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Balaji Industries and anr. Vs. State Bank of India and ors. - Court Judgment

SooperKanoon Citation
SubjectContract
CourtMadhya Pradesh High Court
Decided On
Case NumberM.C.C. No. 262 of 1996 and Civil Revision No. 300 of 1992
Judge
Reported in[1998]94CompCas545(MP); 1997(2)MPLJ316
ActsCode of Civil Procedure (CPC) , 1908 - Sections 47 and 151; Indian Contract Act, 1872 - Sections 41
AppellantBalaji Industries and anr.
RespondentState Bank of India and ors.
Appellant AdvocateS.C. Bagdia and ;Ajay Bagdia, Advs.
Respondent AdvocateK.N. Puntambekar, Adv. for respondent No. 1
DispositionPetition dismissed
Cases ReferredHindustan Aeronautics Ltd. v. Ajit Prasad
Excerpt:
- - and such a provision is not contained in the decree as well, that being so, it is impermissible in law to go behind the decree and entertain the plea, for whatever worth, unsupportable by the decree. it is thus contended that it is neither a performance nor an acceptance from a third person like the corporation......thevar, air 1951 sc 189 and moolchand v. magantal, air 1965 mp 75 [fb].5. on october 12, 1992, the execution proceedings were directed to remain stayed.6. execution of decrees and orders is regulated by order xxi of the civil procedure code which has as many as 106 rules. this prodigious extent is not occupied by any other order of the code. the attempt at misuse needs to be foiled by law. the application was filed under section 47read with section 151 of the code. this provision envisages the consideration of 'all questions' arising between the 'parties to the suit'. indisputably, the corporation was not a party to the suit and as such, no question can arise for consideration vis-a-vis a party foreign to the suit. hence, no application under section 47 read with section 151 of the code.....
Judgment:

A.R. Tiwari, J.

1. The judgment-debtors confronted with liability under the money decree, have filed this revision petition under Section 115 of the Civil Procedure Code, 1908 (for short 'the Code'), against the order dated May 1, 1992, passed by the executing court (Sixth Additional Judge to the Court of the District Judge, Indore) in Execution Case No. 71/84-A, thereby rejecting their objections under Section 47 read with Section 151 of the Code. Objections were preferred on the linchpin that the decree-holder bank has already recovered the sum of Rs. 3,50,000, a substantial part of the decretal liability, from the Deposit Insurance and Credit Guarantee Corporation (for short 'the Corporation') on the strength ofthe premium paid from their (judgment-debtors) accounts and it cannot be permitted to recover the aforesaid amount from them (judgment-debtors) again and to indulge in undue enrichment. The executing court said a monosyllabic 'No' to the objections, on the ground of absence of 'privity of contract' between them and the Corporation and the absence of such a fetter in the decree.

2. I have heard Shri S.C. Bagadia, learned senior counsel with Shri Pan-kaj Bagadia for the applicants and Shri S.C. Consul, learned counsel for non-applicant No. 1. None appeared for non-applicants Nos. 2 to 4.

3. Shri Bagadia has submitted that the order is illegal and vitiated by material irregularity in that 'recovery' cannot be permitted to be duplicated despite the decree and that the promisee, having accepted performance of the promise from the Corporation, i.e., a third person, to the aforesaid extent, cannot be allowed to enforce it against the promisor via execution. He has also submitted that enforcement, designed to secure undue enrichment, would amount to practising fraud and to committing of abuse of the process of the court. In further pursuit, he has placed reliance on Section 41 of the Indian Contract Act, 1872, and on Union of India v. Gangabishan, AIR 1973 Cal 141. He has also stated that efforts for a reasonable settlement with the bank are in progress.

4. Shri Consul has, however, dubbed the oppugnation as non-meritorious and has contended that the executing court has passed the legal and valid order as there is indubitably 'no privity of contract' between the borrower and Corporation. He has submitted that the executing court has no jurisdiction 'to go behind the decree' and imagine the state of affairs, not indicated or mandated by the decree which has attained finality. He clarified that there is no question of duplication or undue enrichment and that payment by the Corporation is an ad hoc arrangement on account of insurance to save the bank from becoming financially paralysed and that the bank has the liability to restitute the amount back to the Corporation on recovery of the debt amount from the borrower i.e., the judgment-debtors, He has placed reliance on Shambhoo Lal Purohit v. State Bank of India [1995] ISJ Banking 222, V. Ramaswami Aiyengar v. T.N.V. Kailasa Thevar, AIR 1951 SC 189 and Moolchand v. Magantal, AIR 1965 MP 75 [FB].

5. On October 12, 1992, the execution proceedings were directed to remain stayed.

6. Execution of decrees and orders is regulated by Order XXI of the Civil Procedure Code which has as many as 106 rules. This prodigious extent is not occupied by any other Order of the Code. The attempt at misuse needs to be foiled by law. The application was filed under Section 47read with Section 151 of the Code. This provision envisages the consideration of 'all questions' arising between the 'parties to the suit'. Indisputably, the Corporation was not a party to the suit and as such, no question can arise for consideration vis-a-vis a party foreign to the suit. Hence, no application under Section 47 read with Section 151 of the Code could properly lie, on this point in the execution case.

7. As regards the merits of the matter, the executing court rejected theplea with the uncontroverted position on observation as noted below:

*** *** ***

And such a provision is not contained in the decree as well, That being so, it is impermissible in law to go behind the decree and entertain the plea, for whatever worth, unsupportable by the decree.

8. The law as enacted in Section 41 of the Indian Contract Act, 1872, as noted above, has been adopted from the Roman law and is a departure from the early English law on the point. The Indian rule is presumably based on the observations in Cook v. Lister, 32 LJCP 121. What is required by this section is actual performance and not a substituted promise. It is stated that there is no actual performance, but ad hoc payment, as substituted one, to become incinerated as being liable to be returned, on recovery from the borrower. It is thus contended that it is neither a performance nor an acceptance from a third person like the Corporation. Section 41 is thus not shown to be attracted in the peculiar facts in this execution case. The decision pressed into service is inapplicable and thus unhelpful,

9. It is, thus, luculent that the submissions are inutile and futile at least so far as the execution proceedings are concerned, There is no material to infer 'fraud' or 'abuse'. The Full Bench decision, cited above, has ruled that the executing court has no jurisdiction to refuse to execute the decree. It is a trite position of law that the executing court cannot spin a new decree for the parties even under the guise of interpretation. Objections are not entertainable even by doctrine of implication.

10. Apart from debility and infecundity, the judgment-debtors have stated nothing substantial to tear up the tenebrosity as to why the alleged position, untriable in such proceedings, was not prevised The course is thus, not relaxant, The order is not fit to be revised.

11. The decree remains executable as it is and the exercise can be seen to suffer no speed-breaker. There is no question for retrogradation or riddance.

12. The order is, thus, found to be on firm foundation. The court below is not shown to have acted in the exercise of its jurisdiction illegally or with material irregularity. The order also does not seem to fall under (a)or (b) of the proviso to Section 115 of the Code. The scope of interference under this section, as held in Managing Director, Hindustan Aeronautics Ltd. v. Ajit Prasad, AIR 1973 SC 76, is even otherwise little and limited. No ground is made out to warrant interference.

13. In the result, I dismiss this revision petition, but with direction/observation as noted below :

(a) This order shall not impair the right of the applicants, if any, to file appropriate proceedings, if not forbidden by law.

(b) The interim order dated October 12, 1992, shall remain operative on the fulcrum of contention about efforts at settlement till January 31, 1997, so as to enable the parties to compromise in the meantime, if they so desire.

(c) Further proceedings in the execution case, in the event of absence of written compromise, shall be resumed after January 31, 1997, in accordance with law without unnecessary delay.

In view of the nature of objection, I make no order as to costs. Counsel fee for each side is, however, fixed at Rs. 500, if certified.


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