Supreme court: Execution Court Should Attach The Debt Under Order XXI Rule 46 CPC Before Proceeding Against Garnishee Under Order XXI Rule 46A CPC

Therefore, it is clear that the lawgiver has contemplated to confer invaluable rights on the garnishee in the form of empowering him to challenge the attachment which is necessarily involved in the order of garnishee Under Order 21 Rule 46A of Code of Civil Procedure. If the attachment is made Under Order 21 Rule 46 of Code of Civil Procedure, it would be open to him to question it Under Order 21 Rule 58. If it is followed by an order Under Order 21 Rule 46A, it is open to him to dispute his liability Under Order 21 Rule 46C. In this regard, we may notice the judgment of High Court of Kerala, in Executive Engineer, T.C. Division, K.S.E. Board, Palghat v. J.H. Sharma and Anr. reported in MANU/KE/0069/1988 : AIR 1988 Ker 285, rendered by a Division Bench and speaking through U.L. Bhat, J. The High Court, inter alia, held as follows:

6A. It has to be noticed that Rule 46 does not contain any provision enabling the garnishee to raise any objection though it gives opportunity to the garnishee to subject himself to the order by making payment into Court. The next step is provided by Rule 46A. He has to be given notice either to pay the amount into court or to show cause why he should not do so. According to Rule 46B, where he fails to pay the amount in Court and also fails to appear and show cause in answer to the notice, the court may order him to comply with the terms of the notice and on such order execution may issue as though such order were a decree against him. This is the consequence of his failure to respond in terms of the notice Under Rule 46B. Where he appears and disputes his liability Rule 46C requires that the court should decide the question as if it were an issue in a suit and upon the determination of such issue the court should pass such order as it deems fit. The Court may uphold the contention raised by the garnishee or reject his contention and pass appropriate orders. Such an order is appealable Under Rule 46H. Thus the scheme of the Rules contemplates a specific opportunity being given to the garnishee to show cause why he should not pay the amount into Court. If he raises an objection the court has a duty to consider the objection and pass appropriate orders. The Rules do not require him to raise an objection suo motu before receiving a show cause notice Under Rule 46A. The fact that he did not suo motu file an objection when the attachment was effected before judgment does not take away his right under the above Rules to raise an objection.

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 8531-8532 of 2022 

Decided On: 16.11.2022

 Bhagyoday Cooperative Bank Ltd. Vs.  Ravindra Balkrishna Patel Deceased through his L.Rs. and Ors.

Hon'ble Judges/Coram:

K.M. Joseph and Hrishikesh Roy, JJ.

Author: K.M. Joseph, J.

Citation: MANU/SC/1601/2022

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Is the relationship between the customer and Bank a creditor and a debtor?

 The money that a customer deposits in a bank is not held by the latter on trust for him. It becomes a part of the banker’s funds who is under a contractual obligation to pay the sum deposited by a customer to him on demand with the agreed rate of interest. Such a relationship between the customer and the Bank is one of a creditor and a debtor. The Bank is liable to pay money back to the customers when called upon, but until it’s called upon to pay it, the Bank is entitled to utilize the money in any manner for earning profit.

Supreme Court

CHIEF JUSTICE OF INDIA N.V. RAMANA JUSTICE SURYA KANT JUSTICE HIMA KOHLI

N. Raghavender Vs. State of Andhra Pradesh, CBI

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Basic concepts of CPC 4 -definitions

Commission

Commission refers to an authority which is appointed to exercise a power or direction issued by court,when for instance a witness is unable to attend court on account of his illness or other similar reasons, the court can order such a witness to be examined on commission.

Under S 75 of CPC, commission can be issued by court for several purposes, as for instance to examine witnesses, to make a local investigation, to adjust accounts, to make a partition and so on.

Letter of request/Rogatory letter

A letter of request or rogatory letter is a letter issued by a court of one country to a court in a foreign country requesting for some judicial assistance from Judiciary of that country. Such assistance may be in the form of request to serve a summons or to take evidence of specified person.

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Whether objection to application for garnishee order can be decided without framing issues?

The
application filed by the respondent no.1 is under Order 21 Rule 46
of the Civil Procedure Code for a garnishee order which
contemplates attachment of a debt not in possession of the
judgment debtor. The learned Counsel appearing for the
respondent no.1 pointed out that the order of attachment directing
the petitioners to deposit the rent is a garnishee order in terms of
Order 21 Rule 46A of the Civil Procedure Code. On perusal of the
provisions of Order 21 Rule 46C of the Civil Procedure Code, the
law contemplates that where the garnishee disputes liability, the
Court may order that any issue or question necessary for the
determination of liability shall be tried as if it were an issue in a
suit, and upon the determination of such issue the Court shall make
such order or orders as it deems fit. In such circumstances, taking
note of the stand taken by the petitioners in the reply filed to the
application under Order 21 Rule 46 of the Civil Procedure Code to
the effect that the petitioners are not responsible or liable to pay the
amount claimed by the respondent no.1 as according to them they
are not judgment debtors in the execution proceedings, I find that
the learned Judge was not justified to pass the impugned order
without holding an inquiry as contemplated under Order 21 Rule
46C of the Civil Procedure Code.
IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NO.182 OF 2012

M/s. Sparrow Technologies Ltd., V/s Mr. Ravinder P. Kumar,

CORAM : F.M. REIS, J.
DATE : 6th MARCH, 2012
Citation: 2012(4) ALLMR 142

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Whether contempt proceeding or breach of injunction proceeding can be initiated against garnishee who fails to pay decretal amount?

 At all events, if a garnishee, or a defendant, who is directed to pay any sum of money, does not pay the amount, the remedy is to levy execution and not in an action for contempt or disobedience/breach under order 39 Rule 2A. This is evident from Rule 46B of Order 21 read with Rule 11A of Order 38 of the Code. Contempt jurisdiction, either under the Contempt of Court Act, 1971, or under Order 39 Rule 2A of the Code, is not intended to be used for enforcement of money decrees or directions/orders for payment of money. The process and concept of execution is different from process and concept of action for disobedience/contempt.

Supreme Court of India

Food Corporation Of India vs Sukh Prasad on 24 March, 2009

Bench: R.V. Raveendran, Markandey Katju

Reportable

CIVIL APPEAL NO.380 OF 2007

Citation:AIR 2009 SC 2330

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Procedure to be followed by court when garnishee denies debt

Citation;1971MPLJ197

IN THE HIGH COURT OF MADHYA PRADESH

Misc. Second Appeal No. 41 of 1967

Decided On: 15.07.1968

Appellants: Meghraj (Decree Holder)
Vs.
Respondent: Balaji and another

Hon'ble Judges/Coram:
T.P. Naik, J.

Service - Recovery of debt - Whether Balaji had paid lease-money to judgment-debtor - Hence, present appeal - Held, in instant case, where garnishee denies debt, it was not business of Court to inquire if debt was really due, unless our High Court had framed rules giving Courts power either to refer parties to a suit to establish claim or to determine it in execution proceedings themselves - No such rules had been framed by Court.

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Under Order 38 Rule 5 CPC, Court can attach debts due to defendant from third party.

The above noticed provisions of sub-section (1) of Section 60 read with the provisions of Rule 7 and 8 of Order 38 CPC clearly shows that even the debts due to the defendants/judgment-debtor from third party falls within the purview of Order 38 Rule 5 CPC and therefore such a debt could be attached under Order 38 Rule 5 CPC. Unfortunately, the provisions of sub-section (1) of Section 60, Rule 7 and 8 of Order 38 CPC were not brought to the notice of the learned Judge in J.Balakrishna's case (supra 1). Therefore, with great respect, we are not persuaded to accept the opinion of the learned Judge as correct law.

The further opinion of the learned Judge in J.Balakrishna's case (supra 1) that the attachment before judgment could be ordered only against the defendant and cannot be ordered against the third party, in my considered opinion, does not seem to be correct proposition of law.

Order 38 Rule 7 CPC provides that the attachment under Order 38 Rule 5 shall be made in the manner provided in the attachment of property in execution decree. It is trite, the attachment envisaged under Order 38 Rule 5 CPC is an attachment before judgment. The restriction found by the learned single Judge that under Order 38 Rule 5, only the properties of the defendant can be attached and not the properties in the hands of garnishee has no statutory support nor the support of any precedent. In Alwar Aiyangar's case (supra 2), the question as to whether a Court attaching a debt either before judgment or in execution can enquire into the truth or the existence of the debt arose. Curgenven,J, speaking for the Madras High Court was pleased to observe : "The attachment in the present instance was made before judgment on an application filed on the same day as the plaint. But I cannot find that it makes any difference whether such an attachment was made before judgment or in execution of the decree, and it appears to me that Rr.7 and 8, O.38, Civil P.C., show that the Court has the same powers in the one case as the other."

The above observation of Curgenven,J also supports our view in a way. Therefore, we hold that in exercise of the power, under Order 38 Rule 5 CPC, the Court can attach the debts due to the defendant from a third party. The attachment of debts due to the defendant from third party could be attached before judgment under Order 38 Rule 5 CPC. In that view of the matter, we hold that the opinion of the learned single Judge in J.Balakrishna's case (supra 1) is not good law and it is accordingly overruled.

Andhra High Court

Surender Singh Bajaj vs M/S.Kitty Steels Limited And ... on 22 April, 2002

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Object of issuance of precept as per s.46 of cpc for execution of decree

The object of a precept is to enable a decree-holder to obtain interim attachment where there is ground to apprehend that he may otherwise be deprived of the fruits of his decree. Section 46 expressly provides that, upon the application of the decree-holder, the Court, which passed the decree, may, whenever it thinks fit, issue a precept to any other Court, which would be competent to execute such decree, to attach any property belonging to the judgment-debtor and specified in the precept: and the Court, to which a precept is so sent, shall proceed to attach the property in the manner prescribed in regard to the attachment of property in execution of a decree, this provision plainly indicates that the Legislature did not intend that a Court should directly attach property beyond tile local limits, of its jurisdiction. It has been argued, in the second place, that, if the contention of the petitioners prevails, two separate orders would be required in respect of the same matter: that is, an order by the Court, which passed the decree, upon the judgment-debtor prohibiting him from recovering the debt, and an order by the Court, to which the decree has been transferred for execution, upon the debtor of the judgment-debtor prohibiting him from making payment thereof. This, in substance, was the argument which found favour with the learned Judges who decided the case of In re Hollick (1868) 2 B.L.R. 108 : 10 W.R. 447. I do not feel pressed by the weight of this contention. The course suggested does not lead to any serious inconvenience. On the other hand, if the prohibitory order is issued by the Court which made the decree, to a person beyond the local limits of its jurisdiction, the order may prove infructuous, if it is disobeyed, and the Court may find itself powerless to enforce it.

Calcutta High Court

Begg, Dunlop And Co. vs Jagannath Marwari on 28 June, 1911

Equivalent citations: (1912) ILR 39 Cal 104

Author: Mookerjee

Bench: Mookerjee, Carnduff

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Whether a party can initiate a proceeding under Order 39 Rule 2A of CPC if the defendant fails to pay money ordered by the court?

1) An application under Order 39, Rule 2A of the Code is maintainable only when there is disobedience of any `injunction' granted or other order made under Rule 1 or Rule 2 of Order 39 or breach of any of the terms on which the injunction was granted or the order was made. 

2) At all events, if a garnishee, or a defendant, who is directed to pay any sum of money, does not pay the amount, the remedy is to levy execution and not in an action for contempt or disobedience/breach under order 39 Rule 2A. This is evident from Rule 46B of Order 21 read with Rule 11A of Order 38 of the Code. Contempt jurisdiction, either under the Contempt of Court Act, 1971, or under Order 39 Rule 2A of the Code, is not intended to be used for enforcement of money decrees or directions/orders for payment of money. The process and concept of execution is different from process and concept of action for disobedience/contempt.

3)  The power exercised by a court under order 39, Rule 2A of the Code is punitive in nature, akin to the power to punish for civil contempt under the Contempt of Courts Act, 1971. The person who complains of disobedience or breach has to clearly make out beyond any doubt that there was an injunction or order directing the person against whom the application is made, to do or desist from doing some specific thing or act and that there was disobedience or breach of such order. While considering an application under order 39 Rule 2A, the court cannot construe the order in regard to which disobedience/breach is alleged, as creating an obligation to do something which is not mentioned in the `order', on surmises suspicions and inferences. The power under Rule 2A should be exercised with great caution and responsibility. Defendent directed to pay any sum of money does not pay the amount, remedy is to levy execution and not an action for contempt or disobedience/breach under o.39,r.2A of CPC.

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.380 OF 2007

Food Corporation of India . Vs Sukh Deo Prasad 

Bench: R.V. Raveendran, Markandey Katju

Dated:24 March, 2009

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