Andhra HC (Pre-Telangana)
Aditya Electronics vs A.S. Impex Limited And Ors. on 16 February, 2004
Equivalent citations: AIR2004AP321, 2004(2)ALD779, 2004(4)ALT50, IV(2004)BC340
ORDER G. Yethirajulu, J.
1. This revision petition is preferred against the order of the I Additional District Judge, Ranga Reddy District, dated 29.3.2003 in E.A. No. 12 of 2001 in E.P. No. 29 of 2001 in O.S. No. 201 of 2000. The revision petitioner is the decree-holder and the Respondents 1 to 3 are the judgment debtors and Respondents No. 4 to 7 are the garnishees in E.P. No. 29 of 2001.
2. The revision petitioner filed O.S. No. 201 of 2000 for recovery of money against the first respondent represented by Respondents No. 2 and 3. After appearance of the respondents a compromise decree was passed on 24.4.2001 through Lok Adalat and an Award under Section 21 of the Legal Services Authority Act, 1987 was passed directing to pay the amount due to the revision petitioner in 10 equal installments. Under the compromise decree the decree holder undertook to withdraw the complaints lodged in various Courts and the first judgment-debtor undertook to abide by the compromise decree. The judgment-debtor failed to report compliance of the conditions under the compromise decree and they wriggled out from the compromise.
3. The revision petitioner contends that the garnishees were indebted to the first Judgment Debtor and the judgment-debtors 2 and 3 are trying to recover the debt from the Garnishees with an intention to deprive the revision petitioner of its legitimate fruits of the decree. In such an event it will not be in a position to enjoy the fruits of the decree. It is further pleaded that the garnishees are about to disburse monies to judgment-debtors No. 2 and 3. If they succeed in their attempts, he would suffer great loss. Therefore, he prayed to direct the garnishees to withhold payment of Rs. 30,02,996/-.
4. In the counter-affidavit the first respondent mentioned that it is a company with its registered office at New Delhi. It is not carrying on any business or work for gain within the jurisdiction of Ranga Reddy Court. It is not having any movable or immovable properties within the jurisdiction of the said Court. The I Additional District Judge, Ranga Reddy District has no territorial jurisdiction to execute the decree. Therefore, the Execution Petition as well as E.A. No. 12 of 2001 are liable to be dismissed on the ground of lack of territorial jurisdiction.
5. The point for consideration is:
Whether the I Additional District Judge, Ranga Reddy District has no territorial jurisdiction to issue direction to Respondents Nos.4 to 7 to withhold Rs. 30,02,996/- through its order dated 29.3.2003.?
Point:
6. It is an undisputed fact that the decree holder filed Q.S. No. 201 of 2000 on the file of I Additional District Judge's Court, Ranga Reddy District in Andhra Pradesh. Subsequently, there was a compromise between the parties and the suit was decreed in terms of the compromise. Subsequently, the decree-holder filed E.P. No. 29 of 2001 for realisation of the amount with a request to order attachment of the money lying with the Respondents No. 4 to 7 in the capacity of garnishees. The respondents questioned the attachment on the ground that the Additional District Judge's Court, Ranga Reddy District has no territorial jurisdiction to order attachment of the money which is lying with the garnishee whose corporate office is situated at New Delhi and who has no branches or business transactions in Ranga Reddy District.
7. The learned Counsel for the decree-holder contended that in the light of the provisions of the Code of Civil Procedure and in the light of the judgments rendered by various Courts, the lower Court has jurisdiction to order attachment of the amount lying with the garnishee. In this regard, I wish to refer to the relevant provisions of Civil Procedure Code.
8. Section 136(1) of CPC deals with the procedure regarding ordering of the attachment of the property situated outside the district and it reads as follows;
"Where an application is made that any person shall be arrested or that any property shall be attached under any provision of this Code not relating to the execution of decrees, and such persons resides or such property situate outside the local limits of the jurisdiction of the Court to which the application is made, the Court may, in its discretion, issue a warrant of arrest or make an order of attachment, and send to the District Court within the local limits of whose jurisdiction such person or property resides or situate a copy of the warrant or order, together with the probable amount of the costs of the arrest or attachment."
9. Order 38, Rules 5 and 6 deal with attachment before judgment. Rules 5 and 6 read as follows.
Order 38, Rule 5: "Where, at any stage of a suit, the Court is satisfied by affidavit or otherwise, that the defendant, with intent to obstruct or delay the execution of any decree that may be passed against him:
(a) is about to dispose of the whole or any part of his property, or
(b) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Court, the Court may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Court, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the decree or to appear and show-cause why he should not furnish security.
Order 38, Rule 6: Where the defendant fails to show-cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Court, the Court may order that the property specified, or such portion thereof as appears sufficient to satisfy any decree which may be passed in the suit, be attached".
10. Order 21, Rule 46 deals with attachment of a debt, share and other property not in possession of the judgment-debtor and it reads as follows;
Order 21 Rule 46--
(A) Notice to the garnishee, The Court may in the case of a debt which has been attached under Rule 46, upon the application of the attaching creditor, issue notice to the garnishee liable to pay such debt, calling upon him either to pay into Court the debt due from him to the judgment-debtor or so much thereof as may be sufficient to satisfy the decree and costs of execution, or to appear and show-cause why he should not do so.
(B) Order against garnishee Where the garnishee does not forthwith pay into Court the amount due from him to the judgment-debtor or so much thereof as is sufficient to satisfy the decree and the costs of execution and does not appear and show cause in answer to the notice, the Court may order the garnishee to comply with the terms of such notice, and on such order execution may issue as though such order were a decree against him.
11. The learned Counsel for the revision petitioner contended that the properties outside the jurisdiction can be attached. In support of his contention, he relied on the following judgments and requested to order attachment of money lying with the garnishees.
12. In Chinamdas v. Firm Manager, Mahadevappa, , a Division Bench of this Court held that Order 38, Rule 5 and Order 21, Rule 46 read in the light of Section 136 makes it abundantly clear that a Court can attach the properties before judgment notwithstanding that they do not lie within the jurisdiction of the Court in which the suit is filed.
13. In the case covered by the above decision, a decree-holder filed a suit for recovery of money in the District Munsif Court, Adoni, Pending the suit, he applied for attachment of the immovable properties described in the petition schedule and also certain monies in the hands of the trustees who are constituted for the discharge of the debts due by the judgment-debtors who were not in solvent circumstances. The petition was opposed on the ground that as the properties were outside the local limits of the jurisdiction of the Court in which the suit was filed, they could not be attached. The Trial Court overruled the objection and directed attachment of the properties in question. On revision filed by the trustees, the matter was referred to the Division Bench to consider the main controversy whether Order 38, Rule 5 or Order 21, Rule 46 C.P.C. are attracted to the properties situated outside the jurisdiction of the Court in which the suit is instituted.
14. In British Transport Co., Ltd. v. Suraj Bhan, , a Division Bench of the Allahabad High Court held that where a debt is payable within the jurisdiction of the Executing Court, the Executing Court has jurisdiction to proceed against the debt, though the debtor or judgment-debtor resides outside the jurisdiction of the Court.
15. The learned Counsel for Respondent Nos. 1 to 3 submitted that after filing of the Execution Petition the decree holder obtained ad-interim directions in the E.P. on 31.12.2001 and the first respondent learnt about the said order only on 15.3.2002, therefore, the order dated 31.12.2001 requires to be reconsidered and the order against the garnishee has to be vacated. The learned Counsel represented that the office of the first judgment-debtor is not within the territorial jurisdiction of the lower Court. The Judgment Debtor is a limited company, having its registered office at New Delhi. The Execution Petition ought to have been filed for recovery of movable property under Section 16 of the Code of Civil Procedure in the Court within the local limits of whose jurisdiction the property is situated. The same principle is applicable to the Execution Petitions also to enable the Court to implement the orders. In the present case, the judgment-debtor has no place of business within the jurisdiction of the Lower Court and as the cause of action did not arise within Ranga Reddy District, the E.P. cannot be maintained. Since, the decree holder failed to mention as to how much amount the gamishees are liable to pay, they are not liable to pay any amount to the judgment-debtors and the petition is liable to be dismissed.
16. The learned Counsel relied on a judgment of Allahabad High Court reported in British Transport Co., Ltd. (supra) wherein the Allahabad High Court held as follows:
"If the judgment-debtor has no property within the jurisdiction of the Executing Court, that Court may transfer the decree to the Court having jurisdiction where the properties of the judgment-debtor are located. In case of a debt, if the debt is payable within the jurisdiction of the Executing Court, it has to be held that, the "situs" of that debt is within the jurisdiction of the Execution Court and that the Court can, therefore, proceed, against debt by attaching it irrespective of the residence of the debtor by whom that debt is payable to the judgment-debtor."
17. The learned Counsel for the judgment-debtors further contended that the prohibitory order passed against the garnishees is untenable as the "situs" of the debt is not within the jurisdiction of the Court.
18. In Begg Dunlop and Company v. Jagannath Marwari, ILR 30 Cal. 104, a Division Bench of the Calcutta High Court held;
"Where the situs of the debt was not within the jurisdiction of the Execution Court, the Court is not competent to issue a prohibitory order upon a person, resident outside the local limits of its jurisdiction in respect of property also beyond such local limits."
19. In Padmanabha Pillai Bhaskara Pillai v. Bank of Kerala, 1956 Travencore -Cochin 100 it was held :
"It is not competent to a Court in execution of a decree for money, to attach at the instance of the decree holder, a debt payment to the judgment-debtor outside the jurisdiction, by a person not resident within the jurisdiction of the Court".
20. In Kumari Renuka Batra v. Grindlays Bank Limited, , a Single Bench of Punjab and Haryana High Court held as follows:
"Order 21, Rule 46 C.P.C. deals with the mode of attachment of debt, share and other property not in the possession of the judgment-debtor, whereas Order 21 Rule 52, C.P.C. provides attachment of property in the custody of Court or Public Officer. Rule 48 of Order 21 contemplates the attachment of salary or allowances of servant of the Government or railway company or local authority. By making this provision in Order 21, Rule 48 C.P.C."
21. It was further observed therein:
"It has appeared to us that on an examination of the Code of Civil Procedure we must hold that it is the situs of the debt that will decide the jurisdiction of the Execution Court and not the situs of the debtor from whom the debt is payable to the judgment-debtor.
The Executing Court at Amritsar was not competent to issue order of attachment of money in the custody of an officer of the All India Institute of Medical Sciences, situated at Delhi, particularly when there was no evidence that the money was payable at Amritsar and that fact was not denied by the decree-holder."
22. The learned Counsel after citing the above judgments submitted that in view of the principle laid down in the above judgments the order passed by the lower Court is liable to be vacated for want of territorial jurisdiction.
23. The learned Counsel for the Respondents 1 to 3 strongly relied on the following judgments in support of their contention that the Executing Court is not competent to attach the amount lying with the garnishee.
24. In Jagannadh Marwari (supra), a Division Bench of the Calcutta High Court while considering the scope of Order 21 Rule 46 C.P.C. held:
It is not competent to a Court in execution of a decree, for money, to attach, at the instance of decree-holder, a debt payable to the judgment-debtor outside the jurisdiction, by a person not resident within the jurisdiction of that Court.
25. In the case covered by the above decision, the decree-holder made an application for execution of the decree in Burdwan Court and applied for an order of attachment of a sum of Rs. 6,750/- out of the amount alleged to be due to the judgment-debtor from Begg Dunlop & Co., which was carrying on business in the town of Calcutta. The Subordinate Judge issued a prohibitory order under Order 21, Rule 46 CPC, 1908. Against the prohibitory order, an objection was filed by the judgment debtor and the garnishee on the ground that the Burdwan Court had no jurisdiction to attach the money in their hands, as they carried their business in Calcutta and the debt was payable outside its jurisdiction. The learned Subordinate Judge overruled the objection and allowed the execution to proceed. Against the said decision, the objectors moved the High Court and the High Court of Calcutta gave the above ruling setting aside the order of the Subordinate Judge.
26. In Satyapriya Banerjee v. Kundunmuli Babu, AIR 1939 Cal. 428, a Division Bench of the Calcutta High Court while referring to Order 21, Rule 46 held:
A debt payable to the judgment-debtor outside the jurisdiction of the Court by a person not residing within the jurisdiction of the Execution Court cannot be attached.
27. In the case covered by the above decision, the Subordinate Judge, Rajshahi made the judgment-debtor liable to have his pay attached under Order 21, Rule 48 C.P.C. and directed the Accountant General of Bengal to remit Rs. 50/- per month from out of the monthly salary of the judgment-debtor and remit the same until the amount under the decree is satisfied. The Judgment Debtor appealed against that order contending that the salary of the judgment-debtor payable to him within Calcutta as an M.L.A. cannot be attached by a Judge at Rajshahi and an order made under Order 21, Rule 46 cannot bind the Accountant General.
28. Subsequently, the relevant provisions were amended facilitating the Execution Court to attach the salary of an employee in respect of the debt payable within the jurisdiction of the Execution Court, though salary is payable outside the jurisdiction of the Court.
29. In Bulkeesu Begum v. Gonzago, 1961 KLT 827, a Division Bench of the Kerala High Court while referring to Order 21 Rule 46 held:
It is not competent to a Court, in execution of a decree for money, to attach at the instance of a decree-holder, a debt payable to the judgment-debtor outside the jurisdiction, by a person not resident within the jurisdiction of that Court, Not merely the garnishee, but also the judgment-debtor, is entitled to raise the objection as to want of jurisdiction.
30. In British Transport Co. Ltd. (supra), a Division Bench of the Allahabad High Court while referring to Sections 51, 46, Order 21 Rule 46 C.P.C. held as follows:
In the case of garnishee proceedings, the first step that the Execution Court has to take is to make an order of execution of the decree by attachment of the property against which the garnishee proceedings are sought. After such an order has been made, the provisions of Order 21 C.P.C. come into play for the purpose of carrying out that order. ... Order 21 Rule 46 lays down the manner in which the jurisdiction of the Execution Court is exercised and the processes that have to be issued for the purposes of exercising that jurisdiction. In the case of a debt, if the debt is payable within the jurisdiction of the Execution Court, the situs of that debt is within the jurisdiction of the Execution Court and that Court can, therefore, proceed against the debt by attaching it irrespective of the place of residence of the debtor by whom that debt is payable by the judgment-debtor.
31. In M.A.A. Raoof v. K.G. Lakshmipathi, , a Single Bench of the Madras High Court while referring to Order 21 Rule 46 C.P.C. held that the Executing Court can attach shares of a company whose places of business is outside the jurisdiction of the Executing Court, when the judgment debtor is residing within the jurisdiction of that Court.
32. As per the above rulings, a debt payable within the jurisdiction of the Executing Court can be attached even though the judgment-debtor is residing outside the jurisdiction of the Court. A debt payable outside the jurisdiction of the Court and when the judgment-debtor and a garnishee are outside the jurisdiction of the Court, the Executing Court is not competent to attach such debt.
33. In the case on hand, the judgment debtors as well as the garnishees are outside the jurisdiction of the Executing Court and there is no material to show that the debt is payable within the jurisdiction of the Executing Court. The garnishees are located at Delhi and the judgment debtors are also residing at various places outside the jurisdiction of the Executing Court. The first respondent company is carrying on business at Delhi with its factory at Haryana. Respondent Nos.4 to 7-garnishees are having Headquarters at Bangalore, Pune, Delhi, Bombay and Aurangabad respectively. Thus, the first judgment-debtor and garnishees are situated beyond the territorial jurisdiction of the Execution Court.
34. It is clear from the provisions of the Code of the Civil Procedure, that the powers of the Executing Court can be exercised only when the judgment-debtor or his property is within the jurisdiction of the Court with only one exception regarding the attachment of salary. As the judgment-debtor or the garnishee in whose custody the property of the judgment-debtor is there are not within the jurisdiction of the lower Court, the order prohibiting the Respondent Nos.4 to 7 - garnishees from making payment of the judgment-debtor is beyond the jurisdiction of the Court. Therefore, the lower Court rightly held that the garnishee proceedings cannot sustain. In view of the above legal position and in view of the facts and circumstances of the case, there shall be no interference with the order of the lower Court.
35. In the result, the revision petition is dismissed, but under the circumstances without costs.