Bombay HC Upholds Appointment of Partner as Court Receiver in Redevelopment Project Dispute

In a judgment delivered on October 27, 2026, the Bombay High Court dismissed Commercial Appeal from Order No. 21 of 2026, upholding the interim judgment and order dated July 14, 2026, passed by the District Judge-1, Pune. The High Court affirmed the appointment of Respondent No. 2 (a partner) as a Court Receiver under Order XL Rule 1 of the CPC to oversee, manage, and complete a housing redevelopment project amidst disputes between partners.

Background

• The Partnership and Project: The dispute arises from a partnership firm named “Kiyaara Buildcon,” originally formed between the Appellant (Akshay Sanjay Dhumal, holding a 33% profit share) and Respondent No. 2 (holding a 67% share), which was engaged in a single redevelopment project of the Radha Anand Co-operative Housing Society in Erandwane, Pune.
• Disputes and Notice of Dissolution: Differences erupted between the partners after the Appellant alleged that Respondent No. 2 sold three flats at below-market rates without securing proportionate considerations. Consequently, the Appellant issued a legal notice on April 22, 2024, seeking to dissolve the partnership “at will” and demanding rendition of accounts, followed by filing a commercial suit.
• Suit and Counterclaim: The Appellant instituted a suit for dissolution and injunction, while the respondents contested it and filed a counterclaim alleging breach of the partnership deed by the Appellant. Both sides filed interim applications primarily seeking the appointment of a Court Receiver to handle the stalled construction.
• Trial Court Order: The District Judge appointed Respondent No. 2 as Court Receiver to complete construction and manage unsold units, while directing him to deposit 2 crores in court as a safeguard and imposing strict conditions on flat sales. The Appellant challenged this order via a commercial appeal.

Court’s Analysis

1. Discretionary Power to Appoint a Partner as Receiver

• Reaffirming established principles governing Order XL Rule 1 of the CPC, the Court noted that a Receiver is appointed to preserve the subject matter of litigation and secure the rights of litigating parties.
• While third parties are ordinarily appointed, courts can exercise discretion to appoint a party to the litigation (such as a partner) in special circumstances especially in running businesses or ongoing construction projects to avoid introducing a stranger unfamiliar with the business intricacies.

2. Protection of Third-Party Interests (Flat Purchasers and Society Members)

• The bench placed heavy emphasis on the plight of 16 society members living in rented accommodations (whose rent is paid by Respondent No. 2) and third-party flat purchasers awaiting possession.
• Allowing an inter se partnership dispute to jeopardize an entire active redevelopment project would cause irreparable public and commercial harm.

3. Conduct of the Parties and Financial Imbalance

• The Court observed that Respondent No. 2 had driven the project forward, obtaining layout sanctions and spending substantial personal funds (including 1.82+ crores from his personal account), whereas the Appellant had contributed minimal capital, withdrawn 95 lakhs as a loan from the firm, and maintained a full-time external job at Axis Bank.
• The trial court’s directive requiring Respondent No. 2 to deposit 2 crores in court and prohibiting him from finalizing sales without judicial concurrence adequately safeguards the Appellant’s financial interests.

Final Decision

• Appeal Dismissed: Commercial Appeal From Order No. 21 of 2026 was dismissed, and Civil Application No. 6248 of 2026 was disposed of. Costs are to be costs in the cause.
• Interim Safeguards Affirmed: The appointment of Respondent No. 2 as Court Receiver under the trial court’s conditions stands fully confirmed.

Citation: Akshay Sanjay Dhumal v. Kiyaara Buildcon (2026:BHC-AS:43888-DB)