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2018 Supreme(Cal) 715
IN THE HIGH COURT OF CALCUTTA
Sanjib Banerjee, Suvra Ghosh, JJ.
G.R. Industries – Appellant
Vs.
Bhanu Iron and Steel Co. Limited and Others - Respondents
Appeal From Order No. 218 of 2018, General Application No. 2554 of 2018, 2108 of 2018, Execution Case No. 25 of 2001
Decided On : 07-12-2018
Aniruddha Chatterjee, Adv., Srijib Chakraborty, Adv., Syed Nurul Arefin, Adv., Rahul Karmakar, Adv., Malay Kr Ghosh, Adv., Anubhav Sinha, Adv., Paritosh Sinha, Adv., K.K. Pandey, Adv., Nilanjana Adhya, Adv., Sreyash Basu Dasgupta, Adv.
The main legal point established in the judgment is the limitation of a civil court's jurisdiction to execute decrees against properties outside its territorial limits, the impact of Section 39(4) of the Code of Civil Procedure, and the conflicting appointments of receivers by different forums.
Headnote:
JUDGMENT - Execution Proceedings - Code of Civil Procedure, 1908 - Section 39(4), Order XXI Rule 9 - The court discussed the authority of the High Court to appoint receivers over properties outside its jurisdiction and execute decrees by attaching and selling properties outside jurisdiction. The court also considered the effect of Section 39(4) of the Code of Civil Procedure and its impact on the long-standing practice of the High Court. The judgment addressed the conflicting appointments of receivers by different forums and the propriety of the sale conducted by the Debts Recovery Tribunal. The court restrained the second respondent from creating any third-party rights in the property for a limited period.
Fact of the Case:
The appellant, a judgment-debtor, challenged the execution proceedings concerning an immovable property. The executing court discharged the receiver appointed over the property and vacated all subsisting orders, removing the impediment between the second respondent and the property. The court observed that it could not proceed against the property outside its jurisdiction for executing the money decree.
Finding of the Court:
The court found that the executing court lacked jurisdiction to execute the decree against the property outside its territorial limits. It also addressed the conflicting appointments of receivers and the propriety of the sale conducted by the Debts Recovery Tribunal. The court restrained the second respondent from creating any third-party rights in the property for a limited period.
Issues: The issues included the authority of the High Court to appoint receivers over properties outside its jurisdiction, the effect of Section 39(4) of the Code of Civil Procedure, and the conflicting appointments of receivers by different forums.
Ratio Decidendi: The court held that the executing court could not reach out to a property beyond its territorial limits in execution, and the appointment of a receiver over the property outside jurisdiction was without authority. The court also addressed the propriety of the sale conducted by the Debts Recovery Tribunal and restrained the second respondent from creating any third-party rights in the property for a limited period.
Final Decision: The court set aside the costs awarded against the appellant and the second respondent, and restrained the second respondent from creating any third-party rights in the property for a limited period. The court disposed of the appeals on this basis.
Sanjib Banerjee, J.
The appeal is by the judgment-debtor in the execution proceedings, complaining of the executing court virtually conferring title in respect of an immovable property in favour of a stranger applicant despite such applicant questioning the very authority of this court to entertain or continue with the execution proceedings.
2. The appellant suffered a decree for sum of Rs.14 lakh, together with interest thereon, in a court in Madhya Pradesh. The decree of March 9, 2000 was transferred to the court of the District Judge, Kolkata and the decree-holder carried the matter to the City Civil Court at Calcutta by way of Money Execution Case No.7 of 2001. However, since the City Court lacked the pecuniary jurisdiction at the relevant time to execute a decree for an amount in excess of Rs.10 lakh, the decree was returned to the decree-holder for presentation to the appropriate court. In August, 2001 the decree-holder, the first respondent herein, lodged the decree for execution in this court.
3. In the meantime, the Debts Recovery Tribunal-II, Kolkata received an ex parte certificate dated August 31, 2001 issued by the Debts Recovery Tribunal, Patna against, inter alia, the appellant herein for recovery a sum in excess of Rs.4.83 crore. The State Bank of India, Jamshedpur Branch had obtained the certificate and caused the transfer thereof to DRT-II in Kolkata. On February 28, 2002, an order of attachment and receiver was passed by the DRT-II, Kolkata over a property of the appellant herein at 10, Jessore Road, Kolkata-700028. It appears that the appellant herein was the guarantor in respect of the credit facilities granted by State Bank to an entity by the name of G. R. Magnets and the Jessore Road property was put up by the appellant herein as collateral security in such context.
4. It transpires that despite the receiver being appointed over the Jessore Road property by the DRT-II, the receiver could not identify or demarcate the land immediately; but the order of appointment of receiver remained in place.
5. On August 1, 2002, a receiver was appointed by this court in the present execution proceedings over the same property of the appellant at 10, Jessore Road, measuring slightly over 1 bigha and 17 cottah. On September 3, 2002, the receiver appointed by this court was given liberty to break open the padlocks and take necessary steps to carry out the order of this court to take possession of the Jessore Road property and on September 27, 2002 the receiver appointed by this court apparently took symbolic possession thereof. By a further order of October 3, 2002, the receiver appointed by this court was required to take physical possession of the property and to put up his padlock. Such receiver appears to have taken physical possession of the property on or about November 27, 2002.
6. In the certificate proceedings before the DRT-II there was some confusion for a considerable period of time as to whether the Jessore Road property was subject to any order of this High Court or had been taken possession of by the receiver appointed by this court. During such period, the receiver appointed by this court published advertisements in April, 2003 inviting offers for sale of the property. To add to the confusion, on a writ petition filed by the labour union of the appellant proprietorship firm, a single judge of this court directed on November 30, 2004 that the claim of the workmen should be settled first from the proceeds realised by the sale of the Jessore Road property before settling any other dues.
7. Sometime in 2005, pursuant to orders passed by the DRT-II, the receiver appointed by such tribunal took possession of the Jessore Road property and put up his own padlocks by replacing those that had been put up by the receiver appointed by this court. According to the appellant, the DRT-II was misled into passing an order for the receiver appointed by such tribunal to take possession of the Jessore Road property, sinc
