Banking/Bank/Code of Civil Procedure, 1908; Proviso (g) to s.60(1):
Recovery of loan – Loan for purchasing a Vehicle – Not repaid – Filing of suit by the Bank against principal debtor and guarantor – Decreed by trial Court directing to recover the amount by auction sale of hypothecated vehicle and remaining amount from other properties of loanee and guarantor – Execution of decree – Executing Court directing attachment of Fixed Deposit Receipts in respect of the amount received by guarantor by way of pension and gratuity as vehicle was not traceable – Challenge to – High Court directing the trial Court to pass an appropriate order – Executing Court directing release of F.D.R. in view of proviso (g) to s.60(1) of C.P.C. – Filing of Revision petition by Bank – High Court directing the guarantor to deposit certain sum which could be adjusted out of F.D.Rs. of the guarantor – Review Petition dismissed by High Court – Correctness of – On appeal, Held: High Court erred in altering the decree of the trial Court in exercise of revisional jurisdiction by directing the decretal amount to be satisfied from Fixed Deposit Receipts held by Bank in respect of pension and gratuity of the guarantor in contravention to proviso (g) to s.60(1) of C.P.C. – The amount received by way of pension and gratuity did not lose their character and continued to be covered by proviso (g) to s.60(1) CPC – Right to proceed against either the guarantor or the principal debtor restricted in terms of order of the trial Court – Nothing is recorded in the impugned judgment by the High Court as to the steps taken by the Bank for recovery of the vehicle for auction sale in order to recover decretal amount – Hence, the impugned order cannot be sustained and set aside – Order of the Executing Court restored – Executing Court – Power of, in issuing order for attachment of F.D.Rs. of pension and gratuity. Code of Civil Procedure, 1908 – S. 115 – Power of the High Court in altering decree of the trial Court, in exercise of revisional jurisdiction – Discussed. Respondent No.2 took a loan of Rs.83, 000/- from respondent No.1, Bank for purchase of a motor vehicle. Appellant stood guarantee for the loanee. Since loanee could not repay the loan, Bank filed a suit for recovery of the loan against the loanee and the guarantor. The suit was decreed by the trial Court for a sum of Rs.1, 10, 360/-with interest with a direction to recover the said amount by auction sale of the hypothecated vehicle and the amount, if any, which remained to be paid could be recovered from the other properties of the loanee and the guarantor. As the vehicle was not traceable, the Bank sought for order of attachment of Fixed Deposits of the guarantor allegedly made from the amounts received by him by way of pension and gratuity. The Executing Court ordered attachment of the Fixed Deposit Receipts. Aggrieved by the order of the Executing Court, the guarantor moved the High Court. The High Court directed the Executing Court to pass appropriate orders. The Executing Court directed release of F.D.Rs. as the amount in the F.D.Rs. could not be attached under proviso (g) to s.60(1) of C.P.C. It further directed that the vehicle was to be auctioned first. Aggrieved, the Bank filed a revision petition. The High Court directed the guarantor to deposit a sum of Rs.50, 000/- forthwith and also to furnish details of the movable and immovable properties of the Principal debtor. The guarantor moved an application praying for adjusting the sum of Rs.50, 000/- out of the F.D.Rs. and balance, if any, could be returned to him. The High Court disposed of the revision petition, inter alia, directing that the amount of Rs.50, 000/- out of the guarantor’s Fixed Deposit Receipts could be adjusted in the first instance. It also directed that on the vehicle being furnished along with solvent security before the Executing Court, the remaining amount under the Fixed Deposit Receipt would be released to the guarantor. Aggrieved, the guarantor filed a Review Petition, which was dismissed in limine by the High Court. Hence the present appeals. Appellant, inter alia, contended that it was clearly the intention of the trial Court that the sale proceeds of the hypothecated vehicle should first be utilized for realization of the decretal amount before touching the other properties of the defendants for recovery of the said dues. On behalf of the Bank, it was submitted that despite several attempts having been made to locate the vehicle, the same could not be traced and the Bank, therefore, had no alternative but to proceed against the appellant in his capacity as the guarantor for recovery of the dues; that the provision of proviso (g) to Section 60(1) C.P.C. would apply only to the source of the amounts received by way of retiral benefit, such as pension and gratuity, but not to payments made in respect thereof; and that once the monies covered by the provisions of the proviso to Section 60(1) of the Code had been paid to the concerned employee, they no longer retained their original character and were, therefore, amenable to attachment. Citation: 2008(15 )SCALE24 , – Allowing the appeals, the Court HELD: 1.1. The order impugned in the revision petition before the High Court did not attract the bar of the proviso to sub-section (1) of Section 115 of the Civil Procedure Code as it sought to finally decide the manner in which the decree passed in the Suit in question by the trial Court, was to be satisfied. However, this Court is also of the view that having regard to proviso (g) to Section 60 (1) of the Civil Procedure Code, the High Court committed a jurisdictional error in directing that a portion of the decretal amount be satisfied from the fixed deposit receipts of the appellant held by the Bank and in placing the onus on the appellant to produce the vehicle in question for being auctioned for recovery of the decretal dues. In other words, the High Court erred in altering the decree of the Trial Court in its revisional jurisdiction, particularly when the pension and gratuity of the appellant, which had been converted into Fixed Deposits, could not be attached under the provisions of the Code of Civil Procedure. [Para 24] [224-G-H; 225-A-B] Calcutta Dock Labour Board and ANOTHER v. Smt. Sandhya Mitra and Ors., [1985] 2 SCC 1; Union of India v. Wing Commander R. R. Hingorani, (1987) 1 SCC 551; Gorakhpur University and Ors. v. Dr. Shitla Prasad Nagendera and Ors., [2001] 6 SCC 591 and Union of India v. Jyoti Chit Fund and Finance and Ors., [1976] 3 SCC 607, relied on. 1.2. The High Court could not have gone behind the decree in the execution proceedings and the alteration in the manner of recovery of the decretal amount was erroneous and cannot be sustained. Even after the retiral benefits, such as pension and gratuity, had been received by the appellant, they did not lose their character and continued to be covered by proviso (g) to Section 60(1) of the Code. [Para 25] [225-D-E] 1.3.
The High Court, erroneously proceeded on the basis that a concession had been made by the appellant that he was willing to have the decretal amount adjusted partly from his fixed deposits, which represented his retiral benefits and that he had also volunteered to produce the vehicle before the Bank so that the same could be sold to recover the major portion of the dues.
Further-more, although the Bank was entitled to proceed both against the principal-debtor and the guarantor for recovery of its dues, the mode of recovery was prescribed by the Trial Court, which clearly indicates that the Bank should at first recover whatever amount it can from the sale of the vehicle.
The right of the Bank to proceed against either the principal-debtor or the guarantor stood restricted by the directions of the Trial Court. Except for recording that the vehicle was not traceable, nothing is recorded in the impugned judgment of the High Court as to what steps were actually taken by the Bank for recovery of the vehicle for sale in order to recover its decretal dues. [Para 26] [255-G-H; 256-A-C] Union of India v. Jyoti Chit Fund and Finance and Ors., [1976] 3 SCC 607, referred to. 1.4.
Instead of disturbing the order of the Executing Court, which was passed in consonance with the provisions of the Code of Civil Procedure, the High Court should have directed the respondent Bank and the Executing Court to seriously pursue the recovery of the vehicle or against any other property of the principal-debtor, having particular regard to the finding of the Executing Court that the said fixed deposits represented the retiral benefits of the appellant.
Hence, the order passed by the High Court is set aside and that of the Executing Court is restored. [Paras 26 and 27] [256- C-E] Case Law Reference : [1985] 2 SCC 1 relied on Para 15 [1987] 1 SCC 551 relied on Para 16 [2001] 6 SCC 591 relied on Para 16 [1976] 3 SCC 607 relied on Para 17 [1976] 3 SCC 607 referred to Para 17 Shobha, Harish Sharma and R.P. Yadav for the Appellant. Dhruv Mehta, Harshvardhan Jha, Yashrah Singh Deora and T.S. Sabarish (for M/s K.L. Mehta & Co.) for the Respondents.
Civil Appeal Nos 6440-41 of 2008
SPECIAL LEAVE PETITION (C) NOS.797-798 of 2006
Radhey Shyam Gupta ..Appellant
Vs.
Punjab National Bank & Anr. …Respondents
J U D G M E N T
ALTAMAS KABIR,J.
1. Leave granted.
2. On 28
th
May, 1986, the Respondent No.1 Bank
sanctioned a loan of Rs.83,000/- to Shri Durga
Prasad, the Respondent No.2 herein. The
appellant stood guarantee for the Principal
Debtor for repayment of the loan.
13. As the loan was not repaid by the Principal
Debtor, Durga Prasad, the Bank in 1992 filed
Suit No.66 of 1992 for recovery of its dues
against the respondent No.2 in his capacity as
the loanee and against the appellant in his
capacity as guarantor. The suit was decreed on
19
th
December, 1994, by the learned Additional
District and Sessions Judge, Bayana, DistrictBharatpur, in favour of the respondent No.1
`Bank for a sum of Rs.1,10,360/-, together with
interest at the rate of 12.5% per annum from
the date of institution of the suit till
realization. While decreeing the suit, the
trial Court directed as follows :-
“The plaintiff shall be entitled to
recover this amount by auction sale of
the hypothecated Matador Mahindra FC
RRD/1851. The plaintiff shall also be
entitled for cost of litigation. If
any amount remains to be paid even
after auction sale of the Matador, then
the same shall be recovered from other
properties of the defendants. The suit
of the plaintiff is hereby decreed
against the defendants in the aforesaid
terms.”
24. The aforesaid directions have created some
confusion in the execution of the decree.
5. For the purpose of executing the decree the
respondent No.1 Bank initiated execution
proceedings and though warrants for attachment
of the Matador were issued, the same were not
executed by the Bank on the ground that the
vehicle was not traceable and instead the Bank
sought attachment of the appellant’s Fixed
Deposits with the said Bank made with the
amounts received by him by way of pension and
gratuity. The Executing Court allowed the
Bank’s application and ordered attachment of
the appellant’s Fixed Deposit Receipts,
hereinafter referred to as “FDRs”. The
appellant moved the High Court against the
order of attachment and the High Court while
allowing the appellant’s application, directed
the trial Court to pass appropriate orders in
the light of the specific directions given in
the judgment and decree dated 19
th
December,
1994, for recovery of the decretal amount. The
3Executing Court by its order dated 1
st
November, 2002, directed release of the
appellant’s F.D.Rs and the pension amount with
a further direction that the hypothecated
Matador was to be auctioned first in terms of
the directions contained in paragraph 11 of the
Judgment dated 19
th
December, 1994. The
Executing Court also took the view that amounts
paid towards gratuity and pension could not be
attached in view of the provisions of proviso
(g) of Section 60(1) of the Code of Civil
Procedure, hereinafter referred to as “the
Code”.
6. The Bank filed a Revision Petition against the
said order of the Executing Court dated 1
st
November, 2002, and also applied for interim
orders therein. On 15
th
October, 2003, when
the matter came up before the High Court, the
appellant herein was directed to forthwith
deposit a sum of Rs.50,000/- with the Bank. He
was also directed to furnish the complete
4details of the movable and immovable properties
of the principal debtor with the stipulation
that in the event the Bank’s revision petition
failed, the amount to be deposited by the
appellant herein would be refunded to him with
interest at the rate of 9% per annum. Instead
of complying with the said direction, the
appellant herein moved an application
indicating that two Fixed Deposit Receipts
belonging to him of over a total value of
Rs.50,000/- were lying with the Bank and
instead of cash deposit of Rs.50,000/- the said
two Fixed Deposit Receipts could be adjusted
against the said sum to be deposited and the
balance, if any, could be returned to the
appellant herein.
SPECIAL LEAVE PETITION (C) NOS.797-798 of 2006
Radhey Shyam Gupta ..Appellant
Vs.
Punjab National Bank & Anr. …Respondents
J U D G M E N T
ALTAMAS KABIR,J.
1. Leave granted.
2. On 28
th
May, 1986, the Respondent No.1 Bank
sanctioned a loan of Rs.83,000/- to Shri Durga
Prasad, the Respondent No.2 herein. The
appellant stood guarantee for the Principal
Debtor for repayment of the loan.
13. As the loan was not repaid by the Principal
Debtor, Durga Prasad, the Bank in 1992 filed
Suit No.66 of 1992 for recovery of its dues
against the respondent No.2 in his capacity as
the loanee and against the appellant in his
capacity as guarantor. The suit was decreed on
19
th
December, 1994, by the learned Additional
District and Sessions Judge, Bayana, DistrictBharatpur, in favour of the respondent No.1
`Bank for a sum of Rs.1,10,360/-, together with
interest at the rate of 12.5% per annum from
the date of institution of the suit till
realization. While decreeing the suit, the
trial Court directed as follows :-
“The plaintiff shall be entitled to
recover this amount by auction sale of
the hypothecated Matador Mahindra FC
RRD/1851. The plaintiff shall also be
entitled for cost of litigation. If
any amount remains to be paid even
after auction sale of the Matador, then
the same shall be recovered from other
properties of the defendants. The suit
of the plaintiff is hereby decreed
against the defendants in the aforesaid
terms.”
24. The aforesaid directions have created some
confusion in the execution of the decree.
5. For the purpose of executing the decree the
respondent No.1 Bank initiated execution
proceedings and though warrants for attachment
of the Matador were issued, the same were not
executed by the Bank on the ground that the
vehicle was not traceable and instead the Bank
sought attachment of the appellant’s Fixed
Deposits with the said Bank made with the
amounts received by him by way of pension and
gratuity. The Executing Court allowed the
Bank’s application and ordered attachment of
the appellant’s Fixed Deposit Receipts,
hereinafter referred to as “FDRs”. The
appellant moved the High Court against the
order of attachment and the High Court while
allowing the appellant’s application, directed
the trial Court to pass appropriate orders in
the light of the specific directions given in
the judgment and decree dated 19
th
December,
1994, for recovery of the decretal amount. The
3Executing Court by its order dated 1
st
November, 2002, directed release of the
appellant’s F.D.Rs and the pension amount with
a further direction that the hypothecated
Matador was to be auctioned first in terms of
the directions contained in paragraph 11 of the
Judgment dated 19
th
December, 1994. The
Executing Court also took the view that amounts
paid towards gratuity and pension could not be
attached in view of the provisions of proviso
(g) of Section 60(1) of the Code of Civil
Procedure, hereinafter referred to as “the
Code”.
6. The Bank filed a Revision Petition against the
said order of the Executing Court dated 1
st
November, 2002, and also applied for interim
orders therein. On 15
th
October, 2003, when
the matter came up before the High Court, the
appellant herein was directed to forthwith
deposit a sum of Rs.50,000/- with the Bank. He
was also directed to furnish the complete
4details of the movable and immovable properties
of the principal debtor with the stipulation
that in the event the Bank’s revision petition
failed, the amount to be deposited by the
appellant herein would be refunded to him with
interest at the rate of 9% per annum. Instead
of complying with the said direction, the
appellant herein moved an application
indicating that two Fixed Deposit Receipts
belonging to him of over a total value of
Rs.50,000/- were lying with the Bank and
instead of cash deposit of Rs.50,000/- the said
two Fixed Deposit Receipts could be adjusted
against the said sum to be deposited and the
balance, if any, could be returned to the
appellant herein.
7. While disposing of the Revision Petition of the
Bank, the High Court noted in its judgment that
the appellant herein had undertaken that he
would furnish the Matador in question to the
Bank for the purpose of auction within a period
5of one week and the Bank would be free to
auction the same in accordance with the terms
of the decree. It was also noted that the
appellant herein was prepared to submit a
solvent security for realization of the balance
decretal amount, which may still remain due
after the adjustment of 50,000/- and the sale
price that would be fetched from the sale of
the matador.
8. In the light of the above, the order of the
Executing Court was set aside and in terms of
the decree as also the order passed by the High
Court on 15
th
October, 2003, the amount of
Rs.50,000/- out of the appellant’s Fixed
Deposit Receipts was directed to be adjusted in
the first instance. It was also directed that
on the Matador being furnished along with
solvent security before the learned Executing
Court by the appellant herein, the remaining
amount under the Fixed Deposit Receipt would be
released to him. It was further directed that
6on the Matador being produced, the decree
holder Bank would be entitled to realize the
decretal amount by sale of the Matador and
while realizing the balance of the decretal
amount, if any, through the solvent security to
be furnished by the appellant herein, the Fixed
Deposit Receipts, which were accepted to be the
appellant’s retirement benefits, were to be
returned to him.
9. On 5
th
April, 2005, the appellant filed a
Review Petition before the High Court in
respect of the order dated 28
th
February, 2005,
on the ground that the Revisional Court had
wrongly proceeded on the basis that the
appellant had given an undertaking to furnish
the Matador to the Bank and that he would also
submit a solvent security for realization of
the decretal amount, if any amount remained to
be recovered by the Bank after sale of the
Matador. The Review Petition filed by the
appellant was dismissed in limine by the High
7Court on 24
th
August, 2005, holding that no
case had been made out in the Review Petition
for review of the order dated 28
th
February,
2005.
10. The Special Leave Petition is directed against
the said orders of the High Court dated 28
th
February, 2005 and 24
th
August, 2005.
11. Ms. Shobha, learned advocate, who appeared for
the appellant, questioned the judgment and
order of the High Court mainly on three
grounds. Her first ground for challenge was
that the direction of the trial Court in its
decree was quite clear and there was no
ambiguity whatsoever which called for any
clarification by the High Court. She submitted
that the direction of the trial Court entitled
the decree holder Bank to recover the decretal
amount as well as the cost of litigation by
auction sale of the hypothecated vehicle, and
if any amount remained to be paid even after
8the auction sale of the Matador, then the same
could be recovered from the other properties of
the defendants. According to Ms. Shobha, the
plain meaning which emerges from such direction
entails the sale of the Matador first and after
adjustment of the sale price with the amount to
be recovered under the decree, any amount still
unpaid, could, at the second stage, be
recovered from the other properties of the
defendant. Ms. Shobha submitted that it was
clearly the intention of the trial Court that
the sale proceed of the hypothecated vehicle
should first be utilized for realization of the
decretal amount before touching the other
properties of the defendants for recovery of
the said dues.
12. In this regard Ms.Shobha referred to and
relied upon the decision of this Court in the
case of Industrial Credit and Development
Syndicate vs. Smithaben H. Patel and Ors.,
[1999 (3) SCC 80}, wherein faced with a
9situation where the trial Court had not
prescribed any mode for payment of the decretal
amount, except for fixing of instalments, it
was, inter alia, held that the general rule of
appropriation of payments towards a decretal
amount was that such an amount has to be
adjusted firstly, directly in accordance with
the direction contained in the decree, and in
the absence of such direction, adjustments are
to be made firstly in payment of interest and
costs and thereafter in payment of the
principal amount, subject to the exception that
the parties could agree to the adjustment of
the payment in any other manner despite the
decree.
13. The second ground urged by Ms. Shobha was that
although initially the appellant’s Fixed
Deposit Receipts were attached by the Executing
Court, ultimately, on objections being filed on
behalf of the appellant, the Executing Court by
its order dated 1.11.2002 came to the finding
10that the appellant’s Fixed Deposit Receipts
could not be attached in view of proviso (g) to
Sub-Section (1) of Section 60 of the Code of
Civil Procedure (hereinafter referred to as
‘the Code’). Ms.Shobha submitted that in the
revision filed by the Bank against the said
order of the Executing Court it was erroneously
recorded by the High Court that the appellant
had undertaken to produce the Matador before
the Bank so that the same could be sold for
recovery of the Bank’s dues and the balance
dues, if any, could then be recovered from a
solvent security to be provided by the
appellant. It was submitted that since such an
undertaking had not been given to the High
Court, a Review Petition was filed on behalf of
the appellant which was dismissed in limine.
Ms. Shobha also added that without making any
attempt to locate the Matador, so that the same
could be sold in keeping with the directions
given by the Trial Court for satisfaction of
the decree, the Decree Holder proceeded only
11against the appellant since it held the Fixed
Deposit Receipts of the appellant in respect of
the fixed deposit made out of the retiral
benefits, including gratuity received by the
appellant at the time of his retirement from
service. Ms. Shobha reiterated her submission
that, as had been rightly held by the Executing
Court, the appellant’s Fixed Deposits which
represented his retiral benefits could not be
attached or sold to satisfy the decree obtained
by the Decree Holder Bank. She urged that even
after the retiral benefits obtained by the
appellant had been converted into Fixed
Deposits it did not lose its essential
character of comprising the retiral benefits of
the appellant, and could not, therefore, be
attached in view of proviso (g) to Section 60
(1) of the Code.
14. Although, the law is well-settled on the point,
various decisions were cited by Ms. Shobha in
support of her submission that the Executing
12Court could not go behind the decree or to
alter the provisions thereof. The first
decision cited by her in this regard is the
decision of this Court in Rajasthan Financial
Corporation v. Man Industrial Corporation
Limited [(2003) 7 SCC 522], wherein while
construing the provisions of Section 47 and
Order XXI of the Code, this Court held that an
Executing Court cannot go beyond the decree and
that the Executing Court must take the decree
according to its tenor. Ms. Shobha also
referred to the decision of this Court in State
Bank of India v M/s. Indexport Registered and
others [(1992) 3 SCC 159), wherein the same
principle had earlier been dealt with.
15. Ms. Shobha’s submission finds support in the
decision of this Court in Calcutta Dock Labour
Board and another v Smt. Sandhya Mitra and
Others [(1985) 2 SCC 1], wherein it was
reaffirmed that gratuity payable to dock
workers under a scheme in absence of a
13Notification under Section 5 of the Payment of
Gratuity Act, 1972, would not be liable to
attachment for satisfaction of a Court’s
decree.
16. The same principle was reiterated by this Court
in Union of India v Wing Commander R. R.
Hingorani [(1987) 1 SCC 551] and Gorakhpur
University and others v Dr. Shitla Prasad
Nagendera and others [(2001) 6 SCC 591].
17. However, in all fairness, Ms. Shobha also cited
the decision of this Court in Union of India
vs. Jyoti Chit Fund and Finance and Others
[(1976) 3 SCC 607], where while dealing with
the provisions of Sections 3 and 4 of the
Provident Funds Act, 1925, prohibiting
attachment of sums held by the Government, as
well as proviso (g) to Section 60(1) of the
Code, this Court held that till such time as
amounts payable by way of provident fund,
compulsory deposits and pensionary benefits did
14not reach the hands of the employee they
retained their character as such and could not,
therefore, be attached. However, once the
amounts were received by the employee they
ceased to retain their original character and,
were, therefore, capable of being attached. Ms.
Shobha urged that the aforesaid decision had
been rendered long before the other decisions
cited by her and the subsequent decisions would
prevail over the earlier decision.
18. In addition to her two aforesaid grounds, Ms.
Shobha lastly submitted that the revision
petition filed by the Bank before the High
Court was in itself not maintainable in view of
the provisions of Section 115 of the Code, as
amended, which makes it clear that if an order
in favour of a party applying for revision
decides the matter finally then only a revision
would be maintainable, but if the same did not
decide the suit or other proceeding finally,
then such revision would not be maintainable.
15Ms. Shobha urged that in the instant case the
Bank had filed a revision against an
interlocutory order which did not have the
effect of finally disposing of the execution
proceedings and consequently the revision
filed on behalf of the Bank should have been
dismissed by the High Court. In this regard,
Ms. Shobha referred to the decision of this
Court in Shiv Shakti Coop. Housing Society,
Nagpur v Swaraj Developers and others [(2003) 6
SCC 659] and also in Surya Dev Rai v Ram
Chander Rai and others [(2003) 6 SCC 675]
reported in the same volume at page 675.
19. Ms. Shobha urged that the High Court had erred
in interfering with the judgment and order
passed by the Executing Court and its judgment
and order impugned in these proceedings were
liable to be set aside.
20. On behalf of the Bank, Mr. Dhruv Mehta
submitted that despite several attempts having
16been made to locate the Matador, the same could
not be traced and the Bank, therefore, had no
alternative but to proceed against the
appellant in his capacity as the guarantor for
recovery of its dues. Mr. Mehta urged that the
provision of proviso (g) to Section 60(1) of
the Code would apply only to the source of the
amounts received by way of retiral benefit,
such as pension and gratuity, but not to
payments made in respect thereof. On the other
hand, once such payments were made, their
character stood altered as they became mixed
with the other assets of the concerned
employee. In support of his submission, Mr.
Mehta also relied on the case of Wing Commander
R.R. Hingorani (supra) which had been referred
to by Ms. Shobha, wherein in the context of
Section 11 of the Pensions Act, 1871, which
provided for exemption of pension from
attachment, this Court referred to the decision
in the Jyoti Chit Fund case (supra) where
Krishna Iyer, J., speaking for the Bench, had
17indicated that once the monies covered by the
provisions of the proviso to Section 60(1) of
the Code had been paid to the concerned
employee, they no longer retained their
original character and were, therefore,
amenable to attachment.
21. On the construction of the directions of the
trial Court, which were subsequently altered by
the High Court, Mr. Mehta urged that when the
hypotheticated vehicle was not traceable, the
Bank could not be left without remedy and it
could not have been the intention of the Trial
Court that even if the vehicle could not be
apprehended the decree of the Bank would remain
unsatisfied. If a pragmatic meaning is to be
given to the language of the decree, it would
have to be interpreted to mean that an attempt
should first be made to realise the decretal
dues by sale of the Matador, and, thereafter,
to realise the balance dues, if any, from the
solvent security to be produced by the
18appellant herein. The decree does not indicate
that in the event the Matador could not be
sold, the decree could not be executed at all
against the other assets either of the Judgment
Debtor or the guarantor.
22. Mr. Mehta urged that in Hingorani’s case
(supra) the High Court was considering the
question as to whether the Executing Court
could go behind the decree in coming to the
finding that the same was not executable
against the appellant on account of proviso (g)
to Section 60(1) of the Code, and in that
context the directions given by the High Court
in the revision petition were justified.
23. Mr. Mehta lastly contended that the order
passed by the learned Executing Court on 1
st
November, 2002, impugned in revision by the
respondent Bank, was final in nature and did
not, therefore, attract the bar under the
proviso to Section 115(1) of the Code.
1924. Having considered the submissions made on
behalf of the respective parties, we are
inclined to accept Mr. Mehta’s submission that
the order impugned in the revision petition
before the High Court did not attract the bar
of the proviso to sub-section (1) of Section
115 of the Code as it sought to finally decide
the manner in which the decree passed in Suit
No.66 of 1992 by the learned Additional and
Sessions Judge, Bayana, Rajasthan, was to be
satisfied. However, we are also of the view
that having regard to proviso (g) to Section 60
(1) of the Code, the High court committed a
jurisdictional error in directing that a
portion of the decretal amount be satisfied
from the fixed deposit receipts of the
appellant held by the Bank. The High Court
also erred in placing the onus on the appellant
to produce the Matador in question for being
auctioned for recovery of the decretal dues. In
other words, the High Court erred in altering
20the decree of the Trial Court in its revisional
jurisdiction, particularly when the pension and
gratuity of the appellant, which had been
converted into Fixed Deposits, could not be
attached under the provisions of the Code of
Civil Procedure. The decision in the Jyoti Chit
Fund case (supra)has been considerably watered
down by later decisions which have been
indicated in paragraphs 15 and 16 hereinbefore
and it has been held that gratuity payable
would not be liable to attachment for
satisfaction of a Court decree in view of
proviso (g) to Section 60(1) of the Code.
25. We also agree with Ms. Shobha that the High
Court could not have gone behind the decree in
the execution proceedings and the alteration in
the manner of recovery of the decretal amount
was erroneous and cannot be sustained. We also
agree with Ms. Shobha that even after the
retiral benefits, such as pension and gratuity,
had been received by the appellant, they did
not lose their character and continued to be
21covered by proviso (g) to Section 60(1) of the
Code. Except for the decision in the Jyoti Chit
Fund and Finance case (supra), where a contrary
view was taken, the consistent view taken
thereafter support the contention that merely
because of the fact that gratuity and
pensionary benefits had been received by the
appellant in cash, it could no longer be
identified as such retiral benefits paid to the
appellant.
26. The High Court, in our view, erroneously
proceeded on the basis that a concession had
been made by the appellant that he was willing
to have the decretal amount adjusted partly
from his fixed deposits, which represented his
retiral benefits and that he had also
volunteered to produce the vehicle before the
Bank so that the same could be sold to recover
the major portion of the dues. Further-more,
although the Bank was entitled to proceed both
against the principal-debtor and the guarantor
for recovery of its dues, the mode of recovery
22was prescribed by the Trial Court, which, in
our view, clearly indicates that the Bank
should at first recover whatever amount it can
from the sale of the Matador. The right of the
Bank to proceed against either the principaldebtor or the guarantor stood restricted by the
directions of the Trial Court. Except for
recording that the vehicle was not traceable,
nothing is recorded in the impugned judgment of
the High Court as to what steps were actually
taken by the Bank for recovery of the Matador
for sale in order to recover its decretal
dues. In our view, instead of disturbing the
order of the Executing Court, which was passed
in consonance with the provisions of the Code
of Civil Procedure, the High Court should have
directed the respondent Bank and the Executing
Court to seriously pursue the recovery of the
Matador or against any other property of the
principal-debtor, having particular regard to
the finding of the Executing Court that the
23said fixed deposits represented the retiral
benefits of the appellant.
27. We, therefore, allow the appeals, set aside the
order passed by the High Court and restore that
of the Executing Court. The respondent Bank may
take appropriate steps for recovery of the
Matador for recovery of its dues in the manner
indicated in the judgment and in the decree of
the Trial Court. Consequently, let the fixed
deposit receipts of the appellant be released
to him as per the directions of the Executing
Court while disposing of the application dated
6.2.1999 and 27.7.2001 by its order dated
1.11.02.
_________________J.
(ALTAMAS KABIR)
_________________J.
(MARKANDEY KATJU)
New Delhi
Dated: 4
th
November, 2008
24
Bank, the High Court noted in its judgment that
the appellant herein had undertaken that he
would furnish the Matador in question to the
Bank for the purpose of auction within a period
5of one week and the Bank would be free to
auction the same in accordance with the terms
of the decree. It was also noted that the
appellant herein was prepared to submit a
solvent security for realization of the balance
decretal amount, which may still remain due
after the adjustment of 50,000/- and the sale
price that would be fetched from the sale of
the matador.
8. In the light of the above, the order of the
Executing Court was set aside and in terms of
the decree as also the order passed by the High
Court on 15
th
October, 2003, the amount of
Rs.50,000/- out of the appellant’s Fixed
Deposit Receipts was directed to be adjusted in
the first instance. It was also directed that
on the Matador being furnished along with
solvent security before the learned Executing
Court by the appellant herein, the remaining
amount under the Fixed Deposit Receipt would be
released to him. It was further directed that
6on the Matador being produced, the decree
holder Bank would be entitled to realize the
decretal amount by sale of the Matador and
while realizing the balance of the decretal
amount, if any, through the solvent security to
be furnished by the appellant herein, the Fixed
Deposit Receipts, which were accepted to be the
appellant’s retirement benefits, were to be
returned to him.
9. On 5
th
April, 2005, the appellant filed a
Review Petition before the High Court in
respect of the order dated 28
th
February, 2005,
on the ground that the Revisional Court had
wrongly proceeded on the basis that the
appellant had given an undertaking to furnish
the Matador to the Bank and that he would also
submit a solvent security for realization of
the decretal amount, if any amount remained to
be recovered by the Bank after sale of the
Matador. The Review Petition filed by the
appellant was dismissed in limine by the High
7Court on 24
th
August, 2005, holding that no
case had been made out in the Review Petition
for review of the order dated 28
th
February,
2005.
10. The Special Leave Petition is directed against
the said orders of the High Court dated 28
th
February, 2005 and 24
th
August, 2005.
11. Ms. Shobha, learned advocate, who appeared for
the appellant, questioned the judgment and
order of the High Court mainly on three
grounds. Her first ground for challenge was
that the direction of the trial Court in its
decree was quite clear and there was no
ambiguity whatsoever which called for any
clarification by the High Court. She submitted
that the direction of the trial Court entitled
the decree holder Bank to recover the decretal
amount as well as the cost of litigation by
auction sale of the hypothecated vehicle, and
if any amount remained to be paid even after
8the auction sale of the Matador, then the same
could be recovered from the other properties of
the defendants. According to Ms. Shobha, the
plain meaning which emerges from such direction
entails the sale of the Matador first and after
adjustment of the sale price with the amount to
be recovered under the decree, any amount still
unpaid, could, at the second stage, be
recovered from the other properties of the
defendant. Ms. Shobha submitted that it was
clearly the intention of the trial Court that
the sale proceed of the hypothecated vehicle
should first be utilized for realization of the
decretal amount before touching the other
properties of the defendants for recovery of
the said dues.
12. In this regard Ms.Shobha referred to and
relied upon the decision of this Court in the
case of Industrial Credit and Development
Syndicate vs. Smithaben H. Patel and Ors.,
[1999 (3) SCC 80}, wherein faced with a
9situation where the trial Court had not
prescribed any mode for payment of the decretal
amount, except for fixing of instalments, it
was, inter alia, held that the general rule of
appropriation of payments towards a decretal
amount was that such an amount has to be
adjusted firstly, directly in accordance with
the direction contained in the decree, and in
the absence of such direction, adjustments are
to be made firstly in payment of interest and
costs and thereafter in payment of the
principal amount, subject to the exception that
the parties could agree to the adjustment of
the payment in any other manner despite the
decree.
13. The second ground urged by Ms. Shobha was that
although initially the appellant’s Fixed
Deposit Receipts were attached by the Executing
Court, ultimately, on objections being filed on
behalf of the appellant, the Executing Court by
its order dated 1.11.2002 came to the finding
10that the appellant’s Fixed Deposit Receipts
could not be attached in view of proviso (g) to
Sub-Section (1) of Section 60 of the Code of
Civil Procedure (hereinafter referred to as
‘the Code’). Ms.Shobha submitted that in the
revision filed by the Bank against the said
order of the Executing Court it was erroneously
recorded by the High Court that the appellant
had undertaken to produce the Matador before
the Bank so that the same could be sold for
recovery of the Bank’s dues and the balance
dues, if any, could then be recovered from a
solvent security to be provided by the
appellant. It was submitted that since such an
undertaking had not been given to the High
Court, a Review Petition was filed on behalf of
the appellant which was dismissed in limine.
Ms. Shobha also added that without making any
attempt to locate the Matador, so that the same
could be sold in keeping with the directions
given by the Trial Court for satisfaction of
the decree, the Decree Holder proceeded only
11against the appellant since it held the Fixed
Deposit Receipts of the appellant in respect of
the fixed deposit made out of the retiral
benefits, including gratuity received by the
appellant at the time of his retirement from
service. Ms. Shobha reiterated her submission
that, as had been rightly held by the Executing
Court, the appellant’s Fixed Deposits which
represented his retiral benefits could not be
attached or sold to satisfy the decree obtained
by the Decree Holder Bank. She urged that even
after the retiral benefits obtained by the
appellant had been converted into Fixed
Deposits it did not lose its essential
character of comprising the retiral benefits of
the appellant, and could not, therefore, be
attached in view of proviso (g) to Section 60
(1) of the Code.
14. Although, the law is well-settled on the point,
various decisions were cited by Ms. Shobha in
support of her submission that the Executing
12Court could not go behind the decree or to
alter the provisions thereof. The first
decision cited by her in this regard is the
decision of this Court in Rajasthan Financial
Corporation v. Man Industrial Corporation
Limited [(2003) 7 SCC 522], wherein while
construing the provisions of Section 47 and
Order XXI of the Code, this Court held that an
Executing Court cannot go beyond the decree and
that the Executing Court must take the decree
according to its tenor. Ms. Shobha also
referred to the decision of this Court in State
Bank of India v M/s. Indexport Registered and
others [(1992) 3 SCC 159), wherein the same
principle had earlier been dealt with.
15. Ms. Shobha’s submission finds support in the
decision of this Court in Calcutta Dock Labour
Board and another v Smt. Sandhya Mitra and
Others [(1985) 2 SCC 1], wherein it was
reaffirmed that gratuity payable to dock
workers under a scheme in absence of a
13Notification under Section 5 of the Payment of
Gratuity Act, 1972, would not be liable to
attachment for satisfaction of a Court’s
decree.
16. The same principle was reiterated by this Court
in Union of India v Wing Commander R. R.
Hingorani [(1987) 1 SCC 551] and Gorakhpur
University and others v Dr. Shitla Prasad
Nagendera and others [(2001) 6 SCC 591].
17. However, in all fairness, Ms. Shobha also cited
the decision of this Court in Union of India
vs. Jyoti Chit Fund and Finance and Others
[(1976) 3 SCC 607], where while dealing with
the provisions of Sections 3 and 4 of the
Provident Funds Act, 1925, prohibiting
attachment of sums held by the Government, as
well as proviso (g) to Section 60(1) of the
Code, this Court held that till such time as
amounts payable by way of provident fund,
compulsory deposits and pensionary benefits did
14not reach the hands of the employee they
retained their character as such and could not,
therefore, be attached. However, once the
amounts were received by the employee they
ceased to retain their original character and,
were, therefore, capable of being attached. Ms.
Shobha urged that the aforesaid decision had
been rendered long before the other decisions
cited by her and the subsequent decisions would
prevail over the earlier decision.
18. In addition to her two aforesaid grounds, Ms.
Shobha lastly submitted that the revision
petition filed by the Bank before the High
Court was in itself not maintainable in view of
the provisions of Section 115 of the Code, as
amended, which makes it clear that if an order
in favour of a party applying for revision
decides the matter finally then only a revision
would be maintainable, but if the same did not
decide the suit or other proceeding finally,
then such revision would not be maintainable.
15Ms. Shobha urged that in the instant case the
Bank had filed a revision against an
interlocutory order which did not have the
effect of finally disposing of the execution
proceedings and consequently the revision
filed on behalf of the Bank should have been
dismissed by the High Court. In this regard,
Ms. Shobha referred to the decision of this
Court in Shiv Shakti Coop. Housing Society,
Nagpur v Swaraj Developers and others [(2003) 6
SCC 659] and also in Surya Dev Rai v Ram
Chander Rai and others [(2003) 6 SCC 675]
reported in the same volume at page 675.
19. Ms. Shobha urged that the High Court had erred
in interfering with the judgment and order
passed by the Executing Court and its judgment
and order impugned in these proceedings were
liable to be set aside.
20. On behalf of the Bank, Mr. Dhruv Mehta
submitted that despite several attempts having
16been made to locate the Matador, the same could
not be traced and the Bank, therefore, had no
alternative but to proceed against the
appellant in his capacity as the guarantor for
recovery of its dues. Mr. Mehta urged that the
provision of proviso (g) to Section 60(1) of
the Code would apply only to the source of the
amounts received by way of retiral benefit,
such as pension and gratuity, but not to
payments made in respect thereof. On the other
hand, once such payments were made, their
character stood altered as they became mixed
with the other assets of the concerned
employee. In support of his submission, Mr.
Mehta also relied on the case of Wing Commander
R.R. Hingorani (supra) which had been referred
to by Ms. Shobha, wherein in the context of
Section 11 of the Pensions Act, 1871, which
provided for exemption of pension from
attachment, this Court referred to the decision
in the Jyoti Chit Fund case (supra) where
Krishna Iyer, J., speaking for the Bench, had
17indicated that once the monies covered by the
provisions of the proviso to Section 60(1) of
the Code had been paid to the concerned
employee, they no longer retained their
original character and were, therefore,
amenable to attachment.
21. On the construction of the directions of the
trial Court, which were subsequently altered by
the High Court, Mr. Mehta urged that when the
hypotheticated vehicle was not traceable, the
Bank could not be left without remedy and it
could not have been the intention of the Trial
Court that even if the vehicle could not be
apprehended the decree of the Bank would remain
unsatisfied. If a pragmatic meaning is to be
given to the language of the decree, it would
have to be interpreted to mean that an attempt
should first be made to realise the decretal
dues by sale of the Matador, and, thereafter,
to realise the balance dues, if any, from the
solvent security to be produced by the
18appellant herein. The decree does not indicate
that in the event the Matador could not be
sold, the decree could not be executed at all
against the other assets either of the Judgment
Debtor or the guarantor.
22. Mr. Mehta urged that in Hingorani’s case
(supra) the High Court was considering the
question as to whether the Executing Court
could go behind the decree in coming to the
finding that the same was not executable
against the appellant on account of proviso (g)
to Section 60(1) of the Code, and in that
context the directions given by the High Court
in the revision petition were justified.
23. Mr. Mehta lastly contended that the order
passed by the learned Executing Court on 1
st
November, 2002, impugned in revision by the
respondent Bank, was final in nature and did
not, therefore, attract the bar under the
proviso to Section 115(1) of the Code.
1924. Having considered the submissions made on
behalf of the respective parties, we are
inclined to accept Mr. Mehta’s submission that
the order impugned in the revision petition
before the High Court did not attract the bar
of the proviso to sub-section (1) of Section
115 of the Code as it sought to finally decide
the manner in which the decree passed in Suit
No.66 of 1992 by the learned Additional and
Sessions Judge, Bayana, Rajasthan, was to be
satisfied. However, we are also of the view
that having regard to proviso (g) to Section 60
(1) of the Code, the High court committed a
jurisdictional error in directing that a
portion of the decretal amount be satisfied
from the fixed deposit receipts of the
appellant held by the Bank. The High Court
also erred in placing the onus on the appellant
to produce the Matador in question for being
auctioned for recovery of the decretal dues. In
other words, the High Court erred in altering
20the decree of the Trial Court in its revisional
jurisdiction, particularly when the pension and
gratuity of the appellant, which had been
converted into Fixed Deposits, could not be
attached under the provisions of the Code of
Civil Procedure. The decision in the Jyoti Chit
Fund case (supra)has been considerably watered
down by later decisions which have been
indicated in paragraphs 15 and 16 hereinbefore
and it has been held that gratuity payable
would not be liable to attachment for
satisfaction of a Court decree in view of
proviso (g) to Section 60(1) of the Code.
25. We also agree with Ms. Shobha that the High
Court could not have gone behind the decree in
the execution proceedings and the alteration in
the manner of recovery of the decretal amount
was erroneous and cannot be sustained. We also
agree with Ms. Shobha that even after the
retiral benefits, such as pension and gratuity,
had been received by the appellant, they did
not lose their character and continued to be
21covered by proviso (g) to Section 60(1) of the
Code. Except for the decision in the Jyoti Chit
Fund and Finance case (supra), where a contrary
view was taken, the consistent view taken
thereafter support the contention that merely
because of the fact that gratuity and
pensionary benefits had been received by the
appellant in cash, it could no longer be
identified as such retiral benefits paid to the
appellant.
26. The High Court, in our view, erroneously
proceeded on the basis that a concession had
been made by the appellant that he was willing
to have the decretal amount adjusted partly
from his fixed deposits, which represented his
retiral benefits and that he had also
volunteered to produce the vehicle before the
Bank so that the same could be sold to recover
the major portion of the dues. Further-more,
although the Bank was entitled to proceed both
against the principal-debtor and the guarantor
for recovery of its dues, the mode of recovery
22was prescribed by the Trial Court, which, in
our view, clearly indicates that the Bank
should at first recover whatever amount it can
from the sale of the Matador. The right of the
Bank to proceed against either the principaldebtor or the guarantor stood restricted by the
directions of the Trial Court. Except for
recording that the vehicle was not traceable,
nothing is recorded in the impugned judgment of
the High Court as to what steps were actually
taken by the Bank for recovery of the Matador
for sale in order to recover its decretal
dues. In our view, instead of disturbing the
order of the Executing Court, which was passed
in consonance with the provisions of the Code
of Civil Procedure, the High Court should have
directed the respondent Bank and the Executing
Court to seriously pursue the recovery of the
Matador or against any other property of the
principal-debtor, having particular regard to
the finding of the Executing Court that the
23said fixed deposits represented the retiral
benefits of the appellant.
27. We, therefore, allow the appeals, set aside the
order passed by the High Court and restore that
of the Executing Court. The respondent Bank may
take appropriate steps for recovery of the
Matador for recovery of its dues in the manner
indicated in the judgment and in the decree of
the Trial Court. Consequently, let the fixed
deposit receipts of the appellant be released
to him as per the directions of the Executing
Court while disposing of the application dated
6.2.1999 and 27.7.2001 by its order dated
1.11.02.
_________________J.
(ALTAMAS KABIR)
_________________J.
(MARKANDEY KATJU)
New Delhi
Dated: 4
th
November, 2008
24
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