|Date | Version||August 11, 2020 | 1.0|
|Keywords||‘Execution Proceedings’, ‘Money Decree’, ‘Order 21 Rule 41 of Code of Civil Procedure’, ‘Income and Assets Affidavit’|
|List of Legislations Referred||‘Code of Civil Procedure, 1908’, ‘Code of Criminal Procedure, 1973’|
Way back in 1925 the Privy Council[i] had observed that the difficulties of a litigant in India commence once he has obtained a decree. In another judgment[ii] the High Court of Oudh highlighted the need to ensure that the process of court is not abused by the judgment debtors in a way that the Courts become instrumental in defrauding decree holders.
Several years later the Courts continues to observe the difficulties faced by decree holder in executing the decrees in their favour. In Shub Karan Bubna alias Shub Karan Prasad Bubna vs. Sita Saran Bubna and Ors.[iii] the Supreme Court aptly noted the need for a conceptual change in courts where the emphasis is not only on disposal of suits but also on ensuring that the decree holder actually gets the relief.
Almost a century after the above referred observations of the Privy Council, decree holders in India continue to struggle to actually realize the fruits of the decree in their favour.
It is a fact that the procedure for having decrees executed gives enough room to a judgment debtor to delay the proceedings on one ground or another. For instance, initially a judgment debtor may avoid service of summons of the execution proceedings. The judgment debtor may not appear at all in the proceedings or appear belatedly. Even if the judgment debtor appears at the beginning of the proceedings, the judgment debtor may seek and is given an opportunity to file objections/reply to the execution petition. The adjudication of the objections/reply typically tends to consume a lot of time.
In India, the Code of Civil Procedure, 1908 (‘Code’) provides the mechanism for the execution of decrees. Under Order 21 Rule 41(2) of the Code if a money decree remains unsatisfied for a period of 30 days, on an application made by the decree holder in this behalf, the court can direct the judgment debtor to file an affidavit stating the particulars of its assets. A format of the affidavit is provided under Form 16A to Appendix E of the Code. It is seen that the courts do not necessarily direct/insist the judgment debtor file such an affidavit at the beginning of the execution proceedings itself. Even when the court directs the judgement debtor to file such an affidavit, the court does not necessarily ask that the details be filed as per Form 16A to Appendix E of the Code. Further, the details sought under the present format are not sufficient to ascertain all the income and assets at the disposal of the judgment debtor. The present format leaves much scope for the judgment debtor to avoid giving material details of all its income and assets and even mislead the court with respect to its ability to satisfy the decree.
The judgment debtors, for obvious reasons provide incomplete information under the affidavits. They thereafter attempt to linger the proceedings by repeatedly seeking time to file complete and proper information in correct formats. Several unscrupulous judgment debtors also provide false and incorrect information with respect to their assets. Since criminal proceedings are generally not pursued for filing of false affidavits, there is no deterrence for such judgment debtors.
Taking cognizance of the various pertinent issues faced by a decree holder in execution of a decree, a Single Bench of the High Court of Delhi in the case of Bhandari Engineers & Builders Private Limited v. Maharia Raj Joint Venture & Others[i] has sought to streamline the procedure for execution of money decrees to curb the delay in executing such decrees. The streamlined procedure partly takes from the already existing statutory provisions relating to execution proceedings and partly from fresh directions incorporated by the Single Bench. Some of the relevant take-aways from the judgment are as under:
– The executing court shall ensure the presence of the judgment debtor by issuing bailable warrants and thereafter non-bailable warrants as per law.
– The executing court shall on the first date itself, direct the judgment debtor to file an affidavit of income and assets within thirty days. After examining the said affidavit, the court may direct the judgment debtor to file an affidavit of expenditure.
– Annexures to the judgment provide modified comprehensive format of affidavits of assets, income and expenditure requiring information on several parameters which are amiss under the present format.
– Decree holder shall verify the disclosures made in the affidavit himself or through an investigator. In appropriate cases the court may pass order for investigation by government agency or a forensic audit.
– An oral request by the decree holder for a direction to the judgment debtor to file the affidavit of income and assets shall suffice.
– The judgement insists upon taking necessary steps in terms of law to elicit true and correct facts and information from the judgment debtor. The same may be done by ordering interrogatories, discovery and production of documents, ordering of any fact to be proved by affidavit, oral examination of judgment debtor in terms of law etc.
– If a decree holder files an application for perjury against the judgment debtor for making false claims or statements in its affidavits, the court after following the due procedure should not hesitate to make a complaint under Section 340 of the Code of Criminal Procedure, 1973 against the judgment debtor.
– Where the court is satisfied after issuing show cause to the judgment debtor that it has the means to satisfy decree but is not paying towards it, the court shall commit the judgment debtor to civil prison for a maximum period of three months.
The directions issued in the judgment can assist in curbing malpractices and dilatory tactics adopted by judgment debtors.
The direction to issue warrants for securing attendance of the judgment debtor can help to curb the practice of judgment debtors avoiding to appear in execution proceedings.
The procedure to direct judgment debtors to file an affidavit of income and assets at the very threshold of the proceedings in the modified format is a welcome step. The filing of the affidavit not only assists the court and the decree holder to ascertain the income and assets at disposal of the judgment debtor against which the decree can be satisfied but also enables the court to pass directions restraining the judgment debtor from disposing of, transferring or alienating his assets to the extent of the decretal amount. Therefore, once the information qua the assets of the judgment debtor becomes available at the threshold necessary steps in furtherance of the execution proceedings can be taken by the court. The direction of mandatory filing of the affidavits at the very beginning in a set format will also obviate the uncertainty surrounding the format in which such information is to be given and prevent dilatory tactics adopted by the judgement debtors while filing the affidavits.
The mechanism of oral request for filing the affidavit will obviate the step of filing an application by the decree holder and satisfying the court that such information is necessary. It may also deter the judgment debtor from unnecessarily objecting to the filing of such affidavits which would have been done in a matter of course otherwise.
The judgment has been passed after considering the suggestions of stakeholders. However, the matter has been posted for November 6, 2020 to consider further suggestions of counsels/litigants. The directions therefore given in the judgment may be subject to changes. It is a journey and it is hoped that the process will evolve such that decrees will get executed in a faster and efficacious manner.
[i] The General Manager of the Raj Durbhnga under the Court of Wards v. Maharajah Coomar Ramaput Sing (1871-72) 14 MIA 605 : 20 ER 912
[ii] Kuer Jang Bahadur v. Bank of Upper India Ltd., Lucknow [AIR 1925 Oudh 448]
[iii] (2009) 9 SCC 689
[iv] Judgment dated August 5, 2020 passed in Ex.P No. 275/2012 and 276/2012