India – Learning To Sprint: Supreme Court Issues Directions To Reduce Delay In Disposing Execution Proceedings.

Introduction:
 

1. In the past decade, the Indian judiciary has been globally recognized for its historic rulings. However, even such successes, more often than not, are tainted because of the time that goes by, in passing the final ruling in a case. Justice delayed is justice denied, as the adage goes. Delay is so integral to judicial proceedings in India that it not only effects litigants initiating legal proceedings, but also plagues the minds of decree holders who have painstakingly gone through the entire lifecycle of a litigation. Even armed with a decree, a litigant must once again fight an already conquered battle before the executing court.
    

2. In all fairness, the Judiciary is not a mute spectator here, and has, time and again, actively taken steps to overcome delays in the dispensation of justice across fora. One such attempt has been in the case of Rahul S. Shah v. Jinendra Kumar Gandhi & Ors.[1], wherein the Apex Court has put in motion appreciative steps to deal with the delays in disposing execution proceedings filed by the judgment creditor.
    

3. The Apex Court has, in this landmark judgment, emphasized how the appeals (before it in this case) ‘portrayed the troubles of the decree holder in not being able to enjoy the fruits of litigation on account of inordinate delay caused during the process of execution of decree’. The Court noted that it has repeatedly observed that remedies provided for preventing injustice are being misused to cause injustice, by not allowing timely implementation of orders and execution of decrees. It also highlighted several legal complexities being faced with respect to execution proceedings which inter alia include:
    

   • the steady rise of proceedings akin to a re-trial at the time of execution, causing failure of realization of the fruits of a decree and reliefs which the party is forced to seek from courts despite there being a decree in their favour;
      

   • various objections that are filed before the executing court in abuse of the process of law;
      

   • the general practice of issuing show cause notice asking the judgment debtor as to why the decree should not be executed as is given under Order XXI Rule 22[2] of the Civil Procedure Code of 1908 (“CPC”) for certain class of cases adopted by the subordinate courts in execution proceedings is often misconstrued as the beginning of a new trial.
      

Brief facts of the case:

 

1. The facts of the case date back to the year 1986, which began with selling of a piece of land on Mysore Road, Bengaluru by the property owner (“N”). The sale of the said land was later challenged in the year 1987 by N. Since the year 1987, the said land was re-sold; injunction on the first purchasers was granted; the first purchasers filed two suits for possession of the said land; first purchasers sought for transfer and mutation of property in their name. All of the aforesaid let to the City Civil Judge, Bangalore, passing a common judgment in December 2006 (“Decree”) allowing the first purchasers to possess the land.
    

2. The original first purchasers thereafter preferred execution proceedings in 2007. Appeals were filed before the High Court of Karnataka (“High Court”) by N, which were dismissed in October 2009. Special Leave Petition was also dismissed by the Apex Court vide its order dated July 23, 2010.
    

3. The execution proceedings initiated resulted in the court requiring parties to lead evidence in view of several obstructions created by the appellant and by N who is the mother of the fourth respondent in the case (hereinafter referred to as “the Vendors”). Pursuant to initiation of the execution proceedings, issues regarding appointment of a court commissioner; recalling of orders; seeking reference to forensic examination of sale documents, were brought before the executing court. Review applications were dismissed; and in June 2017 the executing court declined the application for forensic examination of documents and rejected the obstructers’ resistance to execution.
    

4. All the aforesaid orders led to initiation of five writ petitions on behalf of the appellant, and the Vendors etc. The High Court by way of a common order dated January 16, 2020 dismissed all the proceedings, and specifically directed that the entire exercise including disposal of the execution petition ought to be accomplished within six months. The judgment debtors were directed to collectively pay an exemplary cost of INR 5,00,000/- (Rupees five lakh) within a period of eight   No costs were imposed qua the obstructors.
    

5. During the pendency of the proceedings, multiple proceedings came to be filed before the High Court, such as writ petitions pertaining to the Bangalore Metro Project that had acquired the land; contempt proceedings; criminal proceedings on the ground of forging of certain documents along with the quashing proceedings in this regard. Several writ petitions and first appeals were filed by the Vendors, the second purchasers etc. challenging orders passed in this case by High Court and the executing court. It is by the order of the Apex Court on April 22, 2021, all these writ petitions and appeals were dismissed.
    

Analysis:

 

9. Against the background of the abovementioned legal complexities, the large pendency of execution proceedings and the large number of instances of abuse of process of execution, the Court held that to avoid controversies and multiple issues of a ‘very vexed question emanating from the rights claimed by third parties,’ the Court must play an active role in deciding all such related issues to the subject matter during adjudication of the suit itself and ensure that a clear, unambiguous, and executable decree is passed in any suit.
    

10. In this regard, the Court held that before settlement of issues, the Court must, in cases, involving delivery of or any rights relating to the property, exercise power under Order X Rule 14[3] of the CPC by ordering production of documents upon oath, relating to any third party interest in the suit property either created by them or to their knowledge. This, according to the Court, would assist it in deciding impleadment of third parties at an early stage of the suit so that any future controversy regarding non-joinder of necessary parties may be avoided. This would ultimately facilitate an early disposal of a suit involving any immovable property. Further, it held that it would be necessary for the Trial Court to determine the status of the property and when the possession is not disputed, who and in what part of the suit property is in possession other than the defendant. Accordingly, the Court suggested the following actions:
     

Issue commission under Order XXVI Rule 9 of CPC.
 

The Court observed that a determination through commission, upon the institution of a suit shall provide requisite assistance to the Court to assess and evaluate the necessary steps such as joining all affected parties as necessary parties to the suit. Before settlement of issues, the Court may appoint a Commissioner for the purpose of carrying out local investigation recording exact description and demarcation of the property including the nature and occupation of the property. In addition to this, the Court may also appoint a receiver under Order XL Rule 1 to secure the status of the property during the pendency of the suit or while passing a decree.
 

• Issue public notice specifying the suit property and inviting claims, if any, that any person who is in possession of the suit property or claims possession of the suit property or has any right, title or interest in the said property specifically stating that if the objections are not raised at this stage, non-party shall be allowed to raise any objection in respect of any claim he/ she may have subsequently.
   

• Affix such notice on the said property.
   

• Issue such notice specifying suit number and the Court in which it is pending, including details of the suit property and have the same published on the official website of the Court.
   

• The Court further observed that if despite taking the above suggested recourse, if an objection is received in respect to a ‘suit property’ under Order XXI Rule 97[4] or Rule 99[5] of CPC at the stage of execution of the decree, the executing court shall deal with it after taking into account the fact that no such objection or claim was received during the pendency of the suit, especially in view of the public notice issued during trial. Such claims under Order XXI Rule 97[6] or Rule 99[7] must be dealt with strictly and be considered/ entertained rarely.
   

• Recognising the urgent need to reduce delays in execution proceedings, the Supreme Court, exercising its jurisdiction under Article 142[8] read with Article 141[9] and Article 144[10] of the Constitution of India, issued certain directions (“Directions”). These Directions were issued in larger public interest to ‘subserve the process of justice so as to bring to an end the unnecessary ordeal of litigation faced by parties awaiting fruits of decree and in larger perspective affecting the faith of the litigants in the process of law’. These Directions are required to be mandatorily followed by all Courts dealing with suits and execution proceedings. The Directions set forth by the Supreme Court are as follows:
   

  • In suits relating to delivery of possession, the court must examine the parties to the suit under Order X[11] in relation to third party interest and further exercise the power under Order XI Rule 14[12] asking parties to disclose and produce documents, upon oath, which are in possession of the parties, including declaration pertaining to third party interest in such properties.
     

  • In appropriate cases, where the possession is not in dispute and not a question of fact for adjudication before the Court, the Court may appoint Commissioner to assess the accurate description and status of the property.
     

  • After examination of parties under Order X[13] or production of documents under Order XI[14] or receipt of the commission report, the Court must add all necessary or proper parties to the suit, so as to avoid multiplicity of proceedings and also make such joinder of cause of action in the same suit.
     

  • Under Order XL Rule 1 of the CPC[15], a Court receiver can be appointed to monitor the status of the property in question as custodia legis for proper adjudication of the matter.
     

  • The Court must, before passing the decree, pertaining to delivery of possession of a property ensure that the decree is unambiguous so as to not only contain clear description of the property but also have regard to the status of the property.
     

  • In a money suit, the Court must invariably resort to Order XXI Rule 11[16], ensuring immediate execution of decree for payment of money on oral application.
     

  • In a suit for payment of money, before settlement of issues, the defendant may be required to disclose his assets on oath, to the extent that he is being made liable in a suit. The Court may further by using powers under Section 151 of the CPC, demand security to ensure satisfaction of any decree.
     

  • The Court exercising jurisdiction under Section 47[17] or under Order XXI of CPC, must not issue notice on an application of a third party claiming rights in a mechanical manner. Further, the Court should refrain from entertaining any such application(s) that has already been considered by the Court while adjudicating the suit or which raises any such issue which otherwise could have been raised and determined during adjudication of suit if due diligence was exercised by the applicant.
     

  • The Court should allow taking of evidence during the execution proceedings only in exceptional and rare cases and resort to expeditious methods like appointment of Commissioner or calling for electronic materials including photographs or video with affidavits.
     

  • The Court must, in appropriate cases where it finds the objection or resistance or claim to be frivolous or mala fide, resort to sub-rule (2) of Rule 98[18] of Order XXI of the CPC as well as grant compensatory costs in accordance with Section 35A[19].
     

  • Under Section 60 of CPC the term “…in name of the judgment- debtor or by another person in trust for him or on his behalf” should be read liberally to incorporate any other person from whom he may have the ability to derive share, profit or property.
     

  • The executing court must dispose of the Execution Proceedings within six months from the date of filing, which may be extended only by recording reasons in writing for such delay.
     

  • The executing court may, on satisfaction of the fact that it is not possible to execute the decree without police assistance, direct the concerned Police Station for the same. Further, in case an offence against a public servant, while discharging his duties, is brought to the knowledge of the Court, the same must be dealt stringently in accordance with law.
     

• The Court also directed judicial academies to prepare manuals and ensure continuous training through appropriate mediums to the Court personnel/ staff executing warrants, carrying out attachment and sale and any other official duties for executing orders issued by the executing courts.
   

• In order to expedite the process of execution of decrees with the use of information technology tools, the Supreme Court directed all the High Courts to reconsider and update all the rules relating to execution of Decrees, made under exercise of their powers under Article 227[20] of the Constitution of India and Section 122 of the CPC, within one year of the date of the instant judgment (e. April 22, 2021). The Court also directed the High Courts to ensure that the rules framed by them are in consonance with the CPC and the aforesaid Directions. The Court further ordered that the Directions would remain in force until the aforesaid rules are brought into existence.
   

Conclusion:
 

13. Whilst initiating litigation may not be a grueling task for a litigant, common knowledge of the years (and at times decades) it takes to see the fruits of such litigation make many a litigant shy away from enforcing their rights. What makes matters worse is that winning does not guarantee the fruit. However, the dispute resolution regime in the country has, in recent times, seen (and continues to see) a tectonic shift due to the efforts of the judiciary and the legislation.
     

14. The judiciary has, with righteous vehemence, passed several orders/ judgments recognizing the inordinate delay that cases are often seen inflicted with. The Apex Court’s ruling in Rahul S. Shah is one such instance, which not only recognizes the trials and tribulations of litigants in achieving justice finally, but also takes concerted steps and provides Directions to remedy the same. The aim is clearly to ensure the decoupling of justice and delay. We now await the implementation of the Directions, and their positive impact on execution proceedings in India.
     

 

For further information, please contact:

 

Ankoosh Mehta, Partner, Cyril Amarchand Mangaldas

ankoosh.mehta@cyrilshroff.com
 

[1] Civil Appeal Nos. 1659-1660 of 2021 (at Special Leave to Appeal Nos. 7965-7966/2020)

[2] 22. Notice to show cause against execution in certain cases. — (1) Where an application for execution is made—

(a) more than two years after the date of the decree, or

(b) against the legal representative of a party to the decree or where an application is made for

execution of a decree filed under the provisions of section 44A, or

(c) against the assignee or receiver in insolvency, where the party to the decree has been adjudged to be an insolvent, the Court executing the decree shall issue a notice to the person against whom execution is applied for requiring him to show cause, on a date to be fixed, why the decree should not be executed against him :

Provided that no such notice shall be necessary in consequence of more than two years having elapsed between the date of the decree and the application for execution if the application is made within two years from the date of the last order against the party against whom execution is applied for, made on any previous application for execution, or in consequence of the application being made against the legal representative of the judgment-debtor if upon a previous application for execution against the same person the Court has ordered execution to issue against him.

(2) Nothing in the foregoing sub-rule shall be deemed to preclude the Court from issuing any process in execution of a decree without issuing the notice thereby prescribed, if, for reasons to be recorded, it considers that the issue of such notice would cause unreasonable delay or would defeat the ends of justice.

 

[3] 14. Production of documents.—It shall be lawful for the Court, at any time during the pendency of any suit, to order the production by any party thereto, upon oath, of such of the documents in his possession or power, relating to any matter in question in such suit, as the Court shall think right; and the Court may deal with such documents, when produced, in such manner as shall appear just.

[4] 97. Resistance or obstruction to possession of immovable property.—(1) Where the holder of a decree for the possession of immovable property or the purchaser of any such property sold in execution of a decree is resisted or obstructed by any person in obtaining possession of the property, he may make an application to the Court complaining of such resistance or obstruction.

(2) Where any application is made under sub-rule (1), the Court shall proceed to adjudicate upon the application in accordance with the provisions herein contained.

[5] 99. Dispossession by decree-holder or purchaser.—(1) Where any person other than the judgment debtor is dispossessed of immovable property by the holder of a decree for the possession of such property or, where such property has been sold in execution of a decree, by the purchaser thereof, he may make an application to the Court complaining of such dispossession.

(2) Where any such application is made, the Court shall proceed to adjudicate upon the application in accordance with the provisions herein contained.

[6] Supra

[7] Supra

[8] 142. Enforcement of decrees and orders of Supreme Court and orders as to discovery, etc.— (1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe.

(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.

[9] 141. Law declared by Supreme Court to be binding on all courts. —The law declared by the Supreme Court shall be binding on all courts within the territory of India.

[10] 144. Civil and judicial authorities to act in aid of the Supreme Court. — All authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court.

[11] ORDER X

Examination of Parties by the Court

1. Ascertainment whether allegations in pleadings are admitted or denied.—At the first hearing of the suit the Court shall ascertain from each party or his pleader whether he admits or denies such allegations of fact as are made in the plaint or written statement (if any) of the opposite party, and as are not expressly or by necessary implication admitted or denied by the party against whom they are made. The Court shall record such admissions and denials.

3[1A. Direction of the court to opt for any one mode of alternative dispute resolution.—After recording the admissions and denials, the court shall direct the parties to the suit to opt either mode of the settlement outside the court as specified in sub-section (1) of section 89. On the option of the parties, the court shall fix the date of appearance before such forum or authority as may be opted by the parties.

1B. Appearance before the conciliatory forum or authority.—Where a suit is referred under rule 1A, the parties shall appear before such forum or authority for conciliation of the suit.

1C. Appearance before the court consequent to the failure of efforts of conciliation.—Where a suit is referred under rule 1A, and the presiding officer of conciliation forum or authority is satisfied that it would not be proper in the interest of justice to proceed with the matter further, then, it shall refer the matter again to the court and direct the parties to appear before the court on the date fixed by it.]

4[2. Oral examination of party, or companion of party.—(1) At the first hearing of the suit, the Court—

(a) shall, with a view to elucidating matters in controversy in the suit examine orally such of the parties to the suit appearing in person or present in Court, as it deems fit; and

(b) may orally examine any person, able to answer any material question relating to the suit, by whom any party appearing in person or present in Court or his pleader is accompanied.

(2) At any subsequent hearing, the Court may orally examine any party appearing in person or present in Court, or any person, able to answer any material question relating to the suit, by whom such party or his pleader is accompanied.

(3) The Court may, if it thinks fit, put in the course of an examination under this rule questions suggested by either party.]

13. 13. Substance of examination to be written.—The substance of the examination shall be reduced to writing by the Judge, and shall form part of the record.

14. Consequence of refusal or inability of pleader to answer. — (1) Where the pleader of any party who appears by a pleader or any such person accompanying a pleader as is referred to in rule 2, refuses or is unable to answer any material question relating to the suit which the Court is of opinion that the party whom he represents ought to answer, and is likely to be able to answer if interrogated in person, the Court 2[may postpone the hearing of the suit to a day not later than seven days from the date of first hearing] and direct that such party shall appear in person on such day.

(2) If such party fails without lawful excuse to appear in person on the day so appointed, the Court may pronounce judgment against him, or make such order in relation to the suit as it thinks fit.

[12] ORDER XI

Discovery and Inspection

…14. Production of documents. — It shall be lawful for the Court, at any time during the pendency of any suit, to order the production by any party thereto, upon oath, of such of the documents in his possession or power, relating to any matter in question in such suit, as the Court shall think right; and the Court may deal with such documents, when produced, in such manner as shall appear just.

[13] Supra

[14] Supra

[15] ORDER XL

Appointment of Receivers

1. Appointment of receivers. — (1) Where it appears to the Court to be just and convenient, the Court may by order—

(a) appoint a receiver of any property, whether before or after decree;

(b) remove any person from the possession or custody of the property;

(c) commit the same to the possession, custody or management of the receiver; and

(d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Court thinks fit.

(2) Nothing in this rule shall authorize the Court to remove from the possession or custody of property any person whom any party to the suit has not a present right so to remove.

[16] ORDER XXI

Execution of Decrees and Orders

Payment under Decree

…11. Oral application.—(1) Where a decree is for the payment of money the Court may, on the oral application of the decree-holder at the time of the passing of the decree, order immediate execution thereof by the arrest of the judgment-debtor, prior to the preparation of a warrant if he is within the precincts of the Court.

(2) Written application.—Save as otherwise provided by sub-rule (1), every application for the execution of a decree shall be in writing, signed and verified by the applicant or by some other person proved to the satisfaction of the Court to be acquainted with the facts of the case, and shall contain in a tabular form the following particulars, namely :—

(a) the number of the suit;

(b) the names of the parties;

(c) the date of the decree;

(d) whether any appeal has been preferred from the decree;

(e) whether any, and (if any) what, payment or other adjustment of the matter in controversy has

been made between the parties subsequently to the decree;

(f) whether any, and (if any) what, previous applications have been made for the execution of the decree, the dates of such applications and their results;

(g) the amount with, interest (if any) due upon the decree, or other relief granted thereby, together with particulars of any cross-decree, whether passed before or after the date of the decree sought to be executed;

(h) the amount of the costs (if any) awarded;

(i) the name of the person against whom execution of the decree is sought; and

(j) the mode in which the assistance of the Court is required whether,—

(i) by the delivery of any property specifically decreed;

1[(ii) by the attachment, or by the attachment and sale, or by the sale without attachment, of

any property;]

(iii) by the arrest and detention in prison of any person;

(iv) by the appointment of a receiver;

(v) otherwise, as the nature of the relief granted may require.

(3) The Court to which an application is made under sub-rule (2) may require the applicant to produce

a certified copy of the decree.

[17] 47. Questions to be determined by the Court executing decree.—(1) All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.

1* * * * *

(3) Where a question arises as to whether any person is or is not the representative of a party, such question shall, for the purposes of this section, be determined by the Court.

2[Explanation 1.—For the purposes of this section, a plaintiff whose suit has been dismissed and a defendant against whom a suit has been dismissed are parties to the suit.

Explanation II—(a) For the purposes of this section, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed; and

(b) all questions relating to the delivery of possession of such property to such purchaser or his representative shall be deemed to be questions relating to the execution, discharge or satisfaction of the decree within the meaning of this section.]

[18] 98. Orders after adjudication.— (2) Where, upon such determination, the Court is satisfied that the resistance or obstruction was occasioned without any just cause by the judgment-debtor or by some other person at his instigation or on his behalf, or by any transferee, where such transfer was made during the pendency of the suit or execution proceeding, it shall direct that the applicant be put into possession of the property, and where the applicant is still resisted or obstructed in obtaining possession, the Court may also, at the instance of the applicant, order the judgment-debtor, or any person acting at his instigation or on his behalf, to be detained in the civil prison for a term which may extend to thirty days.

[19] 35A. Compensatory costs in respect of false or vexatious claims or defences.—(1) If in any suit

or other proceedings 2[including an execution proceeding but 3[excluding an appeal or a revision] any

party objects to the claim or defence on the ground that the claim or defence or any part of it is, as against the objector, false or vexatious to the knowledge of the party by whom it has been put forward, and if thereafter, as against the objector, such claim or defence is disallowed, abandoned or withdrawn in whole or in part, the Court, 4[if it so thinks fit], may, after recording its reasons for holding such claim or defence to be false or vexatious, make an order for the payment to the object or by the party by whom such claim or defence has been put forward, of cost by way of compensation.

5[(2) No Court shall make any such order for the payment of an amount exceeding 6[three thousand

rupees] or exceeding the limits of its pecuniary jurisdiction, whichever amount is less:

Provided that where the pecuniary limits of the jurisdiction of any Court excercising the jurisdiction of a Court of Small Causes under the Provincial Small Cause Courts Act, 1887 (9 of 1887), 7[or under a corresponding law in force in 8[any part of India to which the said Act does not extend]] and not being a Court constituted 9[under such Act or law], are less than two hundred and fifty rupees, the High Court may empower such Court to award as costs under this section any amount not exceeding two hundred and fifty rupees and not exceeding those limits by more than one hundred rupees :

Provided, further, that the High Court may limit the amount which any Court or class of Courts is

empowered to award as costs under this section.]

(3) No person against whom an order has been made under this section shall, by reason thereof, be

exempted from any criminal liability in respect of any claim or defence made by him.

(4) The amount of any compensation awarded under this section in respect of a false or vexatious claim or defence shall be taken into account in any subsequent suit for damages or compensation in respect of such claim or defence.]

[20] 227. Power of superintendence over all courts by the High Court.—3[(1) Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction.]

(2) Without prejudice to the generality of the foregoing provision, the High Court may—

(a) call for returns from such courts;

(b) make and issue general rules and prescribe forms for regulating the practice and proceedings of such courts; and

(c) prescribe forms in which books, entries and accounts shall be kept by the officers of any such courts.

(3) The High Court may also settle tables of fees to be allowed to the sheriff and all clerks and officers of such courts and to attorneys, advocates and pleaders practising therein:

Provided that any rules made, forms prescribed or tables settled under clause (2) or clause (3) shall not be inconsistent with the provision of any law for the time being in force, and shall require the previous approval of the Governor.

(4) Nothing in this article shall be deemed to confer on a High Court powers of superintendence over any court or tribunal constituted by or under any law relating to the Armed Forces.