Investments Ltd. & Ors Vs. Raj K. Gupta & Ors  Insc 368 (6 August 2001)
Khare & Ruma Pal Ruma Pal, J.
questions raised in this appeal relate to the interpretation of Order 21 Rules
54, 55 and 58 of the Code of Civil Procedure (hereinafter referred to as the
Code). All the provisions relate to the attachment of immovable property in
execution of a decree.
decree, in this case, was passed in favour of the appellants against respondent
No. 1 by the Queens Bench Division of the High Court in England on 29th
November 1990 for a sum of US$ 12,48,415,49 (being the equivalent of
Rs.3,60,09,821.01) together with interest @ 15 per cent per annum from the date
of the judgment. The decree was put to execution by the appellants by filing an
execution application in the original side of the Delhi High Court on 27th
November 1991 requiring the attachment of property, being 20, Barakhamba Lane,
New Delhi 110 001 and also the share holding of the respondent No. 1 in the
companies of respondent Nos. 2 to 7 herein.
appeared on behalf of the judgment debtors before the Court when the matter was
listed on 4th May, 1994. This was recorded by the Court which
accordingly issued warrants of attachment with regard to premises No. 22, Barakhamba Lane, New Delhi 110001. The matter was made returnable on 31st August 1994. On an application for amendment
moved by the appellants, the Court corrected the description of the premises to
read as 20, Barakhamba
Road, instead of Barakhamba Lane and the returnable date was
extended to 3rd
On 22nd September 1994 an objection was preferred to the
attachment by the respondent No. 1 under Order 21, Rule 58 of the Code ( EA
278/94). A second application was also filed by the respondent No. 1 on the
same date under Section 151 of the Code for recalling the warrants of
attachment ( E.A.279/94).
of these applications appear to have been proceeded with.
these applications were pending, on 16th January 1995 the respondent No. 1 filed a suit
against the appellants herein in the High Court of Delhi praying, inter-alia,
for a declaration that the judgment passed by the Queens Bench Division in favour
of the appellant was void. The respondent No.1 also sought for a permanent
injunction restraining the appellants from executing the judgment and decree of
the High Court of England (hereinafter referred to as the decree). An
interlocutory application was moved in the respondent No. 1s suit and an order
was passed on 3rd
April, 1995 staying the
execution of the decree. It is not in dispute that the interim order is still
operative and the suit is pending.
On 17th October 1997, the respondent No. 8 herein,
namely, United Towers India Private Ltd., filed an application (EA No.343/97)
asking for impleadment as a party to the appellants execution proceedings and
also for recalling and setting aside the warrants of attachment dated 4th May 1994. On the same day, an application
(EA No. 344/97) was filed by the respondent No. 1 herein under Section 151 of
the Code of Civil Procedure for seeking substantially the same relief as had
been claimed earlier in the application filed by him under Section 151 on 22nd
the applications were heard by the Learned Single Judge and an interim order
was passed on 3rd February, 1998 accepting the offer of the respondent No. 8
and modifying the attachment order dated 4th May 1994 subject to the Principal
Officer of the respondent No. 8 filing an affidavit undertaking not to sell
3000 sq. ft. of the covered area in the multi-storey building proposed to be
constructed on the property by the respondent No.8. The affidavit was to be
accompanied by a resolution of the Board of Directors of the respondent No. 8 authorising
the Principal Officer of the respondent No. 8 to furnish the undertaking. On
the filing of the said affidavit, the attachment order dated 4th May 1994 shall stand modified to the extent
that 3000 sq. ft. of the covered area in the superstructure proposed to be
constructed on the land in question shall remain attached till the disposal of
the main execution petition. The Learned Judge also set down EA No. 343/97 and
EA No. 344/97 for trial on evidence.
appellants preferred an appeal from the order dated 3rd February, 1998 before the Division Bench. The Division Bench affirmed the
order of the Single Judge on 5th October, 1998 holding that he had not
committed any illegality by modifying the order of attachment but at the same
time protecting the interest of the decree holder by requiring United Towers to
file undertaking not to sell 3000 sq. ft. of the covered area in the multi-storeyed
building proposed to be constructed at 20, Barakhamba Road. The appeal was
not necessary for us to go into the merits of the respective cases of the
parties as we are of the view that the High Court was clearly procedurally
wrong in modifying the order of attachment dated 4th May 1994, First, there is
nothing on record to show that respondent No. 8s prayer for being impleaded as
a party in the execution proceedings had been allowed and yet the learned
Single Judge accepted the respondent No.8s offer and partially allowed the
application of the respondent No. 8 in terms of such offer.
by the impugned orders the attachment has been directed to be effected on
non-existent property. The building is proposed to be constructed by respondent
No. 8 on the property. It has not been decided whether the respondent No.8 has
any right to construct on the property. According to the High Courts order, if
and when the proposed building is constructed an attachment will be effected of
an area of 3000 sq. ft. in an unspecified area of the building. The High Court
has in effect removed the attachment for the present to be operative at an
un-determined point of time in the future on property which is not and may
never come into existence.
Order 21, Rule 54 in terms prohibits the judgment debtor from transfer or
charging property attached in any way and all persons from taking any benefit
from such transfer or charge.
long the order of attachment is operative, no third party rights can be
created. Pending the determination of the validity of the order of attachment
and ultimate disposal of EA 343/97 and EA 344/97, the Court should not have
allowed the attachment to be rendered infructuous.
21, Rule 55 indicates situations where an attachment order may be withdrawn,
amount decreed with costs and all charges and expenses resulting from the
attachment of any property are paid into Court, or
of the decree is otherwise made through the Court or certified to the Court, or
decree is set aside or reversed If the Court was minded to lift the attachment
temporarily, it should, therefore, have at least secured the decretal amount.
case the Court could not have passed an interim order virtually granting the
final relief in EA 343 and EA 344 without any decision on the merits of the
case. This is fortified by Order 21, Rule 58 which has been substituted in the
Code by the Amendment Act, 1976. Sub-rule 2 of Rule 58 provides:
All questions (including questions relating to right, title or interest in the
property attached) arising between the parties to a proceeding or their
representatives under this rule and relevant to the adjudication of the claim
or objection, shall be determined by the Court dealing with the claim or
objection and not by a separate suit." It is only upon determination of
the questions referred to in sub-Rule (2) that the Court, in accordance with
such determination may, either
the claim or objection and release the property from attachment either wholly
or to such extent as it thinks fit; or
the claim or objection; or
the attachment subject to any mortgage, charge or other interest in favour of
any person; or
pass such order as in the circumstances of the case it deems fit.
any determination of the questions referred to in sub-Rule (2), the Court did
not have the jurisdiction to pass any order varying the orders of attachment.
appellant has also raised a preliminary issue as to the maintainablity of EA
343/97 and EA 344/97. Under Order 21, Rule 58 sub-Rule (1) no claim or
objection shall be entertained where the Court considers that the claim or
objection was designedly or unnecessarily delayed. That the attachment order
had been issued was known at least to the respondent No.1 in 1994. The High
Court has not addressed its mind to this aspect before entertaining the
applications filed by respondents Nos. 1 and 8.
the learned Single Judge himself observed that in the suit filed by respondent
No. 1, an order has been passed staying the execution of the appellants decree
and that that order was still operative. In the circumstances, it was not open
to the Court to proceed with the execution proceedings. As long as the interim
order passed in respondent No. 1's suit is operative, no further steps can be
taken in the execution proceedings.
allow this appeal and set aside the impugned orders of the High Court but
without any order as to costs.