2017 (3) TMI 1062 - SC - Companies Law

Rejecting the prayer of the appellant/plaintiff/decree-holder to eschew evidence of the respondent/defendant/judgment-debtor in a proceeding under Section 47 of the Code of Civil Procedure, 1908 as well as to dismiss such application as not maintainable - Held that - Having regard to the contextual facts and the objections raised by the respondent, we are of the unhesitant opinion that no case has been made out to entertain the remonstrances against the decree or the application under Section 47 CPC. Both the Executing Court and the High Court, in our comprehension, have not only erred in construing the scope and ambit of scrutiny under Section 47 CPC, but have also overlooked the fact that the decree does not suffer either from any jurisdictional error or is otherwise invalid in law. The objections to the execution petition as well as to the application under Section 47 CPC filed by the respondent do not either disclose any substantial defence to the decree or testify the same to be suffering from any jurisdictional infirmity or invalidity. These are therefore rejected. On a consideration of all relevant aspects in the entirety, we are thus disinclined to sustain the impugned orders and hereby set-aside the same. The appeals are allowed. The Executing Court would proceed with the execution proceedings and take it to the logical end with utmost expedition. No costs.

Issues Involved:
1. Maintainability of the application under Section 47 of the Code of Civil Procedure (CPC).
2. Executability of the decree.
3. Allegations of fraud and collusion.
4. Jurisdictional errors and nullity of the decree.

Detailed Analysis:

1. Maintainability of the Application under Section 47 CPC
The appellant challenged the maintainability of the respondent's application under Section 47 of the CPC, which was filed to resist the execution of the decree. The Executing Court and the High Court allowed the respondent to introduce oral and documentary evidence to support his objections. The Supreme Court, however, emphasized that the scope of Section 47 CPC is limited to questions relating to the execution, discharge, or satisfaction of the decree and does not extend to re-examining the merits of the case. The Court concluded that both the Executing Court and the High Court erred in their interpretation of Section 47 CPC, as the objections raised by the respondent did not pertain to the decree's executability but rather to its merits, which is beyond the purview of Section 47 CPC.

2. Executability of the Decree
The appellant argued that the decree did not suffer from any jurisdictional error and was executable in law. The Supreme Court noted that the decree was passed after the respondent failed to file a written statement and did not cross-examine the appellant's witness, despite being given the opportunity. The respondent's subsequent actions, including filing a defective appeal and a delayed review petition, did not invalidate the decree. The Court reiterated that an executing court cannot go behind the decree or question its correctness unless it is a nullity or suffers from jurisdictional infirmity. The Supreme Court held that the decree was valid and executable, and the objections raised by the respondent were frivolous and aimed at delaying the execution.

3. Allegations of Fraud and Collusion
The respondent alleged fraud and collusion between his counsel and the appellant, claiming that his counsel deliberately failed to file a written statement or take necessary steps, resulting in an ex-parte decree. The Supreme Court found these allegations to be speculative and unsupported by evidence. The Court observed that the respondent had been actively involved in the transactions and had represented both firms in the suit. The allegations of fraud and collusion were deemed self-serving and insufficient to render the decree invalid.

4. Jurisdictional Errors and Nullity of the Decree
The respondent contended that the decree was invalid due to the incorrect naming of one of the firms and the non-joinder of his wife, who was the actual proprietor of one of the firms. The Supreme Court held that these errors did not affect the jurisdiction of the court or render the decree a nullity. The Court emphasized that the identity of the firms and their representation by the respondent were not in dispute, and such errors did not constitute a jurisdictional infirmity. The decree was found to be valid and enforceable.

Conclusion
The Supreme Court set aside the orders of the Executing Court and the High Court, holding that the objections raised by the respondent under Section 47 CPC were not maintainable and did not disclose any substantial defence to the decree. The Court directed the Executing Court to proceed with the execution proceedings and bring them to a logical conclusion with utmost expedition. The appeals were allowed, and no costs were awarded.

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