Law:

Section:

(a) Civil Procedure Code (V of 1908)--- ----O. XL, R.1---Receiver, appointment of---Object, scope and effect of appointment of receiver and his status stated. Receiver appointed under Order XL, Rule 1, C.P.C. is ordinarily an impartial and indifferent person between the parties to a cause, appointed by the court to receive and preserve the property or fund in litigation pendente lite, when it does not seem reasonable to the court that either party should hold it or where a party is incompetent to do so as in the case of an infant. Thus, a receiver is an officer of the court through whom equity takes possession of the property, preserves it from waste and destruction, secures and collects the proceeds and ultimately disposes of them according to the rights and priorities of those entitled thereto, whether regular parties in the cause or only coming before the court in a reasonable time and in the due course of procedure to assert and establish their claims. The effect of the appointment of a receiver is not to prejudge the case in any way. The only object and effect of it is to maintain things in their present condition during the pendency of the suit. The main object of the appointment of a receiver is to protect the estate from unnecessary and expensive litigation, to preserve it for the equal benefit of those equally interested in its distribution and to keep the property at all times within the control of the court by which the receiver has been appointed. Thus, the receiver's possession is not a possession by any personal right. It is the possession of the court and he is totally devoid of any interest in the property. He is in the position of a stake-holder, who has custody of the property for the benefit of the true owner, hence the possession of the receiver is on behalf and for the benefit of all the parties to the suit according to their rights in which he is appointed. Therefore, the property in the hands of receiver is in custodia legis for the person, who can make a title to it. No doubt through the appointment a change of possession takes place, but it has no effect upon the title of the property in any way and determines no right as between the…

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