step is to ascertain the assets/means of the judgement debtor to satisfy the
decree. Order XXI Rule 41(2) of the Code of Civil Procedure empowers the
executing Court to direct the judgement debtor to disclose his assets on
affidavit in Form 16A, Appendix E to ascertain his assets/means to satisfy
the decree. Order XXI Rule 41(2) of the Code of Civil Procedure is
reproduced herein below:-
“Order XXI Rule 41
(2) Where a decree for the payment of money has remained
unsatisfied for a period of thirty days, the Court may, on the
application of the decree-holder and without prejudice to its
power under sub-rule (1), by order require the judgmentdebtor
or where the judgment-debtor is a corporation, any
officer thereof, to make an affidavit stating the particulars of
the assets of the judgment-debtor.”
3. Order XXI Rule 41(1) of the Code of Civil Procedure empowers the
executing Court to orally examine the judgment debtor. Order XXI Rule
41(1) of the Code of Civil Procedure is reproduced hereunder: -[
“Order XXI
Rule 41. Examination of judgment-debtor as to his property.-
(1) Where a decree is for the payment of money the decreeholder
may apply to the Court for an Order that—
(a) the judgment-debtor, or
(b) where the judgment-debtor is a corporation, any officer
thereof, or
(c) any other person,
be orally examined as to whether any or what debts are owing
to the judgment-debtor and whether the judgment-debtor has
any and what other property or means of satisfying the decree;
and the Court may make an order for the attendance and
examination of such judgment -debtor, or officer or other
person, and for the production of any books or documents.”
4. In the event of the judgment debtor’s default to file the affidavit of
assets, Order XXI Rule 41(3) of the Code of Civil Procedure empowers the
Court to detain the judgment debtor in civil prison for a term up to three
months. Order XXI Rule 41(3) of the Code of Civil Procedure is reproduced
below:-
“Order XXI Rule 41
(3) In case of disobedience of any order made under sub-rule
(2), the court making the order, or any court to which the
proceeding is transferred, may direct that the person
disobeying the order be detained in the civil prison for a term
not exceeding three month unless before the expiry of such
terms the court directs his release.”
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 11th January, 2016
EX.P. 275/2012
M/S BHANDARI ENGINEERS
& BUILDERS PVT LTD .
v
M/S MAHARIA RAJ
JOINT VENTURE & ORS .
CORAM:
HON'BLE MR. JUSTICE J.R. MIDHA
Citation: 227(2016)DLT302, 2016(155)DRJ212
1. Delays and difficulties in execution of decrees erode public
confidence and trust in justice delivery system. To prevent such delays, the
executing Courts can exercise inherent powers to direct the judgment debtor
to be present in Court (and even ensure his presence by coercive process) to
receive such information or documents as will aid in the execution of the
decree. The executing Court may examine the judgment debtor orally or
direct him to file an affidavit detailing how he wishes or proposes to satisfy
the decree.
2. In cases for execution of decree for recovery of money, an important
step is to ascertain the assets/means of the judgement debtor to satisfy the
decree. Order XXI Rule 41(2) of the Code of Civil Procedure empowers the
executing Court to direct the judgement debtor to disclose his assets on
affidavit in Form 16A, Appendix E to ascertain his assets/means to satisfy
the decree. Order XXI Rule 41(2) of the Code of Civil Procedure is
reproduced herein below:-
“Order XXI Rule 41
(2) Where a decree for the payment of money has remained
unsatisfied for a period of thirty days, the Court may, on the
application of the decree-holder and without prejudice to its
power under sub-rule (1), by order require the judgmentdebtor
or where the judgment-debtor is a corporation, any
officer thereof, to make an affidavit stating the particulars of
the assets of the judgment-debtor.”
3. Order XXI Rule 41(1) of the Code of Civil Procedure empowers the
executing Court to orally examine the judgment debtor. Order XXI Rule
41(1) of the Code of Civil Procedure is reproduced hereunder: -[
“Order XXI
Rule 41. Examination of judgment-debtor as to his property.-
(1) Where a decree is for the payment of money the decreeholder
may apply to the Court for an Order that—
(a) the judgment-debtor, or
(b) where the judgment-debtor is a corporation, any officer
thereof, or
(c) any other person,
be orally examined as to whether any or what debts are owing
to the judgment-debtor and whether the judgment-debtor has
any and what other property or means of satisfying the decree;
and the Court may make an order for the attendance and
examination of such judgment -debtor, or officer or other
person, and for the production of any books or documents.”
4. In the event of the judgment debtor’s default to file the affidavit of
assets, Order XXI Rule 41(3) of the Code of Civil Procedure empowers the
Court to detain the judgment debtor in civil prison for a term up to three
months. Order XXI Rule 41(3) of the Code of Civil Procedure is reproduced
below:-
“Order XXI Rule 41
(3) In case of disobedience of any order made under sub-rule
(2), the court making the order, or any court to which the
proceeding is transferred, may direct that the person
disobeying the order be detained in the civil prison for a term
not exceeding three month unless before the expiry of such
terms the court directs his release.”
5. Form 16A of Appendix E of the Code of Civil Procedure prescribes
the format of the affidavit of assets to be filed by the judgment debtor which
is reproduced hereinbelow:-
“[No. 16A
Affidavit of Assets to be made by a Judgment-debtor
[O. XXI, r.41(2)]
In the Court of
A.B……… .................................…………………………. Decree-holder.
Versus
C.D..............................…….. ………………………….. Judgment-debtor.
I………………….. of …………………..state on Oath/solemn affirmation as
follows:-
1. My full name is ……………………………………(Block Capitals)
2. I live at
3. I am*................................... married/single/widower (widow)/divorced
4. The following persons are dependant upon me:-
5. My employment, trade or profession is that of .....................carried on
by me at .........................................
I am a director of the following companies:-
6. My present annual/monthly/weekly income, after paying income-tax, is as
follows:-
(a) From my employment, trade or profession Rs………….
(b) From other sources Rs…………
7. *(a) I own the house in which I live; its value is Rs..............
I pay as outgoings by way of rates, mortgage, interest, etc., the annual
sum of Rs.................
(b) I pay as rent the annual sum of Rs……........
8. I possess the following:-
(a) Banking accounts;
(b) Stocks and shares;
(c) Life and endowment policies; Give particulars
(d) House property;
(e) Other property;
(f) Other securities;
9. The following debts are due to me:-
(give particulars)
(a) Form ……. of ………………………
Rs.
(b) From …….of ………………………
Rs……. .(etc.)
Sworn before me, etc.]”
6. In order to satisfy whether the judgment debtor has the means to
satisfy the decree and further that the judgment debtor has disclosed all his
assets, the judgment debtor has to be directed to give a declaration and
verify the aforesaid affidavit under Order XXI Rule 41(2) of the Code of
Civil Procedure in the following format:
“Declaration:
1. I declare that I have/do not have means to satisfy the
decree.
2. I declare that I have made full and accurate voluntary
disclosure of my income, expenditure, assets and
liabilities from all sources. I further declare that I have
no assets, income, expenditure and liabilities other than
set out in this affidavit.
3. I undertake to inform this Court immediately upon any
material change in my employment, assets, income,
expenses or any other information included in this
affidavit.
4. I understand that any false statement in this affidavit may
constitute an offence under Section 199 read with Sections
191 and 193 of the Indian Penal Code punishable with
imprisonment upto seven years and fine, and Section 209
of Indian Penal Code punishable with imprisonment upto
two years and fine. I have read and understood Sections
191, 193 199 and 209 of the Indian Penal Code.
DEPONENT
Verification:
Verified at ____________on this ____ day of ___________
that the contents of the above affidavit relating to my assets,
income and expenditure are true to my knowledge, no part of it
is false and nothing material has been concealed therefrom. I
further verify that the copies of the documents filed along with
the affidavit are the copies of the originals.
DEPONENT”
7. If the judgement debtor does not truly or sufficiently disclose his
assets in the aforesaid affidavit under Order XXI Rule 41(2) of the Code of
Civil Procedure, the Court can exercise the inherent power under Section
151 of the Code of Civil Procedure by directing the judgment debtor to file a
further affidavit of assets, income and expenditure in the format provided in
Annexure A in Kusum Sharma v. Mahinder Kumar Sharma, 2015 (217)
DLT 706. The relevant portion of the said judgment is reproduced
hereunder:
“15. Affidavit of income and assets provided in Form 16A of
APPENDIX-E under Order 21 Rule 41(2) of the Code of
Civil Procedure
15.1 Order 21 Rule 41(3) of the Code of Civil Procedure
empowers the Court, in execution of a money decree, to
examine the judgment debtor to ascertain the properties owned
by him. Order 21 Rule 41(2) further empowers the Court to
direct the judgment debtor to file an affidavit stating the
particulars of the assets of the judgment debtor. Upon
disobedience of such an order, Order 21 Rule 41(3) of the
Code of Civil Procedure empowers the Court to send the
judgment debtor to civil prison for a term not exceeding three
months.
15.2 The form of the affidavit required to be filed by the
judgment debtor under Order 21 Rule 41(2) of the Code of
Civil Procedure is provided in Form 16-A in Appendix E.
15.3 Initially the Matrimonial Courts were directing the
parties to file the affidavit in the format given in Form 16-A of
Appendix E under Order 21 Rule 41 of the Code of Civil
Procedure but the litigants were not truly disclosing their
income in the said affidavit.
15.4 This Court is of the view that the format of affidavit of
assets, income and expenditure provided in Form 16-A of
Appendix E of the Code of Civil Procedure is not
comprehensive to discover the complete income, assets and
expenditure of the parties in matrimonial litigation and
therefore, there is a need to formulate a comprehensive
affidavit of assets, income and expenditure.”
8. Where the judgment debtor is a company, the Court can direct all the
directors of the judgment debtor to file their personal affidavit containing the
particulars set out in para 14 below.
9. The statement of the judgement debtor as to his inability to satisfy the
decree may invite the attention of the decree holder to Section 6(2) of the
Provincial Insolvency Act, 1920 (as amended in 1978) which provides for
an insolvency notice and the decree holder may invoke the same.
Conclusion
10. This Court is of the view that in cases of execution of decree for
recovery of money, it would be appropriate to direct the judgment debtor, at
the initial stage itself, to file the affidavit of assets as on the date of the
institution of the suit as well as of the current date i.e. date of swearing the
affidavit in Form 16A, Appendix E under Order XXI Rule 41(2) of the Code
of Civil Procedure along with statement of all their bank accounts for the
last three years within 30 days of the receipt of the notice and to remain
present for being orally examined under Order XXI Rule 41(1) of the Code
of Civil Procedure. The judgment debtor be directed to verify the affidavit
in terms of para 6 above. It is clarified that the application under Order XXI
Rules 41(1) and (2) of the Code of Civil Procedure is not required to be in
writing and such an order can be passed on oral prayer of the decree holder.
In the event of the default of the judgment debtor to file the affidavit within
the stipulated time, the judgment debtor be detained in civil prison for a term
not exceeding three months under Order XXI Rule 41(3) of the Code of
Civil Procedure. If the judgment debtor’s affidavit does not truly or
sufficiently disclose his assets, further affidavit be directed to be filed in
terms of paras 7 and 8 above. The judgment debtor be also examined orally
under Order XXI Rule 41(1) of the Code of Civil Procedure to receive such
information or documents as will aid in execution of the decree.
Present case
11. In the present case, vide order dated 03rd September, 2015, judgement
debtors were directed to file the affidavits of their assets in Form 16A,
Appendix E, under Order XXI Rule 41(2) of the Code of Civil Procedure
along with statement of all their bank accounts for the last three years within
30 days. Relevant portion of the order dated 03rd September, 2015 is
reproduced hereunder:-
“.....The Judgement debtors are directed to file the affidavit
of their assets in Form 16A, Appendix E, under Order XXI
Rule 41(2) of the Code of Civil Procedure along with
statement of all their bank accounts for the last three years
within 30 days. The judgement debtors shall remain present
in Court on the next date of hearing.”
12. On 16th November, 2015, the judgement debtors sought further one
week time to file the affidavit in terms of the order dated 03
rd September,
2015 whereupon further one week time was granted to them failing which
the managing partners/directors of the judgement debtors were directed to be
detained for a period of three months upon deposit of the subsistence
allowance by the decree holder. Relevant portion of the order dated 16th
November, 2015 is reproduced hereunder:-
“Learned counsel for the decree holder submits that the
judgment debtors have not filed the affidavit of their assets in
terms of order dated 03rd September, 2015, and, therefore,
they should be detained in civil prison under Order XXI Rule
41(2) of the Code of Civil Procedure.
Learned counsel for the judgment debtors seeks one week’s
time to file the affidavit in terms of order dated 03rd
September, 2015. In the interest of justice, one week’s time is
granted to the judgment debtors to file the affidavit in terms
of order dated 03rd September, 2015, failing which the
managing partners/directors of the judgement debtors No.1,
3 and 4 shall be detained in civil prison for a period of three
months upon deposit of the subsisting allowance by the
decree holder. The response to the affidavit be filed within
four weeks thereafter....”
13. Learned counsel for judgement debtors submit that judgment debtors
have filed the affidavits but the same are not in the prescribed format. The
judgement debtors have not filed statement of all their bank accounts in
terms of the order dated 03rd September, 2015. The learned counsel for the
judgement debtors submit that the requisite affidavits in terms of the order
dated 03rd September, 2015 along with the application for condonation of
delay shall be filed within one week. The same shall be considered as and
when filed. The fresh affidavits to be filed by the judgement debtors shall be
in Form 16A, Appendix E under Order XXI Rule 41(2) of the Code of Civil
Procedure in which the judgement debtors shall declare their assets as on the
date of the award as well as of the current date i.e. date of swearing of the
affidavit. The affidavit shall be accompanied with statement of all the bank
accounts of the judgement debtors for the last three years.
14. Considering nature of the companies and their business relationship,
the managing partners of the judgment debtor 1 and all directors of
judgement debtors 2 and 3 are directed to file their personal affidavits
setting out the following particulars: -
(i) All information and particulars with regard to their shareholding in
judgment debtors 1, 3 and 4, their involvement in the affairs of said
judgment debtors and the nature of steps taken by them with regard to
the management of the judgment debtors 1, 3 and 4;
(ii) The Profit & Loss Account and the Balance Sheets of judgment
debtors1, 3 and 4 for the last three years;
(iii) The list of all the bank accounts of judgment debtors 1, 3 and 4;
(iv) The names and residential addresses of the Directors of judgment
debtors 1, 3 and 4 along with their PAN numbers and DIN numbers,
as well as complete particulars of all moveable and immovable assets
held in their personal names and the dates of their acquisition, and the
nature of the right, title and interest therein;
(v) The address of the Registered Office and the Corporate or branch
offices, if any, of judgment debtors 1, 3 and 4;
(vi) The location of the statutory records and books of account of
judgment debtors 1, 3 and 4;
(vii) The list of immovable assets, land and building etc. of judgment
debtors 1, 3 and 4 as on the date of the award;
(viii) The list of immovable assets, land and building of judgment debtors
1, 3 and 4 as on the date of filing the affidavit;
(ix) The list of the movable assets of judgment debtors 1, 3 and 4, their
location and value;
(x) The details of the debtors and creditors of judgment debtors 1, 3 and 4
with their complete addresses; and
(xi) The details of workmen/employees and any amount outstanding to
them.
(xii) Whether judgment debtors 1, 3 and 4 have assets/means to satisfy the
decree.
15. The affidavits in terms of para14 be filed within a period of four
weeks from today with advance copy to the counsel for the decree holder.
The concerned directors of the judgement debtors shall remain personally
present on the next date of hearing to enable this Court to examine them, if
required.
16. The judgement debtors shall not dispose of, alienate, encumber either
directly or indirectly or otherwise part with the possession of any assets of
judgment debtor nos.1, 3 and 4 to the tune of Rs.4,00,00,000/- except in the
ordinary course of business and payment of salary and statutory dues.
17. List for hearing on 26th February, 2016.
18. The objections of the objector shall be taken up on the next date of
hearing.
Post script
19. It has come to the notice of this Court that the execution cases for
recovery of money are unreasonably delayed before the Trial Courts as the
Courts seldom exercise the power under Order XXI Rule 41 of the Code of
Civil Procedure. This Court, therefore, considers it necessary to send the
copy of this order to all the District Judges for circulating it to the Trial
Courts for implementation of Order XXI Rule 41 of the Code of Civil
Procedure in its true letter and spirit.
20. The copy of this order be sent to all the District Judges. The copy of
this order be also sent to the Delhi Judicial Academy to sensitize the Judges
about the implementation of Order XXI Rule 41 of the Code of Civil
Procedure in execution cases.
21. Copy of this order be given dasti to counsels for the parties under
signature of Court Master.
J.R. MIDHA, J.
JANUARY 11, 2016
No comments:
Post a Comment