Case Note & Summary
The petitioners, Alfredo Fernandes and Arlette J.N. Carvalho, filed a suit for recovery of money against the respondents in the Civil Judge, Senior Division, at Panaji. During the pendency of the suit, they filed an application under Section 151 of the Code of Civil Procedure, 1908 (CPC), seeking a direction to the defendants to disclose their assets on affidavit to secure the plaintiffs' interest in case the suit was decreed in their favor. The Trial Court rejected this application by order dated 12.05.2023, on the ground that the plaintiffs had failed to prove that the defendants were liable to pay the amount. Aggrieved, the petitioners approached the High Court of Bombay at Goa by way of a writ petition. The High Court heard the matter at the admission stage with consent of parties. The petitioners' counsel argued that the Supreme Court in Rahul S. Shah v. Jinendra Kumar Gandhi & Others, (2021) 6 SCC 418, had laid down guidelines under Articles 141 and 142 of the Constitution, making it mandatory for courts to demand an affidavit of assets from the defendant/judgment debtor, and that such guidelines apply even during the pendency of a suit. The respondents' counsel opposed the petition, contending that the application was premature and that the plaintiffs had not established a prima facie case. The High Court analyzed the impugned order and found that the Trial Court had erred in rejecting the application on the ground that the plaintiffs had not proved liability, as such a determination could only be made at the final stage of the suit. The High Court held that the application under Section 151 CPC for asset disclosure is maintainable during the pendency of a suit, relying on the Supreme Court's guidelines in Rahul S. Shah. The Court noted that the defendants had not denied the transaction and that the suit was for a substantial amount. The balance of convenience was in favor of the plaintiffs. Accordingly, the High Court allowed the writ petition, set aside the impugned order, and directed the defendants to file an affidavit disclosing their assets within four weeks, subject to the outcome of the suit. The rule was made absolute with no order as to costs.
Headnote
A) Civil Procedure - Inherent Powers - Section 151 CPC - Asset Disclosure - The issue was whether the Trial Court could direct the Defendants to disclose their assets under Section 151 CPC during the pendency of a suit for recovery of money. The High Court held that the Trial Court's rejection on the ground that the Plaintiffs failed to prove liability was premature, and that the application for asset disclosure is maintainable under Section 151 CPC to secure the interests of the Plaintiffs pending suit. (Paras 3-10) B) Civil Procedure - Pre-judgment Relief - Section 151 CPC - Guidelines - The High Court relied on the Supreme Court's decision in Rahul S. Shah v. Jinendra Kumar Gandhi, (2021) 6 SCC 418, which laid down guidelines under Articles 141 and 142 of the Constitution for courts to demand an affidavit of assets from the defendant/judgment debtor. The High Court held that such guidelines apply even during the pendency of a suit, not only in execution proceedings. (Paras 5-10) C) Civil Procedure - Interim Orders - Section 151 CPC - Balance of Convenience - The High Court found that the balance of convenience was in favor of the Plaintiffs, as the Defendants had not denied the transaction and the suit was for recovery of a substantial amount. The Court directed the Defendants to file an affidavit disclosing their assets within four weeks, subject to the outcome of the suit. (Paras 10-12)
Issue of Consideration
Whether the Trial Court erred in rejecting the Plaintiffs' application under Section 151 CPC seeking direction to the Defendants to disclose their assets during the pendency of a suit for recovery of money.
Final Decision
The High Court allowed the writ petition, set aside the impugned order dated 12.05.2023, and directed the respondents to file an affidavit disclosing their assets within four weeks, subject to the outcome of the suit. Rule made absolute with no order as to costs.
Law Points
- Section 151 CPC
- Inherent powers
- Asset disclosure
- Pre-judgment relief
- Rahul S. Shah guidelines
