2021 (10) TMI 984 - SC - Indian Laws

Interpretation of statute - Assignee of the decree holder in terms of Order XXI Rule 16 of the Code of Civil Procedure, 1908 - scope of Section 146 of the CPC read with Section 2(1)(g) of the Arbitration Conciliation Act, 1996 - significant aspect is the addition of the explanation to Order XXI Rule 16 of the CPC, which was added pursuant to the recommendation made by the Law Commission of India in its 54th Report on the CPC in 1973, which in turn was a sequitur to the conflicting views of the High Courts on the matter in issue. HELD THAT - It is an admitted position that the explanation was added to Order XXI Rule 16 which did not exist earlier, pursuant to the recommendations made by the Law Commission of India in its 54th Report on the Code of Civil Procedure, 1908. The Explanation was so added due to conflicting High Courts decisions on the question, i.e., whether a person who does not have a written assignment of the decree, but who has succeeded to a decree holders right, is entitled to such decree under Section 146 of the CPC. The objective of amending Order XXI Rule 16 of the CPC by adding the Explanation was to deal with the scenario as exists in the present case, to avoid separate suit proceedings being filed therefrom and to that extent removing the distinction between an assignment pre the decree and an assignment post the decree - Once the legislative intent is clear, and the law is amended, then the earlier position of law cannot be said to prevail post the amendment and it is not in doubt that the present case is one post the amendment. Appeal allowed.

Summary

Issues Involved:
1. Validity of the Assignment Deed under Order XXI Rule 16 of CPC.
2. Applicability of Section 146 of CPC in execution proceedings.
3. Interpretation of amendments to Order XXI Rule 16 of CPC.
4. Jurisdiction of executing court to determine the validity of the Assignment Deed.

Detailed Analysis:

Issue 1: Validity of the Assignment Deed under Order XXI Rule 16 of CPC

The appellants claimed rights based on an assignment deed executed by Shri S.N. Kanungo, asserting that they were authorized representatives entitled to the decretal amount. They relied on the amended provisions of Order XXI Rule 16 of CPC, which allows a transferee of a decree to apply for execution. The respondents disputed the authenticity of the Assignment Deed, arguing that it had not surfaced for 17 years and was not mentioned in any legal notices. The executing court rejected the appellants' claims, stating that the Assignment Deed and cheque had not been proved in the proceedings. The Supreme Court noted that the amendments to Order XXI Rule 16 were significant and aimed to address such scenarios, emphasizing that the explanation added in 1976 was intended to remove the distinction between assignments made before and after a decree.

Issue 2: Applicability of Section 146 of CPC in execution proceedings

The appellants invoked Section 146 of CPC, which allows proceedings to be taken by or against representatives of a party. They argued that their claim under the assignment deed fell within the purview of Section 146, making them entitled to the decretal amount. The respondents contended that the appellants were not legal representatives of Shri S.N. Kanungo and that their claim should be adjudicated in separate civil proceedings. The Supreme Court acknowledged that the amendments to Order XXI Rule 16 clarified that a transferee of rights in the subject matter of the suit could obtain execution without a separate assignment of the decree, thus supporting the appellants' reliance on Section 146.

Issue 3: Interpretation of amendments to Order XXI Rule 16 of CPC

The Supreme Court analyzed the amendments made to Order XXI Rule 16 in 1976, which added an explanation to address conflicting High Court decisions. The explanation clarified that nothing in Order XXI Rule 16 would affect the provisions of Section 146, allowing a transferee of rights in the property to apply for execution without a separate assignment of the decree. The Court emphasized that the legislative intent behind the amendment was to incorporate equitable principles and avoid separate suit proceedings, thus supporting the appellants' claim. The Court concluded that the amendments removed the distinction between assignments made before and after the decree, aligning with the appellants' position.

Issue 4: Jurisdiction of executing court to determine the validity of the Assignment Deed

The Supreme Court held that the executing court had the jurisdiction to determine the validity of the Assignment Deed and the cheque. The Court clarified that the appellants' objections could not be rejected at the threshold based on the timing of the assignment. The matter was remitted back to the executing court for determination, emphasizing the need for a timely resolution given the considerable delay. The Court did not delve into the validity of the Assignment Deed or the cheque, leaving it to the executing court to decide.

Conclusion:

The Supreme Court set aside the impugned judgments and remitted the matter back to the executing court for determination. The Court emphasized that the amendments to Order XXI Rule 16 of CPC were intended to address scenarios like the present case, allowing transferees to apply for execution without a separate assignment of the decree. The executing court was directed to determine the validity of the Assignment Deed and the cheque, ensuring a timely resolution. The appeals were allowed, with each party bearing its own costs.