Supreme Court lays down directions for executing courts

Contributed by: Khaitan & Co




INTRODUCTION


A three-judge bench of the Supreme Court of India (“Supreme Court”), in its judgement dated 22 April 2021 in the case of Rahul S. Shah v Jitendra Kumar Gandhi 2021 SCC OnLine SC 341, laid down mandatory directions to be followed by all Executing Courts. The Supreme Court took notice of the difficulties faced by litigants in execution of decrees, trapped in the endless permutations and combinations of procedural law and thereafter, proceeded to formulate mandatory directions to be followed by all Executing Courts for an expeditious execution of decrees and bringing an end to the litigation.


FACTUAL BACKGROUND


The Respondent No.3 sold certain immovable properties (“Suit Properties”) in favour of the Respondent Nos.1 and 2. After the sale deeds were executed, the Respondent No. 3 and her son (Respondent No. 4) challenged the sale deeds by filing a suit for declaration and possession. The purchasers i.e., Respondent No. 1 and 2 also filed a suit seeking possession of the Suit Properties. The suit filed by the Respondent Nos. 3 and 4 were dismissed, while the suit for possession of the Respondent Nos. 1 and 2 was decreed by the trial court and confirmed by the High Court as well as the Supreme Court in appeal. After the decree in favour of the Respondent Nos. 1 and 2 became final, execution proceedings were initiated. During the pendency of the litigation between the parties, the Respondent 3 and 4 sold the Suit Properties multiple times including in favour of the Appellant and three other persons. In addition, several other litigations were also initiated in relation to the Suit Properties including criminal proceedings. Further, a portion of the Suit Properties had also become subject matter of land acquisition proceedings.


The execution proceedings remained pending for more than 14 years. Various orders of the Executing Court passed from time to time, became the subject matter of writ petitions and appeals, which were disposed off by the High Court by a common Order dated 16 January 2020 (“Impugned Order”). The High Court adopted a fair and balanced approach by inter alia directing the Executing Court to appoint a Court Commissioner to verify the identity of the suit properties and dispose the execution proceedings within a period of six months.

The Appellant challenged the Impugned Order before the Supreme Court


MANDATORY DIRECTIONS


While the Supreme Court did not find any merit in the Special Leave Petition, it proceeded to lay down directions for speedier execution of decrees. The Supreme Court noted the large pendency of execution proceedings and the large number of instances of abuse of process of Execution Court. The Supreme Court specifically observed, “The course of the litigation highlights the malaise of constant abuse of procedural provisions which defeats justice, i.e. frivolous attempts by unsuccessful litigants to putting up spurious objections and setting up third parties, to object, delay and obstruct the execution of a decree.


Accordingly, with a view to reduce delays in the execution proceedings, the Supreme Court passed the following directions, by exercising its powers under Article 142 read with Article 141 and Article 144 of the Constitution of India:


  1. In suits relating to delivery of possession, the trial court must examine the parties to the suit under Order X of the CPC in relation to third party interest and further exercise the power under Order XI Rule 14 of the CPC asking parties to disclose and produce documents, upon oath.

  2. Where the possession is not in dispute, the court may appoint commissioner to assess the accurate description and status of the property.

  3. After examination of parties under Order X of the CPC or production of documents under Order XI of CPC or receipt of commission report, the court must add all necessary or proper parties to the suit, to avoid multiplicity of proceedings and make such joinder of cause of action in the same suit.

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

  5. The court must, before passing the decree, pertaining to delivery of possession of a property ensure that the decree is unambiguous regarding description and status.

  6. In a money suit, the court must invariably resort to Order XXI Rule 11 of the CPC, ensuring immediate execution of decree for payment of money on oral application.

  7. 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.

  8. The court may, at any stage, using powers under Section 151 CPC, demand security to ensure satisfaction of any decree.

  9. The court exercising jurisdiction under Section 47 or under Order XXI of CPC, must not issue notice on an application of third-party claiming rights in a mechanical manner. Court should refrain from entertaining application(s) already considered by the court while adjudicating the suit.

  10. The court should allow taking of evidence during the execution proceedings only in exceptional and rare cases where the question of fact could not be decided by resorting to any other expeditious method.

  11. The court, where it finds the claim to be frivolous or mala fide, resort to Sub-rule (2) of Rule 98 of Order XXI as well as grant compensatory costs in accordance with Section 35A.

  12. 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.

  13. Executing court must dispose of the execution proceedings within six months from the date of filing.

  14. The executing court may direct the concerned police station to provide police assistance to such officials who are working towards execution of the decree.

  15. Judicial academies must prepare manuals and ensure continuous training through appropriate mediums to the court personnel/ staff executing the warrants, carrying out attachment and sale and any other official duties for executing orders issued by the executing courts.

The above directions are required to be mandatorily complied with by all the courts. Additionally, the Supreme Court directed all the High Courts to reconsider and update all the Rules relating to execution of decrees, made under exercise of its powers under Article 227 of the Constitution and Section 122 of CPC, within one year of the date of this order to ensure their consonance with CPC and the above directions.


CONCLUSION


The Supreme Court vide its judgement has examined the frivolous attempts made by unsuccessful litigants, to put up spurious objections and set up third parties, to object, delay and obstruct the execution of a decree, and thus, has formulated well thought out directions to deal with the same. The Supreme Court has with a pragmatic approach, laid down these directions, which can ensure that a judgment debtor or any person instigated or raising frivolous claims, shall not be able to delay the execution of a decree. As noted in the judgment itself, as on 31 December 2018 there were 11,80,275 execution petitions pending in subordinate courts. The directions, if strictly implemented, would not only ensure expeditious execution of decrees leading to finality of litigation, but it would also aid in reduce the huge pendency of cases which has marred the judiciary for decades.


Contributed by Khaitan & Co


The above article is authored by Ajay Bhargava (Partner), Arvind Ray (Partner) and Vansha Sethi Suneja (Senior Associate).