[Cites 4, Cited by 0]
Madras High Court
Oil And Natural Gas Corporation Ltd., vs Brick Steel Enterprises on 21 May, 2026
CRP No. 3082 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21-05-2026
CORAM
THE HON'BLE MR.JUSTICE V. LAKSHMINARAYANAN
CRP No. 3082 of 2026
and
CMP No.13270 of 2026
Oil and Natural Gas Corporation Ltd.,
Cauvery Asset, Neravy,
Karaikal 609 604,
Pondicherry UT.
..Petitioner
Vs
1. M/s. Brick Steel Enterprises,
“Swamy Arul House”,
84/369-B, Salem Road,
Suramangalam Po,
Salem 636 005, Tamilnadu.
2. State Bank of India, Karaikal
Rep by its Chief Manager.
..Respondents
Prayer: Civil Revision Petition is filed under Section 115 of Civil Procedure
Code, 1908 praying to pass an order to set aside the impugned order dated
24.11.2025 passed by the learned District Judge at Karaikal in C.F.R.No.2308
of 2022 in EP.No.37 of 2019 in Arb.OP.No.2 of 2008 by allowing the above
civil revision petition and pass such further or other orders.
For Petitioner: Mr.Mohammed Fayaz Ali
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CRP No. 3082 of 2026
ORDER
The judgment debtor is the civil revision petitioner and the decree holder
is the first respondent.
2. It is aggrieved by an order passed by the District Judge, Karaikal in
C.F.R.No.2308 of 2022 in E.P.No.37 of 2019 in Arb.OP.No.2 of 2008. Between
the parties to the proceedings, arbitration had been initiated by the first
respondent herein. The arbitrator passed an award in 19.08.2008. Challenging
the same, the judgment debtor preferred a petition under Section 34 of the
Arbitration and Conciliation Act, 1996 in Arb.OP.No.2 of 2008. The said
proceedings came to be dismissed by the learned District Judge, Karaikal on
20.07.2016. The order has attained finality. In other words, the challenge to the
decree having been rejected, the liability as passed under the award is fastened
on the civil revision petitioner. An attempt to move the order also came to be
nibbed by this Court in CRP(NPD) Nos.2193 & 2194 of 2013 dated 23.10.2013.
3. Finding that the judgment debtor is not clearing its liability, the
decree holder presented E.P.No.37 of 2019 on 01.02.2019. The decree
holder/first respondent sought attachment of the account of the judgment debtor
in Account No.10956398419. The learned executing Judge took the execution
petition in E.P.No.37 of 2019 on file and by an order dated 24.11.2025,
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crystallized the liability at Rs.33,84,193.17. Aggrieved by the said order, the
present revision.
4. It is the plea of Mr.Mohammed Fayaz Ali that the learned
executing Judge erred in adjusting the interim payment made by the judgment
debtor towards interest first and principal later. According to him, the amount
should have been adjusted towards the principal first and interest thereafter. He
further adds that assuming the order stands confirmed, the learned executing
Judge erred in attaching the entire amount lying in the aforesaid account number
and not confining it to the amount payable in the execution petition.
5. I have carefully considered the submissions of Mr.Mohammed
Fayaz Ali. I have gone through the records.
6. The plea of Mr.Mohammed Fayaz Ali does not pose much of a
difficulty for me in its rejection. A Constitution Bench of the Supreme Court
has settled the position of law. The Supreme Court had directed unless and until
there is a contract to the contrary of amount paid by the judgment debtor to the
decree holder would have to be adjusted first towards interest and thereafter
towards the principal (see, Gurpreet Singh Vs. Union of India, (2006) 8 SCC
457). Furthermore, after the survey of several judgments on the point, the
Supreme Court in Leela Hotels Ltd. Vs. Housing and Urban Development
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Corporation Ltd., (2012) 1 SCC 302, held the well-established rule is that
money paid should first be applied towards interest and when that is satisfied, in
payment of the capital. The law declared is that a debtor cannot be allowed to
take advantage of his default to deny the creditor the amount to which he will be
entitled on account of such default, by way of elimination of principal amount
due. The only exception which permits appropriation towards principal first and
interest later is the existence of the agreement under Section 59 of the Contract
Act, 1872. Admittedly in this case there is no such contract. This is exactly what
has been done by the executing Court. When the law has been clearly settled by
the Supreme Court and when there is right application of the said law to the
facts of the case, I do not find any merits in the revision to entertain the same.
7. However, the next plea of Mr.Mohammed Fayaz Ali deserves
consideration. The executing Court could not have attached the entire amount
lying in the account, especially, when the same is more than what the decree
holder is entitled to. Hence, the pro-order issued by the learned District Judge at
Karaikal shall read that the second respondent/Garnishee is directed to attach
and withhold the account of the judgment debtor bearing Account
No.10956398419 to an extent of Rs.55,00,000/-. The judgment debtor is
permitted to operate the account for withdrawal of any amount above the
aforesaid amount.
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8. With the above modification of the above pro-order passed by the
executing Court, the civil revision petition stands dismissed. Consequently,
connected miscellaneous petition is closed. No costs.
21-05-2026
Index: Yes/No (2/2)
Speaking/Non-speaking order
Neutral Citation: Yes/No
veda/kj
To
The District Judge, Karaikal.
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V.LAKSHMINARAYANAN, J.
veda/kj
and
21-05-2026
(2/2)
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