Case Note & Summary
The dispute arose from an arbitration award dated October 23, 2019, under which the appellant, a tenant, was directed to pay approximately Rs. 1.80 crores (including interest) to the respondent-landlord for rental arrears, maintenance dues, and other charges. The award was not challenged and became final, yet the appellant made no payment. The respondent filed Execution Petition No. 110 of 2023 before the High Court of Madras. An ex parte arrest order was passed against the appellant, who claimed non-receipt of summons. A fresh warrant of arrest was issued on June 19, 2024. The appellant then moved Applications Nos. 3114 and 4667 of 2024 to set aside the arrest order and stay proceedings. By order dated October 25, 2024, a Single Judge set aside the arrest order on condition that the appellant deposit Rs. 25 lakhs (approx. 25% of the award amount) within twelve weeks, failing which the applications would stand dismissed. Aggrieved by the deposit condition, the appellant filed the present Original Side Appeals (OSA Nos. 107 & 68 of 2025). The appellant’s main argument was that under Section 51 of the Code of Civil Procedure, 1908 (CPC), and Order 21 Rules 37 and 41, an arrest could only be ordered if the decree holder proves that the judgment debtor has the means to pay and neglects to pay. It was contended that the respondent had made no such averment and no examination of the judgment debtor was sought. The appellant relied on Jolly George Varghese v. Bank of Cochin, M.M. Saleem v. R. Praveen Kumar Reddy, and Ramasamy v. Pushpa. The respondent countered that the appellant’s conduct was malafide: falsely claiming non-receipt of the award, alleging forgery, and shifting addresses to evade execution. The Court, after hearing both sides, found that the cited decisions were not applicable because the impugned order did not order arrest; rather, it set aside the arrest. The order did not contain any finding on the appellant’s means, as that issue is to be decided by the execution court during the hearing of the execution petition. The condition was merely a procedural measure to ensure compliance and was not assailable. The Court thus dismissed the appeals but granted an extension of four weeks for the deposit. No costs were ordered.
Headnote
A) Civil Procedure - Execution - Condition for Setting Aside Arrest Order - Code of Civil Procedure, 1908, Section 51, Order 21 Rules 37 and 41 - The Single Judge set aside the ex parte arrest order subject to the condition that the judgment debtor deposit 25% of the award amount within twelve weeks, failing which the application would stand dismissed. The appellant challenged the condition arguing that arrest cannot be ordered unless the decree holder proves the judgment debtor has means to pay and neglects to pay. Held, the impugned order does not contain any positive or categoric finding on means; the question of means will be determined by the execution court when hearing the execution petition. The condition was merely to ensure compliance and was not unwarranted. The condition does not violate the cited provisions. Appeals dismissed, time for deposit extended by four weeks (Paras 20-25).
Issue of Consideration
Whether the condition imposed by the Single Judge requiring the appellant to deposit 25% of the award amount as a condition to set aside the arrest order was justified under Section 51 and Order 21 of the Code of Civil Procedure, 1908, and whether it could be imposed without a finding on the judgment debtor's means.
Final Decision
The appeals were dismissed with no order as to costs. The time for deposit of Rs. 25 lakhs was extended by four weeks from the date of uploading of the order on the court's website.
Law Points
- Legal points not extracted
- Execution proceedings
- condition for setting aside arrest
- means of judgment debtor
- Section 51 CPC
- Order 21 Rule 37 CPC
- Order 21 Rule 41 CPC
- no positive finding on means required for conditional order
- compliance with arbitration award
Case Details
2025 LawText (MAD) (03) 29
Dr. Anita Sumanth, C. Kumarappan
Citation not available, 2025:MHC:816
Ms. S.P. Arthi, Ms. R.V. Rukmani for M/s. P.B. Ramanujam Associates
Ru-Ah Ministries, Rep. By its Managing Trustee, Mr.Alwin Thomas
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Nature of Litigation
Execution of arbitration award and challenge to conditional order setting aside arrest.
Remedy Sought
Appellant sought to set aside the condition to deposit Rs. 25 lakhs imposed by the Single Judge for setting aside the arrest order.
Filing Reason
Appellant was aggrieved by the condition requiring a deposit of 25% of the award amount as a pre-condition for setting aside the arrest order, arguing that such condition could not be imposed without proof of the judgment debtor's means to pay.
Previous Decisions
Arbitration award dated 23.10.2019 passed against appellant for arrears; ex parte arrest ordered in Execution Petition No.110 of 2023; warrant of arrest issued on 19.06.2024; Single Judge order dated 25.10.2024 set aside arrest order on condition of deposit of Rs.25 lakhs within 12 weeks.
Issues
Whether the condition imposed by the Single Judge requiring the appellant to deposit 25% of the award amount as a condition for setting aside the arrest order was justified without a finding on the judgment debtor's means to pay under Section 51 and Order 21 of the Code of Civil Procedure, 1908.
Submissions/Arguments
Appellant argued that under Section 51 CPC, arrest can only be ordered if the decree holder proves that the judgment debtor has means to pay and neglects to pay; no such averment or material was produced; no examination under Order 21 Rule 41 was sought; relied on Jolly George Varghese, M.M. Saleem, and Ramasamy.
Respondent argued that the appellant's conduct was malafide: falsely claiming non-receipt of award, alleging forgery, shifting addresses to abscond; the conditional order was justified.
Ratio Decidendi
A condition requiring the judgment debtor to deposit a portion of the decretal amount as a pre-condition for setting aside an arrest order does not require a prior finding on the judgment debtor's means to pay under Section 51 and Order 21 of the CPC, as the arrest order has been set aside and the determination of means is to be undertaken by the execution court during the hearing of the execution petition.
Judgment Excerpts
The award was passed directing the appellant to pay a sum of Rs.1,05,41,427/- with 12% interest per annum from the date of filing of claim petition till the date of realisation. In addition to the aforesaid amount, there has been a quantification of other charges including Arbitrator's fee, in all amounting to a sum of Rs.1.80 Crores (approx.) along with interest till date of realisation.
Not a single naya paisa has been paid by the appellant, as a result, the respondent had approached the Court by way of Execution Petition bearing No.110 of 2023 quantifying the amounts at a sum of Rs.1,67,60,869/- + costs of Rs.3,36,900/- along with interest till date of realisation of the same.
Conditional upon the aforesaid amount being remitted within the time, the learned Master was permitted to proceed to dispose the Execution Petition within a period of 12 weeks from date of expiry of the time frame fixed supra. The applications have thus, in fact, come to be allowed in favour of the appellant.
We are of the categoric view that the above decisions would not apply to the facts of the present case. This is simply for the reason that the order impugned does not lay down any positive or categoric finding in respect of the means of the appellant at all.
We are thus of the considered view that there is nothing untoward in the impugned order and the directions issued thereunder.
Procedural History
Arbitration award dated October 23, 2019, directed appellant to pay arrears. No payment made. Respondent filed Execution Petition No. 110 of 2023. Ex parte arrest order passed. Fresh warrant of arrest issued on June 19, 2024. Appellant filed Applications Nos. 3114 and 4667 of 2024 to set aside arrest and stay proceedings. Single Judge by order dated October 25, 2024, set aside arrest on condition of depositing Rs. 25 lakhs within 12 weeks. Appellant filed OSA Nos. 107 & 68 of 2025 against the condition. On March 20, 2025, the Division Bench dismissed the appeals and extended time for deposit by four weeks.
Acts & Sections
- Code of Civil Procedure, 1908: Section 51, Order 21 Rule 37, Order 21 Rule 41
