JUDGMENT EX.aPPL.(OS) 607/2021 1. The precise scope of Order XXI Rule 46(1) of the Code of Civil Procedure, 1908 (CPC), the concept of 'debt' within its meaning, the extent of the onus on the judgement debtor who seeks to invoke the provision, and the position, in law, in a situation in which the garnishee disputes the debt of which the judgement-debtor seeks attachment, are seminal issues which arise for consideration in this application. 46. attachment of debt, share and other property not in possession of judgment-debtor. - (1) In the case of - (a) a debt not secured by a negotiable instrument, (b) a share in the capital of a corporation, (c) other movable property not in the possession of the judgment-debtor, except property deposited in, or in the custody of, any Court, the attachment shall be made by a written order prohibiting,- (i) in the case of the debt, the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Court; (ii) in the case of the share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon; (iii) in the case of the other movable property except as aforesaid, the person in possession of the same from giving it over to the judgment-debtor. Facts 2. OMP(Enf)(Comm) 172/2019 has been preferred under Section 36 of the arbitration and Conciliation act, 1996 ('the 1996 act') read with Order XXI of the Code of Civil Procedure, 1908 (CPC), seeking execution of a domestic arbitral award dated 18th april, 2015, passed by a three member arbitral Tribunal. 3. The aforesaid mentioned arbitral award ('the award', hereinafter) awarded, to the petitioner and against Respondent1,NeelachalIspat Nigam Limited (NINL), Rs. 15 crores and Rs. 50 lacs, with simple interest @ 10% per annum w.e.f. 30th January, 2011, along with costs of Rs. 60 lacs. 4. NINL and the petitioner have both assailed the award before the learned District Judge, Khurda, Bhubaneswar, under Section 34 of the 1996 act, vide arb P 67/2015, filed on 15th July, 2015 and arb P 68/2015, filed on 17th July, 2015. The challenge in the petitioner's Section 34 petition is limited to the issue of the rate of interest awarded by the learned arbitral Tribunal. Both petitions are currently pending. There is no stay, till date, of the award. 5. The challenge in the petitioner's Section 34 petition is limited to the issue of the rate of interest awarded by the learned arbitral Tribunal. Both petitions are currently pending. There is no stay, till date, of the award. 5. The petitioner has also filed Ex Petition583/2018 before the learned District Judge, Khurda, seeking execution of the award by way of attachment of the assets of NINL situated within the territorial jurisdiction of the learned District Judge, Khurda. That petition is also pending as on date. Statutory and precedential basis for filing the present petition 6. Section 36 of the 1996 act, as it read till 2015, envisaged enforcement of a domestic award, as if it were a decree of a Court, when the time for challenging the award under Section 34 had expired or where an application under Section 34 had been made and rejected. This resulted in a situation in which execution of awards remained pending for long periods, merely because the award had been challenged under Section 34, even where there was no stay of operation of the award.Consequentto detailed deliberations, therefore, Section 36was amended by Section19of the arbitration and Conciliation (amendment) act, 2015('the 2015amendment act'), clarifying that, in cases where the award had been challenged under Section 34, the award was not rendered unenforceable merely because of the pendency of such challenge, in the absence of any order staying the operation of the award under Section 36(3), passed on an application under the said provision. 36. Enforcement - Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court. 36. Enforcement - (1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall been forced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court. (2) Where an application to set aside the arbitral award has been filed in the Court under section 34,the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose. (3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing: Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908 (5 of 1908). Provided further that where the Court is satisfied that a Prima facie case is made out that,- (a) the arbitration agreement or contract which is the basis of the award; or (b) the making of the award, was induced or effected by fraud or corruption, it shall stay the award unconditionally pending disposal of the challenge under section 34 to the award. Explanation. - For the removal of doubts, it is hereby clarified that the above proviso shall apply to all court cases arising out of or in relation to arbitral proceedings, irrespective of whether the arbitral or court proceedings were commenced prior to or after the commencement of the arbitration and Conciliation (amendment) act, 2015 (3 of 2016). 7. Section 26 of the 2015 amendment act, however, made the act applicable only to arbitral proceedings, which had commenced on or after the coming into force of the 2015 amendment act. In a case such as the present, therefore, where the arbitral proceedings had been commenced before the 2015 amendment act, and a Section 34 challenge was pending on the date of the date of enactment of the 2015 amendment act, the benefit of the amended Section 34(2) would not be available. The case would, therefore, be governed by the pre-amended Section 34, which would have rendered the award unenforceable during the pendency of the Section 34 challenge by NINL. 8. The case would, therefore, be governed by the pre-amended Section 34, which would have rendered the award unenforceable during the pendency of the Section 34 challenge by NINL. 8. This, however, would, in its turn, render the words 'has been' in the amended Section 36(2) meaningless. Section 36(2), plainly read, covered cases where the award 'has been' challenged on the date of enactment of the 2015 amendment act.This, in its turn, would necessarily imply that the arbitral proceedings commenced prior to the 2015 amendment act. Paradoxically, however, Section 26negated the applicability of the 2015 amendment act to cases where the arbitral proceedings had commenced prior to its enactment. 9. This apparent disconnect between the amended Section 36(2) and Section 26 of the 2015 amendment act led to the judgment of the Supreme Court in Board of Control for Cricket in India v. Kochi Cricket Pvt Ltd (2018) 6 SCC 287 . The Supreme Court held that, in view of the use of the words 'has been', in the amended Section 36(2), the benefit of the amended Section 36 would also be available to cases where Section 34 challenges were pending on the date of the enactment of 2015 amendment act, i.e.10th March, 2015, even if the arbitral proceedings had been initiated prior thereto. 10. The present petition has been filed, availing the benefit of the judgment of the Supreme Court in Board of Control for Cricket in India (2018) 6 SCC 287 . 11. During the pendency of the present proceedings, Section 87 was introduced in the 1996 act with effect from 9th august, 2019, by the arbitration and Conciliation (amendment) act, 2019. This Section effectively undid the benefit conferred by Board of Control for Cricket in India4. However, Section 87 was subsequently struck down by the Supreme Court as being contrary to the object and purpose of the 1996 act, in Hindustan Construction Co Ltd. v. UOI (2020) 17 SCC 324 . 12. By conjoint operation of the Section 36(2) of the 1996 act (as introduced by 2015 amendment act) and the judgments of the Supreme Court in Board of Control for Cricket in India4and Hindustan Construction Co. (2020) 17 SCC 324 , therefore, the present petition ismaintainable. 13. Though, consequent to the judgment of the Supreme Court in Hindustan ConstructionCo. 12. By conjoint operation of the Section 36(2) of the 1996 act (as introduced by 2015 amendment act) and the judgments of the Supreme Court in Board of Control for Cricket in India4and Hindustan Construction Co. (2020) 17 SCC 324 , therefore, the present petition ismaintainable. 13. Though, consequent to the judgment of the Supreme Court in Hindustan ConstructionCo. (2020) 17 SCC 324 ,no serious contest to the maintainability of the present petition has been raised by the respondent, I deemed it necessary to set out the above factual and legal position for the purposes of completeness. Relief sought in the Execution Petition [OMP(Enf)(Comm) 172/2019] 14. Para 10 of the Execution Petition sets out the following 'mode in which the assistance of the Court is required'. '(a) Direct the Managing Director of theJudgement Debtor and of MMTC Ltd.to make disclosure on affidavit of the full and complete particular of allamounts payable by MMTC Ltd. tothe Judgement Debtor from01.04.2019 till date includingdirecting the MMTC Ltd. toimmediately file the ledger account ofJD from 01.04.2019 showing theamounts paid and payable by MMTCLtd. to JD. (b) Direct the Managing Director of theJudgement Debtor to make fulldisclosure on affidavit of full andcomplete particulars of all assets ofthe Judgment debtor, including the list of all assets; list of all bankaccount numbers with bank namesand addresses; list of all fixed depositreceipt amounts; name of Banks withmaturity dates; details of immoveableproperties with khasra no., locationand Book Values; list of debtors andtrade receivables as on 09.08.2019duly verified by a statutory auditor;and a copy of the Balance sheet ofthe Judgment Debtor as on09.08.2019. (c) Issue warrants of attachment,and/or release of decretal amountunder Order XXI, Rule 46 and 46afrom the sums receivable byJudgment Debtor and payable byMMTC Ltd. having its registered andcorporate offices at Core-l , ScopeComplex,7, Institutional area, LodhiRoad, New Delhi-110003. (d) Issue Warrants of attachment and/orrelease of decretal amount fromauction/ sale of such assets underOrder XXI, Rule 43, 46, 54 and 64,from the receivables and from thebank accounts that are disclosedthrough the aforementionedaffidavits of the Managing Directorsof MMTC Ltd. and the Judgement Debtor, and from properties that arementioned in the "Schedule ofproperties of the Judgment Debtorsituated in the jurisdiction of thisHon'ble Court" provided at Pg. 30hereinafter. 30hereinafter. (e) Until the aforesaid order as prayed in(c) to (d) above is passed, it is humbly prayed that out of moniespayable by MMTC Ltd. to JudgementDebtor, MMTC Ltd. be directed todeposit the aforesaid amount of Rs.34,74,16,164/- plus interest accruedtill the payment in the Registry ofthis Hon'ble Court and furtherMMTC Ltd. be restrained fromtransferring such amount of Rs.34,74,16,164/- plus interest accruedtill the date of payment to theJudgement Debtor to secure thedecretal amount of Decree Holder.' 15. Replies to OMP(Enf)(Comm) 172/2019 have been filed by NINL as well as MMTC (Respondent 2) and rejoinders, to the said replies, have been filed by the petitioner.Written submissions have also been filed in the Execution Petition. 16. During the pendency of the Execution Petition, the petitioner has preferred EX.aPPL(OS) 607/2021, which this order decides. 17. as already noted earlier, a substantive petition for execution of the award, against the properties of NINL (as the award debtor), located at Bhubaneswar, already stands preferred before the learned District Court, Khurda. The present proceedings are essentially in the nature of garnishee proceedings against MMTC, qua amounts stated to be owed by MMTC to NINL. The petitioner has alleged that, after the filing of the Execution Petition before the District Judge, Khurda, the petitioner came to learn, from the audited financial statements and balance-sheet of NINL forFY2017-2018,that there has been substantial erosion in the net worth of NINL and that all its properties stand mortgaged to various banks. The possibility of execution of the award against NINL being thus seriously in doubt, the petitioner has invoked Order XXI Rule 46 of the CPC, essentially seeking attachment of amounts stated to be due by MMTC to NINL. The invocation of the jurisdiction of this Court has been sought to be justified on the basis of the judgment of the Supreme Court in SundaramFinance Limited v.abdul Samad (2018) 3 SCC 622 , which requires garnishee proceedings to be taken before the Court within whose territorial jurisdiction the assets of the garnishee are located. To a query from the Court as to whether, if assets of garnishee are located in various jurisdictions, multiple Execution Petitions under Order XXI Rule 46 of the CPC could be preferred before different Courts having territorial jurisdiction over the garnishee's properties, Mr. abhishekPuri, learned counsel for the petitioner, answers in the affirmative and relies, for the purpose, on the judgment of this Court in Sunderson& Co. abhishekPuri, learned counsel for the petitioner, answers in the affirmative and relies, for the purpose, on the judgment of this Court in Sunderson& Co. v. Harbans Singh Sobti& Co ILR (1972 ) 1 Del. 263. agreements 18. The dispute between the parties, in these proceedings, have essentially centred around four agreements - or, rather, three agreements and an addendum to the third. The petitioner relies on an agreement for Sale/Purchase of raw materials and an agreement for Sale/Purchase of finished products, both executed between MMTC and NINL on 22nd June, 2012. NINL and MMTC, on the other hand, rely on an 'agreement for Working Capital Facility and Trade Finance Facility to NINL' (hereinafter,'the Working Capital agreement') dated 14th November, 2018, and an addendum thereto, dated 3rd July, 2019, between MMTC and NINL. 19. Before proceeding further, therefore, it would be appropriate to note certain relevant covenants of these agreements. agreement for Sale/Purchase of raw material ('the Raw Material agreement') dated 22nd June, 2012 20. NINL is a steel plant, producing pig iron, billets, wire rods, finished steel and other associated products.MMTC purchased NINL's finished products. In order to ensure continuous supply of finished products from NINL, MMTC undertook to purchase raw materials required by NINL for onward purchase of such raw materials by NINL from MMTC, so that the supply of finished products would be persistent and continuous. The agreement clearly states that it is on principal to principal basis. 21. article 3.1 of the Raw Material agreement covenanted that, except for sulphuric acid, river sand and iron ore to be purchased from the Odisha Mining Corporation and NINL's own captive mines, MMTC would sell the entire quantity of raw materials required by NINL, for onward sale to NINL. article 3.2 specifically proscribed NINL from purchasing raw material from any other source. Clause 4.2 envisaged transfer of title in the raw material from MMTC to NINL. Clause 4.3 required NINL to make full payment to MMTC, against the invoices raised by it in respect of the raw material. 22. article 5.2 envisaged that the sale would be on high seas sale basis by transfer of documents before the goods entered India. article 5.3 required NINL to remit the value of the goods on receipt of the documents covering the goods supported by MMTC's invoice and also rendered NINL liable to pay interest in the event of delayed payment. 23. article 5.2 envisaged that the sale would be on high seas sale basis by transfer of documents before the goods entered India. article 5.3 required NINL to remit the value of the goods on receipt of the documents covering the goods supported by MMTC's invoice and also rendered NINL liable to pay interest in the event of delayed payment. 23. article 7.1 set out the manner in which the sale price would be fixed and read thus: '7.1 Sale price shall be fixed on Purchase Value plus Sales Tax, Entry Tax andother statutory levies, if any and a Trade Margin of 3% of the purchase value as defined in clause 1.5.' 24. article 13.1 once again emphasized the fact that the agreement was on the principal to principal basis and read thus: '13.1 This agreement supersedes all agreements and understandings between theparties prior to the signing of this agreement. Thus agreement is a completeagreement on principal to principal basis between MMTC and NINL.' agreement for Sale/Purchase of Finished Products('the Finished Products agreement') dated 22nd June, 2012 25. Under this agreement, NINL agreed to sell its finished products to MMTC on principal to principal basis, for onward sale by MMTC in India as well as abroad. article 3 set out the buying and selling arrangement between the NINL and MMTC. article 3.1 stipulated that NINL would extend 3% trade discount on basic price of the finished products, in the case of domestic sales and a price discount as mutually agreed from time to time in the case of goods which were subsequently exported by MMTC. article 3.2 proscribed NINL from selling of its finished products except to MMTC in accordance with article 1.3. 26. article 4.5 envisaged domestic sale and export, by MMTC, of finished products purchased from NINL. article 14.1 reinforced the fact that the Finished Products agreement was on principal to principal basis. Working Capital agreement dated 14th November, 2018, and its addendum dated 3rd July, 2019 27. Recitals B and C in the Working Capital agreement dated 14th November, 2018 noted the fact that, on 29th December, 1997, MMTC and the Government of Odisha had entered into a Shareholders agreement and also noted the execution of the Sale/Purchase agreements dated 22nd June, 2012, between MMTC and NINL. Recitals B and C in the Working Capital agreement dated 14th November, 2018 noted the fact that, on 29th December, 1997, MMTC and the Government of Odisha had entered into a Shareholders agreement and also noted the execution of the Sale/Purchase agreements dated 22nd June, 2012, between MMTC and NINL. Recital D noted the fact that NINL was partly dependent on MMTC's financial support for meeting its working capital requirement, payment to Iron Ore, Coal and other raw material supplier(s), railway freight and other costs and expenses. The manner in which costs were adjusted, were thus noted in recitals E to H in the Working Capital agreement: 'E. as a part of cost adjustment towards procurement of coal, iron ore and other row materials,MMTC takes the credit of the payment received against sale or NINL products from time to time. Similarly at the request or the NINL, MMTC is also paying to NINL funds for meeting their day to day operational requirements as 'D' above. These payments are adjustedagainst the sales realizations by MMTC on sale of NINL's finished products and by-productsetc. F. The MMTC has a running account at Its Regional Office Bhubaneswar and all payments and receipts are posted in such accounts with a provision of charging interest by the MMTC ondebit balances. G. Keeping in view of the above and In view of continuous requirement of funds for smoothrunning of the plant MMTC has agreed to provide working capital facility to NINL within an overall limit of Rs.1345 Crore on net cash basis which includes one-time exposure of Rs.60 crores on account of signing mining lease agreement by NINL with the miningdepartment, Govt. of Odisha. Moreover, the said limit includes funds for meeting the day-to-day operational, statutory and other misc. expenses for the plant and one-time payment of Rs.130 crores paid for repayment of term loan. The MMTC and NINL shall work together to ensure that the above limit gets decreased gradually over a period of time as per schedule provided at annexure-I.However, the Trade Finance Facility to NINL shall be reviewed by the Board of Directors of MMTC from time to time.The total working capital provided to NINL and outstanding opening balance as on theeffective date of the agreement i.e. 1stapril, 2017, was Rs. 1345 crores. H. Thus the Working Capital limit as on 01.04.2017 was Rs.1345crores. 1345 crores. H. Thus the Working Capital limit as on 01.04.2017 was Rs.1345crores. Board of Directors ofMMTC vide their 437thmeeting dated 28.12.2017 extended the working capital limit to NINLby Rs.80 crores.Therefore,the total limit extended to NINL became Rs.1425 crore w.e.f.28.12.2017 and further directed that the said limit of Rs.1425 crores shall stand reduced toRs.1365 crores as on 01.04.2018 after repayment or Rs.60 croreas by NINL by 31.03.2018. Subsequently, Board of MMTC vide its 440thMeeting held on 26.03.2018 took note of urgent need of financial assistance to NINL enabling it to complete the on-going revamping of Blast Furnace end other Project facilities for operational continuity and avoiding default byNINL that can also trigger financial crisis at MMTC. The Board after deliberations and taking note of the trade related facilities lime import ofCoking Coal on High Seas Sales etc. approved trade related financial facilities to the extent of Rs.550 crores to NINL by MMTC over and above the Working Capital Limit of Rs.1425 crores beyond 31.03.2018. as such, the total financial assistance by way of Working Capital Facility and Trade related facility to NINL by MMTC worked out to Rs.1975 crores w.e.f. 28.03.2018.' 28. Thus, the Working Capital agreement envisaged two facilities being extended by MMTC to NINL to keep it afloat, namely, the Working Capital Facility and Trade Finance Facilities. The modalities and specifics of these two facilities are to be found in Clause 4.0 of the Working Capital agreement and its sub clauses, which read thus: '4.0 aGREEMENT aND TERMS OF THE WORKING CaPITaL: 4.1. amount of Working Capital Facility: The MMTC has agreed to grant the Working Capital facility to the NINL a sum of Rs.1425 Crores (Rupees One Thousand Four Hundred and Twenty Five Crores), out of which financial assistance to the tune of Rs.1295 Crores would be in the nature of Standing Working Capital facility including Trade Receivables, while the remainder Rs.130 Crores has been extended as a one-time facility for repayment of the NINL's outstanding Term Working Capital dues towards various Banks and Financial Institutions. Besides above, MMTC has also agreed to extend Trade Finance Facilities to the extent of Rs.550 crores to NINL over and above the Working Capital Limit of Rs.1425 Crores beyond 31.03.2018. Besides above, MMTC has also agreed to extend Trade Finance Facilities to the extent of Rs.550 crores to NINL over and above the Working Capital Limit of Rs.1425 Crores beyond 31.03.2018. 4.2 Disbursement of Working Capital and Trade Finance Facility: MMTC may at its sole discretion disburse amount or supply raw materials to NINL as per their requirement from time to time. 4.3 Period of Working Capital and Trade Finance Facility: The period of Working Capital and Trade Finance Facility under the agreement shall be initially for a period of one year from the effective date or as may be mutually agreed to between MMTC and NINL which may be extended to further period(s) with mutual consent of both parties in writing. However, in Board Meeting held on 26.03.2018 Working Capital Limit increased upto Rs.1425 Crores and Rs.550 Crores towards Trade Finance and now Loan agreement shall be enforceable upto 31st March, 2019. 4.4 Prepayment of Working Capital and Trade Finance Facility: The NINL can at any time prepay the Working Capital and Trade Finance Facility and there shall not be any penalty for prepayment of facility. 4.5 Mode of Repayment: NINL will supply goods to MMTC for sale in the domestic as well as in the international market. The consideration against such supplies of goods will be adjusted from time to time towards outstanding amount against Working Capital and Trade Finance Facility extended by MMTC.The adjustment of consideration will be carried out depending upon the cash flow and in mutual consultation between MMTC and NINL.' (Underscoring and italics supplied) 29. Clause 7 of the Working Capital agreement, which is of considerable significance in the present case, reads thus: '7. SCHEDULE OF REPaYMENT: 7.1 The outstanding Working Capital and Trade Finance Facility will be adjusted against theconsideration payable to NINL in respect of supplies of goods from time to time in relation to various agreements. The outstanding amount including interest shall be repaid by NINL depending upon the cash flow and on mutual consultation between MMTC and NINL.' (Emphasis supplied) 30. Clause 19 was an 'entire agreement' clause and read thus: '19. ENTIRE aGREEMENT The agreement along with the terms and conditions represents the entire agreementbetween the Parties.' 31. addendum to Working Capital agreement dated 3rd July, 2019. Clause 19 was an 'entire agreement' clause and read thus: '19. ENTIRE aGREEMENT The agreement along with the terms and conditions represents the entire agreementbetween the Parties.' 31. addendum to Working Capital agreement dated 3rd July, 2019. By this amendment to the Working Capital agreement, the Working Capital advance limit and trade credit limit, as envisaged in the Working Capital agreement, were revised upwards to Rs. 1425 crores and Rs. 1375 crores, respectively, thereby permitting a total credit limit of Rs. 2800 crores, outstanding at any point of time during the FY 2019-2020. Clause 4.0 specified the addendum constituted an integral part of the Working Capital agreement dated 14th November, 2018. 32. During the pendency of the Execution Petition, the petitioner preferred EX.aPPL(OS) (OS) 607/2021, which stands decided by the present order. This application contains the following prayer: 'It is therefore most respectfully prayed that this Hon'bleCourt may kindly be pleased to: (a) Issue warrants of attachment and direct realisationof decretal amounts under Order XXI rule 46 and rule 46a from sums receivable by Judgment debtorand payable/ paid/ advanced by MMTC for thesale purchase transactions carried out by MMTCwith Judgment Debtor No.1 in the FY 2019-2021; (b) Until the aforesaid order as prayed in (a) above ispassed, out of monies payable by MMTC Ltd. toJudgement Debtor No. 1, MMTC Ltd. be directed tokeep the decretal amount plus interest accrued tillthe payment, in an escrow account and furtherMMTC Ltd. be restrained from transferring suchamount to secure the awarded amount of DecreeHolder; (c) any other and further orders as this Hon'ble Courtmay deem fit in the fact of the case may kindly bepassed in favour of DH and against the Judgment Debtor.' Rival Contentions 33. I have heard Mr. abhishekPuri, learned counsel for the petitioner and Mr. Dhananjaya Mishra and Mr. akhil Sachar, learned counsel for MMTC and NINL respectively at considerable length. 34. Mr. Puri, learned counsel for the petitioner, submits, at the outset, that the present application has been preferred under Order XXI Rule 46 of the CPC, which is the first step in garnishee proceedings, and merely envisages a restraint, against the judgment debtor (in the present case NINL) from recovery, and the garnishee (in the present case MMTC) from paying, the debt owed by the garnishee to the judgment debtor, i.e. by MMTC to NINL. according to Mr. according to Mr. Puri, if there is prima facie material to indicate that a debt is owed to the judgment debtor by a third party, then, solely on the basis of an affidavit by the decree holder, an order of restraint can be passed under Order 21 Rule 46 of the CPC. all that is required to be established by the decree holder at this stage, according to Mr. Puri, is reasonable belief of the existence of the debt owed to the judgment debtor by a third party.He has relied, for this purpose, on the judgments of the High Court of Calcutta in BeggDunlop & Co v. Jagannath Marwari 1911 SSC Online Cal 129 and Mackinnon Mackenzie and Company Pvt Ltd v. anil Kumar Sen aIR 1975 Cal 150 , an order dated 27thaugust, 2021 passed by this Court in OMP(Enf)(Comm) 19/2018 (anglo-american Metallurgical Coal Pty Ltd v. MMTC Ltd), the judgment of the Queen's Bench in De Pass v. The Capital Industries Corporation Ltd 1891, I QB 216 and the judgment of the Queen's Bench in Coren v. Barne [L.R.] 22 Q.B.D.249. 35. any dispute regarding the existence or quantum of the debt, submits Mr. Puri, is to be examined only under Order XXI Rule 46a(1) of the CPC, after a restraint order against payment of the debt to the judgment debtor has been passed under Order XXI Rule 46 of the CPC, for which purpose, he relies on the judgment of the High Court of Kerala in Executive Engineer v J.H. Sharma 1988 SCC Online Ker 45 and the High Court of Patna in Imperial Bank of India v BibiSayeedan (1958) SCC OnLine Pat 2.This, he submits, is apparent even from the plain wording of Order XXI Rule 46a. He also relies on the judgment of a Division Bench of this Court in Global Trust Bank v Fargo Freight Ltd 2001 SCC Online Del 673 which, according to him, was upheld by the Supreme Court in Fargo Freight Ltd v. Commodities Exchange Corporation 2004 7 SCC 203 , though it was partly set aside on another point. 46-a. Notice to garnishee. 46-a. Notice to garnishee. - (1) The Court may in the case of a debt (other than a debt secured by a mortgage or a charge) which has been attached under Rule 46, upon the application of the attaching creditor, issue notice to the garnishee liable to pay such debt, calling upon him either to pay into Court the debt due from him to the judgment-debtor or so much thereof as may be sufficient to satisfy the decree and costs of execution, or to appear and show cause why he should not do so. 36. To contradistinguish Order XXI Rule 46 with Order XXI Rule 43, Mr. Puri also places reliance on the judgment of this Court in Vali Ram v SatwantiKaur 1983 (5) DRJ 259 . 37. according to Mr. Puri, any and all amounts payable by MMTC to NINL, whether in praesenti or in future are 'debts' within the meaning of Order XXI Rule 46 and are, therefore, capable of being attached. Statements and entries in balance-sheets, he submits, amount to acknowledged debts, akin to admissions under Order XII Rule 6 of the CPC, unless these statements and entries are hedged in by any caveat to the contrary. For this purpose, he relies on the judgment of the Supreme Court in asset Reconstruction Company Ltd v. BishalJaiswal (2021) 6 SCC 366 . Mr. Puri has also sought to point out that, merely on the basis of such entries in balance-sheet, this Court has, on 24th February, 2015, directed attachment of the assets of the amounts due by the garnishee to the judgment debtor in Ex P 58/2015 [Vitol S.a v. asian Natural Resources (India Ltd.)]. Even an unascertained debt, submits Mr. Puri, is attachable under Order XXI Rule 46, for which purpose, he cites the judgment of the High Court of Madras in alsidassKaverlal v. J. HiriyaGowder 1960 SCC Online Mad. 137. 38. Having thus stated what, according to him, are the principles governing exercise of jurisdiction under Order XXI Rule 46, Mr. Even an unascertained debt, submits Mr. Puri, is attachable under Order XXI Rule 46, for which purpose, he cites the judgment of the High Court of Madras in alsidassKaverlal v. J. HiriyaGowder 1960 SCC Online Mad. 137. 38. Having thus stated what, according to him, are the principles governing exercise of jurisdiction under Order XXI Rule 46, Mr. Puri proceeds to draw my attention to the material on record which,according to him, manifests the existence of a debt attachable under Order XXI Rule 46, owed by MMTC to NINL: (i) Form No. aOC-2, filed by NINL as part of its annual report, for the Financial Year 2017-18, under Section 134(3)(h) of the Companies act, 2013 read with Rule 8(2) of the Companies (accounts) Rules, 2014, disclosed 'the details of contracts or arrangement or transactions not an arm's length basis', as including the contracts between NINL and MMTC, thus: 1. Details of contracts or arrangements or transactions not at arm's length basis Name of the Related Party MMTC Limited a) Nature of the relationship Promoter b) Nature of contracts/ arrangements/ transactions The agreements for sale/purchase of finished goods and raw material was signed between MMTC & NINL vide agreement dtd. 22.06.2012 c) Duration of contracts/arran gements /transactions On ongoing basis as long as the requirement for buying and selling subsists. d) Salient terms of the contracts of arrangements or transactions including the value, if any. Shareholders agreement between MMTC & Govt. of Odisha through M/s IPICOL envisage that MMTC shall organise supply of raw materials and consumables for the plant on mutually agreed terms. also MMTC shall arrange domestic sale and export of products of the NINL company at mutually agreed terms between MMTC & NINL. agreement for sale/purchase of finished goods and raw materials was signed between MMTC & NINL vide agreement dtd. 22.06.2012. Value - Rs. 2700.00 cr. e) Justification for entering into such contracts or arrangements or transactions as mentioned above. f) Dates of approval by Board. 24 th May, 2017 g) amount paid as advances, if any. agreement for sale/purchase of finished goods and raw materials was signed between MMTC & NINL vide agreement dtd. 22.06.2012. Value - Rs. 2700.00 cr. e) Justification for entering into such contracts or arrangements or transactions as mentioned above. f) Dates of approval by Board. 24 th May, 2017 g) amount paid as advances, if any. Nil (ii) The Notes on Financial Statements of NINL for 2015-16, 2016-17, 2017-18 and the disclosure made by MMTC to the Securities and Exchange Board of India (SEBI) under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ['the SEBI (LODR) Regulations'] indicated that, during the years 2015-16, 2016-17, 17-18 and 2018-19, the sale of raw material by MMTC to NINL and sale of finished goods by NINL to MMTC, were to the following extent: Financial Year Value of raw material Purchased by NINL from MMTC (Rs. ) Value of finished products sold by NINL to MMTC (Rs. ) 2015-16 483.10 crores 1246.91 crores 2016-17 6147.48 crores 1290.83 crores 2017-18 607.46 crores 993.42 crores 2018-19 1319.46 crores 2012.71 crores (iii) The un-audited accounts of NINL for the Financial Years 2018-19, 2019-20 also indicated the following: 'Details of transactions with related parties: ( Rs. in lakh) Particulars 2019-20 2018-19 Purchase of goods from MMTC Ltd. 91,645.96 1,34,555.93 Sale of goods to MMTC Ltd. 1,04,264.03 2,27,909.08 Equity participation by MMTC Ltd. as on 31.03.2020/31.02.2019 (excluding security premium) 36,876.27 28,934.27 Corporate Guarantee issued to MMTC Ltd. as on 31.03.2020/31.03.2019 2,80,000.00 1,97,500.00 Corporate Guarantee issued by MMTC in favour of banks/FIs for securing the loans of the company as on 31.03.2020/31.03.2019 1,29,582.00 1,34,582.00 Working capital Borrowing from MMTC Ltd. as on 31.03.2020/31.03.2019 1,42,500.00 1,42,500.00 Trade Finance from MMTC Ltd. as on 31.03.2020/31.03.2019 25,221.14* 1,16,723.11 Interest on working capital borrowing and trade finance from MMTC Limited. 25,221.16 20,821.07 Purchase of goods from OMC Ltd. 6,716.92 25,767.95 Equity participation by OMC Ltd. as on 31.03.2020/31.03.2019 (excluding security premium) 15,159.85 7,159.85 Inter Corporate Loan by OMC Ltd. as on 31.03.2020/31.03.2019 31,724.25 16,881.12 Interest on Inter Corporate Loan from OMC Limited 1837.62 1979.81 Interest on Raw Material Outstanding from OMC 852.65 1,330.47' (iv) The annual report of MMTC for 2019-20, forming part of its balance sheet, contained the following entries regarding transactions with related parties and outstanding balances from sale/purchase of goods/services. g. Transactions with Related Parties Particulars Neelachal Ispat Nigam Limited Mar/20 Mar/19 Sale of Goods and Services 837.75 1319.48 Purchase of raw material/gods and services 935.48 2012.71 Payments on behalf of company - - Other transactions - 216.67 h. Outstanding balances arising from sale/purchase of goods/services Particulars Neelachal Ispat Nigam Limited Mar/20 Mar/19 Trade Payables 1.59 1.46 Trade receivables - - Other Payables - - Other Receivables - - 39. The submission of Mr. Puri is, therefore, that the value of the finished goods sold by NINL to MMTC under the aforesaid agreement dated 22nd June, 2012 was more than the value of the raw material sold by MMTC to NINL every year.That apart, there was clear acknowledgment, on record, of an outstanding debt from MMTC to NINL, in 2019-20, of Rs. 1.59 crore. 40. On the basis of the above material, Mr. Puri submits that MMTC is in the possession of a garnishee vis-a-vis the petitioner, with respect to the debts owed by it to NINL, under the aforesaid sale/purchase agreements dated 22nd June, 2012.The petitioner is, therefore, according to him, entitled, under Order XXI Rule 46(1) of the CPC, to an order, from this Court prohibiting NINL from recovering any debt from MMTC, and prohibiting MMTC to liquidate any debt owed to NINL, under the aforesaid sale/purchase agreements dated 22nd June, 2012, pending execution of the award. 41. The execution petition as well as the present application, have been opposed by NINL as well as by MMTC, represented by Mr. Dhananjay Mishra and Mr. akhil Sachar respectively. 42. as their contentions largely overlap, I would be referring to them collectively. 43. Learned Counsel for the respondents submit that, prior to invoking Order XXI Rule 46, there has, in the first instance, to be ascertainment of debt under Order XXI Rule 41(1) of the CPC. It is only in the case of admitted and acknowledged debt that garnishee proceedings under Order XXI Rule 46 can be set in motion.a disputed debt cannot, submit learned Counsel, be attached under Order XXI Rule 46. The standard of admission of debt, for proceedings under Order XXI Rule 46 to be maintainable is, submit learned Counsel, akin to the standard of admission governing Order XII Rule 6 of the CPC. The standard of admission of debt, for proceedings under Order XXI Rule 46 to be maintainable is, submit learned Counsel, akin to the standard of admission governing Order XII Rule 6 of the CPC. Where the judgment debtor, or the alleged garnishee, deny the fact of debt by the latter to the former, the issue has first to be framed and tried, before any order of attachment or even restraint can be passed. For these submissions, learned Counsel for the respondents rely on the judgments of Division Benches of this Court in aaaPortfolios Pvt. Ltd. v. Deputy CIT ILR (2013) 5 Del 3938, Global Trust Bank 2001 SCC Online Del 673 and Vali Ram17. 41. Examination of judgment-debtor as to his property. - (1) Where a decree is for the payment of money the decree-holder may apply to the Court for an order that - (a) the judgment-debtor, or (b) where the judgment-debtor is a corporation, any officer thereof, or (c) any other person, be orally examined as to whether any or what debts are owing to the judgment-debtor and whether the judgment-debtor has any and what other property or means of satisfying the decree; and the Court may make an order for the attendance and examination of such judgment-debtor, or officer or other person, and for the production of any books or documents. 44. Learned Counsel for the respondents have, in one voice, emphatically denied the existence of any subsisting debt owed by MMTC to NINL. They submit that the agreements for sale/purchase of raw material and finished goods, dated 22nd June, 2012, on which the petitioner relies, did not represent the entirety of the financial transactions between NINL and MMTC. They submit that MMTC was, from time to time, extending, to NINL, working capital loans as well as trade finances. They have drawn attention to, (i) annexure-1 to the Independent auditor's Report on the Standalone Financial Statementsof MMTC for the years 2018-19, which contains the following recitals: '4. Compliance of Provision of Section 185 and 186 of the Companies act 2013 in respect of loans, guarantees and securities. The Board of Directors of the Company, during the year, has enhanced the credit facilities to one of its Joint Venture- M/s NeelachalIspat Nigam Ltd. (NINL) from Rs. 550.00 crores to Rs. 1187.00 Crores thereby the total outstanding from NINL Rs. The Board of Directors of the Company, during the year, has enhanced the credit facilities to one of its Joint Venture- M/s NeelachalIspat Nigam Ltd. (NINL) from Rs. 550.00 crores to Rs. 1187.00 Crores thereby the total outstanding from NINL Rs. 2594.56 Crore as on 31st March, 2019 (P.Y. Rs 1786.70 Crores).' (ii) the Preliminary Information Memorandum issued for disinvestment of NINL, in which, with respect to the financial performance of NINL, it was stated as under: 'The current liabilities include MMTC's Loans/advances of Rs. 3221 Crore to NINL as on 31.03.2020 consisting of working capital loan of Rs. 1425 Crore and Trade Credit advance of Rs. 1796 Crore as on 31.03.2020. additionally, MMTC has provided Corporate Guarantee of Rs. 1471.70 Crore to Banks/Financial Institutions for borrowings of NINL.' (iii) the details of transactions with related parties, as reflected in the unaudited accounts of NINL for the Financial Year 2019-20, reproduced in para 37(iii)supra, (with reference to which Mr. Puri had drawn attention to the initial two entries relating to purchase of goods from MMTC and sale of goods to MMTC), which further indicated that NINL had, as on 31st March, 2020, outstanding working capital borrowings of Rs. 1.425 cores and outstanding trade finance, borrowed of Rs. 1796 crores, apart from interest of Rs. 252 crores,which was far in excess of any outstanding payment that MMTC would have towards NINL against the purchase of finished goods from NINL,though learned Counsel for the respondents denied the existence of any such outstanding debt. 45. Thus, assuming any such debt existed, learned Counsel for the respondents contend that MMTC was entitled to set off the said debt against the amounts outstanding from NINL, relating to the working capital and trade finance facilities extended by MMTC to NINL. Reliance has been placed, for this principle, on the judgment of the High Court of Bombay in TayaballiGulamHusein v. atmaramSakharam ILR (1914) 38 Bom 631 and addepalliSatyanarayanamurthy v. VadlamannatiVenkateswararao aIR 1937 Mad 848 . 46. It was categorically asserted by learned Counsel for the respondents that MMTC owed no money to NINL. Rather, it was submitted that NINL owed, as on 31stMarch, 2019, Rs. 2594.96 crores to MMTC which, by 31st December, 2020, had increased to Rs. 3321 crores (as already noted supra). 46. It was categorically asserted by learned Counsel for the respondents that MMTC owed no money to NINL. Rather, it was submitted that NINL owed, as on 31stMarch, 2019, Rs. 2594.96 crores to MMTC which, by 31st December, 2020, had increased to Rs. 3321 crores (as already noted supra). My attention has been invited, in this context, to (i) the recital in annexure-1 to the Independent auditor's Report on the Standalone Financial Statements of MMTC for the years 2018-19 (reproduced in para 43(i)supra), (ii) MMTC's balance-sheet for the year 2019-20, in which it is stated that thus: '(II) The company has been extending, from time to time, short term credit facility (cash credit) to NINL upto a limit of Rs. 1425.00 crores for its day to day operational activities on continuing basis. In addition, a trade related financial facility to the extent of Rs. 1187.00 crore has also been extended. against this, outstanding under Other assets (advances to related parties) (note 11) is Rs. 2594.57 crore (P.Y. Rs. 1787.70 crore) as against total net worth of the company of Rs. 1489.25 crore as on 31.03.2019.' (iii) the following tabular statement of 'advances to Joint Venture', which contained the following recitals: advances to Joint Ventures Particulars Neelachal Ispat Nigam Limited Mar-2019 Mar-18 advances given 2594.56 1786.70 (iv) the general disclosure contained in the same balance sheet, which contained the following recital: '(II) The company has been extending, from time to time, short term credit facility (cash credit) to NINL upto a limit of Rs. 1425.00 crores for its day to day operational activities on continuing basis. In addition, a trade related financial facility to the extent of Rs. 1187.00 crore has also been extended. against this, outstanding under Other assets (advances to related parties) (note 11) is Rs. 2594.57 crore(P.Y. Rs. 1787.70 crore) as against total net worth of the company of Rs. 1489.25 crore as on 31.03.2019.' 47. as such, it was contended that, in order to run NINL's plant, MMTC was advancing working capital loans as well as trade finances to NINL with caps of Rs. 1425 crores and Rs. 550 crores which were increased, by the addendum issued consequent to the Board of Directors meeting dated 28th December, 2017 to Rs. 1425 crores and Rs. 1375 crores. 1425 crores and Rs. 550 crores which were increased, by the addendum issued consequent to the Board of Directors meeting dated 28th December, 2017 to Rs. 1425 crores and Rs. 1375 crores. Further, at the 440th Board of Directors meeting of MMTC, it was decided to increase trade related facilities extended to NINL to Rs. 550 crores. as on 31st March, 2020, therefore, it was contended that the total financial facilities extended by MMTC to NINL aggregated to Rs. 1,975 crores. Reliance was also placed, in this context, on para 9 of NINL's affidavit filed by way of reply to the present enforcement petition, in which it is admitted that NINL owes to MMTC approximately Rs. 2,592 crores as on 31st March, 2022. 48. Re-asserting that Order XXI Rule 46 would apply only where the garnishee acknowledges the debt owed to the judgment debtor, MMTC submits that where, as in the present case, the debt was denied by MMTC, no proceeding under Order XXI Rule 43 would lie until, in the first instance, the debt was ascertain under Order XXI Rule 41. 49. Though Mr. Puri sought to question the applicability of the judgment of the Division Bench of this Court in aaa Portfolios Pvt. Ltd ILR (2013) 5 Del 3938 on the ground that that the judgment would apply at the stage of issuance of a garnishee order under Order XXI Rule 46(c), learned Counsel for the respondents, disputes this submission and relies, for the purpose, on para 19 of the said decision. 50. In fact, learned Counsel for the respondents asserts that there is no admission of debt, whatsoever, in their balance-sheets or financial statements, as would justify invocation, by the petitioner, of Order XXI Rule 46 of the CPC. 51. On the plea of set off, urged by the respondents, Mr. Purisubmits, in rejoinder, that set off could not be pleaded by the respondents in the case of transactions which were not inter-connected. He relies, for the said purpose, on the judgment of the High Court of Bombay in Bank of Rajasthan v. UoI 2002 (1) Mah LJ 812. Further citing UoI v. Karan Chand Thapar (2004) 3 SCC 504 , Mr. He relies, for the said purpose, on the judgment of the High Court of Bombay in Bank of Rajasthan v. UoI 2002 (1) Mah LJ 812. Further citing UoI v. Karan Chand Thapar (2004) 3 SCC 504 , Mr. Puri submits that equitable set off, under Order VIII Rule 6 of the CPC, is required to be pleaded and proved by the respondents.This not having been done, he submits that the respondents cannot plead set off. Karan Chand Thapar25he submits, reinforces the legal position that a plea of set off could only sustain in the context of inter-connected transactions. 52. Besides, points out Mr. Puri, the Working Capital agreement, did not envisage, anywhere, setting off, against the working capital and trade facilities extended by MMTC, the amounts due from MMTC to NINL under the contracts dated 22nd June, 2012, for sale and purchase of raw material and finished products. Rather, he points out that Clause 7.1 of the Working Capital agreement contemplated adjustment of amounts as per mutual consultations between NINL and MMTC and also provided a scheme for re-payment. 53. Even on facts, submits Mr. Puri, the plea of set off is misguided, as the balance sheet of NINL indicates that the working capital borrowings remained stationary from 2017-18 to 2019-20 at Rs. 1425 crores. No part of the amount payable by MMTC to NINL, against purchase of finished product was, therefore, he submits, being set off against the working capital or trade facilities loans extended by MMTC to NINL. The plea of set off, therefore, he submits, is merely a red herring, being advanced so as to escape the respondents' liability under Order XXI Rule 46 of the CPC. analysis Issues that arise for consideration 54. The rival submissions in this case throw upthe following issues for consideration: (1) are these proceedings bad for want of territorial jurisdiction, or by reason of the pendency of Ex Petition 583/2018 filed by the petitioner before the learned District Judge, Khurda Rs. (2) What constitutes an attachable 'debt' for the purposes of Order XXI Rule 46, CPC Rs. (3) What is the applicant under Order XXI Rule 46 required to establish, to be entitled to orders from the Court under the provision Rs. This would involve, in its turn, an examination of the interplay between Order XXI Rule 46 and the provisions that follow, especially Order XXI Rule 46C. (3) What is the applicant under Order XXI Rule 46 required to establish, to be entitled to orders from the Court under the provision Rs. This would involve, in its turn, an examination of the interplay between Order XXI Rule 46 and the provisions that follow, especially Order XXI Rule 46C. (4) Can the garnishee, or the judgement-debtor, plead a case of set off, of the date of which attachment is being sought, against other amounts owed by the judgement debtor to the garnishee Rs. If so, what is the scope of such plea Rs. (5) In view of the answer to the foregoing questions, has the applicant made out a case for passing of prohibitory orders under Order XXI Rule 46 Rs. 55. Given its nature, it would be appropriate, in the 1st instance, to deal with Issue (1). Re. Issue (1) - Territorial jurisdiction and maintainability 56. a preliminary issue that was raised, by the respondents, was whether, having moved the learned District Judge, Khurda for execution of the award, the petitioner could maintain the present proceedings before this Court. Learned Counsel for the respondents sought to contend that the petitioner was essentially seekinga second bite at the cherry. Having failed to obtain any interlocutory protective orders from the learned District Judge atKhurda, in the Execution petition preferred by it, learned Senior Counsel for the respondents contend that the petitioner is seeking to obtain such orders from this Court. 57. It is clear from a juxtaposed reading of EX Petition 583/2018, filed by the petitioner before the learned District Judge, Khurda,and the present petition, that they seek different and distinct reliefs. There is no relief sought before thelearned District Judge, Khurda, against MMTC. The specific prayer, in Clause 10 of the petition before the learned District Judge, Khurda, reads thus: Mode in which the assistance of the Court is required: Direct the Managing Director of the Judgment Debtor to make disclosure onaffidavit of the full and complete particulars of all assets of the JudgmentDebtor, including the list of all assets,list of all Bank account Numbers withBank Names and addresses, list of allFixed Deposit Receipts amounts, name ofthe Banks with maturity dates. Details ofimmovable properties with its location,Khasra Nos. Details ofimmovable properties with its location,Khasra Nos. and Book Value, list of allassets charged with the banks, list ofDebtors/Receivables as on 31.08.2018with name of the parties duly verified by the statutory auditor and a copy ofBalance Sheet of Judgment Debtor as on31.03.2018. The Decree Holder prays awardedamount with uptodate interest inaccordance with award till the date ofactual realization by Decree Holder andthe costs of taking out this execution, berealised by attachment and sale movable&immovable properties of Judgment debtor, details whereof are mentioned inList of Properties attached herewith. 58. as against this, the prayer in the present petition, already stands reproduced in para 31 supra. 59. EX Petition 583/2018, before the learned District Judge, Khurda, is, therefore, not in the nature of garnishee proceedings. The petitioner has not invoked Order XXI Rule 46 in the said proceedings or sought any relief against any amount owed by MMTC to NINL.In the present proceedings, the petitioner's clear case is that MMTC owesa debt to NINL.The petitioner has prayed that this debt be attached against the amounts owed by NINL to the petitioner with an initial prayer, in the present application, for a direction to MMTC not to pay the said amount to NINL. 60. Mr.Puri has cited, in support of his contention that the present petition is maintainable before this Court even during the pendency of EX Petition 583/2018 before the learned District Judge, Khurda,the judgments of the Supreme Court in Sundaram Finance Ltd. (2018) 3 SCC 622 , this Court in S.N. Sunderson& Co. ILR (1972 ) 1 Del. 263, and the judgment of the High Court of Calcutta in Begg, Dunlop & Co 1911 SSC Online Cal 129. 61. These judgments, conjointly read and in view of the facts of the present case,in my opinion, clearly render this petition maintainable before this Court. 62. Sundaram Finance Ltd. 62.1 Sundaram Finance (2018) 3 SCC 622 , addressed the position arising out of a divergence of a legal opinion among High Courts on the issue of whether an award under the 1996 act was required to be first filed before the Court having jurisdiction over the arbitral proceedings for execution and, thereafter, transferred or whether the execution proceedings could straightaway be filed before the Court within whose jurisdiction the assets of the award Debtor were located. 62.2 In the said case, the arbitral proceedings had been conducted in Tamil Nadu.The appellant was the successful litigant before the arbitral tribunal.Execution proceedings were brought by the appellant at Morena, Madhya Pradesh, under Section 41, 151 and Order XXI Rule 27 of the CPC. The Morena court returned the execution petition on the ground of lack of jurisdiction with liberty to the appellant to present the petition before the Court of competent jurisdiction. The appellant was, therefore, as per the said order, required to file the execution petition in Tamil Nadu and, thereafter, seek transfer of the petition to the trial Court in Morena, where the assets of the respondents were located. 62.3 Section 42 of the 1996 act, was invoked for the said purpose. The matter travelled, via the High Court to the Supreme Court. 42. Jurisdiction.-Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court. 62.4 The Supreme Court concurred with the views expressed by several courts, including this Court, that Section 42would not extend to execution proceedings, as execution proceedings were not 'arbitral proceedings'for the purposes of the said provision. 62.5 Section 36(1) of the 1996 act, it was noted, made an arbitral award enforceable in the same manner as if it were a decree. This, however, did not convert the arbitral award into a decree of a civil Court. It merely made the arbitral award enforceable as if it were a decree of the Civil Court. 62.6 Section 42 of the 1996 act, it was further held, conferred on the Court which was first approached under the 1996 act, dominion over the arbitral proceedings. Subsequent applications arising from the arbitration agreement or the arbitral proceedings were, under Section 42 of the 1996 act, required to be made before the same Court. Section 32, however, resulted in termination of the proceedings with the rendition of the final arbitral award. as such, on the date when the execution petition was filed, the arbitral proceedings already stood terminated. In view thereof, Section 42 would no longer be applicable. Section 32, however, resulted in termination of the proceedings with the rendition of the final arbitral award. as such, on the date when the execution petition was filed, the arbitral proceedings already stood terminated. In view thereof, Section 42 would no longer be applicable. The execution proceedings would, therefore, it was held, not be subject to the rigour of Section 42. 32. Termination of proceedings.-(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2). (2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where- (a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute, (b) the parties agree on the termination of the proceedings, or (c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible. (3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings. 62.7 The arbitral award not being a decree, but merely being executable as if it were a decree, the Supreme Court held that the Court within whose jurisdiction the arbitral award was passed could not be equated with a court within whose jurisdiction a decree was rendered.In view thereof, the Supreme Court held that an award could be executed before any Court in the country, where, were the award to be treated as a decree, it could be executed, and there was no requirement of filing the execution petition initially before the Court having territorial jurisdiction over the arbitral proceedings and, thereafter, seeking transfer. 63. Begg Dunlop & Co. 63.1 In Begg Dunlop & Co 1911 SSC Online Cal 129, the District Judge at Burdwan decreed a suit in favour of the respondent for Rs. 6,750/-. The respondent applied for execution before the Burdwan Court. Thereafter, the respondent filed a separate application for attachment of Rs. 6,750/- out of the amount stated to be owed to the Judgment Debtor by the petitioner. 63.2 The business of the petitioner was admittedly in Calcutta and was not conducted within the territorial jurisdiction of the Burdwan Court. 63.3 aprohibitory order containing Order XXI Rule 46, was passed by the Burdwan Court. 6,750/- out of the amount stated to be owed to the Judgment Debtor by the petitioner. 63.2 The business of the petitioner was admittedly in Calcutta and was not conducted within the territorial jurisdiction of the Burdwan Court. 63.3 aprohibitory order containing Order XXI Rule 46, was passed by the Burdwan Court. The petitioner filed objections against the order, on the ground that its debt, towards the Judgment Debtor, was not payable within the territorial jurisdiction of the Burdwan Court, as its business was entirely transacted at Calcutta.The petitioner's objection was overruled by the Burdwan Court, against which the petitioner approached the High Court. 63.4 The Division Bench of the High Court observed that Sections 38 and 39 of the CPC, prohibited execution, by a Court, of a decree against property situated entirely outside its jurisdiction. Exceptions to this general principle were carved out in the case of sale of mortgaged property, attachment of salary, etc. 63.5 The question before the Court was, therefore, identified as whether the principle of Sections 38 and 39, CPC should be held to be inapplicable to attachment of a debt payable outside the jurisdiction of the Court, by a person residing or situated outside such jurisdiction. 63.6 The Court observed, at the outset, that attachment of the property of the Judgment Debtor under Order XXI, Rule 43 could only be in respect of the property within the territorial jurisdiction of the attaching Court.In view thereof, the Court held that prohibitory orders under Order XXI Rule 46, could also not be issued against a person resident outside the territorial jurisdiction of that Court, in respect of property situated outside such jurisdiction. 63.7 The correct test to be applied was identified as whether the Judgment Debtor could have sued the garnishee for the debt in the Court which the Decree Holder had approached under Order XXI Rule 46. 63.8 Garnishee proceedings were, it was observed,proxy in nature, in which the Decree Holder stepped in to the shoes of the Judgment Debtor. The Courts where the Judgment Debtor could have sued the garnishee, for recovery of the debt owed to the Judgment Debtor could also, therefore, be approached by the Decree Holder to attach the said debt. The following passages, from the said decision, expound the legal position with lucid clarity: 'The questionis elaborately discussed in National Fire Insurance Co. v. Chambers (1895) 32 atl. The following passages, from the said decision, expound the legal position with lucid clarity: 'The questionis elaborately discussed in National Fire Insurance Co. v. Chambers (1895) 32 atl. 663, where it is explained that thetest to be applied is, whether the judgment-debtor, ascreditor, could have sued the garnishee as his debtorin the Court in which the execution proceedings havebeen commenced. In its essential elements, a garnishmentproceeding is a proceeding by the defendant inthe suit against the garnishee. in the name and forthe benefit of the plaintiff. The plaintiff is empoweredby law to step into the shoes of the garnishee's creditor and acquire his rights, no more and no less:see In re General Horticultural Co. (1886) 32 Ch. D. 512 (516), where a similar test was suggested by Mr. Justice Chitty. Whateverhe could do, the plaintiff decree-holder,under the statutory novation of garnishment, may do as his assignee and attorney in fact, by operation oflaw. Wherever the garnishee could be sued by thedefendant for the payment, be may be charged asgarnishee on account of it: Mooney v. Bttford (1896) 72 Fed. Rep. 32,German Bank v. american Fire Insurance Co. (1892) 83 Iowa. 491, Burlington Ry. Co. v.Thompson (1884) 31 Kan. 180, Wyeth v. Lang 3(1894) 127 Missouri 242, Gross v. Brown (1897) 19 R. I. 220, Mobile Ry.Co. v. Burnhill (1892) 91 Tenn. 399 and Neufelderv. German Insurance Co. (1893) 6 Wash. 336. If this be adopted as the true criterion to determinethe situs of a debt in garnishment, no difficulty ispresented in the solution of the problem (Rood onGarnishment, sections 241-245). From this point ofview, it becomes needless to consider whether theprinciple, upon which the situs of a debt is determined for purposes of garnishment, is necessarily identicalwith what determines the rights of the parties. Noris it necessary to examine the validity of the ruleof law, by which a debt like other personal property isdeemed for many purposes (such as transmission andsuccession) to attach to the person of the owner, thatis, the creditor. The case before us, in which thegarnishees are admittedly out of jurisdiction, andthe debts due from them are also payable out ofjurisdiction, doesnot present any real difficulty. TheCourt cannot, in a case of this description, issue aprohibitory order under rule 46 of order XXI of theCode of 1908. The case before us, in which thegarnishees are admittedly out of jurisdiction, andthe debts due from them are also payable out ofjurisdiction, doesnot present any real difficulty. TheCourt cannot, in a case of this description, issue aprohibitory order under rule 46 of order XXI of theCode of 1908. We may add that the principle whichunderlies the decisions of this Court in Vulcan IronWorks v.Bishumbhur Prasad (1908) I.L.R. 36 Calc. 233 and Jumna Dassv. HarcharanDass (1911) I.L.R. 38 Calc. 405, and of the House of Lords in Carron Iron Co. v. Mactaren (1855) 5 H.L.C. 616 also supports thisview. The order of the Court below, therefore, mustbe taken to havebeen made without jurisdiction.' 64. S.N.Sunderson& Co. Begg Dunlop & Co 1911 SSC Online Cal 129., was followed, inter alia, by a learned Single Judge in S.N.Sunderson& Co. ILR (1972 ) 1 Del. 263,which clearly holds that a garnishee could be sued only where the garnishee resides or where the debt is payable. 65. The upshot of these decisions is, therefore, that the petitioner could not have preferred the present garnishee proceedings under Order XXI Rule 46 before the learned District Judge, Khurda, as MMTC was neither located within the jurisdiction of the said Court nor was the debt by MMTC to NINL payable within such jurisdiction. 66. Resultantly, the filing of EX Petition 583/2018, by the petitioner/ award Holder before the learned District Judge, Khurda, cannot act as a fetter to the present proceedings preferred under Order XXI Rule 46, CPC, before this Court. 67. The issue of whether, even before ascertaining the debts owed to NINL under Order XXI Rule 41(1), for which the petitioner has moved the learned District Judge at Khurda, the petitioner would be entitled to any relief under Order XXI Rule 46(1)(a) of the CPC against the debt which, as per the present petition, MMTC owes to NINL, is, however, an entirely different issue, which the discussion hereinafter would address. Issue (2) - The nature of the attachable 'debt' 68. The garnishment provisions in the CPC, commencing with Rule 46 of Order XXI, envisage attachment of properties over which the judgement-debtor has a right, but which are not in its possession. The present application concerns itself with sub-Rule (1)(a) of Order XXI Rule 46, which refers to 'a debt not secured by a negotiable instrument'.The provision does not, however, define 'debt'. The present application concerns itself with sub-Rule (1)(a) of Order XXI Rule 46, which refers to 'a debt not secured by a negotiable instrument'.The provision does not, however, define 'debt'. Indeed, there is no provision, in the CPC, which defines the expression 'debt'. Section 60 of the CPC, which delineates the 'Property liable to attachment and sale in execution of decree' as including 'debts', too, however, does not define 'debt'. Mr. Puri has relied on the judgement of the Supreme Court in Rahul S. Shah v. Jinendra Kumar Gandhi41, on the construction of the word 'debt', as employed in Section 60 of the CPC. He submits that, in the said decision, the Supreme Court has held that Section 60 of the CPC is required to be liberally interpreted to include, within its fold, any other person from whom the judgement-debtor may have ability to derive share, profit or property. 60. Property liable to attachment and sale in execution of decree. - (1) The following property is liable to attachment on sale in execution of a decree, namely, lands, houses or other buildings, goods, money, banknotes, checks, bills of exchange, hundis, promissory notes, Government securities, bonds or other securities for money, debts, shares in a Corporation and, save as hereinafter mentioned, or other saleable property, movable or immovable, belonging to the judgement-debtor, or over which, or the proceeds of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the judgement-debtor or order by another person in trust for him on his behalf 69. Rahul S. Shah 2021 SCC OnLine SC 341, however, addressed, essentially, the issue of how execution proceedings are stymied by repeated applications, bereft of merit. It is in these circumstances that the Supreme Court delineated the various statutory provisions in the CPC governing execution of decrees. In that context, the Supreme Court directed, in para 42.11 of the report, that 'under Section 60 CPC the term '.. It is in these circumstances that the Supreme Court delineated the various statutory provisions in the CPC governing execution of decrees. In that context, the Supreme Court directed, in para 42.11 of the report, that 'under Section 60 CPC the term '.. In the name of the judgement-debtor or by another person in trust for him on his behalf' should be read liberally to incorporate any other person from whom he may have the ability to derive share, profit or property.' That, however, does not detract from the fact that there must exist a debt, owed by the garnishee to the judgement-debtor, capable of attachment under Order XXI Rule 46. 70. a Division Bench of the High Court of allahabad, nearly a century ago, examined the issue of the nature of a debt which could be attached in execution of a decree, in Lachman v. Jarbandhan (1927) ILR 50 all 507 [aIR 1928 aLL 193]. The suit, in that case, was brought by a landlord against his tenant.The suit was decreed. The landlord sought attachment, under Section 60 of the CPC, of rent which was payable to the judgement-debtor tenant by this sub-tenant, in future. The learned District Judge held, relying on Sher Singh v. Sri Ram (1908) ILR 30 all 246, that an amount which was not yet due could not be treated as an attachable date within the meaning of Section 60. The precedent was sought to be distinguished by the appellant, before the High Court, on the ground that, in that case, what was sought to be attached were profits which might never become due, whereas there was a certainty that the liability to pay rent would, in any event, become due in future. The High Court upheld the decision of the learned District Judge. Debts, which would arise in future, could also, it was held, be attached under Section 60, provided the liability was in praesenti. as an example, it was noted that 'a person may be a debtor under a bond, although the money due under the bond does not accrue payable to the future date; for the liability is there to pay'. In the case before it, the High Court noted that it could not be said that, on the date of attachment, the sub-lessee was in arrears to the judgement-debtor. In the case before it, the High Court noted that it could not be said that, on the date of attachment, the sub-lessee was in arrears to the judgement-debtor. If, for example, the sub- tenant were to be dispossessed on the date of attachment, no liability to pay any future rent to the tenant/judgement-debtor would arise. as such, the liability of the sub- tenant 'was not complete till he had held for the required period'. 71. alsidass Kaverlal 1960 SCC Online Mad. 137 71.1 Indeed, this position also stands recognised by the judgement of the High Court of Madras inalsidass Kaverlal 1960 SCC Online Mad. 137, on which Mr. Puri relies. In that case, alsidass, the appellant before the High Court and the decree holder in the suit proceedings, applied, under Order XXI Rule 46 for a prohibitory order in respect of amounts owed to the respondent ('Gowdher' hereinafter) by the Garrison Engineer, Wellingdon.The High Court observed, at the outset, that there was no dispute regarding the maintainability of the application under Order XXI Rule 46. Significantly, it was also noted that the application related to sums payable by the Garrison Engineer to Gowdherup to the date of the application. Being the case of debt due, the High Court held that sub- clauses (a) and (c) of Order XXI Rule 46 would equally apply. 71.2 an initial prohibitory order was passed under Order XXI Rule 46. The Garrison Engineer informed the Court that Rs. 7237.75 had been withheld in compliance with the prohibitory interim order. However, there Garrison Engineer further stated that he was unable to say whether any further specific balance was payable to Gowdher. In any event, the Garrison Engineer undertook to place all further amounts which would become due to Counter in a fixed deposit and not to make any payment to Gowdher from the said account.The Subordinate Judge, however, finally confirmed the initial prohibitory order only in respect of Rs. 7237.75.aggrieved thereby, and contending that Gowdher owed him nearly Rs. 20,000/-, alsidass appealed to the High Court. alsidass also apply afresh under Order XXI Rule 46 for fresh attachment of Bill amounts, deposit amounts, etc., totally Rs. 20,000/-. This application was dismissed by the learned Subordinate Judge on the ground that the ascertained debt was only Rs. 7237.75. The para, from the said judgement, on which Mr. 20,000/-, alsidass appealed to the High Court. alsidass also apply afresh under Order XXI Rule 46 for fresh attachment of Bill amounts, deposit amounts, etc., totally Rs. 20,000/-. This application was dismissed by the learned Subordinate Judge on the ground that the ascertained debt was only Rs. 7237.75. The para, from the said judgement, on which Mr. Puri relies, reads thus: 'I find it difficult to follow the reasoning upon which the order of the learned Subordinate Judge is based. Even taking it that the 1stprohibitory order was enforced up to the extent of Rs. 7237 odd alone, I find nothing in the processual law to prevent a party situated like the present appellant from applying for a fresh prohibitory order with regard to any balance of monies still payable by the army authorities to the judgement debtor. again, it is not as if any enquiry or evidence to establish that, on the date of the application by the decree holder, no amount greater than Rs. 7237 order was payable to the judgement debtor.That is merely an uncorroborated statement by the Garrison Engineer, upon which there is no evidence whatever. Needless to say, even the letter could not be accepted as evidence and acted upon, until it had been properly proved. as pointed out in Mulla's Civil Procedure Code, 12thEdn, page 822, even where a debt is being attached, it is not necessary that the exact amount of the debt should be stated, provided there is a debt actually due at the time of the attachment.' (Underscoring supplied; italics in original) 72. a contingent debt is not a 'debt due', till the contingency happens. Money payable conditional on the happening of a future event cannot, therefore, be regarded as a 'debt', attachable under Section 60 of the CPC read with Order XXI Rule 46. That a contingent debt is no debt at all, till the contingency occurs, stand tellingly underscored in the following passage from Shanti Prasad v. Director of Enforcement aIR 1962 SC 1764 : 'a contingent debt is strictly speaking not a debt at all. In its ordinary as well as its legal sense, a debt is a sum of money payable under an existing obligation. It may be payable forthwith, solvendum in praesenti. Then it is a debt due. Or it may be payable at a future date, solvendumfuturo. Then it is a debt accruing. In its ordinary as well as its legal sense, a debt is a sum of money payable under an existing obligation. It may be payable forthwith, solvendum in praesenti. Then it is a debt due. Or it may be payable at a future date, solvendumfuturo. Then it is a debt accruing. But in either case, it is a debt.But a contingent debt has no present existence because it is payable only when the contingency happens an ex hypothesi, that may or may not happen.' (Emphasis supplied) This exposition, in my respectful opinion, must necessarily guide the Court when examining the issue of the existence of attachable debt, when exercising jurisdiction under Order XXI Rule 46 of the CPC. Equally authoritative is the following passage from HyderabadCoop. Commercial Corpn Ltd v. Syed Mohiuddin Kadir (1975) 2 SCC 624 : '14. attachment of debts is a process by means of which a judgment-creditor is enabled to reach money due to the judgment-debtor which is in the hands of a third person. These are garnishee proceedings. To be capable of attachment, there must be in existence at the date when the attachment becomes operative something which the law recognises as a debt. So long as there is a debt in existence, it is not necessary that it should be immediately payable. Where any existing debt is payable by future instalments, the garnishee order may be made to become operative as and when each instalment becomes due. The debt must be one which the judgment-debtor could himself enforce for his own benefit. a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation (see Webb v. Stenton (1883) 11 QBD 518 : 52 LJ QB 584). In the present case, the letter dated June 12, 1959 proves that there is an obligation to pay the specified sum of Rs 4,50,000 to the Cooperative Society. The budget provision fastened on to the claim of the Cooperative Society against the State and it ripened into a debt payable to the Cooperative Society. Therefore, in the circumstances, the attachment levied by the City Civil Court was perfected by bringing money to the Court.' (Emphasis and underscoring supplied) 73. The budget provision fastened on to the claim of the Cooperative Society against the State and it ripened into a debt payable to the Cooperative Society. Therefore, in the circumstances, the attachment levied by the City Civil Court was perfected by bringing money to the Court.' (Emphasis and underscoring supplied) 73. The liability, or obligation, to pay must, therefore, exist in praesenti for a debt to be attachable under Section 60 or, consequently, under Order XXI Rule 46, even if the stage of payment would arise in future. Issue (3) - What the Order XXI Rule 46 applicant is required to establish The legal position 74. The award holder-applicant seeks orders under Order XXI Rule 46(1) of the CPC. Mr.Puri has been at pains to convince me that the considerations which apply at the stage of proceedings under Order XXI Rule 46, are different from those which apply in the subsequent provisions, commencing with Order XXI Rule 46a.all he seeks at this stage, he submits, are prohibitory orders, prohibiting MMTC from effecting any payment to NINL, consequent on the agreements dated 22nd June, 2012, executed between them.For issuance of such prohibitory orders, Mr.Puri submits that the applicant is only required to show,prima facie, the existence of a debt from MMTC to NINL. as the order under Order XXI Rule 46 does not prejudice the garnishee, i.e. MMTC in the present case, MMTC, according to Mr. Puri. is not required to be heard on its defence against attachment of the debt due, by it, to NINL.Before the Court proceeds against the debt due by MMTC to NINL, notice would necessarily have to issue under Order XXI Rule 46a, and it is only thereafter that the Court can direct any part of the said debt to be deposited in the Court or proceed, in any manner, against the debt. all these considerations, according to Mr.Puri, are irrelevant at the Order XXI Rule 46stage. at that stage, the mere prima facie existence of a debt is sufficient. Mr.Puri went to the extent of submitting that an affidavit by the applicant under Order XXI Rule 46 would suffice for a prohibitory order under the said provision to be issued by the Court. 75. at that stage, the mere prima facie existence of a debt is sufficient. Mr.Puri went to the extent of submitting that an affidavit by the applicant under Order XXI Rule 46 would suffice for a prohibitory order under the said provision to be issued by the Court. 75. In the present case, according to him, not only has such an affidavit been filed by his client; the financial statements of MMTC and NINL, also indicate the existence of a debt, in praesenti, by MMTC to NINL. a clear case for passing of prohibitory orders under Order XXI Rule 46, therefore, according to him, exists. 76. Several judgments were cited, at the Bar, by both parties. I am constrained to observe that there is hardly any decision, among them, which throws any real light on the circumstances in which a Court can pass prohibitory orders under Order XXI Rule 46 though they expound, authoritatively, on other propositions. 77. Order XXI Rule 46(1)(a), with which alone we are concerned in the present case, permits attachment of 'a debt not secured by a negotiable instrument'.The provision does not, however, define, 'debt'. Order XXI Rule 41(1), however, provides for a mechanism by which the debts owed to the Judgment Debtor can be ascertained. It requires the Decree Holder to apply to the Court for an Order for an oral examination of the Judgment Debtor as to the debts owned by the Judgment Debtor. 78. It is obvious that, in the present case, the petitioner has chosen to proceed under Order XXI Rule 46, against what the petitioner avers to be the debt owned by MMTC to NINL without, in the first instance, applying under Order XXI Rule 41 to ascertain the existence and amount of such debt, if any to this Court. Rather, the petitioner has approached the learned District Judge, Khurda, for ascertaining the particulars of the debts owed to NINL and, even when those proceedings are pending, moved this Court under Order XXI Rule 46(1)(a) seeking attachment of debts which, according to him, are ex facie due from MMTC to NINL. 79. There is, no doubt, no statutory mandate, in the CPC, requiring a litigant seeking to apply under Order XXI Rule 46 to, a priori, apply under Order XXI Rule 41 and ascertain the debt due. 79. There is, no doubt, no statutory mandate, in the CPC, requiring a litigant seeking to apply under Order XXI Rule 46 to, a priori, apply under Order XXI Rule 41 and ascertain the debt due. Nonetheless, when such a mechanism exists in the CPC and, circumventing Order XXI Rule 41, Order XXI Rule 46 is invoked directly, it would stand to reason, prima facie, that the debt, under Order XXI Rule 46, must be a clear and existing debtin praesenti.It cannot be a debt which is uncertain or denied by the garnishee, who, according to the award Holder, owes the debt to the award Debtor. 80. at the cost of repetition, one of the prayers in Ex Petition 583/2018, preferred by the petitioner before the learned District Judge, Khurda, is for a direction to NINL to 'make disclosure on affidavit of the full and complete particulars of...the list of debtors/receivables as on 31.08.2018 with name of the parties duly verified by the Statutory auditor'. The petitioner has, therefore, in fact, prayed, before the learned District Judge, Khurda, for directions to NINL to disclose the list of debtors and receivables as on 31st august, 2018.Without waiting for such disclosure, the petitioner hasmoved the present petition under Order XXI Rule 46, contending, as already noted, that the petitioner's right under Order XXI Rule 46 is not dependent on such disclosure. Discharge of onus at Order XXI Rule 46 stage 81. That it would be for the decree holder, who seeks to invoke Order XXI Rule 46 and proceed towards attachment of a debt owed by the third-party-garnishee to the judgement debtor, to establish, definitively, that such a debt is, as a matter of fact, owed, is obvious. Mr. Puri sought to submit that there is a difference, and the distinction, between what the decree holder has to show at the Order XXI Rule 46 stage, and what has to be established in order to invoke the provisions that follow. according to Mr. Puri, at the Order XXI Rule 46 stage, all that is required to be tendered by the applicant seeking prohibitory orders under the said provision, is an affidavit with material to indicate that, prima facie, the garnishee owed a debt to the judgment debtor, i.e., in the present case, that MMTC owed a debt to NINL. according to Mr. Puri, at the Order XXI Rule 46 stage, all that is required to be tendered by the applicant seeking prohibitory orders under the said provision, is an affidavit with material to indicate that, prima facie, the garnishee owed a debt to the judgment debtor, i.e., in the present case, that MMTC owed a debt to NINL. For this purpose, he has relied on the judgment of the High Court of Calcutta in Mackinnon Mackenzie aIR 1975 Cal 150 , the judgment of a Division Bench of this Court in Global Trust Bank 2001 SCC Online Del 673, the judgment of the High Court of Kerala in Executive Engineer v JH Sharma 1988 SCC Online Ker 45, the judgment of the High Court of Patna in Imperial Bank of India (1958) SCC OnLine Pat 2, the order passed by a learned Single Judge of this Court in anglo-american Metallurgical Coal and the judgments of the Queen's BenchinDe Pass 1891, I QB 216 and Coren [L.R.] 22 Q.B.D.249. 82. among the contentions that Mr. Puri urges, to justify this stand, is the fact that Order XXI Rule 46C comes after the order XXI Rule 46 in the CPC. He submits that any objection, by the garnishee, disputing the alleged debt, is irrelevant at the Order XXI Rule 46 stage, as Order XXI Rule 46C specifically caters to such a situation. according to Mr. Puri, therefore, Rule 46, 46a, 46B47 and 46C48 of Order XXI have to be applied in that sequence. Thus read, he submits that, on a mere affidavit of the decree holder, accompanied by material on which the decree holder seeks to rely to allege that the garnishee owes a debt to the judgement debtor, a prohibitory order under Order XXI Rule 46 must necessarilyissue.This provision amounts, statutorily, to 'attachment'. The use of the words 'which has been attached under rule 46' in Rule 46a of Order XXI, he points out, indicates that, at the stage of attachment under Order XXI Rule 46, the considerations that govern Order XXI Rule 46a have no application. Once the alleged debt is attached under Order XXI Rule 46, submits Mr. The use of the words 'which has been attached under rule 46' in Rule 46a of Order XXI, he points out, indicates that, at the stage of attachment under Order XXI Rule 46, the considerations that govern Order XXI Rule 46a have no application. Once the alleged debt is attached under Order XXI Rule 46, submits Mr. Puri, then, on the application of the decree holder, the Court may issue notice to the garnishee under Order XXI Rule 46a, calling upon him either to pay, into Court, thedebt due to the judgement-debtor, to the extent required to satisfy the decree or to show cause as to why he should not do so. In the event of the garnishee defaulting in paying, into Court,an amount sufficient to satisfy the decree, out of the amount due from him to the judgement debtor, or in appearing in showing cause, the Court could proceed against the garnishee, under Order XXI Rule 46B, as though the decree against the judgement debtor were a decree against the garnishee. 46-B. Order against garnishee. - Where the garnishee does not forthwith pay into Court the amount due from him to the judgment-debtor or so much thereof as is sufficient to satisfy the decree and the costs of execution, and does not appear and show cause in answer to the notice, the Court may order the garnishee to comply with the terms of such notice, and on such order, execution may issue as though such order were a decree against him. 46-C. Trial of disputed questions. 46-C. Trial of disputed questions. - Where the garnishee disputes liability, the Court may order that any issue or question necessary for the determination of liability shall be tried as if it were an issue in a suit, and upon the determination of such issue shall make such order or orders as it deems fit: Provided that if the debt in respect of which the application under Rule 46-a is made is in respect of a sum of money beyond the pecuniary jurisdiction of the Court, the Court shall send the execution case to the Court of the District Judge to which the said Court is subordinate, and thereupon the Court of the District Judge or any other competent Court to which it may be transferred by the District Judge shall deal with it in the same manner as if the case had been originally instituted in that Court. 83. Thus far, it is obvious, from a reading of the statutory provisions, that Mr. Puri is right in contending that Rules 46, 46a and 46B 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 of the CPC, is in his contention that Rule 46C of Order XXI would apply only at the Order XXI Rule 46B stage. according to Mr. Puri it is only when the court is proceeding to pass an order against the garnishee, under Order XXI Rule 46B, 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. 84. I, personally, see no reason why Order XXI Rule 46C should not apply even after the Order XXI Rule 46 stage.There is, in my mind, nostatutory justification to so read the provisions and, if so read, it may even defeat the purpose of Order XXI Rule 46. Order XXI 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 judgement debtor. If there is no debt - even if in future, provided it relates to an obligation in praesenti - there is nothing tobe attached under Order XXI Rule 46(1)(a). Order XXI 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 judgement debtor. If there is no debt - even if in future, provided it relates to an obligation in praesenti - there is nothing tobe attached under Order XXI Rule 46(1)(a). Nothing, other than a debt, and nothing short of a debt can be attached under Order XXI Rule 46(1)(a). No debt, ergo, no attachment. 85. If, therefore, the garnishee disputes the debt, then, in my considered opinion, whether by operation of Order XXI Rule 46C or otherwise, the decree holder, seeking to invoke garnishment proceedings, would necessarilyhave to convince the Court, prima facie, of the existence of an attachable debt, payable by the garnishee to the judgement-debtor, before any order of attachment under Order XXI 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 judgement-debtor. 86. 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 XXI 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 judgement or order, which is attachable under Order XXI Rule 46, then thedebtcould be attached in favour of the decree holder. If the garnishee indeed owes a debt to the judgement debtor, which is attachable under Order XXI 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. If the garnishee indeed owes a debt to the judgement debtor, which is attachable under Order XXI 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 judgement debtor, to enforce the debt owed to the judgement debtor by the garnishee.If the debt exists, therefore, and if it is enforceable by the judgement debtor against the garnishee, ipso facto it becomes attachable at the instance of the decree holder under Order XXI Rule 46. 87. The debt must, however, in the 1st instance, be established, even for the purposes of Order XXI Rule 46 and, if the garnishee 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. 88. Mr. Puri has cited a number of authorities to support his contention that a case for a prohibitory restraint, against MMTC, from paying it is alleged debt to NINL, is made out. I proceed, therefore, to deal with the said decisions. 89. Mackinnon Mackenzie 89.1 Mackinnon Mackenzie aIR 1975 Cal 150 was the judgment of a Division Bench of the High Court of Calcutta. anil Kumar Sen ('Sen' hereinafter), Respondent 1 before the High Court, sued the second respondent (whose name is not forthcoming from the judgment and who shall, therefore, be referred to as R-2) before the High Court of Calcutta, for Rs. 2,16,000/-, against a loan advanced by Sen to R-2. The suit was accompanied by an application, seeking an injunctionrestraining the appellant Mackinnon Mackenzieand Company Pvt Ltd9 (MMC hereinafter), the appellant before the High Court, from making payment to R-2 of any sum without leaving Rs. 2,16,000/- in its hands. Needless to say, Sen categorized MMC as a garnishee. 89.2 an ex parte ad interim order was passed, restraining MMC from making payments to R-2 without retaining Rs. 2,16,000/- with itself. This order was subsequently modified, and MMC was directed to pay Rs. 80,000/- to the solicitor of R-2, who was appointed as receiver. 89.3 The suit was decreed by a consent decree dated 6thMarch, 1973 for a sum of Rs. 2,16,000/- with itself. This order was subsequently modified, and MMC was directed to pay Rs. 80,000/- to the solicitor of R-2, who was appointed as receiver. 89.3 The suit was decreed by a consent decree dated 6thMarch, 1973 for a sum of Rs. 1,90,000/-, to be paid in installments by R-2 to Sen. Default in payment of any installment has to render the entire decretal amount immediately payable. 89.4 R-2 paid the first and second instalments and a part of the third instalment, but defaulted in payment of the fourth instalment. Sen, thereupon, sought attachment of Rs. 1,40,873.15 out of a sum of Rs. 1,60,000/- alleged to be due from MMC to R-2. The Court passed an order of attachment under Order XXI Rule 46, and passed a further order restraining MMC from making any payment to R-2, without retaining Rs. 1 lakh in its hand. 89.5 MMTC contended, before the High Court, that it was the agent of Bank Line Ltd., a shipping company, of which R-2 was the stevedore of the ships. accounts between the shipping company and R-2, it was contended, stood settled, and no amounts were payable by one to the other. It was also claimed that the Shipping Company had advanced large sums of money to R-2 for working the vessels and that, against the bills raised by R-2 on the Shipping Company, Rs. 31,500/- was due and payable by the latter to the former. MMC contended that the Shipping Company was entitled to adjust the said amount of Rs. 31,500/- due to R-2 against the losses and damages suffered by it owing to the negligence of R-2 in performing his duties as stevedore. 89.6 MMTC therefore contended, before the High Court, that, as it had bonafide disputed the claim, the learned Trial Court ought not to have made the garnishee order. The amount of Rs. 31,500/- due to R-2 was also, it was submitted,entitled to be set off by the shipping company against the losses and damages suffered by it as a result of the negligence and breach of contract by R-2.The liability of the garnishee being disputed, it was contended, that a priori trial was necessary before directing attachment of payment of any amount. It was also pointed out that, in its communications with R-2, the shipping company had disputed the existence of any debt due. It was also pointed out that, in its communications with R-2, the shipping company had disputed the existence of any debt due. Without the factum to the alleged debt, due to the judgment debtor, being positively established, it was submitted that no garnishee order could issue. 89.7 Sen sought to contend, before the High Court, that the applicant invoking garnishee proceedings was not requiredto affirm, positively, that a particular or ascertained sum of money was due from the garnishee to the judgment debtor.a mere averment on affidavit to the effect that, according to the information available with the decree holder, certain amounts were due from the garnishee to the judgment debtor, was, according to learned Counsel for Sen, sufficient. The onus in such a situation would, he submitted, shift tothe garnishee to satisfy the Court that the claim was bonafide disputed. a vague and bare denial of the claim would not suffice in this regard. 89.8 The High Court held, in para 6 of the report, that there was considerable force in this contention, as advanced by learned Counsel for Sen. The Court specifically held that 'it was not necessary .. for the decree holder to positively specify and state on oath that certain sum of money is due from the garnishee to the judgment debtor'.Immediately thereafter, however, the Court went on to observe thus: 'But the question is if the garnishee denies that any sum of money is due to the judgment debtor, is it open to the court to hold the garnishee liable for the claim made by the judgment debtor without raising and trying an issue on the question of such liability Rs. ' This question was answered, in paras 7 to 10 of the report, thus: '7. This question has been answered in the affirmative by the trial Court and its conclusion appears to be based on admission of the garnishee regarding submission of statement of the bill of the judgment-debtor on May 14, 1973, and/also on the assumption that there is no dispute to the claim made in the said bills. We do not think that on the materials on record it was open to the court to conclude that there was any admission of the claim made by the judgment-debtor in the bill for Rs. We do not think that on the materials on record it was open to the court to conclude that there was any admission of the claim made by the judgment-debtor in the bill for Rs. 1,64,746.39 nor was there any justification for concluding that there was no dispute regarding the claim made in the bills. In the two letters written by the garnishee on May 21, 1973 and July 10, 1973, there was unequivocal denial of the judgment debtor's claim.Furthermore, in paragraph 15 of the affidavit-in-opposition there is an equally unequivocal statement that no money is due or payable by the garnishee to the judgment-debtor and further that the garnishee disputes liability to pay any amount to the judgment-debtor. On these statements in the letters and the affidavit it ought not to be held that there is no dispute with regard to such claim. as we read it, the letters and the affidavit make it amply clear that the judgment-debtor's entire claim is denied by the garnishee and this denial is re-affirmed in the affidavit-in opposition filed on behalf of the garnishee. The trial Court appears to have taken into consideration the fact that the garnishee did not object to the judgment-debtor's claim when an order was made in the suit on January 8, 1973, for depositing Rs. 80,000/- with the receiver. This question, in our view, is not relevant for deciding whether an issue should have been raised in order to determine the liability of the garnishee and such issue should have been tried on evidence. 8. What is the provision in the Original Side Rules of this Court on this question and the Code of Civil Procedure Rs. Rule 3 of Chapter XVIII is as follows: 'Where the garnishee disputes his liability the judge, instead of making such order, may order that any issue or question necessary for determining his liability be tried as though it were an issue in a suit; and upon the determination of such issue shall pass such order upon the notice as shall be just'. 9. Order 21, Rule 46-C of the CPC (Calcutta amendment) is almost identical in terms with the Original Side. Rule quoted above. Counsel for the respondents said that the Judge has a discretion under the Rule to make an order summarily or to settle an issue and try the same on evidence. 9. Order 21, Rule 46-C of the CPC (Calcutta amendment) is almost identical in terms with the Original Side. Rule quoted above. Counsel for the respondents said that the Judge has a discretion under the Rule to make an order summarily or to settle an issue and try the same on evidence. No doubt the order contemplated by the Rule is a discretionary one, but such discretion must be judicially exercised. Where a Judge finds that a claim is bona fide disputed and the dispute is not frivolous, he should not rush to a conclusion on the affidavit evidence having regard to the requirement of the Rule. a garnishee order which enables a judgment-creditor to obtain satisfaction of his claim in a summary proceeding is a matter of procedure, similar in scope as in the case of a judgment on admission under Order XII, Rule 6 of the CPC or the summary procedure in suits to recover debts or liquidated demands as prescribed in Chapter XIII-a of the Original Side Rules. This procedure can be availed of by a decree-holder where either the debt is not disputed or the dispute appears to the Court to be frivolous and without any substance. It is of no avail in a case where there is a substantial bona fide dispute with regard to the debts sought to be attached. 10. Let us see what would be the result if the matter is allowed to be decided summarily on affidavits. a judgment-creditor makes a claim against the garnishee, who disputes the same. If a garnishee order is made in such a case, the garnishee without getting an opportunity of contesting and refuting the claim of the judgment creditor is required to pay the money to the Sheriff. The result would be that in one single summary proceeding there would not only be adjudication of a disputed claim but there would be a levy of execution, attachment and entering up of satisfaction. That is not permissible in law. No doubt where a claim is admitted, or no dispute is raised with regard to the claim by the judgment-debtor it is the duty of the court to make an order directing the garnishee to make over the amount claimed by the judgment-debtor for satisfaction of the dues of the decree-holder. That is not permissible in law. No doubt where a claim is admitted, or no dispute is raised with regard to the claim by the judgment-debtor it is the duty of the court to make an order directing the garnishee to make over the amount claimed by the judgment-debtor for satisfaction of the dues of the decree-holder. But this is not permissible where the claim is denied and disputed.' 89.9 Though, the decision in Mackinnon Mackenzie aIR 1975 Cal 150 was not strictly rendered in the context of Order XXI Rule 46, but under Order XXI Rule 46C of the CPC (Calcutta amendments),which is parimateriawith Order XXI Rule 46C of the CPC, the High Court clearly held, in the said decision that, where the garnishee disputed the factum of debt, the dispute had to be triedand the debt ascertained before garnishee orders could be issued. 90. Global Trust Bank The judgment of the Division Bench of this Court in Global Trust Bank 2001 SCC Online Del 673 need not detain the present judgment,as the decision was carried, in appeal, to the Supreme Court which, vide its judgment in Fargo Freight Ltdv. Commodities Exchange Corporation 2004 7 SCC 203 held that the moneys payable by the Bank - which was treated as the garnishee, in the said case - did not attract Order XXI Rule 46. 91. J H Sharma 91.1 In J H Sharma 1988 SCC Online Ker 45 ('Sharma' hereinafter), Sharma obtained a money decree against the second respondent (R-2) on the basis of a compromise. an application under Order XXXVIII Rule 5 of the CPC was filed by Sharma for attachment of certain sums of money, said to be belonging to R-2 and in the hands of the Executive Engineer, Kerala State Electricity Board, the appellant before the High Court ('the XEN' hereinafter). Subsequently, an execution petition was preferred by Sharma under Order XXI Rule 46a, CPC, with an application for a direction to the XEN to remit, in Court, the amount owed to R-2. The executing court allowed the application. The XEN appealed. 91.2 The XEN contended, before the Trial Court, that owing to abandonment of its contract by R-2, the KSEB had sustained huge losses, the liability in respect of which was yet to be fixed. The executing court allowed the application. The XEN appealed. 91.2 The XEN contended, before the Trial Court, that owing to abandonment of its contract by R-2, the KSEB had sustained huge losses, the liability in respect of which was yet to be fixed. Once fixed, it was submitted that no debt would be due from KSEBto R-2; rather, a substantial amount would be due from R-2 to KSEB. The Trial Court rejected this submission, holding that, as XEN had not disputed its status as garnishee, these arguments were not available tohim. 91.3 The High Court went on to allow the appeal of the XEN on the ground that, before directing the XEN to remit the alleged debt owed to R-2 in the Court, opportunity to show cause under Order XXI Rule 46a had not been extended to the XEN. Paras 6a and 8 of the report may, for ready reference, be reproduced thus: '6a. It has to be noticed that R. 46 does not contain any provision enabling the garnishee to raise any objection though it gives opportunity to the garnishee to subject himself to the order by making payment into Court. The next step is provided by R. 46a. He has to be given notice either to pay the amount into court or to show cause why he should not do so. according to R. 46B, where he fails to pay the amount in Court and also fails to appear and show cause in answer to the notice, the court may order him to comply with the terms of the notice and on such order execution may issue as though such order were a decree against him. This is the consequence of his failure to respond in terms of the notice under R. 46B. Where he appears and disputes his liability R. 46C requires that the court should decide the question as if it were an issue in a suit and upon the determination of such issue the court should pass such order as it deems fit. The Court may uphold the contention raised by the garnishee or reject his contention and pass appropriate orders. Such an order is appealable under R. 46H. Thus the scheme of the rules contemplates a specific opportunity being given to the garnishee to show cause why he should not pay the amount into Court. The Court may uphold the contention raised by the garnishee or reject his contention and pass appropriate orders. Such an order is appealable under R. 46H. Thus the scheme of the rules contemplates a specific opportunity being given to the garnishee to show cause why he should not pay the amount into Court. If he raises an objection the court has a duty to consider the objection and pass appropriate orders. The rules do not require him to raise an objectionsuo motu before receiving a show cause notice under R. 46a. The fact that he did not suomotu file an objection when the attachment was effected before judgment does not take away his right under the above rules to raise an objection. ***** 8. We find that the executing Court at no stage had taken care to issue notice to the garnishee under R. 46a calling upon him either to pay the money into court or to show cause why he should not do so. The only endorsement on the execution petitionis that letter was sent to him. Learned counsel for the decree-holder invites our attention to O. V, R. 30, C.P.C. and contends that letter must be deemed to be notice. This rule enables the court to substitute for a summons a letter signed by the Judge oran appointed officer where the defendant is, in the opinion of the Court, of a rank entitling him to such mark of consideration. However, the letter shall contain all the particulars required to be stated in the summons. The rule applies to summons and not to notice. Office copy of the letter sent to the appellant is seen in the file. Letter dt. 29-6-1984 refers to the attachment before judgment, that is, prohibitory order and states: 'In continuation of the Order under reference, I request that the amount may be sent to this court for giving credit to the concerned suit.' The reminder letter dt. 26-7-1984 does not refer to any earlier order. But nevertheless it states thus: 'Please refer to the order cited. Neither a reply nor any amount has been received so far. Hence I request you to let me know the result immediately failing which steps under O. 21, R. 46-B, C.P.C. will follow. 26-7-1984 does not refer to any earlier order. But nevertheless it states thus: 'Please refer to the order cited. Neither a reply nor any amount has been received so far. Hence I request you to let me know the result immediately failing which steps under O. 21, R. 46-B, C.P.C. will follow. The case stands posted to....' These letters do not contain any of the particulars required to be stated in the summons or notice and therefore would not attract R. 30 of O.V. We are therefore of the opinion that prior to the passing of the impugned order garnishee was not served with a notice under R. 46a.Notice was not ordered to the garnishee either in the E.P. or in the E.a. referred to earlier. The appellant appeared in court only in response to the letter and filed counter-affidavit raising certain contentions. Since he raised his contentions in the counter-affidavit, the same can be treated as objections contemplated under R. 46C, even in the absence of a formal notice under R. 46a. That being so, the court below had a duty under R. 46C to order that the disputed question be tried as it were an issue in a suit and to decide the issue. In the impugned order the Court below did not consider the merits of the dispute raised by the appellant. The view taken by the Court below that the contention raised that no amount is available with him is not open to him is unsustainable. The observation of the court below that garnishee had no case that he is not the garnishee does not convey any meaning. He is a garnishee in the sense that he received a prohibitory order. But it is open to him to contend that he does not have any money belonging to the judgment-debtor or due to the judgment-debtor. If such a contention is raised at the appropriate stage in response to notice under R. 46a the Court has a duty to consider the same.' 91.4 Clearly, J H Sharma 1988 SCC Online Ker 45 was rendered in the context of Order XXI Rule 46a and not in the context of Order XXI Rule 46. The issue before this Court never came up for consideration before the High Court of Kerala in J H Sharma 1988 SCC Online Ker 45. The issue before this Court never came up for consideration before the High Court of Kerala in J H Sharma 1988 SCC Online Ker 45. What the High Court was addressing, in that case, was whether,without following the prescribed procedure in Order XXI Rule 46a, the XEN could have been directed to deposit the alleged debt owed to R-2 in Court. That judgment is, therefore, of little assistance to the controversy at hand. 92. Imperial Bank of India 92.1 The decision Imperial Bank of India (1958) SCC OnLine Pat 2, too, is of little worth in adjudicating the issue in controversy. In that case, the respondent, BibiSayeedan ('Sayeedan' hereinafter) obtained a decree against the legal heirs of her deceased husband Nadir ali, relating to her dower debt, in a suit brought by her against the said legal heirs. Sayeedan proceeded for execution. Nadir ali had a fixed deposit account with the appellant Imperial Bank of India ('the Bank').During the pendency of her suit, Sayeedan applied under Order XXXVIII Rule 5, for attachment before judgment. In the said application, the learned Trial Court restrained the Bank from making payment of any amount, out of the money of Nadir ali held with the Bank, till further orders. The Bank informed the Court, that Nadir ali was not maintaining any current account with it.It, however, accepted that Nadir ali maintained a Fixed Deposit account with the Bank, to the tune of Rs. 6,090/-. The Bank undertook not to pay any amount out of the said Fixed Deposit account without production of a succession certificate and duringthat period the prohibitory order of the Court remained in force. 92.2 Subsequently, the learned Trial Court directed attachment, before judgment, of the amount of Rs. 6,090/- lying with the Bank in Fixed account in the name of Nadir ali. 92.3 as already noted, the suit was decreed in favor of Sayeedan. Execution was filed. Notice under Order XXI Rule 63a was issued by the executing court to the Bank. The Bank objected to the notice. The learned Subordinate Judge, however, overruled the objections and directed the Bank to pay the aforesaid amount of Rs. 6,090/- to Sayeedan in satisfaction of the decree. The Bank appealed to the High Court. Execution was filed. Notice under Order XXI Rule 63a was issued by the executing court to the Bank. The Bank objected to the notice. The learned Subordinate Judge, however, overruled the objections and directed the Bank to pay the aforesaid amount of Rs. 6,090/- to Sayeedan in satisfaction of the decree. The Bank appealed to the High Court. 92.4 The High Court observed that directions under Order XXI Rule 63a could be issued only if, prior thereto, an order of attachment under Order XXI Rule 46 had been passed. For that, the decree holder would have to apply under Order XXI Rule 46 and the Court would have to direct the garnishee to show cause under Order XXI Rule 46(3) as to why the garnishee be not directed to pay to the decree holder the debt owed to the judgment debtor. It was held, therefore, that 'garnishee proceedings, therefore, in respect of a debt, can be started only after the debt has been attached under Rule 46 of Order XXI'. 92.5 Para 7 of the report reiterated this position relying, for the purpose, on the judgment of the High Court of Calcutta, in Kurseong Hydroelectric Supply Co. Ltd. v. Lukshmi Narayan Sukhani aIR 1941 Cal 364. It reads thus: '7. The above view taken by me is supported by a Bench decision of the Calcutta High Court in Kurseong Hydro-Electric Supply Co. Ltd. v. Lakshmi Narayan Sukhani, ILR (1941) 1 Cal 389 : (aIR 1941 Cal 364), in which it was held that garnishee proceedings in respect of a debt can be started only when the debt is both attachable under O. 21. R. 46 of the CPC and in fact has been so attached. The corresponding provision of O. 21, R. 63a of our Court in the Calcutta High Court is O. 21, R. 46a. The language of R. 46a of the Calcutta High Court and R. 63a of the Patna High Court of O. 21 is the same. On the language of R. 63a of Patna, like R. 46a of O. 21 of Calcutta, it is plain that if a debt attachable under O. 21, R. 40 had not in fact: been attached, garnishee proceedings cannot be taken.' 92.6 Thereafter, the question before the High Court was thus delineated, in paras 8 and 9: 8. On the language of R. 63a of Patna, like R. 46a of O. 21 of Calcutta, it is plain that if a debt attachable under O. 21, R. 40 had not in fact: been attached, garnishee proceedings cannot be taken.' 92.6 Thereafter, the question before the High Court was thus delineated, in paras 8 and 9: 8. In the present case admittedly a notice under O. 21, R. 63a had been issued to the appellant is fling upon it to appear before the Court and show cause why it should not pay into Court the debt Sue from it. So far there is no dispute. But the contention of Mr. Bhattacharya is that as no attachment has been made in accordance with O. 21, R. 46, the issue of the notice under O. 21, R. 63a is without jurisdiction. On the above contention of Mr. Bhattacharya, therefore, two questions arise first, whether in fact there was an attachment under R. 46 of O. 21 Rs. and, secondly, whether clause (2) of R. 46 of O. 21 was complied with Rs. 9. The first question, therefore, is was the debt in question attached in fact under R. 46(1) of O. 21 Rs. 92.7 The High Court went on to allow the appeal of the Bank on the ground that, prior to issuing summons to the Bank under Order XXI Rule 63a, no orders had been passed under Order XXI Rule 46 of the CPC. 92.8 as in the case of J H Sharma 1988 SCC Online Ker 45, it is clear that this decision is also of no help in adjudicating the issue in controversy. The Court was not concerned either with issuance of any direction under Order XXI Rule 46 or even under Order XXI Rule 46a, or with the considerations relevant in that regard. The issue before the Court was whether a notice, under Order XXI Rule 63 could be issued, without, a priori, orders being issued under Order XXI Rule 46. Holding that, on facts, no prior order under Order XXI Rule 46 had been issued by the Court, the invocation, by the Court, of Order XXI Rule 63a was found to be erroneous. 93. anglo-american Metallurgical Coal and Vitol S.a. 93.1 anglo-american Metallurgical Coal (supra) and Vitol S.a. (supra), on which Mr. Holding that, on facts, no prior order under Order XXI Rule 46 had been issued by the Court, the invocation, by the Court, of Order XXI Rule 63a was found to be erroneous. 93. anglo-american Metallurgical Coal and Vitol S.a. 93.1 anglo-american Metallurgical Coal (supra) and Vitol S.a. (supra), on which Mr. Puri relies, are merely interim uncontested procedural orders, which do not lay down any legal principles. In anglo-american Metallurgical Coal (supra), 3 orders were passed, which Mr. Puri has placed on record. The 1st order, dated 23rd august, 2021, notes the fact that immovable properties of the judgement-debtor, located in Delhi, were already under restraint consequent on order dated 22nd May, 2019, passed by this Court. a statement was made, by learned Senior Counsel for the judgement debtors,to the effect that these properties were unencumbered and could be proceeded against. In the circumstances, this Court proceeded to attach the said 3 properties. Subsequently, by order dated 27th august, 2021, the draft proclamation of sale in respect of 2 of the said 3 properties, as settled by the cab joint Registrar of this Court, was approved by the Court and was directed to be published. Qua the 3rd property, learned Counsel for the judgement debtor stated that he would be suggesting a proposal, for consideration by the decree holder. The 3rd order, dated 14th September, 2021, passed in the said case, granted further time to the decree holder to examine the said proposal. 93.2 Vitol S.a.(supra), for its part, directed deposit by the garnishees, of the amounts stated to be owed by them to the judgement-debtor, on submission made by the decree-holder to that effect.The order was passed without contest and, in fact, in the absence of the judgement-debtor as well as the garnishees. This order, too, therefore, cannot aid in adjudicating the issues that arise in the present case. 94. De Pass 1891, I QB 216 and Coren [L.R.] 22 Q.B.D.249 94.1 These decisions were rendered in the context of Order XLV of the Rules of the UK Supreme Court ('the UKSC Rules'). Rules 1 to 4 of Order XLV of the UKSC Rules read thus: '1. 94. De Pass 1891, I QB 216 and Coren [L.R.] 22 Q.B.D.249 94.1 These decisions were rendered in the context of Order XLV of the Rules of the UK Supreme Court ('the UKSC Rules'). Rules 1 to 4 of Order XLV of the UKSC Rules read thus: '1. The Court or a Judge made upon the ex parte application of any person who has obtained a judgement or order for the recovery order payment of money, either before or after any oral examination, of the debtor liable under such judgement or order, and upon affidavit by himself or his solicitor stating that the judgement has been recovered all the order made and that it is still unsatisfied, and to what amount, and that any other person is indebted to the judgement debtor, and is within the jurisdiction, order that all debts owing or accruing from such 3rd person (hereinafter called the garnishee) to the judgement debtor shall be attached to answer the judgement or order, and by the same or any subsequent order it may be ordered that the garnishee shall appear before the Court or a Judge or an officer of the Court, as such Court or Judge shall appoint, to show cause why he should not pay to the person who has obtained such judgement or order dated due from him to such data, or so much thereof as may be sufficient to satisfy the judgement or order. 2. Service of an order that debts due or accruing to a debtor liable under a judgement or order shall be attached, or notice thereof to the garnishee, in such manner as the Court or Judge shall direct, shall bind such debts in his hands. 3. If the garnishee does not forthwith pay into Court the amount due from him to the debtor liable under the judgement or order or an amount equal to the judgement or order and does not dispute the debt due or claimed to be due from him to such debtor, or if he does not appear upon summons, then the Court or Judge may order execution to issue, and it may issue accordingly, without any previous rate or process, to levy the amount due from such garnishee, or so much thereof as may be sufficient to satisfy the judgement or order. 4. 4. If the garnishee disputes his liability, the Court or Judge, instead of making an order that execution shall issue, may order that any issue or question necessary for determining his liability be tried or determined in any manner in which any issue or question in an action may be tried or determined.' 94.2 The garnishment provisions in the UKSC Rules are, clearly, different from those in Order XXI Rule 46 of the CPC and the provisions that follow. Rule 1 of Order XLV of the UKSC Rules expressly allows the Court to, on the ex parte application of the decree holder, before any examination of the judgement debtor, and solely on affidavit regarding the decree being still unsatisfied, and regarding the indebtednessof the garnishee to the judgement debtor,order attachment of all debts owing to the judgement debtor from the garnishee, only provided the garnishee is within the jurisdiction of the Court. There is no such provision in the CPC. Order XXI Rule 46 of the CPC does not say so. Judgements which pronounce that, on a mere affidavit of the decree holder,containing an averment that the garnishee is indebted to the judgement debtor, attachment can follow, predicated on Order 45 of the UKSC Rules, therefore, cannot, in my opinion, be regarded as good law, as the provisions in the UKSC Rules relating to garnishment are not in para materia with those in the CPC. 94.3 Jurisprudence, in our country, has long shaken off the shackles of overseas precedents.More than half a century ago, when the growth of post-Constitutional precedential law in this country was still in a state of adolescence, the Supreme Court held, in State of West Bengal v. B.K. Mondal aIR 1962 SC 779 , that 'resort to English law is not justified for deciding a question arising on our statute unless the statute is such that it cannot be reasonably understood without the assistance of English law'. On the precedential value of foreign decisions, the Supreme Court also pronounce thus, in General Electric Co. v. Renusagar Power Co. (1987) 4 SCC 137 : 'We do not propose to refer to them in our judgment - not because we do not find them instructive; indeed we read them carefully and found them helpful, but because we think that reference to such persuasive authority is justified only if there is no guidance from binding authority. v. Renusagar Power Co. (1987) 4 SCC 137 : 'We do not propose to refer to them in our judgment - not because we do not find them instructive; indeed we read them carefully and found them helpful, but because we think that reference to such persuasive authority is justified only if there is no guidance from binding authority. The time has perhaps arrived to discourage uninhibited reference to and extravagant use of foreign precedents, though indeed we welcome such precedents when they explore virgin territory and expand the horizons of legal thought. The setting of a foreign judgment is the foreign country's past and present history, its economic relations, its social relations, its trade and commerce, its traditions, its values, its needs, the stages of the development of its people, its legal ideology, its constitutional direction and strategies and its statutes and precedents. Foreign precedents are to be read and remembered in their setting, but never to be elevated to the level of binding precedents and, therefore, to be avoided from frequent and needless quotation.' Blind citation of foreign judgements, during arguments, must firmly be discouraged. any reliance on foreign precedential authority must also cite the relevant statutory provisions, in the backdrop of which the precedent was rendered. To be fair to him, Mr. Puri has placed on record Order XLV of the UKSC Rules. They, however, are not in para materia with the provisions for garnishment as contained in the CPC. Where the foreign statute, in relation to which the foreign precedent has been rendered, is not inpara materiawith the Indian statutory position, the foreign judgement loses,substantially, precedential value.This position is augmented where the statute relates to procedure. Procedural provisions are, axiomatically, is endemic to every jurisprudence. Foreign precedents are, therefore, of very little value where the issue is one of procedure, as in the present case. I, therefore, agree with Mr. Sachar in his submission that the decisions in De Pass 1891, I QB 216and Coren [L.R.] 22 Q.B.D.249 cannot advance the petitioner's cause. 94.4 I do not, therefore, deem it necessary to comment on the rulings inDe Pass 1891, I QB 216 and Coren [L.R.] 22 Q.B.D.249, rendered, as they are, under the UKSC Rules and in their context. 95. Sachar in his submission that the decisions in De Pass 1891, I QB 216and Coren [L.R.] 22 Q.B.D.249 cannot advance the petitioner's cause. 94.4 I do not, therefore, deem it necessary to comment on the rulings inDe Pass 1891, I QB 216 and Coren [L.R.] 22 Q.B.D.249, rendered, as they are, under the UKSC Rules and in their context. 95. Vali Ram 1983 (5) DRJ 259 95.1 Order XXI Rule 46 of the CPC did not arise for consideration in this case at all, though the decision (authored by a learned Single Judge of this Court) does make certain incidental observations with respect to the said provision, on which Mr. Puri relies. 95.2 In this case, Satwant Kaur (Respondent 1 before this Court and referred to, hereinafter, as 'Satwant') obtained a decree against the judgement debtor, who happened to be the son of Vali Ram, the appellant before this Court, for recovery of money. Satwant applied for execution, seeking attachment of the properties of the judgement debtor. an affidavit, deposing that the properties belonged to the judgement debtor, was also filed by Satwant.a warrant for attachment of the property was issued, and the properties were attached. Vali Ram applied, under Order XXI Rule 58 of the CPC, read with Sections 47 and 151 thereof, for delivery of the attached property to him, claiming that he owned the property and that the judgement debtor, his son, had no right, title or interest therein. Vali Ram contended that the Court could not have attached the property of a third person. Satwant contended, before the additional District Judge, that she was seeking attachment of the properties only of the judgement debtor, and not of Vali Ram. The learned aDJ upheld her contention and rejected the objections of Vali Ram.Vali Ram appealed to the High Court. 95.3 The issue before the High Court was, therefore, whether the attached properties could have been attached, in view of the order XXI Rule 43 of the CPC and the objections of Vali Ram. One of the incidental contentions of Vali Ram, before the High Court, was that attachment of property in the hands of a third party could be effected only under Order XXI Rule 46. One of the incidental contentions of Vali Ram, before the High Court, was that attachment of property in the hands of a third party could be effected only under Order XXI Rule 46. as, however, it was not Vali Ram's case that he was in possession of the attached property over which the judgement debtor otherwise had a lien or which he owed to the judgement debtor, no occasion arose for the Court to enter, on merits, into Order XXI Rule 46. Mr. Puri relies on the following observations, to be found in the said decision: 'Rule 43 provides for attachment of movable property in possession of the judgment-debtor by actual seizure and the attaching officer is required to keep the property his custody. Rule 46 provides for attachment of movable property not in possession of the judgment-debtor. The rule provided for attachment by a written order prohibiting the person in possession from giving over the property to the judgment-debtor. Under this rule after service of prohibitory order if such person i.e. garnishee disputes his liability, the question of liability of the garnishee is to be decided by the court as if it were an issue as under a suit.' (Emphasis supplied) Mr. Puri relies on the words 'after service of prohibitory order', as contained in the afore-extracted passage from Vali Ram16. These words, he submits, indicate that, at the stage of issuance of the prohibitory order, the garnishee's objections are not required to be addressed. I am unable to agree. In the 1st place, this Court was, in Vali Ram 1983 (5) DRJ 259 , not concerned with any kind of garnishment proceedings. No garnishment proceedings had been initiated.There was no garnishee. There were no objections by any garnishee, therefore, either. The issue of whether, at the stage of passing prohibitoryattachment orders under Order XXI Rule 46, the Court was to pay heed to the objections of the garnishee, disputing the factum of the date, therefore, did not arise for consideration. It cannot, therefore, be said that the learned Single Judge of this Court, in employing the italicised words in the passage extracted supra - felicitous though they may appear to Mr. It cannot, therefore, be said that the learned Single Judge of this Court, in employing the italicised words in the passage extracted supra - felicitous though they may appear to Mr. Puri - intended to hold, as a proposition of law, that the objections by the garnishee, regarding the existence of the debt that the decree holder sought to attach, were of little importance at the Order XXI Rule 46 stage. 96. Qua Issue (3), therefore, I am of the considered opinion that, where the garnishee disputes the existence of the debt, the decree holder would have to satisfy the Court that such a debt, within the meaning of Order XXI Rule 46(1)(a) exists.Without convincing itself, prima facie, that such a debt exists, any attachment by the Court would violate the express wording of Order XXI Rule 46(1)(a). I cannot reconcile myself to the position that the objection of the garnishee, regarding the very existence of the debt, should be relegated to the Order XXI Rule 46C stage and, unmindful thereof, attachment of the date should straightaway be directed under Order XXI Rule 46. 97. Needless to say, however, this position would apply only where the garnishee appears and contests the existence of the debt. It cannot operate as a fetter to the Court, in an appropriate case and on the basis of judicious exercise of discretion, directing attachment of the debt alleged to be due by the garnishee to the judgement debtor without calling for objections from the garnishee in the 1st instance. Re. Issue (4)- plea of set off 98. Extensive arguments were also advanced before me on the contention of MMTC and NINL that the monies payable by MMTC to NINL, if any, were counter-balanced against the working capital and trade finance facilities extended by MMTC to NINL under the Working Capital agreement dated 14th November, 2018, read with addendum dated 3rd July, 2019 thereto. as such, contended learned counsel for the respondents, the agreements for sale/purchase of raw material and finished product, dated 22nd June, 2012, could not be seen in isolation. Mr. Sachar, appearing for MMTC, especially, contended that MMTC had an interest in ensuring continuous and uninterrupted production of finished products by NINL, for indigenous sale and export by MMTC. as such, contended learned counsel for the respondents, the agreements for sale/purchase of raw material and finished product, dated 22nd June, 2012, could not be seen in isolation. Mr. Sachar, appearing for MMTC, especially, contended that MMTC had an interest in ensuring continuous and uninterrupted production of finished products by NINL, for indigenous sale and export by MMTC. The amounts outstandingfrom NINL to MMTC, it was pointed out, far exceeded any amount which still remained to be paid by MMTC to NINL towards the finished goods supplied by NINL to MMTC. 99. Generalised principles regarding a plea of set off, whether under Order VIII Rule 4 of CPC or otherwise, need not detain this opinion, as Mr. Puri himself agreed that set off could be pleaded where the transactions were inter-connected. His submission was, however, that there was nothing to indicate that the transactions of sale and purchase of raw material and finished products, under the agreement dated 22nd June, 2012, and the transactions of extending of Working Capital agreement and Trade Finance under the agreement dated 14th November, 2018 read with the addendum dated 3rd July, 2019 were inter-connected. He also sought to point out, in this context, that, in fact, the working capital balance in the financial statements of NINL was constant at Rs. 1425 crores from 2018-19 to FY 2020-21. 100. The contention that the advancement of working capital and trade finance facilities by MMTC to NINL and the sale and purchase of raw material and finished goods under the agreements dated 22nd June, 2012 were not inter-connected stands clearly belied by Clause E of the Working Capital agreement dated 14th November, 2018, which, at the cost of repetition, is again reproduced thus: 'E. as a part of cost adjustment towards procurement of coal, iron ore and other row materials, MMTC takes the credit of the payment received against sale or NINL products from time to time. Similarly at the request or the NINL, MMTC is also paying to NINL funds for meeting their day to day operational requirements as 'D' above. These payments are adjusted against the sales realizations by MMTC on sale of NINL's finished products and by-products etc. 101. Similarly at the request or the NINL, MMTC is also paying to NINL funds for meeting their day to day operational requirements as 'D' above. These payments are adjusted against the sales realizations by MMTC on sale of NINL's finished products and by-products etc. 101. This is also supported by the stipulation, in Clause H of the Working Capital agreement, to the effect that any default by NINL in running its blast furnace and other project facilities for operational continuity could trigger a financial crises at MMTC. The inter-connection between the advancing of working capital and trade facility by MMTC to NINL and the production of finished goods by NINL out of raw material supplied by MMTC and sale thereof to MMTC also standunderscored by Clauses 4.5 and 7 of the Working Capital agreement, which, again at the cost of repetition, may be reproduced thus: '4.5 Mode of Repayment: NINL will supply goods to MMTC for sale in the domestic as well as in the international market. The consideration against such supplies of goods will be adjusted from time to time towards outstanding amount against Working Capital and Trade Finance Facility extended by MMTC. The adjustment of consideration will be carried out depending upon the cash flow and in mutual consultation between MMTC and NINL.' (underscoring supplied) '7. SCHEDULE OF REPaYMENT: 7.1 The outstanding Working Capital and Trade Finance Facility will be adjusted against the consideration payable to NINL in respect of supplies of goods from time to time in relation to various agreements. The outstanding amount including interest shall be repaid by NINL depending upon the cash flow and on mutual consultation between MMTC and NINL.' (Emphasis supplied) 102. Clearly, therefore, there was inter-connection between the extending of working capital and trade finance facilities by MMTC to NINL, and the production of finished goods by NINL, out of the raw material supplied by MMTC. The payments by MMTC to NINL, against the finished goods produced by NINL and sold to MMTC, cannot, therefore, be entirely disassociated from the working capital and trade finance facilities provided by MMTC to NINL. They did, therefore, constitute an integrated transaction. Even, therefore, applying the test accepted by Mr. The payments by MMTC to NINL, against the finished goods produced by NINL and sold to MMTC, cannot, therefore, be entirely disassociated from the working capital and trade finance facilities provided by MMTC to NINL. They did, therefore, constitute an integrated transaction. Even, therefore, applying the test accepted by Mr. Puri as applicable for pleading set off, of integrated/inter-connected transactions, it has to be held that the respondents were entitled to advance such a plea, while contesting the existence of a debt owed by MMTC to NINL, attachable under Order XXI Rule 46 of the CPC. Re-Issue (5) - Is the petitioner entitled to the relief sought Rs. 103. Viewing the facts of the case and the contentions pleaded, in the backdrop of the legal position outlined hereinabove, I am unable to hold that the petitioner has made out a case for attachment of debt due by NINL to MMTC, within the meaning of Order XXI Rule 46 of the CPC. 104. In the first place, barring, possibly, an amount of Rs. 1.59 crores, Mr. Puri has been unable to make out any case of any debt owed by MMTC to NINL in praesenti. The contention of Mr. Puri that, year by year, the value of the finished goods sold by NINL to MMTC is in excess of the value of the raw material supplied by MMTC to NINL cannot make out any case of debt owed by MMTC to NINL, unless, there is material which can indicate, at least prima facie, that any part of the amount payable by MMTC to NINL, against the finished goods supplied by the latter to the former, still remains to be paid. No credible material, to that effect, has been placed on record. 105. as already noticed hereinabove, attachment, under Order XXI Rule 46, can also be of a debt which becomes due at a future point of time, provided the obligation to pay the debt exists in praesenti. Where, the debt is contingent in nature, i.e. dependant on a contingency which may or may not take place, there can, axiomatically, be no obligation to pay the debt in praesenti. In a case such as the present, the liability of MMTCto make payment to NINIL depends on the supply of finished goods by NINL to MMTC. Where, the debt is contingent in nature, i.e. dependant on a contingency which may or may not take place, there can, axiomatically, be no obligation to pay the debt in praesenti. In a case such as the present, the liability of MMTCto make payment to NINIL depends on the supply of finished goods by NINL to MMTC. Though the contract dated 22nd June, 2012, between NINL and MMTC, for supply of finished goods from the former to the latter, envisages such supply to be continuing, and payments thereagainst to be made till the need subsists, that, by itself, cannot be a ground to hold that an obligation, of MMTC, to make payment to NINL exists in praesenti. If, tomorrow, NINL were to stop supply of finished goods to MMTC, no obligation to make payment would, needless to say, arise. There could, for that matter, be any number of foreseeable and unforeseeable circumstances which could interrupt the continued making of payment by MMTC to NINL. The liability to pay being dependent on supply of finished goods, and supply of finished goods being in the nature of an unforeseeable future occurrence, no obligation, in praesenti can be said to exists, for MMTC to make payment to NINL. It cannot, therefore, be said that any debt, within the meaning of Order XXI Rule 46(1a) or, for that matter, even Section 60, of the CPC, can be said to exist, which would be attachable under the former provision. 106. Expressed otherwise, attachment of a debt may be sought, under Order XXI Rule 46(1)(a), as and when the liability to make payment arises; it cannot, however, be sought if and when the liability to make payment arises. Existence of an obligation to pay, in praesenti, is essential. 107. Yet another reason why the petitioner cannot be held to be entitled to relief under Order XXI Rule 46 is because the agreement dated 22nd June, 2012 for sale and purchase of raw material and finished goods are interconnected with the working capital agreement dated 14th November, 2018, read with the addendum dated 3rd July, 2019, and the working capital and trade finance facilities extended by MMTC to NINL under the said agreements. The contention of learned Counsel for the respondents that the amount due to NINL by MMTC, under the working capital agreement and trade facility agreements is far and excess of the amounts payable by MMTC against finished goods supply by NINL, has not been contested by Mr. Puri. The submission of Mr. Puri that these two sets of agreements are independent of each other and that it is not permissible, therefore, for the respondents to seek to set off the liability of NINL under the working capital agreement against the obligation of MMTC under the agreement for supply of finished goods cannot, therefore, pass muster. 108. It would have been open to the petitioner to seek a determination of the debts due to NINL under Order XXI Rule 46 of the CPC, before seeking attachment of the debt under Order XXI Rule 41 of the CPC, before seeking attachment of the debt under Order XXI Rule 46. The petitioner has not chosen to do so. The petitioner has, instead, chosen to directly invoke Order XXI Rule 46, predicated on the premise that a clear and subsisting debt owed by MMTC to NINL, capable of immediate attachment under Order XXI Rule 46, exists. 109. That, however, is not the case. Conclusion 110. In view of the aforesaid discussion, no case for passing of any prohibitory orders under Order XXI Rule 46 can be said to exist, on the basis of the material on record. 111. The application is, accordingly, bereft of merit and is therefore dismissed.