Bombay High Court
Bank Of India vs Winston Vaz on 21 March, 1986
Equivalent citations: 1986(2)BOMCR74
JUDGMENT S.P. Pratap, J.
1. Mr. Madon hands over compilation of the (i) dates and events and (ii) copies of three judgments and/or orders of this Court. Mr. Vishwanath for the judgment debtor refuses to accept copy thereof. Compilation given to the Court is taken on record. Objection not to do so is overruled.
2. Affidavit of the judgment debtor taken on record and matter heard on the footing of denial by the judgment creditor. For reasons to follow, judgment debtor's request for leading evidence is rejected. Judgment creditor is not called upon to lead evidence.
3. Contentions raised on behalf of the judgment debtor are on par with those raised by the same learned Counsel on behalf of the judgment debtor's brother in similar proceedings. These contentions, I am constrained to say, are but a continuation of the process of abuse of the Court initiated earlier and characterized as such by the Division Bench in the former proceedings. Facts are eloquent. The judgment creditor-Bank of India's Summary Suit No. 1428 of 1982 inter alia against the present judgment debtor Winston and his brother Mario and their father Mark was decreed ex parte on 11th October, 1982. Motion for setting aside the said decree was dismissed. There was no challenge to the said dismissal. Insolvency notice was thereafter served on the judgment debtor but to no avail. The judgment creditor then filed three insolvency petitions viz., one against the present judgment debtor, one against his brother Mario and one against their father Mark. Notice of motion for setting aside the insolvency notice was dismissed. In the meanwhile all these three person viz., the present judgment debtor, his brother Mario and their father Mark filed Suit No. 1258 of 1984 for setting aside the decree supra. Notice of motion taken out therein inter alia for stay of the insolvency proceedings was also dismissed. The present judgment debtors brother Mario was then adjudicated insolvent in September 1985. His appeal there from failed. The matter is now before the Supreme Court at the stage of special leave petition.
4. Facts and circumstances in the present matter are the same as in the earlier case of the judgment debtor's brother Mario. And the same contentions as were raised in the earlier proceedings are now being raised hereby way of a repeat performance. There is no material or relevant difference between the earlier proceedings of Mario and the present proceedings. Submissions of Mr. Vishwanath here are akin to those made by him before Pendse, J., who by his detail speaking order rejected the same. I see no good reason to take a different view. It is unfortunate that serious charges like fraud and nullity are repeatedly set forth and so lightly. Though a challenge can be raised to a decree which is a nullity or fraudulently obtained, question is whether the present decree can by any stretch be said to be either of these ? Not a single relevant circumstance has been even prima facie shown to even remotely indicate a possibility of the decree being either fraudulently obtained or a nullity. It is hence that I have not permitted the judgment debtor to lead evidence. After all, to what purpose ? It can only compound a hollow claim. When even a prima facie case is not made out, persistent attempt to nevertheless pursue a matter virtually non est can be nothing short of an exercise in utter futility.
5. Mr. Vishwanath referred to Mulla's Law of Insolvency, Third Edition, page 129, in support of his contention that Court has power to go behind a judgment and that a judgment by itself cannot preclude an Insolvency Court from making its own enquiry. In this context he also cited, Jethmal Narandas v. Mahadeo Anandji Dhoria, (1940)42 Bom.L.R. 1078. At page 1081 thereof one finds the following observations :
"The Court must consider whether the petitioning creditor in fact has a good debt, and it is not bound by any decree as between the creditor and the debtor. The debtor may be estopped from disputing the decree, but the Insolvency Court is not estopped."
Now, there can be no dispute on the aforesaid settled position in law. The difficulty of Mr. Vishwanath, however, is the extremely weak factual position of his present case. There is here not even the bare minimal foundation laid for an enquiry and investigation worth the name. There is blissful absence thereof. The need for an insolvency Court to go behind a judgment can arise also in the case of a collusive decree, to defeat and/or defraud the other creditors. But that also is nobody's case here. Moreover, Jethmal's case (supra) was one of a consent decree and, what is more, sufficient particulars were well disclosed in the affidavit itself making out a prima facie case indicating that the said consent decree was obtained by fraudulent suppression of material facts. Such is not in the least the case here. No relevant particulars have been disclosed so as to institute even a prima facie case of fraud and/or misrepresentation. Still further, as observed in J.P. Tiwari v. Bhimraj Harlalka, referred to by Mr. Vishwanath himself :
"Undoubtedly and we wish to make it clear it is discretionary with the Court to go behind the decree and it would be very rarely that the Insolvency Court would exercise that discretion. It would depend upon the circumstances of each case, and we cannot lay down any general principle to guide the discretion of the Insolvency Court."
(vide page 971).
In the present proceedings, no case even prima facie for exercising discretion accordingly is made out. Indeed, in the absence of relevant and material particulars, to nevertheless use judicial discretion to go behind the decree here may as well be legitimately characterised as a perverse exercise thereof.
6. Reference was also made to certain other authorities. In Hiralal Patni v. Shri Kali Nath, , it was observed thus:
"The validity of a decree can be challenged in execution proceedings only on the ground that the Court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seized of the case because the subject matter was wholly foreign to its jurisdiction or that the defendant was dead at the time the suit had been instituted or decree passed, or some such other ground which could have the effect of rendering the Court entirely lacking in jurisdiction in respect of the subject matter of the suit or over the parties to it. But in the instant case there was no such inherent lack of jurisdiction."
To the same effect almost is the ruling in Sunder Das v. Ram Prakash, wherein at page 1204 are the following observations :
"Now, the law is well settled that an executing Court cannot go behind the decree nor can it question its legality or correctness. But there is one exception to this general rule and that is that where the decree sought to be executed is a nullity for lack of inherent jurisdiction in the Court passing it, its invalidity can be set up in an execution proceeding. Where there is lack of inherent jurisdiction, it goes to the root of the competence of the Court to try the case and a decree which is a nullity is void and can be declared to be void by any Court in which it is presented. Its nullity can be set up whenever and wherever it is sought to be enforced or relied upon and even at the stage of execution or even in collateral proceedings. The executing Court can, therefore, entertain an objection that the decree is a nullity and can refuse to execute the decree."
In the aforesaid context, what is the position here ? No better for the judgment debtor. The purported infirmities such as---
(i) awarding interest at a higher rate with quarterly rests and for a longer period;
(ii) summary suit not maintainable on a claim based on account;
(iii) summary suit not maintainable if security is given up, are no such infirmities as to render the decree a nullity. All these infirmities fall severely short of what in law constitutes a nullity or inherent lack of jurisdiction. None of these (infirmities) even if accepted as such have the effect of rendering the Court entirely lacking in jurisdiction in respect of the subject matter of the suit or over the parties to the suit. Nor can any such infirmity lead to the conclusion that the Court, therefore, could not have seizing of the case or that the subject matter is wholly foreign to its jurisdiction. To reiterate then the Supreme Court observation, there is in the present case no inherent lack of jurisdiction. And no question, therefore, of the decree being a nullity. Though in a given case, Court can go behind a decree, conditions pre-requisite therefore are absent in the instant case. It is well to remember that there is in law a world of difference between the two concepts viz., mere infirmity in law and nullity. The former does not per se invalidate the decree; the latter would. The former does not render the decree void and inexecutable; the latter does render it so. The former does not warrant or justify going behind the decree in execution or otherwise; the latter well justifies, indeed enjoins this course. In the former case, the decree is not in the least non-est; in the latter case the decree would indeed be so.
7. Turning to yet another cited ruling viz., Ramkarandas Radhavallabh v. Bhagwandas Dwarkadas, it has been observed thus at page 1145:
"Learned Advocate for the tenant contended that High Court was wrong in its view section 151 had not application to the present case. We are unable to accept this contention. It has been observed by this Court in Manohar Lal v. Hiralal, A.I.R. 1962 Bom. 527 at p. 534:
'The inherent powers are to be exercised by the Court in very exceptional circumstances, for which the Code lays down no procedure.' This a well recognised principle. Rule 4 of Order 37 expressly gives power to a Court to set aside a decree passed under the provisions of that Order. Express provision is thus made for setting aside a decree passed under Order 37 and hence if a case does not come within the provisions of that rule, there is no scope to resort to section 151 for setting aside such a decree."
It is difficult to appreciate the relevance of this ruling to the present case. Same virtually is the position with regard to the next two rulings viz., The State Bank of Saurashtra v. Chitranjan Rangnath Raja & another, which relates to sections 139 and 141 of the Contract Act and Bhurmal Kapurchand v. Premier Machine Tools, A.I.R. 1977 Bom. 305 which relates to Order XXI, Rule 22 of the Code of Civil Procedure read with sections 9(1) and 9-A of the Insolvency Act.
8. Thus, none of the cited authorities redeems the position in which the judgment debtor here is otherwise placed. Indeed, some of these ruling preclude the Court form going behind a decree save and except in circumstances which are totally absent in the present case. It may in passing be mentioned that some of these very authorities were referred to by Mr. Vishwanath before the earlier learned Single Judge and Division Bench then seized of the companion and/or allied proceedings. The repeat performance here has not changed the situation.
9. In all the circumstances, there is no valid answer to the present petition of the judgment creditor. The relief claimed therein is well justified.
Hence order:
10. Petition is made absolute in terms of prayer (a). Order of adjudication as prayed. Usual order of costs.
11. Request for stay of the order of adjudication is rejected. There will, however, be stay of publication till and inclusive of 17th April, 1986 on condition that if any appeal or special leave petition is preferred against this order, forty-eight hours prior written notice in that behalf shall be given to the Attorneys for the judgment creditor and on further condition that the judgment debtor shall not , in the meanwhile, encumber, alienate or dispose of any of his assets.