The Delhi HC recently laid down guidelines with respect to the execution proceedings against judgment-debtor owing to the inordinate delay in execution proceedings which would frustrate the decree holders from reaping the benefits of the decrees/awards.
- The Executing Court shall direct the judgment-debtor to file an affidavit of assets on the date of cause of action, date of the decree, and on swearing of the affidavit in Form 16A of Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure within thirty days.
- The Executing Court can restrain the judgment-debtor to dispose off property except for the ordinary course of business or discharge any financial liability.
- Non-appearance of judgment-debtor before the court will lead to the issuance of the bailable warrant at first followed by non-bailable warrants.
- Failure to file affidavit will lead to the detention of the judgment-debtor in civil prison for the term not exceeding three months under Order XXI Rule 41(3) of the Code of Civil Procedure by directing the decree-holder to deposit the subsistence allowance @ Rs.40 per day per person with the Executing Court for the detention of the judgment-debtor
- To complement the above-mentioned Appendix, the Court under its power formulated three affidavits:-
Annexure A1 - Affidavit of assets and income of the judgment-debtor;
Annexure B1 - Affidavit of assets and income of a proprietorship firm/partnership firm/HUF/company/trust as a judgment-debtor;
Annexure C1 - Affidavit of expenditure of the judgment-debtor
- The Executing Court during the initial stage can ask the judgment-debtor to file Annexure A1 within 30 days and Annexure B1 if judgment-debtor is proprietor, partner, trustee etc.
- After perusal of the same, judgment-debtor can be asked to file Annexure C1.
- For pending cases, the Executing Court shall direct the judgment-debtor to file the affidavit of his assets and income in terms of this judgment.
- The Directors/Promoters of the judgment-debtor company shall be directed to disclose their assets as per Annexure A1 if as per law, there’s any ground for the lifting of the corporate veil.
- The court may grant judgment-debtor reasonable time to correct the discrepancy, if any, in the affidavits.
- For claims regarding HUF character etc. to the property, the court may direct to file evidence regarding the same.
- The decree-holder shall verify the disclosures made by judgment-debtor.
- Upon non-disclosure of assets, the decree-holder may seek relevant documents under Order XI of CPC
- The court shall determine if oral examination is necessary u/s 165 of the Indian Evidence Act
- The Executing Court shall ensure that the property does not fall in the list of properties which are exempt from attachment/sale under the Proviso to Section 60(1) of the Code of Civil Procedure
- The court may issue a show-cause notice upon nonsatisfaction of decree despite the capacity to pay.
- An order may be passed by the court to reimburse the loss suffered by the decree-holder.
- The decree-holder may invoke prosecution of the judgment-debtor under Section 209 of IPC if judgment-holder makes a false statement in the affidavit.
The afore-mentioned guideline shall be applicable to all execution proceedings. Further, the court may direct to file the Annexures to ascertain the financial capability of a party. Even the arbitral tribunal can direct the same.
Case Details
Case- M/S BHANDARI ENGINEERS & BUILDERS PVT LTD v. M/S MAHARIA RAJ JOINT VENTURE & ORS; M/S BHANDARI ENGINEERS & BUILDERS PVT LTD v. M/S YOU ONE MAHARIA (JV) DELHI & ORS
Decree holder- M/S BHANDARI ENGINEERS & BUILDERS PVT LTD
Judgment-Debtor - M/S MAHARIA RAJ JOINT VENTURE and M/S YOU ONE MAHARIA (JV) DELHI & ORS
Counsel for decree-holder- Mr. S. S. Jauhar, Advocate
Counsel for judgment-debtor -Mr.Dayan Krishnan, Senior Advocate and Mr.Sanjiv Kakra, Advocate as Amici Curiae
Read Judgment @LatestLaws.com
