ORDER
D.G. Deshpande, J.
1. This Notice of Motion is taken out by applicant Kailash Prasad Agarwal, for modification or for setting aside the Order dated 10-7-1997 passed by Justice Variava on the Report of the Court Receiver dated 2-7-1997. In that Order Justice Variava observed and held that the present applicant – Kailash Prasad Agrawal refused to accept the service and that was good service of the Report to Mr. Kailash Prasad Agarwal. Kailash Prasad Agarwal remained absent in the Court. It was further found that Mr. Kailash Prasad Agarwal and his sons were acting high handedly and were carrying out unauthorised construction and giving threats to the representative of the Court Receiver, therefore Court Receiver was directed to evict Kailash Prasad Agarwal and his sons from the suit premises with the help of the police, if necessary. It was clarified that if Mr. Kailash Prasad Agarwal was to make any representation, the said representation can be heard only after he hands over possession to the Court Receiver.
2. It appears that after this Order the applicant took out this Notice of Motion and moved Justice Variava for urgent reliefs on the ground that the premises of which the applicant was to hand over possession were residential premises and if no relief were granted then the entire family of the applicant will be thrown on streets. Justice Variava did not find any reason to interfere and he observed and held that the Report of the Court Receiver dated 2-7-1997 was sought to be served on Mr. Agarwal but he refused to accept the service and on the contrary threatened the representative of the Court Receiver and behaved in high handed manner with an Officer of the Court.
3. Justice Variava further observed that the party who threatened an Officer of the Court has no right of being heard and since a tendency was increasing, it was required to be curbed and therefore Justice Variava refused to stay his Order dated 10-7-1997 and observed that the Court Receiver must take possession from the applicant. However, liberty was given to the Court Receiver to appoint applicant Kailash Prasad Agarwal as his agent and to allow Kailash Prasad Agarwal and his family members to continue to stay in the flat. Admittedly this was an interim arrangement till the present Notice of Motion taken out by the applicant was decided and disposed of.
4. Mr. Anney, Counsel for the applicant firstly, contended that Order dated 10-7-1997 being an ex-parte order was liable to be set aside. Secondly, Mr. Anney had never refused to accept the service of the Receiver’s Report. Thirdly, Mr. Agarwal or his son did not act in high handed manner with the representative of the Court Receiver. Fourthly, that this Order dated 10-7-1997 was bound to result in dispossession of Mr. Agarwal from his residential premises and lastly that on 10-7-1997 there was no Receiver in respect of the property in occupation of Mr. Agarwal as the Receiver was discharged by an Order dated 26-11-1992 and therefore even if the applicant dis-regarded the authority of the Receiver and did not permit the Receiver’s
representative to hand over the premises, the applicant did not commit any wrong. Mr. Anney also contended that if the Receiver stood discharged from 26-11-1992, the Orders of Justice Variava dated 10-7-1997 and 21-8-1997 were without jurisdiction and therefore they were liable to be modified or varied.
5. On the other hand Counsel for the applicant and for defendant No. 2 contended that even by Order dated 26-11-1992 Court Receiver was discharged, the property continued to remain as cuslodia legis of the Court through the Court Receiver because even after the discharge order the Court Receiver had not taken any steps regarding putting the parties to the suit in possession nor had the Court Receiver submitted accounts to the Court and two Reports of the Court Receiver in that regard were still pending and not finally decided and therefore on 10-7-1997 and 21-8-1997 when Justice Variava passed the Order, Court Receiver was still in picture and, therefore, if the applicant and/or his son refused to accept the notice and/or misbehaved with the representative of the Court Receiver then no interference was called for in the orders of Justice Variava. It was also submitted that the statement made by the applicant before Justice Variava on 21-8-1997 that the premises were residential premises and if no relief were granted then the entire family of the applicant will be thrown on streets was factually incorrect and false statement and therefore on that ground itself the Notice of Motion was liable to be rejected.
6. It was further submitted by the Counsel for the plaintiff and defendant No. 2 that the applicant was, when the Court Receiver was initially appointed by the Order dated 2-6-1985 in his possession only one room but the applicant continued to make encroachment on the adjoining property under different pretexts and also indulged in making additional construction over the property and therefore he was liable to be dispossessed from the encroachments made. It was also contended as per the Court Receiver’s Report dated 21-8-1997 filed at Exhibit 10 along with affidavit of Rakesh Kumar Sharma dated 27-4-1998, the applicant was carrying on business and commercial activities in the premises in his possession and therefore his contention that his family would be thrown on the streets was false. Therefore, for all these reasons the Notice of Motion was strongly opposed by the plaintiff and the defendant No. 2.
7. The crucial question in this case is whether the Court Receiver stands discharged from the date an Order is passed by the Court in that regard or whether he continues in his office till he discharges and fulfills all the incidental obligations that are cast upon him by virtue of his appointment and before he renders account to the Commissioner of Accounts. The second question is also whether the applicant succeeds in making out a case for modification or variation of the Order passed by Justice Variava on 10-7-1997.
8. From the record of this case, it appears that the present suit was filed by Atul D. Sohni and one another for declaration that defendant No. 1 and/or defendant Nos. 2 and 4 purchased the suit property in the auction held by the Bombay Municipal Corporation on behalf of and for the benefit and as trustee of the plaintiff and that defendant Nos. 1 to 3 have no right, title or interest in respect of the suit property and that they are trespassers. In the Notice of Motion No. 2700 of 1984 taken out by the plaintiff for interim reliefs, Court Receiver came to be appointed by Justice Pratap on 12-6-1985. At that time the applicant was a tenant and when the Court Receiver inspected the property and took possession pursuant to Court’s order, he made a report that so far as Kailash Prasad Agarwal, the applicant is concerned, the plaintiffs state that only two galas are in possession of Kailash Prasad Agarwal used as a ration shop and applicant started paying rent to the Court Receiver.
9. Thereafter, Justice Vyas passed an Order dated 26-11-1992 discharging the Court Receiver but he was continued for certain period to enable the parties to file appeal from the said order. Appeals were filed but were dismissed by the Division Bench and Special Leave Petition which was filed before the Supreme Court also came to be dismissed by Order dated 27-7-1993.
10. The question therefore is whether the Court Receiver became functus officio right from 26-11-1992 i.e. when Justice Vyas passed the Order discharging the Court Receiver or whether 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 quoted above as pointed out by the Counsel for the plaintiff and defendant No. 2.
11. It is necessary at this juncture to refer to the relevant provisions regarding Receiver in the Code of Civil Procedure and in the Original Side Rules of this Court. Order XL of the Code of Civil Procedure is about appointment of Receivers. In this Order there are only five Rules. First rule is regarding Appointment of Receiver for the purpose of realisation, management, protection, preservation and improvement of the property, the collection of rents and profits thereof, the application and disposal of such rents and profits and the execution of documents as the owner himself has or such of those powers as the Court thinks fit. Sub-rule (2) of Rule 1 clarifies that the Court shall have no power to remove from possession or custody of property, any person whom any party to the suit has not a present right so to remove. Rule 2 speaks about remuneration of the Receiver, Rule 3 is about the duties of the Receiver and Rule 4 is about enforcement of Receiver’s duties and Rule 5 speaks about appointment of Collector as a Receiver. There is nothing in Order XL which speaks about the discharge of the Receiver and the effect of the order of discharge at the time when the discharge order shall be effective.
12. Chapter XXX of the Original Side Rules deals with the Office of the Receiver. As per Rule 589 after the Receiver is appointed, the Prothonotary has to forward the certificate to the Commissioner for taking Accounts slating the name of such Receiver and the conditions of his appointment. Rule 591 prescribes that Court Receiver shall charge for discharging his duties as per the scale given in the said Rule. Rule 592 empowers the Court Receiver to charge to the suits, estates of matters under his management a sum which in his discretion he considers proper, towards the expenses of his office etc. Rule 593 requires the Court Receiver to invest the amount standing to the credit of the suit or matter, which is not immediately required for current expenses, in Government security etc. As per Rule 594(b) the Court Receiver has to file in the Office of the Commissioner his accounts from the date of his appointment to the end of the next calendar year i.e. within three months from the expiry of the said calendar year. It is further provided that if the Court Receiver is discharged after the end of the calendar year and before the account is filed, he may file his account upto the date of his discharge.
13. Apart from the aforesaid provision Chapter XXIX relating to Office of the Commissioner for taking Accounts also makes out some provision regarding the Receiver and submission of accounts by him. Rule 512 provides that if the Receiver neglects to file his accounts or to get it passed as provided under Rule 594, the Commissioner may issue show cause to the Receiver and if the Commissioner is not satisfied with the explanation offered he will make a report in that matter and submit it before the Prothonotary & Senior Master, who in turn place such report before the Judge in Chambers and the Judge may pass such orders on the said report as may be found just. As per Rule 513 upon a Receiver’s account being filed in the office of
the Commissioner for being passed, a notice to proceed thereon and other necessary notices shall be issued by the Receiver. Further as per Rule 514 when the Commissioner completes the examination of accounts filed by the Receiver, he will issue a certificate stating the result of such examination and those certificate shall be binding on the parties to the proceedings unless the same is discharged- or varied. Rule 515 provides that any party desiring such certificate to be discharged or varied shall apply to the Prothonotary & Senior Master within 20 days and this time can be extended by the Judge in Chamber.
14. The aforesaid rules of the Original Side of this Court do not provide for anything regarding the discharge of the Receiver i.e. from when the discharge shall be effective and what will be the position of the Receiver after the order of discharge and before the files accounts, certified by the Commissioner and what will be the position of the Receiver after the discharge, by order of the Court vis-a-vis the property in the suit and vis-a-vis parties to the suit. My attention was drawn by Mr. Anney, learned Counsel for the applicant, on certain portions of a book “Law of Receivers” 3rd Edition by Pillai & Nairs, and my attention was drawn to page 457 Note No. 4; Duty to follow directions of Court. Duty to be impartial on page 459. Further he relied upon page 519 under caption Duration of Receivership, page 520 note under caption Jurisdiction of Court as regards discharge. Page 524 Note No : 9 caption when appointment is for a limited time. Mr. Anney also relied upon the Judgment of Supreme Court Anthony C. Leo v. Nandlal Bal Krishnan & others.
15. Even after going through all the aforesaid parts of the Book on Receiver, I do not find any specific provision as to when the office of the Court Receiver should be deemed to have ceases to function i.e. whether from the date of the discharge order or whether on any subsequent date or event. Chapter XVII regarding discharge of the Receiver also does not clarify this position even though it states under Note: 1 Duration o( Receivership, that the duration of the Receivership is limited by the Court. However, it is repeatedly held that there is no automatic discharge of Receiver merely because the proceedings have ended and Note No. 6 of the same Chapter also provides that the termination of the suit will not ipso facto discharge the Receiver. It also says an order requiring a Receiver to return the property in his possession to the defendant does not in itself effect the discharge of Receiver. However, it states that when the main suit is dismissed and the rights of the parties are finally established, the Receiver must account to the Court appointing him for money or property which is in his hands and the Court which appoints Receiver has authority to pass orders for winding up the affairs of the Receiver and his powers even after the dismissal of the suit.
16. Supreme Court decision in Hiralal Patni v. Loonkaren Sethia, , is referred to in this book on page 523 and the following guidelines laid down by the Supreme Court have been quoted as under :
“(1) If a Receiver is appointed in a suit until judgment, the appointment is brought to an end by the judgment to in the action.
(2) If a Receiver is appointed in a suit without his tenure being expressly defined, he will continue to be a Receiver till he is discharged.
(3) But after the final disposal of the suit as between the parties to the litigation, the Receiver’s functions are terminated; he would still be answerable to the Court as its officer till he is finally discharged.
(4) The Court has ample power to continue the Receiver even after the final decree if the exigencies of the case so require.”
17. If the object of appointment of Receiver, the duties of the Court Receiver and the obligations cast upon the Court Receiver are considered along with the aforesaid observations of the author on judgment and the Original Side Rules quoted above, it becomes clear that an order of discharge of the Receiver by the Court does not in itself bring an end to the office of the Court Receiver vis-a-vis the suit property and the parties to the suit. But the Court Receiver stands discharged only after he puts the property to its status quo anti-position unless otherwise directed by the Court or unless the Receiver was required to do something a new in respect of the property and unless and until the Receiver has submitted his accounts and they have been approved by the Commissioner for accounts.
18. If the argument of Mr. Anney is accepted that a Receiver stands discharged on and from the date of the order by the Court to that effect then it will result in disastrous consequences because after appointment particularly in respect of immovable property, the Receiver may take physical possession or may take symbolic possession, may appoint the person in actual possession as his agent, may take steps to improve the property, (depending upon the facts of the case and the powers given to him), may recover rent and royalty from the occupants, may file suits for protection of the property, may have leased the property or the Receiver may be taking steps for sale of the property. If the Receiver is to cease the function in any manner whatsoever from the date of his discharge, then all the work undertaken by him will come to a standstill and even he will not be able to give effect to the order of his discharge. He will also not be in a position to put back the property to the status-quo ante that was in existence on the date of his appointment as Receiver and his taking charge of the property and therefore if the argument of Mr. Anney is accepted then all the parties to the suit in which Receiver is appointed will suffer. All these consequences will be vis-a-vis the Receiver and the property and/or the Receiver and the parties to the suit or those in occupation of the property, are concerned with the property. So far as the obligations of the Receiver to the Court are concerned, he will not be accountable and he will not be under obligation to render accounts and get them approved from the Commissioner. In my opinion, therefore, the arguments of Mr. Anney that the Court Receiver ceases to function immediately from the date of the order of his discharge has to be rejected. It may be that after the order of discharge the Receiver may not take new decisions in respect of the property and may not encumber or burden the property additionally by his actions but he can certainly take those steps which are necessary for the purpose of maintaining the possession of the property, as between the parties to the suit or as between the third parties.
19. Receiver is a person who has to exercise certain rights vis-a-vis the property. In the High Court, there is an officer of the Receiver. However, till the Receiver is appointed as Receiver by Judicial order in a suit or proceedings, the Receiver, as an officer as such, cannot deal with any property in any suit. However, as soon as he is appointed as such by Court’s order he gets certain rights in respect of the suit property and as against the parties to the suit or third parties. All the rights are followed by liabilities and therefore it can be said that after appointment, a Receiver gets rights in respect of the property but after discharge his liabilities continues till he dis-burden himself from those liabilities. It can also be said that even after order of discharge the Receiver continues as such till all of his liabilities vis-a-vis property and vis-a-vis the parties to the suit and third parties are dis-burdened by him, shifted by him or released by him. A judicial order of discharge does not automatically result in dis-burdening the liability of the receiver or shifting his
liabilities or relieving him from his liabilities. The order of appointment of Receiver casts a burden on the Receiver and gives him certain rights to carry that burden, whereas, the order of discharge starts the process of unloading or unburdening the Receiver. In other words it can be said that parties to the suit or litigants carry the initial burden of managing or looking after their property but when they come to the Court and seek appointment of Receiver then such burden or load is shifted to the Receiver and when the Receiver is discharged, he must again pass on his burden or toad to the parties and till this is done he will be directly concerned with the property or with the parties to the suit or the third parties. Therefore, the contention of Mr. Anney that a Receiver ceases to be a Receiver on and from the date of his discharge cannot be accepted.
20. In the instant case, Receiver came to be discharged by order dated 26-11-1992 but thereafter he filed his report, which has not yet been accepted and he has also to submit the accounts to the Commissioner for Taking Accounts, as per the rules of the Original Side quoted above, and therefore, his liabilities as Receiver continues. I, therefore, hold that even after order dated 26-11-1992, the Receiver in this case did not cease to have control over the property.
21. Now coming to the facts of the present case, as per the Receiver’s original report, the applicant was in possession of only two galas. However, as per the further report, the applicant has made encroachment and also made new construction. This is clear from the report of the representative of the Court Receiver dated 18-6-1994 which is filed by defendant No. 2 along with his affidavit in reply to the Notice of Motion. The applicant tried to contend by filing compilation of documents that no encroachment was made by him and all the structures that have been noted by Receiver in his aforesaid report were there in existence and in his possession since last more than 40 years. I am not inclined to accept this contention because the Receiver who is an impartial officer of the Court had no reason to report, when he was appointed in respect of the suit property, that applicant Kailash Prasad Agarwal was in possession of only two galas. That report of the Court Receiver has to be accepted in preference to the submissions made by the applicant, and therefore, the order of justice Variava dated 10-7-1997 and his further Order dated 21-8-1997 are not required to be modified as prayed by the applicant.
22. However, the Order of Justice Variava dated 10-7-1997 will have the effect of dispossessing the applicant from all the properties in his possession including two galas which were noted by the Receiver in his first report. Since admittedly, the applicant was in possession of those two galas at the time when the Court Receiver was appointed, his possession in respect of those two galas is required to be protected.
23. Since it has been held that the Court Receiver in this case continue to have control over the property till he discharge his liabilities, the conduct of the applicant Kailash Prasad Agarwal in refusing to accept the notice and misbehaving with the Court Receiver requires to be taken serious note of as has been rightly done by Justice Variava. The explanation given by Mr. Anney regarding this conduct of Kailash Prasad Agarwal cannot therefore be accepted. Tendency of misbehaving with the Officers of the Court is increasing and this has to be curbed by taking serious view of such conduct and also by dealing such persons sternly and therefore both the Orders of Justice Variava dated 10-7-1997 and 21-8-1997 are required to be maintained excepting variation regarding the two galas which were in occupation of the applicant Kailash Prasad Agarwal. For all the above reasons, I pass the following Order :
ORDER
1) Prayer (a) of the Notice of Motion is partly allowed. Applicant Kailash Prasad Agarwal not to be evicted from the two galas which were found in his possession when the Court Receiver took possession on 14-6-1985 or at any time after and for implementing the order of the Court dated 12-6-1985 about appointment of Court Receiver in this case and he be continued to pay the rent to the Court Receiver in respect of those two galas as he was doing since 1985 till the Report of the Court Receiver is accepted by this Court. Consequently, order of Justice Variava dated 10-7-1997 will be enforced. It is clarified that order of Justice Variava dated 21-8-1997 has merged in the present order.
2) Other prayers of the Notice of Motion are rejected and accordingly the Notice of Motion is disposed of.
After the order was pronounced, Advocate Mr. Anney for the applicant Kailash Prasad Agarwal prayed for continuation of status-quo for a period of three weeks. Counsel for defendant No. 2 has no serious objection. Hence, status-quo to continue for three weeks on a condition that if the applicant wants to prefer appeal, he will give 48 hours notice to defendant No. 2.
24. Notice of motion partly allowed.