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Principal of Custodia Legis or In the custody of the law explained

In Haji Hanif Hakam Vs. Debt Recovery Appellate Tribunal at Kolkata & Ors., the plaintiff being assignee of the residue of the unexpired period of the leasehold interest in the suit property submitted that Joint Receivers were appointed by the Hon’ble High Court for taking actual physical possession of the suit property and the suit premise is, therefore, custodia legis. The third respondent is aware of such possession by the Joint Receivers yet without obtaining the leave of the Court appointing the Joint Receivers, had filed a proceeding RDDB Act. Subsequently the suit property was put up for sale and sold by the Recovery Officer and therefore the sale is illegal, null and void.

The third respondent submitted that the Joint Receivers are not in actual physical possession of the immovable property. Although, the initial order was for actual physical possession, the same was later modified to mean that the Receivers will take constructive possession. Therefore, it cannot be said that, the Receivers are in actual physical possession of the suit property. He has relied upon 1996 Volume 11 Supreme Court Cases page 376 (Anthony C. Leo v. Nandlal Bal Krishnan & Ors.) and 2002 Volume 2 Calcutta High Court Notes page 522 (Bengal Peerless Housing Development Co. Ltd. v. Gopeswar Prasad Agarwal & Ors.) for the proposition that, when the Receiver is not in an actual physical possession, then, the dealings with regard to an immovable property cannot be struck down on the ground of the breach of the principles of custodia legis.

The Calcutta High Court held that the Division Bench in Bengal Peerless Housing Development Co. Ltd. (supra) has considered Kanhaiyalal (supra) as well as Anthony C. Leo (supra).

Court appointing a Receiver over a property to take actual physical possession thereof becomes custodia legis of such property. However, appointment of a Receiver does not mean that the property vests in the Receiver or the Court, even pendente lite. A person claiming any paramount right in respect of the property has to obtain the leave of the Court in custodia legis to establish such right. Such leave is required when the Court has appointed a Receiver to take physical possession of the property. A proceeding initiated without the leave of Court appointing the Receiver, when the Receiver is not in physical possession of the property, does not stand vitiated by absence of leave.

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