Delhi High Court
Adonis Limited vs Narotam Sayal on 14 February, 2017
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ EX.P. 61/2012
ADONIS LIMITED ..... Decree Holder
Through: Mr Saket Sikri and Mr Junaid Nahvi,
Advocates.
versus
NAROTAM SAYAL ..... Judgement Debtor
Through: Mr Atul S. Mathur, Ms Nimita Kaul
and Ms Sweta Singh, Advocates.
Ms Priya Kumar and Ms Tanya
Tiwari, Advocates for Objector (M/s
Ashita Impex Pvt. Ltd.).
Mr Buddy A. Ranganadhan and Mr
Raunak Jain, Advocate for Objector
(Champika Sayal).
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 14.02.2017
VIBHU BAKHRU, J
EA (OS) No.348/2016 (Restoration of Ex.P.61/2012) and EA(OS) 349/
2016 (Condonation of delay in filing) in EX.P.61/2012
1. The applicant, Adonis Limited (formerly known as Mayar (HK) Ltd.)
had filed the above captioned petition for execution of a decree dated
18.08.2009 passed by the High Court of the Hong Kong Special
Administrative Region, Court of First Instance in Commercial Action
No.4/2007. The said petition was dismissed in default and for non-
prosecution on 18.01.2016. Accordingly, the applicant has filed an
application for seeking restoration of the petition along with an application
being EA(OS) 349/2016 seeking condonation of delay in filing the
application for restoration being EA(OS) 348/2016.
2. The respondents have opposed the above applications principally on
the ground that Section 5 of the Limitation Act, 1963 is inapplicable in
respect of any application filed under Order XXI of the Code of Civil
Procedure, 1908 (hereafter 'CPC'). The learned counsel for the respondents
also drew the attention of this Court to Order XXI Rule 106 of the CPC
which, inter alia, provides that an applicant, against whom an order is made
under Sub-rule 2 of Rule 105 of Order XXI, may apply for setting aside the
said order. And, if he satisfies the Court that there was sufficient cause for
his non-appearance when the application was called on for hearing, the
Court would set aside the order on such terms and at such costs as it thinks
fit. However, Sub-rule 3 of Rule 106 expressly provides that an application
under Sub-rule 1 of Rule 106 of Order XXI of the CPC is to be made within
30 days from the date of the order. It was submitted that since, admittedly,
the present application for restoration of the execution petition was filed
beyond the period of 30 days, the same was liable to be rejected.
3. Mr Sikri, learned counsel appearing for the applicant did not dispute
that the provisions of Section 5 of the Limitation Act, 1963 were
inapplicable in respect of any application under Order XXI of the CPC. He,
however, earnestly contended that the order dated 18.01.2016 dismissing the
execution petition was not in terms of Rule 105 of Order XXI CPC since
according to him, the execution petition, which was dismissed on that date,
was not set down for hearing. He submitted that although the execution
petition was listed on that date, the Court had not set down the petition for
hearing and the matter was listed for hearing of the applications -
EA(OS)530-531/2012. The execution petition was also listed on 18.01.2016
but hearing of the petition was subject to the issue regarding the execution of
a foreign decree by a Hong Kong Court being decided by the Hon'ble
Supreme Court in the pending matter. He further submitted that the matter
had been deferred on various occasions awaiting the decision of the
Supreme Court on the aforesaid issue. As on 18.01.2016, the Supreme Court
had not delivered the decision in question (which was only delivered on
15.04.2016) and therefore, the execution petition was not to be taken up for
hearing. He relied on the decisions of the Division Bench of this Court in
Formosa Plastics Corporation, USA v. Ashok Chauhan & Ors.: 2016 SCC
OnLine Del 3141; and Deutsche Ranco GmbH v. Mohan Murti: 176
(2011) DLT 280 (DB) in support of his contention.
4. Mr Atul S. Mathur, learned counsel appearing for the Judgment
Debtor sought to distinguish the aforesaid decisions and referred to the
decision of the Supreme Court in Damodaran Pillai and Ors. v. South
Indian Bank Ltd.: (2005) 7 SCC 300 and the decision of the Madhya
Pradesh High Court in Khoobchand Swaroopchand and Anr. v.
Kashiprasad Parmanand and Ors.: AIR (1986) MP 66. He submitted that
the question whether suit or an application is listed for hearing must be
viewed in the context of whether the matter is listed for interlocutory orders
or orders of routine nature or whether the matter has been listed for business
other than interlocutory or routine matters. He stated that in the event the
matter is not listed for routine matters such as issue of service, completion of
pleadings etc., the matter must be taken as listed for hearing. He contended
that since there was no dispute that execution petition as well as other
applications were listed on 18.01.2016, the contention that Order XXI Rule
105 CPC is not applicable, is erroneous.
5. Ms Priya Kumar, learned counsel appearing for M/s Ashita Impex
Pvt. Ltd., Objector (applicant in application (EA(OS) 396/2012), submitted
that the application of Objector (EA(OS) 396/2012) was admittedly listed
for hearing on 18.01.2016 and was also disposed of consequent to the order
dated 18.01.2016 dismissing the execution petition. She submitted that the
principal grievance of M/s Ashita Impex Pvt. Ltd. was that by an order dated
11.05.2012, this Court had also attached some of its properties. She further
submitted that although the said company was not a Judgment Debtor, its
property was attached solely for the reason that the Judgment Debtor was a
shareholder in the said company. She also drew the attention of this Court
to Order XXI Rule 57(2) of the CPC which provided that if the Court
omitted to give any direction while dismissing the execution petition, the
attachment shall be deemed to have ceased. She submitted that since this
Court had not issued any direction for extending the attachment on the assets
of M/s Ashita Impex Pvt. Ltd., the attachment of its properties had ceased.
She stated that she would have no objection if the execution petition was
restored, however, urged that the attachment orders would not revive
automatically and further attachment orders could be passed only on a fresh
application and after hearing the objectors.
6. Mr Mathur, the learned counsel for the Judgment Debtor, also stated
that although he had opposed the present applications, he would have no
objection if the petition was restored, albeit, without restoration of the
attachment orders and subject to his objections as to the maintainability of
the execution petition.
7. I have heard the learned counsel for the parties.
8. First and foremost, the issue to be considered is whether the execution
petition had been set down for hearing on 18.01.2016. In order to address
the aforesaid issue, it would be necessary to refer to the orders passed by this
Court from time to time.
9. The execution petition was moved on 22.02.2012 and on that date,
notice was issued to the Judgment Debtor. The Judgment Debtor entered
appearance and sought time to file its objections on 07.03.2012 and the
matter was adjourned to 10.05.2012 and thereafter to 11.05.2012. On
11.05.2012, this Court passed an order in EA(OS) 348/2012 and directed
issuance of "warrants of attachment of movable and immovable properties
of the Judgment Debtor as set out in Annexure 'A' to the present
application". This Court also granted further time to the Judgment Debtor to
file objections to the execution petition. The Judgment Debtor thereafter
filed an application (EA(OS) 330/2012) seeking review of the order dated
11.05.2012, inter alia, on the ground that the execution petition itself was
liable to be dismissed as the decree sought to be executed was not passed by
the "superior court" as provided in Explanation 1 of Section 44A of the
CPC. The Judgment Debtor also filed its objections (EA (OS) 379/2012),
inter alia, raising the aforesaid plea.
10. The matter was thereafter adjourned on several occasions. In the
meanwhile, Ms Pushpa Sayal - the mother of Judgment Debtor - filed an
application seeking release of her properties from attachment which was
allowed on 28.05.2012. Other objections were also filed (EA(OS) 530-
531/2012) by Smt Champika Sayal, the wife of Judgment Debtor, for
vacation of the attachment order dated 11.05.2012 in respect of certain
properties. The petition and the applications were listed on 12.09.2012 and
on that date, the counsel for the Decree Holder informed this Court that in a
similar matter, a Special Leave Petition had been filed and the Supreme
Court had granted leave to appeal. Accordingly, the petition and the
applications were adjourned to 28.01.2013 to await the outcome of the said
appeal. The matter was listed on a few occasions thereafter, but was
adjourned including to await the decision of the Supreme Court in SLP(C)
26680/2010 and 30485/2010.
11. On 15.04.2014, this Court passed an order listing the petition on
11.11.2014 for hearing. However, on 11.11.2014, the petition was once
again adjourned to 12.12.2014 and the parties were directed to inform the
Court regarding the status of the matter before the Hon'ble Supreme Court.
On 12.12.2014, this Court adjourned the matter once again to 18.03.2015.
On 18.03.2015, the parties once again informed the Court that the Supreme
Court was likely to take up the matter concerning the question regarding the
execution of a foreign decree passed by a Hong Kong Court, in the last week
of March, 2015 and at their joint request, the petitions and applications were
listed on 29.05.2015. On 29.05.2015, the execution petition and applications
were once again adjourned to 26.08.2015. On 26.08.2015, this Court passed
the following order:-
"EA No. 396/2012 (by the objector M/s Ashita Impex Pvt.
Ltd. & u/XXI R 58 r/w S 151 CPC) EA No. 530/2012 (by
the objector/Smt. Champika Sayal, u/o XXI R 58 r/w S
151 CPC) & EA No. 531/2012 (by the Objector/Smt.
Champika Sayal, u/O XXI R 26 r/w S 151 CPC)
1. Mr Batra, learned Senior Advocate appearing for the
Decree Holder submits that the question as to whether a
foreign decree passed by the Hong Kong Court can be
executed in India, is still pending consideration before the
Supreme Court.
2. Counsels for the applicants in EAs No. 503 & 531/2012
state that the applications filed by them can be considered
dehors the pendency of the case before the Supreme Court.
3. In the event the court is informed on the next date of
hearing that the aspect of the execution of a foreign decree by
the Hong Kong Court remains pending for adjudication before
the Supreme Court, then the parties shall be ready to address
arguments on the aforesaid applications.
4. List on 18.1.2016."
12. It is apparent from the above that this Court had specifically indicated
that on 18.01.2016, arguments would be heard on applications - EA(OS)
530-531/2012, if the decision of the Supreme Court regarding execution of
the foreign decree by a Hong Kong Court remained pending. Admittedly, as
on 18.01.2016, the Supreme Court had not rendered the decision that was
awaited and, therefore, the only matters that could be considered on that date
- in terms of the directions of the court - were the pending applications as
indicated in the order dated 26.08.2015. However, the Decree Holder was
not represented on 18.01.2016 and, therefore, the petition was dismissed.
13. In Formosa Plastics Corporation, USA (supra), a division bench of
this court considered a similar controversy where certain applications
regarding executability of the decree were part heard by the Court and the
petition and applications were listed on the subsequent date before another
Bench, which dismissed the execution petition. This Court referred to the
decision in Deutsche Ranco GmbH (supra) and the decision of the Supreme
Court in Damodaran Pillai and Ors. (supra) and inter alia held that since
the execution petition itself had not been set down for hearing, the order
dismissing the execution petition for non-prosecution could not be treated as
an order under Order XXI Rule 105(2) of the CPC.
14. In Deutsche Ranco GmbH (supra), a Division Bench of this Court
had referred to the decision of the Supreme Court in Damodaran Pillai and
Ors. (supra) and had held that since the execution petition had not been set
down for hearing, it should not have been dismissed in default and,
therefore, Rule 105 and 106 of Order XXI of the CPC were not attracted.
15. In Khoobchand Swaroopchand and Anr. (supra), the Madhya
Pradesh High Court was concerned with the case where executing Court had
granted time to the Decree Holders to furnish a list of properties within a
period of three days and on such list being furnished, a warrant of
attachment was to be issued. The case was adjourned to 21.08.1979,
awaiting report as to the execution of the warrant. However, on that date,
none appeared for the Decree Holders and the execution application was,
therefore, dismissed. The Court explained that although the Court would
have powers to dismiss the application in default of appearance or failure to
comply with its directions, the main question to be addressed was whether
the dismissal was under Rule 105 of Order XXI of the CPC so as to attract
the provisions of Rule 106 of Order XXI of the CPC. In that context, the
Court held as under:-
"17. Rule 106 of Order 21 of the Code of Civil Procedure
provides that if the Court is satisfied that there was sufficient
cause for non-appearance, when the application was called
for 'hearing', the Court shall set aside the order. No such
order shall be made unless the application is made within 30
days from the date of order. Rule 105 contemplates
dismissal of the application on a date of 'hearing', while rule
106 provides for restoration of application on making out
sufficient cause for non-appearance, when the application
was called for 'hearing'.
18. In my opinion, the date on which the execution
application was dismissed for default of appearance of the
decree-holder, namely, 21-8-1979 was not a date fixed for
'hearing' within the meaning of Rule 105. It was a date
awaiting report as to execution of the warrant which was
supposed to be issued on submission of a list of moveable
property by the decree-holders within three days of the
earlier order dated 21-7-1979. Consequently, the dismissal
of execution application on 21-8-1979 was not under rule
105(2) of Order 21 of the Code of Civil Procedure, and
therefore, the provisions of rule 106 are not attracted. The
dismissal of the execution application in default of
appearance on 21-8-1979 is referable inherent powers of the
Court.
19. I have pointed out above that there is a specific provision
for dismissal of suit for non-payment of costs etc. in Order
9, while there is no analogous provision in Order 21 of the
Code of Civil Procedure. Consequently, the dismissal of
execution application for non-payment of process-fee or for
failure to comply with any direction of the Court, will be in
exercise of inherent powers. In the present case, the
dismissal was not for failure of the decree-holder to pay
process fee or to submit a list of property, but was in default
of appearance of the decree-holders. The Courts below
committed a mistake in treating the dismissal of execution
application under rule 105 so as to attract rule 106 of Order
21 of the Code. The orders passed by the Courts below
cannot be sustained.
20. Since the dismissal of the execution application on 21-8-
1979 was under inherent powers, the application for its
restoration will be by invoking the inherent powers of the
Court and in that event, no time limit is prescribed for
invoking the inherent powers of the Court."
16. There is much merit in the contention advanced by Mr Mathur that if
the petition and applications are all listed on a date, the petition along with
all applications could be dismissed in default and for non-prosecution.
However, it is necessary that the petition must be listed for hearing in order
for provisions of Rule 105 and consequently the provisions of Rule 106 of
Order XXI of the CPC, to be attracted. In the present case, there is
sufficient indication in the order passed by this Court on 26.08.2015 that
Court would consider hearing the petition only if the Supreme Court had
decided the matter concerning the execution of a decree passed by a Court in
Hong Kong. Thus, in the facts of this case, it is apparent that the petition
was not set down for hearing; consequently, the order passed dismissing the
petition cannot be construed as an order passed under Order XXI Rule
105(2) of the CPC.
17. The applicant has explained that delay in filing the application was
because the earlier counsel had refused to cooperate to return the files. The
explanation provided is not convincing since the applicant could have acted
with urgency and taken steps to appoint a new counsel - as it did later -
within the specified time. However, since the applicant is not an Indian
resident, it is understandable that the petitioner would have taken some time
to react to its counsel not returning to the files and thus, it would be apposite
to take a lenient view.
18. Thus, for the reasons stated in the application, the same is allowed.
The order dated 18.01.2016 is recalled and the petition is restored.
However, it is clarified that the attachment orders that stood vacated are not
restored. The question whether assets of any person other than Judgment
Debtor could be attached is a contentious one and it would be necessary to
hear the objections raised on behalf of M/s Ashita Impex Pvt. Ltd., and other
objectors before such orders are reinstated. At this stage, Mr Sikri states that
he is not in a position to address arguments on the objections raised by the
said objectors.
19. The objection raised by the Judgment Debtor objecting to the
maintainability of the present petition (being EA(OS) No. 379/2012) is also
reinstated.
20. It is clarified that it would be open for the petitioner to file a fresh
application seeking attachment of assets of Judgment Debtor, which shall be
considered on its merits.
21. The applications are disposed of in the above terms.
EX.P. 61/2012
22. List on 07.07.2017.
FEBRUARY 14, 2017 VIBHU BAKHRU, J
RK
