Steel Authority of India Limited vs Ram Krishan Kulwant Rai and Others

Nadira Patherya, J.—This execution application has been filed to execute the decree dated 12th September, 2003. An order was passed on 13th June, 2013 in terms of prayer (a) of Column 10 of the Tabular Statement i.e. restraining the judgment debtors from dealing with or encumbering the assets mentioned in Schedule A & B annexed thereto. On the returnable date the judgment debtors seek to vacate the interim order on the ground that Section 39(4) of the CPC is a bar to execution of a decree against any person or property outside the Court''s jurisdiction. Reliance has been placed on Mohit Bhargava Vs. Bharat Bhushan Bhargava and Others, The properties mentioned in Schedule A admittedly is outside the jurisdiction of this Court and as the order in terms of prayer (a) although interim in nature is in aid of the final relief, which final relief cannot be granted by this Court as held in The State of Orissa Vs. Madan Gopal Rungta, the order be vacated. In view of Cotton Corporation of India Limited Vs. United Industrial Bank Limited and Others, the order dated 13th June, 2013 also needs to be vacated. Reliance is also placed on Mechano Paper Machines Ltd. Vs. NEPC Papers and Boards Ltd. and Others, for the proposition that no order appointing a Receiver or directing sale can be passed in execution where person and property are outside. Therefore the order dated 13th June, 2013 be vacated in respect of the Delhi property which is outside the jurisdiction of this Court. Counsel for the decree-holder submits that the decree is sought to be executed against the partnership firm and one of its properties is situate at Waterloo Street. The restraint order sought is in personam. Mohit Bhargava Vs. Bharat Bhushan Bhargava and Others, does not prohibit passing of an order of injunction on the principle of Mareva injunction. That an order of injunction can be passed in respect of properties situate outside will be reflected best from Mechano Paper Machines Ltd. Vs. NEPC Papers and Boards Ltd. and Others, are distinguishable on facts. D.V.M. Construction and Others Vs. Srei Infrastructure Finance Ltd., has been stayed in appeal. AIR (1952) SC 12 and Cotton Corporation of India Limited Vs. United Industrial Bank Limited and Others, are not to apply as Cotton Corporation of India Limited Vs. United Industrial Bank Limited and Others, was a case u/s 41(b) of the Specific Relief Act, 1963. The order of injunction sought is in personam and for the final relief the decree holder will have to go somewhere else. The order dated 24.4.2013 was passed on an application filed under the 1940 Act in this Hon''ble Court, therefore the order passed be continued.

In reply counsel for the judgment debtors submits that the address of the judgment debtors given in the decree is of Delhi. The Section 14(2) notice under the 1940 Act was served in Delhi. It has been admitted by the decree-holder in paragraph 11 that the judgment debtors Nos. 10 & 11 are outside the jurisdiction of this Court. Therefore the persons and property are both outside and Order 21 Rule 3 CPC and Section 21 CPC will not apply as there is no pleading to that effect. It has also not been stated that the order of injunction in respect of the Delhi property is restricted to the shares of the judgment debtors Nos. 10 & 11. The grounds for passing Mareva injunction does not exist and in view of the Law Commission''s recommendation for incorporating Section 39(4) CPC the order be vacated.

Having considered the submissions of the parties the decree is sought to be executed against the judgment debtors and in aid thereof an order of injunction was passed restraining the judgment debtors from dealing with the properties mentioned in Schedule A and Schedule B. While Schedule B property is at Waterloo Street within the jurisdiction of this Court, the Schedule A property is in Delhi outside the jurisdiction of this Court.

In Mohit Bhargava Vs. Bharat Bhushan Bhargava and Others, it has been held that an order of injunction can be passed as it is nothing but a freezing order by which the judgment debtor is being restrained from parting with possession of a property though outside. No Receiver can be appointed or sale directed in respect of properties outside has been enunciated in Mechano Paper Machines Ltd. Vs. NEPC Papers and Boards Ltd. and Others, which decision has disapproved the decision reported in Birla Corporation Ltd. Vs. Prasad Trading Company and Another,

As held in (1989) 1 AER 433 a decree-holder is entitled to a Mareva injunction in respect of assets outside as such an injunction is not a form of attachment but is a relief in personam and operates against the persons.

In the instant case the judgment debtor No. 1 is a partnership firm which has an office both at Aurangzeb Road, Delhi and 6, Waterloo Street, Calcutta and the partners carry on business from the aforementioned address. As the decree holder seeks to restrain the partners from dealing with the properties and such order operates in personam and is not an attachment of the property, the order dated 13th June, 2013 does not call for any interference as the legal heirs and representatives of the original judgment No. 2 have become his successor-in-interest in respect of the said property and the judgment debtors Nos. 10 and 11 are partners of the partnership firm.

The State of Orissa Vs. Madan Gopal Rungta, will not apply to the facts of this case in view of Cotton Corporation of India Limited Vs. United Industrial Bank Limited and Others, will also not apply as the said was a case u/s 41(b) of the Specific Relief Act, 1963. For all the said reasons the interim order dated 13.6.2013 is continued and directions given for filing affidavits. Affidavit-in-opposition within three weeks, Reply, if any, one week thereafter. Matter to appear in the list five weeks hence.