The Delhi High Court has established comprehensive templates for the affidavit of assets and income of judgment-debtors to be submitted at the commencement of execution proceedings. In its decision dated August 5, 2020, the Court also issued detailed directives for the Executing Court, emphasizing that this approach aims to minimize delays and facilitate the prompt resolution of execution proceedings.
Concerning the affidavits of assets and income, the High Court underscored the need for special attention to the execution of decrees and awards. It expressed concern that prolonged delays in execution proceedings could hinder decree-holders from enjoying the benefits of the decrees or awards. The Court highlighted that Form 16A of Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure does not provide a comprehensive means to ascertain all the assets, income, expenditure, and liabilities of the judgment-debtor.
In a modification to its previous judgment dated December 5, 2019, the Court appended revised formats for the affidavit of assets and income of the judgment-debtor, as well as for proprietorship firms, partnership firms, HUFs, companies, trusts who are judgment-debtors. This modification, executed under Sections 30 and 151 and Order XXI Rule 41 of the Code of Civil Procedure, alongside Sections 106 and 165 of the Indian Evidence Act and Article 227 of the Constitution of India, applies to pending execution cases.
The Court specified that in pending execution cases where the judgment-debtor has not filed the affidavit of assets and income, the Executing Court must instruct the judgment-debtor to comply with the terms outlined in the judgment.
Guidelines
The judgment in the case of Bhandari Engineers & Builders Pvt. Ltd. v. Maharia Raj Joint Venture & Ors. not only introduced the revised affidavit formats but also detailed the procedures for the Executing Court. The Court directed the Executing Court to:
- 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 emphasized that these directives and guidelines are applicable to all execution proceedings, including those under Section 36 of the Arbitration and Conciliation Act, before Motor Accident Claims Tribunals, before SDMs empowered to execute decree/award as arrears of land revenue, before Debt Recovery Tribunals, and under the Consumer Protection Act.