RECEIVER UNDER ORDER XL OF CPC

Content
•Introduction on receiver
•Appointments of Receivers (Rule-1)
•Who can be appointed as Receiver?
•Principles governing appointment of receiver
•Powers
•Duties
Introduction on receiver-Meaning and Objects

Meaning
Objects
The object and purpose of appoint of receiver may generally be
stated to be the preservation of the subject matter of litigation
pending for judicial determination of the rights of the parties.

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Appointments of Receivers (Rule-1
 Appointments of Receivers (Rule-1)
 Where it appears to the Court to be just and convenient, the Court may by
order—
 a) Appoint a receiver of any property, whether before or after decree;
 b) Remove any person from the possession or custody of the property;
 c) Commit the same to the possession,custody or management of the receiver;
and
 d) confer upon the receiver all such powers, as to bringing and defending suits
and for the realization, management, protection preservation and improvement
of the property, the collection of the 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.

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 Who can be appointed as Receiver?

The rules order XL, confers wide discretion to the court and
appointment of receiver cannot be claimed as a matter of
course. Such discretion must be exercised very sparingly as it
takes away certain property out of the possession of parties
litigating against each other.

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Principles governing appointment of receiver:
 Principles governing appointment of receiver:
To following principles have been laid down for the
counts to consider while deciding the question of
appointment of receiver-
 The appointment of receiver is discretionary with

the court.
 It is protective relief. The object is preservation of

the property is dispute pending judicial

determination of the right of the parties to it.
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Cont...
 A receiver should not be appointed unless the plaintiff prima facie proves that he has
very excellent chance of succeeding in the suit.
 It is one of the harshest remedies which the law provide for the enforcement of the
rights and therefore should not be lightly resorted to since it deprives the opposite
party of possession of the property before a final judgment is pronounced, it should
only be granted for the prevention of manifest wrong or injury. (A court will never
appoint a receiver merely on the ground that it will do harm.
 Generally on order appointing a receiver will not be made where it has the effect of
depriving the defendant of a de facto to possession since that might cause irreparable
loss to him. But if the property. Shown to be in media, that is to say in enjoyment of no
one. It will be the common interest of all the parties to the suit to appoint a receiver.
 The court should look at the conduct of the party who makes on application for
appointment of a receiver. He must come with clean hands and should not have
disentitled himself to this equitable relief by latches, delay on acquiescence.

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Power which may be conferred as a receiver:
 Power which may be conferred as a receiver: Order-40(1-d)
 A receiver is an officer of the court and he functions under the

direction of the court. The court may confer all or any of the
following powers to the receiver-
 To institute and defend suits;
 To realize, manage, protect,reserve and improve the property.
 To collect apply and dispose of the  rents and profits;
 To execute documents’ and
 Such other powers as it thinks fit.

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What are the duties of the receiver?
 Under order 40 rule (3), duties of a receiver are provided as follows:
 Furnish security to account for what he will receive from the property
as income.
 Submit accounts (half yearly) for such period or form as directed by
the court. The account basically includes the income received and
expenses incurred for the protection and preservation of the property.
 Pay the amount due to the court.
 Take responsibility for any reduction in the value of the property
because of the receiver’s willful negligence.
 Discharge the duties personally and should not delegate or assign any
of the rights entrusted to him by the court.

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Liability of the receiver:
 Liability of the receiver:
 A receiver is liable to duly account for the income and the

properties which come into his hands and he is responsib1e for

any loss occasioned by his willful default or gross negligence.  A
receiver disregarding the court’s order actuated by his own interest
is liable to be removed or committed for contempt. A ‘cannot be
prosecuted for criminal breach of trust in respect property without
the sanction of the court which appointed him sanction is
necessary in respect of other offences committed by the receiver in
his capacity as receiver. But no such ii will be necessary where the
offense committed have nothing with the office held by him.

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 What are the liabilities of a receiver under Order
XL?
 According to Order 40 rule (4), When a receiver fails:
 To submit the reports as specified by the court or,  
 To pay the amount due from him as directed by the court or,

 Causes loss to the property due to gross negligence.

 Any other duty which court directed him to do,
 The court may order the attachment of property of the receiver to

recover the loss caused due to his willful default or negligence.

 The court, after recovering all the losses from the proceeds

received after selling receiver’s property, will pay the balance (if
any) to the receiver.

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Thank You

Q&A

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