  the  Court  Receiver  so
appointed  submitted  Report  No.25/2007  before  the  High  Court   seeking
directions with regard to the encroachment on the suit property and  handing
over possession  to  the  appellant.   The  Court  Receiver  also  submitted
Additional Report  No.383  of  2012.   The  High  Court  after  taking  into
consideration these Court Receiver's  reports,  passed  the  impugned  order
holding that the receiver shall be deemed to have been discharged after  the
dismissal of the first appeal by the High Court, followed  by  dismissal  of
the Special Leave Petition by the Supreme Court.

8.    Assailing the impugned order, Mr. Shyam Divan, learned senior  counsel
appearing for the appellant, submitted that even after the disposal  of  the
appeal, affirming the judgment and decree of  the  trial  court,  the  Court
Receiver continues in his office till he is discharged and fulfills all  the
incidental obligations that are cast upon him by virtue of  his  appointment
and till he renders account to the Commissioner of Accounts.

9.    The short question, therefore, that falls for consideration is  as  to
whether after the  disposal   of  the  appeal,  the  Court  Receiver  stands
discharged or whether he continues in his office till an order of  discharge
is passed by the Court?

10.   The High Court in the impugned order observed:
      "The directions cannot be issued only on assumption  that  this  Court
was monitoring the matter for all these years irrespective  of  disposal  of
the Appeal from Order.  That  may  be  the  understanding  of  parties,  but
before me nothing has been placed which would enable me to  hold  that  from
1983 till this report was filed in the year 2007, this Court had issued  any
directions or had passed any orders indicative of  control  over  the  Court
Receiver.  In fact the Court Receiver's  reports  and  paragraphs  of  which
have been reproduced by me hereinabove, would indicate that it is  only  the
correspondence and meetings of  parties  with  the  Court  Receiver  or  his
representative that have been referred to.  The Court Receiver seems to b  e
now for the first time informing the Court of such meetings and contents  of
letters.  He has not sought any direction for all these decades and  because
the parties were engaging and involving  him  in  correspondence,  does  not
mean  that  the  Court  has  in  any  way  continued  him.   If  it  is  the
understanding of parties that  the  Court  Receiver  continues,  then,  that
cannot be proved only by  his  correspondence.   The  Court  Receiver,  High
Court of Bombay, on account of his own limitation and lack of  understanding
may be under an impression that he continues as a Receiver of the  immovable
property despite disposal of the Appeal from Order, main suit, First  Appeal
and thereafter, the proceedings before the  Honourable  Supreme  Court.   If
that is the understanding which he has given  to  parties  or  parties  have
given to him and he entertains correspondence and holds meetings, by  itself
and without anything more cannot assist the Plaintiffs/Decree Holders.   The
Court cannot issue any directions on such reports and filed  belatedly.   In
fact the Plaintiffs/Decree Holders understood that they have to  proceed  to
execute and enforce the Decree for possession in their  favour  by  adopting
appropriate proceedings.  Even then they have continued  the  correspondence
and persuaded the Court Receiver to file reports  before  this  Court,  does
not mean that the Court is obliged to take cognizance of the same.

To my mind these are thoroughly misconceived proceedings and the  remedy  of
the Plaintiffs/Decree Holders lies elsewhere.  They  cannot  insist  on  the
Court passing orders only because of continued correspondence  and  meetings
with the Court Receiver.  The Court  has  not  authorized  him  nor  has  he
sought permission of the Court authorising him in any manner to continue  in
possession of the suit property.  If parties and equally the Court  Receiver
do not deem it fit to approach this Court for all these years and  seek  its
intervention or  interference,  then,  all  the  more  they  cannot  in  the
exercise that is now carried out, insist on directions to be  given  to  the
Court Receiver.  Equally, the Court Receiver cannot pray for any  direction.
 If the Court Receiver continues to be in possession and wants  to  handover
possession to the parties claiming under the Decree, then he is  at  liberty
to move the Executing Court.  If the plaintiffs/Decree  Holders  desire  any
directions being given to the Court Receiver, then it is for  them  to  seek
appropriate reliefs and directions in  the  pending  execution  proceedings.
It is open to the Court Receiver or parties to do so.  This Court after  the
disposal of the Appeal from Order has nothing before it which could be  said
to be pending.  The First  Appeal  is  disposed  of  long  time  back.   The
Reports are filed in proceedings  which  are  no  longer  pending,  but  are
disposed of finally.  Neither the parties nor the Court Receiver sought  any
further directions from the Court."

11.   In paragraph 49 of the order the High Court noted the following:-
"Therefore, the record of that case was perused by the learned judge in  its
entirety and he found that  the  order  was  passed  discharging  the  Court
receiver on 26.11.1992 and at the  same  time  continuing  him  for  certain
period to enable parties to file  the  Appeal  from  the  said  order.   The
Appeals were filed, but same were dismissed by  a  Division  Bench  and  the
Special Leave Petition which was filed before the Supreme  Court  also  came
to be dismissed on 27.07.1993.  The issue was  whether  the  Court  Receiver
became functus officio right from the date when  the  order  was  passed  on
26.11.1992 discharging the Court receiver  or  whether  the  Court  Receiver
continued to be in charge of the property on  account  of  pendency  of  his
reports before the Court and for  the  other  reasons  pointed  out  by  the
counsel for the Plaintiffs and Defendant No.2 therein."

12.    Normally,  when  a  Receiver  is  appointed   on   an   interlocutory
application without any limit of time, it is necessary to  provide  for  the
continuance of his appointment in the final judgment.  In Halsbury  Laws  of
England, 3rd Edn., Vol. 32 (Lord Simond) at page 386 says :-
"When a receiver is appointed for a limited time, as in the case of  interim
orders, his office determines on the expiration of  that  time  without  any
further order of the court, and if the appointment  is  'until  judgment  or
further order' it is brought to an end by the judgment in the  action.   The
judgment may provide for the  continuance  of  the  receiver,  but  this  is
regarded as a new appointment.  If a further  order  of  the  court,  though
silent as to the receivership, is inconsistent with  a  continuance  of  the
receiver, it may operate as a discharge."

      When a receiver has been appointed  on  an  interlocutory  application
without any  limit  of  time,  it  is  not  necessary  to  provide  for  the
continuance of his appointment in the final judgment.  The  silence  of  the
judgment does not operate as a discharge of the  receiver  or  determination
of his powers.  So also the appointment of a receiver by the judgment in  an
administration action need  not  be  continued  by  the  order,  no  further
consideration."

13.   In Law  of  Receiver,  4th  Edn.  by  James  L.  High,  the  following
observation appears at page 985:-
"the functions of a receiver usually terminate with the termination  of  the
litigation in which he was appointed.  And when  the  bill  upon  which  the
appointment was made is afterwards dismissed upon demurrer,  the  duties  of
the receiver cease as between the parties to the  action.....  And  although
as between the parties to the litigation his functions have terminated  with
the determination of the suit, he is still amenable  to  the  court  as  its
officer until he has complied with its directions as  to  the  disposal  the
funds which he has received during the course of his receivership....But  an
order of discharge does not necessarily follow, in  all  cases,  because  of
the determination of the suit, and the  court  may,  upon  sufficient  cause
shown,  either  discharge  or  continue  the  receiver,  according  to   the
exigencies of the case."


14.   In our view, when a Receiver is appointed pending suit or appeal,  the
prime objective  is  to  preserve  the  property  by  taking  possession  or
otherwise and to keep an account of rent and profits that  may  be  realized
by the Receiver and to submit it before the court till the  lis  is  finally
decided.  Ordinarily the function of receivers who are  appointed  comes  to
an end with the final decision of the case.  However, even after  the  final
decision, the Court has the discretion to take  further  assistance  of  the
Receiver as and when the need arises.  In the instant case, admittedly,  the
appellants have  already  put  the  decree  in  execution  for  recovery  of
possession.  We are, therefore, of the  opinion  that  the  Executing  Court
while executing the decree  may  take  assistance  of  the  Receiver  or  by
appointing  new  Receiver  or  Commissioner  for   effecting   delivery   of
possession in accordance with law and not more than that.

15.   In the facts and circumstances of the case, we do not find  any  error
in the impugned order passed by the High  Court.   The  Civil  Appeals  are,
therefore, of no merit and are dismissed.


                                        ..................................J.
                                                              [ M.Y. Eqbal ]


                                         ..................................J
                                                             [Kurian Joseph]
New Delhi
February 27, 2015