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2024 DIGILAW 405 (CAL)

Ravi Sanei v. Rajesh Sanei

2024-02-23

APURBA SINHA RAY

body2024
JUDGMENT : Apurba Sinha Ray, J. 1. The Learned Counsel Ms. Noelle Banerjee appearing for the judgment-debtor/the petitioner in GA 1/2023 has submitted that the instant execution case is not maintainable since a declaratory decree has been passed without having any observation how to execute such decree in case of default. As such the instant proceeding is not maintainable. 2. The Learned Counsel has relied upon several case laws reported at AIR (1923) Cal 252 (para 5), (2013) 4 CLT 1 (para 35). 3. Moreover, the Execution Application being No. EC 190 of 2023 was moved without any notice to the respondents after more than two years of passing of the decree, and further, direction of filing affidavit of assets and the order of attachment of the property of the judgment debtor no. 1 are beyond the scope of order 21 of the C.P.C. in view of the factual matrix of the suit. 4. The Learned Counsel has further argued that failure to comply with the consent decree cannot be executed unless there is a specific remedy in the said consent decree. The judicial decisions reported at (2014) 3 Cal LT 477 (Shivani Properties Pvt. Ltd. Vs. United Bank of India) paras 14 and 15, (1998) 2 SCC 510 (State of M.P. Vs. Mangilal Sharma), (2012) SCC OnLine Del 3446 (Atul Chopra & Ors. Vs. Technotree Corporation & Ors.) paras 60, 61 and 63, have been cited. 5. It is also the contention of the learned counsel of the judgment-debtor that as the decree does not specify the mechanism for execution of the said decree, the decree-holder himself imposes a bar upon himself not to execute the decree. It is argued that it is not a money decree and so an affidavit-of-asset is not required to be filed. Therefore, the prayer as made out in GA No. 1 of 2023 for recalling the order dated 17.05.2023 in this execution proceeding should be allowed since affidavit-of-assets is required to be submitted only when there is any proceeding for execution of a money decree. 6. The learned counsel for the judgment-debtor has also pointed out that the decree-holders have filed execution proceeding without serving any notice and got an order dated 17.05.2023 which is contrary to the provisions as laid down in Order 21 Rule 41(2) of Code of Civil Procedure, 1908. The GA Application being no. 6. The learned counsel for the judgment-debtor has also pointed out that the decree-holders have filed execution proceeding without serving any notice and got an order dated 17.05.2023 which is contrary to the provisions as laid down in Order 21 Rule 41(2) of Code of Civil Procedure, 1908. The GA Application being no. 1 of 2023 has been filed for dismissal of the instant execution case and setting aside the order dated 17.05.2023. Moreover, the aforesaid order does not record any reason. 7. The learned counsel of the judgment-debtor has vehemently argued that the instant execution case was filed against three judgment-debtors that is the brother of the decree-holder, brother’s wife and brother’s son. The letter dated 20.07.2017 shows the name of the person who is supposed to release bank guarantees and the clause(d) of the settlement agreement shows that execution proceeding, for argument sake, can be maintainable only against Rajesh Sanei and not against his wife and son. The wife and son of Rajesh Sanei have no obligation under the decree to comply with the consent decree but in spite of that they are made parties only to harass them and to put a pressure upon Rajesh Sanei. 8. The learned counsel for the judgment-debtor has further submitted that the instant proceeding is barred under Article 135 of Limitation Act since the instant execution proceeding was not brought within three years from the date for performance of mandatory obligation/injunction. 9. The consent decree, in a suit according to the learned counsel of the judgment-debtor, is merely a contract between the parties on which the court put its seal. In this regard the case law reported in (1969) 2 SCC 201 has been cited. Therefore, according to the judgment-debtor the execution court should keep its hands away from execution of the consent decree unless there is any mechanism provided therefor. The decree-holder filed a writ petition against the bank seeking release of his personal guarantee. 10. The learned counsel appearing for the decree-holder Mr. Swatarup Banerjee has submitted that the relevant suit was not a declaratory suit, it is suit for specific performance and money decree only. The decree sought for is a money decree which was not challenged nor nullified. 11. The learned counsel for the decree-holder has vehemently argued that if a part of the decree has been executed, the remaining portion is also to be executed. The decree sought for is a money decree which was not challenged nor nullified. 11. The learned counsel for the decree-holder has vehemently argued that if a part of the decree has been executed, the remaining portion is also to be executed. The decree has attained finality and now when the 3/4th of the decree has been executed, the judgment-debtor cannot resist the execution of remaining 1/4th the portion of the same. 12. The learned counsel has further argued that the judgment-debtor has admitted that the decree-holder has performed his part. By order dated 17.05.2023 attachment order in respect of the property of the judgment-debtor has already been made but no challenge was made against the said order. The order dated 17.10.2023 directing the judgment-debtor to file affidavit-of-assets was also not challenged and therefore the same reached its finality. Therefore, the GA application being No. 1 of 2023 is not maintainable. 13. The learned counsel for the decree-holder has submitted that the case law reported in MANU/WB/0134/1922 is not applicable since in the said case law the suit was a declaratory suit but in this case the suit is not a declaratory suit but for specific performance of the contract and money decree. The said case law has laid down that if in the relevant decree there was any direction or act to be done, then it should be enforced. In this case there was certain directions upon the parties and therefore the consent decree can be enforced by way of the instant execution proceeding. The Learned Counsel has further pointed out that the judicial decision reported at (2013) 4 CLT 41 Shivani Properties Pvt. Ltd. (supra) is also not applicable. Decree-holder performs his part and there is no plea that decree-holder did not perform his part. Therefore, obligations are inter-linked between the parties. The case law reported at (2014) 3 CLT 447 also upholds the above judgment, and, therefore supports the case of decree-holder. The Learned Counsel has reiterated his submission that when there was any direction or act to be done in the consent decree then it should be enforced through execution proceeding. 14. The Learned Counsel of the decree-holder has also tried to distinguish the case law reported at (1998) 2 SCC 510 , cited on behalf of the judgment-debtor, by contending that when the decree directs acts to be done, then the same should be implemented. 14. The Learned Counsel of the decree-holder has also tried to distinguish the case law reported at (1998) 2 SCC 510 , cited on behalf of the judgment-debtor, by contending that when the decree directs acts to be done, then the same should be implemented. The case law reported at (2012) SCC OnLine 3446 cited by the judgment-debtor was also tried to be distinguished from the side of the decree-holder by contending that in the instant case there is a fraud practiced upon the concerned court, but in our case there is no challenge to the validity of the decree nor there is any plea that any fraud was practiced upon the court. 15. The learned counsel by referring to the arbitration clause in the settlement agreement, has submitted that no interpretation, explanation or construction of the agreement is sought for by the decree-holder and therefore there is no scope for referring the matter to arbitration. The case law reported (1969) 2 SCC 201 cited by the judgment-debtor was distinguished by the decree-holder by contending that the factual matrix are not akin to the facts of the present case. 16. The learned counsel of the decree-holder has cited (1974) 1 SCC 242 in support of his contention that the instant execution case is maintainable and the consent decree is enforceable through execution proceeding. It is also contended that the consent decree was passed on 05.04.2017 and the decree-holder came to know about the non-performance on behalf of the judgment-debtor on 01.01.2021 and as at that time, covid-19 pandemic was persisting, the execution case was filed on 23.03.2023 and in view of the order of the Hon’ble Supreme Court the plea of limitation as raised by the judgment-debtor does not have any leg to stand upon. 17. The learned counsel has further submitted that though the property of judgment-debtor has been attached by this court on 17.05.2023, no challenge was made to that order. According to him the decree-holder is to be released from personal guarantee of the concerned bank and the concerned bank that is UCO Bank asset management may be permitted to proceed against Rajesh Sanei and his group. In other words group A is required to be released from their personal guarantee in connection with the assets of the Rajesh Sanei and his group B. 18. In other words group A is required to be released from their personal guarantee in connection with the assets of the Rajesh Sanei and his group B. 18. In reply, the case law reported at (1974) 1 SCC 242 , cited by the decree-holder was tried to be distinguished by the judgment-debtor by contending that the judgment-debtor did not take the plea of nullity or the plea that the court which passed the decree was lacking the jurisdiction. In that suit there was a compromise decree wherein it was specified that the violation would entail the decree to be executed. There was a mechanism for default but in this case there is no mechanism for default. The executability of the decree is to be considered. She has further submitted that she never argued that the relevant suit was a declaratory suit rather she argued that this was a declaratory decree and declaratory decree can be passed even in the suit for specific performance as well as money decree or in any other suit. The nature of decree is to be considered. It only declares certain rights and obligations of the parties. In fact the judgment-debtor got the specific performance of decree in a suit instituted in 2013 by way of settlement. In 2017 the present settlement through consent decree was obtained. The Judgment in Shivani Properties Pvt. Ltd. (supra) lays down that if there is any direction to perform any act then the same is enforceable. Para 11 referred to by the learned counsel of the decree-holder as observation of the court is not correct since it was mere submission from the side of the concerned parties. Para 32 of the said judgment shows that the court rejected the two decisions of Jaynarayan’s case and Prakash Chand’s case. 19. The learned counsel for the judgment-debtor has further argued there is an agreement between the concerned parties in terms of Section 7 of the Arbitration and Conciliation Act, 1996. The date of performance of a decree can be modified by a letter. As the petitioner did not come forward with the execution proceeding within March, 2021 the instant application is barred by limitation. The date of performance of a decree can be modified by a letter. As the petitioner did not come forward with the execution proceeding within March, 2021 the instant application is barred by limitation. The Learned Counsel has also contradicted the submission of the learned counsel of the decree-holder on order 21 rule 41(2) Code of Civil Procedure, 1908 by submitting that in fact there is no money decree in the relevant suit. There is no obligation of the judgment-debtor to pay to the decree-holder any amount of money and therefore, the order dated 17.10.2023 asking the judgment-debtor to file affidavit-of-assets should not have been passed. The decree-holder paid money amounting to Rs. 2.79 crores on 29.03.2017. The learned counsel for the judgment-debtor has left the matter to the discretion of this court by saying that this court can pass appropriate order if it thinks so for releasing group A from their personal guarantee in connection with the loan obtained by the Group B, although the concerned Bank did not initiate any proceedings for the relevant loan transaction. Court’s view:- 20. The submission and counter-submission of the learned counsels of the parties show that by filing the instant GA application judgment-debtor is tried to resist the execution of the relevant consent decree on the grounds that the consent decree did not provide or does not provide for any mechanism for execution in case any of the parties to the consent decree makes any default. Without challenging the decree as a nullity and without contending that the court which passed the decree did not have the jurisdiction to pronounce the same, the judgment-debtor has taken the plea that the decree is in the nature of a declaration specifying rights and obligation of the parties but as the decree does not provide for the modes for execution of the concerned decree the instant execution proceeding cannot be proceeded with since there is no condition in the decree for its implementation. However, according to the judgment-debtor in case of any dispute the matter can be referred to arbitration as provided in the relevant Act of 1996. However, according to the judgment-debtor in case of any dispute the matter can be referred to arbitration as provided in the relevant Act of 1996. The judgment-debtor has further contended that though the suit was for specific performance of contract and money decree but in actual sense no money decree was passed by the consent court and therefore neither the property of the judgment-debtor can be attached nor the judgment-debtor can be asked to file affidavit of assets. 21. The decree-holder submits that when a consent decree contains certain directions or acts to be performed by the parties, the said consent decree can be executed through court process. Moreover, as the decree-holder has performed his part, the judgment-debtor is also bound to perform his part and in default, the court can proceed against his property and for which affidavit of assets has been rightly sought for by this court and further the court has rightly attached the relevant property of the judgment-debtor. 22. It appears from the materials on record that the terms of the relevant consent have admittedly been performed by the decree-holder and further the judgment-debtor has also performed most part of his obligation under the decree-holder. The only condition that the judgment-debtor shall take necessary steps to ensure that the group-A consisting of a decree-holder and his relatives be released from the personal guarantee in connection with the loan obtained for the business or the properties which have come to the dominion of group-B, has not been complied with from the side of the judgment-debtor. 23. I have gone through the relevant case law reported at (1998) 2 SCC 510 cited by the judgment-debtor which shows that in the said case there was a declaratory suit where only relief for declaration that the plaintiff was still in the service of the concerned state government was prayed for. No consequential relief was prayed for and accordingly the court refuses to allow the prayer of the decree-holder concerning consequential reliefs like payment of arrears salaries and other necessary benefits on the ground that such reliefs were not prayed at the time of presenting the suit. The Hon’ble Court has been pleased to hold that a declaratory decree merely declares the right of the decree-holder vis-à-vis judgment-debtor but does not direct the judgment-debtor to do or refrain from doing any particular act or thing. 24. The Hon’ble Court has been pleased to hold that a declaratory decree merely declares the right of the decree-holder vis-à-vis judgment-debtor but does not direct the judgment-debtor to do or refrain from doing any particular act or thing. 24. In our case, the suit was for specific performance of contract and also for a money decree. A consent decree was passed on the basis of an agreement arrived at by the parties on the terms and conditions settled between the parties. Therefore, it is needless to mention that when a decree is passed by a court on consent of the parties it is usually seen that the parties have fixed/settled their respective rights and obligation to which the court puts its seal if the terms and conditions do not violate the provisions of the law of the land. It is the parties who demarcate or specify their exact position of rights and obligations and further to give sanctity to the said terms and conditions they persuade the court to put its seal on the undertaking by both the parties that they shall abide by the terms and conditions agreed upon. Therefore, when a consent decree is passed by a court then it is, in my view, not the court but the parties themselves declare their respective rights and obligations on which they have settled the matter. Further by placing such agreed terms and obligations, the parties undertake before the court that they shall abide by the terms of the agreement and shall perform their respective obligations. 25. Now in spite of such undertakings if a party does not perform his part, can a court remain mute spectators and resist the execution to such consent decree merely on the ground that such consent decree cannot be executed as certain terms of the agreement are lacking. 26. If we go through the relevant consent decree in connection with this matter we shall find that both the parties to the said proceeding have undertaken to perform their part within a certain period of time. Therefore, the said decree which was passed on the consent of parties shows that it deals not only with the rights and obligations of the parties but also contains certain directions or acts to be done or performed by the respective parties. 27. Therefore, the said decree which was passed on the consent of parties shows that it deals not only with the rights and obligations of the parties but also contains certain directions or acts to be done or performed by the respective parties. 27. It is true that that relevant consent decree was passed in a suit for specific performance of a contract and money decree. It is needless to mention that during pendency of the suit the matter was settled between the parties and a consent decree was passed on an agreement arrived at by the parties. Therefore, the decree to be executed through the instant proceeding is the relevant consent decree only which, essentially, does not pertake the character of a decree for specific performance for contract nor money decree as prayed for at the time of institution of suit. This court being the executing court should confine itself to the terms of the consent decree which are sought to be executed in this case, and, in other words, shall implement the undertaking/obligation of the judgment debtor given at the time of persuading the court to pass a decree on consent of the parties. Needless to mention, the decree-holder performed his part in entirety, and, therefore, if the judgment-debtor is allowed to resist the decree on technical grounds, there would be a failure in justice dispensation mechanism/process. 28. However, after giving anxious consideration I find that impleadment of Sima Sanei and Yasbardhan Sanei in column 9 of the tabular statement cannot be said to be unnecessary since the plaint of C.S. No. 330 of 2014 was filed by them including the judgment-debtor no. 1 and his daughter, and the consent decree was passed against them in the relevant proceeding and as such their names cannot be expunged from the instant proceeding. 29. Under the consent decree the judgment debtor was not directed to pay any sum of money in favour of the decree-holder and as such at this stage there is no need for examining the status of assets of the judgment -debtor and as such the order dated 17.05.2023 directing the judgment -debtor to file affidavit-of-assets be kept in abeyance. 30. Under the consent decree the judgment debtor was not directed to pay any sum of money in favour of the decree-holder and as such at this stage there is no need for examining the status of assets of the judgment -debtor and as such the order dated 17.05.2023 directing the judgment -debtor to file affidavit-of-assets be kept in abeyance. 30. It is argued from the side of the decree-holder that the concerned bank should be asked to release the decree-holder from the relevant personal guarantee for the loan account in connection with the properties/business of Group-B. This argument does not impress this court since the issue of personal guarantee of the Group-A in connection with Group-B business are matters of tripartite agreement which includes the judgment – debtor, the decree-holder and the bank. In this execution proceeding the bank is not a party. Issue of releasing personal guarantee is of enormous importance so far as regards the business transaction of the above said three parties. In a proceeding where concerned bank is not made a party, the issue of releasing personal guarantee cannot be considered. It is further found from the submission and argument of the learned counsel of the judgment debtor that the decree-holder has already taken out a separate writ proceedings against the concerned bank for releasing the decree-holder from the personal guarantee in respect of the business of the Group-B parties. In such a situation it would be totally uncalled for if, in this present proceeding, the bank is asked to release the decree-holder from the personal guarantee as discussed above. The argument of the learned counsel of the decree-holder on this score merits no consideration. 31. So far as the point of limitation is concerned it appears that respective obligation under the consent decree are required to be completed within March, 2018. The letter dated 30th March, 2018 by the judgment-debtor no. 1 shows that he had requested the Group-A companies to extend the time line from March 2018 to March 2019. If we consider that the execution of the consent decree is to be taken up within three years from the date of decree, then after taking into account the request made by the judgment-debtor no. 1, the limitation period will extend up to March 2022. If we consider that the execution of the consent decree is to be taken up within three years from the date of decree, then after taking into account the request made by the judgment-debtor no. 1, the limitation period will extend up to March 2022. However, as the Hon’ble Supreme Court in the relevant decision directed the limitation period for any type of matters, cases, proceedings shall be countable from 1st March, 2022, I find that the plea of limitation is not of much significance. 32. The judgment-debtor’s learned counsel has harped on the point that as there is an arbitration clause in the consent decree the matter should be referred to the arbitration in view of the provisions of Arbitration and Conciliation Act, 1996 as amended up to date. The relevant arbitration clause as found in the consent decree referred to above is hereunder:- “In the event any dispute or difference arises relating to or touching or under the instant family settlement agreement or relating to its interpretation or expression or construction, the same shall be referred for arbitration in terms of the provisions laid down under the Arbitration and Conciliation Act, 1996 before a sole arbitrator.” 33. From the above clause it appears that in case of dispute and difference the matter can be referred to arbitration. In this case admittedly the decree-holder has performed his part in entirety and the judgment-debtor no. 1 has also performed most part of his commitment. However, the issue of releasing the decree-holder from personal guarantee of the loan account in connection with Group-B companies was not complied with and to enforce that liability of the judgment-debtor no. 1, the instant execution proceeding has been filed. The learned counsel for the decree-holder has rightly submitted that no question of interpretation or explanation over the terms of the consent decree has been sought for, and therefore the question of referring to arbitration does not arise. 1, the instant execution proceeding has been filed. The learned counsel for the decree-holder has rightly submitted that no question of interpretation or explanation over the terms of the consent decree has been sought for, and therefore the question of referring to arbitration does not arise. I find this argument is well reasoned since this court does not find any dispute regarding the terms of the consent decree nor any dispute that the decree-holder did not comply with his part, rather the judgment-debtor has admitted that the decree-holder has performed his part in entirety and it is also admission on the part of the judgment-debtor that the judgment-debtor fails to discharge his obligation so far as regards releasing the decree-holder, that is, Group-A companies from personal guarantee of the relevant loan account of the Group-B companies. As there is no dispute over the terms of the consent decree, the said arbitration clause cannot be availed of. 34. However, as the judgment-debtor under the consent decree is to take appropriate steps for releasing the decree-holder from personal guarantee in connection with the loan account of Group-B parties, the judgment debtor is directed to comply with the same within one month, in default necessary coercive steps will follow. 35. GA 1 of 2023 is thus disposed of. List the matter after one month. 36. Urgent certified website copies of this judgment, if applied for, be supplied to the parties subject to compliance with all the requisite formalities.