Circa 1872, the Privy Council in General Manager of the Raja Durbhunga[1] observes that the tribulations of a litigant in India began once the decree was secured. Fast forward to 2009, in Shub Karan Bubna & Anr. V Sita Saran Bubna[2], the apex court urges the law commission and the parliament to review the framework of execution proceedings under the Civil Procedure Code, 1908(“CPC”).
In present day India, even a century and a half later, the plight of litigants continues in spite of amendments to Order XXI of CPC in 1976. Sadly, over time the state of enforcement proceedings in India has remained static, if not worse. As highlighted by the Supreme Court there were 11,80,275 execution petitions pending across courts as on 31 December 2018. Albeit an assumption, it is likely that the graph of pending execution petitions is only on an upward trajectory, particularly in view of the backlog since the start of the pandemic.
Ask any litigant about dispute resolution process in India and, amongst others, a common refrain one hears is the cliched piece of medical humour “operation successful, patient dead”. By the time a judgment creditor is able to secure a semblance of an order in her/his enforcement application, the judgement debtor has already successfully frittered away the assets. What the Privy Council said in 1872 rings absolutely true till date.
It is thus with an equal mix of amazement and relief that the authors welcome the decision of the Supreme Court in Rahul S Shah v. Jinendra Kumar Gandhi & Ors[3]. The directions of the Supreme Court are a leap forward in the interest of litigants who are often caught in a tireless maze to obtain the fruits of judgments secured by them. Addressing the grievances of litigants troubled by the complexities of executing a decree in Indian courts, inordinate delays, and frivolous applications – this decision promises to be a leading light.
The facts involved in the matter are nothing out of ordinary. As one traverses through the factual narration, realisation sets in that it is what one has come to expect in any execution proceeding. As one is given to understand in context of the matter for execution of a decree, multiple ancillary legal proceedings (including criminal proceedings) were initiated that resulted in an excessive delay and deference of justice.
Recognizing the failed attempts by the decree holder to secure the fruits of its judgment, the Karnataka High Court put to naught attempts to stall execution, passed orders to facilitate execution of the decree before it and directed the executing court to complete the process within a timeframe of 6 months. In a special leave petition preferred from the High Court’s order, the Supreme Court affirmed the High Court’s directions, dismissed the appeals, and cautioned parties to cooperate with the executing court – failing which the court would use its powers including the powers to proceed ex parte or impose costs.
Our judiciary, comprehensive statutes, and consistently developing jurisprudence – have the potential to establish India as a world class judicial system and favourable environment for global business. However, we do fall short when it comes to administration, streamlining practice and procedures, and time keeping. Both, India’s homegrown businesses and foreign investors, while litigating often find themselves stuck at a bottleneck – with a paper decree in hand that has failed to yield tangible results.
While there are multiple routes for dispute resolution, the legislature has failed to acknowledge that litigants are concerned with the ultimate relief, i.e. the end result, and not a mere paper decree. Multiplicity of proceedings and parties playing hardball to resist execution has created a situation of victory with no rewards.
Despite the repeated requests by courts in India to amend the CPC, the legislature has failed to introduce efficacious change and turned a blind eye. Thus, the Supreme Court once again was compelled to exercise its jurisdiction under the available framework of the law, to streamline execution proceedings in public interest. After a long wait, in exercise of its jurisdiction under Article 142 read with Articles 141 and 144 of the Constitution of India, the Supreme Court has issued mandatory directions to all courts dealing with suits and execution of decrees. While the directions are many, we eke out the most interesting amongst them:
(i) the executing court shall dispose of execution proceedings within six months from the date of filing, which may be extended if reasons for the delay are recorded in writing;
(ii) in a money suit – the court shall always resort to Order XXI Rule 11 to ensure immediate execution of decree for payment of money on oral application;
(iii) in a suit for payment of money – before settlement of issues, the defendant may be required to disclose his assets on oath to the extent that he/she is liable in the suit;
(iv) when possession is not in dispute and not a factual question for adjudication, in appropriate cases, the Court may appoint a commissioner to assess the status of the property;
(iv) in appropriate cases where the resistance or objection is found to be frivolous or malafide the court must grant compensatory costs
The High Courts have also been directed to update their rules on Execution of Decrees within one year. The directions passed in Rahul S Shah v. Jinendra Kumar Gandhi & Ors[4]. shall remain enforceable until the amended rules come into effect.
Clearly, the decision is another attempt on the part of the judiciary to accelerate the process of enforcement, which is the dire need of the hour. Whatever, be the nature of proceedings, whether a suit or an arbitration, without proper execution mechanisms victory remains only on paper. Lest we forget, in October 2015, mandatory time limits were introduced for completion of domestic arbitrations in India and undoubtedly, the ticking clock promoted speedy resolution of disputes. However, all of it is rendered useless since for the execution of the award one needs to take refuge under the provisions of CPC.
Undoubtedly, it is a creditable piece of legislation, however, the law must evolve to reflect the interests of litigants. The Supreme Court through its decision seeks to energise the process of enforcement. While the apex court has set the ball rolling to streamline execution proceedings, the question to ask is – isn’t it time to consider amending CPC and reassess provisions that frustrate execution proceedings instead of facilitating them?
The author of this article is Naresh Thacker, Partner at Economic Laws Practice. You can reach the author at nareshthacker@elp-in.com
[1] The General Manager of the Raja Durbhunga v. Maharaja Coomar Ramaput Sing (1871-72) 14 Moore’s I.A. 605
[2] (2009) 9 SCC 689
[3] CIVIL APPEAL NOS. 1659-1660 of 2021 (@ SPECIAL LEAVE TO APPEAL NOS. 7965-7966/2020)
[4] Supra 3
