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2023 DIGILAW 1188 (AP)

POTHU PURUSHOTHAM REDDY v. SHAIK SABJAN

2023-08-11

B.S.BHANUMATHI

body2023
ORDER : 1. Cannot a JDr be arrested in an execution petition for recovery of money, if an insolvency proceeding filed by JDr is pending? This revision, under Section 115 CPC, is filed against the order, dated 06.12.2022, allowing E.A. No. 114 of 2022 in E.P.No. 29 of 2016 in O.S. No. 118 of 2014 on the file of the Court of Principal Senior Civil Judge, Madanapalle, filed by the decree holder under Section 151 CPC read with Section 94(e) CPC to issue fresh warrant of arrest against the judgment debtor with police aid. 2. Heard Sri N. Pramod, learned counsel for the petitioner/judgment debtor and Ms. Ayesha Azma, learned counsel for the respondent/decree holder. 3. The facts stated by the petitioner, are briefly as follows: The petitioner is the decree holder and he filed the execution petition seeking arrest of the judgment debtor for realization of the EP amount. The JDr took a plea that he has no means to pay the decree amount. Thereupon, the execution court conducted enquiry into the means and ordered arrest of the JDr on 04.04.2017 against which the JDr preferred a revision before the High Court and obtained a conditional order of stay and later the revision petition was dismissed. Thereafter, the JDr filed I.P. No. 7 of 2018 before the Court of Senior Civil Judge, Punganur, and failed to get interim protection orders. The JDr also filed C.R.P. No. 269 of 2020 for setting aside the decree in which the High Court passed conditional order to furnish security towards 25% of the suit claim and pay costs of Rs.5,000/- within four weeks from the date of the order which the JDr intentionally failed to comply. Thereafter, the Court ordered arrest of the JDr on 02.08.2022. The Amin who went for execution of the warrant found that the door of the house of the JDr was locked, and thereby, he could not execute the warrant. On that day, the JDr filed a petition seeking to stay the EP on the ground that he will produce protection orders in I.P. No. 7 of 2018. 4. The JDr filed I.P. No. 7 of 2018 and initially obtained an interim order of protection in I.A. No. 26 of 2018 and it was in force till 07.03.2022. On that day, the JDr filed a petition seeking to stay the EP on the ground that he will produce protection orders in I.P. No. 7 of 2018. 4. The JDr filed I.P. No. 7 of 2018 and initially obtained an interim order of protection in I.A. No. 26 of 2018 and it was in force till 07.03.2022. The JDr contends that by mistake, it was not noticed that interim order was not extended subsequently, and therefore, the warrant of arrest in execution cannot be ordered against him. Since there is no order of interim protection, the executing court allowed the petition and ordered assistance of police of Madanapalli Police Station while executing the arrest warrant against the JDr. 5. So long as the petitioner does not get an interim order of protection, mere pendency of the insolvency proceedings do not give protection to him. The petition in E.A. No. 114 of 2022 was filed on 11.10.2022, and till now, the revision petitioner/JDr failed to get either extension of the interim protection earlier ordered or freshly granted. In the absence of any such order, there is no illegality or impropriety in the order passed by the executing court in E.A. No. 114 of 2022. 6. The learned counsel for the petitioner placed reliance on the decision of this High Court in Naraharisetti Thirupathi Rao v. Sathi Subbi Reddy, C.R.P. No. 1828 of 2019, dated 20.01.2020 in support of his contention that the JDr is entitled to file insolvency proceedings as per Section 55 CPC. In this case when the JDr was produced on arrest in execution proceedings for recovery of money, as he informed that he had filed an insolvency petition, he was released under Section 55 CPC and the execution petition as closed giving liberty to the DHr to seek issuance of warrant for arrest of JDr, if he does not comply with the provisions of the Provincial Insolvency Act. Later, the insolvency petition was dismissed and the DHr filed a petition under Order XXI Rule 38 read with Section 151 CPC to issue an arrest warrant against JDr. The JDr filed counter. The execution Court allowed the execution petition. Challenging the said order, the revision petition was filed. Later, the insolvency petition was dismissed and the DHr filed a petition under Order XXI Rule 38 read with Section 151 CPC to issue an arrest warrant against JDr. The JDr filed counter. The execution Court allowed the execution petition. Challenging the said order, the revision petition was filed. This High Court held that the DHr need not file a fresh execution petition as it was closed tentatively and that there is no need to again conduct enquiry to prove means of the JDr as the order is still in force. It is true that when JDr is brought before the Court, on executing a warrant of arrest, he should be informed of his right to apply for insolvency proceedings and for such purpose, he can be released. But, if he fails to apply, he does not have right to oppose the execution petition in perpetuity. The contention of the revision petitioner is that since he had already applied for insolvency proceedings, he could not be arrested. Section 55 CPC is a provision to enable the JDr to apply for being declared as insolvent and by that itself does not cloth him with absolute protection against arrest in execution. 7. Section 23(1) of the Provincial Insolvency Act, 1920 reads as under: “23. Release of debtor: (1) At the time of making an order admitting the petition or at any subsequent time before adjudication, the Court may, if the debtor is under arrest or imprisonment in execution of the decree of any Court for the payment of money, order his release on such terms as to security as may be reasonable and necessary.” Thus, there is a specific provision in the Insolvency Act to obtain interim protection pending adjudication of the insolvency proceedings. Therefore, just by placing reliance on Section 55 CPC, the petitioner cannot oppose the petition in the circumstances of the present case, where he initially obtained but failed to get the order subsequent to 07.03.2022 till now. 8. Therefore, just by placing reliance on Section 55 CPC, the petitioner cannot oppose the petition in the circumstances of the present case, where he initially obtained but failed to get the order subsequent to 07.03.2022 till now. 8. The learned counsel for the respondent/DHr placed reliance on the decision of the High Court of Madras in R. Saravanan v. E. Raju, C.R.P. No. 1964 of 2008, dated 06.11.2008 wherein it was held that only if the JDr obtained an interim protection order under Section 31 of the Provincial Insolvency Act, release from arrest could be considered by the executing Court and that he is not protected from arrest by mere fact of his having applied for insolvency. It is further held that merely because JDr presented an insolvency petition, the executing Court need not stay its proceedings in the absence of any adjudication by the Court dealing with the insolvency petition. In support of this view, earlier decision on the same proposition in Sudhandiran v. S. Krishnan, AIR 2006 Madras 10; Ponnudurai v. Kumaraswami Mudaliar, 1971 (2) MLJ 252 ; Kuppu Boyan v. Sengottaiyan, AIR 1983 Madras 314 and Pothuganti Venkateshwarulu v. Yangala Mallaiah, AIR 2001 A.P. 358 were cited. In that case, there is a reference to a decision of this High Court in the case of Sanapala Narasamma and others v. Mallana Laxminarayana and others, AIR 2000 A.P. 219 wherein it was held that protection under Section 31 of the Act is not available as no order of adjudication is made in the insolvency proceedings and the applicant could be released by virtue of Section 23 and that Section 23 would come into play only when the judgment debtor is under arrest or imprisonment in execution of the money decree passed by any court and the said section does not empower the court to pass an order to prevent the arrest of the judgment debtor. Finally, it is held that the orders of arrest and committal to civil prison passed by the execution Court do not suffer from any legal infirmity. Akin to the present case, in the case before the High Court of Madras, though the JDr produced a copy of the insolvency petition, did not obtain any interim stay of execution, whereas, in the present case, he could not obtain extension of order of interim protection. Akin to the present case, in the case before the High Court of Madras, though the JDr produced a copy of the insolvency petition, did not obtain any interim stay of execution, whereas, in the present case, he could not obtain extension of order of interim protection. For all the above reasons, this Court finds that there is no illegality or irregularity in the order impugned and the revision petition is liable to be dismissed. 9. Accordingly, the Civil Revision Petition is dismissed. 10. There shall be no order as to costs. 11. Pending miscellaneous petitions, if any, shall stand closed.