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Supreme Court Flags Judgment Impeding of Civil Decrees
The on , expressed serious concern over a division bench judgment of the that has been obstructing the expeditious disposal of across the country. A bench comprising Justice JB Pardiwala and Justice K Vinod Chandran, while hearing a matter related to the staggering pendency of nearly 8.8 lakh in district courts, indicated that the Court may have to take corrective action to remove the legal hurdle created by the 's ruling in .
The , , submitted a report revealing that approximately 17,000 fresh had accumulated before the in the last six months alone. He attributed this surge to the division bench's modification of the earlier single-judge decision in , which had laid down mandatory guidelines for to disclose their assets and income, thereby streamlining the execution process.
The Judicial Roadblock
Justice Pardiwala, visibly concerned, questioned whether the division bench judgment had been challenged.
"Have you placed that division bench judgment or not? This DB judgment is creating trouble? This judgment was rendered in a litigation by two private parties and nobody has questioned this judgment so far? Because of this DB, this 151 powers are not being exercised. If this observation is coming in the way of executing Courts, we will have to do something."
The judge was referring to , which empowers courts to make such orders as may be necessary to secure the or prevent . The division bench's ruling effectively curtailed the use of this in execution matters, thereby slowing down the disposal of cases.
Background of the Conflict
The root of the problem lies in two conflicting judgments of the . In , a single judge had issued comprehensive guidelines requiring to file affidavits disclosing all assets and sources of income at the very outset of execution proceedings. This was intended to expedite the process and reduce delays caused by repeated applications for asset discovery.
However, in Delhi Chemicals and Pharmaceutical Works Pvt. , a division bench overturned that part of the Bhandari Engineers ruling, holding that such mandatory guidelines could not be applied universally to all and all executing courts. The division bench observed:
"We are thus of the view that
supra, to the extent it extends what is laid down therein to execution proceedings pertaining to all
and to all courts executing a money decree, cannot said to be good law. Axiomatically, what is held in
supra could not have been followed in the execution proceedings from which this appeal arises."
This reversal removed the compulsion on to proactively disclose assets, leading to a rise in contested and consequent backlog.
Data on Pendency and Disposal
The Supreme Court had, on , directed all high courts to collate data on the pendency of across district courts nationwide. The amicus report, prepared with the assistance of his junior, was placed before the bench during the hearing. The Court briefly discussed the figures and noted that the had performed exceptionally well in disposing of , followed by the .
The bench appreciated the amicus's report and requested the junior to continue providing assistance as and when required. It also reiterated the need for the government to bring an amendment to the , to provide that execution in commercial suits shall be governed by the Commercial Court Rules, which have remained unnotified since .
Implications for Legal Practice
The Supreme Court's intervention signals a potential restoration of the Bhandari Engineers approach or the formulation of a uniform mechanism to ensure of civil decrees. For legal practitioners, this could mean a return to mandatory asset disclosure requirements, reducing the time spent on multiple hearings for asset tracing. The Court's emphasis on Section 151 CPC also reinforces the of executing courts to pass necessary orders, even in the absence of specific procedural rules.
The proposed amendment to the Commercial Courts Act would further streamline execution in commercial disputes, aligning it with the efficient procedures already existing under the Commercial Court Rules. This move is expected to reduce litigation costs and enhance predictability for businesses.
Next Steps
The bench kept the matter part-heard and stated that it will pass orders after incorporating fresh figures on the pendency of recently received from the high courts. It scheduled the next hearing for the following Wednesday, indicating that it would make observations to facilitate the Centre in bringing the necessary amendment to the Commercial Courts Act.
The case highlights the Supreme Court's proactive role in addressing systemic bottlenecks in the justice delivery system, particularly in the area of execution of decrees, which is often the weakest link in civil litigation. By flagging the judgment and calling for legislative amendments, the Apex Court has set the stage for meaningful reforms that could significantly reduce the burden of pending and ensure that successful litigants are not left without remedies.
