' SADIQ HUSSAIN BHATTI, J.---Appellants being aggrieved by order dated 17-9-2010, passed by the learned single Judge of this Court in Suit No,123 of 2010, whereby the proceedings of the Suit were stayed, Nazir of this Court appointed as Receiver and the Defendants Nos.1 to 4 (Respondents Nos.5 to 8 herein) were directed to directly deposit the monthly rent of the shops in question with the Nazir with effect from October, 2010 till further order.
2. Brief facts of the case are that father of the appellant and respondents Nos.1 to 4 was the owner of Shops bearing Nos.A27, A-27/A, 36 and 36/1, Second floor, Phase-II, Karim Shopping Centre, constructed on Plot No,SB.7/4&5, situated on Abdullah Haroon Road, Saddar Karachi. Apart from Shop No,36, an additional area measuring 530 Sq. Ft. Adjoining to said shop on the second floor was also allotted jointly to the appellant and respondents Nos.1 to 4, thus, they jointly became owner of an area of 1450 Sq. Ft. Or thereabout on the Second Floor, Karim Centre and their father used to collect rent in respect of the said shops from the respective tenants.
3. Respondents Nos.1 to 4 came to know that the appellant, their brother, was forcing their ailing lather to sell the above mentioned properties and to hand over the sale proceeds to him, hence they filed Suit bearing No,1399 of 2007 before this Court against their father, and brother for declaration, direction, possession, mesne profit and permanent injunction. In that suit properties of their deceased mother Shahjehan Begum were also included for distribution amongst all the legal heirs according to Sharia. During pendency of that suit their father expired on 6-1-2008 and since then the appellant-started collecting rent without any authority given by the respondents Nos.1 to 4, on the ground that properties were orally gifted to him by their deceased father. Criminal proceedings between the parties in the shape of Cr. Transfer Application bearing No,S-54 of 2009, were also pending before this Court at Circuit Court, Hyderabad, wherein acconsent order had been passed, where all the matters between the parties were referred to Sole Arbitrator Mr. Justice
(R) Mujibullah Siddiqui.
4. Arbitration proceedings were initiated, parties filed their claims, objections/counter-affidavits and issues were framed. However, during pendency of the proceedings, an application was filed by the plaintiffs before the learned Arbitrator, seeking order to restrain the tenants from making payment of rent to the appellant as he is collecting the rent illegally and without consent and authorization of the respondents Nos.1 to 4. The learned Arbitrator disposed of the said application by observing that the claimants may approach the proper Court of law, hence they filed the Suit No,123 of 2010, against the appellant and respondents Nos.5 to 8, for permanent injunction and possession with following prayers:--
(a) Restrain the defendants from paying the rent of subject shops to anybody else except the plaintiffs.
(b) Permanently restrain the defendant No,5 from collect the rent of the subject shop from the defendants Nos.1 to 4.
(c) Direct the defendants to pay the rent of the shops to the plaintiffs.
(d) Direct the defendants to handover the shop to the plaintiffs only.
(e) Cost of the Suit; and
(f) Any other relief(s) that this honourable Court may deem fit and appropriate in the circumstances of the present case.
5. During pendency of arbitration proceeding in the Suit, the defendant No,5 (Appellant herein) moved an application under section 34 of the Arbitration Act being C.M.A. No,2298 of 2010 for staying the instant Suit. After hearing the parties, learned single Judge disposed of the said C.M.A.
And passed the impugned order, directing the defendant No,5 to submit monthly accounts of rent of the shops in question to the Nazir of this Court from the date when he started to collect the rent and was restrained from collecting future rent. The defendants Nos.1 to 4 were directed to directly deposit the monthly rent of the shops in question with the Nazir of this Court with effect from October, 2010 till further orders and the suit was stayed, accordingly. The above order has been challenged by the appellant through present High Court Appeal. Earlier, a Division Bench of this Court, after hearing the counsel for the parties, passed order dated 5-4-2012 and disposed of the instant appeal, which order reads as follows:-- "This appeal arises from the order passed in Suit No,123 of 2010 on C.M.A. No,2298 of 2010, filed by the appellant under section 34 of the Arbitration Act. In the application it was stated that as the dispute between the parties is being adjudicated before an Arbitrator appointed with consent of the parties, the suit may be stayed. While passing order of stay of the suit, learned single Judge also disposed of the' injunction application bearing C.M.A. No,824 of 2010 as having become infructuous.
While disposing of the application under section 34 of the Arbitration Act, the learned single Judge restrained the appellants from collecting the rents of the disputed shops which the appellants were already collecting prior to the filing of the suit. A bare perusal of the impugned order shows that learned single Judge only decided the application filed under section 34 of the Arbitration Act but while deciding so directions were also given to the Nazir to collect and retain with himself the rents of the disputed shops. In this manner he disturbed the status quo without deciding C.M.A.
No,824 of 2010 as the same was ordered to have become infructuous. It clearly implies that no arguments were heard on the merits of such application. In absence of disposal of injunction application being C.M.A. No,824 of 2010 on merits and only deciding application under section 34 of the Arbitration Act status quo was disturbed which was not justified insofar as order pertaining to collection of rents is concerned. Hence we set aside the impugned order to such an extent only and restore, the o injunction application bearing C.M.A. No,824 of 2010 and direct the learned single Judge to decide the C.M.A. No,824 of 2010 afresh. The respondents may file application for appointment of receiver if they are so advised.
6. Being aggrieved by the above order dated 5-4-2012, the respondents Nos.1 to 4, challenged the same in Civil Petition No,105-K of 2012, before the honourable Supreme Court of Pakistan.
Honourable Supreme Court of Pakistan, after hearing the counsel for the petitioners and the respondent(s), converted the petition into appeal and allowed the same, by setting aside the order dated 5-4-2012 passed by the Division Bench of this Court, directing that respondent's Appeal bearing No,204 of 2010 shall be deemed to be pending before the Division Bench of the High Court of Sindh and be decided afresh on merits within 30 days of the receipt of its order and both the parties were directed to appear before the Division Bench of this Court on 8-5-2012.
7. Mr. Malik Naeem Iqbal, learned counsel for the appellant, argued that late father of the appellant orally gifted all his properties including benami properties to the appellant being his only son and handed over physical possession whereof to the appellant, who became exclusive owner of properties being Shops Nos.A-27, A-27/A, 36 and 36/1, situated at Second Floor, Phase-2, Karim Shopping Centre, Saddar Karachi. Respondents Nos.1 to 4 filed a Suit bearing No,1399 of 2007 for declaration, direction, possession, mesne profit and permanent injunction before this Court against the appellant and his father, during pendency of the said suit, father of the appellant passed away and after demise of his father the appellant started collecting rent of the above properties. Learned counsel contended that vide consent order dated 20-11-2009 passed in Cr. Transfer Application No,S-52 of .2009 pending before Circuit Court Hyderabad, all disputes between the parties were referred to the Sole Arbitrator, namely, Mr. Justice (R) Mujeebullah Siddiqui, before whom the appellant and respondents Nos.1 to 4 have filed their respective claims. He further contended that application under section 34 of the Arbitration Act was filed by the appellant in Suit No,123 of 2010, seeking stay of the proceedings of the Suit as the controversy involved the subject property is the subject matter of arbitration proceedings, to which counter affidavit and affidavit-in-rejoinder were filed by the parties. He contended that the after hearing arguments at length, learned single Judge passed the order, impugned herein, by misinterpreting the provisions of law and ignoring and overlooking the legal principles of law, material and evidence available on record, appointed the Nazir as Receiver for collection of rent in respect of the suit property, hence appointment of Receiver is challenged through the instant appeal mainly on the ground that arbitration proceedings are pending before the Arbitrator and the Receiver cannot be appointed during pendency of such proceedings. He further contended that Receiver can only be appointed in exceptional circumstances, which are amiss in the instant case.
8. Conversely, Ms. Sofia Saeed, learned counsel for the respondents Nos.1 to 4, argued that appellant and respondents Nos.1 to 4 agreed to settle their dispute regarding the properties inherited by them from their parents through a Sole Arbitrator. The parties submitted their respective claims before him, consent issues were also framed and the parties were directed to lead their evidence. The said respondents moved an application before the learned Arbitrator, seeking restraining order against the appellant not to collect rent from the respective tenants in respect of the Suit property, who considered the said application, when learned counsel for the appellant raised objection stating that the Arbitrator cannot entertain such application and that relief can be sought from the Court, upon which the learned Arbitrator directed the respondents to approach the proper Court of Law. Learned counsel further argued that as per decree passed in Suit No,738 of 1977, Suit No,749 of 1978, 750 of 1978, Suit No,772 of 1978 and Suit No,1165 of 1978, the above respondents and the appellant are joint owners of the subject shops, hence the appellant alone is not entitled to collect and use the rent of the suit property. She fully supported the impugned order by stating that the same has rightly been passed by the learned single Judge. She further contended that the appellant is trying to blow hot and cold in the same breath, as on hand he raised objection stating that learned Arbitrator is not empowered to entertain such claim and on the other hand he states that this Court has no jurisdiction to intervene in the arbitration proceedings. She finally argued that the appellant is trying to usurp all the Suit properties inherited by the respondents Nos.1 to 4 from their parents, the order impugned herein has rightly and lawfully been passed, the same may be maintained and the instant appeal may be dismissed.
9. In support of her contentions, learned counsel for the respondents Nos.1 to 4, relied on the following case-law:
(1) Ishwara Joisha v. Saraswa thi Amma and others (AIR 1959 MAYSORE 35 (V 46 c 12),
(2) Amarnath v. Mt. Tehal Kuar (AIR 1922 Lahore 444)
(3) Lala Rosha Lal and others v. Ch. Muhammad Afzal and others (PLD 1949 Lahore 60).
10. We have heard the appellant and the learned counsel for the respondents, and have also perused the impugned order, order 4-5-2012, passed by the Division Bench of this Court as well as the order by the honourable Supreme Court of Pakistan in Civil Petition No,105-K of 2012.
11. During the lifetime of the deceased father of the parties, the respondents 1-4 filed a Suit bearing No,1399/2007 against their father, who expired during pendency of the suit, and the appellant.
' In this suit the following prayer was made:--
(A) Declare that the plaintiffs (respondents No, 1-4 herein) are the lawful owners of the suit properties as specified in paragraphs 7, 8 & 9 of the plaint;
(B) Direct the defendants to hand-over possession of the Suit Properties along with all original title documents thereof to the plaintiffs;
(C) Direct the defendants Nos.1 and 2 to pay the rents/mesne profits and benefits from the Suit Properties at the rate of Rs,500,000 per month with effect from 1st January, 1985 up-to-date and all further rents/ benefits in respect of the Suit Properties to the plaintiffs from the date of filing of this suit till handing over the possession and original title deeds of the Suit Properties to the plaintiffs;
(D) Restrain the defendants, their agents, servants, or any person or persons acting on their behalf from creating any charge, lien, encumbrance or third party interest in any manner whatsoever in respect of the Suit Property a described in paragraphs 7, 8, & 9 of the plaint;
(E) Cost of the suit; and
(F) Any other relief(s) that this honourable Court may deem fit and appropriate in the circumstances of the present case.
12. In terms of a consent order dated 20-11-2009, passed in Criminal Transfer Application No, S-54 of 2009, all the dispute between the parties, including the above suit, were referred to Sole Arbitrator Mr. Justice (Retd.) Muhammad Mujeebullah Siddiqui. Before the learned Arbitrator an application was moved by the respondents No,1-4 seeking directions to restrain the appellant from receiving rents of the properties in dispute. On this application, the learned Arbitrator passed an order to the effect that the claimant may approach proper civil Court of law for seeking such direction. It was in the light of this order that the respondents Nos.1-4 filed Suit No, 123 of 2010.
However, as soon as the said suit was filed, the appellant, respondent No,5 in that suit, filed an application under ' section 34 of the Arbitration Act, seeking stay of the suit during pendency of the arbitration proceedings. Vide the impugned order, passed by a learned Single Judge of this Court on 17-9-2010, the suit was stayed. However, the learned single Judge also appointed Nazir as Receiver who was directed to contact the defendants/tenants to deposit the rents with him. The Nazir was further directed to invest the amount of rent in profitable securities for the benefit of the party who may succeed in the proceedings before the learned Sole Arbitrator. It was this part of the order which was challenged by the appellant through this High Court Appeal, which was earlier allowed by a Division Bench of this Court vide order dated 5-4-2012. This order of the Division Bench was challenged before the Hon'ble Apex Court in C.P.L.A. No, 105-K of 2012. The Apex Court, vide order dated 3-5-2012, converted the petition into appeal, allowed the same by setting aside the order of the Division Bench dated 5-4-2012 and restoring the High Court Appeal to be decided afresh.
13. The dispute in this appeal relates to the properties which, admittedly, belonged to the predecessors-in-interest of the parties i,e, father and mother of the appellant and the defendants.
In para 3 of the memo of appeal, the appellant asserts that all the properties, including benami properties, were orally gifted by the late father of the appellant to the appellant. However, this - aspect is denied by the contesting respondents who claim that all the properties belong to the late father and mother of the contesting parties and they all have their respective share therein according to law. At present, all the properties still stand in the name of the deceased father as well as mother of the parties. Therefore, the learned single Judge while staying the proceedings in Suit No,123 of 2010 passed orders for appointment of the Nazir as receiver for collecting rents in respect of the properties occupied by tenants. The relevant portion of the impugned order reads as under:- - "Since the issue of gift and ostensible ownership is pending adjudication before the learned Arbitrator, therefore, in my view unless the issue is decided in favour of the plaintiffs, no further steps can be taken in the present suit. The chance of plaintiffs' success is dependent upon the findings on issue of gift in their favour, therefore, in my view, the plaintiffs are not entitled to claim the rent before award. However, it is also a matter of record that the learned counsel for the defendant No,5 took a plea before the Arbitrator that no directions could be issued by the Arbitrator against the strangers/tenants and for the purposes of the claim of rent, plaintiff must approach to the competent court of law. In order to avoid any miscarriage of justice and to: secure the rights and interests of the plaintiffs if any sustained or declared in the award of the arbitrator, it would be appropriate for this Court to exercise its powers under section 41 of the Arbitration Act, which inter alia provides ample jurisdiction to grant interim, injunction or the appointment of receiver. Accordingly, the defendant No,5 is directed to submit monthly accounts of rent of the shops to the Nazir of this Court from the date when, he started to collect the rent, he is also restrained froth collecting he rent, consequently, the defendant No,1 to 4 are directed to directly deposit the monthly rent of the shops in question with the Nazir of this Court with effect from October, 2010 till further orders of this Court. The case-law cited by the learned counsel for the defendant No,5 on the applicability and scope of section 34 of the Arbitration Act are quite applicable and attracted, while the case-law cited by the plaintiffs' counsel are distinguishable as in none of the case, the matter was under consideration before the Arbitrator with specific issue of gift and ostensible ownership. In the present case, the factum of ownership of the plaintiffs is under dispute, therefore, at this stage no directions can be given to the alleged tenants for the payment of rent to the plaintiffs. Any such order would amount to negate the very purpose of arbitration and tantamount to circumvent the arbitration proceedings. The application is allowed in the above terms. Suit is stayed accordingly.
' The Nazir fee shall be Rs,15000 which will be paid by the plaintiffs. Nazir may contact to the defendants for the compliance of this order. Nazir may also invest the amount of rent in any Government profit bearing scheme for the benefit of party who may be found entitled to the rent amount under the terms of award. Since I have already passed an order for depositing rent of the shops in question with the Nazir, the C.M.A. No,823 of 2010 and C.M.A. No,824 of 2010 have become infructuous."
14. In the case of Mahendra H. Patel v. Ram Narayan Singh (AIR 2000 SC 3569) it was held as under:-- "In our opinion, it was not open to the High Court in a writ petition against that order to appoint a Receiver in respect of the property in question under Order XL, Rule 1, C.P.C. Particularly when one of the parties had asked for it. The power to appoint a Receiver suo motu cannot be exercised by the High Court."
' In the case of Srinivasa Rao v. Baburao and another (AIR 1970 (sic) 141) it was held that: "The question of appointing a receiver is a matter resting in the discretion of the Court. A receiver should not be appointed unless the party has an excellent chance of succeeding in the suit. The plaintiff himself must show that there is some emergency or danger or loss that may be caused to the right involved in the suit. An order appointing a receiver shall not be made if it has the effect of depriving a defendant of de facto possession. However, the position would be different, if the property is shown to be 'in medio' that is to say, in the enjoyment of no one. The Court should always look into the conduct of the parties who seek for the appointment of a receiver."
' In the case of Subramania Odear and others v. Govindamal and another (AIR 1994 NOC 213 (Mad.)), it was held that harsh remedy of appointment of receiver is allowable only in extreme cases and Court should grant it only when requirements embodied in words 'just and equitable' are fulfilled by the facts of the case.
14. In the case of Salma Majhi and another v. Bija Majhi and others (AIR 2004 Orissa 46), it was held that plaintiffs have neither alleged nor substantiated the. Ground of waste and damage of the suit property in the hands of the defendants and also nothing has been stated justifying grounds or urgency. Therefore, it was held that receiver cannot be appointed simply on the ground that such appointment would not cause inconvenience to either of the parties.
15. In the case in hand the cited judgments, relied upon by the learned counsel for the appellant, are not attracted. Firstly, it is an admitted position that the suit properties are in the name of the deceased father and mother of the contesting parties and in the earlier suit as well as in the latter suit it was alleged by the respondents 1.4 that the rents are being illegally collected the appellant.
Although the appellant claim that his father had orally gifted to him all the properties but it is denied by the respondents/defendants and they are seeking their share out of the estate left behind by their deceased parents. The very purpose of filing of Suit No 123 of 2010 was to safeguard the interest of the respondents Nos.1 - 4 with regard to the rents received by the appellant.
Therefore, it cannot be said that the Court suo motu appointed the receiver. Even otherwise, in the case reported as Amamath v. Mt. Tehal Kuar (AIR 1922 Lahore 444), relied upon by the learned counsel for the respondents 1-4, it was held that a court has the right to proceed under Order XL, Rule 1, C.P.C. Where it appears to be just and convenient to do so and the Court can make an order appointing a receiver suo motu even in a suit for declaration. Similar view was taken in the case of Ishwara Joisha v. Saraswa thi Amma and others (AIR 1959 MAYSORE. 35 (V 46 c 12).
16. We do not want to dilate upon the respective submissions of the learned counsel for the parties in minute details as it will prejudice case of either of the party. Suffice it to say that the dispute regarding the properties in the suits is not between strangers but between closely related relatives whose claim cannot be ignored lightly and the same would be decided on the basis of evidence to be adduced before the Arbitrator by the respective parties as to whether the properties were orally gifted by the father of the appellant to him or otherwise. However, at this stage it cannot be said that the respondents have no case at all as it is admitted position that the properties stand in the name of the deceased parents of the parties and the appellant that at least two of the four contesting I respondents are his real sisters.
17. For appointment of receiver it is imperative that the party making such prayer makes out a prima facie title to the suit property in respect whereof receiver is sought to be appointed. In the present case, it is admitted position that all the properties stand in the names of the deceased parents of the contesting parties. While the appellant claims that his late father during his lifetime had orally gifted all the parties to him, the respondents Nos.1-4, who claim to be sisters of the appellant, deny the same. Thus, the oral gift in favour of the appellant is not free from doubt. This would be decided before the Arbitrator whether the properties belong to the parents of the contesting parties or the same were legally and properly gifted, through oral gift, by the deceased father to his son the appellant. Thus, prima facie, there is a bona fide dispute between the parties.
In case no receiver is appointed and the matter lingers on, say for another ten years, and thereafter, assuming for the sake for arguments, the case is decided in favour of the respondents, the respondents would be forced to go through another agonizing exercise of claiming the rents for the last many years from the appellant. Therefore, till such time that an award is announced by the learned Arbitrator, it would be just and convenient if the rents of the disputed properties are collected by the Nazir for the benefit of the party who succeeds before the learned Arbitrator.
18. The upshot of the above discussion is that we do not find any infirmity in the impugned order calling for interference by this Court, therefore, we maintain the same and dismiss the appeal. Both the parties are advised to proceed before the Arbitrator withoia any undue delay so that the dispute between brother and sisters is settled at an early date.