Saturday, 26 January 2019

Whether chamber summons is maintainable for seeking particulars of assets of Judgment debtor?

 In my opinion, application under Order XXI, Rule 41 is not an
application in an execution. It is an application in aid of
execution or a step towards the execution. Under Clause (j) of
Rule 11(2) of Order XXI of the Code of Civil Procedure, the
execution petition must specify the mode in which assistance
of the Court is required for the execution of a decree. Clause
(j) reads as follows :

(j) the mode in which the assistance of the Court is required
whether -
(i) by the delivery of any property specifically decreed.
(ii) by the attachment, or by the attachment and sale, or by the
sale without attachment, of any property.
(iii) by the arrest and retention in prison of any person;
(iv) by the appointment of a receiver;
(v) otherwise, as the nature of the relief granted may require.
Examination of a judgment debtor under Sub-rule (1) of Rule
41 of Order XXI or direction to the judgment debtor to file an
affidavit to be issued under Sub-rule (2) of Rule 41 or Order
XXI is not one of the mode of execution of a decree provided in
Clause (j) of Rule 11(2) of Order XXI, Rule 30 . Disclosure of
the assets is a preliminary step towards the execution of a
decree. Rule Nos. 3 to 9 of Order XXI of the Code of Civil
Procedure contemplate transfer of a decree by the Court
which passed the decree to another Court for execution. The
decree holder, who is not aware of the assets of the judgment
debtor, is often unable to decide in which Court he should file
the execution petition or in which Court he should get the
decree transferred unless he knows the particulars of the
assets of the judgment debtor. Rule 41 of Order XXI enables
the decree holder to get from the judgment debtor the
information of the assets, which is within the special
knowledge of the judgment debtor. Therefore, an application
under Order XXI, Rule 41 is not an application for execution
of the decree but, merely an aid to the decree holder to enable
him to execute the decree by obtaining information which is
within the special knowledge of the judgment debtor. If this be
so, the application under Order XXI, Rule 41 would ordinary
precede the filing of an execution petition, though it can also
be filed in the pending execution petition itself.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO. 1098 OF 2017
IN
SUIT NO. 12 OF 2014

Bhupesh Sevantilal Shah vs M/s Bhoomi Tractors Sales & Services


CORAM : B.P.COLABAWALLA, J.
JANUARY 14, 2019.



This Chamber Summons has been filed seeking a direction
against the Defendants / Judgment Debtors to file an affidavit stating
the particulars of their assets ( movable and immovable ) as provided
under Order XXI Rule 41 Sub-rule (ii) of the Code of Civil Procedure,
1908 (for short the “CPC”). Prayer clause (b) in the Chamber
Summons is to detain the Defendants / Judgment Debtors in a civil
prison, in case they do not comply with the order passed by this Court
for disclosure.
2 Initially, since disputes arose between the Plaintiff and

the Defendants, the above suit came to be filed in this Court seeking a
direction against the Defendants jointly and/or severally to pay to the
Plaintiff a sum of Rs.1.26 Crores together with further interest at the
rate of 18 % per annum from the date of filing of the suit till payment
and or realization.
3 This suit came to be decreed pursuant to an amicable
settlement arrived at between the parties by filing the consent terms
dated 14th June, 2016. As per these consent terms, Defendant Nos.1
to 7 admitted their liability and in full and final settlement agreed to
pay a sum of Rs.1,12,50,214/- to the Plaintiff in installments, the last
payment to be made on or before 31st December, 2016. The suit was
accordingly disposed of in terms of the consent terms.
4 It is an admitted fact before me that the monies payable
as per the consent terms have not been paid by the Defendants to the
Plaintiff. The Defendants have paid only an amount of Rs.34,99,786/-
and the balance amount of Rs.77,50,428/- together with interest has
not been paid. It is, in these circumstances, that the present
Chamber Summons has been filed seeking a direction against the
Defendants to disclose the particulars of all their assets (movable and
immovable) as provided in Order XXI Rule 41 Sub-Rule (2) of the

CPC.
5 Defendant No.3 being a partner of Defendant No.1 has
filed an affidavit of reply opposing the Chamber Summons. According
to the Defendants, the Plaintiff has security worth almost Rs.2.30
Crores and hence there is no necessity for the Defendants to disclose
any of their movable and/or immovable assets. It has been further
argued by the counsel for the Defendants that this Chamber Summons
is not maintainable as it is filed in the suit which is already disposed
of and not in the execution proceedings. In other words, it was the
submission of the Defendants that since the suit is already decreed
and disposed of, this Court becomes functus officio and hence this
Chamber Summons cannot be entertained. For all these reasons it
was submitted that the Chamber Summons be dismissed.
6 I have heard the learned counsel for parties and have
perused the papers and proceedings in the present suit. As far as the
maintainability of the Chamber Summons is concerned, I find that
this issue is squarely answered by this Court in the case of United
Phosphorous Ltd. Vs. A.K.Kanoria [2003 (1) Bom. C.R. 299]. The
identical argument that is made before me was sought to be made
before this Court in the case of Phosphorus Ltd (supra). This can be

found in paragraph 11 of this decision. After considering the law on
the subject and relying upon a Division Bench decision of this Court in
the case of Cooverji Varjang Vs Cooverbai Nagsey Champsey, [42
Bom. L.R. 564] this Court came to the conclusion that the Chamber
Summons filed under Order XXI Rule 41(2) of the CPC can be
entertained by the Court that passed the decree. It came to this
conclusion on the basis that, this was strictly not an application in
execution but it was an application in aid of the execution.
Paragraphs 11 and 12 of this decision reads thus -
“11. Shri Chande, the Learned Advocate for the defendant
contended that an application under Order XXI, Rule 41 is an
application in an execution petition; according to him.
Execution commences on filing of written application
(commonly called as Execution Application or Darkhast)
under Sub-rule (2) of Rule 11 of Order XXI of the Code of Civil
Procedure. Unless the execution petition is filed and
numbered, contends Shri Chande, any application under
order XXI cannot be filed. Shri Chande submits that after the
judgment is delivered, the Court becomes functus officio and
only after filing of an execution petition under Order XXI,
Rule 11(2), the Court again assumes Jurisdiction. The
petition under Order XXI, Rule 41, is to be made to the
executing Court and not to the Court which passed the decree,
because the Court passing the judgment decree becomes
functus officio, the moment judgment and decree is passed.
12. In my opinion, application under Order XXI, Rule 41 is not an
application in an execution. It is an application in aid of
execution or a step towards the execution. Under Clause (j) of
Rule 11(2) of Order XXI of the Code of Civil Procedure, the
execution petition must specify the mode in which assistance
of the Court is required for the execution of a decree. Clause
(j) reads as follows :

(j) the mode in which the assistance of the Court is required
whether -
(i) by the delivery of any property specifically decreed.
(ii) by the attachment, or by the attachment and sale, or by the
sale without attachment, of any property.
(iii) by the arrest and retention in prison of any person;
(iv) by the appointment of a receiver;
(v) otherwise, as the nature of the relief granted may require.
Examination of a judgment debtor under Sub-rule (1) of Rule
41 of Order XXI or direction to the judgment debtor to file an
affidavit to be issued under Sub-rule (2) of Rule 41 or Order
XXI is not one of the mode of execution of a decree provided in
Clause (j) of Rule 11(2) of Order XXI, Rule 30 . Disclosure of
the assets is a preliminary step towards the execution of a
decree. Rule Nos. 3 to 9 of Order XXI of the Code of Civil
Procedure contemplate transfer of a decree by the Court
which passed the decree to another Court for execution. The
decree holder, who is not aware of the assets of the judgment
debtor, is often unable to decide in which Court he should file
the execution petition or in which Court he should get the
decree transferred unless he knows the particulars of the
assets of the judgment debtor. Rule 41 of Order XXI enables
the decree holder to get from the judgment debtor the
information of the assets, which is within the special
knowledge of the judgment debtor. Therefore, an application
under Order XXI, Rule 41 is not an application for execution
of the decree but, merely an aid to the decree holder to enable
him to execute the decree by obtaining information which is
within the special knowledge of the judgment debtor. If this be
so, the application under Order XXI, Rule 41 would ordinary
precede the filing of an execution petition, though it can also
be filed in the pending execution petition itself. I am fortified
in this view by the judgment of the Calcutta High Court in
Shew Kumar Company v. Grindlays Bank Limited reported
in AIR 1986 Cal 328 wherein the Division Bench observed in
para-9 of its judgment:
"We accept the contention of the Respondent that an
application for examination of a judgment debtor
(under Order XXI, Rule 41) is strictly not an
application for execution".
In the said case, the Division Bench further held even after
the decree is transmitted for execution to another Court,
the Court passing the decree retains jurisdiction in respect
of the decree and can examine the judgment debtor, under
Order XXI, Rule 41. It is not necessary in this case to

consider whether the Court which passes the decree
retains jurisdiction over the decree even after its
transmission for execution to another Court, but I am of the
opinion that the Court which passed the decree does not
cease to have a jurisdiction to entertain an application
under Order XXI, Rule 41 at least till the decree is
transmitted to another Court for execution.”
(emphasis supplied)
7 This decision has thereafter been followed by another
single Judge of this Court ( K.R.Shriram, J.) in the case of Cipla
Limited Vs Krishna Dushyant Rana [Chamber Summons No. 735
of 2013 in Summary Suit No.475 of 2010 decided on 31st August,
2016]. Paragraph 7 of this decision reads thus -
“7. When the matter was listed on 18.6.2015, this Court after hearing the
counsels and considering the law, held that a Chamber Summons of this
nature can be entertained and there is no necessity of filing execution
proceeding under Order XXI Rule 11(2) before filing of an application under
Order XXI Rule 50 of the Code of Civil Procedure 1908 or under Order
XXI Rule 41 of the Code of Civil Procedure, 1908. The defendant has not
challenged this order and this has attained finality. In the said order this
court also observed as under:-
“At the outset, counsel for the defendant/judgment debtor submitted that
this chamber summons is not maintainable and this has to be dismissed
because according to counsel, an application under Order XXI Rule 41 of
the Code of Civil Procedure, 1908 cannot be filed unless a formal decree was
drawn up and remains unsatisfied for a period of 30 days thereafter and
without first filing an execution petition under Order XXI Rule 11(2) of the
Code of Civil Procedure, 1908. This issue has been considered by this Court
in the matter of United Phosphorous Limited Vs. A.K.Kanoria reported in
AIR 2003 Bombay 97(1) and this Court has held that such a chamber
summons can be entertained and there is no necessity of filing an execution
petition under Order XXI Rule 11(2) before filing of an application under
Order XXI Rule 50 of the Code of Civil Procedure, 1908 or under Order
XXI Rule 41 of the Code of Civil Procedure, 1908. The defendant has filed
affidavit-in-reply in which the defendant No.5 has disclosed certain assets.
Disclosure is totally incomplete and does not contain any particulars.

For example, defendant states that he has Honda Amaze car.
Defendant has not disclosed what is the registration number of the car and
whether the car is hypothecated or not. Defendant has also stated that an
amount of Rs.24,000/- is invested in mutual fund and an amount of
Rs.42,425/- is invested in shares. Defendant has not disclosed in which
mutual fund and in which shares he has invested the said amounts. The
defendant has also disclosed that an amount of Rs.11,380/- is to be received
from Mahavir Developers. No details are provided as to who is Mahavir
Developers and on what count amount is to be received from it. Defendant
has also mentioned that he has certain bank accounts without disclosing with
which branches and account numbers. Therefore, it is quite obvious that an
attempt is made to prolong the proceedings and the defendant is also trying
to give impression that he has complied with the orders of this Court but at
the same time not giving full and complete particulars.
2. This application has been taken out by the plaintiff in aid of
execution or as a step towards the execution. Unless the defendant discloses
complete details and full particulars, plaintiff will not be able to decide in
which Court he should get the decree transferred. Therefore, as and by way
of last chance, defendant is directed to disclose in detail and give full
particulars of all assets supporting documents and also make a statement that
he has made full disclosure of his assets and he has not suppressed any
particulars from the Court. Defendant is also directed to furnish copies of
his annual returns that have been filed in the last five years.
3 In the circumstances, defendant is called upon by way of last chance
to disclose all his assets. A copy of this affidavit to be provided to advocate
for the plaintiff on or before 24.6.2015.
S.O. to 25.6.2015.”
(emphasis supplied)
8 This being the case, I find that the argument canvassed on
behalf of the Defendants regarding the maintainability of the
Chamber Summons cannot be sustained and has to be rejected.
9 As far as the argument of the Defendants regarding the
Plaintiff having adequate security is concerned, I find that this
argument is premature at this stage. Firstly, what is the exact value
of these properties, is not something that I have been called upon to

decide, at this stage. All that is sought, is the disclosure of the assets,
movable and immovable, of the Defendants. Once this is disclosed and
the Plaintiff seeks to attach any of the properties that are in excess of
their claim, these objections can certainly be raised by the
Defendants, at that stage.
10 This being the case, the Chamber Summons is allowed in
terms of prayer clause (a) by directing the Defendants / Judgment
Debtors to file their affidavit stating the particulars of all their assets
(movable and immovable) including the value of each asset and the
status thereof including if there are encumbrances on the same. This
affidavit shall be filed within a period of eight weeks from today. It is
made clear that prayer clause (b) of this Chamber Summons is kept
alive. If for any reason the Defendants do not comply with this order,
the Plaintiff will not be precluded from filing a fresh Chamber
Summons seeking detention of the Defendants/Judgment Debtors in a
civil prison as per the provisions of Order XXI Rule 41(3) of the CPC.
11 The Chamber Summons is disposed of in the aforesaid
terms. However, there shall be no order as to costs.
(B.P.COLABAWALLA, J.)

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