Gujarat High Court
C.M. Smith And Sons Limited vs R.K. Casting Co. on 16 October, 2019
Equivalent citations: AIRONLINE 2019 GUJ 471
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/15137/2019 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 15137 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA Sd/
and
HONOURABLE MR.JUSTICE VIRESHKUMAR B. MAYANI Sd/
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1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
CIRCULATE THIS JUDGMENT IN THE SUBORDINATE
JUDICIARY
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C.M. SMITH AND SONS LIMITED
Versus
R.K. CASTING CO.
================================================================
Appearance:
MR SALIL M THAKORE(5821) for the Petitioner(s) No. 1
MR ADITYA J PANDYA(6991) for the Petitioner(s) No. 1
MR HARESH H PATEL(611) for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
and
HONOURABLE MR.JUSTICE VIRESHKUMAR B. MAYANI
Date : 16/10/2019
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA)
1. By this application under Article 227 of the Constitution of India, the applicant (judgment-debtor) calls in question the Page 1 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT legality and validity of the order passed by the Principal Senior Civil Judge, Rajkot, dated 20th August 2019 below Exhibits 11 and 15 respectively in the Execution Petition No.10 of 2019.
2. The facts giving rise to this petition may be summarised as under:
3. The respondent herein - original plaintiff instituted the Special Summary Suit No.23 of 2014 against the applicant herein in the court of the Principal Senior Civil Judge, Rajkot, to recover an amount of Rs.1,12,26,500=00 (Rupees One Crore Twelve Lakh Twenty-six Thousand and Five Hundred only). The applicant herein prayed for grant of leave to defend. The same was declined by the court below. The Principal Senior Civil Judge, Rajkot, proceeded to pass the money decree. This decree came to be challenged by the applicant herein before this Court by instituting the First Appeal No.1730 of 2015. Along with the First Appeal, a Civil Application No.9634 of 2015 also came to be preferred for stay of the operation, implementation and execution of the money decree. On 29th January 2016, a coordinate bench of this Court passed the following order:
"ORDER IN FIRST APPEAL :
Heard learned counsels for the parties. The appeal deserves to be admitted as the counsel for the appellant has raised questions qua the limitation and the amount in question not being paid and not agreed between the parties and interest accumulated thereon is concerned. Hence, Admit.Page 2 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019
C/SCA/15137/2019 JUDGMENT ORDER IN CIVIL APPLICATION :
1. The Court has heard learned counsels for the parties and perused the papers. The counsel for the applicant has contended that the entire suit was based upon the ledger account as the invoices and purchases orders were only 4 to 5 produced. This being not in consonance with the provisions of the Indian Evidence Act, especially Sections 65B and 34, the Appeal in fact, deserves to be not only admitted but allowed.
2. The second contention was raised in respect of suit being time barred as the amount claimed was ranging from the period upto the period which according to him had rendered the entire claim being barred by law.
The learned counsel for the applicant has relied upon the following decisions in support of said contention:
i. Judgment reported in AIR 1977 SC 577 in case of M/s. Mechalec Engineers and Manufacturers Vs. M/s. Basic Equipment Corporation;
ii. Judgment reported in AIR 2008 SC 1117 in case of Neebha Kapoor Vs. Jayantilal Khandwala and Ors;
iii.Judgment reported in 2002 (2) GLH 673, in case of State Bank of Saurashtra Vs. M/s Ashit Shipping Services (P) Ltd & Anr;
3. Learned counsel appearing for the applicant further submitted that the so called admission which is said Page 3 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT to be held-out against the defendant cannot be said to be an admission. On its close perusal, the E-mail is said to have been dated 28.5.2014, which was admittedly sent after the limitation was over and looking to Section 18 of the same, it could not have been said to have been so, as to extend the limitation period.
4. Shri Nilesh Pandya, learned advocate appearing for the respondent contended that the leave to defend was filed beyond the period of its filing. The counsel for respondent has invited this Court's attention to leave to defend, more particularly page nos. 58 and 61 and indicated that in light of these averments, the admission is clearly emerging so far as the debt is concerned, coupled therewith, the contents of E-mail is required to be noted, in which, schedule for payment was mentioned, couple with request for bearing with the defendant, in view of market situation.
5. We are of the considered view that as the Appeal is admitted, the question of granting of interim relief is required to be addressed. Looking to averments made in leave to defend application and E-mail, the amount of Rs.43,40,061/-, can be said to be an admitted amount, which is required to be taken into consideration for considering the interim relief to be granted. Hence, the impugned judgment and order is stayed on a condition the applicant depositing the amount of Rs.43,40,061/- before the trial Court within Page 4 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT
4 weeks from today and for the remaining amount, furnish appropriate security to the satisfaction of the trial Court, failing which, the stay shall automatically said to have been vacated.
6. In the result, the Civil Application is disposed of."
4. Thus, it appears that the judgement and decree was ordered to be stayed by this Court on a condition that the applicant herein shall deposit the amount of Rs.43,40,061=00 before the trial court within a period of four weeks from the date of the order. This Court also clarified that if the amount would not be deposited, then the stay shall stand automatically vacated. It is not in dispute that the applicant herein failed to deposit the amount of Rs.43,40,061=00. In such circumstances, the respondent herein proceeded for execution of the decree.
5. It appears that the respondent instituted the Execution Petition No.24 of 2015. The Execution Petition later came to be transferred to the Commercial Court and, upon transfer, it came to be registered as the Execution Petition No.10 of 2019.
6. It appears that the respondent herein wants the immovable properties of the ownership of the applicant situated at Nadiad to be attached for the purpose of execution of the money decree. It is not in dispute that the decree came to be passed by the Principal Senior Civil Judge at Rajkot.
7. It appears that in the first round of the litigation, the executing court at Rajkot passed an order for issue of warrant of attachment. Such order was made a subject matter of challenge Page 5 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT by the applicant herein by filing the Special Civil Application No.7417 of 2016 in this Court.
8. On 3rd May 2016, a learned Single Judge of this Court passed the following order :
"1. Prima facie, it appears that the respondent decree holder moved an application below Exh.11 in Special Execution Petition No.24 of 2015 with a request to issue warrant for attachment of movable/immovable properties of the petitioner. The said application was kept for hearing on 12.04.2016. On 22.03.2016, the respondent decree holder made an application to take the matter on board and presented an application below Exh.15 for identical relief, as prayed for, in application Exh.11. It seems that copy of application Exh.15 was provided to the learned advocate appearing for the petitioner but, the learned Executing Court has not heard any submissions of the petitioner nor granted any time and, in his absence, passed order below Exh.15. Upon perusal of Rojkam submitted by learned advocate for the petitioner, which is ordered to be taken on record, it appears that learned advocate for the petitioner was not present when order below Exh.15 has been passed and thus, the impugned order has been passed without extending any opportunity to the petitioner.
2. Apart from it, it is a matter of fact that the decree under execution was passed by the competent Court at Rajkot whereas, warrant issued by the learned trial Judge as per order dated 22.03.2016 came to be executed for attachment of movable/immovable properties situated at Nadiad. Thus, Page 6 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT considering the provisions of Section 39(4) of the Code of Civil Procedure, the learned Executing Court is not authorized to issue such warrant for executing the decree against any property outside the local limits of its jurisdiction. Admittedly, warrant issued pursuant to application Exh.15 came to be executed in respect of properties situated at Nadiad and, therefore, present petition deserves consideration. Hence, issue notice to the respondent for final disposal, making it returnable on 26.07.2016. Meanwhile, ad-interim relief in terms of para 18(B) is granted. Direct service is permitted. The learned advocate for the petitioner is permitted to file additional documents with the Registry of this Court."
9. Later, the Special Civil Application No.7417 of 2016 came to be finally disposed of vide order dated 18 th November 2016. The order reads thus :
"1. By way of the present petition under Article 227 of the Constitution of India, the petitioner challenges the order dated 22.03.2016 passed by the learned 12 th Additional Senior Civil Judge, Rajkot below Exh.15 in Special Execution Petition No.24 of 2015.
2. Learned advocate Mr.Nilesh Pandya appearing for learned advocate Mr.H.H. Patel for the respondent, upon instructions, states at bar that the order passed below Exh.15 may be quashed and set aside and the learned trial Judge may be directed to hear application Exhs.11 and 15 moved in Special Execution Petition No.24 of 2015 afresh and pass appropriate order after hearing both sides.Page 7 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019
C/SCA/15137/2019 JUDGMENT
3. As against this, learned advocate Mr.S.M. Thakore for the petitioner makes a request that the petitioner has issued cheque for a sum of Rs.10 lacs pursuant to order passed by the learned Executing Court on 22.03.2016 and that, the amount received through the said cheque and other cheques obtained during the course of execution of decree, more particularly, placed on record at page Nos.79 to 82 to the present petition, may be ordered to be returned back to the petitioner.
4. In light of the statement made at bar, order dated 22.03.2016 passed by the learned 12th Additional Senior Civil Judge, Rajkot below Exh.15 in Special Execution Petition No.24 of 2015 is hereby quashed and set aside and the learned Executing Court is directed to decide application Exhs.11 and 15 afresh and pass appropriate order after hearing both sides. So far as request to return the amount of cheque is concerned, the said request is kept open to be agitated before the learned Executing Court. The learned Executing Court is directed to consider such request while deciding application Exhs.11 and 15 afresh. Meanwhile, the respondent shall not deposit the cheques issued by the petitioner for execution of decree till final disposal of application Exhs.11 and 15.
5. It is made clear that this Court has not examined application Exhs.11 and 15 on merits and the learned Executing Court shall decide the same on merits uninfluenced by the observations recorded in the impugned Page 8 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT order as well as concessional statement made at bar by the learned advocate appearing for the respondent. Not only that, the learned Executing Court shall pass appropriate order of refund of cheque amounts realized while executing order dated 22.03.2016 and also order to return unrealized cheques to the petitioner, if application Exhs.11 and 15 are decided in favour of the petitioner.
6. In view of the above observation and direction, present petition stands disposed of. Direct service is permitted.
Order in Civil Application Learned advocate for the applicant does not press this application.
Accordingly, present application stands disposed of as not pressed."
10. Thus, the matter came to be remitted to the court at Rajkot. The Principal Senior Civil Judge, Rajkot, once again adjudicated the applications Exhibits 11 and 15 respectively and proceeded to pass the impugned order. The impugned order passed by the Principal Senior Civil Judge, Rajkot, reads thus :
"8. The judgements produced by the defendant side can established that the plea can be considered at any stage, but it is to be noted that the forum is not proper as the decree was passed by Principal Senior Civil Judge and the defendants are producing their plea at the same forum.Page 9 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019
C/SCA/15137/2019 JUDGMENT Therefore, that is not proper forum and cannot be considered on merits.
9. Now, perusing the records and proceedings of the present execution petition, it appears that the present plaintiff has filed this applications for issuance of attachment warrant against the defendant and in turn after due process to the defendants and the defendant has not remained present in the Court, therefore, this Court has ordered to issue Attachment Warrant against the present defendant. By aggrieved with the said order the defendant filed Special Civil Application No.19631 of 2018 in the Hon'ble High Court of Gujarat and thereafter, the defendant has filed objections against the applications along with objections against the present execution petition.
10. It is the main contention of the original defendant that the decree in Special Summary Suit No. 23 of 2014 is illegal as the suit was not filed in proper form. But considering the case on hand, the defendant has raised this contention at the stage of execution of decree and not in proper forum being the Decree was passed by Senior Civil Judge at Rajkot and challenged the decree at the same forum. Therefore, the plea was not proper and cannot be allowed without going into the merits. The defendant has also raised some other contentions and specially stated that the defendant has issued total of 10 cheques to the plaintiff, out of which one cheque of Rs.10,00,000/- was already satisfied and therefore, the execution petition is bad in law. But in my considered view, when the decree was passed Page 10 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT against the defendants, they have to pay the total decreetal amount as decided and this all are look like delay tactics.
11. Therefore, considered all the facts and circumstances of this case on hand and even considered the fact that the Attachment Order passed below Exh.11 and Exh.15 was passed after due process of law and the defendant was not remained present at any stage, but when the Attachment Warrant was issued the defendant went to Hon'ble High Court of Gujarat and thereafter, filed objections against the present applications along with against the execution petition, which is only delay tactics and therefore, considering all the facts, it is to be believed that the Attachment Order was issued in true spirit of law and after following proper procedure and hearing of the defendant was not made as the defendant was not remained present on the fixed dates and even considering the objections of the defendant, objections are baseless and cannot be considered at this stage. Therefore, the order passed below Exh.11 and Exh.15 earlier stands confirmed."
11. It is very distressing to read para-11 of the impugned order, more particularly, the underlined portion. We are saying so, because the Principal Senior Civil Judge, Rajkot, was directed by this Court to re-hear the applications Exhibits 11 and 15 respectively and pass a fresh order after hearing the parties concerned.
12. It appears from what has been observed in para-11 that the Principal Senior Civil Judge, Rajkot, has tried to justify its Page 11 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT first order which was passed and later came to be quashed by this Court.
13. Be that as it may, today we are called upon to examine the legality and validity of the impugned order dated 20 th August 2019. If the impugned order is affirmed, the legal effect of the same would be that the attachment warrant issued by the executing court could be executed.
14. As noted above, the money decree in the Summary Suit came to be passed by the court at Rajkot. The immovable properties of the applicant (judgment-debtor) sought to be attached are situated at Nadiad. It comes to this that an attachment warrant issued by the court at Rajkot is sought to be enforced for the purpose of attaching the properties situated at Nadiad.
15. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the question that arises for determination in this petition is, whether in view of the insertion of sub-section (4) to Section 39 of the Code, the court at Rajkot has the jurisdiction to issue warrant of attachment for the purpose of taking possession of the property for sale of the same notwithstanding the fact that such property is situated beyond the territorial limit of the court at Rajkot.
16. If the court below would have taken little pains to look into Section 39 of the CPC, then probably the impugned order might not have been passed. In fact, such a hint was given by this Court itself in the order dated 3rd May 2016 passed in the Page 12 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT Special Civil Application No.7417 of 2016. Despite the same, the court below has committed the very same mistake.
17. In order to appreciate the aforesaid question, the provisions contained in Sections 38 and 39 of the Code are relevant and quoted below :
"38. Court by which decree may be executed.- A decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution."
"39. Transfer of decree.- (1) The Court which passed a decree may, on the application of, the decree-holder, send it for execution to another Court a [of competent jurisdiction,-
(a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain, within the local limits of the jurisdiction of such other Court, or
(b) if such person has no property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property within the local limits, of the jurisdiction of such other Court, or
(c) if the decree directs the sale or delivery of immovable property situate outside the local limits of the jurisdiction of the Court which passed it, or
(d) if the Court which passed the decree considers for any other reason, which it shall record in writing, that the decree should be executed by such other Court.Page 13 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019
C/SCA/15137/2019 JUDGMENT (2) The Court which passed a decree may of its own motion send it for execution to any subordinate court of competent jurisdiction.
(3) For the purposes of this section, a Court shall be deemed to be a Court of competent jurisdiction if, at the time of making the application for the transfer of decree to it, such Court would have jurisdiction to try the suit in which such decree was passed.
(4) Nothing in this section shall be deemed to authorise the Court which passed a decree to execute such decree against any person or property outside the local limits of its jurisdiction."
18. A conjoint reading of the aforesaid provisions makes it clear that a decree can be executed either by the court which passed the decree or the one to which it is sent for execution. The court which passed the decree on an application of the decree-holder may transfer the decree to another court having pecuniary jurisdiction to entertain the suit in any of the circumstances mentioned in sub-clauses (a) to (d) of Section 39(1) of the Code. Apart from the application of the decree-holder for transfer, the original executing court can also of its own motion send it to any subordinate court of competent jurisdiction for execution.
19. Sub-section (4) of Section 39 which has been incorporated by way of an amendment is couched in the negative form and, Page 14 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT thus, is mandatory which debars the court which passed the decree to execute the decree against any person residing or carrying on business or the property situated beyond the territorial limits of the same.
20. Thus, after the amendment of the said provision of Section 39, there is no scope of exercising the jurisdiction for execution at the instance of the original court which passed the decree if the person or the property, as the case may be, against which the decree is sought to be enforced, is not available within the territorial limit of the original court at the time of execution, subject to only two exceptions as provided in Order 21, Rules 3 and 48 of the Code. According to the provisions contained in Order 21, Rule 3 of the Code, where immovable property forms one estate or tenure situated within the local limits of the jurisdiction of two or more courts, any one of such courts can attach and sell such estate or tenure. Similarly, according to Order 21, Rule 48 of the Code, where the property to be attached is the salary or allowances of a servant of a Government or of a servant of a Railway company or local authority which is established by a Central, Provincial or State Act or a Government Company as defined in Section 617 of the Companies Act, 1956, whether the judgment-debtor or the disbursing officer is or not within the local limits of the court's jurisdiction, the court is vested with authority subject to Section 60 of the Code under the said provisions to pass necessary order as provided therein.
21. Although the said provisions are inconsistent with sub-section (4) of Section 39 of the Code, the Supreme Court in the case of Salem Bar Association v. Union of India (AIR 2005 SC Page 15 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT 3353), has made the following observations in that connection :
"Section 39 does not authorise the Court to execute the decree outsides its jurisdiction but it does not dilute the other provisions giving such power on compliance of conditions stipulated in those provisions. Thus, the provisions, such as, Order XXI, Rule 3 or Order XXI, Rule 48 which provide differently, would not be effected by Section 39(4) of the Code."
22. Thus, the restriction imposed by Section 39(4) of the Code is relaxable only to the extent indicated above which is provided in the Code itself.
23. Before the insertion of sub-section (4), the judicial pronouncement of the Calcutta High Court in the decision of the case of Haridas Basu v. National Insurance Company Ltd., reported in AIR 1932 Cal 213, clearly held at page 214 (column I) as follows :
"The executing Court, like the Court entertaining a suit (except in case of breach of contract) must have territorial jurisdiction over the subject matter against which execution is sought. Where it has no such jurisdiction the provisions of Section 39 Civil P.C. must apply, that is to say, the executing Court should send this application for execution to any other Court which has such territorial jurisdiction. The word "may"
used in Section 39 does mean that it is in the discretion of the Court which passed the decree either to execute the Page 16 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT decree itself or to send this application for execution to another Court where the property against which execution is sought is situated outside the jurisdiction of the Court which passed the decree. The discretion given there indicates that the Court should send the application for execution to another Court where it thinks that the decree is executable in the way prayed for.
If the movable property such as money against which execution is asked for and not within the territorial limits of the executing Court, the only other way in which that Court may have jurisdiction to execute the decree is when the person against whom execution is sought is or resides within the jurisdiction of that Court. Except these or one of these circumstances exist or exists the executing Court has no jurisdiction to seize property which is not within its territorial jurisdiction and where the person against who execution is sought does not reside within its territorial jurisdiction."
24. The plain reading of Section 39 of the Code would indicate that the decree may be executed by the court which passed it or by the court to which it is send for execution. Sub-section (1) of Section 39 sets out a condition in which a decree may be transferred. Clause (a) provides for transfer in case the judgment debtor resides or carries on business within the jurisdiction of the other court. Clause (b) provides a situation where the judgment debtor does not have sufficient property within the jurisdiction of the court which passed the decree. Clause (c) contemplates a situation where the decree is for sale or delivery Page 17 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT of an immovable property situated outside the jurisdiction of the court which passed the decree. Clause (d) provides that where the court transfers the decree for other reasons, the same be recorded in writing. It would be seen from the foregoing that transfer is contemplated on the existence of any of the specified circumstances in clauses (a), (b), (c) and (d).
25. When the property sought to be proceeded against, is outside the jurisdiction of the court which passed the decree acting as the executing court, there was a conflict of views earlier, some courts taking the view that the court which passed the decree and which is approached for execution cannot proceed with the execution but could only transmit the decree to the court having jurisdiction over the property and some other courts have taken the view that it is a matter of discretion for the executing court and it could either proceed with the execution or sends the decree for execution to another court. However, such conflict was set at rest by the Amendment Act No.22 of 2002 w.e.f. 1st July 2002, by adopting the position that if the execution is sought to be proceeded against any person or property outside the local limits of the jurisdiction of the executing court, nothing in Section 39 of the Code shall be deemed to authorize the court to proceed with the execution. In such circumstances, it cannot be said to be a matter of discretion for the court either to proceed with the execution of the decree or to transfer it for execution to the court within the jurisdiction of which the property is situated.
26. In the aforesaid context, we may refer to a decision of the Supreme Court in the case of Mohit Bhargava v. Bharat Page 18 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT Bhushan Bhargava and others, reported in AIR 2007 SC 1717. We quote the relevant observations thus :
"4. We shall first deal with the objection of the decree holder to the transfer of the execution to the court at Indore having jurisdiction over the property sought to be brought to sale. The decree holder who appeared in person as also the counsel who was appearing on his behalf in Petition for Special Leave to Appeal (Civil) No. 7742 of 2006 argued that Section 39(4) of the Code as amended in 2002, was not attracted since this was not a case to which Section 39(1) was applicable. It was contended that the court which passed the decree had the jurisdiction to execute the decree and the decree holder had approached that court for execution of the decree. There was no defect in jurisdiction in seeking to enforce the decree through the court which passed the decree. It was submitted that the decree was being executed by the present court at Gwalior only because of the abolition of the court before which the execution petition was originally filed and the High Court misunderstood the factual position while coming to the conclusion that Section 39(4) was attracted. On behalf of the judgment debtor it was pointed out that though normally it is correct to say that the court which passed the decree has the jurisdiction to execute the decree, the moment the decree holder sought to execute such a decree against property lying outside the jurisdiction of that court, Section 39(4) of the Code was attracted and the court was obliged to transfer the decree for execution to the proper court. Section 42 of the Code was referred to. Counsel further contended Page 19 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT that earlier, in terms of Section 39(1) of the Code, a discretion was vested in the court, either to proceed with the execution of the decree or to transfer the same to another court as understood by some of the decisions. There was a conflict of judicial opinion. The legislature had therefore stepped in with an amendment in the year 2002 curtailing that discretion and introducing sub-section (4) in Section 39 of the Code making it clear that any attempt of the court to proceed with the execution against a property outside the jurisdiction of that court, would be one without authority and this legislative intent had been properly understood by the High Court when it transferred to the decree to another court. Both sides brought to our notice Salem Advocate Bar Association, T.N. Vs. Union of India [2005 (6) SCC 344) with particular reference to paragraphs 22 to 24 dealing with Section 39 of the code.
5. In that decision, clarifying the fields of operation of Order XXI Rule 3, Order XXI Rule 48 and Section 39 of the Code, this Court stated:
"Section 39 does not authorise the court to execute the decree outside its jurisdiction but it does not dilute the other provisions giving such power on compliance with the conditions stipulated in those provisions. Thus, the provisions, such as, Order 21 Rule 3 or Order 21 Rule 48 which provide differently, would not be affected by Section 39(4) of the Code."
6. There cannot be any dispute over the proposition that the court which passed the decree is entitled to execute the Page 20 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT decree. This is clear from Section 38 of the Code which provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution. Section 42 of the Code indicates that the transferee court to which the decree is transferred for execution will have the same powers in executing that decree as if it had been passed by itself. A decree could be executed by the court which passed the decree so long as it is confined to the assets within its own jurisdiction or as authorised by Order XXI Rule 3 or Order XXI Rule 48 of the Code or the judgment debtor is within its jurisdiction, if it is a decree for personal obedience by the judgment debtor. But when the property sought to be proceeded against, is outside the jurisdiction of the court which passed the decree acting as the executing court, there was a conflict of views earlier, some courts taking the view that the court which passed the decree and which is approached for execution cannot proceed with execution but could only transmit the decree to the court having jurisdiction over the property and some other courts taking the view that it is a matter of discretion for the executing court and it could either proceed with the execution or send the decree for execution to another court. But this conflict was set at rest by Amendment Act 22 of 2002 with effect from 1.7.2002, by adopting the position that if the execution is sought to be proceeded against any person or property outside the local limits of the jurisdiction of the executing court, nothing in Section 39 of the Code shall be deemed to authorise the court to proceed with the execution. In the light of this, it may not be possible to accept the contention that it is a Page 21 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT matter of discretion for the court either to proceed with the execution of the decree or to transfer it for execution to the court within the jurisdiction of which the property is situate.
7. Pending a suit, the court approached with the suit, may have jurisdiction to order attachment of a property even outside its jurisdiction. In execution, under Order XXI Rule 54 of the Code, it may also have jurisdiction to order attachment of the property prohibiting the judgment debtor from transferring or charging the property in any way when it exercises its jurisdiction over the judgment debtor though not over the property itself. It could in such a case issue a percept in terms of Section 46 of the Code and thereupon, the court to which the percept is sent, has to actually attach the property in the manner prescribed. Section 136 of the Code provides for an order of attachment in respect of a property outside the jurisdiction of the court and sending the order of attachment to the district court within whose local limits the property sought to be attached, is situate as provided for therein. But Section 136 clearly excludes execution of decrees from within its purview. An execution against immovable property lying outside the jurisdiction of the executing court is possible in terms of order XXI Rule 3 of the Code which governs a case where the particular item of immovable property, forms one estate or tenure situate within the local limits of jurisdiction of two or more courts, and one of those courts is approached for execution of the decree against that property. In a case where Order XXI Rule 3 has no application, the position seems to be that if a decree holder wants to proceed against a property situate Page 22 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT outside the jurisdiction of the court which passed the decree, he has to get the decree transferred to the appropriate court for execution on moving the executing court in that behalf. Whatever doubts there might have been earlier on this question, must be taken to have been resolved by the introduction of sub-section (4) of Section 39 of the Code which is a mandate to the executing court to desist from proceeding against a property situate outside its jurisdiction, unless it be a case coming under Order XXI Rule 3 of the Code.
8. In the case on hand, the property that is sought to be sold in execution of the decree for dissolution is not a property of the partnership. It is not a partnership asset held by the court at Gwalior or within the jurisdiction of the court at Gwalior. Order XXI Rule 50 of the Code is, therefore, not attracted. What is sought to be done by the decree holder is to seek the sale of a property belonging to the judgment debtor so as to realise the fruits of his decree. Since that property lies outside the jurisdiction of the court at Gwalior, the executing court was not correct in over ruling the objection of the judgment debtor regarding the absence of jurisdiction in the Gwarlior court to order sale of the property outside its jurisdiction. The High Court was, therefore, justified in interfering with that order and in transferring the decree to the court having jurisdiction over the property that is sought to be proceeded against by the decree holder. We, therefore, see no infirmity in that part of the order of the High Court sought to be challenged before us by the decree holder."
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27. In view of the above, it is clear that the Principal Senior Civil Judge at Rajkot, as an executing court and also as a court which passed the original decree, could not have issued warrant for attachment of the properties of the applicant (judgment debtor) situated at Nadiad.
28. In fact, this entire controversy could have been avoided if the respondent, at the very first instance, would have preferred an application under Section 39 of the CPC for transfer of the decree to the court where the immovable property of the judgment debtor is situated.
29. However, at this stage, we would like to say something for the guidance of the subordinate courts.
30. Order 21, Rule 41(1) of the Code is the provision which needs to be looked into and kept in mind. It reads thus :
"41. Examination of judgment-debtor as to his property,- (1) Where a decree is for the payment of money the decree-holder may apply to the Court for an order that -
(a) the judgment-debtor or
(b) (where the judgment-debtor is a corporation), an officer thereof, or
(c) any other person, be orally examined as to whether any or what debts are owing to the judgment-debtor and whether the Page 24 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT judgment-debtor has any and what other property or means of satisfying the decree; and the Court may make an order for the attendance and examination of such judgment-debtor, or officer or other person, and for the production of any books or documents."
31. A perusal of the aforesaid rule would clearly show that where there was a decree for payment of the money, the decree holder may apply to the court for an order that the judgment-debtor be orally examined as to whether any or what debt are owing to the judgment-debtor and whether the judgment-debtor has any and what other property or means of satisfying the decree. The court may make an order for attendance and examination of the said judgment-debtor and for production of any books or documents. The question of transferring the execution proceeding would only arise upon examination of the judgment-debtor in the court on the question as to whether he holds any property within the territorial jurisdiction of the court at Rajkot and as to whether he has any further debts within the territorial jurisdiction of the court at Rajkot. Without this question being answered in favour of the judgment-debtor, i.e. to the effect that the entire property of the judgment-debtor is outside the territorial jurisdiction of the court at Rajkot, the question of transferring the decree may not even arise at this stage.
32. At least one thing is clear that the impugned order is not tenable in law and it will have to be quashed and set-aside.
33. In the result, this petition succeeds and is hereby allowed. The impugned order passed by the Principal Senior Civil Judge, Page 25 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019 C/SCA/15137/2019 JUDGMENT Rajkot, dated 20th August 2019 below Exhibits 11 and 15 respectively in the Execution Petition No.10 of 2019 is hereby quashed and set-aside.
34. However, we reserve the liberty for the respondent (decree holder) to prefer an application in the court which passed the decree against the applicant for transfer of the decree to the court within whose territorial jurisdiction the immovable properties of the applicant are situated. In fact, clause (2) of Section 39 also provides that the court which passed a decree may of its own motion send it for execution to any subordinate court of competent jurisdiction. In other words, while sub-section (1) deals with transfer to another competent court having jurisdiction or assets being located within its jurisdiction, sub-section (2) empowers the court passing the decree on its own motion to transfer it for execution to any subordinate court of competent jurisdiction. Sub-section (2) confers a suo motu power to assign a decree for execution of its own motion to any subordinate court. The exercise of the power under sub-section (2) of Section 39 of the Code, to send the decree for execution to a subordinate court can be exercised without meeting the requirements of sub-clauses (a) to (d) under sub-section (1) of Section 39 of the Code.
35. Mr.Pandya, the learned counsel appearing for the respondent, submitted that he would advise his client to prefer an appropriate application at the earliest under Section 39 of the Code for transfer of the decree. If any such application is preferred, the court concerned shall pass appropriate order at the earliest after giving opportunity of hearing to the other side.
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36. With the above, this petition is disposed of. Rule made absolute to the aforesaid extent.
(J. B. PARDIWALA, J.) (VIRESHKUMAR B. MAYANI, J.) /MOINUDDIN Page 27 of 27 Downloaded on : Sat Oct 19 00:01:45 IST 2019