Unknown vs ) The Present C.R.P. Is Filed Under ...
2022 Latest Caselaw 717 AP

       THE HON'BLE SRI JUSTICE C. PRAVEEN KUMAR

                                    AND

       THE HON'BLE DR.JUSTICE K. MANMADHA RAO

         CIVIL REVISION PETITION No. 1211 of 2021

ORDER: (Per Hon'ble Sri Justice C. Praveen Kumar)

1)    The present C.R.P. is filed under Section 115 of Code of

Civil Procedure, 1908, ['C.P.C.'] assailing the Order, dated 29th

September, 2021, passed in E.P. no. 84 of 2017 in A.C. No. 563

of   2011,   on   the   file   of   XII   Additional   District   Judge,

Visakhapatnam, wherein the E.P. was allowed for realization of

the amount awarded with interest.


2)    The averments in the affidavit filed in support of the E.P.

would show that the 1st Respondent herein represented by its

General Power of Holder filed a Claim Petition before the Sole

Arbitrator for recovery of the amount due under the loan

transaction. An Award came to be passed against the Judgment

Debtors for payment of a sum of Rs.7,91,966.00. After obtaining

the Award, Decree Holder requested the Judgment Debtors to

pay the amount with interest and costs, but, there was no

response. Hence, an Execution Petition came to be filed under

Order XXI Rule 37 C.P.C., for realization of the E.P. amount,

failing which to detain the 2nd Judgment Debtor in civil prison

under Order XXI Rule 38 C.P.C. The averments further disclose

that the 2nd Judgment Debtor is having sufficient means to pay

the amount awarded but intentionally avoiding to pay the

amount.

3) Counter came to be filed before the trial Court stating that

the 2nd Judgment Debtor is aged about 64 years, having no work

and business, suffering with ill-health for which he is taking

treatment in different hospitals. It is stated that, because of his

health condition, he is not able to work and earn money and, as

such, the claim amount cannot be paid. It is further stated that,

since, there is no income he cannot repay the amount due.

4) In support of its case, the Decree Holder examined PW1,

while 2nd Judgment Debtor got examined himself as RW1 and

got marked Ex.B1 and Ex.B2.

5) After considering the material available on record, the trial

Court found that the 2nd Judgment Debtor is doing business

and his houses are not within the purview of Section 60 (1)

C.P.C. It was further held that, 2nd Judgment Debtor has got

sufficient means to pay the E.P. amount, but intentionally

avoiding the same and, as such, he is liable for arrest and

accordingly allowed the E.P. Challenging the same, the present

C.R.P. is filed.

6) Sri. S.V.S.S. Sivaram, learned Counsel for the Petitioner,

mainly submits that, in the absence of any evidence to show

that the Petitioner has any property of his own or that he is

earning, there cannot be any order of arrest. In other words, he

would submit that, the 2nd Judgment Debtor [Petitioner] has no

means to pay the amount and any action taken would be

contrary to the provisions of C.P.C. and also to the ratio laid

down in the judgments in G. Sudhakara Reddy V. Jahnavi

Chit Fund Private Limited and Others1, and Pandugayala

Subbrayadu V. Kattamuri Sree Krishna2. He further submits

that the burden of proving that the 2nd Judgment Debtor has

source of money to repay the debt is on the Decree Holder. But,

strangely the trial Court inferred that the 2nd Judgment Debtor

is withholding the documentary evidence, which if produced

would establish that he has source of income to repay the

amount.

7) On the other hand, Sri. Maheswara Rao Kuncheam,

learned Counsel appearing for Respondent No.1/Decree Holder,

would contend that, a perusal of evidence on record show that

the 2nd Judgment Debtor has properties and enough source of

income to pay the amount. He further submits that, there is a

deliberate and willful negligence on the part of Judgment

Debtors to pay the amount and, as such, the Order under

challenge requires no interference. Relying upon a judgment of

this court in Konda Subbaiah V. Yedoti Kamalakshaiah3, he

would contend that, the executing court was right in drawing an

inference that the Judgment Debtor has suppressed the material

available with him.

2006 (4) ALT 665

2008 (4) ALD 454

2008 (6) ALD 290

8) In order to appreciate the same, it would be appropriate to

refer to the two judgments relied upon by the Counsel for the

Petitioner. In Pandugayala Subbrayadu [cited 2nd supra] the

learned Single Judge after referring to Jolly George Varghese

V. Bank of Cochin4 held that, the Courts are expected to be

cautious while making an order of arrest in execution of decree

since it involves personal liberty and it is necessary for the

Courts to examine whether other modes of recovery are available

to the decree-holder and whether it is absolutely necessary to

order arrest for recovery of the decretal amount

9) In G. Sudhakara Reddy [cited 1st supra], the Court while

dealing with the Order XX1 and Section 51 C.P.C. held that, the

burden squarely lies on the decree holder to establish that the

Judgment Debtor has got sufficient means to pay and that with

a view to defeat the decree, he has been avoiding the payment.

At the same time, it would also be appropriate to refer to a

judgment in Kanneganti Anjaneyulu and Ors. V. State Bank

of India5. In the said case, the issue before the Court relates to

arrest of J.Drs. after setting them ex parte on their failure to

appear in Court in pursuance of the notice issued under Order

21 Rule 37 C.P.C. The Court found that the Subordinate Court

has not addressed with regard to the means of the J.Drs. to pay

the decree debt and whether they willfully neglected and refused

to pay the debt though having means to pay the same. No

AIR 1980 Supreme Court 470

1997(2) ALT 303

enquiry was held and no positive finding was given on this

aspect. Hence, the order under challenge therein was set aside.

10) Before proceeding further, it would also be necessary to

see the judgment of the learned Single Judge in Konda

Subbaiah [cited 3rd supra]. In the said case, an E.P. came to be

filed to recover the decreetal amount. The executing court issued

notice to the respondent and after his appearance, undertook

the enquiry. The Petitioner filed an affidavit in lieu of chief-

examination and pleaded that the respondent is the owner of

agricultural land to an extent of Ac.1.12 Cents and he is also

doing business and possess adequate means to discharge the

decree. Some documents came to be filed in support of the

same. Though, in the counter filed in the E.P., the J.Dr. took the

plea that he is small farmer, but he did not utter a word in the

chief-examination. The counter filed does not even deny that he

is doing business. The executing court placed burden on the

Petitioner with regard to the status of the respondent as a

landless poor. The approach of the executing court was found to

be untenable in law by the Hon'ble High Court. The Court held

that the duty of a decree holder in matters of this nature ends,

where he places some material before the Executing Court,

which indicates that the judgment-debtor is possessed of the

property and means and thereafter the burden shifts to the

judgment debtor to establish as to how he is handicapped from

discharging the decree. Having regard to all the circumstances,

the C.R.P. was allowed and the order under revision was set-

aside.

11) Keeping in view the judgments referred to above, we shall

now proceed to deal with the case on hand.

12) As stated earlier, the issue now is whether the J.Dr., has

any means to pay the amount and whether he is willfully

denying payment of the amount?

13) PW1 in his examination-in-chief affidavit submits that 2nd

Judgment Debtor is doing real estate business, iron ore

business, commercial business and also doing business of hiring

the vehicles. Though, he is having sufficient means to pay the

amount, but intentionally avoiding to pay the amount. It was

further stated that the 2nd Judgment Debtor and his family

members are having two floor building, which fetches a rent of

Rs.50,000/-. It is further stated in the affidavit that Judgment

Debtors are doing fancy and kirana business. In the cross-

examination of the Decree Holder, it was elicited that they have

not submitted any documentary proof to show the nature of

business and the details of business allegedly done by Judgment

Debtor as mentioned in the affidavit-in-chief. It was further

elicited that he cannot say the details, such as, door number,

extent, boundaries, place etc, of the building owned by

Judgment Debtor. He further admits that he has not submitted

any documentary proof to show that 2nd Judgment Debtor is

doing any fancy and kirana business.

14) The 2nd Judgment Debtor also filed his affidavit-in-chief

stating that he has no means to pay and that his health

condition also does not permit doing any business. However, in

the cross-examination, he stated that he, his wife and son-in-

law together took vehicle finance from Sri Ram City Union

Finance Limited, Vizianagaram, and about 10 to 15 loans were

obtained for doing transport business. The loan amounts were

sanctioned on hypothecation of the vehicles. Subsequently, the

hypothecated vehicles were seized and there is some balance to

be repaid in discharge of the said loan. It was further elicited

that since 2012 he has been suffering with ill-health and since

last one year he has not been taking any treatment and that he

has been staying with his daughter since last six years. He

further admits that the house mentioned in the ration card and

Aadhar card do not belong to him and also does not know to

whom the said address belong to. To a suggestion that, he is

continuing transport business, was denied by him. He further

submits that, he has not taken any steps to declare him as

insolvent subsequent to 2012.

15) As against the evidence of PW1, there is the evidence of

RW1, who categorically admits that he is not aware of the house

numbers mentioned in his Aadhar card and ration card.

16) The admissions elicited, namely, that he does not know the

owners in whose names the houses mentioned in the Aadhar

card and ration card are, does not by itself establish that he has

sufficient means to pay the amount. In fact, in Jolly George

Varghese [cited 4th supra], the Hon'ble Supreme Court held

that, even where it is pleaded that the Judgment debtor is

possessed of some immovable property, the burden lies on the

decree-holder to show that such property is not a property

exempted from attachment in execution of a decree and that the

Judgment debtor has the capacity to pay the decretal amount.

17) At this stage, the learned Counsel for the Respondent

justified the arrest of the Petitioner/2nd Judgment Debtor in view

of Section 51 of C.P.C.

18) The question that arises for consideration is, whether the

trial Court was right in passing an order of arrest of the

Petitioner committing him to Civil Prison in execution of a

decree for payment of money?

19) Similar issue came before this Court in Kanneganti

Anjaneyulu [cited 5th supra], wherein, it was held as under:

"The crucial question to be considered in this revision petition is whether the order of arrest of the petitioners for the purpose of committing them in civil prison as ordered by the lower Court in execution of (the decree for) payment of money is in consonance with the provisions of Section 51 of C.P.C. which reads as follows:

"Subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree-holder, order execution of the decree-

        (a) xxxx    xxxx
        (b) xxxx    xxxx

(c) by arrest and detention in prison for such period not exceeding the period specified in Section 58 where arrest and detention is permissible under that Section;

        (d) xxxx     xxxx
        (e) xxxx    xxxx

Provided that where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied-

(a) that the judgment-debtor, with the object or effect of obstructing or delaying the execution of the decree-

(i) is likely to abscond or leave the local limits of the jurisdiction of the, Court, or

(ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed or removed any part of his property, or committed any other act of bad faith in relation to his property; or

(b) that the judgment-debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same, or

(c) that the decree is for a sum for which the judgment-

debtor was bound in a fiduciary capacity to account.

Explanation:- In the calculation of the means of the judgment-debtor for the purposes of clause (b), there shall be left out of account any property which, by or under any law or custom having the force of law for the time being in force, is exempt from attachment in execution of the decree."

A reading of the provisions of the above Section makes it clear that the arrest and detention of a J.Dr. in civil prison in execution of a decree for payment of money is not a matter to be resorted to lightly. The scheme of Section 51, C.P.C. is to ensure that sufficient reasons exist for making an order of arrest and detention of a J.Dr. in civil prison in execution proceedings. Moreover, it is also evident that in every case of non-payment of decretal amount, a J.Dr. is not liable to be arrested and detained in civil prison unless the case falls within one of the clauses of the proviso to Section 51 C.P.C. To recover debts by the procedure of putting one in prison is flagrantly violative of Article 21 of the Constitution unless there is proof of the minimal fairness of his willful failure to pay in spite of his sufficient means and willful neglect and refusal to pay the decree-debt. The provisions under Section 51 C.P.C. read with Rule 37 of Order and (sic. are) concerned in the interest of the protection of the liberty and freedom of the J.Dr. which the Code considers to be of paramount importance. Any provision of law pertaining to the protection of such liberty and freedom of a citizen are (sic. is) to be construed as mandatory, violation of which, invariably results in vitiating the consequential order. The Court is obliged to issue a warrant for the arrest of a J.Dr. only when there is a positive finding that the J.Dr. though having means to pay the decree debt had willfully neglected and refused to pay the same. In the absence of such a positive finding, it would be extremely difficult to visualize that a person could be put behind the bars in pursuance of a civil proceeding by any Court of law. [Jolly George Varghese] [cited 4th supra].

20) Since, the finding of the trial Court is mainly based on the

admissions in the evidence of RW1, namely, that he is not aware

about the persons in whose name the property reflected in his

Aadhar card and ration card is, there is no other material to

show that he is having means to repay the debt amount. It may

be true that, the Petitioner was doing transport business and

has taken 10 to 15 loans from the Respondent/Decree Holder

herein, but, at the same time, it was also elicited that the

buses/vehicles which were hypothecated to the Respondent/

Decree Holder were seized and the Petitioner is said to be living

with his daughter. If really the two houses mentioned in the

Aadhar card and ration card form part of Petitioner's property,

nothing prevented the Decree Holder to obtain necessary

material from the Office of the Municipal Corporation to show

that the Petitioner/Judgment Debtor has suppressed the

material and acted in bad faith.

21) At this stage, it is to be noted that this Hon'ble Court while

granting stay of arrest, directed the Petitioner herein i.e.,

Judgment Debtor to pay 25% of the awarded amount to the

credit of E.P. within a period of three weeks, which was done.

22) Having regard to the above, while leaving it open to the

Respondent/Decree Holder to avail other modes for recovery of

the amount, the Order of arrest is set-aside and the amount

paid pursuant to the interim order shall be withdrawn by the

Respondent/Decree Holder if not already done and adjust the

same towards the due amount. However, this Order shall not

preclude the 1st Respondent from filing another E.P., if any

material is secured from which the amount due can be

recovered.

23) With the above direction, the Civil Revision Petition is

disposed off. No order as to costs.

24) As a sequel thereto, miscellaneous applications, if any

pending, shall stand closed.

________________________ C. PRAVEEN KUMAR, J

___________________________ Dr. K. MANMADHA RAO, J

Date: 09.02.2022

Note:

Lr. Copy to be marked.

B/o.

SM.

THE HON'BLE SRI JUSTICE C. PRAVEEN KUMAR

AND

THE HON'BLE DR.JUSTICE K. MANMADHA RAO

CIVIL REVISION PETITION No. 1211 of 2021 (Per Hon'ble Sri Justice C. Praveen Kumar)

Date: .02.2022

SM