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1994 DIGILAW 32 (BOM)

T. A. Darbar and Company & others v. Union Bank of India

1994-01-19

M.L.DUDHAT, M.L.PENDSE

body1994
JUDGMENT - PENDSE M.L., J.:—The respondent bank instituted Suit No. 1747 of 1976 against the appellants on the Original Side of this Court for recovery of sum of Rs. 48,494.05 along with simple interest on the principal sum of Rs. 46,520.31 at the rate of 6% per annum from the date of the decree till realisation. On January 17, 1977 this Court passed a consent decree and the decretal amount as sought by the bank was made payable by instalments. The appellants were directed to pay the amount by monthly instalment of Rs. 1200/-, first of such instalment to be paid on or before February 10, 1977 and recurring instalments to be paid on or before tenth day of each succeeding month. The decree also provided that in the event of the appellants committing default of any three monthly instalments, the bank will be entitled to recover the entire decretal amount forthwith. The appellants committed default and on April 10, 1977 the bank served notice upon the appellants informing of the commission of three defaults and calling upon to pay the decretal dues forthwith. The appellants made some part payment. On June 27, 1977 the decree was sealed by the Registry of this Court. 2. On July 5, 1988 the bank filed an application for execution of the decree. The mode in which the assistance of the Court was sought, was “by issuing notice to the defendants under Order XII, Rule 22 and if no cause is shown, by allowing execution to issue”. The column initially referred to the mode in the following terms : “and thereafter issuing, warrant of attachment under Order XXI, Rules 43 and 54, attaching the movable and immovable properties of the defendants lying and being at their respective address mentioned in the title of the suit.” The later portion was struck off and what remained was the relief of issuing notice under Order XXI, Rule 22 of the Code. The application for execution was numbered as Application No. 144 of 1988 and on July 19, 1988 the Prothonotary and Senior Master of this Court directed notice to be issued under Order XXI, Rule 22 of the Code of Civil Procedure. The notice, after service, came up for hearing before the Chamber Judge and by order dated October 31, 1988 the notice was made absolute. The notice, after service, came up for hearing before the Chamber Judge and by order dated October 31, 1988 the notice was made absolute. The notice called upon the appellants to show cause why consent decree should not be executed. It is not in dispute that no steps were taken after the Chamber Judge made the notice absolute, for execution of the decree. 3. On June 23, 1989 the bank lodged proceedings for issuance of insolvency notice to the appellants. On June 27, 1989 the Insolvency Registrar issued notice to the appellants intimating that thirty five days after the service of notice, the appellants shall satisfy the decree or furnish security for the payment of the decretal dues. The insolvency notice was served on the appellants on July 21, 1989. The appellants took out Notice of Motion No. 105 of 1989 on August 21, 1989 for setting aside the insolvency notice. The appellants claimed that insolvency notice should be set aside as the remedy of the respondent bank to execute the decree stands extinguished on expiry of twelve years from the date of passing of the decree. The appellants claimed that as the decree was inexecutable, the insolvency notice was not valid and required to be set aside. The motion was resisted by the respondent and the learned Single Judge, by impugned order dated June 20, 1992, came to the conclusion that as the application for execution of the decree filed on July 5, 1988 was not finally disposed of, the claim of the appellants that the decree was inexecutable on the date of service of notice of insolvency cannot be accepted. The trial Judge thereupon dismissed the notice of motion and that has given rise to the filing of this appeal. 4. Shri Cooper, learned Counsel appearing on behalf of the appellants, submitted that the finding of the trial Judge that the execution application was alive and the decree cannot be said to be inexecutable on the date of service of notice of insolvency is incorrect. Shri Cooper submitted that the application which was presented on July 5, 1988 was not a valid application and in any event the relief sought in the application having been granted on October 31, 1988, the efficacy of the application came to an end. Shri Cooper submitted that the application which was presented on July 5, 1988 was not a valid application and in any event the relief sought in the application having been granted on October 31, 1988, the efficacy of the application came to an end. Shri Shah, learned Counsel for the respondent bank, on the other hand submitted that the execution application was not finally disposed of and merely because the application was defective as the mode of assistance from the Court was not specifically sought, the contention that the decree was inexecutable cannot be accepted. Shri Shah also submitted that the period of twelve years must commence to run not from the date of order of passing consent decree but from the date of sealing of the decree, as what could be executed is only the decree and not the consent order. It was urged that the application for issuance of insolvency notice was filed within period of twelve years from the date of the sealing of the decree and, therefore, the contention that the decree was not executable on the date of service of the notice cannot be accepted. Shri Shah submitted that the relevant date to ascertain whether decree is enforceable or not is the date on which the application is lodged before the Insolvency Registrar for issuance of insolvency notice and not the date of service. In view of the rival submissions, short question which falls for determination is whether the decree was executable on the date of service of insolvency notice on the appellants. 5. The consent decree came to be passed on January 17, 1977 and Execution Application No. 144 of 1988 was lodged on July 5, 1988 i.e. within period of twelve years. The execution application was filed in accordance with the provisions of Rule 11(2) of Order XXI of Code of Civil Procedure. Rule 313 of the Rules and Forms of the High Court of Judicature at Bombay provides that application for execution shall be in Form No. 45. The form provides for furnishing several particulars as required under Rule 11(2) of Order XXI of the Code and the heading of the last column is, 'the mode in which the assistance of the Court is required'. The form provides for furnishing several particulars as required under Rule 11(2) of Order XXI of the Code and the heading of the last column is, 'the mode in which the assistance of the Court is required'. The perusal of Rule 11(2)(j) of Order XXI of the Code makes it clear that the assistance of the Court can be sought by seeking (a) delivery of any property specifically decreed; (b) by attachment and sale of any property; (c) by arrest and detention in prison of any persons and (d) by appointment of a receiver. These are the modes in which assistance of the Court is required for enforcement of a decree. A practice has developed on the Original Side of this Court and the assistance of the Court is sought only by issue of notice under Order XXI, Rule 22 against the judgment-debtor. The practice was noticed by a Single Judge in the decision reported in A.I.R. 1947 Bom. 430, (Vallabhdas Narandas v. Kantilal G. Parekh)1. The practice is clearly irregular and will have to be abandoned as it is in contravention of the provisions of the Code of Civil Procedure. Rule 11 of Order XXI provides for filing of an application for execution of a decree and prescribes that the application should set out certain requirements. Rule 17 of Order XXI then provides that on receiving application for the execution of a decree as provided by Rule 11, sub-rule (2), the Court shall ascertain whether such of the requirements of rules 11 to 14 as may be applicable to the case have been complied with. The rule further demands that in case the requirements are not complied with, then the Court shall allow the defect to be remedied then and there or within a time to be fixed by the Court. Sub-rule (1-A) of Rule 17 then provides that if the defect is not so remedied, then the Court shall reject the application. The rule further demands that in case the requirements are not complied with, then the Court shall allow the defect to be remedied then and there or within a time to be fixed by the Court. Sub-rule (1-A) of Rule 17 then provides that if the defect is not so remedied, then the Court shall reject the application. Sub-rule (2) of Rule 17 reads as follows :— “Where an application is amended under the provisions of sub-rule (1), it shall be deemed to have been an application in accordance with law and presented on the date when it was first presented.” Sub-rule (4) of Rule 17 then provides that when the application is admitted, the Court shall enter in the proper register a note of the application and the date on which it was made. Order XXI, Rule 22 provides that where an application for execution is made (a) more than two years after the date of the decree, (b) against the legal representative of a party to the decree and (c) against the assignee or receiver in insolvency, where the party to the decree has been adjudged to be an insolvent, then the Court executing the decree shall issue a notice to the person against whom execution is applied for requiring to show cause why the decree should not be executed. The perusal of the provisions of Order XXI makes it clear that stage for issuance of the notice under Order XXI, Rule 22 of the Code arises only when the application is examined by the executing Court and admitted after the defects, if any, are remedied by the decree-holder. The language of Rule 17(1) makes it clear that the duty is cast upon the executing Court to ascertain whether the requirements of application for execution as contemplated by the Code are satisfied and if not, to permit the decree-holder to remedy the defects. In case the defects are not remedied, then the power is bestowed upon the Court to reject the application and as long as the application is not rejected by the executing Court in exercise of powers under Rule 17(1-A) of Order XXI of the Code, the application remains alive, even though there may be defects in the application. In case the defects are not remedied, then the power is bestowed upon the Court to reject the application and as long as the application is not rejected by the executing Court in exercise of powers under Rule 17(1-A) of Order XXI of the Code, the application remains alive, even though there may be defects in the application. In the light of provisions of Order XXI it is now necessary to examine whether the application filed by the respondent bank is still alive and consequently the execution of the decree is not barred. 6. Shri Copper contended that the application for execution presented under Rule 11(2) of Order XXI on July 5, 1988 was not a valid application and should be treated as non est. The learned Counsel urged that the application had not sought assistance of the Court in a manner prescribed under Rule 11(2)(j) of the Code. The only relief sought was service of notice under Order XXI, Rule 22 of the Code on the appellants and that is not the assistance which can be sought from the Court as prescribed under the Code. The learned Counsel urged that as the assistance from the Court as prescribed under the Code was not sought, there was no valid application in the eyes of law and consequently it is impossible to suggest that the decree is still enforceable because of the pendency of the application. It is not possible to accede to the submission of the learned Counsel. It is undoubtedly true that the relief sought was issuance of notice under Order XXI, Rule 22 of the Code and therefore execution application was defective as the mode in which the decree is to be executed was not specifically set out. The mere fact that the application was defective is not sufficient to warrant conclusion that the application presented could not be taken note of. The application for execution was presented within twelve years from the date of passing of the consent decree and the application was entertained by the registry of this Court and was numbered. The defect in the application was not noticed by the registry and notice under Rule 22 was issued and was made absolute on the assumption that the application was free of any defect. The defect in the application was not noticed by the registry and notice under Rule 22 was issued and was made absolute on the assumption that the application was free of any defect. It was always open for the Court, after noticing the defect, to permit the decree-holder to amend the application and on such amendment in accordance with Rule 17(2) the application shall be deemed to have been presented on the date on which it was originally presented. The principle that the party shall not suffer for the error committed by the Court is well recognised and we are not prepared to accede to the submission of Shri Cooper that merely because the registry numbered the application and directed issue of notice under Rule 22, that cannot lead to the conclusion that the application presented was a valid application. We are not prepared to accede to the contention that the presentation of the application being defective, it should be concluded that the application for execution was not presented within period of twelve years. 7. Shri Cooper in support of the submission that the execution application presented by the bank was not a valid application as the only prayer made was for issuance of notice under Order XXI, Rule 22 of the Code, referred to certain decisions. The first decision is reported in A.I.R. 1942 All. 442, (Master Bhanpal Singh v. Siya Ram and others)2, where a Single Judge observed that if it is found that the steps mentioned in the particular application cannot be taken, then the application must be dismissed and the Court cannot give opportunity to the decree-holder to amend it so as to execute the decree by some other means. The Single Judge of Allahabad High Court felt that to allow the decree-holder to amend the execution application amounts to presentation of a new application and which may be barred by limitation. We are unable to share the view of the learned Single Judge. The provisions of Order XXI, Rule 17(2) were not brought to the attention of the learned Single Judge and consequently the observations, with respect, are incorrect. We are unable to share the view of the learned Single Judge. The provisions of Order XXI, Rule 17(2) were not brought to the attention of the learned Single Judge and consequently the observations, with respect, are incorrect. Reference was then made to the decision reported in A.I.R. 1941 Patna 635, (Maharaja Bahadur Ram Ranbijaya Prasad Singh v. Kesho Prasad Singh and another)3, where it was held that the Code does not make provision for amendment of application to execute decree except for the purpose of removing formal defects by reason of which application fails to conform to the requirements of Order XXI, Rules 11 to 14 and the decree-holder applies to amend the application under Rule 17. Patna High Court observed that there is nothing in the Code to warrant an execution proceeding being carried out in different form from that in which it has started. The observations cannot be read to suggest that the Court is powerless to permit decree-holder to amend execution application so as to set out the mode of assistance which is required for enforcement of decree. Shri Cooper then referred to two decisions of Nagpur High Court reported in 1947 Nag.L.J. 376, (Prayagdas Shankerlal Maheshri another v. Mt. Indirabai w/o Vinayakrao Harkare)4, A.I.R. 1949 Nag. 272, (Deorao Suryabhanji v. Ramchandra Amrutlal Rathi)5. In the first case it was held that an application cannot be regarded as an application in revival of a previous application unless it is of the same nature and if any relief different from that claimed in the previous one is asked for or any new property is sought to be attached or sold, it cannot be treated as a mere revival but a fresh application. In the second decision it was held that an application for amendment seeking execution against immovable property when initially the execution was sought only against movable property, must be treated as a fresh application. We are unable to appreciate how the two decisions of Nagpur High Court are of any assistance in the present case. The execution application in the present case did not seek any assistance save and except seeking issuance of notice under Order XXI, Rule 22 of the Code. The defect was not noticed and notice was issued and made absolute. We are unable to appreciate how the two decisions of Nagpur High Court are of any assistance in the present case. The execution application in the present case did not seek any assistance save and except seeking issuance of notice under Order XXI, Rule 22 of the Code. The defect was not noticed and notice was issued and made absolute. In our judgment, the Nagpur High Court decisions have no application and the contention that the application filed by the decree-holder in the present case was not a valid application and, therefore, the decree was barred by limitation cannot be accepted. Shri Cooper also referred to the decision of the Single Judge of this Court reported in 32 Bom.L.R. 1368, (Sukkargauda Basangauda Gonnagar v. Bhimappa Hanmappa Pujar)6, where the learned Judge held that application for execution of a decree which contravenes Rule 13 of Order XXI of the Code is not an application in accordance with law within the meaning of Article 182 of the Indian Limitation Act, 1908. It is not possible to accede to the contention raised on behalf of the appellants that the application was not a valid application and, therefore, the execution of the decree was barred by law of limitation. As mentioned hereinabove, the Court should strive to ensure that execution of the decree passed by the Court is enforced and unless and until execution is clearly barred by law of limitation, the Court should not defeat the execution by reference to technical contentions. It is desirable that the Court should take a healthy and practical view and should not defeat the decree by technical considerations. The provisions of Rule 17 of Order XXI are enacted with a view to enable the Court to permit the decree-holder to amend the execution application and we are not prepared to take a limited or restricted view of the provisions of Rule 17 so as to defeat the decrees passed by the Court. In our judgment, the correct view was taken by a Single Judge of this Court in the decision reported in A.I.R. 1947 Bom. 430, Vallabhdas Narandas v. Kantilal G. Parekh. The decree-holder in that case filed application for execution and the mode in which the assistance of the Court sought was “issue of notice under Order 21, Rule 22 against the judgment-debtor”. 430, Vallabhdas Narandas v. Kantilal G. Parekh. The decree-holder in that case filed application for execution and the mode in which the assistance of the Court sought was “issue of notice under Order 21, Rule 22 against the judgment-debtor”. The application was made in accordance with the practice followed on the Original Side of this Court and the Single Judge came to the conclusion that issuance of notice under Order XXI, Rule 22 was not a mode of execution and the practice and the decision on which the decree-holder had relied was wrong and the application for execution was defective. The learned Single Judge then held that even though the period of limitation for making a fresh application for execution had expired, the decree-holder should be allowed to amend the application by inserting the words “By the arrest and detention in prison of the judgment-debtor” in place of the words “By the issue of a notice under Order XXI, Rule 22 against the judgment-debtor” as the error was committed by the decree-holder through no fault of his. The learned Judge held that Rule 17 of Order XXI confers ample power upon the Court to permit an amendment even after the period of limitation has expired. We are in entire agreement with the view taken by the learned Single Judge and which view advances the cause of justice. 8. The second contention urged by Shri Cooper is that even assuming that the application presented by the decree-holder on July 5, 1988 was a valid application, the relief sought in the application being granted, the life of the application had come to an end and it is not open for the decree-holder to amend the application. It was urged that the only relief sought in the execution application filed on July 5, 1988 was issuance of notice to the appellants under Order XXI, Rule 22 of the Code. The notice was issued and was subsequently made absolute and thereupon the life of the application came to an end. Shri Cooper submitted that it is not open for the Court to permit decree-holder to amend the application which stands exhausted on the relief being granted. We are unable to accede to the submission. The notice was issued and was subsequently made absolute and thereupon the life of the application came to an end. Shri Cooper submitted that it is not open for the Court to permit decree-holder to amend the application which stands exhausted on the relief being granted. We are unable to accede to the submission. In the first instance issuance of notice under Order XXI, Rule 22 of the Code can by no stretch of imagination be said to be the relief which can be sought in an execution application filed under Order XXI, Rule 11 of the Code. Execution application is required to be filed for seeking assistance of the Court for enforcement of decree by various modes set out under Rule 11 itself. Only when the Court is satisfied that a valid application in accordance with Rule 11 is presented, then the stage of issuance of notice under Rule 22 arises. Notice under Rule 22 is a requirement in certain contingencies before enforcement of decree and unless and until a valid application for execution is presented seeking assistance in the mode set out under Rule 11, the stage of issuance of notice under Rule 22 does not arise. In our judgment, in the present case notice under Rule 22 was issued without noticing the defect in the execution application. As mentioned hereinabove, the duty is cast upon the executing Court to ascertain whether the application suffers from any defect and the Court is required to call upon the decree-holder to remedy the defect. The Rule confers power upon the Court to dismiss the application if the defects are not cured. In the present case the defect was not noticed by the Court and we are not prepared to visit the consequence of the decree being barred by law of limitation on the decree-holder for the error committed by the Court. In our judgment, the party should never suffer for the error of the Court or the Court Officer. The power to call upon the decree-holder to remedy the defect is not exhausted merely because notice under Rule 22 is made absolute. The power remains alive as long as the execution application is not rejected under Rule 17(1-A) of Order XXI. The second contention of the learned Counsel is, therefore, required to be turned down. The power to call upon the decree-holder to remedy the defect is not exhausted merely because notice under Rule 22 is made absolute. The power remains alive as long as the execution application is not rejected under Rule 17(1-A) of Order XXI. The second contention of the learned Counsel is, therefore, required to be turned down. In our judgment, the impugned decision of the learned Single Judge does not suffer from any infirmity and the conclusion that the decree was not barred by law of limitation on the date of service of the insolvency notice because of the pendency of Execution Application No. 144 of 1988 is correct. In view of our finding that the execution is not barred by limitation, the other contentions raised on behalf of the decree-holder as regards the period from which the limitation for enforcement of decree commences need not be examined. 9. Accordingly appeal fails and is dismissed with costs. At this stage Shri Cooper requests that the decree-holder should be restrained from taking any steps in pursuance of the notice of insolvency. We are not inclined to restrain the respondent from filing petition before the Insolvency Court but we direct that the petition should not be listed for hearing for a period of four weeks from today. Appeal dismissed. -----