“BRIG. SAWAI BHAWANI SINGH vs. M/S INDIAN HOTELS COMPANY LTD.

&

OTHERS”
FINAL DRAFT SUBMITTED IN THE FULFILLMENT OF THE COURSE TITLED C.P.C
FOR OBTAINING THE DEGREE OF B.B.A. LL.B (Hons.)

PROJECT PROPOSED BY:

NAME: VISHWAN UPADHYAY
ROLL NO.: 1864
SEMESTER: 5TH

SUBMITTED TO:
Dr. MEETA MOHINI
FACULTY of LAW

SEPTEMBER, 2019

CHANAKAYA NATIONAL LAW UNIVERSITY, NYAYA NAGAR,

MITHAPUR, PATNA- 800001

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 DECLARATION BY THE CANDIDATE

I hereby declare that the work reported in the B.B.A., LL.B (Hons.) Project Report entitled “BRIG.
SAWAI BHAWANI SINGH vs. M/S INDIAN HOTELS COMPANY LTD. & OTHERS”
submitted at Chanakya National Law University is an authentic record of my work carried out
under the supervision of Dr. Meeta Mohini.
I have not submitted this work elsewhere for any other degree or diploma. I am fully responsible
for the contents of my Project Report.

SIGNATURE OF CANDIDATE
NAME OF CANDIDATE-VISHWAN UPADHYAY
CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

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 ACKNOWLEDGEMENT

A project is a joint endeavour which is to be accomplished with utmost compassion, diligence and
with support of all. Gratitude is a noble response of one’s soul to kindness or help generously
rendered by another and its acknowledgement is the duty. I am overwhelmed in all humbleness
and gratefulness to acknowledge from the bottom of my heart to all those who have helped me to
put these ideas, well above the level of simplicity and into something concrete effectively and
moreover on time.

I would like to thank my faculty Dr. Meeta Mohini whose guidance helped me a lot with structuring
my project. I owe the present accomplishment of my project to my friends, who helped me
immensely with materials throughout the project and without whom I couldn’t have completed it
in the present way.

I would also like to extend my gratitude to my parents and all those unseen hands that helped me
out at every stage of my project.

THANK YOU,

NAME: Vishwan Upadhyay

COURSE: B.B.A., LL.B. (Hons.)
ROLL NO: 1864
SEMESTER: 5TH

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  Aims and Objectives

The main aim in this project is to present a critical analysis on the case law, Brig. Sawai Bhawani
Singh vs. M/S Indian Hotels Co. Pvt. Ltd.

 Research Methodology

The researcher has followed the doctrinal method of research to make this project. The researcher
has visited the library of Chanakya National Law University to collect relevant research material
from books, articles, law journals, etc. The researcher has also used the source of internet while
making the project.

 Scope and limitations

Limited period of time was the biggest limitation of the study.

 Sources of data

The following secondary sources of data have been used in the project-

1. Cases

2. Books

3. Journals

• Method of Writing:

The method of writing followed in the course of this research paper is primarily analytical.

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  Mode of citation:

The researcher has followed a uniform mode of citation throughout the course of this research
paper.

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 TABLE OF CONTENTS

TITLE PAGE NO.

1. INTRODUCTION 7-8

2. FACTS OF THE CASE 9

3. PROVISIONS RELATED TO THE CASE 10-16

4. JUDGEMENT OF THE COURT 17

5. CONCLUSION 18

6. BIBLIOGRAPHY 19

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 INTRODUCTION

The Code of Civil Procedure, 1908 is a procedural law related to the administration of civil
proceedings in India.

The Code is divided into two parts: the first part contains 158 sections and the second part contains
the First Schedule, which has 51 Orders and Rules. The sections provide provisions related to
general principles of jurisdiction whereas the Orders and Rules prescribe procedures and method
that govern civil proceedings in India.

HISTORY:

To give uniformity to Civil Procedure, Legislative Council of India, enacted Code of Civil
Procedure, 1858, which received the assent of Governor-General on 23 March 1859. The Code
however, not applicable to Supreme Court in the Presidency Towns and to the Presidency Small
Cause Courts. But it did not meet the challenges and was replaced by Code of Civil Procedure
Code, 1877. But still it did not fulfil the requirements of time and large amendments were
introduced. In 1882, the Code of Civil Procedure, 1882 was introduced. With passing of time it is
felt that the Code needs some flexibility to breathe the air of speed and effectiveness. To meet
these problems Code of Civil Procedure, 1908 was enacted. Though it has been amended number
of time it stood the test of time.

The Code of Civil Procedure has been substantially amended in the year 2002. The main purpose
of the Amendment to the code was ensure speedy disposal of civil cases governed under the Act.

CPC (Amendment) Act 2015:

Keeping in view the establishment of Commercial Court and the provisions thereof, CPC
(Amendment) Act, 2016 has been enacted to amend certain provisions of the CPC. These
provisions are applicable to Commercial disputes of specified value. The act clarifies that the

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provisions of the CPC as amended by the Act would have an overriding effect over any rules of
the High Court or of the amendments made by the State Government concerned.

The Code of Civil Procedure, 1908 was further amended in the year 2018.

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 FACTS OF THE CASE

Pursuant to an agreement the respondent are alleged to have come into possession of the suit
property for running the business or a hotel. It is the case of the respondents their possession and
running of the business. On the other hand, it is the case of the appellant that it is his exclusive
property and the respondents have no manner of right to come into possession. Consequently, the
respondents filed the suit for perpetual injunction restraining the appellant from interfering with
their possession and running of the business. Pending suit, both the parties came to file
applications. The appellants filed an application under Order 40, Rule 1 CPC for appointment of a
Receiver and respondent filed an application under Order 39 Rule 1 for an ad interim injunction.
Though the trial Court had refused to issue the direction for appointment of Receiver, it had issued
an injunction against the respondents restraining them from running the business.

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 PROVISIONS RELATING TO THE CASE

ORDER 40 RULE 1:

“(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 or 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.

(2) Nothing in this rule shall authorize the Court to remove from the possession or custody of
property any person whom any party to the suit has not a present right so to remove.”

ORDER 39 RULE 1:

Cases in which temporary injunction may be granted. - Where in any Suit it is proved by affidavit
or otherwise—

“(a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by
any party to the suit, or wrongfully sold in execution of a decree, or

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(b) that the defendant threatens, or intends, to remove or dispose of his property with a view to
defrauding his creditors,

(c) that the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff
in relation to any property in dispute in the suit,the court may by Order grant a temporary injunction
to restrain such act, or make such other Order for the purpose of staying and preventing the
wasting, damaging, alienation, sale, removal or disposition of the property or dispossession of the
plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the
suit] as the court thinks fit, until the disposal of the suit or until further orders.”

APPOINTMENT OF RECIEVER:

Under order 40 of CPC, The Receiver is an independent and impartial person who is appointed by
the court to administer/manage, that is, to protect and preserve a disputed property involved in a
suit.

For example, in a dispute between A and B for an immovable property, if the court thinks that it
is in the best interest of both the parties that possession should be taken from B and given to an
independent person, the court may appoint a receiver who can manage the property till the time
the suit is being decided. Such a receiver appointed by the court would be responsible for the
maintenance of the property. He can collect the income accruing like rent or any other profits and
utilize it to maintain the property. After deducting the expenses incurred in maintenance from the
income received from the property, the receiver will have to submit the remaining income, if any,
in the court.

He is not representative of either of the parties in the action, is uniformly regarded as an officer of
the court working in the interest of neither plaintiff nor defendant but for the common benefit of
all the parties.

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When a party in possession of the disputed property exhausts the property or causes irreparable
damages to it, the whole object of the suit gets defeated because the subject matter ceases to exist
or its value gets affected. Therefore, when the court is of the opinion that the property in dispute
must not go to either of the parties, pendente lite, the court appoints a receiver who is entrusted
with the protection and preservation of such property. It is a form of interim protection which the
court provides to the parties who makes the application till the time the court adjudicates the
matter.

The Receiver is regarded as an officer of the court and is the extended arm and hand of the court.
He is entrusted with the responsibility to receive disputed property or money given by the court
and manage such property or money till the time a decree is passed or the parties have
compromised or any other period as the court deems fit. The property or fund entrusted to the
receiver is considered to be custodia legis i.e. in the custody of the law. The Receiver has no power
other than those entrusted to him by the court while appointing him.

According to the civil procedure code, the court before which the proceedings are pending can
appoint a receiver if it appears just and convenient to the court to appoint such receiver [section
51(d)]. It is within the discretionary power of the court to appoint the receiver. For example, in a
suit, the trial court can appoint a receiver. Whereas, in appeal, the appellate court can appoint a
receiver.

However, the discretion is not absolute, arbitrary or unregulated. The expression “just and
convenient” does not mean the appointment is based on the whims and wishes of the judge on any
grounds which stand against equity.

Court has to keep the following principles in mind before appointing a receiver:

1. Appointment of a receiver is a discretionary power.

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 2. It is a protective relief to the plaintiff. The object is to protect and preserve the disputed
property till the time the suit is pending in the court.
3. A receiver should not be appointed unless the plaintiff shows prima facie that he has a
strong case against the defendant and it is more than likely that he will succeed in the
suit.
4. Appointment of a receiver is one of the hardest remedies as it deprives the defendant of
his right to possession before the final decree. Therefore, the
5. court should not resort to it merely on the ground that it will do no harm. There should
be strong apprehension that there is a danger to the property or the plaintiff will be in
worse of a situation if the appointment of a receiver is delayed.
6. The court should appoint a receiver only when there is a possibility of wrong or injury.
Also, if it is shown that the subject matter is not in the possession of any of the parties
and it is in the common interest of both the parties to appoint a receiver for the protection
and preservation of the property.
7. The court should look at the conduct of the party who makes the application for
appointment of a receiver. The party should come to the court with clean hands and
their conduct should be such that they are not disentitled to this equitable relief.

The above principles were introduced by the Madras Court in the case of T. Krishnaswamy Chetty
vs C. Thangavelu Chetty And Ors., AIR 1955 Mad 430. These principles are now well established
in the Indian jurisprudence.

Generally, a plaintiff files the application for appointment of a receiver but defendants can also
file such application. A third party is not allowed to file the application but if he is interested in
the protection and preservation of the property, he can also make an application after taking
permission from the court.

A person who is independent, impartial and totally disinterested should be appointed as a receiver.
Such a person should not have any stake in the disputed property. Generally, parties to the suit are
not appointed as receiver by the court. But in extraordinary circumstances, a party to suit can be
appointed as receiver.

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The court can appoint receiver whenever the court is of the opinion that either party should not
hold the property in dispute. The court can appoint a receiver before or after a decree and can
remove any person from the possession or custody of the property and commit the same property
in the custody or management of the receiver.

Under the code itself, the receiver can be appointed to prevent the ends of justice being defeated.
[section 94(d)]. Similarly, for the execution of a decree, the court has the power to appoint a
receiver. [section 51(d)].

There are provisions in special acts which provides for the appointment of a receiver by the court.
For example, section 84 of the Companies Act, 2013 provides for the appointment of a
receiver. Similarly, section 69A of the Transfer of Property Act, 1882 also provides for the
appointment.

Under order 40 rule 1(d) powers of the receiver are provided as following:

1. Collection of rents and profits arising out of the property.

2. Application and disposal of such rents and profits.
3. Execution of documents as the owner himself.
4. To institute and defend the suit.
5. Such powers as the court may deem fit.

Also, there are indirect powers which a receiver enjoys being the hand of the court. For example,
If a person obstructs or interferes with the receiver’s right to possession, it will amount to
obstruction in a court proceeding and such a person can be made liable for contempt of court.
Similarly, property in the hands of the receiver cannot be attached without the leave of the court.

The court has the discretionary power to not confer all the rights on the receiver. Even if the court
has given all the powers to him, he should take the advice of the court in all important decisions
related to the property to protect himself.

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Without the permission of the court, the receiver cannot:

 Grant lease on the property.

 Bring suits except for suit for rent. A suit will be dismissed if not permitted by the court.

Under order 40 rule (3), duties of a receiver are provided as follows:

1. Furnish security to account for what he will receive from the property as income.
2. 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.
3. Pay the amount due to the court.
4. Take responsibility for any reduction in the value of the property because of the
receiver’s willful negligence.
5. Discharge the duties personally and should not delegate or assign any of the rights
entrusted to him by the court.

The receiver has to fulfil all the duties and responsibilities entrusted to him by the court. Otherwise,
the court can take action against him and make him personally liable for any loss which might
occur due to his negligence or willful failure to protect and preserve the property.

AD INTERIM INJUNCTION:

The term interim order refers to an order issued by a court during the pendency of the litigation. It
is generally issued by the Court to ensure Status quo. The rationale for such orders to be issued by
the Courts is best explained by the Latin legal maxim "Actus curiae neminem gravabit" which,
translated to English, stands for "an act of the court shall prejudice no one". Therefore, to ensure
that none of the interests of the parties to the litigation are harmed, the court may issue an interim
order.

Interim orders issued by the court may be of various kinds. The nature of the order essentially
depends on the direction issued by the Court. Some examples of court orders classified as interim
orders include:

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Restraining orders (also called Injunction), which are issued to stop either party from acting in a
particular manner during the pendency of the civil action. These are essentially issued by the court
to prevent situations in which either party may suffer harm because the other party did/continued
an act which was the matter in issue; and

Directive orders, which are issued to direct either party to continue to act in a particular manner
until the conclusion of the trial or until further orders are issued. Directive orders may be issued if
the non-continuation of the act would cause harm to the other party.

Interim orders may be passed by civil courts in matters before them. Such orders can be passed
either under the Specific Relief Act passed by the Parliament of India in 1963 or in terms of Section
151 of the Civil Procedure Code of 1908, which recognizes and retains some inherent powers with
the civil courts. However the latter provision is usually seldom exercised. In terms of the 1963
Act, an interim order may be passed by the court only if the following conditions are satisfied;

1. Where there is a prima facie case in favor of the party seeking the order,
2. Irreparable damage may be caused to the party if the order is not passed and such damage
may not be ascertained in terms or money and payable as damages, and
3. Where the balance of convenience lies with the party requesting for the order.

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 JUDGEMENT OF THE COURT

On appeal, the district Court has set aside the direction to run the business and dismissed the
application for appointment of Receiver which came to be affirmed by the High Court.

The High Court has set aside the appointment of the Receiver qua the property. Thus, these appeals
by special leave. In view of the fact that the respondents are continuing, as alleged, to be under an
agreement, they would obviously act as custodia legis pending the suit as Receivers on behalf of
the Court. But any rights accrued or claimed by them will be subject to the result in the suit. The
claim for enhancement of the rentals cannot be gone into in this case and it is de hors the relief in
the suit. Under these circumstances, if it is permissible, appropriate steps may be taken by the
appellant in any appropriate proceedings as per law. With these observations, these appeals are
dismissed. No costs.

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 CONCLUSION

The receiver plays an important role whenever the court requires the receiver to manage the subject
matter in a suit to protect and preserve it till the time, the court decrees the suit.

The receiver is an officer of the courts and the subject matter managed by him is considered to be
in custody of the law. The court appoints a receiver when the court is of the opinion that neither
of the party should manage the property till the time the matter is decided. Any person can become
a receiver provided they fulfil the requirements set by the court.

A receiver should be of impartial, independent and indifferent character who has no stake in the
subject matter and can manage the property just as a prudent man will do with his own property.
Court have vested certain powers and responsibilities on the receiver which he should use to
manage the property in the best way possible.

The receiver should be careful while making an important decision related to the subject matter as
he is personally liable for any damage to it. He can seek the permission of the court before making
such decisions to be safe.

The term interim order refers to an order issued by a court during the pendency of the litigation. It
is generally issued by the Court to ensure Status quo. The rationale for such orders to be issued by
the Courts is best explained by the Latin legal maxim "Actus curiae neminem gravabit" which,
translated to English, stands for "an act of the court shall prejudice no one". Therefore, to ensure
that none of the interests of the parties to the litigation are harmed, the court may issue an interim
order.

In the final judgement of the court, the appeals as contested were dismissed by the court.

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 BIBLIOGRAPHY

 Websites:

o www.indiankanoon.org

o www.westlaw.co.in

o www.scconline.com

o www.manupatra.com

 Books:

o Civil Procedure Code, 1908 (Bare Act)

o Civil Procedure Code with Limitations Act by C.K. Talwani

(ISBN-13: 978-9387487772)

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