DELHI HIGH COURT
J.R. Midha, J.
M/s. Bhandari Engineers & Builders
Pvt. Ltd. —Decree Holder
versus
M/s. Maharia Raj Joint Venture
and Ors. —Judgment Debtors
Ex.P. 275 of 2012 and Ex.Appl. (OS) 193 of 2020, Ex.P. 276 of 2012
Decided on 5.8.2020

IMPORTANT POINTS
(1) Execution of decrees/awards deserve special attention considering that inordinate delay in execution proceedings would frustrate decree-holders from reaping benefits of decrees/awards.
(2) Mandatory filing of affidavit of assets, income, expenditure and liabilities by judgment-debtor in a detailed prescribed form at the very threshold of execution litigation should be incorporated in statutes, as in developed countries.
(3) Section 151 of CPC empowers High Court to make such orders as may be necessary to secure ends of justice or to prevent abuse of process of Court in exercise of its inherent powers.
(4) Imposition of actual and realistic costs in appropriate cases would go a long way in controlling tendency of filing false cases.

Headnote:

(A) Civil Procedure Code, 1908 – Order XXI Rule 41(2) – Execution of decree – Delays and difficulties in execution of decrees/awards erode public confidence and trust in justice delivery system – Execution jurisdiction deserves special attention and expeditious disposal considering that decree-holders have already succeeded in litigation and hold a decree/award in their favour – In execution proceeding, Executing Court has to ascertain assets and income of judgment-debtor to determine, whether judgment-debtor has means to satisfy money decree – In many developed countries, law prescribes a comprehensive format of affidavit of assets, income, expenditure and liabilities to be filed by judgment-debtor at very threshold of execution proceedings to ascertain financial means of judgment-debtor – However, Form 16A of Appendix E under Order XXI Rule 41(2) of CPC is not exhaustive to ascertain all assets, income, expenditure and liabilities of judgment-debtor – If judgment-debtor does not voluntarily satisfy decree/award, decree-holder is compelled to initiate execution proceedings – If decree-holder is aware of assets of judgment-debtor, Executing Court attaches assets at very threshold of execution proceedings – Executing Court thereafter initiates proceedings for sale of attached assets of judgment-debtor – If decree-holder is not aware of complete assets and income of judgment-debtor, Executing Court directs judgment-debtor to disclose his assets in Form 16A of Appendix E under Order XXI Rule 41(2) of CPC – There is an urgent need to formulate a detailed format of affidavit of assets and income to be filed by judgment-debtor at very threshold of execution proceedings to curb delay and expedite disposal of execution proceedings. (Paras 1, 5, 8, 9, 10 and 12)

(B) Civil Procedure Code, 1908 – Order XXI Rule 41(2) – Inherent Jurisdiction – Section 151 of CPC empowers High Court to make such orders as may be necessary to secure ends of justice or to prevent abuse of process of Court in exercise of its inherent powers – Power under Section 151 of CPC is extraordinary in its nature and is to be exercised to do real and substantial justice for which Courts exist – Article 227 of Constitution confers on this Court power of superintendence over subordinate Courts – Paramount consideration behind vesting such wide power of superintendence in this Court is to keep path of justice clear of obstructions which would impede it – It is salutary duty of this Court to prevent abuse of process, miscarriage of justice and to correct irregularities in judicial process. (Para 14)

(C) Civil Procedure Code, 1908 – Order XXI Rule 41(2) – Indian Evidence Act, 1872 – Section 165 – Execution of decree – It is duty of Court to ascertain true assets and income of judgment-debtor – Truth is foundation of justice – Dispensation of justice, based on truth, is an essential feature in justice delivery system – People would have faith in Courts when truth alone triumphs – Justice based on truth would establish peace in society – One major incentive for obstruction and delay of execution proceedings by judgment-debtors is ability to benefit by either tiring out decree-holders into giving up or coercing them to settle for less – This occurs because of reluctance of Executing Court to wield their power to order restitution – Unless Courts disgorge all benefits that a party availed by obstruction or delays or non-compliance, there will always be incentive for non-compliance and parties are ingenious enough to come up with all kinds of pleas and other tactics to achieve their end – Whatever benefits a person has had or could have had by not complying with judgment must be disgorged and paid to decree-holder – This is bounden duty and obligation of Court – Imposition of actual and realistic costs in appropriate cases would go a long way in controlling tendency of filing false cases. (Paras 29, 43, 44, 45 and 49)

(D) Civil Procedure Code, 1908 – Order XXI Rule 41(2) – Execution of decree – Execution of decrees/awards deserve special attention considering that inordinate delay in execution proceedings would frustrate decree-holders from reaping benefits of decrees/awards – In execution proceedings, Executing Court shall direct judgment-debtor, at first instance, to file affidavit of assets on date of cause of action, date of decree/award as well as on date of swearing of affidavit in Form 16A of Appendix E under Order XXI Rule 41(2) of CPC within thirty days – Oral prayer/application of decree-holder for issuance of such direction shall be sufficient compliance of Order XXI Rule 41(2) of CPC – Executing Court is empowered, at initial stage itself, to restrain judgment-debtor from transferring, alienating or disposing of or otherwise parting with possession of any assets to the tune of decretal/award amount except in ordinary course of business such as payment of salary and statutory dues – Executing Court shall restrain judgment-debtor from discharging any financial liability, other than liabilities of Banks/financial institutions, without permission of Executing Court – If judgment-debtor fails to appear before Court upon service of notice, Executing Court shall ensure his presence initially by issuing bailable warrants and thereafter, by issuing non-bailable warrants as per law – In event of default of judgment-debtor to file such affidavit within stipulated time, Executing Court shall consider detention of judgment-debtor in civil prison for the term not exceeding three months under Order XXI Rule 41(3) of CPC by directing decree-holder to deposit subsistence allowance @ Rs.40 per day per person with Executing Court for detention of judgment-debtor – Upon deposit of subsistence allowance, Executing Court shall issue non-bailable warrants against judgment-debtor for his detention – Courts below shall expedite execution proceedings and shall make endeavour to decide execution cases within one year of institution – Mandatory filing of affidavit of assets, income, expenditure and liabilities by judgment-debtor in a detailed prescribed form at the very threshold of execution litigation should be incorporated in statutes, as in developed countries – Let this suggestion be considered by Central Government. (Paras 54 to 58, 61, 82, 83 and 87)

Result: Suggestions issued to Government.