User talk:Virendra Kumar Tyagi

By- Anubhav Tyagi(Advocate Delhi High Court).

This document is helpful for getting procedural clarity regarding the execution proceedings. It is helpful for the people working in the Finance Industry.

BRIEF INTRODUCTION

This document seeks to resolve or answer some of the basic questions raised by our collection team. It addresses the issues and difficulties which come in the way of our collection team while seeking the decree enforced against the defaulters i.e. in the execution. It has been observed that there are certain technical issues which can be addressed only through almighty laws and legal practices. We have tried to resolve the issues in totality and with brevity as to the arrest, attachment and sale involved in the process of execution.

The term “EXECUTION” in its widest sense signifies the enforcement or giving effect to a Decree, Judgment, Award and Order of a court of justice. In generic sense it is the enforcement of decrees and orders by the process of the court, so as to enable the decree holder to realize the fruits of the decree. The execution stands complete when the Judgment Creditor (decree holder) gets money or other thing awarded to him by the judgment, decree, order and award. It is one of the most important parts of the code and is one of the lengthiest orders as all the proceedings become futile without proper procedure of the execution.

As per our needs and requirements, there are certain provisions which are very important as to recovery and collection of the dues. Here we would be discussing the modes of execution as without its awareness we would not be able to choose the best mode of execution suitable for the particular defaulter. Under the CPC it is the reasonable and equitable discretion of the Judgment creditor to choose the modes of execution subject to the provisions of the code. The best part as to the choosing of the mode of execution is the discretion of choosing one of the alternate modes available or some of the modes taken cumulatively. As we have seen previously, there are three kinds of warrants which have acted as a great weapon and have led to notorious defaulting people to settle the matter. These three weapons are arrest and detention, attachment and sale and sale without attachment. There are two more important provisions i.e. Precept Order and Garnishee Order which helps in execution and is worth to be discussed in this document.

1. Who can initiate execution? Ans. Decree-holder, Legal Representative of the decree-holder (if decree holder is dead), Representative of the decree-holder, Any person claiming under the decree holder, Transferee of the decree holder, if the following conditions are satisfied: a.	the decree must have been transferred by an assignment in writing or by operation of law; b.	the application for execution must have been made to the court which passed the decree; c.	Notice and opportunity of hearing must have been given to the transferor and the judgment-debtor in case of assignment by transfer.

2. Whether court can stay execution? Ans. The executing court can very well stay the execution on the sufficient cause being shown and on the judgment-debtor furnishing security or fulfilling such conditions, as may be imposed on him. This stay of execution can be granted for reasonable time to enable the judgment-debtor to apply to the court which has passed the decree or to the appellate court for an order to stay execution. But this stay can not be granted in case of execution of the award passed in the arbitration proceedings. The only remedy to get the execution of the award stayed is Section 34 of the Arbitration and Conciliation Act, 1996 which provides for setting aside of the arbitral award.

3. How we can initiate arrest of the judgment debtor in the execution proceedings? Ans. As we know that one of the modes of getting the decree executed is the arrest and detention of the JD. It is the best way of creating a pressure over the erring and defaulting hirers having malafide motive to not to pay their debts. Where Decree is for payment of money, it can be executed by arrest and detention of the judgment-debtor. The arrest of the judgment-debtor can only be initiated with regard to money decree, if the decretal amount exceeds two thousand rupees.

Procedure for initiating Arrest: - Where a money decree has remained unsatisfied for a period of thirty days, the court may, on the application of the decree-holder, require the judgment debtor to make an affidavit stating the particulars of his assets and also decree holder has to pay subsistence allowance. Here to file such an application and affidavit we must have the knowledge of the assets of the JD. Therefore we suggest our sales team and credit team (FI team) to enquire in full about the assets of all the debtors or customer while advancing credit and conducting FI. Also we can get the record of the assets of the JD through RTI’s. RTI’s can be filed to extract information of the immovable property from SDM, Tehsil Office, Patwari, Lekhpal, Development Authorities, Aavas Vikas, Banks, Municipal Corporations and Municipalities etc.

Procedure before arrest and detention of the JD: - Where the decree is for payment of money and the application is for arrest and detention of the JD, the court shall, instead of issuing a warrant of arrest, issue a Notice (notice of rule 37 order 21) calling upon the JD to appear and show cause why he should not be committed to civil prison in execution of the decree. The purpose of issuing notice is to afford protection to honest debtors incapable of paying dues for reasons beyond their control. Where the judgment-debtor appears before the court in obedience to such notice, and if the court is satisfied that he is unable to pay the decretal amount, the court may reject the application for arrest. On the other hand, where the JD appears but fails to show cause to the satisfaction of the court against the arrest and detention, the court may, subject to the provisions of the code, make an order of detention. It depends upon the discretion of the court to order arrest of the JD after issuing notice of rule37 of order 21. This rule is to safeguard honest, poor and indigent person and alongside to punish people who has sufficient means to pay decretal dues but is not willing to pay out of mala fides.

Guiding Principal behind Arrest and Detention: -

This provision of Arrest and detention of the JD protects and safeguards the interests of the decree-holder. If the judgment-debtor has means to pay and still refuses or neglects to honour his obligations, he can be sent to civil prison. Mere omission to pay does not result in arrest or detention of the JD. Before ordering arrest, the court must be satisfied that there was an element of mala fide or bad faith, attitude of refusal on demand leading to disowning of the obligation under the decree.

Who can not be Arrested : - a.	a woman (our sales team should refrain in extending loan to the ladies as it not possible to get a lady arrested in the process of execution. Team should try to advance credit in name of some male members of the family rather than females); b.	Judicial officers; c.	Members of legislative body ex- MLA, MP, Municipal councilors (Parshad or Sabhasads), Jila Panchayat members and President (Adyaksha), Gram Panchayat members and President (Pradhan), members of district planning board, and Mayor. d.	A JD, where the decretal amount does not exceed rupees 2000. e.	Any person or class of persons, whose arrest, according to the State Govt., might cause danger or inconvenience to the public. This provision also provides us a caution to advance credit to persons having public support like dharma gurus, religious leaders, union leaders, association leaders, student leaders, etc.

Period of Detention: Where decretal amount is below rupees 2,000 - no detention can be ordered. Where decretal amount is above rupees 5,000 but below rupees 10,000 - then up to 3 months. Where decretal amount is above rupees 2,000, but below rupees 5,000 - then up to 6 weeks. No person can be detained in civil prison beyond the period of 3 months.

How JD can seek release or avoid arrest: a.	When he pays the amount mentioned in the warrant, b.	On satisfying the decree, c.	When decree holder requests for the same, d.	On the omission of the decree holder to pay subsistence allowance, e.	On grounds of ill health and poor medical conditions.

Note- Quantum of subsistence allowance is to determined by the court by exercising its discretion reasonably.

4. Issues related to the attachment of salary. Ans. Now it is well settled that salary of all the employees is attachable irrespective of the department, sector and wings. Now there is no distinction as to the private and public sector employees. However there is a portion of salary that is not attachable. This rule provides that first 1,000 rupees and two-third of the remainder is exempt.

Here it becomes imperative to know the definition of the ‘salary’- “total monthly emoluments whether on duty or on leave”. Dearness allowance is exempt from attachment.

Exemption from repeated attachment of salary- Where the salary of the JD has been under continuous attachment for 24 months than it becomes totally exempt from further attachment. Attachment of salary beyond 24 months is not permissible.

•	Remuneration of temporary employee on daily fee, e.g. daily fee payable to advocate engaged to conduct a civil suit on behalf of Govt., is salary. Therefore fee which is collected by the advocate is attachable but practical difficulty comes in knowing the amount of fee collected by the advocate, in case they are not associated with work of any organization and practices generally in the court.

Following pay and allowances can not be attached (Exceptions):- a.	Army Officers (people governed by Army Act.) b.	Naval Officers, (people governed by Navy Act.) c.	Air-force Officers (people governed by Air-force Act.) d.	Welfare funds like stipends and gratuities allowed to pensioners of the state govt. and central govt., political pension, family pension funds notified in the Official Gazette. e.	Wages of skilled, unskilled and semiskilled laborers and domestic servants. f.	Provident fund, money payable under a policy of life insurance of the JD. Therefore it gives a signal to be reluctant in financing vehicle to the above people as it becomes very difficult to recover dues from these people by the means of attachment of salary and welfare funds.

5. Whether agricultural produce, houses and other buildings belonging to the agriculturists, laborers or domestic servants, cattle, tools of husbandry, can be attached? Ans. Agricultural produce is partially exempt in certain States and the exempt portion is the one which is necessary for the subsistence of the JD (portion exempt depends upon the state and discretion of the court). Therefore up to some extent agricultural produce can be attached. Houses, other buildings and land attached to such building belonging to the agriculturist under his occupation used for cultivating the land can not be attached. Also he can not waive off his protection by giving consent. Agriculturist is a person who cultivates his land personally and depends for his livelihood mainly on the agricultural land and income derived out of such land. Cattle can be attached if a person does not depend completely upon those cattle for his livelihood and to determine such a question is the prerogative of the court. Cattle used in agricultural purposes are not exempt. Therefore cattle of a dairy owner can not be attached if his livelihood completely depends up on it. Tools of husbandry are the basic tools used in agriculture and in other vocations. Without presence of such tools even the basic activity of the above vocations can not be performed and it has direct impact over the livelihood of an individual. Such tools are exempt from attachment in execution. There are certain things which are already ascertained by the court as tools of husbandry however it is the reasonable discretion of Error! No index entries found.agriculturist to cultivate his land are exempt.

6. Whether ancestral property or joint family property can be attached and sold in the process of execution? Ans. There is no bar or restriction on the attachment and sale of the ancestral and joint family property but to understand it in the holistic manner we must segregate the issue in two points:- a. Credit taken by father and decree obtained by the creditor against the father alone: - In such a case the creditor can attach and sell the interest of the father and son in the joint family property. The straight jacket formula for this is to see whether father has the power to dispose of the property for debts incurred by him. If he has disposing power then whole of the property which can be so disposed can be attached and sold out irrespective of the fact that it is JFP or ancestral property. For this it is important to have name of the JD in the Khasra, khatoni or in the records registry maintained by the sub-registrar. Son can not claim to get his portion of share separated and exempted from attachment and sale. In case of death of the father, the son has to pay the debt incurred by the deceased father in accordance with the principal of pious obligation found under mitakshara law. Again he can not claim protection of the estate or property on the pretext of the property being JFP or ancestral property. Whole of the property is liable to be attached and what he can safeguard or protect from attachment and sale is his personal property, in case credit was obtained by his father.

SUGGESTION- While advancing loan our credit team should ask for the documents of the JFP and ancestral property, if the case is related to any joint family or to the person who belongs to rural background. After looking at the name in the document they should try to advance loan in the name of the person who’s name appears in such document rather than in the name of his son or so. This approach would increase the recovery and in turn profit of the company as it would make easy for the legal team to get the decree executed.

b. Credit taken by the son who has share in the ancestral property: - In such a case his share in the JFP or ancestral property has to be determined, segregated, attached and sold. It is his personal property which can be proceeded against in execution. Here also the formula as to which property can be attached and sold is that of looking at the disposing power of the JD regarding the property irrespective of the nature of the property.

Garnishee Order: “Garnishee” means judgment-debtor’s (defaulter’s) debtor. He is the person who is liable to pay a debt to the judgment debtor (defaulter) or to deliver any movable property to him. “Garnishor” is a judgment creditor or decree holder who initiates garnishee proceedings to reach JD’s money or property held or possessed by third party (garnishee). “Garnishment” is the proceeding by which the decree holder seeks to get the property of the JD from the third party. “Garnishee order” is an order passed by the court ordering a garnishee not to pay money to the JD because he is indebted to the decree holder and he needs to pay back to the decree holder. By this process, an executing court may order a third party to pay to the decree holder the debt from him to the JD. This kind of order is discretionary and the court may refuse to pass such order if it is inequitable. Garnishee proceedings can not be taken in respect of a debt which can not be attached as per the CPC.

Precept Order- A precept is an order or direction given by the court which passed the decree to a court which would be competent to execute the decree to attach any property belonging to the JD. Such kind of order may be obtained by the decree holder on the presentation of the application to the court which passed the decree and is obtained in the cases where the property of the JD which is liable to be attached is there in the jurisdiction of some other court. This is merely an order given to facilitate execution through interim attachment of the property (generally for 2 months) and thus prevents alienation of the property by the JD. This order does not have the effect of transferring the decree for execution. An order for permanent attachment is therefore illegal and such an order can not be obtained if the property is situated outside India.

7. How can we proceed as to the sale of attached property? Ans. It is very clear through the all mighty Laws that any property attached by it and liable to sale shall be sold and the proceeds out of such sale should be used for satisfying the decree. In order to sell the attached property it must be within its territorial jurisdiction. Sale is to be conducted by an officer of the court or by such other person as the court may appoint in this behalf and shall be made by public auction in manner prescribed. Proclamation and publication of the intended sale is to be made for making the sale valid. Content of Proclamation- a.	the property to be sold and such part of the property which would be sufficient to satisfy the decree. b.	revenue payable to the Govt., c.	any encumbrance, loan or other liability over the property, d.	every other thing which the court considers material for the purchaser of the property to know in order to judge the nature, character and value of the property, e.	the amount for the recovery of which the sale is ordered.

Proclamation must contain the estimate of the value of the property given by either or both of the parties but court shall not give its own estimate of the value of the property. As per general practice adopted by our Advocates, the estimate is provided by the dealers who deal in selling of second hand cars. I(f in the public auction such value is not provided by the bidders then sale is done in the favor of such highest bidder.

Court may summon any person in regard to sale as to the valuation of the subject matter and the connected matters therein. Notice as to the sale must be sent to the JD but it is not necessary to send the copy of the proclamation. Proclamation of sale or setting the terms of sale is not adjudication but an order of administrative kind therefore it is non- appealable. Revision lies in place of appeal.

BIBLIOGRAPHY

1.	Sudipto Sarkar and V.R. Mamohar, Sarkar Code Of Civil Procedure, Wadhwa and Company, Ninth Edition 2ooo, Nagpur. 2.	C.K. Takwani, Code Of Civil Procedure, Eastern Book Company, Sixth Edition 2009, Lucknow. 3.	Jolly George Varghese v. Bank of Cochin (1980) 2 SCC 360: AIR 1980 SC 470. 4.	Accounts Officer Railway v. Radhakissen, A1959 C 574. 5.	Ghurey v. Sanwala, 61 IC 777. 6.	Shrimant v. Bhalchandra, A 1961 SC 589; pg- 348 Sarkar Code of Civil Procedure 9th edition,2000. 7.	Faqir v. Harnam, A 1967 SC 727.

By- Anubhav Tyagi (Advocate Delhi High Court).