Delhi High Court - Orders
(U.O. Xxi R. 46 R/W S. 46& 51 Cpc) Itd ... vs Ssjv-Zvs Joint Venture & Ors on 21 April, 2023
Author: Yashwant Varma
Bench: Yashwant Varma
$~32
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ OMP (ENF.) (COMM.) 188/2021, CCP(O) 46/2022,
EX.APPL.(OS) 1318/2021 (Stay), EX.APPL.(OS) 1319/2021
(Necessary Direction), EX.APPL.(OS) 2822/2022 (U.O.
XXXIX R. 4 r/w S. 151CPC) & EX.APPL.(OS) 3243/2022
(U.O. XXI R. 46 r/w S. 46& 51 CPC)
ITD CEMENTATION INDIA LIMITED ..... Decree Holder
Through: Mr. Amit George, Mr. Piyo
Harold, Mr. Amol Acharya, Mr.
Rayadurgam Bharat, Mr.
Arkaneil Bhoumik, Advocates.
versus
SSJV-ZVS JOINT VENTURE & ORS ..... Judgement Debtors
Through: Mr. Deepanjan Dutta, Adv. for
R-1& 2.
Mr. Puneet Taneja, Mr.
Manmhan singh Narula, Ms.
Laxmi Kumari, Mr. Amit
Yadav. Advocates. for NTPC.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
ORDER
% 21.04.2023 EX.APPL.(OS) 1316/2021 (U.O. XXI R. 46A(1) & (2)r/w S. 46 & 51 CPC
1. The present application has been moved for garnishee orders being framed against the National Thermal Power Corporation Limited [NTPC]. The said prayer is addressed in the backdrop of the following facts.
2. The instant enforcement petition has been instituted against the respondent for the enforcement of an Award 09 March 2019. It appears that in the meanwhile disputes arose between the respondents and NTPC which led to the same being referred for resolution by an Arbitral Tribunal. The aforesaid dispute which forms subject matter Signature Not Verified of two references ultimately concluded in awards being rendered in Digitally Signed By:NEHA Signing Date:25.04.2023 10:34:31 favour of the respondents and against NTPC. Mr. Taneja, learned counsel appearing for NTPC, also apprises the Court that in those disputes it had also raised certain counter claims which have been partly allowed by the Arbitral Tribunal. According to Mr. Taneja, in the challenge under Section 34 of the Arbitration and Conciliation Act, 1996 [the Act] which stands comprised in OMP (COMM.) 94- 95/2018, the challenge which stands raised by NTPC is not just with respect to the amounts held as due and payable to the respondents herein but also and insofar as it refuses the counter claims.
3. Dr. George, learned counsel appearing for the enforcement petitioner, has drawn the attention of the Court to the Affidavit of Assets as filed by the respondents herein and submits that no valuable property or assets have been disclosed which may be attached for the purposes of enforcement of the present Award. It is in the aforesaid backdrop that the enforcement petitioner has sought the drawl of garnishee proceedings against NTPC.
4. Learned counsel appearing for the respondents in the present petition has, however, submitted that as long as the debt remains subject matter of challenge in the pending petitions preferred under Section 34 of the Act, the Court would stand precluded from exercising the power of attachment as flowing from Order XXI Rule 46 of the Code of Civil Procedure, 1908. Learned counsel has in support of his submissions placed reliance upon the judgment rendered in Goyal MG Gases Private Limited v. Neelachal Ispat Nigam Limited (NINL) and Ors., [2022 SCC OnLine Del 736] and more particularly to the following observations as appearing therein:-
―97. Thus far, it is obvious, from a reading of the statutory provisions, that Mr Puri is right in contending that Rules 46, 46-A and 46-B form a sequence, with each following on the preceding provision. Where, however, I find it difficult to subscribe to the submission of Mr Puri, on a plain reading CPC, is in his contention that Rule 46-C of Order 21 would apply only at the Order 21 Rule Signature Not Verified 46-B stage. According to Mr Puri it is only when the court is Digitally Signed By:NEHA Signing Date:25.04.2023 10:34:31 proceeding to pass an order against the garnishee, under Order 21 Rule 46-B, that the dispute, regarding the debt, raised by the garnishee, if any, is required to be accorded cognizance, and subjected to trial, if the court so deems appropriate.
98. I, personally, see no reason why Order 21 Rule 46-C should not apply even after the Order 21 Rule 46 stage. There is, in my mind, no statutory justification to so read the provisions and, if so read, it may even defeat the purpose of Order 21 Rule 46. Order 21 Rule 46(1)(a) permits attachment of ―a debt not secured by a negotiable instrument‖. The debt must be owed by the garnishee to the judgment-debtor. If there is no debt -- even if in future, provided it relates to an obligation in praesenti -- there is nothing to be attached under Order 21 Rule 46(1)(a). Nothing, other than a debt, and nothing short of a debt can be attached under Order 21 Rule 46(1)(a). No debt, ergo, no attachment.
99. If, therefore, the garnishee disputes the debt, then, in my considered opinion, whether by operation of Order 21 Rule 46-C or otherwise, the decree-holder, seeking to invoke garnishment proceedings, would necessarily have to convince the court, prima facie, of the existence of an attachable debt, payable by the garnishee to the judgment-debtor, before any order of attachment under Order 21 Rule 46 can be passed. I am not able to convince myself that a mere affidavit by the decree-holder would suffice for the purpose, and would serve to shift the onus to the garnishee, or the judgment-debtor.
100. Attachment of a debt is not a step to be taken lightly. It has its own inexorable sequelae, the reversal of which could take ages.
Every citizen has a right to deal with her, his or its property as it chooses, in accordance with law. The right to property may no longer be a fundamental right, but it remains a constitutional right. A direction of attachment under Order 21 Rule 46 results in the probation of the right of the garnishee to deal with its property in the manner it chooses. Of course, if it is found that the garnishee owes a debt to the judgment or order, which is attachable under Order 21 Rule 46, then the debt could be attached in favour of the decree-holder. If the garnishee indeed owes a debt to the judgment- debtor, which is attachable under Order 21 Rule 46, then it may not lie in the mouth of the garnishee to refuse to permit attachment of the debt, when proceedings are initiated by the decree-holder. It is for this reason that garnishee proceedings have been regarded as proceedings by proxy, in which the decree-holder effectively steps into the shoes of the judgment-debtor, to enforce the debt owed to the judgment-debtor by the garnishee. If the debt exists, therefore, and if it is enforceable by the judgment-debtor against the garnishee, ipso facto it becomes attachable at the instance of the decree-holder under Order 21 Rule 46.
101. The debt must, however, in the 1st instance, be established, Signature Not Verified even for the purposes of Order 21 Rule 46 and, if the garnishee Digitally Signed By:NEHA Signing Date:25.04.2023 10:34:31 disputes the debt, the decree-holder would, at least prima facie, have to dispel the contention of the garnishee before being entitled to an order of attachment under the said provision.‖
5. As this Court views the principles which were enunciated by the learned Judge in Goyal MG Gases, it is manifest that the prayer for a garnishee order being farmed is clearly merited for the following reasons.
6. While the NTPC may have presently disputed the debt which is owed to the respondents in light of its challenge which stands comprised in the petitions preferred under Section 34 of the Act, the Court in Goyal MG Gases itself had observed that as long as the decree holder seeking to invoke garnishee proceedings is able to prima facie satisfy and convince the Court of the existence of an attachable debt, an order of attachment under Order XXI Rule 46 of the Code could be framed.
7. The Court notes that in the petitions preferred under Section 34 of the Act which are pending, no interim order operates. The awards which are challenged by NTPC have also not been placed in abeyance.
8. In view of the above, this Court is of the considered view that the enforcement petitioner has clearly satisfied the prima facie test of establishing a debt due and payable by NTPC to the respondents.
9. In view of the aforesaid, the Court hereby provides that subject to further orders being passed on the present petition, NTPC shall stand restrained from releasing any monies payable to the respondents pursuant to the awards which form the subject matter of challenge in OMP (COMM.) 94-95/2018.
10. The application shall stand disposed of.
EX.APPL.(OS) 3243/2022 (U.O. XXI R. 46 r/w S. 46& 51 CPC) Signature Not Verified Digitally Signed By:NEHA Signing Date:25.04.2023 10:34:31
11. In light of the orders passed by the Court today on EX.APPL.(OS) 1316/2021, no further orders need be passed on the present application which shall consequently stand disposed of. OMP (ENF.) (COMM.) 188/2021, CCP(O) 46/2022, EX.APPL.(OS) 1318/2021 (Stay), EX.APPL.(OS) 1319/2021 (Necessary Direction), EX.APPL.(OS) 2822/2022 (U.O. XXXIX R. 4 r/w S. 151CPC)
12. Let the matter be called again on 12.09.2023.
YASHWANT VARMA, J.
APRIL 21, 2023 bh Signature Not Verified Digitally Signed By:NEHA Signing Date:25.04.2023 10:34:31