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Deepak Jain v. Century Textiles Industries Company
Factual and Procedural Background
The revision under Section 115 of the Code of Civil Procedure (CPC) challenges the order dated 8-5-2004 passed by the Second Additional District Judge (ADJ), Jabalpur, in Execution Case No. 2/2004. The non-applicant Century Textiles Industries Ltd. obtained a money decree in C.S. No. 76/93 against non-applicant M/s. Surya Trading Company Proprietor D.K. Jain. The decree was transferred for execution to Jabalpur. Notice to M/s. Surya Trading Company Proprietor D.K. Jain was returned unserved, and an attempt was made to serve notice upon the applicant Deepak Jain. The applicant objected to execution against him. The District Judge held that the execution court could not go behind the decree, thus the decree against M/s. Surya Trading Company could not be executed against Deepak Jain. Aggrieved, Century Textiles Industries Ltd. preferred a revision, which was disposed of with directions for inquiry into the identity of the proprietor. The Executing Court held that Deepak Jain was the owner of M/s. Surya Trading Company and directed execution of the decree against him, leading to the present revision under Section 115 CPC.
Legal Issues Presented
- Whether the Executing Court erred in holding that applicant Deepak Jain was the owner of M/s. Surya Trading Company, thereby allowing execution of the decree against him despite not being a party to the original suit.
- Whether a decree against a firm can be executed against an individual not named or impleaded as a party to the suit without proper amendment or procedure.
Arguments of the Parties
Applicant's Arguments
- Applicant Deepak Jain was not a party to the original suit C.S. No. 76/93 and hence cannot be subjected to execution of the decree passed against M/s. Surya Trading Company Proprietor D.K. Jain.
- The Executing Court erred in going behind the decree and holding him liable without amendment of the decree under Section 152 CPC.
- Bank accounts and transactions showed separate identities for D.K. Jain and Deepak Jain, indicating they are distinct persons.
- The District Judge correctly held that the Executing Court cannot go behind the decree.
Non-Applicant's Arguments
- Non-applicant Century Textiles Industries Ltd. sought execution of the decree against Deepak Jain after failure to serve notice on D.K. Jain.
- They relied on the Executing Court's inquiry which concluded that Deepak Jain was the owner of M/s. Surya Trading Company.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Topanmal Chhotamal v. M/s. Kundomal Ganguram and Ors., AIR 1960 SC 388 |
Conditions under which a decree against a firm can be executed against individuals:
|
The Court held that since Deepak Jain was not a party to the suit, not served notice as proprietor, and not admitted as partner, the decree could not be executed against him personally. |
Court's Reasoning and Analysis
The Court analyzed the nature of the original decree passed against M/s. Surya Trading Company Proprietor D.K. Jain and observed that execution proceedings cannot proceed against a person not named or impleaded in the suit without proper amendment under Section 152 CPC. The Executing Court erred in accepting the applicant's ownership of the firm based on the enquiry and evidence, which the Court found insufficient to override the decree's terms. Reliance was placed on the precedent in Topanmal Chhotamal v. M/s. Kundomal Ganguram and Ors., which restricts execution against individuals not parties to the suit or not properly served. The Court emphasized that the Executing Court cannot go behind the decree and must execute it as it stands, thereby rejecting the attempt to execute the decree against Deepak Jain without legal basis.
Holding and Implications
The revision is allowed and the impugned order dated 8-5-2004 is set aside.
The direct effect of this decision is that execution of the decree against applicant Deepak Jain is quashed as he was not a party to the original suit and no amendment to the decree was made to include him. No costs were ordered. The opinion does not establish any new precedent but reinforces the principle that execution must conform strictly to the decree and parties named therein.
1. The revision under Section 115 of CPC is directed against the order dated 8-5-2004 passed by Second ADJ, Jabalpur in Execution Case No. 2/2004.
2. Non-applicant Century Textiles Industries Ltd. in C.S. No. 76/93 obtained a money decree against non-applicant M/s. Surya Trading Company Proprietor D.K. Jain, 744, Sarafa Bazar, Kamaniya Gate, Jabalpur (Document No. 5). The Court of Joint Civil Judge Sr. Division, Chandrapur (Maharashtra) thereafter transferred the decree to Jabalpur for its execution. In Execution Case No. 2/2004, notice to M/s. Surya Trading Company Proprietor D.K. Jain, 744, Sarafa Bazar, Kamaniya Gate, Jabalpur returned unserved. An attempt was made to serve the notice upon applicant Deepak Jain s/o Sumer Chandra Jain, 745, Sarafa, Jabalpur. Since non-applicant, Century Textiles Industries Ltd. was endeavouring to execute the decree against the applicant, an objection was preferred. The District Judge vide order dated 14-8-2001 (Document No. 7) held that it can not go behind the decree as such the decree against M/s. Surya Trading Company Proprietor D.K. Jain can not be executed against applicant Deepak Jain s/o Sumer Chandra Jain. Being aggrieved, by the order aforesaid non-applicant preferred C.R. No. 379/2002. Vide order dated 21-8-2002 (Document No. 8) the revision was disposed of with the direction that in case non-applicant Surya Trading Company files an appropriate application disclos- ing and satisfying the identity of proprietor, an enquiry thereon shall be held by the Executing Court and the same shall be decided in accordance with law. Therefore, an enquiry was held by the Executing Court and the evidence was led on the issue framed as under:-
Whether the objector Deepak Jain s/o late Sumcr Chandra Jain, Advocate, Sarafa Bazar, Kamaniya Gate, Jabalpur is the owner of M/s. Surya Trading Company ?
3. The Executing Court declined to accept the evidence adduced by the applicant, instead held that applicant Deepak Jain s/o late Sumcr Chandra Jain, Advocate, 743, Sarafa, Jabalpur was the owner of M/s. Surya Trading Company a proprietorship concerned. As such vide impugned order dated 8-5-2004 directed execution of the decree against the applicant. Being aggrieved, applicant has preferred this revision under Section 115 of CPC.
4. The proprietorship concerned called M/s. Surya Trading Company opened account No. 453 in the Bank giving the specimen signature of its proprietor D.K. Jain. Applicant also opened an account No. 454 in the same Bank by giving his specimen signature. Applicant was designated as an authorized stockist of non-applicant Century Textiles Industries Ltd. (Document No. 3-A) and in pursuance applicant Deepak Jain had furnished a bank guarantee (Document No. 3-A). The cheque dated 2-8-92 (Document No. 4) was said to have been issued in favour of Century Textiles Industries Ltd. by D.K. Jain proprietor M/s. Surya Trading Company. The cheque aforesaid being dishonored, C.S. No. 76/93 was instituted before the Joint Civil Judge Sr. Division Chandrapur (Maharashtra) against M/s. Surya Trading Company Proprietor D.K. Jain, 744, Sarafa Bazar, Kamaniya Gate, Jabalpur. In the said suit applicant Deepak Jain s/o late Sumer Chandra Jain, Advocate, 743, Sarafa, Jabalpur was not a party. As such vide judgment (Document No. 5) in C.S. No. 76/93, a money decree against M/s. Surya Trading Company Proprietor D.K. Jain, 744, Sarafa Bazar, Kamaniya Gate, Jabalpur, was passed. Since notice to D.K. Jain could not have been served, Century Textiles Industries Company Ltd. intended to execute the decree against applicant Deepak Jain, s/o late Sumer Chandra Jain, Advocate, 743, Sarafa, Jabalpur. Vide order dated 14-8-2001, the District Judge rightly held that the Executing Court can not go behind the decree. This Court in C.R. No. 379/2002 vide order dated 21-8-2002 (Document No. 8) simply held that in case Century Textiles Industries Ltd. files an appropriate application disclosing and satisfying the identity of the proprietor, an enquiry thereon shall be held and decided in accordance with law. An application under section 47 of cpc could not have been filed to require the Executing Court to adjudicate whether the decree could be executable against an individual who has not been named and impleaded as a party to the suit. A question arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree. Admittedly, applicant Deepak Jain s/o late Sumer Chandra Jain, Advocate, 743, Sarafa, Jabalpur was not named and impleaded as a party to the suit C.S. No. 76/93.
5. In Topanmal Chhotamal v. M/s. Kundomal Ganguram and Ors., AIR 1960 SC 388, it has been held :-
A decree against a firm can be executed- (i) against the property of the partnership, (ii) against any person who has appeared in the suit individually in his own name and has been served with a notice under Rule 6 or 7 of Order XXX of the Code of Civil Procedure, (iii) against a person who has admitted on the pleadings that he is or has been adjudged a partner, or (iv) against any person who has been served with notice individually as a partner but has failed to appear. The decree against the firm can be executed against the personal property of such persons.
6. Where a decree against the Firm and assets of firm in hands of partners is ambiguous, to construe the Executing Court may look to pleadings and judgment. However, the Executing Court can not go behind it and must take it as it stands. The case of non-applicant Century Textiles Industries Ltd. in C.S. No. 76/93 in fact related to the transaction with M/s. Surya Trading Company Proprietor D.K. Jain, There is no reference of applicant Deepak Jain s/o late Sumer Chandra Jain, Advocate, 743, Sarafa, Jabalpur in the judgment (Document No. 5). Without seeking amendment under Section 152, CPC of judgment-decree (Document No. 5) non-applicant is erroneously endeavouring to execute the money decree against him.
7. Therefore, the Court below erred in allowing the application under Section 47, CPC filed by non-applicant Century Textiles Industries Ltd. to enable him to execute the decree of C.S. No. 76/93 against him. The order impugned suffers from material irregularity-illegality.
8. Consequently, revision is allowed. Order impugned dated 8-5- 2004 is set aside. No order as to costs.
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