HIGH COURT OF SINDH, KARACHI

High Court Appeal No.264 of 2010

Present :                Mr. Justice Muhammad Ather Saeed &

                             Mr. Justice Muhammad Ali Mazhar

Date of hearing:              28.01.2011

Appellants:                    Asadullah Mirbahar and another

Respondents        :                   Mrs. Ayesha Muzahir and 9 others.

Ms. Zubaida K. Jamali, Advocate for the Appellants.

Mr. Rasheed A.Razvi and Mr. Haq Nawaz Talpur Advocates for the Respondent No.1

Mr. Qadir Bux Umrani, Official Assignee.

Non present for the other Respondents     

J U D G M E N T

Muhammad Ali Mazhar, J: This appeal is directed against an order dated 11.11.2010, passed by the learned single judge of this Court on C.M.A No.8588/2010 in civil suit No.1090/2010, whereby, the Application moved under Order 40 Rule 1 C.P.C was allowed and Receiver was appointed to preserve and protect the property in question.

1.The brief facts of the case are that the respondent No.1 filed a suit for declaration and permanent injunction, in which it was alleged that she is a lawful and bona fide owner of land measuring 80 acres located at Naclass No.82, (New Survey Nos.423 to 428), Deh Phiahai, Korangi Town, Karachi. The said property was initially allotted to five persons namely (i) Muhammad Abad Rasheed, (ii) Umar Abdul Hassan, (iii) Ishaque Hassan, (iv) Hassan Imam and (v) Abdul Saboor, by the Land Utilization Department, Board of Revenue, Government of Sindh, on the perpetual basis. Subsequently, on 19.06.1993, the subject property was gifted through registered Gift Deed to the respondent No.1 by the said allottees. On her application to the Survey Superintendent, Karachi, for the demarcation and survey, the suit property was surveyed and new Survey Nos.423 to 428, was assigned for the land, measuring 80 acres. A ghat wadh form was also prepared by the Survey Department, Government of Sindh, Karachi. On 12.03.1995, the concerned Mukhtiarkar had mutated the subject property in favour of the respondent No.1 vide Entry No.93, hence the respondent No.1 had become the bona fide owner of the land. It is further stated that on 15.05.1995, the respondent No.1 executed and registered an irrevocable power of attorney in favour of two persons namely Akhtar Ellahi and Syed Nasrullah Shah. After the promulgation of the Sindh Government Land (Cancellation of Allotments, Conversion & Exchange) Ordinance-III of 2001, the subject property was cancelled. The Land Utilization Department through its letter dated 20.07.2002, in compliance of Section 4(2) of the Ordinance III of 2001, informed that the Committee has worked out a differential amount, which offer was accepted by the respondent No.1 and the Land Utilization Department had also issued challan No.218 dated 31.12.2005 which was paid.

2.After the payment of the differential amount, the Land Utilization Department had regularized 80 acres of land vide Regularization Letter dated 18.01.2006 and concerned Mukhtiarkar effected Entry No.24 dated 28.01.2006 in the Record of Rights in favour of the respondent No.1. It is also stated that the respondent No.1 sold 70 acres of land out of subject property to various persons through registered sale deeds, however, remaining 10 acres out of subject property is lawfully owned by the respondent No.1 and she entered into a sale agreement through her attorneys with one Muhammad Aslam Siddiqui. In pursuant to an agreement to sell, the respondent No.1 handed over physical possession to said buyer who raised construction of boundary wall to save the land from the land grabbers. In the month of March, 2010, it transpired that the defendant Nos.1 to 5 in the suit are bent upon to encroach upon the land, as such a complaint was lodged to the concerned SHO, who saved the respondent No.1 from dispossession but the defendant Nos.1 to 5 again tried to dispossess the said buyer from subject property and another report was lodged to the concerned SHO who took no action.

3.In the suit, it was, inter alia prayed that a declaration may be issued that the plaintiff in suit is a lawful and bona fide owner of the land in question and the defendants are not entitled to claim any right, title or interest in respect of the land in question and they are not entitled to take any action to disturb the lawful possession of the plaintiff or prospective buyer. Besides above, it was further prayed for another  declaration that the defendants in suit have no ownership title of the land, therefore, a permanent injunction may be issued against the defendants from dispossessing the plaintiff/prospective buyer from the land in question.

4.The defendants No.1 to 4 in suit had filed their written statement in which it was, inter alia, contended that the suit is legally defective as the necessary parties were not impleaded and no cause of action accrued to the plaintiff for filing the suit. It was further pleaded that neither the plaintiff nor her predecessor ever remained the owner and at no point of time the possession of the land in question was handed over to them. The defendants No.1 to 4 further asserted in their written statement that documents as Annexure A-1 to A-11, attached with the plaint are forged and fabricated documents and the plaintiff in suit is trying to occupy the land of “Allah Bux Goth” on the pretext of allotment where many villagers are already living since the time immemorial in physical possession of hundreds of acres of the said land. Due to possessory rights, the villagers have purchased the said land from time to time in different pieces from Government.

5.Along with the plaint, the plaintiff/respondent No.1 filed an application under Order 39 Rule 1 & 2 CPC, in which it was prayed that the defendants in suit may be restrained from interfering in any manner in the plaintiff's and prospective buyer's enjoyment of the suit land till disposal of the suit with further prayer that the defendants in suit may also be restrained from evicting or dispossessing the plaintiff and the prospective buyer from the land in question without adopting due process of law.

6.On injunction application (CMA 7334/2010), interim orders were passed by the learned single judge, however, in the month of August, 2010, the plaintiff in suit, who is presently respondent No.1 in the appeal, had filed another application (C.M.A No.8588/2010)  under Order 40 Rule 1 read with Section 94 (e) and 151 CPC, in which it was asserted that vide order dated 28.06.2010, the learned single judge of this court was pleased to restrain the defendants from eviction/dispossession of the plaintiff from the land in question but despite the restraining order, the defendants have forcefully dispossessed the plaintiff, therefore it will be just, fair and reasonable to preserve the corpus of the land in question so that whosoever succeeds in the proceedings, the corpus remain available for the decree holder, hence the appointment of the Receiver is necessary.

7.It appears from the impugned order that several opportunities were given to the defendants/present appellants to file counter affidavits to the pending  applications including the receivership application but no counter affidavit was filed and even on the date of passing the impugned order, the learned counsel for the defendants was called absent. The present appeal has been filed only by the two appellants who are defendant No.1 & 4 in the suit against the order for appointment of receiver.

8.We have heard the learned counsel for the parties and perused the record. The learned counsel for the appellants argued that while passing the order for appointment of receiver, the learned single judge has acted in excess of jurisdiction and the appellants were condemned unheard as no proper opportunity was provided to file objections to the application filed for the appointment of receiver. She further argued that a receiver cannot be appointed in case of declaration and permanent injunction if the suit is not filed for mesne profit, damages or compensation. The learned counsel further argued that receiver cannot be appointed on bald allegations of wastage without giving any proper instances and the object of appointment of receiver is to preserve the status quo during the  pendency of litigation. It was further argued that the learned single judge, while passing the impugned order, failed to appreciate the facts of the case and without assigning cogent reasons allowed the application and appointed the receiver, which is not sustainable under the law. In support of her arguments, the learned counsel relied upon the following case law:-

i. PLD 1970 Karachi 42 (Smt. Vanibai versus Republic of Pakistan & others). In this matter, the learned single judge of this court held that the only consideration laid down in Rule 1 of Order XL CPC is whether it is just and convenient to appoint a receiver or not. The main reason given by the plaintiffs for the appointment of a receiver was that it would be otherwise difficult for them to estimate the income of the property. The suit, however, was for declaration that the plaintiffs were the owners of the land. The defendants on the other hand were in possession of land for a number of years. In such circumstances since the suit was neither for mesne profits nor for damages nor for compensation for use and occupation of the land, therefore, the trial court was right in rejecting the prayer for appointment of a Receiver.

The facts of the aforesaid case are distinguishable to the facts and the circumstances of the case in hand as in this matter, the restraining orders were passed in favour of the plaintiff on the ground that she was in possession and thereafter, in violation of the interim orders, the plaintiff was dispossessed and then she filed an application for appointment of receiver to protect and preserve the property in question.

ii. 1974 SCMR 54 (M. Ataur Rehman Alvi versus Inamur Rahman). In this matter, the honorable supreme court held that the plaintiff was clearly not entitled to either of the prayers made by him in the high court as none of the properties stood in his name.  His title to the properties was disputed and, therefore, until the dispute was decided he could not ask for a receiver to be appointed and the person bona fide in possession deprived of the properties. The petitioner made an alternative prayer for a decree in terms of money, which showed that he himself was not certain as to whether he had clear title to these properties. In the circumstances, it does not lie in his mouth to say that he has made out a prima facie title which alone could entitle him to be appointed as a Receiver of these properties.

The facts and circumstances of the aforesaid case law relied upon by the learned counsel for the appellants are also distinguishable to the present facts and circumstances of the case as in the present matter the plaintiff in her suit had produced copies of allotment letter, registered gift deed and copies of Form II to substantiate her title in the property without claiming any damages in the suit.

iii. PLD 1975 Lahore 492 (Sardar Wali Muhammad versus Sardar Muhammad Iqbal Khan Mokal). In this matter, the learned single judge has discussed the guiding principles for the appointment of receiver and held that a receiver can be appointed if it is just and convenient to do so. Appointment is not as a matter of course but discretionary with the Court. Order 40 Rule 1 CPC does not lay down any clear principles governing the exercise of discretion but these principles have been laid down by the superior courts. One of these principles is that the power to appoint a receiver should be sparingly used. Another principle is that it should be exercised for the safeguard of the interest of all the parties as well as the property which is subject matter of the litigation. The third principle is that the possession of persons bona fide in occupation of the property should not be disturbed unless there are allegations of wastage or dissipation of property or apprehension of irreparable loss and injury.

There is no cavil to the guiding principles laid down by the learned single judge for the appointment of receiver but again it is pertinent to mention here that the facts and circumstances of the above case are also distinguishable to the facts and circumstances of the present case as in the above case the only ground of dissipation was the apprehension of alienation of property by Sardar Wali Muhammad so the learned single judge of the Lahore High Court held that after the issuance of temporary injunction, this apprehension should be allayed and he further held that in the application under Order 40 Rule 1 CPC, the apprehension is only of misappropriation of movables and in the absence of any definite allegation of wastage, dissipation, misappropriation or malversation of property in dispute, the discretion under Order 40 Rule 1 CPC cannot be exercised.

iv. PLD 1977 Lahore 830 (Mst. Ghulam Zainab verus Mst. Tahira Sultana). In this matter, the learned single judge held that the appointment is made to preserve property pending litigation to decide rights of the parties, or to prevent a scramble among those entitled. In exercising its discretion, the Court proceeds with caution and is governed by a view of all the circumstances. The appointment of a receiver is recognized as one of the harshest remedies which the law provides for the enforcement of rights and is allowable only in extreme cases where the interest of the creditors is exposed to manifest peril. A party seeking appointment of a receiver, therefore, has to show some emergency or danger or loss demanding immediate action.

The facts and circumstances of this case are also distinguishable as according to the facts of the above reported judgment, the petitioners were continuing in possession since 1947 and according to their version, since before the death of the original owner. During all this time no action was taken by the respondent/applicant or her father against the alleged pilferage. Parties who have acquiesced in property being enjoyed against their own alleged rights cannot, except in special circumstances, come to the Court for a receiver.

9.In rebuttal, the learned counsel for the respondent No.1 argued that initially only injunction application was filed and the interim order was passed by the learned single judge but in spite of restraining orders, the defendants forcefully dispossessed the plaintiff from the land in question, therefore the plaintiff in suit was left with no other option but to file an application for the appointment of receiver to protect and preserve the property during the pendency of suit. He further argued that the respondent No.1 is the lawful owner of the land by virtue of the gift deed and after execution of gift deed, the name of plaintiff as owner was also mutated. After promulgation of Sindh Government Land (Cancellation of Allotment, Conversion and Exchange) Ordinance, 2001, the suit property was cancelled, thereafter, the Committee constituted under the above Ordinance worked out the differential amount and the  said offer was accepted by the respondent No.1 and she paid the said differential amount to the Government.  Learned counsel further pointed out an inspection report dated 19.07.2010, submitted by the Assistant Registrar D-II Branch of this court in pursuance of an order passed by the learned single judge on 15.07.2010. The Commissioner reported to the court that during the course of inspection, he found that the plaintiff and the prospective buyer have posted five chowkidars and they are performing their duties round the clock. It was further intimated in the report that the plot in question is open to sky and surrounded by boundary wall and according to the Commissioner’s report, the plaintiff was found in exclusive possession of the suit property. The learned counsel invited our attention to another report dated 06.09.2010, submitted by the same Commissioner in pursuance of another order passed by the single judge in suit on 31.08.2010, whereby he was appointed to inspect the land in question without notice to the parties. In the second report, the Commissioner reported that the employees of the plaintiff have been dispossessed and he further stated in the report that after his first inspection, the defendants have constructed some hutments at different places and a mosque has also been partly constructed but no plastering work or renovation has been done. In fact, the defendants by dispossessing the employees of the plaintiff tried to convert the entire suit land into  Goth Allah Bux for which a site office has been renovated and fully furnished, which was not in existence at the time of earlier inspection carried out by the said Commissioner.

10.The learned counsel further argued that since the defendants are continuously raising construction and in spite of restraining order passed by this Court, they dispossessed the plaintiff from the land in question, which fact is also clearly reflecting from the reports of Commissioner, therefore, the learned single judge has rightly passed an order for the appointment of receiver to preserve and protect the property from encroachment and land grabbers. In support of his arguments, he relied upon following case law:-

1. PLD 2007 Karachi 527 (Saeed ur Rehman versus Ehsanullah Khan Afridi). In this matter, the learned divisional bench of this Court has considered the object, scope and effect of appointment of receiver and his status in detail and held that the main object of the appointment of a receiver is to protect the estate from unnecessary 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 stakeholder, who has custody of the property for the benefit of the true owners, 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 be entitled 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 parties, therefore, the possession of a receiver during the pendency of a suit should be regarded as possession for the party, who might ultimately turn out to be the true owner and entitled to possession as such. The effect of such possession by the receiver is to destroy the adverse possession. A receiver should not be appointed in supersession of a bona fide possessor of property in controversy unless there is some substantial ground for interference.

11.We have examined the impugned order passed by the learned single judge on 11.11.2010, which shows that several opportunities were granted to the present appellants’ Advocate for filing counter affidavits in the interest of justice but no counter affidavit was filed to the injunction application or application for appointment of Receiver. The court also fixed the date and time for hearing of the applications but on the date of hearing, the appellant’s  counsel was not present and on the basis of reports submitted by the Commissioner, the Official Assignee was appointed receiver with the direction to appoint his chowkidars and look after the said property. On the same date, the interim orders passed earlier were also confirmed and the injunction application was disposed of. The appellants have only assailed the order for the appointment of Receiver but no appeal has been filed against the confirmation of restraining order.

12.Even after the appointment of Receiver in the suit, the respondent No.1 in this High Court Appeal repeatedly complained to this Court that unlawful activity of construction is going on. He further stated to the Court that two opportunities were given by the Receiver to the learned counsel for the appellants to come to his office and accompany him for the purpose of implementing the impugned order but on both the dates, the learned counsel for the appellant did not appear. On 29.11.2010, the Official Assignee was directed by this Court in appeal to visit the site and see how many people are in possession and to submit the complete details of such persons along with the details of permanent and temporary construction or encroachment on the land in question. The official Assignee filed his Reference No.1/2010 in the aforesaid appeal in pursuance of the order passed by this Court on 29.11.2010 and reported that the entire construction on the plots has been raised recently in due haste. Most of the houses are without amenities of life. The building material is lying in front of plots and the work of construction of most of the plots was in progress. Even the mosque has been constructed recently and is incomplete without doors and windows. Finally he submitted in his reference that there are 250 incomplete houses and 14 houses are likely to be completed and the numbers of people gathered on the spot were 135 males and 102 females, who were claiming to be the residents of disputed plots.

13.Again on 10.12.2010, the Official Assignee/Receiver was directed to visit the said property along with the representative of both the parties with police aid and to take photographs of every piece of construction on the said property with further direction to the appellants that even if a brick is laid after photographs have been taken by the Official Assignee, action for contempt shall be taken without any further notice. The official Assignee submitted another Reference No.2/2010 on 20.12.2010, in which, he again reported that some of the occupants were carrying out construction work particularly of flooring and doors in Blocks A, B and C. He asked the occupants for stopping the work but they did not pay any heed. The Official Assignee also submitted his inspection notes to this Court in which he has pointed out the status of construction of at least 212 houses and also attached various photographs to show the construction activity on the land in question .

14.The first argument of the learned counsel for the appellants that the defendants/appellants were not allowed ample opportunity in the suit to file their counter affidavit is not rational as the learned single judge has categorically observed in the impugned order that perusal of court diaries show that several opportunities were granted to the defendants’ advocate for filing counter affidavits and her requests were conceded to by the Advocate for the plaintiff in the good faith and in the interest of justice. When we confronted this portion of order to the learned counsel for the appellant, she completely failed to offer any plausible or cogent justification as to why she failed to file the counter affidavit in spite of availing several opportunities, therefore at this stage, we are of the view that the learned counsel cannot claim that the private defendants were condemned unheard. The impugned order further shows that on 11.11.2010, the time was also fixed for hearing of the case in court, but the learned counsel for the defendants was called absent without any intimation. In our view, no unlimited opportunities could be acceded to for filing the counter affidavit to the defendants, hence, the learned single judge rightly decided the matter on the basis of available record keeping in view the exigency in the matter and the state of affairs emanating from the Commissioner’s reports.

15.The guiding principles for the appointment of Receiver under Order 40 Rule 1 CPC are laid down as under:-  

(i) Appointment of receiver rests entire with the discretion of the court, which is to be exercised judiciously, keeping in view the attending circumstances, to do justice between the parties;

(ii) Appointment of receiver should be to safeguard the interest of both parties, and to save disputed property from mismanagement and mischief ;

(iii) Plaintiff is bound to prove strong prima facie case in his favour to the effect that ultimately he will succeed in getting relief as prayed for;

(iv) What are circumstances which warrant immediate appointment of Receiver;

(v) The purpose is not merely to dispossess someone but to prevent the property from waste. Material should be placed on record to show that  the subject matter is in danger of waste and malversation ;

(vi) Power to appoint Receiver should be sparingly used ;

(vii) Possession of person bona fide in occupation of property should not be disturbed unless there are allegations of wastage or dissipation of property or apprehension of irreparable loss or injury.

16. A relief by specific performance, injunction and receiver belongs to the same branch of the law. The relief granted by appointment of a receiver pendente lite bears in many respects a close analogy to that by temporary injunction, as such, both are essentially preventive in their nature being properly used only for the prevention of future injury, rather than for the redress of past grievances and both have one common object in so far as they seek to preserve the res or subject matter of the litigation unimpaired, to be disposed of in accordance with the future decree or order of the Court.

17.The case law relied upon by the learned counsel for the respondent No.1 reported in PLD 2007 Karachi 527 is fully attracted to the present facts and circumstances of this case in which also the possession was handed over by the owner of the property by virtue of agreement to sell after receiving the entire sale consideration but subsequently with collusion of another person, trespassed in the suit property and evicted the chowkidar of buyer. The buyer filed a suit for declaration, specific performance, permanent injunction, possession and also filed injunction application along with an application under Order 40 Rule 1 C.P.C for appointment of receiver on the ground that the property was likely to be wasted and mismanaged by the appellants. The learned single judge allowed the application and appointed receiver on the property. The said order was challenged in appeal but the appeal was dismissed by this Court.

18.The receiver appointed under Order 40 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 in litigation, 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 them of according to the rights and priorities of those entitled thereto. In the present matter, the learned single judge has only appointed receiver with the power to appoint his own chowkidars to look after the said property and no powers were assigned or conferred upon the receiver to dispossess any of the occupants but the main purpose to appoint a supervisor on the land in question so that further encroachment or construction if any may not be raised. The appointment has only been ordered after the Commissioner has reported two times that in spite of restraining order, the construction is being raised on the plot which fact has been further confirmed when the Official Assignee was directed to inspect the site two times in this appeal but in each report/reference, he reported the same facts and also produced various photographs to show that the occupants of the land in question are continuously raising the construction in spite of the appointment of receiver. Even in the Reference No.1/2010, the Official Assignee reported that looking to the hostile and aggressive attitude of the persons of the disputed plot, it is not possible to post chowkidars or even armed guards and he suggested for stopping the further encroachment, a police picket (police chowki) be arranged at the site, otherwise, there will be no stoppage of infiltration of unauthorized construction.

19.The effect of appointment of receiver by the learned single judge was not to prejudice the case of any party but the only object was to maintain the situation intact during the pendency of the suit. The controversy between the parties and their rights to the land in question can only be decided or finally determined after leading evidence by the parties in support of their case. At this stage, we do not find any illegality or irregularity in the impugned order and keeping in view the bare bones of the matter and on the touchstone of the criterion as discussed hereinabove, the learned single judge rightly appointed receiver of the property for proper supervision and to save the land   from further encroachment and illegal construction.

20.The bottom line of the above discussion is that we uphold the order passed by the learned single judge and this appeal fails and the same is dismissed.

21.Since, we uphold the appointment of receiver, it is now his duty  to effectively implement the order of the learned single judge in accordance with law and if he needs any assistance and aid from law enforcement agencies, he may file his reference before the learned single judge for necessary orders in this regard.

Karachi:                                                                         Judge

Dated.8.2.2011                                           Judge