Case Note & Summary
The appeal arose from an order appointing a Receiver over a property in a suit for specific performance and permanent injunction. The plaintiffs (respondents) filed Suit No.1022 of 2007 seeking specific performance of an agreement to sell a flat and for injunction restraining the defendants from alienating the property. During the pendency of the suit, the appellant (defendant no.5) sold the flat to a third party. The plaintiffs took out a Notice of Motion for appointment of a Receiver, which was allowed by the trial court. The appellant appealed against that order. The High Court examined the conduct of the appellant and found that the alienation was done with full knowledge of the pending suit, in violation of the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882. The court held that such conduct amounted to contempt of court and justified the appointment of a Receiver to protect the property pending disposal of the suit. The court also noted that the balance of convenience was in favor of the plaintiffs and that irreparable loss would be caused if the Receiver was not appointed. The appeal was dismissed with costs.
Headnote
A) Civil Procedure - Appointment of Receiver - Order 40 Rule 1 of Code of Civil Procedure, 1908 - The court appointed a Receiver over the suit property after the appellant, during the pendency of the suit, alienated the property to a third party. The court held that such conduct amounted to contempt and justified the appointment of a Receiver to protect the interests of the plaintiffs. (Paras 1-10) B) Transfer of Property Act - Lis Pendens - Section 52 of Transfer of Property Act, 1882 - The appellant's alienation of the suit property during the pendency of the suit was in violation of the doctrine of lis pendens. The court noted that the purchaser was aware of the pending litigation and thus the alienation did not affect the rights of the plaintiffs. (Paras 5-8) C) Contempt of Court - Alienation of Property During Suit - The appellant's act of selling the property while the suit was pending was held to be contumacious and an attempt to defeat the plaintiffs' claim. The court deprecated such conduct and upheld the appointment of a Receiver. (Paras 6-9)
Issue of Consideration
Whether the appointment of a Receiver over the suit property was justified given the appellant's conduct of alienating the property during the pendency of the suit, and whether the appeal against such appointment should be allowed.
Final Decision
The appeal was dismissed with costs. The order appointing a Receiver was upheld.
Law Points
- Doctrine of lis pendens
- Section 52 of Transfer of Property Act
- 1882
- Appointment of Receiver
- Order 40 Rule 1 CPC
- Contempt of court by alienating property during suit
- Balance of convenience
- Irreparable loss
