Andhra HC (Pre-Telangana)
P. Bhaskar Rao vs K. Sreenivasa Rao on 19 October, 2012
Equivalent citations: AIR 2013 ANDHRA PRADESH 4, (2014) 1 CIVLJ 750, (2013) 125 ALLINDCAS 641 (AP), 2013 (125) ALLINDCAS 641, (2013) 1 ANDHLD 640
Author: B.N. Rao Nalla
Bench: B.N. Rao Nalla
THE HONOURABLE SRI JUSTICE B.N. RAO NALLA CIVIL REVISION PETITION No.6337 OF 2009 19-10-2012 P. Bhaskar Rao K. Sreenivasa Rao Counsel for the petitioner: Sri R.V. Prasad (919) Counsel for the respondent: Sri Sricharan Telaprolu (8640) <GIST: > HEAD NOTE: ?CASES REFERRED: ORDER:
This Civil Revision Petition is filed against the order in E.P. No.87 of 2009, a petition under Order - XXI Rules - 37 and 38 of the Code of Civil Procedure (for short 'CPC') for arrest and detention of the petitioner in civil prison, in O.S. No.290 of 2007 passed by the learned Principal Junior Civil Judge, Bapatla, whereby and whereunder the executive Court allowed the E.P. directing to issue warrant against the revision petitioner.
2. The revision petitioner herein is the judgment-debtor and the respondent is the decree-holder in the E.P. arising out of the suit referred supra for recovery of money.
3. For the sake of convenience, the parties are hereinafter referred to as they arrayed before the executive Court.
4. Heard the learned counsel on either side and perused the material available on record.
5. The point that arises for consideration in this revision is whether the executive Court has committed any error or infirmity in passing the impugned order?
6. The case of the decree-holder is that in spite of having sufficient means to pay the decreetal amount, the judgment-debtor is neglecting to discharge the same, as such, filed the impugned E.P. for his arrest and detention in civil prison.
7. A perusal of the impugned order shows that the decree-holder by examining himself as PW.1 produced sufficient material before the executive Court showing that the judgment-debtor has got sufficient means to pay the decreetal amount i.e. Acs.12-00 of land, a house and Ac.0-37 cents of agricultural land, but to rebut the same judgment-debtor neither entered the witness box nor adduced any evidence except contending that prior to filing of the E.P., he filed I.P. No.6 of 2009 on the file of Senior Civil Judge Court, Bapatla and as per the Provincial Insolvency Act, 1920 (for short "PI Act") no proceedings including execution can be entertained by any Court without the prior permission of the Insolvency Court. However, Section 28(2) of the PI Act speaks that on making of an order of adjudication in the insolvency proceedings adjudicating the petitioner therein to be insolvent, the decree-holder is entitled to execute the decree only after obtaining the leave of the Insolvency Court. But, when there is no order of adjudication on the insolvency proceedings no such leave or permission is necessary to execute the decree. Hence, the executive Court holding that the in spite of having sufficient means to discharge the decreetal amount the judgment-debtor is intentionally avoiding to pay the same, ordered to issue warrant of arrest against him on payment of process by the decree-holder. Assailing the same, judgment-debtor preferred this revision.
8. Now the case of the judgment-debtor is that the executive Court erred in observing that as per Section 28(2) of the PI Act, unless there is an order of adjudication, the decree-holder is entitled to execute the decree and that though there is no material on record to show that in spite of having sufficient means to pay the debt he is intentionally avoiding to discharge the same, erroneously allowed the E.P. issuing warrant of arrest against him. It is also his case that according to sub-sections (3), (4) & (5) of Section 55 of CPC, the Court should inform the judgment-debtor that he may apply before declaring him as an insolvent and if he expresses his intention to be declared as insolvent, he should not be arrested, however in spite of brining to the notice of the executive Court about pendency of the insolvency proceedings, erroneously issued the warrant of arrest.
9. Since the contention of the judgment-debtor is that the executive Court erred in holding that unless there is an order of adjudication, under sub- section (2) of Section 28 of the PI Act, there is no necessity to obtain leave or permission of the Insolvency Court to initiate execution proceedings, the said provision is extracted hereunder for better appreciation which is as under:
"28. Effect of an order of adjudication:-
(1) ... ... ...
(2) On the making of an order of adjudication, the whole of the property of the insolvent shall vest in the Court or in a receiver as hereinafter provided, and shall become divisible among the creditors, and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the insolvency proceedings have any remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceeding, except with the leave of the Court and on such terms as the Court may impose."
10. From a reading of the above provision, it is clear that only after making of an order of adjudication in the insolvency petition adjudicating the petitioner therein to be an insolvent, the whole of the property of the insolvent shall vest in the Court or in a receiver appointed by the Court and not before that. Hence, as rightly held by the executive Court there is no necessity to obtain leave or permission of the Insolvency Court to initiate execution proceedings against the judgment-debtor since there is no order of adjudication in the insolvency proceedings filed by the judgment-debtor adjudicating him to be an insolvent.
11. The next contention of the judgment-debtor is that according to sub- sections (3), (4) & (5) of Section 55 of CPC, the Court should inform the judgment-debtor that he may apply before declaring him as an insolvent and if he expresses his intention to be declared as insolvent, he should not be arrested.
12. Though the judgment-debtor relies on sub-section (5) of Section 55 of CPC, actually there is no sub-section as such under Section 55 of CPC.
13. For better appreciation of sub-sections (3) & (4) of Section 55 of CPC, the same is extracted hereunder which is as under:
"55. Arrest and detention:-
(1) ... ... ...
(2) ... ... ...
(3) Where a judgment-debtor is arrested in execution of a decree for the payment of money and brought before the Court, the Court shall inform him that he may apply to be declared an insolvent, and that he may be discharged if he has not committed any act of bad faith regarding the subject of the application and if he complies with the provisions of the law of insolvency for the time being in force.
(4) Where a judgment-debtor expresses his intention to apply to be declared an insolvent and furnishes security, to the satisfaction of the Court, that he will within one month so apply, and that he will appear, when called upon, in any proceeding upon the application or upon the decree in execution of which he was arrested, the Court may release him from arrest, and, if he fails so to apply and to appear, the Court may either direct the security to be released or commit him to the civil prison in execution of the decree."
14. From a reading of the above provisions, no doubt, it is crystal clear that when a judgment-debtor is arrested in execution of a decree for the payment of money and brought before the Court, the Court shall inform him that he may apply to be declared an insolvent, and that he may be discharged if he has not committed any act of bad faith regarding the subject of the application and if he complies with the provisions of the law of insolvency for the time being in force, and if he expresses his intention to apply to be declared as insolvent, he is required to furnish security .
15. The above situation arises only after arrest of the judgment-debtor but not before that, but under the impugned order only arrest warrant was issued against him and not arrested by then. Further, the judgment-debtor is required to comply with the provisions of the law of insolvency and furnish sufficient security for the decreetal-amount which he failed to do so. In that view of the matter, the executive Court cannot be found faulted with in passing the impugned order.
16. Apart from the above, after filing this revision also the learned counsel for the judgment-debtor sought time on 16-08-2012 to facilitate the judgment- debtor to obtain "Certificate of Protection from Arrest", but till today did not produce the same even after three adjournments thereafter.
17. Now coming to the contention of the learned counsel for the judgment-debtor that the executive Court erroneously allowed the E.P. in spite of no material on record to show that the judgment-debtor has sufficient means to discharge the debt, as found hereinabove, the decree-holder by examining himself as PW.1 disclosed about the assets of the judgment-debtor which the judgment-debtor failed to rebut either by examining himself or any other person or by producing any material, as such, it cannot be said that the judgment-debtor has no means to discharge the decreetal amount.
18. For the aforesaid reasons, this Court is of the view that the executive Court has not committed any error or illegality in passing the impugned order requiring interference of this Court, as such, the revision is liable to be dismissed.
19. Therefore, the Civil Revision Petition is dismissed. The miscellaneous applications, if any, pending are closed. No order as to costs.
_________________ B.N. RAO NALLA, J Date:19-10-2012.