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1996 DIGILAW 549 (KAR)

S. v. APPARAO VS VIJAYA BANK, GANGAVATI, RAICHUR DISTRICT

1996-09-12

M.F.SALDANHA

body1996
M. F. SALDANHA, J. ( 1 ) THESE two civil revision petitions involve a common point and therefore have been disposed of through a common order. I have heard the learned Advocates on both sides. The only grievance projected by the petitioner's learned Advocate is that he was a surety for the loan that was given by the Bank to judgment-debtor 1. His contention is that the Bank has straightaway applied for attachment of his property and that according to him, this is unfair because the decree becomes enforceable as against him provided the Bank is unable to recover its dues or unable to execute the decree against judgment-debtor 1. Learned Advocate submits that it is not permissible in law for the Bank for whatever reason, to bypass the principal debtor and straightaway apply for the attachment of the puperty of the surety because this could give rise to unfair practices where for extraneous reasons, the decree-holder-Bank may choose to exonerate the principal debtor and go after the surety. Learned Advocate submits that his liability may be absolute but that the starting point of this liability arises only when the Bank has found the amount due to it irrecoverable from the principal debtor. In the present case, the Bank had applied for execution of the decree against judgment-debtors 1 and 2 and straightaway applied for an order of attachment of the movables belonging to judgment-debtor 2 who was the surety. The petitioner's learned Advocate submits that the Trial Court was in error in having straightaway issued an order of attachment as far as his property is concerned and that the correct procedure would have been to issue notice to the judgment-debtors and only if the decretal amount was not forthcoming from them, to thereafter adopt coercive steps. ( 2 ) LEARNED Advocate who represents the Bank disputes this position. According to him, the loan was advanced to judgment-debtor 1 who in turn was working for judgment-debtor 2 and who has given his address C/o Judgment-debtors 2. Learned Advocate submits on instructions that both these persons remained absent before the Court in the first instance and that an ex parts decree was passed against them. According to him, the loan was advanced to judgment-debtor 1 who in turn was working for judgment-debtor 2 and who has given his address C/o Judgment-debtors 2. Learned Advocate submits on instructions that both these persons remained absent before the Court in the first instance and that an ex parts decree was passed against them. Thereafter, the Bank issued notice to both of them to comply with the terms of the decree which was not done and he submits that the reason why the Bank proceeded against judgment-debtor 2 by way of an attachment was because according to the learned Advocate, judgment-debtor 1 was not traceable. He therefore defends the action and he submits that where the decree is executed within time i. e. within two years, that under Order 21, Rule 22, Civil Procedure Code a show-cause notice is not obligatory. Learned Advocate submits that in this background, the action is fully justified and he further submits that no interference is called for by this Court. ( 3 ) AS regards the first aspect of the matter is concerned, I doconcede that the petitioner's learned Advocate has made out a case for interference because in situations such as the present one, the decree is executable primarily against the judgment-debtor and, by its very implication, the term surety presupposes the fact that his liability though co-extenso would commence only at the point of time when the Bank's recovery becomes impossible vis-a-vis the principal debtor. Learned advocate is right when he submits that unlike in partnership cases, that the liability is not joint and several but that the liability arises virtually consecutively or in other words that a surety would become liable only when it is demonstrated that the amount is irrecoverable from the judgment-debtor. There may be situations to justify the bypassing of the principal debtor such as if his whereabouts are unknown or if the record indicates that he is insolvent or in such a condition that nothing would be recoverable from him. There must however be some material placed before the Court to justify the action directed against the surety in the first instance. As indicated by me, there is no bar as far as recovery from the surety is concerned but the precaution that the Executing Court must take is to first ensure that reasonable efforts for execution have been made as against the principal debtor. As indicated by me, there is no bar as far as recovery from the surety is concerned but the precaution that the Executing Court must take is to first ensure that reasonable efforts for execution have been made as against the principal debtor. In the present instance, petitioner's learned Advocate submits that had his client been given an opportunity, that he would have disclosed the whereabouts of judgment-debtor 1 and furthermore that he would have also indicated as to what property judgment-debtor 1 has so that the bank could have recovered its dues by attachment and sale of that property. To this extent therefore, it is always a rule of caution that an Executing Court must observe to ensure that even in executing a decree, that the right parties are proceeded against in the right order. ( 4 ) ON the second aspect of the matter namely the question as to whether notice should have been given to the judgment-debtor who is the petitioner before me is concerned, it is true that the law does not make such notice compulsory. The fact that no such prior notice was issued would therefore not render the action either illegal or irregular. Regardless of this fact, as a matter of procedure Courts invariably issue of notice to the parties against whom the action is directed but the dispensation of notice would certainly be valid in certain instances particularly if the decree-holder points out to the Executing Court that the judgment-debtor is likely to abscond or is likely to do away with the property or take such other similar steps to defeat the execution. In such situations where adequate grounds exists, an ex parte attachment order would still be valid because the law does permit it. ( 5 ) COMING back to the facts of the present case, the application for execution did not make out any special ground for purposes of bypassing judgment-debtor 1 and to this extent therefore, che action taken straightaway against judgment-debtor 2 will have to be interfered with. I clarify however that if the Bank makes out a case, that the Court could still proceed against judgment-debtor 2 if it is satisfied that judgment-debtor 1 is either not available or that judgment-debtor 1 does not possess any assets through which the decree can be satisfied. The impugned order is accordingly set aside. I clarify however that if the Bank makes out a case, that the Court could still proceed against judgment-debtor 2 if it is satisfied that judgment-debtor 1 is either not available or that judgment-debtor 1 does not possess any assets through which the decree can be satisfied. The impugned order is accordingly set aside. The Court shall however hear the parties as far as the execution is concerned and if the judgment-debtor 2 is in a position to satisfy the Court that there is sufficient ground to execute the decree against judgment-debtor 1, efforts along those lines shall first be taken. It is however unnecessary for the Court to delay the execution proceedings for any abnormally long period of time and the Executing Court shall also not be debarred if it appears that the execution vis-a-vis judgment-debtor 1 is doubtful from taking such steps including by way of an attachment or asking for security from judgment-debtor 2 also. ( 6 ) THERE is another significant aspect of the matter where this Court is required to intervene. In case after case, particularly where Banks are concerned, it is found that there is abnormal delay between the passing of the decree and its execution. This court has taken judicial notice of the fact that in many cases this happens because of collusion with the judgment-debtor and in the remaining, because of negligence. In both instances it is unpardonable and as a corrective, or deterent, it is essential to prescribe certain remedial action. It is therefore directed that the Executing Court shall exclude, while computing the interest due from the judgment-debtors the entire period between the date of passing the decree and the date when the execution was applied for, excluding a period of one month, which is a reasonable time for the drawing up of the decree. Also, having regard to the long experience of this Court in many suits where the plaintiff takes years and decades to establish a simple straight forward claim, it has become essential to provide for certain disincentives. The Trial Courts shall hereafter dismiss such suits in which the service and other formalities are not completed within a reasonable time which should normally be one month from the date of filing. The Trial Courts shall hereafter dismiss such suits in which the service and other formalities are not completed within a reasonable time which should normally be one month from the date of filing. If the plaintiff is guilty of delay in completing the formalities or delays the hearing/disposal of the proceeding, the Trial Court shall disqualify the party concerned from claiming interest for the period after the filing of the suit. Also while awarding interest for the earlier period the Court shall disallow interest if there has been unexplained delay in approaching the Court. Conversely, if the defendant adopts delaying tactics the Court shall step up the rate of interest and costs against that party. ( 7 ) IT is in the aforesaid circumstances, that the impugned order is set aside. The proceedings are remanded to the executing Court where the parties are directed to appear on 23-10-1996. Civil revision petitions accordingly succeed. No order as to costs. --- *** --- .