Case title:
G.S Sandhu & Anr. Vs Geeta Aggarwal
Date of Order:
14th January 2022
Bench:
HON’BLE MR. JUSTICE AMIT BANSAL
Parties:
GS Sandhu (Petitioner)
Geeta Aggarwal (Respondent)
SUBJECT
- The Executing Court directed the petitioners to submit affidavits of their assets, citing the judgment of the Court in the case of Bhandari Engineers and Builders Pvt. Ltd. (Supra).
- The court ruled that Order XXI Rule 41(2) does not require the officers of the judgment debtor company to disclose their personal asset information, allowing the decree holder to pursue her application.
IMPORTANT PROVISIONS
- A show-cause notice is sent to a person who is about to be arrested under Order XXI Rule 37 of CPC so that they can appear in court and argue why they shouldn’t be sent to the civil prison as part of the implementation of the order.
- Order XXI Rule 41(2) refers to a specific rule in the Civil Procedure Code (CPC) in India that pertains to the disclosure of personal asset details by officers of a judgment debtor company. It states that this rule does not mandate the execution court to issue a direction for such disclosure on its own accord.
BRIEF FACTS
- The respondent filed a lawsuit in 2012 to recover Rs.13,56,625/- from the judgment debtor company. On July 6, 2012, the court granted the claim and decreed a sum of Rs.6,00,000/-.
- On August 12, 2013, the respondent initiated execution proceedings and warrants of attachment were issued against the judgment debtor company.
- The judgment holder managed to recover Rs. 5,00,000/- through an auction sale of movable property belonging to the judgment debtor company on January 20, 2014.
- However, the decree holder subsequently filed an application seeking the imprisonment of the petitioners. The petitioners argued that the judgment debtor corporation no longer existed as its movable assets had been seized.
- The Executing Court ordered the petitioners to file affidavits of assets in accordance with the judgment of the Court in Bhandari Engineers and Builders Pvt. Ltd. (Supra)
ARGUMENTS ADVANCED BY THE PETITIONER
- It is argued that the petitioners were not involved in the lawsuit initiated by the respondent under Order XXI Rule 37 of CPC and that they were not named as parties to the lawsuit as directors of the company against which the judgment was issued in the respondent’s favour.
- The petitioners were also made parties to the execution petition, and the directors of the judgment debtor company were not asked to file their assets.
- Counsels relied on judgments of Anirban Roy, Gurmeet Satwant Singh, and Delhi Chemical and Pharmaceutical Works Pvt. Ltd.
- Replying to the respondent, it’s stated that the statements provided in the application under Order XXI Rule 37 of the CPC lack clarity and specificity. No specific accusations of fraud have been made against the petitioners.
- In relation to the petitioner no.2’s alleged non-compliance with this Court’s directive from the order dated 20th September 2019, the sane has filed an application before the Executing Court seeking an extension of time, which has been granted
ARGUMENTS ADVANCED BY THE RESPONDENT
- Counsel argues that while petitioner no.1 has complied with the order, the petitioner no.2 has failed to comply, and the balance sheet of the judgment debtor company has been relied upon.
- It is contended that the petitioners were accused of making false statements and fraud in an application filed on behalf of the decree holder.
- The rulings in the cases of Anirban Roy and Others and Delhi Chemical and Pharmaceutical Works Pvt. Ltd. And Others are not applicable to the current case.
- The order issued by the Trial Court is valid because the judgment in Bhandari Engineers and Builders Pvt. Ltd. Had not been overturned.
JUDGEMENT ANALYSIS
- A judgement debtor or its directors are not required to file their list of assets under Order XXI Rule 37, so there was no justification for the Executing Court to issue the contested order requiring the petitioners to submit a list of their assets.
- If the initial affidavit submitted by the judgment debtor does not adequately disclose their assets, they may be required to submit a supplementary affidavit and may also be examined orally. Therefore, the Executing Court’s reliance on the Bhandari Engineers and Builders Pvt. Ltd. (supra) judgment to mandate the filing of the petitioners’ affidavit of personal assets is clearly mistaken.
- Delhi Chemical and Pharmaceutical Works Pvt. Ltd. And Ors. Stated that a direction under Order XXI Rule 41(2) of the CPC can only be made upon an application submitted by the decree holder. The court must first identify and locate the judgement debtor’s assets in accordance with Order XXI’s regulations, and only if the decree holder is unable to do so can the court provide help.
- The case of Anirban Roy and Ors. (supra) states that since no decree has been issued against the petitioners, the decree against the judgment debtor company cannot be enforced against them. Order XXI Rule 41(2) does not mandate a direction to be given against the officers of the judgment debtor company to submit their personal asset details. The execution court cannot pass such a direction on its own accord.
- The challenged order dated 13th August 2019, which required the petitioners to submit an affidavit revealing their personal assets, was overturned.
- However, the decree holder is still allowed to proceed with her application filed under Order XXI Rule 37 or any other relevant provisions of the CPC. The petition was granted in accordance with the above conditions.
