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Case Number

C.R.P No. 3937 of 2005

Attorney(S)

For the Appellant: V. Subrahmanyam, Advocate.
For the Respondent: Harinath Reddy Soma, Advocate.

Judges

C.Y Somayajulu, J.

Acts

A.P. Municipalities Act, 1965,
Rule 30 of Order 21 CPC
Rule 21 of Order 21 CPC
Order 21 Rule 40 CPC.

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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This revision challenges an order of the executing Court directing the arrest of the revision petitioner in execution of a money decree obtained by the respondent. The respondent filed an execution petition seeking the arrest of the revision petitioner, alleging that the petitioner owned multiple properties in Nellore (a house at Gandhinagar allegedly worth Rs. 50,00,000/-, a building on Jawaharlal Road with ten shops, and a lodge called "Swagath Lodge") and derived substantial monthly rent/income from them, yet wilfully evaded payment of the decree debt.

The revision petitioner filed a counter denying the alleged rents and ownership details, claiming limited rental income (including Rs. 1,000/- p.m. being deposited into court in respect of a relative's suit), that some shop rooms had been alienated to third parties, that several creditors had obtained attachments, that the lodge was running at a loss, and that he lacked means to pay the respondent. The executing Court heard evidence (respondent examined as P.W.1 and produced Ex.A-1; revision petitioner testified as R.W.1 but produced no documentary support) and ordered the arrest of the revision petitioner on payment of process. The petitioner sought revision of that order; this opinion disposes of that revision petition.

Legal Issues Presented

Whether the executing Court's order directing the arrest of the revision petitioner in execution of a money decree was valid in law.
Whether a decree-holder is entitled to choose the mode of execution (including arrest) under the Code of Civil Procedure (specifically Order 21 Rule 30 CPC) even if the judgment-debtor possesses immovable property.
Whether the material on record established that the judgment-debtor (revision petitioner) had sufficient means and yet wilfully evaded payment such that detention under Section 51 CPC was justified (considering the standard set in Jolly George Vanghese v. Bank of Cochin).

Arguments of the Parties

Revision Petitioner's Arguments

The executing Court misunderstood or misapplied the precedents cited before it, resulting in an erroneous order for arrest.
The petitioner has no present means to pay the decree debt: he is indebted to several creditors, some creditors have attached his properties, he is allegedly living with his mother-in-law, and his lodge is running at a loss.
Because other remedies (proceeding against immovable properties) were available to the respondent, the petitioner should not have been arrested; arrest would unduly curtail his personal liberty.
Relied on authorities including T. Doraswamy Reddy v. K. Kodanda Naidu, V. Ganesa Nadar v. K. Chellathai Ammal / Kalidindi Rama Raju v. Vijaya Bank, and K. Vijayakumar v. N. Gururaja Rao to support these contentions.

Respondent's Arguments

The petitioner's own counter admits possession of two houses and alleges rents and operation of a lodge; therefore the petitioner's claim of no means is not believable.
The petitioner failed to produce documentary evidence to substantiate alleged attachments by other creditors, arrears to the municipality, or the asserted low rents; absence of such documents undermines the petitioner's defence.
Because the petitioner did not substantiate his claims, the executing Court's order for arrest requires no interference.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
T. Doraswamy Reddy v. K. Kodanda Naidu (1997 (3) An.W.R. 47 : 1997 (2) ALD 190)	Illustration that an order of arrest may be set aside where there is no material except the oral evidence of the decree-holder to prima facie establish means of the judgment-debtor.	The Court noted that in that case the arrest order was set aside for lack of material; it acknowledged the precedent but considered the facts there distinguishable from the present case.
V. Ganesa Nadar v. K. Chellathai Ammal / Kalidindi Rama Raju v. Vijaya Bank, Bhimavaram (2001 (2) An.W.R. 184 (A.P.))	Referenced by the revision petitioner (in particular as to limitations on arrest where immovable property exists); Kalidindi Rama Raju also provided guidelines and remittal where executing court order suffered a lacuna.	The Court disagreed with the view (attributed to V. Ganesa Nadar) that a judgment-debtor who possesses immovable property cannot be arrested and relied on other provisions (Order 21 Rule 30 CPC) permitting the decree-holder to choose the mode of execution. Kalidindi Rama Raju was recognised for laying guidelines where remittal is appropriate, but facts differ here.
K. Vijayakumar v. N. Gururaja Rao	Relied upon by the revision petitioner; in that case the executing court order was set aside and remitted based on prior guidelines.	The Court observed that K. Vijayakumar followed the approach of setting aside and remitting where the executing court's order was inadequate; however it found the facts of the present case distinguishable.
Venkatappa and Ors. v. Lakshmikant Rao (AIR 1956 Hyderabad 7 (F.B.))	Decree-holder has the discretion to decide the mode of execution of a money decree; Court cannot compel the decree-holder to adopt a particular mode.	The Court treated this full-bench decision as authoritative support for the proposition that a decree-holder may choose arrest or attachment/sale, and used it to reject arguments that the decree-holder must first exhaust remedies against immovable property.
A.K. Subrahmania(n) Chettiar v. A. Ponnuswamy Chettiar	If a decree-holder prays for arrest of the judgment-debtor, the court cannot, except as provided by the proviso to Section 51 CPC, compel the decree-holder to proceed against the property or to accept instalments; procedure under Order 21 Rule 40 CPC must be followed.	The Court relied on this principle to support that the decree-holder's choice of execution mode is protected and that prior decisions ignoring Rule 30 Order 21 CPC are of limited assistance.
Jolly George Vanghese v. Bank of Cochin	Section 51 CPC's constitutional validity upheld; detention requires proof of wilful failure to pay despite sufficient means — simple default alone is not enough; there must be bad faith or present means to pay.	The Court applied this standard to assess whether the petitioner wilfully failed to pay despite means; it concluded that the present record demonstrates neglect and bad faith rather than mere default.
R.V.J. Sastry v. Bank of India (1978 (2) ALT 335 : 1978 (2) APLJ 217 (HC))	Authorised remittal of execution matter where executing court's order was cryptic and did not adequately record reasons for arrest; requiring remand for proper determination.	The Court referred to Sastry as authority for remittal in cases of inadequate orders but found the present executing order to be supportable on the evidence, distinguishing the present facts from Sastry.
Pothireddi Laxman Rao (referenced)	Referenced as a decision considered by the revision petitioner, but described as decided without reference to Order 21 Rule 30 CPC and the Venkatappa full-bench decision.	The Court treated that decision as of no assistance because it did not take into account Rule 30 of Order 21 CPC and the full-bench authority discussed above.

Court's Reasoning and Analysis

The Court's analysis proceeded in the following logical steps, relying on statutory provisions and judicial authorities cited in the opinion:

Statutory framework: The Court identified that arrest/detention is one mode of execution under Section 51 CPC and that Order 21 Rule 30 CPC expressly permits a decree-holder in money recovery suits the liberty to execute the decree either by detention in civil prison or by attachment and sale of property, or by both. Rule 21 of Order 21 CPC allows the executing Court to refuse simultaneous execution by two modes but does not displace the decree-holder's right to select a mode.
Precedent reconciliation: The Court relied on the full bench decision in Venkatappa (AIR 1956 Hyderabad 7 (F.B.)) and A.K. Subrahmania Chettiar to hold that the decree-holder's choice of mode is protected and that earlier decisions (such as Pothireddi Laxman Rao) that did not consider Rule 30 and the full-bench authority were of limited value.
Standard for detention: The Court acknowledged the Jolly George Vanghese standard requiring proof of wilful failure to pay despite sufficient means and that mere default is not enough; there must be evidence of bad faith or present means adequate to pay.
Evaluation of evidentiary record: The Court examined the evidence before the executing Court and this Court. Key findings included:
- The revision petitioner admitted possession of two houses in his counter—one at Gandhinagar and another at Jawaharlal Road.
- The respondent produced evidence (P.W.1 and Ex.A-1, a registration extract) supporting aspects of his case; the revision petitioner testified (R.W.1) but produced no documentary proof (no sale deeds, no registration extracts, no books of accounts for the lodge, no documents showing attachments by other creditors, no particulars of municipal arrears, and no plaint of the relative's suit).
- The Court observed various unexplained aspects of the petitioner's story: why tenants would pay other creditors rather than the respondent (who had a decree since 2002), unexplained failure to produce sale deeds for alleged alienations, and absence of ledger/accounts for the lodge despite its alleged operation.
- The Court also noted the respondent's age (83 years) and treated the petitioner's assertions as potentially aimed at harassing an elderly decree-holder.
Application of law to facts: Applying the Jolly George standard to the evidentiary picture, the Court concluded that the respondent had made out a prima facie case that the revision petitioner had sufficient means but was neglecting or refusing to pay. The absence of documentary evidence from the revision petitioner and the admissions in his counter reinforced the inference of bad faith rather than mere inability to pay.
Conclusion on the executing Court order: Given the statutory allowance for the decree-holder's choice of execution mode, the precedents permitting arrest where wilful evasion is shown, and the Court's factual findings about insufficiency of the petitioner's evidence, the Court held that the executing Court's order directing arrest could not be said to be erroneous.

Holding and Implications

Holding: The civil revision petition is dismissed with costs.

Implications:

Direct effect: The executing Court's order directing the arrest of the revision petitioner is upheld (i.e., the revision succeeds in no relief and the arrest order stands subject to the executing Court's direction regarding process payment).
On precedent and broader law: The Court applied existing statutory provisions (Section 51 CPC; Order 21 Rules 21, 30 and 40 CPC) and existing case law (including Venkatappa and Jolly George Vanghese) to resolve the matter. The opinion does not purport to lay down a novel legal principle or to overrule existing precedents; it applies controlling authorities to the facts and distinguishes other authorities relied upon by the petitioner. No new precedent is stated to have been created by this decision beyond its application to the facts before the Court.

Note: This summary is strictly confined to the matters and findings stated in the provided opinion. No facts, arguments, or authorities have been added beyond those contained in the opinion text.

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Guvvala Sudhakara Reddy v. Katamreddy Venugopala Reddy

1. Order directing the arrest of the revision petitioner, passed by the executing Court is challenged in this revision.

2. In execution of a money decree obtained by the respondent against the revision petitioner, he filed a petition seeking arrest of the revision petitioner inter alia alleging that in spite of his owning a house worth Rs. 50,00,000/-at Gandhinagar, Nellore, from which he is receiving a monthly rent of Rs. 7,000/- by letting out a portion thereof as ago-down, and another building at Jawaharlal Road, Nellore, in which he let out 10 shop rooms in the ground floor on a monthly rent of Rs. 5,000/- per each shop and thereby earning Rs. 50,000/- per month as rents from that building, besides running a lodge under the name and style of 'Swagath Lodge' in the first floor of the said building earning about Rs. 10,000/- p.m. from that lodge and possessing other valuable sites at Nellore, is wilfully evading to pay the amount due to him.

3. Revision petitioner filed a counter denying his letting out a portion of his building on a monthly rent of Rs. 7,000/- for go-down purpose and contending that the said house is being used by his family members for residence and that he let out a portion thereof to L. Niranjan Reddy, his relative, who filed O.S.No.1330 of 2003 and is depositing Rs. 1,000/- p.m. as its rent into Court and that the rent being derived by him from the building at Jawaharlal Road, is only Rs. 1,000/- p.m. from five tenants, but not Rs. 5,000/- p.m. as alleged and that the remaining five shop rooms therein were alienated to third parties under registered documents and that the rents from those tenants also are being collected by his other creditors, and as the Swagath Lodge is running in losses and as several of his creditors had obtained orders of attachment and as his son filed a suit for partition and separate possession of his half share in the properties, and as he is not owning any other site and is living at the mercy of his mother-in-law, and is owing about Rs. 2,50,000/- as house tax for the Swagath Lodge and other taxes to the Nellore Municipality, he has no means or capacity to discharge the amount due to the respondent and since the respondent who is alleging that he owns several properties, can proceed against those properties, he is not liable to be arrested.

4. In support of his case, respondent examined himself as P.W.1 and marked Ex.A-1, a registration extract of the partition deed dated 28-11-1999 executed by the revision petitioner and his family members. In support of his case, revision petitioner examined himself as R.W.1, but did not adduce any documentary evidence. Basing on the evidence on record the executing Court ordered arrest of the revision petitioner on payment of process by the respondent.

5. The main contention of the learned Counsel for the revision petitioner is that the failure of the executing Court in properly understanding the purport of the various judgments cited before it resulted in its reaching an erroneous conclusion and contended that inasmuch as the respondent could proceed against the properties allegedly owned by the revision petitioner, who has no means to pay the decree debt at present, as the evidence of the revision petitioner as R.W.1 shows that he is indebted to several others and that those creditors had attached his properties and that he is living at the mercy of his mother-in-law, the order of the executing Court is liable to be set aside as his arrest would curtail his personal liberty.

He placed strong reliance on T. Doraswamy Reddy v. K. Kodanda Naidu 1997 (3) An.W.R. 47 : 1997 (2) ALD 190, v. Ganesa Nadar v. K. Chellathai Ammal , Kalidindi Rama Raju (JD) v. Vijaya Bank (Nationalised), Branch Manager, Bhimavaram, W.G. District 2001 (2) An.W.R. 184 (A.P.), and K. Vijayakumar v. N. Gururaja Rao . in support of the contentions raised by him.

6. The contention of the learned Counsel for the respondent is that since the counter filed by the revision petitioner itself establishes his ownership over two buildings and about his running a lodge and receiving rents from shop rooms, his contention that he has no means to pay the decree debt of respondent cannot be accepted or believed and since revision petitioner did not adduce any documentary evidence to show that there are orders of attachment over his properties or to show that he owes amount to municipality, or documentary evidence relating to the rents being received by him and the income from the lodge being run by him, the order, under revision needs no interference.

7. I see no force in the contention of the learned Counsel for the revision petitioner that since respondent is claiming that revision petitioner has immovable properties, he should first exhaust his remedies against immovable properties only, but cannot seek his arrest, inasmuch as arrest and detention is one of the several modes of execution available to a decree-holder as per Section 51 CPC. So, it is for the decree holder to choose the mode of execution of his decree. It is no part of the duty of the executing Court to lay down or prescribe the mode of execution to be followed by the decree holder. In fact, in respect of decrees relating to recovery of money Rule 30 of Order 21 CPC gives the liberty to the decree holder to execute the decree either by seeking his detention in civil prison or by attachment and sale of his property 'or by both'. It is no doubt true that Rule 21 of Order 21 CPC empowers the executing Court to refuse simultaneous execution of a decree by two modes, but that is different from the decree holders's right to execute a decree for recovery of money in a particular mode. In fact, a full bench of Hyderabad High Court in Venkatappa and Ors. v. Lakshmikant Rao AIR 1956 Hyderabad 7 (F.B.), held that it is for the decree holder to decide how he should execute his decree for payment of money and that the Court cannot compel him to adopt a particular mode of execution. In A.K. Subrahmania Chettiar v.

A. Ponnuswamy Chettiar , it is held that if a decree-holder prays for arrest of the judgment-debtor, the court cannot, except as provided by the proviso to Section 51 CPC, compel the decree-holder to proceed against the property, or to accept the payment in instalments, and has to follow the procedure prescribed under Order 21 Rule 40 CPC. Since Pothireddi Laxman Raocase (1 supra) (sic), relied on by the learned Counsel for the revision petitioner, was decided without taking into consideration Rule 30 of Order 21 CPC and the full bench decision of the Hyderabad High Court in Venkatappa case AIR 1956 Hyderabad 7 (F.B.), and the ratio in A.K. Subrahmanian Chettiar case that decision is of no help in deciding this case, because, CPC itself empowers the decree holder to choose the mode of execution to be adopted by him. Therefore neither the judgment debtor nor the Court can direct the decree holderto execute the decree obtained by him in a particular mode. In view of the above I am unable to agree with the view taken in V. Ganesa Nadarcase (2 supra) that a judgment debtor, if he possesses immovable property, cannot be arrested and detained as the decree holder can proceed against his immovable property.

8. The apex Court in Jolly George Vanghese v. Bank of Cochin , while upholding the constitutional validity of Section 51 CPC relating to detention of the judgment debtor in execution of a money decree, held that simple default to discharge the decree debt is not enough to detain him in prison and that there should be proof of minimal fairness of his wilful failure to pay in spite of sufficient means, and when there are terribly pressing claims on his means, such as payment of medical bills to treat cancer or grave illness and the like those requirements will have precedence and in such circumstances simple default to discharge the debt is not enough and that there must be some element of bad faith beyond mere indifference to pay or some deliberate or recusant disposition in the past or alternatively current means to pay the decree or substantial part of it.

9. In T. Doraswamy Reddy's case (1 supra) order of arrest and detention passed against the judgment debtor was set aside by a learned judge of this Court on the ground that there is no material before the court, except the oral evidence of the decree holder to prima facie establish that the judgment-debtor was having means to pay and yet neglected to pay the amount.

10. In Kalidindi Rama Raju's case (3 supra) the learned Judge, on the ground that the order under revision therein, passed by the executing court, suffered a lacuna, had set aside the said order and remitted the case to the executing court, directing the execution court to dispose of the case according to law, after giving an opportunity to both sides, and laid down certain guidelines.

11. In K. Vijaya Kumar case (4 supra), relied by the learned Counsel for the revision petitioner, the learned Judge relying on a division bench decision of this Court in R.V.J. Sastry v. Bank of India, rep. by its duly constituted Attorney N.R. Vijaya Raghavan and Ors. 1978 (2) ALT 335 : 1978 (2) APLJ 217 (HC), and on the basis of the guidelines issued in Kalidindi Rama Raju's case (3 supra), set aside the order of the executing court ordering arrest of the judgment-debtor and remitted the case to the executing court for fresh disposal. In R.V.J. Sastry's case 1978 (2) ALT 335 : 1978 (2) APLJ 217 (HC), the cryptic order of the executing court holding that the judgment debtor has means to pay the amount and ordering arrest of the judgment-debtor was set aside-and the case was remitted to the executing court with a direction to proceed according to law. The facts in all the above cases are different from the facts of this case.

12. That the respondent, who is the decree holder, is an old man, is evident because his age is shown as 83 years in the cause title of this revision petition. That revision petitioner is possessed of two houses is admitted by the revision petitioner himself in his counter. The specific case of the respondent is that revision petitioner has let out a portion of a building as a go-down and is earning Rs. 7,000/-, and that 10 shop rooms in the ground floor in another building are let out to tenants at Rs. 5,000/- p.m. from each tenant and that he is running a lodge in the first floor of that building and is earning not less than Rs. 50,000/- p.m. from that lodge and yet is neglecting and refusing to pay the decree debt. The specific case of the revision petitioner is that he did not let out a portion of his house to a go-down, but had let it out to a relative of his and that relative of his filed a suit against him in 2003 and is depositing Rs. 1,000/- p.m. into court. No documentary evidence is adduced by the revision petitioner in this regard. Had he produced the plaint in the suit filed by his relative the date of suit would have been known, as the possibility of the revision petitioner getting a suit filed by his relative to serve as defence in the E.P. cannot be ruled out. The details of the decrees said to have been obtained by the other creditors of the revision petitioner are not mentioned, and no documents to show that there are attachments over the properties of the revision petitioner are produced by the revision petitioner. In his evidence as R.W.1, revision petitioner stated that some of his creditors are collecting rents from his tenants. How he permitted some of his tenants to pay the rents to his other alleged creditors, and why he preferred those other creditors to the respondent is not explained by the revision petitioner, when respondent obtained the decree against him in 2002 in the suit filed in 1999.

13. Revision petitioner who alleged that he alienated some shop rooms to third parties, under registered instruments to discharge some debts, failed to produce those sale deeds, or their registration extracts and failed to explain why he preferred to liquidate the debts of his other alleged creditors, without paying any amount to the respondent.

14. Since the revision petitioner admittedly is running Swagath Lodge, its books of account would be the best piece of evidence to show the income being derived therefrom. But those books of account are not produced. It is alleged that Rs. 2,50,000/- is due to municipality as house tax without furnishing the details of those arrears. Since property tax would be the first charge on the buildings as per the A.P. Municipalities Act, 1965, if revision petitioners were to fail to clear the alleged arrears, the municipality can and would recover the arrears of property tax by proceeding against the building.

15. Thus even from the case set up by the revision petitioner it is clear that he, having sufficient means, is neglecting and refusing to pay the amount to the respondent, and it is also clear that he took the defence in bad faith only with a view to cause inconvenience and to harass the old decree holder. In view thereof, the executing court ordering arrest of the revision petitioner cannot be said to be erroneous.

16. Therefore, I find no merits in the petition. Hence the civil revision petition is dismissed with costs.

Guvvala Sudhakara Reddy v. Katamreddy Venugopala Reddy

Structured Summary of the Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Revision Petitioner's Arguments

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Guvvala Sudhakara Reddy v. Katamreddy Venugopala Reddy

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