Telangana High Court
Komuravelli Jayaprakash, vs Ganipisettivenkateshwar Rao, on 18 September, 2024
Author: K. Lakshman
Bench: K. Lakshman
HON'BLE SRI JUSTICE K. LAKSHMAN
CIVIL REVISION PETITION Nos.1832 AND 2141 OF 2024
832
COMMON ORDER:
Heard Mr. Anirudh, learned counsel representing Mr. Boosa Shivachandra, learned counsel for the petitioner in C.R.P. No.1832 of 2024, Mr. Gummala Bhasker Reddy, learned counsel for the petitioners in C.R.P. No.2141 of 2024 and Mr. Gudiseva Narasimha Rao, learned counsel for respondent No.1. Respondent Nos.2 to 13 are not necessary parties as per the cause title in C.R.P. No.2141 of 2024.
2. C.R.P. No.1832 of 2024 is filed by the petitioner - judgment- debtor No.4 in E.P. No.102 of 2020 challenging the order dated 30.04.2024 passed by learned Principal District Judge, Karimnagar in E.P. No.102 of 2020. Challenging the very same order, judgment- debtor Nos.2, 3, 6, 14 and 16 filed C.R.P. No.2141 of 2024.
3. The petitioners in both the revisions are arrayed as judgment-debtor Nos.2, 3, 4, 6, 14 and 16, respectively, while respondent No.1 is the decree-holder in E.P. No.102 of 2020. For the sake of convenience, the parties herein are hereinafter referred to as they were arrayed in E.P. No.102 of 2020.
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4. Originally, the decree-holder filed a suit vide O.S. No.144 of 2015 against the judgment-debtors including the petitioners herein, for recovery of Rs.65,16,588/- along with future interest @ 12% per annum on the principal amount of Rs.54,76,125/- and costs arising out of sale of cotton crop to judgment-debtor No.1 cotton industry. Vide judgment and decree, dated 23.08.2019, learned District Judge, Karimangar, decreed the suit for Rs.65,16,588/- with future interest @ 6% per annum on the aforesaid principal amount from the date of suit till the date of realization, however, dismissed the counter claim made by judgment-debtor No.1.
5. As the judgment-debtors failed to pay the decretal amount, the decree-holder filed an execution petition vide E.P. No.102 of 2020 against judgment-debtor Nos.2, 3, 4, 6, 7, 11, 14 and 16 under Order - XXI, Rules - 11A, 37, 38, 39 and 40 of CPC seeking arrest and detention of judgment-debtor Nos.3, 4, 6, 7, 11, 14 and 16. The decree-holder contended that the aforesaid judgment debtors are rich enough and having sufficient properties/means to pay the decretal amount, but are intentionally evading payment of decretal amount and, therefore, sought to order for arrest and detention in civil prison as per law and after due enquiry in case they fail to pay the decretal 3 KL,J CRP Nos.1832 & 2141 of 2024 amount as per Section - 55, Order - XXI, Rule 11-A read with Rules 37 to 40 of CPC.
6. The judgment-debtor Nos.2, 3, 6, 7, 14 and 16 filed counter opposing the said execution petition contending that the decree-holder did not file any evidence to prove their income. Judgment-debtor No.4 specifically pleaded that judgment-debtor No.1 industry, M/s. Kamakshi Cotton Industries, was a partnership firm. During pendency of O.S. No.144 of 2015, the said firm was dissolved and the properties owned by the firm including the industry, sheds, machinery and other structures with land covered by it were sold to third parties. As against the judgment and decree dated 23.08.2019 in O.S. No.144 of 2015, the judgment-debtors preferred an appeal vide A.S. No.4 of 2021 before this Court and the same is pending. Judgment-debtor No.11 died and judgment-debtor No.4 is not having any properties and he is suffering from colon cancer. Therefore, they cannot be sent for civil prison.
7. During course of inquiry, the decree-holder examined himself as PW.1 and got marked Exs.A1 to A5, whereas, judgment- debtor Nos.4, 2, 3, 6, 16 and 14 were examined themselves as RWs.1 to 6, respectively.
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KL,J CRP Nos.1832 & 2141 of 2024
8. After hearing both sides and on perusal of entire evidence, both oral and documentary, vide order, dated 30.04.2024, learned Principal District Judge rejected the plea of the said judgment-debtors and accordingly issued warrant against judgment-debtor Nos.2, 3, 4, 6, 7, 14 and 16 on deposit of subsistence allowance tentatively for five (05) days.
9. Challenging the said order, dated 30.03.2024, judgment- debtor No.4 and judgment-debtor Nos.2, 3, 6, 14 and 16 filed the aforesaid revisions.
10. As far as judgment-debtor No.4 (C.R.P. No.1832 of 2024) is concerned, he contended as follows:
i) Learned Executing Court failed to conduct enquiry properly with regard to the means of judgment-debtor No.4;
ii) The decree-holder did not show liability of each of the judgment-debtor;
iii) Judgment-debtor No.4 is suffering from colon cancer and is a diabetic and taking treatment since 2016 and, therefore, he cannot be sent to civil prison; 5
KL,J CRP Nos.1832 & 2141 of 2024
iv) The decree-holder did not follow the procedure laid down under C.P.C.; and
v) The appeal is pending against the judgment and decree.
11. As far as judgment-debtor Nos.2, 3, 6, 14 & 16 (C.R.P. No.2141 of 2024) is concerned, they contended as follows:
i) They do not have any source of income to pay the decretal amount and are suffering from various ailments;
ii) The Executing Court failed to fix individual liability; and
iii) The Executing Court also failed to consider pendency of appeal;
12. In the light of the aforesaid rival submissions, it is relevant to note that Order - XXI of CPC deals with 'execution of decrees and orders'. Order - XXI, Rule - 11A of CPC deals with 'application for arrest to state grounds and it says that where an application is made for the arrest and detention in prison of the judgment-debtor, it shall state, or be accompanied by an affidavit stating, the grounds on which arrest is applied for. Burden lies on the decree-holder to show that the judgment-debtor has means and capacity to pay the decretal amount and has been negligent in discharging decretal amount. The said 6 KL,J CRP Nos.1832 & 2141 of 2024 principle was also laid down by the combined High Court of Andhra Pradesh at Hyderabad in Buddana Nageswara Rao v. Yendeevi Sri Anjaneyulu1.
13. As per the said rule, decree-holder has to either state reasons in the execution application or in an accompanying affidavit since in the absence of grounds, the Court cannot take action. In the present case, respondent No.1 - decree-holder filed execution petition stating that the judgment-debtors did not come forward to pay the decretal amount to the decree-holder, judgment-debtors are rich persons having valuable immovable and movable properties at Karimnagar, Peddapally and Godavarikhani. The decree-holder is an old aged person and senior citizen. They are intentionally evading to pay the decretal amount to the decree-holder with a mala fide intention to delay the execution for the further time and to evade the payment. On the said grounds, he sought for arrest and detention of judgment-debtor Nos.2, 3, 4, 6, 7, 11, 14 and 16 and their detention in civil prison.
14. As per Order - XXI, Rule - 11A of CPC, decree-holder either has to state the grounds of arrest/detention in civil prison in the 1 . 2002 (2) ALT 56 7 KL,J CRP Nos.1832 & 2141 of 2024 execution petition itself or file an accompanying affidavit. Thus, filing of an affidavit is only on obligatory but not mandatory. In the present case, the decree-holder filed the execution petition specifically stating the grounds for arrest and detention of the aforesaid judgment- debtors in civil prison. But, the burden lies on the decree-holder to show that the judgment-debtors have the means and capacity to pay the decretal amount and has been negligent in discharging the decretal amount.
15. To prove the said aspects, the decree-holder examined himself as PW.1 and filed Exs.A1 to A5 documents. The aforesaid judgment-debtors examined themselves as RWs.1 to 6. They have not filed any document.
16. Ex.A1 is the certified copy of registered sale deed bearing document No.2153 of 2008, dated 29.08.2008. It was executed by Mr. Bathini Odelu in favour of judgment-debtor Nos.2, 3 and 4. The schedule property mentioned therein is the land admeasuring Ac.1.00 guntas in Survey No.479, situated at Suglampally Sivar of Sulthanabad Revenue Village and Mandal, presently in Peddapalli District. The sale consideration mentioned therein is Rs.1,60,000/-. 8
KL,J CRP Nos.1832 & 2141 of 2024 Ex.A2 is the certified copy of sale deed bearing document No.3918 of 2005, dated 08.08.2005 registered on 29.08.2005 executed by Mrs. Geethabai Sharada and 2 others in favour of judgment-debtor No.11 (who is no more now). The sale consideration mentioned therein is Rs.1,86,000/-. The schedule property mentioned therein is the house bearing No.4-3-210/4, admeasuring 441.38 square yards in Survey No.692, situated at Bhoomnagar, Peddapalli Town and Mandal and also District. Ex.A3 is the certified copy of Gift (Settlement) Deed bearing document No.468 of 2000, dated 27.03.2000 executed by Mrs. Rampyari Bang in favour of her eldest son, Mr. Bajrang Bang, younger brother of judgment-debtor No.3. The schedule property mentioned therein is house bearing No.3-1-46, admeasuring 174.85 square yards, situated at Peddapalli Town, Mandal and District. The value of the said house mentioned therein is Rs.1,32,100/-. Ex.A4 is the another Gift (Settlement) Deed bearing document No.469 of 2000, dated 27.03.2000 executed by Mrs. Rampyari Bang in favour of her eldest son, Mr.Bajrang Bang, husband of judgment-debtor No.15. The schedule property mentioned therein is the house bearing No.3-1-47, admeasuring 27.70 square yards, situated at Peddapalli Town, Mandal 9 KL,J CRP Nos.1832 & 2141 of 2024 and District. The value of the said house mentioned therein is Rs.16,700/-.
17. Ex.A5 is the certified copy of release deed bearing document No.2214 of 2018, dated 28.03.2018. It was executed by the State Bank of India, Peddapalli Branch in favour of judgment-debtor No.2, his wife and another. In the said release deed, it is mentioned that judgment-debtor No.2 and his wife and another repaid an amount of Rs.45.00 lakhs obtained by them as loan by way of cash credit/working capital in the year 2013. The schedule property released in favour of judgment-debtor No.2 is the house bearing No.3- 3-184/32/B/1 on Plot No.114, admeasuring 52 square yards with RCC roof of 450 square feet each in ground floor and first floor, situated at Indira Shopping Complex Locality of Peddapalli Town, Mandal and District. The schedule property of the wife of judgment-debtor No.2 is the open land in Survey Nos.577/1, 577/2 and 577/3, near House No.4-2-14/4, admeasuring 198.79 square yards, situated at Kunaram Sub-Road Locality, Peddapally Town, Mandal and District.
18. The decree-holder by examining himself as PW.1 and by fling the aforesaid Exs.A1 to A5, discharged his burden to show that 10 KL,J CRP Nos.1832 & 2141 of 2024 the aforesaid judgment-debtors have the means and capacity to pay the decretal amount and that they have been negligent in discharging the decretal amount.
19. It is relevant to note that during cross-examination, RW.1 (judgment-debtor No.4) categorically admitted that he got acquaintance with judgment-debtor Nos.2, 3, 6, 7, 14 and 16 through judgment-debtor No.1 firm when they became partners of judgment- debtor No.1 firm. Judgment-debtor Nos.2 and 3 offered to make him partner in judgment-debtor No.1 firm. He invested Rs.60,000/- per 1% share. He is having 5% share in the said firm. Earlier, he had a fertilizer shop at Peddapalli. Judgment-debtor No.2 does Kirana business at Peddapalli. Judgment-debtor No.16 is doing pesticide business. Judgment-debtor No.3 was doing cotton trading under the name and style 'Kamala Cotton'. Judgment-debtor No.6 was earlier doing Rice Mill business. Judgment-debtor No.7 was commission agent. Judgment-debtor No.14 is younger brother of judgment-debtor No.2. He did not know judgment-debtor Nos.2, 3, 6, 7, 14 and 16 are rich and they always travel by Car. His younger brother's wife filed a suit for partition, and he is contesting the suit by filing his written statement. He did not remember that he has admitted that the 11 KL,J CRP Nos.1832 & 2141 of 2024 properties mentioned in the said suit are his own properties. He filed income tax returns prior to 2016. He and other partners obtained term loan and cash credit loan for the sake of judgment-debtor No.1 firm. Loan will be given only on furnishing security. The property of judgment-debtor No.1 firm was sold by the Bank under SARFAESI Act for clearing the loan. He deposed in his earlier case that he gave money for interest to 20 or 30 persons and he gave as part of his business.
20. Likewise, RW.2 (judgment-debtor No.2) during cross- examination admitted that he is residing in H.No.3-3-184/32/B, Peddapalli, and he sold away the said house about five years ago to his daughter and he is staying in the said house along with his daughter. He was the Managing Partner of judgment-debtor No.1 firm. He is having 6% share in the said firm. All the partners together invested an amount of about Rs.1.20 Crores or Rs.1.60 Crores. They have obtained loan for purchase of machinery etc. They borrowed loan amount for purpose of business of judgment-debtor No.1. The partners furnished their private properties towards security at the time of establishment of judgment-debtor No.1 firm and for its business. He furnished the aforesaid house towards security for other loans. 12
KL,J CRP Nos.1832 & 2141 of 2024 The aforesaid house was released from mortgage five years ago at the time of sale of the said house to his daughter. He purchased 200 or 230 square yards of open land vide registered sale deed bearing document No.3076 of 2011, dated 04.05.2011 in the name of his wife, Mrs. Radharani. He purchased open land vide registered sale deed bearing document No.1746 of 1995, dated 10.07.1995, in which he constructed the aforesaid house. He mortgaged these two properties for other business purpose. He cleared the said loans with the amount gained from cotton trading business and got the aforesaid two properties released from mortgage. He has two daughters, who do business.
21. RW.3 is judgment-debtor No.3 and husband of judgment- debtor No.15. During cross-examination, he admitted that judgment- debtor No.16 is his son, who does seed business in Karimnagar. He is residing in the house bearing No.3-1-46, Old Bazar, Peddapalli, which belongs to his younger brother, Mr. Bajarang Bung. His son recently purchased Apartment in Jyothinagar for Rs.85.00 lakhs. Judgment- debtor No.1 was sold for Rs.2.65 Crores. No amount remained after clearing the debts.
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22. RW.4 (judgment-debtor No.6) during cross-examination admitted that he is residing in House No.3-3-195, Shanker Gunj, Peddapalli, from his childhood. The said house belongs to his father. He invested Rs.20-30 lakhs in judgment-debtor No.1 firm in the year 2009-10. They purchased Ac.4.00 of land for establishment of judgment-debtor No.1 and spent Rs.4.00 Crores for purchasing land, machinery etc. for judgment-debtor No.1 firm. He used to look after the labour, machinery and stock. He used to file IT returns individually.
23. RW.5 (judgment-debtor No.16), during cross-examination, admitted that he belongs to business community. He had ancestral land in which his father constructed a house in the year 2004. He is doing seeds business under partnership firm in the name and style 'Durga Devi Traders'. He is working partner in the said business firm. The annual turnover of the said business is Rs.2 to 3 Crores.
24. RW.6 (judgment-debtor No.14), during cross-examination, admitted that he is working as Accountant in Rice Mill, by name Vagdevi Industries at Huzurabad. His father was running Kirana shop at Huzurabad. He is having 5% share in judgment-debtor No.1 firm. He invested Rs.5.00 lakhs in the said firm. 14
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25. As discussed above, burden lies on the decree-holder to show that the judgment-debtors have means and capacity to pay the decretal amount and have been negligent in discharging the decretal amount. On consideration of the said aspects, learned Executing Court gave specific finding that the aforesaid judgment-debtors have means of income and they are intentionally evading to pay the decretal amount to the decree-holder. In paragraph Nos.43, 44 and 46 of the impugned order, the Executing Court categorically held that the evidence of PW.1 and RWs.1 to 6 clearly established that the judgment-debtors are having sufficient movable and immovable properties and they have means to pay the decretal amount. Learned counsel for the judgment-debtors submitted that in another suit filed against the decree-holder by judgment-debtor No.4, the decree-holder was ordered to pay some amount to judgment-debtor No.4, that they have challenged the said decree in appeal, that even if the said amount is taken into consideration, judgment-debtor No.4 can be ordered to pay the amount by deducting the suit amount. The said fact was not raised by the judgment-debtors and the same can be decided once the amount is recovered from the judgment-debtors. With the said observations, the Executing Court held that the decree-holder proved 15 KL,J CRP Nos.1832 & 2141 of 2024 that in spite of having sufficient means to satisfy the decree, the aforesaid judgment-debtors willfully disobeyed the decretal order of the Court and accordingly they are liable to be set to civil imprisonment.
26. It is relevant to note that Order - XXI, Rule - 37 of CPC deals with 'arrest and detention in the civil prison', and it is discretionary power to permit judgment-debtor to show cause against detention in prison. The clear object is that warrant of arrest shall not be issued as a matter of course for the mere asking. Before action, the Court must be fully satisfied that notice was personally served. Where judgment-debtor appears after serviced of notice, the proper course for the Court is to proceed with the enquiry as contemplated in Sub- Section (2) or Rule - 40, make an appropriate order. The coercive process of arrest and detention of a judgment-debtor ought not to be resorted to by an Executing Court in the very first instance even before ascertaining whether the decree can be satisfied by the judgment-debtor. The Executing Court is bound to follow the procedure prescribed under Section - 51 and Order - XXI, Rules - 37 to 41 before committal of the judgment-debtor to civil prison. Before ordering detention of the judgment-debtor, the provisions of affording 16 KL,J CRP Nos.1832 & 2141 of 2024 opportunity of hearing to the judgment-debtor and recording of reasons are mandatory. Where the Court holds inquiry and records finding as to means of judgment-debtor in his absence, the order for sending judgment-debtor to civil prison would be illegal. A person who claims a statutory discharge of the debt cannot succeed unless he proves that he is a debtor. There must be some intentional act on the part of the judgment-debtor, which may give rise to an inference that they are refusing or neglecting to pay the decretal amount. The decree-holder has to demonstrate that the judgment-debtor has willfully with the mala fide intention, to deprive the benefit of the decree, is refusing to pay the decretal amount in spite of having sufficient means to pay.
27. In the light of the aforesaid legal position, coming to the case on hand, as discussed above, learned Principal District Judge decreed the suit in O.S.No.144 of 2015 vide judgment and decree, dated 23.08.2019. Respondent No.1 herein - decree-holder filed the aforesaid execution petition vide E.P. No.102 of 2020 on 17.10.2020. The decree-holder was examined himself as PW.1 and the aforesaid judgment-debtors examined themselves as RWs.1 to 6. It is also apt to note that the judgment-debtors preferred an appeal vide A.S. No.4 17 KL,J CRP Nos.1832 & 2141 of 2024 of 2021 challenging the said judgment and decree. They have also filed an interlocutory application in the said appeal to suspend the operation of the aforesaid judgment and decree. The said I.A. and the appeal are pending. The judgment-debtors failed to get an order in the said interlocutory application. Therefore, on consideration of the said aspects only, conducting enquiry and following procedure laid down under Order - XXI, Rules - 37 to 41, the Executing Court passed the impugned order. Therefore, impugned order is reasoned and well- founded order and it does not deserve interference by this Court in the present revisions.
28. Learned counsel for the petitioner in C.R.P. No.2141 of 2024 placed reliance on the judgment of Madras High Court in T. Dharmalingam v. K.P. Bharathi 2, wherein it was held that procedures laid down under Order - XXI, Rules - 39 and 40 is mandatory and thereafter order of arrest to be passed, as decree-holder has to file execution petition for attachment first and thereafter he can seek for arrest. In the present case, there is no violation of the procedure laid down under Rules - 39 and 40 by the Executing Court. 2 . 2017 SCC OnLine Mad. 8254 18 KL,J CRP Nos.1832 & 2141 of 2024
29. He has also placed reliance on an another judgment of the Madras High Court in V. Ganesa Nadar v. K. Chellathai Ammal 3, wherein it was held that arrest cannot be sought as a lever to force payment without taking recourse to proceedings for attachment and sale of immovable property. In the said case, the judgment-debtor was in a position to pay the amount by installments. The Executing Court took a view that instead of paying the decretal amount in full, the judgment-debtor is making payments only by installments and that since he has waived the right to file a counter he must be held to have the means to pay the decretal debt. Merely because a judgment- debtor possesses immovable property, an order of detention in civil prison cannot be made for his failure to pay. It is open to the decree- holder to file a petition for attachment and sale of the immovable property. The decree-holder in the said case has not taken recourse to those provisions. But, in the present case, the facts are slightly different.
30. As discussed above, there is no violation of the procedure laid down under Order - XXI, Rules - 11A and 37 to 41 of CPC by the Executing Court. On consideration of the entire evidence, the learned 3 . AIR 1989 Madras 8 19 KL,J CRP Nos.1832 & 2141 of 2024 Executing Court passed the impugned order. It is a reasoned and well-founded order. The petitioners failed to make out any ground to interfere with the impugned order by this Court. Both the revisions fails and the same are liable to be dismissed.
31. Both the Civil Revision Petitions are accordingly dismissed confirming the order dated 30.04.2024 passed by learned Principal District Judge, Karimnagar in E.P. No.102 of 2020. In the circumstances of the case, there shall be no order as to costs.
As a sequel thereto, miscellaneous petitions, if any, pending in the revisions shall stand closed.
_________________ K. LAKSHMAN, J 18th September, 2024 Mgr