2025 PLP 544 (MLD)

agha Faisal, J.

1-4 This is a suit for administration etc. wherein a preliminary decree has also been rendered on 24.02.2023. The pressing issue before the Court today is the admitted illegal use of residential property, subject matter herein, as a commercial guest house / motel. Nazir report dated 19.04.2024, in paragraph 2 thereof, demonstrates that Bungalow No.24-B/1, Circular Street, DHA Phase-II, Karachi is being used commercially as a Rest House by the name of New Grace Inn. The respective learned counsel submit that the property is residential in nature, however, the same is illegally being used for commercial purposes to the detriment of all legal heirs parties hereto. The defendant No.1 is present in court and admits to the aforesaid and states that the illegal activity is being perpetuated by a purported tenant and the same has been happening for the last eight years. The defendant states that he has been unable to restrain the illegal commercial use of the residential property since he has been away from the country. There is no cavil to the fact that the residential property is a constituent of the estate of the deceased and the same can also be gleaned from documentation available at pages 229 and 233 herein. Pursuant to order dated 24.02.2023, a preliminary decree has already been drawn up and the subject property is the part thereof. Admittedly, the subject property is being used for unlawful purposes to the manifest detriment of all legal heirs; admitted by the defendant No. 1 in person. It is also articulated that illegal use / conversion of the residential property may entail adverse consequences including determination of the lease in respect thereof. Therefore, it is prayed that the subject property may be given in the sole care and custody of the Nazir, pending adjudication hereof. The statutory1 and the common law in such regard is well settled. Saeed ur Rehman2 and Asadullah Mirbahar3 are two time honored Division Bench edicts of this such regard and Zamir Ahmed Khan4 is a recent reiteration of the law. In Saeed ur Rehman, a Division Bench upheld the appointment of a receiver, while observing as follows: "... it will be advantageous to observe that a Receiver appointed under Order XL, Rule I, 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 life, 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 prejudice 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 B 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 parties, therefore, the possession of a receiver during the pendency of a suit should be regarded as possession for the party, who might ultimately tuna 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. It is pointed out that the issue of appointment of a receiver during pendency of suit and issue of injunctions, whether temporary or permanent, are a form of specific relief. Sir John Woodroffe in his Book "Law Relating to Receivers" observed that a relief by specific performance, injunction and receiver belongs to the same branch of the law. The appointment of a receiver operates as an injunction against the parties, their agents and persons claiming under them, restraining them from interfering with the possession of the receiver except by permission of the court and an order for an injunction is always more or less included in an order for a receiver, therefore, it is not necessary, if a receiver be appointed, to go on and grant an injunction in terms. He further observed that all the three forms of relief are dealt with by the Specific Relief Act. 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. The appointment as well as the removal of a receiver is also a matter which rests in the sound discretion of the Court. In exercising its discretion, the court should proceed with caution and be governed by a view of the whole circumstances of the case. It is pointed out that 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. Reference is invited to the case of M. Ataur Rehman Alvi v. Inamur Rahman 1974 SCMR

54. It will be noticed that in Order XL, Ruled, C.P.C the words "just and convenient" have been used, which mean than the Court should appoint a receiver for the protection of property or the prevention of injury, according to legal principle and not that the court can make such appointment because it thinks convenient to do so. References are invited to the cases of Habib v. Abtia (23 CLJ 567) and Bhupendra v. Monohar (28 CWN 86). As regards appointment of receiver, a receiver can be appointed, if it is found that the estate is in danger, because no longer properly managed or that difficulties have arisen in connection with litigation about the properties comprised in the estate or that there is good ground to apprehend that the defendant may misapply trust funds. The main principles upon which such discretion should be exercised have been laid down in the case of Owen v. Homan (94 RR 516) and those principles have been held to be equally applicable in Pakistan as in England, as observed by the then justice Cornelius in a case of Lala Roshan Lal v. Ch. Muhammad Afzal PLD 1949 Lah.

60. In the Owen's case Lord Cranworth said: "The receiver, if appointed in this case, must be appointed on the principle on which the Court of Chancery acts, of preserving property pending the litigation, which is to decide the right of the litigant parties. In such cases the Court must of necessity exercise a discretion as to whether it will or will not interfere by this kind of interim protection of the property. Where, indeed, the property is as it were in medio, in the enjoyment of no one, the Court can hardly do wrong in taking possession. It is the common interest of all parties that the Court should prevent a scramble. Such is the case when a receiver of a property of a deceased person is appointed pending a litigation in the Ecclesiastical Court as to the right of probate or administration. (1) No one is in the actual lawful enjoyment of property so circumstanced, and no wrong can be done to anyone by taking it, and preserving it for the benefit of the successful litigant. But where the object of the plaintiff is to assert a right to property of which the defendant is in the enjoyment, the case is necessarily involved in further questions. The Court by taking possession at the instance of the plaintiff may be doing a wrong to the defendant; in some uses- an irreparable wrong. If the plaintiff should eventually fail in establishing his right against the defendant, the Court may by its interim interference have caused mischief to the defendant for which the subsequent restoration of the property may afford no adequate compensation. In all cases, therefore, where the Court interferes by appointing a receiver property in the possession of the defendant before the title of the defendant is established by decree, it exercises a discretion to be governed by all the circumstances of the case " ... Thus, apparently the alleged possession of the appellant is not a bona fide possession, therefore, his possession cannot be protected in the present circumstances of the case as appearing at this stage... As regards the appellant letting out the property to his tenant, the written-statement is silent, as no such plea was raised in it. It also appears that at the time of inspection of the property by the Nazir he did not mention such fact to him. In these circumstances, the learned advocate for the respondent No.1 has argued that the said plea was set up after filing the written-statement in order to protect the illegal possession of the property..." It is paramount to bear in mind that in Saeed ur Rehman the fact that the possession of the property could not be demonstrated to be bona fide and that played a pivotal role in substantiating the appointment of a receiver. In Asadullah Mirbahar5, Muhammad Ali Mazhar J encapsulated the salient principles for appointment of a receiver. It was observed as follows: "

15. The guiding principles for the appointment of Receiver under Order XL, Rule 1, C.P.C. are laid down as under: (i) Appointment of receiver rests entirely 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 insofar 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...

18. The 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 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...

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..." Encapsulating the discussion, it is observed that the residential property forms a constituent of the estate; it is being used illegally for a commercial purpose despite the same being impermissible under the lease thereof; the legal heirs / parties hereto are in unison that such illegal utilization is without sanction and to their collective manifest detriment and it is imperative for the lis to be preserved pending adjudication of the respective claims. Therefore, a fit case has been set forth before this Court to commit the property to safe custody of this Court. On the anvil of the law, including as illumined vide Saeed ur Rehman6, Asadullah Mirbahar7 Zamir Ahmed Khan8, it appears just and convenient for a receiver be appointed in respect of Bungalow No.24-B/1, Circular Street, DHA Phase-II, Karachi; in the following terms; i. The Nazir of this Court is hereby appointed receiver of the Bungalow No.24-B/1, Circular Street, DHA Phase-II, Karachi, which shall remain in his exclusive possession and custody until further orders. ii. The Receiver shall cause the Suit Property to be vacated and in such regard may obtain the assistance of any law enforcement agency / regulatory body deemed expedient. The vacated Suit Property shall be sealed pending further orders of this Court. iii. The Receiver's remuneration shall be Rs. 100,000/- to be paid by the parties equally. The Receiver shall be entitled to recover any expenses incurred in discharge of duty from the parties. iv. The Receiver, appointed herein, shall remain at liberty to require further orders from this Court to undertake its task herein conferred and shall make a reference as and when considered expedient. The Pakistan Defense Officers' Housing Authority ("DHA"), defendant No. 6 herein, and the respective Sub-Registrar shall cause this order to be noted in the respective record of rights and shall ensure that no alienation takes place in respect of the property until further orders of this Court. The DHA shall depute a conversant officer to be present in Court on the next date and submit a written explanation as to why the relevant residential property is being permitted to be used for commercial purposes. The office is instructed to serve a copy upon the Pakistan Defense Officers' Housing Authority through the bailiff. SA/R-12/Sindh Order accordingly.