Calcutta High Court
Mrs. K. Saroja Nakshatri vs Sadasukh Kabra & Company on 11 February, 1994
Equivalent citations: AIR1995CAL80, (1995)1CALLT27(HC), AIR 1995 CALCUTTA 80, (1995) 1 CALLT 27
ORDER
1. The instant application has been made by the judgment debtor under Order 41, Rule 6 (1) of the Code of Civil Procedure. Order 41, Rule 6 provides as hereunder:--
"6(1) Where an order is made for the execution of a decree from which an appeal is pending, the Court which passed the decree shall, on sufficient cause being shown by the appellant, require security to be taken for the requisition of any property which may be or has been taken in execution of the decree or for the payment of the value of such property and for the due performance of the decree or order of the Appellant Court, or the Appellate Court may for like cause direct the Court which passed the decree to take such security.
(2) Where an order has been made for the sale of immoveable property in execution of a decree, and an appeal is pending from such decree, the sale shall, on the application of the judgment-debtor to the Court which made the order, be stayed on such terms as to giving security or otherwise as the Court thinks fit until the appeal is disposed of."
2. The petitioner judgment-debtor, made an application under Sections 30 and 33 of the Arbitration Act, 1940 inter alia for setting aside the award. The said application of the petitioner was dismissed by an order dated 9th March, 1992. Thereafter a decree was passed in terras of the award, by the Court taking Arbitration matters on 7th May, 1993. The petitioner thereafter preferred an appeal from the order dated 9th March, 1933 whereby the petitioner's application for setting aside the award was dismissed. There have been several proceedings in the said appeal and the matter with respect to the said appeal went up to the Hon'ble Supreme Court. A Special Leave Petition was made by the decree-holder from the order of the Division Bench of this Court dated 23rd September, 1993. The appeal before the Supreme Court being Civil Appeal No. 7599 of 1993 (M/s. K. Saroja Nakshtri v. Sadasukh Kabra & Co.) was disposed of by an order dated November 26, 1993 which is inter alia to the following effect:--
"Special Leave granted."
"We, therefore, set aside the impugned order dated 23rd September, 1993 and remit the matter to the High Court to-be considered as Review Application against the order of 21st June, 1993. We would like the High Court to dispose of this Review Application at an early date as execution proceedings are in progress. We think it would be in order if the Review Application i.s disposed of within a month's time without raising the question of delay since the petition has already been filed. The appeal will stand disposed of accordingly with no order as to costs."
3. As a result of the said order of the Hon'ble Supreme Court the matter now stands remitted to this Court to be considered as review application against the order dated 21st June, 1993. I understand from the parties that the said review application is still pending for disposal.
4. During the pendency of the appeal aforesaid as preferred by the judgment debtor, the decree holder on or about 11th August, 1993 applied for execution of the said decree and from time to time various orders were passed in the said execution proceeding. The Executing Court being the Interlocutory Bench of this Court, which takes execution applications appointed a Receiver over the membership card of the judgment debtor of the Calcutta Stock Exchange with a direction upon the Receiver to sell the same and also for withdrawing the security deposit of the judgment debtor lying with the Calcutta Stock Exchange. From the order made in execution an appeal was preferred by the judgment debtor on 2nd September. 1993 and as already stated above the petitioner during the pendency of the said appeal and pursuant to order dated 2nd September, 1993 passed by the Hon'ble Appeal Court, paid a sum of Rs. 2,00,000/- to the decree holder without prejudice to the rights and contentions of the parties. I understand that the temporary stay granted by the Appeal Court in the appeal from the order made in execution stood vacated but the application for stay as also the appeal from the order made in execution is still pending before the Hon'ble Appeal Court.
5. According to the petitioner judgment debtor the said card of the petitioner of the Calcutta Stock Exchange is valued at not less then Rs. 50,00,000/-. According to the petitioner the said card is not early available in market and in the event the said card is sold there is no possibility of restitution in the event the petitioner succeeds in the pending proceeding in terms of the order of the Hon'ble Supreme Court. According to the petitioner, the decree holder is a house-wife. The husband of the decree holder is an employee of Tata Engineering Locomotive Co. Ltd. at Jamshedpur. According to the petitioner in the even of payment of decretal dues either by the petitioner or by sale of the said card to the decree holder, the said decree holder will not be able to restitute the same to the petitioner, in case the petitioner ultimately succeeds in the pending appeal and/or the review application. The petitioner relied on a full bench judgment of this Court reported in AIR 1929 Cal 689 (Taleb Ali v. Abdul Aziz) as also thejudgments (Scottish Union National Insurance Co. v. Sm. Saraswati Sajnani) and (P. C. Ray & Co. (India) Pvt. Ltd. v. Union of India) for the proposition that if the petitioner succeeds in the said review application as also ip the said appeal then and in that event, the decree passed pursuant to the judgment upon, award by the Arbitration Court will also stand set aside and/ or can be set aside by the Appeal Court.
6. He also relied on the judgment (Dhirendra Nath Roy v. Sailaj Kumar Bose) where a Division Bench of this Court held as follows :--
"Where an order has been made for sale and an application under Order 41, Rule 6 has been made to the Court, the Court should stay the sale on suitable terms and the Court must consider what terms are suitable. The fact that the stay has been refused under Order 41, Rule 5 does not justify the Court in refusing to exercise the jurisdiction vested in it under Order 41, Rule 6 : 44C WN 701, Rel. on."
7. He also relied on another judgment of another Division Bench of the Court reported in AIR 1940 Cal 543 (Murari Mohan Bandury v. Krishnapada Bandury), where it was held as follows:--
"Under the provisions of O.41, R. 6(2) the Court which passed the decree has full powers to stay a sale on taking security from the judgment debtor. It need not, and ought not to, grant a limited stay order and ask the judgment debtor to obtain a further order of stay from High Court."
8. He also relied on the judgment reported in AIR 1940 Madras 82 (Rukmani Ammal v. Subramania Sastrigal), where a Divisional Bench of Madras High Court while considering the provisions of order 41, Rule 6 Sub-rule (2) observed held as follows :--
"Sub-rule (2) of Rule 6 of Order 41 is quite clear that when an order has been made for the sale of immoveable property in execution of a decree and an appeal is pending from such decree, the sale shall, on the application of the judgment-debtor to the Court which made the order, be stayed on such terms, as to giving security or otherwise as the Court thinks fit until the appeal is disposed of. There is no limit to the discretion of the Court in imposing terms and the Court is not without power to deal with a vexatious judgment debtor if the Court is obliged to stay a sale when such an application is made. If the court does not stay but proceeds to sell, the Court commits what is more than an irregularity. It amounts clearly to an illegality."
9. Mr. P. K. Das, Learned Counsel appearing on behalf of the decree holder, inter alia, submitted that in case the entire decretal amount is deposited then his client should be allowed to withdraw the same unconditionally, He did not dispute the fact that in case the petitioner/judgment-debtor wins in the review application as per order of the Hon'ble Supreme Court and also wins in the appeal, thereafter, then and in that event his client will be obliged to restitute to the judgment-debtor as provided under Section 144 of the Code of Civil Procedure. According to the judgment-debtor/petitioner the total balance sum which still remains payable under the terms of the decree comes to Rs. 11,59,560/-. The, petition was moved yesterday and I asked the petitioner whether the petitioner was inclined to deposit the entire balance decretal amount with the Registrar, Original side of this Court. The judgment debtor/petitioner has today produced two bank drafts, one drawn by ABN-AMRO Bank N.V. dated 11-2-1994 for a sum of Rs. 7,00,000/- and another one drawn by the Oriental Bank of Commerce bearing No. P. O./B416852/3958/94 dated 11th February 1994 for a sum of Rupees 4,59,560/-, both drawn in favour of the Registrar, High Court, Original Side, Calcutta. This according to the judgment-debtor/petitioner, is the entire balance decretal amount which still remains payable under the said decree. The petitioner prays that he should be allowed to deposit the entire balance decretal amount with the Registrar, Original Side, High Court, Calcutta and all further steps in execution should be stayed. It also prays that the decree holder should be put on terms and may be allowed under the provisions of Order 41, Rule 6 to withdraw the said sum of money upon furnishing security for the restitution of the said decretal amount in case the petitioner succeeds in the pending appeal and/or the said review application. In the facts of this case, I am satisfied that there is sufficient cause that the decree-holder should be required to furnish security before withdrawing the decretal amount. Mr. Das, learned counsel, appearing on behalf of the decree holder/respondent prayed that in case the petitioner is allowed to deposit the balance decretal amount, the amounts should be directed to be held subject to final result of the pending review application and/or appeal in case the petitioner succeeds in the pending review application. He also prayed that money should be directed to be invested by the Registrar, until further orders of the Appeal Court and/ or the orders to be made in the pending review application. He also submitted that the commission payable to the Registrar should be paid by the petitioner in addition to the amounts for which the bank drafts have been produced, which represent the balance decretal amount payable to the decree holder in terms of the decree.
10. The learned Counsel for the petitioner/judgment-debtor has given an undertaking before this Court that in case his client is allowed to deposit the balance decretal amount in terms of the instant application made before this Court the judgment debtor will withdraw the appeal from the order made in execution proceeding being the order dated 27th August, 1993.
11. The learned counsel appearing on behalf of the respondent does not intend to file any affidavit-in-opposition but he does not admit the allegations made in the petition.
12. In view of what has been stated above and after hearing the parties, it is ordered as follows.
13. The two bank drafts produced by the petitioner/judgment debtor are directed to be encashed by the Registrar, Original Side of this Court. Let these two bank drafts be forwarded by the Assistant Registrar of this Court to the Registrar, Original Side, High Court, Calcutta. The proceeds of the Bank drafts will be treated as the amount realised in execution of the said decree passed by this Court in the concerned award case in which the decree was passed in terms of the award. After encashment of the said two bank drafts, the Registrar, Original Side, will invest the said amount in short term fixed deposit of not less then 181 days and such fixed deposits will be renewed along with the accrued interest thereon for further periods of not less than 181 days on expiry of the earlier deposit. The money so deposited as also the accrued interest thereon is to be dealt with, in accordance with the final order that may be passed in the pending review application and/or the appeal from original order aforesaid dated 9th March 1993, in case the judgment debtor wins in the pending review application.
14. There will be stay of all further proceedings in execution and the Receiver already appointed in execution will and is directed to return the petitioner's card of the Calcutta Stock Exchange, to the petitioner. The petitioner is directed to pay the commission which is chargeable and/or is payable to the Registrar, Original Side, High 'Court within seven days from the date of intimation by the Registrar, Original Side, High Court, Calcutta, to the petitioner's Advocate-on-Record. The Registrar, Original Side, High Court, Calcutta will inform the petitioner's Advocate-on-record about the correct amount of commission payable by the petitioner/judgment debtor as soon as practicable. The respondent/decree holder will be entitled to withdraw the amount lying in deposit with the Registrar, Original Side of this Court, upon furnishing bank guarantee in favour of the said Registrar, for the amount lying in deposit with him at the time of withdrawal thereof. Such bank guarantee is to be for a period of one year and the decree holder will be bound to go on renewing the same, until further orders of Court, for further periods of one year each. The bank guarantees to be so furnished will contain a clause that the same will be payable without any demand, in case the same is not renewed one month in advance, before the period of expiry thereof. In case the respondent/decree holder withdraws the said amount upon furnishing the bank guarantee then the said bank guarantee will be renewed one month in advance from the date of expiry of the bank guarantee. In case, the bank guarantee is not renewed within the time as stated above, then and in that event, the bank furnishing the guarantee is direted to and will automatically and without any further demand from the Registrar, Original Side, High Court, Calcutta pay the guarantee amount to the Registrar, Original Side, High Court, Calcutta. Such Bank guarantee to be furnished will be in favour of the Registrar, Original Side, High Court, Calcutta, and on such further or other terms, to the satisfaction of the said Registrar.
15. The application made by the petitioner/judgment debtor is thus disposed of.
16. All parties including the Assistant Registrar of this Court as also the Registrar, Original Side, High Court, Calcutta and the Receiver to act on a signed copy of the operative portion of this judgment.
17. Order accordingly.