February 20, 2024

A receiver aids the court in a significant way in a civil action. Until the court makes a decision, the Receiver is regarded as an officer of the court who assists in protecting and preserving the subject matter of the lawsuit. Occasionally, the court determines that designating a receiver who will oversee the subject matter is in the best interests of both parties. In general terms, the topic is real estate, either mobile or immovable.

receiver under cpc

  • There is no definition for “Receiver” in the Code of Civil Procedure. Because it is believed that neither of the parties must be in possession of the disputed property, the conventional idea is that it refers to a person selected by the court.
  • In simple terms, the Court may designate an independent and unbiased third party to take over the estate that is the subject of the dispute until it is resolved if the Court determines that it would not be appropriate for either of the parties to hold it. He is in charge of the property’s upkeep and will administer it like a decent person would.
  • It should be remembered that the receiver is a court officer who acts in the best interests of the property as a whole, not on behalf of the plaintiff or defendant.

appointment of receiver order 40 CPC

  • The Court may choose to provide relief by appointing a receiver. Section 44 of the Specific Relief Act 1877 states that the court has the final say over who gets appointed as a receiver while a lawsuit is proceeding. The Code of Civil Procedure governs his rights, powers, duties, and obligations as well as the manner and effect of his appointment.
  • When the requirements outlined in Order XL Rule-1 of the Code are met, the Court is qualified to name a receiver for a contested property. Order XL Rule-1 of the Civil Procedure Code states that the court may, in cases where it deems it just and convenient, by Order
  • Designate a receiver for any assets, either before or following a decree
  • Remove any individual from the property’s custody or possession.
  • Transfer the same to the receiver’s control, custody, or possession and
  • Give the receiver all the authority the owner has, including the ability to file lawsuits and defend them, manage the property, collect rent and profits, apply and dispose of those funds, execute documents that belong to the owner, and manage, preserve, and improve it. The receiver should also be given any additional authority the court deems appropriate.

duties of receiver under cpc

The following are the responsibilities of a receiver as stated in Order 40 Rule 3:

  • Provide security to cover the revenue he will get from the property.
  • Provide accounts (semi-annually) for the duration or format specified by the court. In essence, the account records the money received as well as the costs incurred to safeguard and maintain the property.
  • Remit the money owed to the judge.
  • Assume liability for any decrease in the property’s worth resulting from the receiver’s deliberate carelessness.
  • Fulfil your responsibilities directly; do not assign or transfer any of the rights that the court has granted you.

The receiver is required to carry out all of the tasks and obligations that the court has given him. If not, the court may take legal action against him and hold him personally accountable for any loss resulting from his carelessness or deliberate disregard for safeguarding and maintaining the property.

receiver under cpc: Case Laws   

  • It was determined in Krishna Kumar v Grindlays Bank P.L.C. that a receiver cannot initiate a lawsuit or be sued without the consent of the court; in the event that a lawsuit is filed without this consent, it runs the risk of being dismissed and having its verdict overturned. Giving leave, however, is the exception rather than the rule.
  • A receiver is an unbiased individual, according to the Supreme Court’s definition in Anthony C. Leo v Nandlal Balakrishnan. He is employed by the Court. Custodio legis, or in the care of the law or the court, refers to the property that is in the deceiver’s custody. The receiver is constantly under the Court’s supervision, but he has the same authority as the real owner of the property.

As a general rule, the receiver cannot be appointed; great care must be used in the appointment process. As a result, a receiver plays a crucial role in the court system’s efforts to protect the parties’ interests by overseeing property that is subject to pendente lite. He must treat his own property with the care and objectivity that a reasonably prudent person would.

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