1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. Notice of Motion No.3657 of 2008 IN Court Receiver's Report No.145 of 2008 IN Suit No.543 of 2000 Smt.Prafullata Rajan Varhadi .. .. Applicant v/s. Smt.Pushpalata Chandrakant Chury & ors. .. Defendants Mr.Uday P. Warunjikar for Applicant. Mr.P.G . Lad for Defendant Nos.1 & 3. Mr.M. Kondekar for Defendant No.2. ----- CORAM : SMT.ROSHAN DALVI, J. Dated : 24 th November 2008 JUDGMENT : 1. This Notice of Motion is taken out for clarification of the order passed by the Appeal Court on 30.9.2008 in Appeal (Lodging) No.379 of 2008 in the above Court Receiver's Report. 2. A preliminary decree in terms of the Consent Terms signed by the parties and their Advocates came to be passed in the Suit by the order dated 3.7.2008. The Plaintiff essentially requires modifications to that order. 2 3. The Defendants have not opposed the Notice of Motion. Though granted time, they have not filed any Affidavit- in- reply and stated that they are supporting the Plaintiff. 4. The Suit is between three sisters for partition of the suit property. The suit property is admitted. The relationship between the parties is also admitted. Hence the entitlement of the parties follows as a matter of course. In any event, 1/3 rd equal entitlement of each of the 3 sisters is also specifically admitted. 5. Upon the filing of the Suit in the year 2000, the Court Receiver came to be appointed on 22.2.2000. The suit property is fully tenanted. Hence the Court Receiver, who is in management of the suit property, which is custodia legis, has had to deal with several tenants. The Court Receiver has collected rents/compensation from the tenants. The Court Receiver was called upon to enter into litigation by filing Suits for eviction and other reliefs against several of the tenants. The Court Receiver required various directions to manage the property as required by the parties. It is under those circumstances that the Court Receiver filed his Report No.145 of 2008 mentioned above. 3 6. At the time of hearing of the said Report, it transpired that the parties fairly conceded the rights of one another. They also accepted and admitted the 1/3 rd equal share of each of them. Nevertheless they all required and desired the Court Receiver to be in management and to act on their behalf specially with regard to the collection of rents and filing of Suits against the tenants. It was noticed by the Court that entire exercise sought to be saddled upon the Court Receiver by virtue of his appointment in such a Suit is an abuse of the Court process. 7. It may be mentioned that the Court Receiver cannot be appointed by consent of the parties or as a matter of course. He also cannot be appointed at the behest of one party merely because the other party agrees with his appointment and concedes management of the property to the Court Receiver. The seminal imperative circumstance for appointment of a Court Receiver under the provisions of Order 40 Rule 1 of the Code of Civil Procedure, 1908, which governs his appointment, is his appointment where it is just and convenient. Consequently, both these tests must be satisfied. The appointment cannot be made merely because of convenience. It has to be made because it is also just to appoint the Court Receiver. Similarly after the Court Receiver is appointed his continuation is required to be 4 under the same provision and hence within the same ambit – Court Receiver can continue as such in a Suit where his continuance is both just and convenient. 8. It may be mentioned that it has been noticed by this Court that in many Suits, more specially Suits for partition of properties belonging to and owned by the parties or administration of the estate of a deceased owner amongst his heirs and legal representatives that applications for appointment and continuation of Court Receiver are made despite the fact that the entitlement of the parties, the relationship of the parties and the suit properties themselves are admitted. 9. It may also be mentioned that in case of such admissions there would be no issues required to be agitated by the parties or adjudged by the Court for the continuance of the lis. Consequently it follows as a matter of corollary that in such cases preliminary decree of partition or administration of the suit properties would be required to be passed under the provisions of Order 20 Rule 18 and Order 20 Rule 13 of the C.P.C., respectively. 10. This is one such case. It is gratifying to note that the 3 sisters have fairly conceded their relationships in the suit 5 property and specifically admitted their equal 1/3 rd share therein. Nothing further is required to be done by the Court in a Suit for partition except to pass a preliminary decree for partition of the property by declaring their rights to the said extent and giving further directions for the ascertainment and division of their specific shares. 11. It is in this light that the Court Receiver's Report No.145 of 2008 came to be considered. The parties were given the option of deciding how the entire tenanted property would be amicably distributed in 3 equal shares by and between them. After the application was adjourned on a number of occasions to enable the parties to determine such share the parties sought to file Minutes of the Order for preliminary decree. The parties as well as their Advocates signed the Consent Terms that were arrived at between them. The Consent Terms ran into 11 pages with 2 Schedules and 6 plans marked as Exhibit- A thereto as well as a plan of the City Survey Office marked as Exhibit- B thereto. 12. The Consent Terms show that the suit property is joint property and each of the 3 sisters have a 1/3 rd share therein. 13. The parties agreed to refer their matter to the learned Commissioner for Taking Accounts for effecting partition and 6 separate possession in accordance with law of partition by metes and bounds as mentioned in Exhibit- E to the Plaint and during the pendency of such partition to distribute the property as mentioned in Clause- 3 therein. 14. Each of the parties were allotted 57 rooms. The parties also agreed upon 7 rooms in an unauthorised Patra shed and one shop in chawl No.5 which was unauthorisedly constructed to be demolished or to be distributed equally amongst them. 15. They confirmed that the accounts of the management have been settled by the parties and they had no claim against one another in respect of any such accounts. 16. They further agreed that there were 17 occupants who had come into possession of the property after the Court Receiver was appointed and so they agreed that the Court Receiver would take appropriate steps for their removal with Police assistance, if required. The parties listed the names of those occupants. Consequently, they agreed that until a final decree was passed the Court Receiver would continue as such Receiver and would recover rent and compensation from the tenants and occupants “as usually being done for the benefits of all parties.” The parties referred to the interim order dated 17.1.2008 passed in this Suit relating to eviction 7 of unauthorised occupants for which they required the Court Receiver to file eviction Suits as per draft submitted and further drafts to be submitted to the Court Receiver. The parties listed the occupants against whom such eviction Suits were to be filed. 17. The parties further sought to direct the Court Receiver to fix “applicable compensation/damages @ Rs.30/- per sq. foot p.m. as earned by the sub- lettee” under certain leave and licence Agreement and also to recover damages within 2 months. 18. The parties agreed to co-operate with one another in respect of notices, if any, received from any Government Authority or MHADA and withdrew all allegations made against one another. 19. The parties further agreed to appoint a developer to develop the property also. 20. The parties agreed to discharge the Court Receiver after the final decree was passed, upon which the Court Receiver was to hand over possession to the respective parties as per their shares divided/distributed amongst themselves. 8 21. The parties further agreed that until such discharge the Court Receiver would pay all the liabilities of the suit property as property taxes, MHADA cess, land revenue tenor, etc. from the suit funds. 22. It may be mentioned that the Court was aware that the Suit was for partition between the 3 sisters. The parties were asked to arrive on an amicable settlement relating to the distribution and division of their precise shares in the tenanted property. After certain adjournments in that behalf, the parties arrived at settlement and tendered the Minutes of the Order for preliminary decree to the Court. As aforesaid, the Minutes of Order ran into 11 pages with 7 pages of Annexures. It showed the division between the parties in separate colours for the Ground as well as 1st floors of the property. 23. The Court noted in the order dated 3.7.2008 that the parties had settled their dispute to divide the suit property as per the allotment made out in the plan annexed to the Consent Terms signed by the parties and their Advocates. Consequently, the Court passed the order and decree in terms of “The Minutes of the Order for Preliminary Decree.” The Court accepted the undertakings given by the parties. In view thereof, the need for continuing the Receiver was 9 absent. The Court passed the direction that the Receiver shall not take any further steps in furtherance of any previous orders. The Court recorded that the parties will be entitled to take whatever action they deemed fit in accordance with law against any of the tenants or parties inducted into the premises which came to their share under the allotment as per the Consent Terms. Hence the Court discharged the Court Receiver on payment of his fees as per Rules and disposed of the Court Receiver's Report accordingly. Certain 24 Pay Orders, which were received by the Court Receiver from the occupants of the suit premises, were directed to be credited to the suit account and the parties were to be entitled to claim them equally subject to the payment of the Receiver's costs, charges and expenses. 24. In the circumstances, the parties had required the Court Receiver to do all the acts which are set out therein. The detailed Consent Terms were not meant or expected to be read by the Court specially in view of the fact that the parties had settled the disputes as was previously orally mentioned to the Court and were represented by Counsel. Further the parties had not only agreed to merely partition the suit property but had divided and distributed the suit premises amongst themselves as shown in various colours in the plans annexed to the Consent Terms. The Court, therefore, 10 was of the firm view that no case for continuation of the Court Receiver, as was initially argued by Counsel, remained. In view of the admission of the parties, of their shares, the distribution of shares, the withdrawal of the allegations previously made and the passing of the order for preliminary decree itself, the case for appointment of Court Receiver ceased to exist in its entirety. The aforesaid order, copy of which is annexed to the Affidavit- in-support of the Notice of Motion, came to be passed in open Court. Neither of the Counsel attempted to correct the Court with regard to any of the observations or directions in the order. The Suit came to be disposed of upon such preliminary decree and subject to the actual division before the learned Commissioner for Taking Accounts, upon which the application for placing the Suit on board for final decree would be required to be then passed. 25. It is now seen that the insistence of the parties that the Court Receiver must manage their property for recovery of rents, payment of taxes, repairing the property, demolishing unauthorised constructions, filing Suits for eviction etc. continued in the Consent Terms and thereafter. 26. Since it was seen that the Court was not prepared to continue the possession of the Court Receiver, the parties 11 filed an Appeal against the said order. The record shows that the Appeal came to be withdrawn by the Appellant with liberty to move this Court for certain clarifications and praying for implementation of the Consent Terms. It is this order that the Plaintiff has sought to have clarified. It is esoteric how this Court can clarify the order of the Appeal Court. This Court can clarify its own order. How the order dated 3.7.2008 came to be passed and what is contained in that order has been set out hereinabove. Prayers in the Notice of Motion do not show that the Plaintiff has sought clarification of the order passed by this Court dated 3.7.2008 in the above Court Receiver's Report. The order of the Appeal Court allows the Appellant/Plaintiff to apply for clarification for implementation of the Consent Terms. The Consent Terms have been executed by and between the parties upon their volition. They seek division and distribution of their joint property between themselves. The parties are free to implement the Consent Terms. They may divide the property themselves by metes and bounds or take the assistance of the learned Commissioner for Taking Accounts in that behalf. They may also take whatever steps that they deem necessary for demolition of unauthorised construction on their property or division of those constructions amongst them, remove the illegal occupants, file eviction Suits, recover rent and compensation from the tenants /occupants, 12 sue the sub- lettee for damages, develop the suit property and pay the taxes in respect thereof as per their specific agreement contained in the Consent Terms. 27. The only exception that the Court has taken in the order dated 3.7.2008 is to the agreement and the assumed authority of the parties to the Suit to have all these acts and deeds performed through the medium of the Court Receiver. The parties had insisted in the Court Receiver's Report for the order in that behalf. An order directing the Court Receiver to perform any of those acts as required by the parties was not passed. The parties were instead given time to settle their disputes, if any, relating to the management of their admitted property and admitted entitlements. The parties dared to enter into the Consent Terms to agree and put on record and have the order passed for the directions specifically applied for and not granted. Though the Court allowed the Suit to be settled and the preliminary decree to be passed for division of the property and the allotment as per the plan of the parties, the Court specifically did not allow the Receiver to take any further steps as sought to be agreed by the parties. 28. It may be mentioned that the Court Receiver is an officer of the Court. He manages the property of which he is 13 appointed Receiver. The property remains custodia legis for the benefit of the parties who would be entitled to such property at the final determination of the Suit. It pre- supposes a serious dispute between the parties. It pre- supposes that the property is in inherent peril upon disputed claims and is likely to be wasted. A Court Receiver cannot be used by the parties as their Estate Manager. Such user is an egregious abuse of the legal process. Such user was, therefore, specifically not allowed. 29. Mr.Warunjikar on behalf of the Plaintiff/Applicant argued that the clarification is required to see that the Receiver is directed to take steps as per the Consent Terms between the parties with regard to the management of the suit property until the final decree is passed and that the Receiver cannot be discharged from the Suit. The argument is, therefore, essentially for clarification of the order dated 3.7.2008. Such clarification would essentially be in terms of Speaking to the Minutes of the order. The jurisdiction of the Court in that regard is extremely narrow. Only arithmetical or clerical errors need necessarily be corrected in such an application. Knowing such legal position, the application, though made out to be for modification of that order, is not of such a nature. The Notice of Motion taken out by the Plaintiff, strangely seeks clarification of the order of the Appeal Court 14 dated 30 th September 2008. This Court is hardly able to clarify an order of the higher Court on grounds of judicial propriety. The order of this Court needs no clarification. It is clear and precise. It discharges the Court Receiver and calls upon the Court Receiver not to take any further steps in furtherance of any previous order. It allows the entire agreement between the parties save and except that they would do all such acts and deeds which they otherwise required by their own order and agreement to be done by the Court Receiver. 30. Kerr on Receivers, Sixteenth Edition on page 5 has set out the object of the appointment of the Receiver and the 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.” 15 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 .” 31. 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 the specific directions of the order which needs no amendment. 32. The English Courts as well as the Indian Courts, since prior to the coming into force of the Civil Procedure Code, 1908, 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. 33. In the case of Harris vs. Beauchamp Brothers, 1 Queen's Bench Division, 801 , the appointment of Court 16 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 .” 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 .” 34. 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 17 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 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 a 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 .” 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.” 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 18 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.” 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 .” The appointment of the Receiver made even in a disputed case by the Trial Court was set aside by the Court of Appeal. 19 35. 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