Assankutty v. Kerala Gramin Bank (erstwhile), South Malabar Gramin Bank, Vazhavatta, Wayanad District

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **THURSDAY, THE 26TH DAY OF OCTOBER 2017/4TH KARTHIKA, 1939** ## **OP(C).No. 2121 of 2014 (O)** **--------------------------OS.NO. 50/2011 OF MUNSIFF COURT, KALPETTA ------------------** ## **PETITIONER :** **----------------------** **ASSANKUTTY, AGED 38 YEARS, S/O.SAIDALAVI, KOKKENCHERY HOUSE, P.O.PARIYARAM, MUTTIL, WAYANAD DISTRICT.** **BY ADVS.SRI.MANOJ RAMASWAMY SMT.SANJANA R.NAIR** ## **RESPONDENT :** **------------------------** **KERALA GRAMIN BANK (ERSTWHILE), SOUTH MALABAR GRAMIN BANK, VAZHAVATTA, WAYANAD DISTRICT-673 122 REP. BY ITS MANAGER.** **BY SRI.T.R.RAVI, SC,** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 26-10-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **OP(C).No. 2121 of 2014 (O)** ## **---------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **---------------------------------------** - **EXHIBIT P1 : TRUE COPY OF THE PLAINT IN OS.NO. 50/2011 BEFORE THE HON'BLE MUNSIFF COURT, KALPETTA.** - **EXHIBIT P2 : TRUE COPY OF THE JUDGMENT DT. 25-5-2011 IN OS.NO. 50/11 OF THE HON'BLE MUNSIFF COURT, KALPETTA.** - **EXHIBIT P3 : TRUE COPY OF THE EXECUTION PETITION NO.72 OF 2013 IN OS.NO. 50/11.** - **EXHIBIT P4 : TRUE COPY OF THE AFFIDAVIT FILED BY THE RESPONDENT IN EP.NO. 72/13 IN OS 50/2011.** - **EXHIBIT P5 : TRUE COPY OF THE COUNTER STATEMENT DT. 7-1-2014 FILED BY THE PETITIONER.** - **EXHIBIT P6 : TRUE COPY OF THE ORDER DT. 2-8-14 IN EP.NO. 72/2013 IN OS.NO. 50/2011 OF THE HON'BLE MUNSIFF COURT, KALPETTA.** **RESPONDENT(S)' EXHIBITS: NIL** **--------------------------------------------** **/TRUE COPY/** **P.A.TO JUDGE** **sts** ## **ANIL K. NARENDRAN, J** **................................................. O.P.(C)No.2121 of 2014 ...............................................** Dated this the 26[th] day of October, 2017 ## **JUDGMENT** The petitioner, who is the judgment debtor in E.P.No.72 of 2013 in O.S.No.50 of 2011 on the file of the Munsiff Court, Kalpetta is before this Court in this original petition filed under Article 227 of the constitution of India, seeking an order to set aside Ext.P6 order passed by the said court dated 02.08.2014 in that execution petition in an enquiry conducted under Order XXI, Rule 40 of the Code of Civil Procedure, 1908 (for brevity, 'the Code'), whereby the plea of the judgment debtor that he has no means to pay the decree debt was turned down. 2. On 18.09.2014, when this original petition came up for admission, this Court admitted the matter on file and granted an interim order of stay of all further proceedings pursuant to Ext.P6 order, for a period of two weeks. The said interim order, which was extended from time to time, is still in force. 3. Heard the learned counsel for the petitioner/ judgment debtor and also learned counsel for the respondent/ O.P.(C) No.2121 of 2014 2 decree holder. 4. The sole issue that arises for consideration in this original petition is as to the legality or otherwise of Ext.P6 order passed by the court below whereby the plea of the judgment debtor that he has no means to pay the decree debt was turned down. 5. The respondent/decree holder filed E.P.No.72 of 2013 to realise the decree debt in O.S.No.50 of 2011 amounting to Rs.70,948/- together with interest at the rate of 6% per annum from the date of suit till realisation, by the arrest and detention of the petitioner/judgment debtor under Order XXI, Rule 37 and 38 of the Code. The petitioner is the first defendant in that suit and the second defendant is his wife. On receipt of notice in Ext.P3 execution petition, the judgment debtor entered appearance and filed Ext.P4 counter statement contending that he has no means to pay the decree debt. 6. In the enquiry conducted under Order XXI, Rule 40 of the Code, the Branch Manager of the decree holder Bank, who was examined as PW1 has deposed that the judgment debtor is having 50 cents of land in his possession, where he is O.P.(C) No.2121 of 2014 3 cultivating coffee and pepper. PW1 has also deposed that the judgment debtor is having plantain and real estate business. During cross examination, PW1 has deposed that the details of the property owned by the judgment debtor are mentioned in his application submitted before the decree holder Bank. PW1 deposed further that, the judgment debtor is having plantain cultivation in the land taken on lease and also real estate business. PW1 has also deposed that the judgment debtor is getting an average income of Rs.60,000/- per month. The judgment debtor has not chosen to mount the box. The court below by Ext.P6 order has turned down the plea of the judgment debtor that he has no means to pay the decree debt, stating that the judgment debtor could not discredit the version of PW1 and that by the oral evidence of PW1, the decree holder has succeeded in proving that the judgment debtor has means to pay the decree debt and that, he has neglected to pay the same without sufficient cause. 7. Section 51 of the Code deals with the powers of the Court to enforce execution. Clause (c) of Section 51 provides that, subject to such conditions and limitations as may be prescribed, the court may, on the application of the decree O.P.(C) No.2121 of 2014 4 holder, order execution of the decree, by the arrest and detention in prison for such period not exceeding the period specified in Section 58, where arrest and detention is permissible under that section. Going by sub-clause (ii) of clause (a) of the proviso to Section 51 and clause (b) of the proviso to that Section, where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment debtor an opportunity of showing cause why he should not be committed to prison, the court, for reasons recorded in writing, is satisfied that, that the judgment debtor, with the object or effect of obstructing or delaying the execution of the decree, has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property, or committed any other act of bad faith in relation to his property; or that the judgment debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same. Explanation to the proviso to Section 51 provides that, in the calculation of the means of the judgment debtor for the purposes of clause O.P.(C) No.2121 of 2014 5 (b), there shall be left out of account any property which, by or under any law or custom having the force of law for the time being in force, is exempt from attachment in execution of the decree. 8. In **Abraham T.J. and another v. M/s. Maharashtra Apex Corporation Ltd. and another (2011** **(2) KHC 770)** this Court held that, under clause (b) of the proviso to Section 51 of the Code of Civil Procedure, in order to pass an order for arrest and detention of the judgment debtor in civil prison, the executing court has to arrive at a finding that the judgment debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same. Only on arriving at a finding as provided in clause (b) of the proviso to Section 51 of the Code of Civil Procedure, the executing court would be justified in passing an order for arrest and detention of the judgment debtors in civil prison. Such an order cannot be passed on surmises and conjectures. There must be clear evidence to prove the ingredients of clause (b) of the proviso to Section 51. The object of detaining a judgment debtor in civil prison O.P.(C) No.2121 of 2014 6 for non-payment of the amount decreed is not to punish him. Detention in civil prison is aimed at enabling the decree holder to realise the decree for payment of money. Mere inability to pay the money does not render the judgment debtor liable to be arrested and detained in civil prison. 9. In **Secretary, Kallanode Service Co-op. Bank v. Philip Joseph (2014 (2) KHC 781)** this Court held that, if the judgment debtor has saleable, movable or immovable property, from which sufficient amount can be raised to satisfy the decree debt by sale of the same, save as mentioned under the proviso to Section 60 of the Code of Civil Procedure, 1908, it can be held that he has means to pay off the debt. Paragraphs 6 and 7 of the judgment read thus; "6. Here, the Court below dismissed the execution petition on a finding that the income from the monthly or annual yieldings of the property alone can be taken into account as 'means' to pay off the decree amount and the same is not sufficient to pay off that debt. Then the question that emerges for consideration is whether the saleability of the property also can be taken into account in the determination of judgment debtor’s 'means' to pay off the decree debt? In **Kuppuswamy v. P.G. Menon (1992 (2) KLT 203)** this Court specifically interpreted the scope and extent of the crucial words in Clause (b) O.P.(C) No.2121 of 2014 7 of the proviso to S.51 of the Code of Civil Procedure, as follows: “The means to pay the amount of decree or substantial part thereof only mean that the judgment debtor should have realisable assets from which necessary money can be raised or realised to pay up the decree amount.” 7. So, I am of the opinion that the expression 'means' employed in Clause (b) of the proviso to Section 51 of the Civil Procedure Code includes saleable right or interest over any property also. Put it differently, the expression 'means' encompasses saleability of the property also. It cannot be confined to income from yieldings of the property only. If the judgment debtor has saleable, movable or immovable property, from which sufficient amount can be raised to satisfy the decree debt by sale of the same save as mentioned under the proviso to Section 60 of the Code, it can be held that he has means to pay off the debt." 10. Order XXI, Rule 40 of the Code deals with proceedings on appearance of the judgment debtor in obedience to notice or after arrest. As per sub-rule (1) of Rule 40, when a judgment debtor appears before the court in obedience to a notice issued under Rule 37, or is brought before the court after being arrested in execution of a decree for the payment of money, the court shall proceed to hear the O.P.(C) No.2121 of 2014 8 decree holder and take all such evidence as may be produced by him in support of his application for execution, and shall then give the judgment debtor an opportunity of showing cause why he should not be committed to the civil prison. Subrule (2) of Rule 40 provides that, pending the conclusion of the inquiry under sub-rule (1), the Court shall release the judgment debtor on his furnishing security to the satisfaction of the court for his appearance when required and if the judgment debtor fails to furnish the security ordered, the court may order the judgment debtor to be detained in the custody of an officer of the court on the decree holder depositing in court the necessary amounts payable to the judgment debtor and the officer of the court in connection with such detention. Going by sub-rule (3) of Rule 40, upon the conclusion of the inquiry under sub-rule (1) the court may, subject to the provisions of Section 51 and to the other provisions of the Code, make an order for the detention of the judgment debtor in the civil prison and shall in that event cause him to be arrested if he is not already under arrest. The proviso to subrule (3) makes it clear that, in order to give the judgment debtor an opportunity of satisfying the decree, the court may, O.P.(C) No.2121 of 2014 9 before making the order of detention, leave the judgment debtor in the custody of an officer of the court for a specified period not exceeding fifteen days or release him on his furnishing security to the satisfaction of the court for his appearance at the expiration of the specified period if the decree be not sooner satisfied. 11. In **Rajappan v. Shaju (2009 (4) KHC 602)** this Court held that, burden cast on the decree holder is only to show that judgment debtor is possessed of means to discharge decree debt. The decree holder cannot be expected to prove the means with documentary evidence. Once the decree holder leads such evidence, the burden shifts to the judgment debtor to show that he is not possessed of means and thus incapable of discharging the decree debt. Paragraph 2 of the said judgment reads thus; "2. I heard the counsel on both sides. Previously the execution court after enquiry has passed an order that the judgment debtor is possessed of sufficient means and a warrant was ordered against him for realising the decree debt. The judgment debtor challenged that order by way of a revision in CRP 774/07 before this court. The revision was allowed and the case remitted for fresh consideration directing for affording opportunity to both parties to adduce evidence, both oral and documentary, O.P.(C) No.2121 of 2014 10 in support of their respective case. Pursuant to such remission the decree holder examined one witness stated to be the employer of the judgment debtor. It is submitted that in his examination inchief, he gave a version that the judgment debtor was employed under him as a worker in dealing with gold ornaments, but in the cross examination, he gave a different version that the judgment debtor was with him only for 2-3 months to learn the making of ornaments from gold. No evidence other than what was let in earlier was tendered by the judgment debtor after remission. The learned Munsiff after appreciating the evidence let in the enquiry concluded that the decree holder has not established that the judgment debtor is possessed of sufficient means to discharge the decree debt. After going through the impugned order, I find the learned Munsiff is under a misconception that the decree holder is bound to prove that the judgment debtor is possessed of some landed properties or financial capacity by way of his employment or other means to discharge the decree debt. The burden cast on the decree holder is only to show that the judgment debtor is possessed of means to discharge the decree debt and he cannot be expected to prove the means of the judgment debtor with documentary evidence. Once the decree holder leads such evidence the burden shifts to the judgment debtor to show that he is not possessed of means and thus incapable of discharging the decree debt. The exemption provided by the statute from arrest on a warrant for the default in discharging the decree debt is carved in O.P.(C) No.2121 of 2014 11 favour of the judgment debtor and he who claims that benefit must show to the satisfaction of the court his incapacity and lack of means to discharge the decree debt. So the question to be considered is whether on the evidence tendered in the case the learned Munsiff was justified in entering a finding sustaining that plea of no means raised by the judgment debtor. Whatever be the reason for retraction of PW3, who is stated to be the employer of the judgment debtor, prevaricating from his version in examination of chief during his cross examination, his evidence would indicate that the judgment debtor worked under him, probably only as an apprentice for about 2-3 months to learn the making of gold ornaments. His continuous attending for such work is a circumstance from which it could be gathered that he is capable of doing that work and has reasonable ability to generate income for his livelihood. Further more, despite an opportunity given by this Court to lead further evidence in the enquiry he was satisfied with whatever evidence already in the case before the remission. So on the materials placed the acceptance of the plea of no means canvased by the judgment debtor by the learned Munsiff cannot be sustained. The impugned order is set aside and the learned Munsiff is directed to consider the matter afresh and pass appropriate orders on the materials tendered, in the light of the observations made above. The revision is allowed." 12. In **Nizar v. M/s. Indus Bank Limited (2015 (5)** O.P.(C) No.2121 of 2014 12 **KHC 925)** this Court held that, when the judgment debtor is arrested and produced, or surrenders before the court, Order XXI, Rule 40 of the Code of Civil Procedure, 1908 comes into play. As the court has not proceeded to the stage of enquiry regarding his means to pay the debt, he has not lost his right to show cause why he should not be detained in jail for non-payment of the debt. Even if he does not show cause, he cannot be immediately ordered to be detained in jail unless the decree holder proves that the judgment debtor has the means to pay the debt. No means is pleaded or not, the court has to conduct an enquiry, in which the decree holder should adduce evidence to establish his allegation of the judgment debtor having the means to pay the debt. Rule 40(2) gives discretion to the court to release the latter on his furnishing security for his appearance or to detain him in the custody of an officer of the court during the pendency of the enquiry. The detention under this sub-rule is not for non-payment of the debt, but only to ensure his presence during the enquiry. The enquiry contemplated in Rule 40(1) is mandatory. A bald statement in the decree holder's pleadings and evidence that the judgment debtor has properties or income to pay the debt is not O.P.(C) No.2121 of 2014 13 sufficient. If, on enquiry, the court reaches the conclusion that the debtor is liable to be detained for non-payment of the decree debt, he shall be caused to be arrested so that he may be detained. His arrest is necessary only if he is not already under arrest. This is the procedure prescribed in Rule 40. 13. In the instant case, going by the averments in Ext.P1 plaint, the petitioner/judgment debtor availed a loan for Rs.50,000/- from the decree holder Bank for business purpose. In the said loan transaction his wife, who is arrayed as the second defendant in the suit, stood as co-obligant. The borrower and the co-obligant have executed a demand promissory note and also a demand promissory note delivery letter. In the enquiry conducted under Order XXI, Rule 40 of the Code, the Branch Manager of the decree holder Bank as PW1 has deposed that the judgment debtor is having 50 cents of land in his possession and that, the details of the property owned by him are mentioned in his application submitted before the decree holder Bank. However, the decree holder Bank has not chosen to produce those documents before the execution court. Though, PW1 has deposed that the judgment debtor is having plantain cultivation in the land taken on lease O.P.(C) No.2121 of 2014 14 and also real estate business and that, the judgment debtor is getting an average income of Rs.60,000/- per month, he has no direct knowledge about those aspects, as he totally relies on the information provided by the field officers. 14. In the instant case, the suit was decreed by Ext.P2 judgment since the defendants filed written statement admitting the transaction and seeking one year time to pay the decree amount. Therefore, no documents relating to the loan transaction were marked, as discernible from Ext.P2 judgment. In an enquiry under Order XXI, Rule 40 of the Code, burden cast on the decree holder is only to show that the judgment debtor is possessed of means to discharge decree debt. However, a bald statement in the decree holder's pleadings and evidence that the judgment debtor has properties or income to pay the debt is not sufficient to discharge the said initial burden cast on the decree holder. In the instant case, by the evidence of PW1 the decree holder Bank has not discharged the initial burden to show that the judgment debtor is possessed of means to discharge the decree debt. In that view of the matter, Ext.P6 order passed by the court below, whereby the plea of the judgment debtor that he has no O.P.(C) No.2121 of 2014 15 means to pay the decree debt stands turned down, cannot be sustained in law. In the result, Ext.P6 order is set aside, and Munsiff's Court, Kalpetta is directed to reconsider the matter with notice to the petitioner/judgment debtor and respondent/decree holder and pass appropriate orders, after affording them an opportunity to adduce evidence, as expeditiously as possible, at any rate within a period of four months from the date of production of a certified copy of this judgment. Sd/- **ANIL K. NARENDRAN JUDGE** AMV/