A receiver may supervise disputed joint property and business without dispossessing the existing operator.

The respondent-plaintiff instituted O.S. No. 780 of 2024 before the Civil Judge (Senior Division XV), Ranchi, seeking partition of six kathas of land at Mouza Siram, Ranchi, together with the multi-storied commercial building and hotel business operated thereon in the name of “M/s Hotel Swarn”.

The appellant-defendant filed a written statement and counter-claim, asserting that although both brothers’ names appeared in the sale deeds, the entire consideration and development expenses had been paid by him and that he alone was the proprietor of the hotel business.

The respondent applied under Order XL Rule 1 CPC for appointment of a receiver to supervise and preserve the property and business, collect and account for profits, and protect the relevant records.

The trial court allowed the application by order dated 22.05.2026, directing that the appellant could continue the day-to-day business but must maintain accounts and preserve GST, banking and business records; it also appointed a receiver/Advocate Commissioner to inspect the property and business and submit a report.

The appellant challenged that order under Order XLIII Rule 1(s) read with Section 104 CPC.

The appeal was governed by Section 104 CPC and Order XLIII Rule 1(s) CPC, which permit an appeal against an order made under Order XL Rule 1 CPC appointing a receiver.

Order XL Rule 1 CPC empowers the court, where just and convenient, to appoint a receiver for the preservation, management and protection of disputed property and to issue consequential directions regarding its possession, custody and administration.

The court applied the principle that such interim protection must be assessed on the prima facie materials and should not unnecessarily dispossess or disable the party in actual management, particularly where the order is directed toward preservation of the property and accurate maintenance of accounts.

The High Court noted that the parties were admittedly brothers and that the two sale deeds showed prima facie joint purchase of the suit property, while the appellant’s assertion that he alone paid the consideration remained a matter for trial.

The loan documents also prima facie showed that the loan for development of the property was sanctioned in the names of both brothers, with the respondent shown as a co-borrower or co-applicant.

These circumstances supported interim supervision and preservation of the disputed property and business.

The court further found that the trial court had not removed the appellant from possession, restrained him from operating the hotel, or taken over the day-to-day management; rather, the appellant was permitted to continue the business subject to maintaining proper accounts and preserving records.

The receiver’s role was limited to inspection and submission of a report concerning the physical condition, possession, management, accounts, GST records, licences, bank transactions, income-generating activities and any alienation or structural alteration.

Consequently, the order was considered protective and supervisory rather than dispossessory, and no illegality or jurisdictional error was established.

The appellant was permitted to continue the day-to-day operation of the hotel, but was required to maintain accounts, preserve business records and refrain from alienating or encumbering the property without the trial court’s prior permission; both parties were also restrained from making structural alterations or changing the nature of the property during the suit.

Pending applications, if any, were disposed of.