Order XL CPC: Appointment of Receivers

Order XL of Code of Civil Procedure: Appointment of Receivers

Official Bare Act Text

Override / Mandate Court Discretion Procedural Action Non-Compliance Limitation Monetary

Rule 1. Appointment of receivers

(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.

Rule 2. Remuneration

The Court may by general or special order fix the amount to be paid to the receiver by way of remuneration for his services.

Rule 3. Duties

Every receiver so appointed shall:—

(a)furnish such security (if any) as the Court thinks fit, duly to account for what he shall receive in respect of the property;

(b)submit his accounts at such periods and in such form as the Court directs;

(c)pay the amount due from him as the Court directs; and

(d)be responsible for any loss occasioned to the property by his wilful default or gross negligence.

Rule 4. Enforcement of receiver's duties

Where a receiver fails to submit his accounts or pay the amount due from him or occasions loss by wilful default, the Court may direct his property to be attached and sold to recover the deficiency.

Legal Commentary & Landmark Judgments: Order XL

Order XL of the Code of Civil Procedure, 1908 governs the appointment of Receivers by civil courts, establishing the equitable standard of 'just and convenient'.

Core Legal Standard: The appointment of a receiver is one of the harshest remedies known to civil equity, as it dispossesses a party before final adjudication.
Procedural Rule & Jurisdiction: Consequently, courts do not appoint receivers lightly: the applicant must show that the property is exposed to manifest danger of waste, dissipation, or destruction, and that their title is backed by a strong prima facie case.

Receiverships are common in partnership dissolutions and contested corporate estate administrations.

Key Landmark Precedents:

Kasturi Bai v. Anguri Chaudhary, (2003) 3 SCC 225: The Supreme Court held that the appointment of a receiver under Order XL Rule 1 is an extraordinary discretionary power that must be exercised with extreme caution, requiring clear evidence of waste or dissipation.
Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155: The Supreme Court affirmed that a receiver can be appointed in commercial and partnership disputes to manage running assets where mutual trust has broken down completely and assets are at imminent risk.

Legal Commentary:

A receiver is an officer of the court; once appointed, the property enters the custody of the law (*custodia legis*). No person can institute a suit against a court receiver or attach property in their hands without the prior leave of the appointing court. Receiverships are common in partnership dissolutions and contested corporate estate administrations.

Order XL: Appointment of Receivers