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1990 DIGILAW 473 (KAR)

ROSE CHIT FUNDS (P) LTD. , BANGALORE v. G. VENKATACHALAM

1990-08-31

M.RAMAKRISHNA RAO

body1990
M. RAMAKRISHNA RAO, J. ( 1 ) IN this revision petition the petitioner-Chit Funds Company (hereinafter referred to as the Company) having been aggrieved by the order made by the Small Causes judge in Execution No. 1146/1984, dated 12th April, 1985, has come up before this court challenging the legality and correctness of that order. I have heard the learned counsel on both side and perused the order under revision. A short question that irises for consideration in this revision petition is: whether the view taken by the court below in rejecting the petition sought to be executed holding that under the provision of Section 64 of the Chit Fund Act the petition is not maintainable would be justified. ( 2 ) THE admitted facts as disclosed both by the order under revision and the argument sadvanced on both sides are that G. Venkatachalam and respondent herein owed a certain sum of money payable to the petitioner. The petitioner having moved this Court under the provision of Section 446 (2) (b) of the Companies Act, 1956 (hereinafter referred to as the Act) obtained an order directing the respondent to pay a sum of Rs. 6,972. 03 ps. payable to the Company under liquidation. There is no dispute about that. The question is whether that order could be executed as if it is a decree. The second question is that if it is a decree, could the decree be executed before the Small Causes Court in Bangalore. ( 3 ) TO answer the first question, there is no difficulty having regard to the scope of Section 635 of the Companies Act. An order passed under Section 446 (2) (b) by the competent Court could be considered as a decree which can be enforced for the purpose of realising the amount ordered to pay. Section 635 of the Companies Act for the purpose of enforcement of such an order reads as follows: (1) Where any order made by one Court is required to be enforced by another court, a certified copy of the order shall be produced to the proper officer of the Court required to enforce the order. (2) The production of such certified copy shall be sufficient evidence of the order. (2) The production of such certified copy shall be sufficient evidence of the order. (3) Upon the production of such certified copy, the Court shall take the requisite steps for enforcing the order, in the same manner as if it had been made by itself. (4) Where any order made by the Company Law Board under Section 17, section 18, Section 19, Section 79 or Section 186 is required to be enforced by a Court, a certified copy of the order shall be produced to the proper officer of the Court required to enforce the order and the provisions of sub- sections (2) and (3) shall, as far as may be, apply to every such order in the same manner and to the same extent as they apply to an order made by a Court. ( 4 ) PURSUANT to the order made by this Court, a certified copy of the order made by this Court was sought to be executed before the Small Causes Court in Execution no. 1146/1984 against respondents Venkatachalam and another. ( 5 ) AN objection was raised on behalf of the respondent - herein one of the Judgment debtors - that in view of the provision of 634 of the Chit Funds Act that court had no jurisdiction to execute the order. Having regard to the plea put forward before the executing Court, the following two questions came to be raised: (1) Whether this Court has jurisdiction to entertain the instant execution petition? (2) Whether the provisions of the Karnataka Debt Relief Act, 1980 are applicable to the facts of this case?the learned Small Causes Judge having heard both sides answered the first question in the negative and the second question in the affirmative and accepted the plea put forward by the Judgment-debtor. The execution petition came to be dismissed. Hence, this revision petition. The execution petition came to be dismissed. Hence, this revision petition. ( 6 ) THE learned counsel appearing for the petitioner took me through the provisions under Section 635 of the Companies Act extracted above and submitted that having regard to the observation made by commentator Ramaiah on Companies act 11th Edition, at page 1497, it was argued that for the purpose of treating an order made under Section 446 (2) (b) of the Companies Act, that that order to be executed to realise the amount for all purposes of execution of such orders having regard to the provision of the Code of Civil Procedure governing execution petition, it must be treated as if the order sought to be executed before the Court having jurisdiction, must be treated as if that order came to be passed by that Court, and therefore in view of the provision of Section 635 such a Court will have all the powers and jurisdiction for the purpose of executing that order and to recover the amount involved in the decree. However, the learned counsel for the petitioner submitted that unfortunately neither this argument was advanced before the Small Causes Court nor it came to be considered by that Court. Indeed by a perusal of the impugned order, it is seen that the learned Small Causes Judge in spite of considering the relevant question involved in the execution proceedings, he having dealt with Section 63 of the Chit fund Act and the Karnataka Debt Relief Act, 1980 reached the conclusion against the decree-holder and thereby resulting in the dismissal of the execution petition. ( 7 ) SRI Shankarappa, the learned counsel appearing for the respondent however submitted that insofar as the initial jurisdiction for the purpose of executing the order made under Section 446 (2) (b) of the Companies Act there may not be difficulty that the Court before which the order sought to be executed. ( 7 ) SRI Shankarappa, the learned counsel appearing for the respondent however submitted that insofar as the initial jurisdiction for the purpose of executing the order made under Section 446 (2) (b) of the Companies Act there may not be difficulty that the Court before which the order sought to be executed. However, his submission is that having regard to the provision of Karnataka Debt Relief Act, 1980, a judgment-debtor-respondent is entitled for the exemption for considering to be a debtor within the meaning of that Act and that the Court will bound to consider that aspect ( 8 ) WITHOUT observing anything about the second submission made by Sri Shankarappa as to whether the Judgment-debtor-respondent is entitled for such a benefit, as it is left open to the executing Court, I would consider the main question on which the revision petition has to be disposed of. ( 9 ) AS I have already noticed that the Small Causes Judge who passed the order under revision failed to consider relevant question arising in this petition. On the other hand he proceeded to consider the scope of Section 63 of the Chit Fund Act read with the provisions of the Karnataka Debt Relief Act, 1980. This is unconfirmed. ( 10 ) THE learned Small Causes Judge instead of considering as to whether the execution petition as brought before it was maintainable having regard to the provision of Section 635 of the Companies Act read with the provision of the Sections 8 and 14 of the Karnataka Small Cause Courts Act, 1964, considering the irrelevant provision of Section 63 of the Chit Fund Act has reached a conclusion against the petitioner. This approach is incorrect and erroneous. All that the Court will have to look for is, whether the order sought to be executed before that Court could be treated as a decree and if so whether that Court has jurisdiction to execute the decree. As I have already noticed in the earlier paragraphs for the purpose of treating the order made by this Court on the company side to be a decree for the purpose of the same being executed to recover the money ordered to be recovered and that whether that Court has jurisdiction to do so. As I have already noticed in the earlier paragraphs for the purpose of treating the order made by this Court on the company side to be a decree for the purpose of the same being executed to recover the money ordered to be recovered and that whether that Court has jurisdiction to do so. Since I have already hold that in view of the provision of section 635 of the Companies Act, any order made by the Company Court under section 446 (2) (b) of the Companies Act must be treated as a decree for the purpose of recovering the money ordered to be recovered in favour of the Company. Therefore, there may not be difficulty to reach that conclusion, as to the question of jurisdiction of that Court both pecuniary as well as territorial jurisdiction. The respondent is living within the area of that Court namely Rajajinagar, Bangalore City which is not disputed. Having regard to the provision of Section 8 of the Small Causes Court act read with Section 14, the Court ought to have decided as to whether that Court has jurisdiction to execute the order as if it is a decree, and convinced that having regard to Sections 8 and 14 referred to above, the Small Causes Court has jurisdiction to entertain the order as if it is a decree for the purpose of execution of that decree and to realise the amount involved in that decree. This point having not been considered by the Small Causes Judge, the orders under revision are liable to be set aside. In the result the revision petition is allowed. The order made in Execution No. 1146/1984, dated 12th April, 1985 holding the petition is not maintainable is set aside. The matter stands remitted to the Small Causes Court, Bangalore City with a direction to take appropriate action to execute the decree in accordance with law and in the light of the observations made above. ( 11 ) SINCE the parties to the execution petitions having duly served, there is no need to issue fresh notice. The Court below is directed to re-hear and dispose of the matter by the end of 30th September, 1990. The parties are directed to appear before the Court below on 3rd September, 1990. Let the copy of this order be communicated to the Court below immediately. --- *** --- .