Court directs receiver to supervise multi-storied commercial property and hotel business while allowing defendant to continue operations under strict conditions
In a significant judgment delivered on August 27, 2026, the Jharkhand High Court dismissed the appeal filed by Harjit Singh against the trial court's order appointing a receiver over jointly owned property and business with his brother, Birendra Pal Singh. The dispute pertains to a partition suit involving six kathas of land in Mouza Siram, Ranchi, along with a multi-storied commercial building housing the hotel business "M/s Hotel Swarn."
The appellant, Harjit Singh, contended that though the property was in both brothers' names, he alone had paid the entire consideration and developed the building at his own cost. He claimed the respondent was merely a name lender and had no right over the property or the hotel business, which he runs as a sole proprietor. He challenged the appointment of the receiver, arguing that such an appointment requires proof of prima facie success and emergency, and that the order deprived him of de facto possession.
Conversely, the respondent Birendra Pal Singh submitted that both brothers had jointly taken a loan from Tata Capital Housing Finance Limited for the property's development, with the plaintiff named as a co-borrower along with his son. The respondent emphasized that the hotel business was a joint venture and their only livelihood source. He stressed that the trial court rightly appointed the receiver for supervision and preservation of the property and business, while permitting the appellant to continue day-to-day operations under strict conditions, including maintaining accounts and preserving GST and other business documents.
After examining the pleadings and documentary evidence, the High Court found the trial court's decision to appoint the receiver justified. It held that the prima facie conditions for appointment of a receiver under Order XL Rule 1 of the Civil Procedure Code, 1908, were fulfilled. The court noted that the receiver's role was supervisory to ensure proper management and preservation of the property and business during the pendency of the suit. The appellant was allowed to continue running the hotel business but was restrained from alienating or encumbering the property without prior court permission.
The directions issued by the trial court include the receiver inspecting the physical condition of the property, management of the hotel, maintenance of accounts, GST records, licenses, bank transactions, and any structural alterations or transfers made. The receiver is also to submit a detailed report to the court, ensuring transparency and proper supervision.
The High Court's dismissal of the appeal affirms the legal principle that appointment of a receiver is a preventive remedy aimed at safeguarding property and business interests pending adjudication, without causing undue harm to possession rights. The judgment underscores the court's role in balancing interests of joint owners in complex family and business disputes.
Bottom Line:
Appointment of receiver in partition suit - Receiver appointed for supervision of joint property and business operations without restraining the defendant from continuing business activities.
Statutory provision(s): Civil Procedure Code, 1908 Order XL Rule 1, Order XLIII Rule 1(s), Section 104
Harjit Singh v. Birendra Pal Singh, (Jharkhand) : Law Finder Doc Id # 2972593
