2021 (6) TMI 1156 - HC - Indian Laws

Seeking modifications in the guidelines issued in Bhandari Engineers-II - HELD THAT - The modifications are directed to be incorporate in the guidelines. These directions are being issued by this Court in exercise of powers under Section 30 and 151 and Order XXI Rule 41 of the Code of Civil Procedure read with Sections 106 and 165 of the Indian Evidence Act and Article 227 of the Constitution of India. Paras 54 to 83 reproduced in paragraph 6 of this judgment are substituted in Bhandari Engineers-II Judgment and the modified judgment is attached hereto and is named as Bhandari Engineers-III Judgment. The Execution Courts shall henceforth follow Bhandari Engineers-III in execution cases.

Issues Involved:
1. Modification of guidelines for execution of decrees/awards.
2. Specific procedures for execution proceedings filed within two years of the decree/award.
3. Procedures for execution proceedings initiated after two years of the decree/award.
4. Restraint on judgment-debtor from transferring assets.
5. Formats of notices to judgment-debtor.
6. Detention of judgment-debtor for failure to file affidavit of assets.
7. Verification of assets of the judgment-debtor.
8. Imposition of costs and consequences for raising false claims.
9. Powers of the Execution Court.
10. Restitution of the decree-holder for delays and obstruction.
11. Application of modified guidelines to various execution proceedings.

Detailed Analysis:

Modification of Guidelines for Execution of Decrees/Awards:
The court has laid down new guidelines to address the execution of decrees/awards, initially set in Bhandari Engineers-I and modified in Bhandari Engineers-II. These guidelines have been further refined based on suggestions from amici curiae to ensure comprehensive and effective execution proceedings.

Specific Procedures for Execution Proceedings Filed Within Two Years of the Decree/Award:
If the execution is filed within two years and the decree-holder has disclosed the assets of the judgment-debtor, the court shall attach the assets and direct the judgment-debtor to deposit the decretal amount within 30 days. If the assets are not disclosed, the court will issue a notice and attach the assets, directing the judgment-debtor to deposit the amount within 30 days. Failure to deposit the amount will require the judgment-debtor to file an affidavit of assets.

Procedures for Execution Proceedings Initiated After Two Years of the Decree/Award:
For executions filed after two years, the court will issue a notice to the judgment-debtor to show cause why the decree should not be executed. Directions for deposit, attachment, and affidavits will be considered post-service of the notice unless a case under Order XXI Rule 22 of the CPC is made out.

Restraint on Judgment-Debtor from Transferring Assets:
The court can restrain the judgment-debtor from transferring or disposing of assets up to the decretal amount, except for ordinary business activities like salary payments. This ensures the assets remain available to satisfy the decree.

Formats of Notices to Judgment-Debtor:
The court has prescribed specific formats for notices to be issued to different types of judgment-debtors, ensuring clarity and uniformity in communication.

Detention of Judgment-Debtor for Failure to File Affidavit of Assets:
If the judgment-debtor fails to file the required affidavit, the court may consider detention in civil prison for up to three months. A show cause notice and opportunity for hearing must precede the detention order.

Verification of Assets of the Judgment-Debtor:
The decree-holder is responsible for verifying the disclosures made in the affidavits. The court may order an investigation by a government agency or forensic audit if necessary. Interrogatories and document production may also be ordered to ensure complete disclosure.

Imposition of Costs and Consequences for Raising False Claims:
The court emphasizes imposing actual costs to deter false claims and frivolous litigation. False claims may lead to prosecution under Section 340 CrPC for offenses under Section 209 IPC.

Powers of the Execution Court:
The court can issue various directions, such as garnishee orders, inspection of assets, auditor reports, and appointing receivers or local commissioners to ensure effective execution.

Restitution of the Decree-Holder for Delays and Obstruction:
The court aims to place the decree-holder in the position they would have been if the decree had been promptly satisfied, addressing losses due to delays and obstruction.

Application of Modified Guidelines to Various Execution Proceedings:
The modified guidelines apply to all execution proceedings, including those under the Arbitration and Conciliation Act, Motor Accident Claims Tribunals, SDM, Debt Recovery Tribunals, Consumer Protection Act, and NCLT/NCLAT.

Conclusion:
The court has issued these directions under its powers to ensure effective execution of decrees/awards, addressing delays and ensuring compliance by judgment-debtors. The modified guidelines, named Bhandari Engineers-III, are to be followed in all execution cases, with copies sent to Principal District Judges and the Delhi Judicial Academy for dissemination and training purposes.

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