We use affiliate links. If you purchase something using one of these links, we may receive compensation or commission.
Introduction
Most of us fight in the Courts for years to win but forget to safeguard the future of our case. What if we win a case and when it’s time for the losing party to pay us the money we won, we become aware of the fact that the bank account from which losing party have to pay money to us is empty or the property, the possession of which is to be given to us, have been sold to a third party. Worse still it may happen that the losing party either runs away from the Country or your State, leaving you in the lurch. Can you run after a party if after losing the case in Delhi, it runs to let’s say Tamil Nadu.
That’s why safeguarding the future of our case is important. There can be many ways of doing this like Appointment of Receiver (Order XL of Civil Procedure Code, 1908), interim injunction against opposite party (Order XXXIX of Civil Procedure Code, 1908), interim measures during Arbitration proceedings (Section 9 and Section 17 of Arbitration and Conciliation Act, 1996) etc.
In the present article we are going to discuss about one such “future safeguarding” process which is called Attachment. It protects our future by binding the bank account, house or any other property so that the opposite party cannot run away. This is an excellent method to ensure that you get paid when you win. Under Section 64 of Civil Procedure Code, 1908 if any person sells the property after attachment such act will be void i.e. it will be considered as never happened. That is the advantage of attachment.
So let’s understand about attachment from the point of view of the instant case.
Brief Facts
A won a case against B. After winning the case he filed an execution petition. After filing this petition he was successful in attaching one of B’s property, let’s say Vasant Kunj property. But due to some lapse on part of A, he could not apply for sale of the Vasant Kunj property and therefore the execution case was dismissed by the Court. When A filed an execution case again to bring the Vasant Kunj property for sale, the Executing Court stated that A have to again get the Vasant Kunj property attached because when the previous case was dismissed the attachment also ended. Hence A should again ask for attachment of the Vasant Kunj property.
Of course most of the above was probably Roman to most of the readers of this Article. So let me explain it bit by bit.
What is an Execution Petition?
When a person (let’s say C) files a case against another person (let’s say D) for claiming Rs. 100 (let’s say), there will be either victory or defeat for C. Even if C wins, don’t assume it will be all hunky dory for him and he will get his money straight away on winning the case. So what C has to do to get his money? Firstly on C’s win, the Court will draw a Money Decree in favour of C. Money Decree is a calculation sheet which tells how much money have you won. (Do not confuse it with Judgment on the basis of which you win a case. There is a difference between Judgment and Decree. A Judgment tells the reason on the basis of which a Court dismisses a case or allows it. It does not tell you exactly how much money you have won. After Judgment, a Decree Sheet is prepared which essentially does this).
Then C will take this Money Decree of Rs. 100 and file an Execution Petition under Order XXI Rule 11 of Civil Procedure Code, 1908 (in short CPC)which will be numbered as a separate case. In the new case C will be called Decree Holder and D will be called Judgment Debtor. The Court in which the Execution Petition is filed is called an Executing Court. The Executing Court will call D and ask him as to whether he is willing to pay Rs. 100 to C. If D agrees it’s all over and C will get his money and the Court will write an order stating that “the decree stands fully satisfied”.
But what if D does not pay the money?
In the case D declines to pay the money the Executing Court will issue attachment orders, firstly against the movable property of D under Order XXI Rule 43 of CPC and then against immovable property of D under Order XXI Rule 54 of CPC. This order of attachment is important. Firstly always the movable property like vehicles, bank accounts, shares, bonds etc. are attached. The reason is that if Rs.100 can be recovered by selling D’s car, there is no need to attach D’s house. But if after selling the D’s car only Rs.10 is recovered then these, his immovable property like his house etc., need to be necessarily attached so that rest of the money under the Decree i.e. Rs.90 can be recovered.
Process of Attachment of Property in Execution
For attachment of the property the Executing Court appoints a Bailiff. This Bailiff will attach the property of D and finally C will apply to the Executing Court to sell this property, be it movable or immovable. I will not dwell upon the process of sale of a House etc. by the Court in satisfaction of a Decree, as I have explained the same in this Article.
Attachment Before and After Judgment
One thing needs to be clarified here. Attachment need not to be only after the case has been won by one of the parties and lost by another. Even during the pendency of a case you can get an attachment against the person from whom you have to recover your money or property. This kind of attachment is called Attachment before Judgment and is dealt in Order under XXXVIII of CPC. It comes into picture when there is a threat of the person, from whom you have to take your money back, running away or selling the property in a manner which will make the recovery of money impossible.
So lets’ say you make a claim of Rs. 100 against Z, now Z is not a resident of India, though he is a citizen of India, and lives in United Kingdom. But in Delhi he has a bank account which has Rs. 80 in it. So you will ask the Trial Court in which you have filed the case (remember it’s not an Executing Court as you have not won the matter till now), for attachment of his bank account as there is threat that he may withdraw the money anytime and never come back to India. After detailed argument, if the Court thinks fit, it will attach the said bank account and send a notice to the bank to not release any money to Z till the case is over.
These 2 kind of attachments i.e. attachment before and after judgment or more particularly attachment before and after winning the case are entirely different. Attachment before judgment is not for the purpose of sale of the property so that money can be recovered but it is only there to assure that in the case someone wins the case, he is not left remediless due to the Defendant (the person from whom someone have to recover money) leaving the country or disposing the money in a manner which will affect your right adversely.
For example insolvency cases are one of these kinds where the person against whom a case for money recovery is pending, sells his property and at the same time withdraws all the money from his bank account, so that he is left with nothing at least on paper. So even after a party wins, the Defendant cannot be forced to pay anything as he will say I am insolvent and hence cannot pay a single paisa. Cases of this kind are aplenty. When you file a case against a party it may have money in its bank account or property from sale of which your money can be paid. But just to evade paying money to you it may dispose all the money in the bank account to some 3rd party or sell his flat or plot in order to save himself from paying any money to you. In these cases it is advisable to get an attachment order on the property or the bank or any other property of the defaulting party so that even after winning the battle you don’t lose the war.
In contrast the aim of attachment after judgment i.e. during the execution is not to save the property but rather is to sell the property so that the winning party can reap the benefits of the Decree.
But as I explained earlier to get an attachment of property is difficult as the Courts are wary of stepping on the wrong side of law. That’s why in the case at hand when A have obtained an attachment in the previous execution petition it will be wrong to ask A to obtain an attachment again as A again have to go through the onerous task which may take even upto one year.
That is the reason that Calcutta High Court held that the Executing Court was incorrect in holding that attachment is needed to be effected again and held that the attachment of B’s property in the previous case will continue in this case also and A can apply directly to the Executing Court to sell the property to realise his money which B have to pay to A.
Conclusion
So we saw in this case that a person should not be content with only winning a case and he should also engage an able advocate in the Execution process as money to the winner of a case only flows to him when he wins the Execution case and journey does not end with trial. Execution of a Decree is, be it Money or Mortgage or of any other kind, should be taken seriously and the winner (called the Decree Holder) should appeal to higher Courts if some wrong order is passed against him even in Execution. Like in this case if A would not have appealed in the Calcutta High Court against the incorrect order, the attachment process would have to be started afresh wasting the time of the Winning party i.e. A. And who knows in the meanwhile, as there was no attachment, B might have sold his Vasant Kunj property and fled from Delhi or even the Country making any recovery from B a pipe dream for A.
Parveen Semwal
Advocate, High Court of Delhi and Supreme Court of India