(a) Appointment of receiver:
When it appears to the court to be just and convenient the court may by order appoint a receiver of any property, whether before or after the decree. The appointment of a receiver is in the discretion of the court.
That discretion has to be exercised not arbitrarily but cautiously, judicially and according to legal principles after consideration of the circumstances of the case. The main object and purpose of his appointment is the preservation of the subject-matter of the litigation pending a judicial determination of the rights of the parties or for the prevention of injury.
The court should not appoint a receiver of property in possession of the defendant claiming the same by legal title, unless the plaintiff can show prima facie that he has a strong case and a good title to the property.
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ADVERTISEMENTS:
A receiver should be appointed not only where it is necessary for the realization, preservation or better custody or management of any property, movable or immovable the subject of a suit or attachment, but also where it appears to the court to be just and convenient.
But the bona fide possessor of the property should not be disturbed by the appointment of a receiver unless some substantial ground for such interference has been made out and there is well-founded fear that the property will be dissipated unless the court gives its protection. (O. 40, R. 1).
(b) Power of receiver:
ADVERTISEMENTS:
The powers of a receiver are determined by the court appointing him. It may confer upon him all such powers, as to bringing and defending suit 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.
(c) Duties of receiver:
The duties of a receiver are enumerated in rule 3 of Order 40. That rule provides—
Every receiver so appointed shall—
ADVERTISEMENTS:
(i) Furnish such security (if any) as the court thinks fit, duly to account for what he shall receive in respect of that property;
(ii) Submit his accounts at such periods and in such form as the court directs;
(iii) Pay the amount due from him as the court directs; and
(iv) Be responsible for any loss occasioned to the property by his willful or gross negligence.
(d) Penalty in case of breach of duty:
Where a receiver fails to submit his accounts at such periods and in such form as the court directs, or fails to pay the amount due from him as the court directs, or occasions loss to the property by his willful default or gross negligence, the court may direct his property to be attached and may sell such property and apply the proceeds to make good any amount found to be due from him or any loss occasioned by him, and shall pay the balance (if any) to the receiver. [O. 40, R. 4].
(e) Incidents of receivership:
A receiver is the servant of the court and not the legal representative or assign of the parties to the suit. He is a public officer appointed for the benefit of all concerned. He is the representative and also an officer of the court subject to its orders. His possession is the possession of the court by its receiver. He does not represent the estate, but is merely an officer of the court and, as such, cannot sue and be sued without leave of the court appointing him.
A receiver appointed by the court cannot be sued without notice under Section 80 of the Civil Procedure Code. Property in the hands of a receiver cannot be attached without the leave of the court first obtained. His remuneration is determined by the court, and any agreement between the receiver and a party regarding his remuneration is gross contempt and void.
The receiver is an officer of the court. He is not the owner of the property which he has taken into his possession. (Haridas Mundhra v. Mahabir Prasad Juthalal, A.I.R. 1975 Cal. 357).