Supreme Court Refuses Receiver Appointment in Property Dispute: Satya Pal Anand vs. Punjabi Housing Co-operative Society (2013)

Date of the Judgment: 17 July 2013
Citation: Satya Pal Anand v. Punjabi Housing Co-operative Society & Others, Special Leave Petition(C) No. 13255 of 2012
Judges: P. Sathasivam, J., J. Chelameswar, J.
Can a court appoint a receiver for a property when the applicant has already received compensation and a third party is in possession? The Supreme Court of India addressed this question in a case involving a property dispute. The Court ultimately declined to appoint a receiver, finding no justification for such an action given the circumstances. This judgment was delivered by a two-judge bench consisting of Justice P. Sathasivam and Justice J. Chelameswar.

Case Background

The case revolves around a plot of land originally allotted to the petitioner’s mother by the Punjabi Housing Co-operative Society Ltd. A sale deed was executed on March 22, 1962, and registered on March 30, 1962. The petitioner’s mother passed away on June 12, 1988. The petitioner claimed to be her sole heir, although a compromise deed indicated he had a sister.

Approximately 40 years later, the Society cancelled the sale in favor of the petitioner’s mother. On August 9, 2001, an Extinguishment Deed was executed. Subsequently, on April 21, 2004, the Society sold the same property to the second respondent. A compromise deed dated July 6, 2004, was executed between the petitioner and the second respondent, where the petitioner agreed to accept Rs. 6,50,000 to settle all disputes. The petitioner received the payment, but later claimed the compromise was made under duress.

The petitioner then raised a dispute with the Additional Registrar, Cooperative Societies, challenging the Extinguishment Deed and the subsequent sale. The Deputy Registrar initially issued an injunction against construction or transfer of the property on February 1, 2006, but this was later vacated on April 12, 2006. The Registrar then set aside the vacation order on August 29, 2006. The petitioner sought the appointment of a receiver for the property.

Timeline

Course of Proceedings

The petitioner initially sought an interim injunction which was granted by the Deputy Registrar, but then vacated. The Registrar then set aside the vacation order. The petitioner then applied for the appointment of a receiver. The Deputy Registrar appointed a receiver, initially for physical possession, later modified to symbolic possession. The Joint Registrar then remitted the matter back to the Deputy Registrar. The Cooperative Tribunal dismissed the petitioner’s appeal. The petitioner then approached the High Court, which dismissed the writ petition, leading to this appeal before the Supreme Court.

Legal Framework

The judgment refers to Section 64 of the M.P. Cooperative Societies Act, which deals with disputes that can be referred to the Registrar. The judgment also mentions Order 40 Rule 1 of the Code of Civil Procedure (CPC), which pertains to the appointment of receivers.

Order 40 Rule 1 of the Code of Civil Procedure states:

“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.”

Arguments

The petitioner argued that the compromise deed was obtained under duress and was therefore invalid. The petitioner also challenged the legality of the Extinguishment Deed and the subsequent sale of the property to the second respondent. The petitioner sought the appointment of a receiver to protect his interest in the property.

The petitioner’s argument is that the agreement was secured by misrepresentation and was for unlawful purposes, violating the Indian Contract Act, 1872. Therefore, the amount paid under such agreement could not be claimed back, and the suit would be dismissed.

The respondents argued that the petitioner had already received compensation as per the compromise deed and that the property was now in the possession of a third party (respondent no. 4). They contended that there was no justification for the appointment of a receiver.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issue before the Court was whether the High Court was correct in refusing to appoint a receiver for the disputed property.

Treatment of the Issue by the Court

Authorities

The judgment does not explicitly cite any authorities.

Judgment

The Supreme Court dismissed the special leave petition, upholding the High Court’s decision not to appoint a receiver. The Court noted that the petitioner had received Rs. 6,50,000 as part of the compromise and that respondent no. 4 was in possession of the property. Given these circumstances, the Court found no reason to interfere with the High Court’s judgment.

Treatment of Submissions

What weighed in the mind of the Court?

The Court was primarily influenced by the fact that the petitioner had already received compensation as per the compromise deed and that a third party was in possession of the property. The Court also considered that the proceedings arose out of an interlocutory application for the appointment of a receiver, not a final adjudication of the property dispute.

Logical Reasoning

The Court did not find it necessary to delve into the merits of the underlying property dispute. The decision was based on the specific facts related to the interlocutory application for the appointment of a receiver. The Court’s reasoning was primarily driven by the factual circumstances, rather than a detailed legal analysis.

The Court stated, “Having regard to the fact that respondent no.4 was in possession of the property in dispute at least since 13.03.2007 admittedly and also having regard to the fact that the petitioner received an amount of Rs.6,50,000/- we do not see any justification for the appointment of the receiver.”

The Court also observed, “We must also mention herein that during the pendency of these proceedings, the second respondent sold the property in favour of respondent nos. 4 and 5 by sale deed dated 11.07.2006.”

Further, the Court noted, “It must be remembered that the instant proceedings arise out of the interlocutory proceedings seeking appointment of the receiver at the instance of the petitioner herein.”

Key Takeaways

• ✓ Courts may refuse to appoint a receiver if the applicant has already received compensation for the disputed property.
• ✓ The possession of the disputed property by a third party can be a factor in denying the appointment of a receiver.
• ✓ Interlocutory proceedings for the appointment of a receiver are decided based on the specific facts of the case.

Directions

No specific directions were given by the Supreme Court in this judgment.

Development of Law

This judgment reinforces the principle that the appointment of a receiver is a discretionary remedy and will not be granted if there is no justifiable reason. The ratio decidendi of the case is that a receiver will not be appointed if the applicant has received compensation and a third party is in possession of the property.

Conclusion

The Supreme Court dismissed the special leave petition, upholding the High Court’s decision not to appoint a receiver for the disputed property. The Court based its decision on the fact that the petitioner had already received compensation and that a third party was in possession of the property. This case highlights the importance of considering the specific facts and circumstances of each case when deciding on the appointment of a receiver.