Jharkhand HC Upholds Receiver Over Hotel Swarn in Partition Suit Between Brothers

The Jharkhand High Court dismissed an appeal against the appointment of a receiver over a disputed hotel business, finding that both brothers appear jointly on the property sale deeds and the loan documents used to develop the suit land.

The High Court of Jharkhand at Ranchi, on 27 August 2026, dismissed a civil miscellaneous appeal filed by Harjit Singh against his brother Birendra Pal Singh, upholding an order of the Civil Judge (Senior Division XV), Ranchi, which had appointed a receiver over the suit property and the hotel business running on it. Justice Sanjay Kumar Dwivedi, sitting singly, held that there was no illegality in the trial court's order. The decision turns on loan documents that show both brothers — and even the plaintiff's son — as co-borrowers for the financing used to develop the multi-storied commercial building where M/s Hotel Swarn now operates.

The Partition Suit and the Disputed Hotel

The underlying suit, O.S. No.780 of 2024, was filed by Birendra Pal Singh before the Civil Judge (Senior Division XV), Ranchi, seeking partition of land situated at Mouza Siram, Thana No.210, PS Chutia, District Ranchi, Khata No.50, Plot Nos.882 and 883, admeasuring six kathas, along with the multi-storied commercial building and business standing on it.

Birendra Pal Singh's case, as set out in the plaint, was that both brothers used to reside jointly and carried on a small hotel business in the property. They had mutually decided to jointly develop the six kathas into a multi-storied commercial building to run a hotel. According to paragraph 10 of the plaint, the joint hotel business was the only source of livelihood for the plaintiff and his family, and only a meagre amount had been paid to him over the last couple of years.

Harjit Singh — the appellant and defendant in the suit — contested this account entirely. He contended that he alone had purchased the land and paid the entire consideration, that Birendra Pal Singh was merely a “name lender” who had permitted his name to appear on both sale deeds, and that there was an understanding between them that the respondent had no right in the suit property. He further submitted that he developed the multi-storied B+G+4 commercial building at his own cost and runs the hotel as its sole proprietor. In support, he pointed to the GST registration under the GST Act, 2017 and the Municipal Trade Licence issued by the Ranchi Municipal Corporation, both of which are in his name.

The Receiver Application Before the Trial Court

During pendency of the suit, Birendra Pal Singh moved an application under Order XL Rule 1 of the Code of Civil Procedure, 1908, seeking appointment of a receiver over the suit property and the hotel business for its management, protection, and preservation, and for collection of profits and maintenance of accounts.

By its order dated 22 May 2026, the trial court allowed the application. The court directed that a letter be issued to the Judicial Commissioner, Ranchi, for nomination of a suitable Receiver/Advocate Commissioner from the approved panel. Crucially, it permitted Harjit Singh to continue day-to-day operation of the hotel while requiring him to maintain proper accounts of income and expenditure and to preserve all GST records, bank statements, account books, and other business documents. The defendant was restrained from alienating, encumbering, or creating any third-party interest over the suit property without prior leave of court. Both parties were directed against structural alterations or changes to the nature and character of the property.

The Receiver/Advocate Commissioner, once nominated, was to inspect the property and submit a detailed report covering the physical condition of the property, persons found in actual possession and management, the mode of operation, availability and maintenance of accounts and GST records, approximate nature of income-generating activities, and whether any structural alteration or encumbrance had occurred.

Harjit Singh challenged this order before the High Court under Order XLIII Rule 1(s) read with Section 104 of the Code of Civil Procedure, 1908, filing M.A. No.452 of 2026.

Arguments Before the High Court

Senior Advocate Mr. Amar Kumar Sinha, assisted by Ms. Shivani Jaluka, appeared for Harjit Singh. He argued that under Order XL Rule 1, a receiver can be appointed only if the plaintiff proves a chance of success in the case and demonstrates some damage, loss, or emergency. He submitted that a receiver ought not to be appointed where it would deprive the defendant of de-facto possession, and that the trial court had not appreciated this principle before passing the impugned order.

Mr. Shresth Gautam, appearing for Birendra Pal Singh, drew the court's attention to the plaint, the written statement filed by the defendant, and the loan documents. He pointed out that in paragraph 11 of the written statement, Harjit Singh himself had referred to a loan taken from Tata Capital Housing Finance Limited, loan account no.9492617, with an EMI of Rs.60,376. The loan sanction letter at page 58 of the counter affidavit was in the names of both Harjit Singh and Birendra Pal Singh. At page 47, Birendra Pal Singh's signature appeared as co-borrower, and in the loan agreement schedule at page 51, the plaintiff was also listed as co-borrower along with his son.

Mr. Gautam further submitted that the trial court had not restrained the defendant from running the business. The first part of the trial court's direction made that clear. The court had merely appointed a receiver to seek a report and to ensure proper maintenance of income-expenditure records and preservation of GST and business records.

High Court's Reasoning

Justice Dwivedi identified an admitted position at the outset: the appellant and the respondent are own brothers. From the two sale deeds on record, it appeared that the suit land was purchased by both brothers. While the appellant's argument that he paid the entire consideration remained live, the court noted that this dispute was a matter for trial.

The court then focussed on the loan documents. It found, from pages 38 and 51 of the counter affidavit filed by the respondent/plaintiff, that the loan number in the loan application matched the loan number in the loan agreement schedule. Birendra Pal Singh appeared as co-borrower in the loan agreement, along with his son. This led the court to conclude, prima facie, that the loan was taken by both brothers.

Against this factual backdrop, the court read the actual directions issued by the trial court carefully. It observed that the trial court had not restrained Harjit Singh from running the business or maintaining the premises. What the trial court had done was to seek a report on the business, its physical condition, mode of operation, maintenance of account books and GST records, licences, bank transactions, and approximate nature of income-generating activities, while also restraining alienation or third-party encumbrance.

Justice Dwivedi then addressed the legal framework relied upon by the appellant's senior counsel. He found that the conditions for appointing a receiver under Order XL Rule 1 — as articulated by Mr. Sinha himself in argument — were fulfilled on the facts. The court noted that this finding applied in the context of the prima facie material on record, including the joint appearance of both brothers on the sale deeds and loan documents.

The court concluded that there was no illegality in the impugned order of 22 May 2026.

Order

Justice Sanjay Kumar Dwivedi dismissed M.A. No.452 of 2026 on 27 August 2026. The trial court's order dated 22 May 2026 passed by the Civil Judge (Senior Division XV), Ranchi, in O.S. No.780 of 2024 stands. All pending petitions arising from the miscellaneous appeal were also disposed of. Harjit Singh remains free to continue day-to-day operations of M/s Hotel Swarn subject to the conditions imposed by the trial court, including maintenance of accounts and preservation of business records, pending the outcome of the partition suit.