IMPORTANT POINT
If the execution is sought to be proceeded against any person or property outside the local limits of the jurisdiction of the executing court, nothing in Section 39 of the Code of Civil Procedure shall be deemed to authorise the court to proceed with the execution.

Headnote:Civil Procedure Code, 1908 — Section 39 read with Order XXI Rule 3 — Execution — Territorial jurisdiction — When property sought to be proceeded against, is outside the jurisdiction of the Court which passed the decree acting as the executing Court — Transfer of decree to the Court having jurisdiction over the property that is sought to be proceeded against by the decree holder — Dissolution of partnership — Decree holder and grandfather of judgment debtor among others were partners in that firm — In year 1981, Court passed a preliminary decree declaring that the partnership firm stood dissolved w.e.f. 20-6-1978 — In March, 1985, grandfather of judgment debtor executed a Will bequeathing the properties to the judgment debtor — In November, 1985, grandfather of judgment debtor died — Under the final decree, judgment debtor was liable to pay to the plaintiff a sum of Rs. 6,66,292/- and a total sum of Rs. 10,83,757/- to other partners — Decree holder filed an execution petition in the District Court of Gwalior for execution of the decree — Execution petition was filed in the Court which passed the decree — Prayer of decree holder for sale of property situate at Indore — Whether Executing Court at Gwalior had territorial jurisdiction to proceed with the execution — (No) — High Court was justified in transferring the decree to the Court having jurisdiction over the property.
       Held : There cannot be any dispute over the proposition that the court which passed the decree is entitled to execute the decree. This is clear from Section 38 of the Code which provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution. Section 42 of the Code indicates that the transferee court to which the decree is transferred for execution will have the same powers in executing that decree as if it had been passed by itself. A decree could be executed by the court which passed the decree so long as it is confined to the assets within its own jurisdiction or as authorised by Order XXI Rule 3 or Order XXI Rule 48 of the Code or the judgment debtor is within its jurisdiction, if it is a decree for personal obedience by the judgment debtor. But when the property sought to be proceeded against, is outside the jurisdiction of the court which passed the decree acting as the executing court, there was a conflict of views earlier, some courts taking the view that the court which passed the decree and which is approached for execution cannot proceed with execution but could only transmit the decree to the court having jurisdiction over the property and some other courts taking the view that it is a matter of discretion for the executing court and it could either proceed with the execution or send the decree for execution to another court. But this conflict was set at rest by Amendment Act 22 of 2002 with effect from 1.7.2002, by adopting the position that if the execution is sought to be proceeded against any person or property outside the local limits of the jurisdiction of the executing court, nothing in Section 39 of the Code shall be deemed to authorise the court to proceed with the execution. In the light of this, it may not be possible to accept the contention that it is a matter of discretion for the court either to proceed with the execution of the decree or to transfer it for execution to the court within the jurisdiction of which the property is situate. (Para 6)
       Pending a suit, the court approached with the suit, may have jurisdiction to order attachment of a property even outside its jurisdiction. In execution, under Order XXI Rule 54 of the Code, it may also have jurisdiction to order attachment of the property prohibiting the judgment debtor from transferring or charging the property in any way when it exercises its jurisdiction over the judgment debtor though not over the property itself. It could in such a case issue a percept in terms of Section 46 of the Code and thereupon, the court to which the percept is sent, has to actually attach the property in the manner prescribed. Section 136 of the Code provides for an order of attachment in respect of a property outside the jurisdiction of the court and sending the order of attachment to the district court within whose local limits the property sought to be attached, is situate as provided for therein. But Section 136 clearly excludes execution of decrees from within its purview. An execution against immovable property lying outside the jurisdiction of the executing court is possible in terms of order XXI Rule 3 of the Code which governs a case where the particular item of immovable property, forms one estate or tenure situate within the local limits of jurisdiction of two or more courts, and one of those courts is approached for execution of the decree against that property. In a case where Order XXI Rule 3 has no application, the position seems to be that if a decree holder wants to proceed against a property situate outside the jurisdiction of the court which passed the decree, he has to get the decree transferred to the appropriate court for execution on moving the executing court in that behalf. Whatever doubts there might have been earlier on this question, must be taken to have been resolved by the introduction of sub-section (4) of Section 39 of the Code which is a mandate to the executing court to desist from proceeding against a property situate outside its jurisdiction, unless it be a case coming under Order XXI Rule 3 of the Code. (Para 7)
       In the case on hand, the property that is sought to be sold in execution of the decree for dissolution is not a property of the partnership. It is not a partnership asset held by the court Gwalior or within the jurisdiction of the court at Gwalior. Order XXI Rule 50 of the Code is, therefore, not attracted. What is sought to be done by the decree holder is to seek the sale of a property belonging to the judgment debtor so as to realise the fruits of his decree. Since that property lies outside the jurisdiction of the court at Gwalior, the executing court was not correct in over ruling the objection of the judgment debtor regarding the absence of jurisdiction in the Gwalior court to order sale of the property outside its jurisdiction. The High Court was, therefore, justified in interfering with that order and in transferring the decree to the court having jurisdiction over the property that is sought to be proceeded against by the decree holder. We, therefore, see no infirmity in that part of the order of the High Court sought to be challenged before us by the decree holder. (Para 8)

Judgement Key Points

Key Points: - The court which passed the decree is entitled to execute it, either directly or through a court to which it is sent for execution [1000404870005]. - Section 42 of the Code of Civil Procedure indicates that a transferee court executing a decree has the same powers as if it had passed the decree itself [1000404870005]. - A decree can be executed by the court that passed it if the execution is confined to assets within its jurisdiction, or as authorized by Order XXI Rule 3 or 48, or if the judgment debtor is within its jurisdiction for personal obedience decrees [1000404870005]. - If the property sought to be proceeded against is outside the jurisdiction of the court that passed the decree, and it is acting as the executing court, the conflict of views on whether it could proceed or only transmit the decree was settled by Amendment Act 22 of 2002 [1000404870005]. - Section 39(4) of the Code of Civil Procedure mandates that if execution is sought against a person or property outside the local limits of the executing court's jurisdiction, the court is not authorized to proceed with the execution [1000404870005] (!) . - An executing court cannot proceed with the execution of a decree against a property situated outside its jurisdiction unless it falls under Order XXI Rule 3 of the Code [1000404870006]. - In cases where Order XXI Rule 3 does not apply, if a decree holder wishes to proceed against a property outside the jurisdiction of the court that passed the decree, the decree must be transferred to the appropriate court for execution [1000404870006]. - Orders of restraint, such as "freezing orders" or "Mareva injunctions," can be issued by an executing court even if the property or person concerned is outside its jurisdiction [1000404870008]. - The High Court was justified in transferring the decree to the court having jurisdiction over the property when the executing court at Gwalior lacked territorial jurisdiction to order the sale of a property located in Indore [1000404870007]. - The judgment debtor's challenge to the High Court's refusal to interfere with earlier restraint orders dated March 19, 2003, and July 7, 2003, was found to be without merit as these orders were within the executing court's jurisdiction and were not challenged at the appropriate time [1000404870008].

What is the territorial jurisdiction of an executing court when the property sought to be proceeded against is outside its local limits?

What are the implications of Section 39(4) of the Code of Civil Procedure on the execution of decrees against properties outside the executing court's jurisdiction?

What is the scope of an executing court's power to issue orders of restraint when dealing with properties outside its jurisdiction?

JUDGMENT

P.K. Balasubramanyan, J. — Leave granted.

1. While the judgment debtor challenges the order of the High Court in a petition filed by him under Article 227 of the Constitution of India to the extent it rejects his prayers, the decree holder has also challenged the same order to the extent it upheld an objection of the judgment debtor. The decree holder and the grand father of the judgment debtor among others, were partners in a firm. A notice of dissolution was issued by some of the partners to the grand father of the judgment debtor. Ultimately, the decree holder filed a suit in the District Court of Gwalior for dissolution of the partnership and for rendition of accounts. On 27.4.1981 the court passed a preliminary decree declaring that the partnership firm stood dissolved with effect from 20.6.1978 and directing that accounts be taken to settle mutual rights and liabilities. A receiver who had been appointed pending the suit was directed to continue.

2. The father of the judgment debtor pre-deceased the grand father of the judgment debtor. It is said that on 26.3.1985, the grand father executed a will bequeathing the properties to his grand son, the judgment debtor. At the relevant time, the judgment debtor, the legatee, was a minor. Provisions were made regarding the management of the properties during the minority of the judgment debtor. On 19.11.1985, the grand father of the judgment debtor died. The final decree proceedings continued and the Commissioner submitted his report after scrutinising the accounts on 27.8.2002. On 29.11.2002, the District Court Gwalior, passed a final decree in the suit for dissolution. Under the final decree, the judgment debtor was liable to pay to the plaintiff a sum of Rs.6,66.292.50 and a total sum of Rs.10,83,757/- to other partners and a sum of Rs.5,000/- as his share of fees to the Commissioner. According to the judgment debtor, he has filed an appeal against this final decree, but due to objections raised by the Registry of the High Court regarding the court fee payable, further orders are awaited in the appeal on that question.

3. On 2.1.2003, the decree holder, the plaintiff in the suit, filed an execution petition in the District Court of Gwalior for execution of the decree. In other words, the execution petition was filed in the court which passed the decree. Meanwhile, it is said that the will executed by the grand father designating the judgment debtor as the legatee was probated. On 19.3.2003, the decree holder moved the executing court for an injunction restraining the person holding the building said to have been bequeathed to the judgment debtor by his grand father, from handing over possession of the same to the judgment debtor and from handing over the documents of title to him. He also sought a direction restraining the bank holding an account of the estate from permitting the judgment debtor to operate the accounts. The executing court passed an order on 19.3.2003 directing the occupant of the building as well as the bank not to transfer to the judgment-debtor the properties enumerated in the list submitted by the decree holder. The person holding the building moved the executing court praying that he be relieved from the responsibility of managing the property. He also produced certain documents in the executing court with a prayer that he be relieved of his obligations. On 7.7.2003, the executing court, after taking notice of the documents produced by the occupant of the building concerned, directed that the documents be kept in safe custody of the court. On 26.7.2003, an application was moved by the decree holder submitting that he had received an offer for the purchase of the building in question, which was situate at 14, Bakshi Colony, Indore, and praying that the said property may be sold by way of auction and the amount received be apportioned among the decree holder and other partners. Though the judgment debtor had not then and there challenged t

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2007 Supreme(SC) 549

IMPORTANT POINTIf the execution is sought to be proceeded against any person or property outside the local limits of the jurisdiction of the executing court, nothing in Section 39 of the Code of Civil Procedure shall be deemed to authorise the court to proceed with the execution.

What is the territorial jurisdiction of an executing court when the property sought to be proceeded against is outside its local limits?

What are the implications of Section 39(4) of the Code of Civil Procedure on the execution of decrees against properties outside the executing court's jurisdiction?

What is the scope of an executing court's power to issue orders of restraint when dealing with properties outside its jurisdiction?

Cases Referred (1)

IMPORTANT POINT
If the execution is sought to be proceeded against any person or property outside the local limits of the jurisdiction of the executing court, nothing in Section 39 of the Code of Civil Procedure shall be deemed to authorise the court to proceed with the execution.