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Sreyas Sripal And Mr. T.P. Anand vs Upasana Finance Limited on 9 June, 2007

Madras High Court
Sreyas Sripal And Mr. T.P. Anand vs Upasana Finance Limited on 9 June, 2007
Author: S Rajeswaran
Bench: S Rajeswaran


ORDER

S. Rajeswaran, J.

1. Application No. 2784/2006 has been filed by the judgment debtor-2 to set aside the order of the Master dated 3.7.2006 passed in Application No. 2109/2006 in E.P. No. 193/2000 in C.S.No. 704/1998.

2. Application No. 2285/2006 has been filed by the judgment debtor-2 to stay all further proceedings in E.P.Nos. 193/2000 in C.S.No. 704/1998, pending disposal of the appeal.

3. Application No. 2286/2006 has been filed by the judgment debtor-3 to set aside the order of the Master dated 3.7.2006 passed in Application No. 2110/2006 in E.P. Nos. 194/2000 in C.S. Nos. 704/1998.

4. Application No. 2287/2006 has been filed by the judgment debtor-3 to stay all further proceedings in E.P.Nos. 194/2000 in C.S. Nos. 704/1998, pending disposal of the appeal.

5. Application Nos. 2284, 2285 and 2109 of 2006 were filed by the judgment debtor/2nd defendant in E.P.No. 193/2000 in C.S. No. 704/1998. The other Applications were filed by the judgment debtor/3rd defendant in E.P.Nos. 194/2000 in the very same suit.

6. The respondent/decree holder in all the Applications filed a suit in C.S. No. 704/1998 and a decree was passed by this Court dated 30.1.1999 in terms of a Memorandum of Compromise (MoC) signed by all the parties. The following are the terms of the compromise decree dated 30.1.99:

(i) That defendants 1, 2, 3, 5 and 6 herein do pay to the plaintiff herein a sum of Rs. 95,37,103.00 only (Rupees Ninety five lakhs thirty seven thousand one hundred three only) with further interest at the rate of 33% p.a., at monthly rests from the date of compromise i.e., 4.1.1999 till the date of payment.

(ii)That the defendants herein be and are hereby permitted to pay the amount decreed in Clause (i) supra along with interest at the rate of 33% at monthly rests in 78 weekly instalments commencing from 8.1.1999 and ending 30.6.2000 in the Schedule ‘A’ to the Memorandum of Compromise annexed hereunder, and if there being any delay in payment of the instalments shall carry interest at the rate of 36% p.a., at monthly rests from the due date till date of payment of the instalment;

(iii) That if the defendants fail to pay any three consecutive instalments on the due dates the plaintiff shall be at liberty to execute the decree for the entire amount and the entire amount becomes payable irrespective of the period fixed for the payment of the decree amount;

(iv) That as agreed the mortgage created by defendants 5 & 6 herein over the property more fully set out in the schedule ‘B’ hereunder by way of depositing of title deeds, shall continue till the entire decree amount is paid;

(v) That defendants 5 and 6 herein shall not alienate by way of sale or mortgage the properties in any manner till the entire decree is satisfied;

(vi) That in case of default in payment of the instalments and in the event of the plaintiff executing the decree the plaintiff herein shall be entitled to have the properties mentioned in the schedule ‘B’ to the Memorandum of Compromise annexed hereunder be sold. (vii) That the suit C.S. No. 704/1998 be and is hereby dismissed as not pressed against the defendant-4.

7. According to the Applicants a sum of Rs. 34,25,000/-has been paid till date towards the decretal sum. Subsequently as default was committed, the decree holder filed E.P. Nos. 193 and 194 of 2000 against defendants 2 an 3 respectively. An order of arrest was passed by the Master on 7.11.2001 against both the Applicants. It came to light to the Applicants only on 26.6.2006 as during the interregnum period, the Applicants were discussing with the decree holder to arrive at a settlement, that too, without even knowing that order of arrest was already passed on 7.11.2001. Immediately they filed applications to recall the order of arrest, but the Master passed a conditional order to keep the warrant of arrest pending by directing the judgment debtors 2 and 3 to pay a sum of Rs. 10 lakhs on or before 15.7.2006 and aggrieved by the same, Application Nos. 2284 and 2285 of 2006 were filed by judgment debtors 2 and 3 respectively.

8. Heard the learned Counsel for the judgment debtors 2 and 3 and the learned Counsel for the decree holder. I have also perused the documents filed and the judgments referred to by them in support of their submissions.

9. The learned Counsel for the judgment debtors 2 and 3 submitted that the Master has overlooked the fact that an extent of 7.5 cents of vacant lands situated at No. 139, Kanakam village, Mambalam Guindy Taluk, Chennai Corporation area owned by 5th defendant and the land bearing Plot No. 8 situated at Survey No. 13/104, Erukkancheri village, measuring an extent of 43 cents owned by 6th defendant were mortgaged and as per Clause 6 of the compromise decree, the decree holder is entitled to have the properties, mentioned above, sold. According to the learned Counsel, these properties worth about more then Rs. 1 crore and the decree holder should have proceeded only against the properties, and therefore the order of arrest passed by the Master is not in consonance with Section 51 of C.P.C.

10. He relied on the decision of the Supreme Court (Jolly George Varghese v. Bank of Cochin) to submit that Order 21 Rule 37 CPC read with Section 51 emphasises the need to establish not mere omission to pay but an attitude of refusal on demand verging on dishonest disowning of the obligation under the decree. The learned Counsel submitted that as there is no finding by the Master that the judgment debtors are refusing to pay with dishonest intention, the orders are liable to be set aside.

11. Per contra the learned Counsel for the decree holder submitted that the original orders of the Master dated 7.11.2001 passed in the execution petition ordering arrest of judgment debtors are not at all challenged and they have reached a finality. What is challenged before this Court is the subsequent conditional order passed by the Master on 3.7.2006 in the Applications filed by them to recall the warrant of arrest. The learned Counsel relied on the decision of the Supreme Court (State Bank of India v. Indexport Registered) to submit that the decree passed in C.S. No. 704/1998 is a compromise decree which is both personal and mortgage decree and in such circumstances, the decree holder cannot be forced to first exhaust the remedy of execution of mortgage decree alone.

12. I have considered the rival submissions with regard to facts and citations.

13. After going through the relevant records and documents, I am of the considered view that the above Applications are devoid of merits.

14. As rightly contended by the learned Counsel for the decree holder, the order of arrest was passed by the Master in both the Execution Petitions on 7.11.2001 itself and that order was not at all challenged. In the order under challenge, the Master has ordered that, the warrant of arrest issued shall not be extended till 15.7.2006 on condition that the judgment debtors 2 and 3 should pay together a sum of Rs. 10 lakhs and undertake to pay the balance of Rs. 50 lakhs by 31.8.2006. This order passed on 3.7.2006 in both the Application Nos. 2109 and 2110 of 2006 filed by the judgment debtors 2 and 3 respectively alone are under challenge before me. Therefore it is not for the judgment debtors to contend now that the order of arrest itself has not been passed as per Section 51 CPC read with Order 21 Rule 37 CPC nor can they be allowed to raise a contention that the decree, holder should proceed first against the mortgage decree. The Supreme Court in (cited supra) has clearly held that the decree holder cannot be forced first to exhaust the remedy by way of execution of mortgage decree alone and then to proceed with the personal decree. Moreover, even this contention of the judgment debtors 2 and 3 that the decree holder to proceed first against the ‘B’ schedule property, contained in the decree dated 30.1.1999, which is untenable, should have been raised before the execution of decree at the time of the Master passing the order of arrest.

15. Therefore I do not find any merits in all the above Applications and the same are dismissed. No costs.

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