Indoor Table Tennis Trust And Ors. vs Shri Kapil Khanna
2003 Latest Caselaw 384 Del

JUDGMENT

Mukul Mudgal, J.

1. In this execution application filed by a decree holder a preliminary plea of lack of territorial jurisdiction of this Court has been raised by the Garnishee Bank, namely, Ghaziabad Nagariya Sahakari Bank Ltd., Ghaziabad.

2. The facts of the case briefly stated are as follows:

(i)The petitioner is the original decree holder against the judgment debtor Kapil Khanna. The decree dated 12th May 1998 was not appealed against and the amount awarded as per the decree is Rs.27,87,226.08 together with costs assessed at Rs.29.730./05. The decree is sought to be executed against the judgment-debtor and inter alia an order of attachment of property bearing No. C 89, NDSE Part II, New Delhi has been sought.

(ii)The decree is resisted by the Garnishee bank and the contention raised is that since the Garnishee Bank and the situs of the debt are outside the territorial jurisdiction of this Court, this Court had no jurisdiction to execute the decree. It was, inter alia, also contended that the amount of Rs.4.24 lacs were deposited in this Court but the plea regarding jurisdiction of this Court and the effect and ambit of the U.P. Co-operative Societies Act, 1965 (hereinafter referred to as the Act) was not gone into by the Division Bench and the Single Judge.

3. The pleas of the decree holder are as follows:

i.1(A)(i) The submissions of the decree holder are in the alternative viz. (i) after the Amnendment Act 1976 of CPC. 1908 the concepts of the situs of the Act and the location of the Garnishee that prevailed prior to 1976,was totally dislodged and (ii) in the alternative it is submitted that the Garnishee by its conduct in not having filed its reply to EA 256/93 since 27.08.1993 onwards etc., it should be deemed to have waived its objections,if any, based on lack of territorial jurisdiction of the executing Court and thus the Garnishee became a person within the local jurisdiction of the executing court.

ii.That by its affidavit dated 9thMarch 1995 the only objection raised by the Garnishee was that by the order dated 6th October 1993 the District Assistant Registrar, Co-operative Societies, Ghaziabad had obtained attachment before judgment in Case No. 2/1994-95 before that Tribunal. On 20th September 1996 the Garnishee was directed to deposit the money in the executing court by this court's single Judge and was granted time till 10th September 1996 to do so. On 7th October 1996 FAO (OS) 380 of 1996 filed by the Garnishee came up for admission before the Division Bench of this Court and it was misrepresented to the appellate court by the Garnishee that it had secured a decree and an attachment pursuant thereto. Significantly no other objection was pressed in the said appeal about lack of territorial jurisdiction of the executing Court to pass the garnishee order.

iii.In so far as territorial jurisdiction of the executing court is concerned, divergent views by various High Courts on the following issues were pointed out:

"(a) whether the Garnishee and the situs of the debt should be within the local jurisdiction of the executing Court,

(b) whether it was enough for the situs of the debt to be within the local jurisdiction of the executing Court irrespective of the fact that the Garnishee might be located outside the said jurisdiction, (iii) whether irrespective of Garnishee or the situs of the debt being outside the local jurisdiction of the executing Court, the court can directly execute the decree outside the said territorial jurisdiction etc."

iv)      It was also submitted:
  "Even prior to 1976 the executing court had the equitable jurisdiction against the property located outside the territorial jurisdiction of the executing court by appointing a Receiver or otherwise." 
 

(v)The plea of territorial jurisdiction was  belatedly taken only on 10th February 1998 by the garnishee Bank Along with the rejoinder affidavit. 
 

4. According to the decree holder the facts of this care briefly stated are as follows: 

" (a) On 27th August 1993, EA 256 of 1993 was filed under Order XXI Rules 46 and 46 A read with Section 151 of the Code for the Garnishee order for the attachment of sum of Rs.28.16 lacs lying with Garnishee Bank to the credit of the judgment-debtor. On the failure of Garnishee to show cause in respect of the EA 256 of 1993, it was directed to file an affidavit showing the amount lying with it to the credit of the judgment debtor which affidavit was filed on 9th March 1995. In the said affidavit for the first time an order before attachment in case No. 2/1994-95 before the District Assistant Registrar, Co-operative Societies, Ghaziabad was disclosed. On 8th November 1995 the decree holder filed its reply to the affidavit dated 9th March 1995 filed by the Garnishee Bank and the rejoinder was filed by the Garnishee only on 10th February 1998. In the meanwhile, as no cause was shown by the Garnishee for about three years pursuant to the notice under Section 46A of the Civil Procedure Code (hereinafter referred to as CPC), a learned single Judge of this Court on 20th September 1996 directed the Garnishee to deposit a sum of Rs.4,24,692.50 pending final disposal of the said EA 256 of 1993. On 7th October 1996 FAO(OS) 380 of 1996 was filed in the Division Bench against the order 20th September 1996 passed by learned single Judge and the only plea raised for the determination of the Division Bench was as to which party was entitled to realize the said amount of Rs.4.24 lacs. The question of territorial jurisdiction was not raised. On 7th October 1996 the FAO(OS) 380 of 1996 was dismissed by the Division Bench and two weeks time was granted to the Garnishee to deposit the sum ordered. A rejoinder was filed on 10th February 1998 where the plea of lack of territorial jurisdiction of the executing court was raised for the first time. This Court was also only informed by the affidavit dated 10th February 1998 that a sum of Rs.40 lacs mentioned in the order was the amount decreed by the District Judge, Bhopal against the Garnishee. In fact in the executing/appellate proceedings, the Garnishee itself disputed the fact that it had issued any such guarantee.

5. The plea of the decree holder is Rs.4.24 lacs cannot be retained by the Garnishee at the decree holder's behest merely on the plea that it has to cover the risk of an ultimate decree that may be passed against the Garnishee by the District Judge, Bhopal. The decree holder has relied upon the position of law laid down in the following cases in support of its pleas:

(i) In , it was held that the territorial jurisdiction of the executing Court is co extensive with the Court's original side jurisdiction.

(ii)In  and AIR 1927 Mad 627 it was held that the Receiver can be appointed by the Executing Court for executing    a decree in respect of a property which is outside its territorial jurisdiction.
 

(iii)In  and , it was held  that the Court which had passed the decree has the  jurisdiction to execute it directly even if the subject matter is  outside the territorial jurisdiction.
 

(iv) In  and AIR 1928 Cal 818, it was held that in case the situs of the debt and garnishee are situated outside the territorial jurisdiction of the executing Court, Garnishee order cannot be passed.
 

(v) In , it was held that in case the debt sought to be  attached or the Garnishee are within jurisdiction of the executing Court, a Garnishee order can be passed by the executing court.
 

(vi) In , it was held that a garnishee order if a result of an irregular exercise or jurisdiction and not an order made in lack of the inherent jurisdiction when both the garnishee and situs of the debt are outside the territorial jurisdiction of the Executing Court and thus if the Garnishee and/or the judgment Debtor do not raise any objection on this ground before the Garnished amount is paid into executing Court, they would not be permitted to do so later for permitting them to do so would to allow them to abuse the process of the Court.

(vii) In ILT Cal 104 and was held that the garnishee proceeding is a proceeding by the judgment debtor/defendant in the suit by the defendant for the benefit of the plaintiff/decree holder and wherever the garnishee could be sued by the defendant for payment, it may be charged on account of it and no prohibitory order can be made against the garnishee unless specifically provided by the Court.

(viii) In , it was held that the Calcutta High Court Rules prior to Amendment to CPC in 1976 provided for both stages in garnishee proceedings, i.e., (i) for issuance of notice to the garnishee (ii) for hearing and deciding fully the objections of the garnishee or any third party to the garnishment order and apart from the High Court of Calcutta, Bombay and Madras,the second stage was not legislatively provided for.

(ix) In SCF Finance Co. Ltd. Vs Masri & Another 1987 (I) All ER 1984 it was held that the garnishee /wife is a 'person within the jurisdiction' for the purposes of Order 49 r (1) (1) even though she was not within the jurisdiction when order nisi was passed.

(x)In 1970 11 Guj LR 1069, it was held that a Receiver can be appointed even before the property is attached as attachment of the property is not a necessary preliminary to the appointment of a receiver in execution.

(xi) In it was held that the appointment of receiver with respect to the properties which could not be attached/sold can be made.

(xii) In it was held that a receiver may be appointed to realize a decree or debt attached in execution proceedings or to collect the future rents/profits accruing from attached properties or from the estate of a deceased debtor in the hands of his heirs, even in respect of property situated outside the Court's jurisdiction or for realisation of property by prosecuting causes of action arising outside jurisdiction.

(xiii) In AIR 1925 Rang 318 (320) (DB), it was held that the Court can suo motu order the appointment of a receiver under Section 94(d) CPC and Order 40, Rule 1 even without an application.

6. In so far as the cases relied upon by the decree holder are concerned, the Garnishee bank has submitted that these authorities have been fully discussed in the judgment of Delhi High Court in Sunderson vs. Harbans Singh Sobt reported as and the decision of Punjab & Haryana High Court in Kumari Rauneka Batra vs. Grindlays Bank reported as and the said decision of the Delhi High Court covers the issue raised in these proceedings.

7. According to the Garnishee in the aforesaid judgments both the Delhi High Court and the Punjab & Haryana High Court have come to the conclusion that in a Garnishee proceedings under order XXI Rule 46 of the Code of Civil Procedure no prohibitory orders can be passed against the Garnishee if the Garnishee and the situs of debts happened to be outside the territorial jurisdiction of the executing court and the territorial jurisdiction in a Garnishee proceedings is co-extensive with the Court's original jurisdiction.

8. The plea of the decree holder to equate the present case with the Sunderson (supra) case has also been rebutted by the Garnishee by submitting that the order of payment of amount by Garnishee in Sunderson's case was merely an irregular exercise of jurisdiction and not a lack of inherent jurisdiction as distinct from the present case where there is inherent lack of jurisdiction. The following reasons have been cited in support of this plea by the Garnishee:

a) The Garnishee himself in Sunderson's case (supra) had not objected to the money being sent from Shimla to the Court of Delhi and its attachment by the Courts at Delhi.

b) The objection was raised by the judgment debtor in Sunderson's case after the money had been paid to the decree holder.

c) The amount in Sunderson's case (supra) was only Rs.850/-

7. In distinguishing the Sunderson's case (supra) in the present case in so far as it held that deposit in the Executing Court amounted to a waiver of the plea of jurisdiction, the facts as urged by the Garnishee bank are:

i)The Garnishee in its very first affidavit dated 9th March 1995 in reply to the application brought the lack of jurisdiction of the Hon'ble Court to its notice by mentioning the fact that the amount of Rs.4.24 lakhs lying at the credit of the judgment debtor in its books already stood attached under the provisions of the UP Co operative Societies Act 1965. The affidavit dated 9th March, 1995 filed by the Garnishee states as under:-

"1. That as per the direction of this honorable court, I hereby declare that I am competent to swear this affidavit.

2. That I have seen the books of accounts of Kapil Khanna and others and I find the following balances in respective a/cs:

i. Sh. Kapil Khanna, share a/c no. 1298 Rs.500/- credit.

ii. Sh. K.L. Khanna, share a/c no. 1134 Rs. 5000/- credit.

iii.M/s Chandra Agencies, current a/c no. 278

Rs.424692.50 credit

That there is an attachment order issued by Distt. Asstt. Registrar, Cooperative Societies U.P. Ghaziabad dated 6.10.93. Whereby the aforesaid s.no. 3 (M/s Chandra Agencies, current a/c no. 278 Rs.424692.50) stands attached."

ii)This Hon'ble Court in its order dated 20th September 1996 simply ordered the deposit of the said amount in FDR in UCO Bank in Delhi High Court Branch, New Delhi as an interim arrangement pending final hearing of the IA.

iii)On 27.9.96 in an application filed by the Garnishee Bank in the application dated 27.9.96 seeking extension of time for deposit the amount ordered the following plea was taken.

"However, this is without prejudice to the rights and contentions of the defendant Bank as may be available to it in law."

iv)Before the above amount was deposited, the Garnishee bank filed an appeal being FAO (OS) 380 of 1996 before the Hon'ble Division Bench of this Court on 4th October 1996 challenging the order of deposit dated 20th September 1996 of the learned single Judge on the ground of lack of jurisdiction of the Hon'ble Court. The amount was, however, deposited on 7th October 1996 to avoid any contempt proceedings against the Garnishee.

v)The said appeal was dismissed in liming by the Hon'ble Division bench holding that the deposit of the said amount was simply an interim arrangement and that the matter was yet to be heard finally. The order of the Division Bench dated 7.10.96 against the order of deposit passed by the learned Single Judge inter-alia held as under:-

" In our opinion, the appellant has no cause for grievance and the appeal is totally misconceived. The amount has only been called by the High Court and directed to be kept in deposit. The Ld. Single Judge has not directed the amount to be disbursed to any of the parties, who are yet to be heard on the question as to which the parties is entitled to the amount where after only the amount will be disbursed. What has been ordered by the learned Single Judge is merely an arrangement made for the period until hearing takes place."

vi) Before the date of final argument, the Garnishee Bank stated in his rejoinder dated 10th February 1998 that the Hon'ble Court lacked jurisdiction to hear the IA not only on account of ouster of jurisdiction by the special state legislation but also because of territorial jurisdiction. The present plea as to lack of jurisdiction of this Court was taken only on 10.2.98 by the Garnishee Bank inter-alia in the following terms:

"That in the above execution matter, the Garnishee Bank is admittedly a Cooperative Bank and its functions are regulated under the U.P. Cooperative Societies Act, 1965. The Bank is situated at Ghaziabad which is obviously outside the territorial jurisdiction of this Hon'ble Court. The Judgment Debtors who are members of the above Cooperative Bank are having accounts with the Bank wherein certain amounts are lying to their credit. The debt due to the Judgment Debtors which is sought to be attached by the Decree-Holders through their application (EA-256/93) dated 6.7.1993, if and when payable by the Garnishee Bank, is payable at Ghaziabad only. Thus both the Garnishee and the situs of the debt sought to be attached by the Decree-holder are beyond the local limit of jurisdiction of this Hon'ble Court."

vii)It is thus clear that objection of the Garnishee regarding jurisdiction of the Hon'ble Court in this case was always there not only before the Single Judge but also in appeal before the appellate court on one ground or the other from the very beginning.

viii)The amount involved in this case is substantial i.e. Rs. 4.24 lacks and it has been simply kept in deposits pending final hearing. It has not been paid to the decree holder as yet. Thus, there is no legal ground as to why the amount of deposit should not be refunded to the Garnishee.

8. It is further stated by the Garnishee that the appointment of a a receiver is not relevant to the subject matter of this application and the proceedings under order XXI Rule 46 of the Code are of Garnishee nature where both the Garnishee and the debt are outside the territorial jurisdiction of the executing court. In any case the Garnishee Bank has every right to set off any cross debts due to it from the judgment debtor which right has already been exercised under the orders of the competent authority under the provisions of UP Co operative Act 1965 which over rides any general law enactment.

9. The Garnishee bank has also submitted that the 1976 amendment to CPC has no relevance to the Garnishee proceedings and order XXI Rule 46 of the Code has not been amended so far and as far as the applicability of rule 46A to 46I under Order XXI of the Code introduced by the Act 104 of 1976 with effect from 1st February 1977 is concerned, these can only come into play when the application under Order XXI Rule 46 of the Code falls within the jurisdiction of this Court.

10. The learned counsel for the garnishee bank has sought to contend that the aforesaid judgment of Sunderson(supra) in so far as it held about the irregularity of jurisdiction plea being raised after the deposit was not applicable to the present case because in its first affidavit deated 9.3.95 it objected by stating that Rs.4.24 lakhs was already attached under U.P. Co-op. Societies Act, 1965 and thus such a plea was taken and this amounted to taking the plea of lack of jurisdiction of this Court. He further submitted that the amount was not paid to the Judgment Debtor but only ordered to be deposited in this Bank by the Court order dated 20th September 1996 and in its rejoinder dated 10th February 1998 the plea of lack of jurisdiction of this court both on amount of the special State legislation of U.P. And lack of territorial jurisdiction of this Court were raised. He further submitted that the plea of lack of inherent territorial jurisdiction stood on a different footing from that of an irregularity in the attachment.

11. In my view the judgment in Sunderson's case (supra) is germane to the issue involved in these proceedings wherein a learned single Judge of the Court held that following the views of the Calcutta, Madras, Lahore and Travancore Cochin in preference to the Allahabad High Court's views, the debt could only be attached if it was payable within the jurisdiction of the executing court or the garnishee was within its jurisdiction. However, the aforesaid judgment relied upon by the Garnishee bank also shows that it was held following the judgment of the Rajasthan High Court in Hanuman Dutt vs. Hajarimal that when there has been no irregularity in the attachment a garnishee can object to the attachment before the money is paid into Court but the objection to the irregularity in attachment could not be raised after the deposit in the Court had been made.

12. In my view the date of deposit of the sum of Rs. 4.24 lacs in this Court is a material circumstance in assessing the rival pleas of the judgment debtor and the Garnishee Bank. In the present case, it is evident from the extracts of pleadings and the order of the Division Bench dated 7th October, 1996 that the present plea as to lack of territorial jurisdiction was raised in terms only for the first time by the Garnishee on 10.2.98 in its rejoinder. Since the deposit in this Court was made on 7th October 1996 the aforesaid judgment of Sunderson's case (supra) which though seemingly in favor of the Garnishee Bank nevertheless supports the plea of the decree holder that the plea as to the UP Legislation barring this Court's jurisdiction to execute the decree was only raised on 10th February 1998 after the deposit was made in this Court on 7th October 1996.

13. In my view the above pleas of the Garnishee Bank are not tenable because even in the Sunderson's case (supra) the relevant finding is as follows:-

"The next question is if there was some irregularity in the attachment of the money, as it obviously was, whether the subordinate Judge could order refund of the amount to the objecting judgment-debtor. The relevant facts are that the garnishee himself has not objected to the money being sent from Simla to Delhi. The objection was filed by the objecting judgment-debtor after the money was paid to the decree-holder. Even in the application under Order XXI rule 59 filed by the objecting judgment-debtor no objection as to jurisdiction was taken. It is only subsequently after the amount was actually paid to the decree-holder that an application under Section 39 read with Section 47 and Section 151 C.P.C. was filed for the restitution of the attached an appropriated amount. In such circumstances, it seems to me that such an objection could not be entertained. I am rather inclined to agree with the Division Bench of Rajasthan High Court in Hanuman Dutt Vs Hazarimal and I am of the view that where there has been an irregularity in the attachment and as a result of that irregularity the interest of the third party is affected be he a garnishee or a co-decree-holder, he can certainly object to the attachment before the money is paid in Court. But where, after the, money is paid into the court and the judgment-debtor comes forward to object on the basis of some irregularity in the process of attachment the court should not allow the judgment-debtor to raise such an objection, for that would be allowing him to abuse the process of the court."

14. The judgment of the Division Bench of the Rajasthan High Court in Hanuman Dutt Vs Hazarimal , relied upon by the learned Single Judge is instructive and the relevant portion of paragraph 5 of this judgment reads as under:

"5. The principle, to our mind, which applies in such a case is clear. Where there has been any irregularity in the attachment and as a result of that irregularity, the interest of a third party is affected, be the garnishee or a co-decree-holder, he can certainly object to the attachment, before the money is paid in court.

But, where after the money is paid into court, the judgment-debtor comes forward to object on the basis of some irregularity in the process of attachment, it is enough to say that the court should not allow the judgment-debtor to raise such an objection, for that would be allowing him to abuse the process of the court."

15. In Sunderson's case extracted above, it was clearly held that objection could be raised before the money was paid in the Court and not after it was deposited in the Court. Even in the present case a sum of Rs.4.24 lacs has been deposited in this Court on 7th October 1996 much prior to the rejoinder dated 10th February 1998, taking in terms the plea of lack of jurisdiction of this Court. The plea of the primacy of the UP Legislation can not per se be construed as the plea of lack of jurisdiction of this Court.

16. The plea taken in the affidavit dated 9th March 1995 was only to the effect that the amount of Rs.4.24 lacs stood attached by the Assistant Registrar, Ghaziabad dated 6th October 1993. Thereafter in the application dated 27th September 1996 seeking extention of time to deposit the amount ordered by the learned Single Judge the only plea taken was that the deposit was without prejudice to the rights and contentions of the garnishee in law. The Division Bench also by its order dated 7th October 1996 only disposed of the appeal by observing that the amount had not yet been disbursed. Thus, specifically the plea of lack of jurisdiction had not surfaaced in any of the pleadings till the date of deposit dated 7th October 1996 in this Court nor did it figure in the order of the Division Bench dated 7th October 1996. The specific plea of lack of jurisdiction of this Court to pass an order in respect of the amount of Rs.4.24 lacs was taken for the first time only on 10th February 1998 in the rejoinder by the garnishee long after the amount of Rs.4.24 lacs was deposited in this court by the garnishee on 7th October 1996.

17. Thus while on facts it was found in Sunderson's case that the Decree Holder had been paid before the objection was made, nevertheless the court held that the objection should be taken before the money was paid in Court as opposed to disbursal to any party. Even in the present case the objection as to the lack of territorial jurisdiction was raised only on 10th February 1998 after the money was paid in Court on 7th October 1996 . Furthermore, even in the Sunderson's case the issue was of territorial jurisdiction as it is in the present case.

18. Since I am proceeding to decide the preliminary plea on the basis of Sunderson's case relied upon by the Garnishee Bank itself and in view of the Garnishee's plea that this decision in Sunderson's case has considered all the earlier cases on the subject including those cited by the Decree Holder, it is not necessary to consider the other judgments cited by the parties and to arrive at a finding whether the view taken by the Allahabad High Court in Bhagwati Prasad Bajpai Vs Jai Narain Hanuman Das & Rajasthan High Court in Laxmi Narain & Others Vs Firm Ram Kumar Suraj Bux & Others is the view applicable or whether the view taken by the Calcutta High Court in Prem Chand Dev Vs Mokhoda Debi 2nd (17) Cal 699 (FB), Promothannath Malia Vs H.V. Low & Co., Vesireddi Srimanathu & Others Vs Devabhaktuni Venkatappayya & Another AIR 1948 Madras 347; Bilas Mal Damodar Das & Others Vs Hari Das & Others AIR 1929 Lahore 645 and Padmanabha Pillai Bhaskara Pillai Vs Bank of Kerala Ltd. AIR 1956 Trav. Cochin 100 is the correct view, as this exercise has already been done by a learned Single Judge of this Court in Sunderson's case (supra) which judgment of Sunderson (supra) I am applying in this case. For the same reason it is also not necessary to decide the question of the effect and applicability of the 1976 amendment of C.P.C. to the present case.

19. Accordingly the preliminary objection raised by the Garnishee Bank is rejected. The matter be now listed before the appropriate Judge on the original side according to the roster, subject to the orders of Hon'ble the Chief Justice for further orders on this application on 25th April 2003.