06 August 2020

Execution proceedings – Delhi High Court formulates detailed affidavit of assets and income of judgement-debtor

The Delhi High Court has formulated detailed formats of affidavit of assets and income of the judgement-debtor to be filed at the threshold of execution proceedings. The Court in its judgement dated August 5, 2020 also laid down detailed guidelines for the Executing Court. It observed that this will curb the delay and expedite disposal of execution proceedings.

Affidavits of assets and income

The High Court in this regard noted that the execution of decrees/awards deserve special attention, considering that inordinate delay in execution proceedings would frustrate the decree-holders from reaping the benefits of the decrees/awards. It was also of the view that Form 16A of Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure is not exhaustive to ascertain all the assets, income, expenditure and liabilities of the judgment-debtor.

Modifying its earlier judgement dated 05-12-2019, the Court annexed the modified formats of affidavit of assets and income of the judgment-debtor; affidavit of assets and income of a proprietorship firm/partnership firm/HUF/Company /Trust who is a judgement-debtor; and affidavit of expenditure of the judgment-debtor. The High Court in this regard exercised its powers under Sections 30 and 151 and Order XXI Rule 41 of the Code of Civil Procedure read with Sections 106 and 165 of the Indian Evidence Act and Article 227 of the Constitution of India.

It may be noted that the judgement would be applicable in pending execution cases as well. It states that,

“In pending execution cases, if the judgment-debtor has not already filed the affidavit of assets and income, the Executing Court shall direct the judgment-debtor to file the affidavit of his assets and income in terms of this judgment.”

The Court for this purpose also examined the formats of the affidavits of assets, income, expenditure and liabilities to be filed by the judgment-debtor in execution cases in the United Kingdom, United States of America, Canada, Ireland, Australia, Singapore, New Zealand and South Africa.

Guidelines for Executing Court

The judgement in the case Bhandari Engineers & Builders Pvt. Ltd. v. Maharia Raj Joint Venture & Ors. also elaborately laid down the procedure to be followed by the Executing Court. It directed that the Executing Court,

  • shall direct the judgment-debtor, at the first instance i.e. first date of filing, to file the affidavit of assets on the date of cause of action, date of the decree/award as well as on the date of the swearing of the affidavit. Oral prayer/application of the decree-holder for issuance of such direction shall be sufficient;
  • to restrain the judgment-debtor from discharging any financial liability, other than the liabilities of Banks/financial institutions, without the permission of the Executing Court;
  • to ensure presence of judgement-debtor before the Court initially by issuing bailable warrants and thereafter, by issuing non-bailable warrants as per law;
  • to consider detention of the judgment-debtor in civil prison, in case the latter defaults to file affidavit within stipulated time;
  • can direct the Directors/Promoters (other than independent/non-executive and nominee directors) of the judgment-debtor company to disclose their personal assets and income, in case any ground for lifting of the corporate veil of a judgment-debtor company is made out as per law;
  • grant reasonable time to the judgment-debtor to remove the defects/deficiencies and simultaneously act on the information available in the deficient affidavit as per law;
  • may order investigation by a government agency including a forensic audit, cost of which shall be borne by the decree-holder;
  • shall ensure the compliance of Sections 60 to 64 and Order XXI Rules 41 to 57 of the Code of Civil Procedure with respect to the attachment of properties in execution of decrees;
  • pass appropriate order of restitution to reimburse the loss suffered by the decree-holder on account of delay and obstruction in the execution proceedings caused by the judgment-debtor;
  • may impose real costs equal to the deprivation suffered by the rightful person, and also order prosecution.

The High Court further held that the directions/guidelines will apply to all execution proceedings, such as the execution proceedings under Section 36 of the Arbitration and Conciliation Act; execution proceedings before Motor Accident Claims Tribunals; execution proceedings before the SDM empowered to execute decree/award as arrears of land revenue; execution proceedings before Debt Recovery Tribunals and execution proceedings under the Consumer Protection Act.

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