1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Amk NOTICE OF MOTION NO. 4299 OF 2008 IN SUIT NO. 3392 OF 2008 Smt. Khatijabai Safakat Kaka .. Plaintiff Vs. Abdullabhai Mohamedbhai Moonim & Ors. .. Defendants Mr. ASI Zaidy with Mridula Bhatia with Mr. Ali Zaidy, Tasneem Zaidy for the Plaintiff. Mr. D. H. Mehta with Naseem Patrawala i/b P. Mehta & Mithi & Co. for Defendant Nos. 2 to 4, 5B, 8 to 12, 13B to 13D, 14, 16, 18, 19 to 28. Mr. P. P. Kulkarni for Defendant Nos.5E, 6A to 6D. CORAM : MRS. R. S. DALVI, J. Date of reserving the order : 08.04.2010 Date of pronouncing the order : 28.04.2010 JUDGMENT 1. This is a partition suit between the members of the families of 4 brothers. This suit relates to 4 properties of 4 brothers settled under a Deed of Trust dated 29.11.1954. The plaintiff is supported by certain defendants. The other defendants are represented separately through defendant No.11. There are, therefore, two separate groups in respect of the suit properties. 2. The defendants are in-charge and management of the properties. The plaintiff’s claim that the properties are being mismanaged. The plaintiff has 1/48th share in the suit properties. The suit is valued accordingly. Certain 2 other defendants also have shares in the suit properties. Their share is not valued and court fee is not paid on that valuation though they also claim their rights in the suit properties. 3. The 4 properties are described in Schedule Exh.A to the plaint which is verbatim the schedules shown in the Deed of Settlement. 4. The relationship of the parties is admitted. The properties of the family are admitted. The fact that each of the parties is entitled to a specified share on partition is admitted. Upon such admission a judgment on admission under Order XII Rule 6 of the Code of Civil Procedure is otherwise required to be passed. Since this is a partition suit, a preliminary decree under Order XX Rule 18 of the Code of Civil Procedure would also be required to be passed since upon the aforesaid admissions, the properties would have to be partitioned and the plaintiff would have to be given the share claimed by her which is not disputed by the defendants. 5. Upon hearing the parties it was deemed fit that the plaintiff’s share be ascertained and paid to her. Further subject to the defendants who support the plaintiff valuing their shares and paying ad valorum court fees thereon, their shares be also ascertained and paid to them. 6. It may hardly be stated that the order of payment of the share of the plaintiff whether in the suit properties, if they are capable of being partitioned, or the market value of the share as determined upon valuation 3 being taken of the properties, if the properties are not capable of being partitioned, would be the ultimate and final relief for the plaintiff. Since the Court considered granting such a relief in view of the admissions as aforesaid, the defendants’ Counsel was directed to take instructions to show the precise position of the suit properties and how the plaintiff’s share can be ascertained and paid to her. 7. Mr. Mehta on behalf of the defendants submitted to the Court details of 3 tenanted properties shown in the 1st and the 4th Schedules in Exh.A to the plaint and 3 properties shown in the 2nd and the 3rd Schedules including another property relating to the revisionary right in the property sold to tenants under certain Consent Terms in a suit filed in the Small Cause Court, Mumbai. In two of the properties the share of the plaintiff is shown to be paid to her on 01.12.2009 and 10.08.2002 and with regard to one property Rs.2.29 lacs are shown to be deposited in a Fixed Deposit. 8. Mr. Mehta made an offer to obtain a valuation of the suit properties. 9. That being a fair and reasonable approach, the plaintiff was also directed to obtain her separate valuation. Mr. Mehta conceded that the higher offer could be accepted and based on that offer the plaintiff could be paid off her share. 10. Under these circumstances considering the incomes of the properties, expenses by way of repairs, property taxes, lease rent and other expenses, the valuation 4 of the suit properties which are completely tenanted buildings would have to be determined so that the ultimate relief prayed for by the plaintiff be granted to her. 11. Mr. Zaidy, Advocate on behalf of the plaintiff, however refused to get valued the suit properties or to put any effort towards such valuation. He insisted that the properties must be auctioned and sold and the plaintiff’s share be determined. He relied upon the order of my brother Judge More dated 16th December, 2009 in the case of Yusuf Vs. Yusuf in Trust Petition No. 3 of 2008 in which the offer of the private sale was rejected and a public auction was directed. In that case, the Trust Petition was filed under Section 34 of the Indian Trust Act, 1882, which relates to the right of any trustee to apply by way of a petition to the Civil Court for opinion in management of trust property upon serving a copy thereof to persons interested therein. In that case the trustees of the trust which owned a 100 years old dilapidated and fully tenanted building had sought to enter into an agreement with a developer to develop the property. The trust required to sell the property to develop it. The respondents challenged the value in view of the current market rate. Under those circumstances upon considering other judgments and orders, the Court considered that though the trust in that case was a private trust, since a part of the net rent income being 15% of the income was to be spent for charitable purpose and returns of the trust were filed with the Assistant Charity Commissioner, Bombay, it had to be treated as a public trust and since the market 5 value was much higher than the sale price, the Court deemed it fit to order a public auction by giving wide publicity to obtain the fair market price. 12. Reliance placed upon the order dated 16th December, 2009 in the said trust the petition is completely misplaced. This is a suit for partition. The plaintiff has to be paid her share. The suit properties are fully tenanted. They are not capable of partition by metes and bounds. The suit properties would have to be valued and the plaintiff’s share would have to be paid to her. 13. Yet the plaintiff’s Advocate would neither accept that the defendants get a valuation made which they have fairly offered, as they should, in view of the admission, or to obtain a valuation by the plaintiff herself or even to suggest the steps to be taken in that behalf and insisted upon a public auction and appointment of Court Receiver in respect of the suit properties. 14. Aside from merely alleging that the defendants are mismanaging in the plaint and in Notice of Motion No. 4299 of 2008, which allegations are denied, the plaintiff has done little else. Unfortunately guided and driven by her Advocate, who refused to see reason or to act in her interest despite being of some seniority, the plaintiff has applied for the appointment of Court Receiver without putting in any effort to obtain her share. It is seen that no case of the property being wasted is made out in the plaint as well as in Notice of Motion 4299 of 2008. 15. This Court has noticed a very unhealthy practice 6 in partition and administration suits of plaintiffs praying for and insisting upon the appointment of Court Receiver which, order if granted is followed by numerous applications and Court Receiver’s Reports in respect of several parts of the suit premises, which are usually tenanted and require continuous acts by the Court Receiver and supervision by the Court when the claims of the parties in such partition and administration suits are admitted, as in this case, upon the suit properties and the relationship between the parties being admitted. This unhealthy practice has resulted in a continuous drain of the resources of the Court in the office of the Court Receiver without the property being shown to be wasted which would necessitate the appointment of the Court Receiver. 16. Consequently it is deemed necessary to consider and lay down the law relating the appointment of the Court Receiver from the earliest judgments in English cases and privy council cases which have been constantly followed by the Apex Court and various High Courts. The reasoning in those judgments would be even more applicable in suits for partition and administration when, as in this case, the relationship between the parties and the suit properties and consequently the plaintiff’s claim, are admitted and no waste is alleged or proved. 17. The ambit of the appointment and the continuance of the Court Receiver, as a matter of law through more than a century of precedents, is required to be seen to appreciate this specific statutory provision of law. 7 18. Kerr on Receivers, Sixteenth Edition on page 5 has set out the object of the appointment of the Receiver and the several illustrations when such Receiver is necessitated thus :- “Object of appointment. A receiver can only be properly appointed for the purpose of getting in and holding or securing funds or other property, which the court at the trial, or in the course of the action, will have the means of distributing amongst, or making over to, the persons or person entitled thereto. The object sought by such appointment is therefore the safeguarding of property for the benefit of those entitled to it. There are two main classes of cases in which the appointment is made: (1) to enable persons who possess rights over property to obtain the benefit of those rights and to preserve the property pending realisation, where ordinary legal remedies are defective; and (2) to preserve property from some danger which threatens it.” 19. The cases in which the Court Receivers have been appointed are where there is danger of the property being damaged or dissipated, where the Plaintiff alleges and proves some peril to the property; the appointment then rests on the sound discretion of the Court :- “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.” 20. The English Courts as well as the Indian Courts have laid down the parameters of the appointment of Court Receiver when it is just and convenient as specifically enunciated in Order 40 Rule 1 of the C.P.C. 8 21. In the case of Harris vs. Beauchamp Brothers, 1 Queen's Bench Division, 801, the appointment of Court Receiver by way of “equitable execution” under the Judicature Act, 1873 in England came to be considered. It has essentially been held in that case thus :- “The Court therefore has no jurisdiction to appoint a receiver merely because, under the circumstances of the case, it would be a more convenient mode of obtaining satisfaction of a judgment than the usual modes of execution.” 22. The Court considered what would be the circumstances if the appointment of Court Receiver could be granted upon the plea of “equitable execution”. It is observed thus :- “The learned counsel for the plaintiff boldly argued, that, if you have got a subject-matter which might be made available for the satisfaction of the judgment debt, you may have a receiver, if it is a better mode of getting it in than the usual mode. In our opinion, this is wrong.” 23. The Court has observed about the past practice of the Courts in England thus:- “Some laxity, however, appears to have prevailed, and receivership orders would seem to have been made on the ground of greater convenience only, and in many cases ex parte. .... the practice of granting such orders ex parte was disapproved in this Court. .... We should be sorry to limit by construction the beneficial jurisdiction of the Court to grant an injunction or make an order for a receiver where it is “just or convenient” to do so; but we conceive those well-known words do not confer an arbitrary or unregulated discretion on 9 the Court, and do not authorize the Court to invent new modes of enforcing judgments in substitution for the ordinary modes. .... In that case, Cotton, L.J. said, “confusion of ideas has arisen from the use of the term `equitable execution.' The expression tends to error.” .... But what he gets by the appointment of a receiver is not execution but equitable relief, which is granted on the ground that there is no remedy by execution at law; it is taking out of the way a hindrance which prevents execution at common law. .... Fry, L.J., said in that case, “the idea that a receivership order is a form of execution is, in my opinion, erroneous.” 24. The Court has set out when Receivers can be appointed or be continued in execution thus:- “When the Plaintiff was met by certain difficulties arising from the nature of the property, which prevented his obtaining possession at law, and in these circumstances only did the Court of Chancery interfere in aid of a legal judgment for a legal debt.” 25. The Court then considered that the Receiver may be appointed under special circumstances, an indefinable concept, and observed as follows:- “The case of Manchester and Liverpool District Banking Co. v. Parkinson was referred to in the Court below as shewing that the order might be made under special circumstances. It would be rash and unwise to attempt to define the special circumstances which would justify the making of an order such as that which we have before us. But for the reasons which will appear from what has been already said, we think they must be such circumstances as would have enabled the Court of Chancery before the Judicature Act to have interfered by way of injunction or receiver at the suit of the judgment creditor.” 10 26. The special circumstances made out in that case were (1) obstruction of the Defendants, (2) the form of the judgment and (3) the threats to make away with the property. It was observed that only a statement in the Affidavit that the Defendants have appealed the judgment is shown to be the obstruction. These were held not to be real grounds for appointing Receiver in execution. It was observed thus :- “ .... he appointed the receiver, not so much by way of execution as to preserve the assets for the Court to give effect to the rights of the parties interested. We are of opinion that the learned judge had no jurisdiction to make such an order. This is not equitable execution, but administration, which the Court had no jurisdiction to order, at any rate in this action. It was in fact an irregular substitute for a receiving order in bankruptcy.” Thus the appointment of the Receiver made even in a disputed case by the Trial Court was set aside by the Court of Appeal. 27. In the case of Marshall v. Charteris, (1920) Chancery Division 520 the Defendant was in actual possession of the house which was in dispute in the action but did not receive rents and profits therefrom also. The Court refused to exercise its discretionary jurisdiction by appointing Receiver of the rents and profits of the house but ordered the Defendant to give up possession to the Receiver. Hence it can be seen that in a disputed action when a good case was made by the Plaintiff, possession 11 itself was granted to the Receiver appointed but the Receiver was not called upon and directed to receive rents and profits. The spirit of the judgment shows how the services of the Court Officer are not required to be needlessly used as a Manager though the protection of possession of the Plaintiff is heeded. 28. In the case of M.V. Kunhan Menon vs. M.V. Kannan Menon & ors., AIR 1924 Madras 482, which is also a Suit for partition, it has been held that the fact that no harm would be done by the appointment of Court Receiver is not a sufficient ground specially when there is no danger or waste. It is held in that case that the Suit for partition filed by a coparcener of HUF to become divided shows the self-evident right which may be taken for granted and the form that the partition will take was alone left in issue. Even in this case, upon the property itself and the entitlement of the parties being admitted, a decree of partition must follow as a matter of course. It may only be a preliminary decree if the property cannot be divided by metes and bounds upon agreement between the parties but subject to only such form that the partition would take being left in issue to be determined by the learned Commissioner for Taking Accounts. There would be no other dispute left to be agitated and for which any substantial ground for danger or waste could be made out necessitating the appointment of the Court Receiver. 29. In the case of Rajammal vs. Tyagaraja Aiyar & anr., AIR 1925 Madras 1245 where a wife who applied for 12 being maintained from the property of the family sought appointment of a Court Receiver to ascertain the real income of the property so that the maintenance amount payable to her could be fixed. It was observed that where the purpose of appointment of Court Receiver is not to safeguard any property but to obtain maintenance from the husband's coparceners who are themselves in possession of the property to make up accounts by management of the property and gathering material to serve as her evidence, Court Receiver could not be appointed. The question that the Division Bench posed upon itself in that case and its answer is material and striking : “Why should this unnecessary obligation be imposed upon the Plaintiff ? What, in effect, the Court has done by making the order in question is, that it has given the defendant facilities for preparing evidence that may be available to them at a later stage so that they may be in a position to tell the appellate Court that the evidence is ready and that it should be received.” 30. In the case of Benoy Krishna Mukerjee & ors. vs. Satish Chandra Giri & ors., AIR 1928 Privy Council 49 the law relating to the parameters of appointment of Court Receiver by way of some judicial discretion is set out thus:- “ On an interim application for a receivership such as this, the Court has to consider whether special interference with the possession of a defendant is required, there being a well-founded fear that the property in question will be dissipated, or that other irreparable mischief may be done unless the Court gives its protection. Such an order is 13 discretionary, and the discretion is, in the first instance, that of the Court in which the suit itself is pending. When, as in this case, the order of that Court is altered on appeal it becomes necessary to consider whether the Court below had before it the evidence required to support such an order and considered it in accordance with the principles on which judicial discretion must be exercised. If the Court of review rightly concludes that proper discretion was not used below, it is free to exercise its own discretion in the matter.” Consequently, in that case though the Mahunt of the temple had abandoned the office and danger or loss or injury to the property was alleged, Court Receiver was not appointed in a Suit for his removal. 31. In the case of Ramsarup Das & ors. vs. Rameshwar Das & ors., AIR 1950 Patna 184 upon the death of the Plaintiff in a Suit for declaration of title and recovery of possession of properties, it was contended that the Receiver, who was appointed of the estate, held the property for the rightful owner of the property. It was argued that the Receiver should be directed to continue in possession of the property until the rightful owner establishes such right in preference to Defendant No.1 in the Suit. It was observed thus:- “But I am not aware of any procedure known to law in accordance with which this Court can ask the receiver to continue in possession indefinitely, or even for a specified period, in the expectation that a decision might be given in favour of Parmeshwar, or in favour of another person, as preferential successor.” 14 32. It was observed that there was no proceeding pending before any Court in which Receiver could be appointed and the appointment made by the District Judge was held ultra vires since it was a property which seized to be the subject-mater of the litigation. It was held that power under Order 40 Rule 1 of the C.P.C. to appoint the Receiver referred only to the appointment of a Receiver in respect of property in regard to which a litigation was pending, “that is to say, as long as the suit remains pending.” Hence, it was held that when there was no power in the Court to appoint Receiver, the Court could not even continue such appointment. In this case it is seen that there is no dispute at all with regard to the determination of the share of the plaintiff and accordingly no case for Court Receiver. 33. In the case of T. Krishnaswamy Chetty, vs. C. Thangarelu Chetty & ors., AIR 1955 Madras 430, after extensively going through a number of precedents the Court laid down 5 principles for appointment of Court Receiver in paragraph 13 which reads thus:- “ (1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court. The discretion is not arbitrary or absolute: it is a sound and judicial discretion, taking into account all the circumstances of the case, exercised for the purpose of permitting the ends of justice, and protecting the rights of all parties interested in the controversy and the subject- matter and based upon the fact that there is no other adequate remedy or means of accomplishing the desired objects of the judicial 15 proceeding. (2) The Court should not appoint a receiver except upon proof by the plaintiff that prima facie he has very excellent chance of succeeding in the suit. (3) Not only must the plaintiff show a case or adverse and conflicting claims to property, but he must show some emergency or danger or loss demanding immediate action and of his own right he must be reasonably clear and free from doubt. The element of danger is an important consideration. A Court will not act on possible danger only; the danger must be great and imminent demanding immediate relief. It has been truly said that a Court will never appoint a receiver merely on the ground that it will do no harm. (4) An order appointing a receiver will not be made where it has the effect of depriving a defendant of a ‘de facto' possession since that might cause irreparable wrong. (5) The Court, on the application of a receiver 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. He must come to Court with clean hands and should not have disentitled himself to the equitable relief by laches, delay, acquiescence etc.” 34. It has been held in the case of Ram Ekbali Singh