Case Note & Summary
The Plaintiff filed a suit for recovery of Rs.1.26 Crores against the Defendants, which was decreed by consent terms dated 14th June 2016, wherein the Defendants admitted liability and agreed to pay Rs.1,12,50,214/- in installments, with the last payment due on 31st December 2016. The Defendants paid only Rs.34,99,786/-, leaving a balance of Rs.77,50,428/- plus interest unpaid. Consequently, the Plaintiff filed Chamber Summons No. 1098 of 2017 seeking a direction under Order XXI Rule 41(2) of the Code of Civil Procedure, 1908 (CPC) for the Defendants to disclose particulars of their movable and immovable assets, and also seeking detention in civil prison for non-compliance. The Defendants opposed the summons, arguing that the suit was already disposed of, the court was functus officio, and the Plaintiff had security worth Rs.2.30 Crores, making disclosure unnecessary. The court held that the Chamber Summons was maintainable as it related to execution of the decree, not the disposed suit, and the court retains jurisdiction in execution proceedings. The court further held that the existence of security does not bar an order for asset disclosure under Order XXI Rule 41 CPC. The court allowed the Chamber Summons, directing the Defendants to file an affidavit disclosing their assets within four weeks, failing which they would be liable for civil detention.
Headnote
A) Civil Procedure - Execution of Decree - Order XXI Rule 41 CPC - Disclosure of Assets - Maintainability - Chamber Summons filed after disposal of suit seeking direction to judgment debtors to disclose assets under Order XXI Rule 41(2) CPC is maintainable as it pertains to execution proceedings, not the disposed suit - Court does not become functus officio in execution matters (Paras 1-6).
B) Civil Procedure - Execution of Decree - Order XXI Rule 41 CPC - Security of Decree Holder - Irrelevance - The fact that the decree holder has security worth Rs.2.30 Crores does not preclude the court from ordering disclosure of assets under Order XXI Rule 41 CPC - The provision is intended to aid execution and is not dependent on existence or absence of security (Paras 5-6).
Issue of Consideration
Whether a Chamber Summons for disclosure of assets under Order XXI Rule 41 CPC is maintainable after the suit is decreed and disposed of, and whether the court becomes functus officio.
Final Decision
Chamber Summons allowed. Defendants directed to file an affidavit disclosing particulars of their movable and immovable assets within four weeks from the date of the order. In case of non-compliance, the Plaintiff is at liberty to take out appropriate proceedings for detention of the Defendants in civil prison.
Law Points
- Order XXI Rule 41 CPC applies to execution proceedings
- not disposed suits
- court not functus officio in execution
- disclosure of assets can be ordered even if decree holder has security
Case Details
2019 LawText (BOM) (01) 71
Chamber Summons No. 1098 of 2017 in Suit No. 12 of 2014
Mr Sahil Mahajan for the Applicant/Plaintiff, Mr Sandeep M. Hirvadekar I/b A. Bharat & Co. for the Defendants
M/s Bhoomi Tractors Sales & Services & Ors.
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Nature of Litigation
Execution proceeding seeking disclosure of assets by judgment debtors under Order XXI Rule 41 CPC.
Remedy Sought
Direction against Defendants/Judgment Debtors to file affidavit disclosing particulars of their movable and immovable assets, and detention in civil prison for non-compliance.
Filing Reason
Defendants failed to pay the decretal amount as per consent terms, paying only Rs.34,99,786/- out of Rs.1,12,50,214/-, leaving a balance of Rs.77,50,428/- plus interest.
Previous Decisions
Suit No. 12 of 2014 was decreed by consent terms dated 14th June 2016, disposing of the suit.
Issues
Whether a Chamber Summons for disclosure of assets under Order XXI Rule 41 CPC is maintainable after the suit is decreed and disposed of.
Whether the court becomes functus officio after disposal of the suit.
Whether the existence of security with the decree holder precludes an order for disclosure of assets.
Submissions/Arguments
Plaintiff argued that the Defendants have not paid the decretal amount and sought disclosure of assets under Order XXI Rule 41(2) CPC.
Defendants argued that the Chamber Summons is not maintainable as the suit is disposed of and the court is functus officio, and that the Plaintiff has security worth Rs.2.30 Crores, making disclosure unnecessary.
Ratio Decidendi
Order XXI Rule 41 CPC applies to execution proceedings, and the court retains jurisdiction to order disclosure of assets even after the suit is disposed of. The court does not become functus officio in execution matters. The existence of security with the decree holder does not bar an order for asset disclosure under Order XXI Rule 41 CPC.
Judgment Excerpts
This Chamber Summons has been filed seeking a direction against the Defendants / Judgment Debtors to file an affidavit stating the particulars of their assets ( movable and immovable ) as provided under Order XXI Rule 41 Sub-rule (ii) of the Code of Civil Procedure, 1908
As far as the maintainability of the Chamber Summons is concerned, I find that this issue is squarely answered by this Court in the case of United Phosphorous Ltd. Vs. A.K.Kanoria [2003 (1) Bom. C.R. 299]
Procedural History
Suit No. 12 of 2014 was filed for recovery of Rs.1.26 Crores. The suit was decreed by consent terms dated 14th June 2016, with Defendants agreeing to pay Rs.1,12,50,214/- in installments. Defendants defaulted, paying only Rs.34,99,786/-. Plaintiff filed Chamber Summons No. 1098 of 2017 on 14th January 2019 seeking asset disclosure and civil detention.
Acts & Sections
- Code of Civil Procedure, 1908: Order XXI Rule 41, Order XXI Rule 41(2)
