Indian Kanoon - Search engine for Indian Law

5. As against this. Mr. P. V. Shah relied upon Judgment of Madras High Court reported in Madras Law Journal Reports page 250 T.R. DeluanaiAchi. Petitioning Creditor v. K. S. D. Radhakrishnan. Debtor, and another judgment of Justice Dhanuka in Sharad R. Khanna and Others., Judgment Debtors v. Industrial Credit and Investment Corp. of India Ltd. and Others., and contended that not initiating proceedings for execution of the decree within two years of the passing of the decree does not make the decree unexecutable and at any rate the insolvency notice cannot be and should not be set aside on that ground.

Without prejudice to the provisions of sub-section (1) a debtor commits an act of insolvency if a creditor, who has obtained a decree or order against him for the payment of money (being a decree or order which has become final and the execution whereof has not been stayed) has served on him a notice (hereinafter referred to as "the insolvency notice"), as provided in sub-section (3) and the debtor does not comply with that notice within the period specified therein."

7. Relying upon this amended section 9 sub-section (2) and the amended section 5. it was contended by the counsel for the Judgment debtor that even though the bank - judgment creditor has obtained a decree against the judgment debtor, the decree was not executable on the date when the insolvency notice was issued because two years period as prescribed by Order XXI Rule 22 has elapsed and if after the period of two years, the judgment creditor wanted to execute the decree they would have been required to ontain leave of the Court and since that has not been done, the decree has become unexecutable and if the decree has become unexecutable then it cannot be said that the judgment debtors committed act of insolvency referred to in section 9 sub-section (2) would not arise against the judgment debtors.

8. It is difficult to accept this argument at least in its entirety. It is true that Order XXI Rule 22 provides that if an application for execution is made more than two years after the date of the decree, the Court executing the decree shall issue a notice to the judgment debtors requiring him to show cause. But it cannot be said that if a decree holder does not follow this procedure then the decree obtained by him becomes or can be treated as unexecutable decree. The decree can become amongst other reasons unexecutable if the execution is filed after 12 years or after the decree is fully satisfied. But decree does not become unexecutable because no application is made within two years as contemplated by Order XXI Rule 22 of C. P. C. A decree obtained is a decree enforceable till the period of limitation expires or till it is fully satisfied and it cannot in any case be treated as an unexecutable decree.

12. Therefore, even though not starting proceedings for execution of a decree within two years does not make the decree unexecutable, for the purpose of deciding whether the judgment debtor has committed an act of insolvency or not particularly in case where a decree is not sought to be executed by starting any proceedings, the Insolvency Court or the Court dealing with matters will have to see whether there was failure on the part of judgments debtor to satisfy the decree even after the show cause notice being issued by the executing decree under Order XXI Rule 22 of the C. P. C.