A decree-holder bank sought recovery against a guarantor's fixed deposits made from pension and gratuity instead of auctioning the untraceable hypothecated vehicle. The Supreme Court held such deposits could not be attached and that the High Court erred in altering the trial court's mode-of-recovery directions in revision.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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A judgment by the High Court as to the steps taken by the Bank for recovery of the vehicle for auction sale in order to recover decretal amount -- Hence, the irnpugned order cannot be sustained and s!Jt aside - Order of the Executing Court restored - Executing Court - Power of, in issuing order for B attachment of F.D.Rs. of pension and gratuity.
. Code of Civil Procedure, 1908 - S. 115 - Power of the High Court in altering decree of the trial Court, in exercise of revisional jurisdiction '""" Discussed. ,
C Respondent No.2 took a loan of Rs.83, 0001- from respondent No.1, Bank for purchase of a motor vehicle. Appellant stood guarantee for the loanee. Since loanee could not repay the loan, Bank filed a suit for recovery of the loan againsUhe loanee and the guarantor. The suit D was decreed by the trial Court 'for a sum of Rs.1, 10, 3601 -with interest with a direction to recover the said amount by auction sale of the hypothecated vehicle and the amount, if ariy, which remaned to be paid could be recovered from the other properties of the loanee and the E guarantor. As tbe vehicle ws not traceable, the Bank sought for order of attachment of Fixed Deposits of the guarantor allegedly made from the amounts received by him by way of pension and gratuity. The Executing Court ordered attachment of the Fixed Deposit Receipts. F Aggrieved by the order of. the Executing Court, the guarantor moved the High Court. The High Court directed the Executing Court to pass appropriate orders. The Executing Court directed release of F .D.Rs. as the amount in the F.D.Rs. could not be attached under proviso (g) to s.60(1) f C.P .C. It further directed that the vehicle was to G be auctioned first. Aggrievd, the Bank filed a revision petition. The High Court directed the guarantor to deposit a sum of Rs.50, 000/- forthwith and also to furnish details of the movable and immovale properties of the Principal H debtor. The guarantor movd an application praying for
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RADHEY SHYAM GUPTA v. PUNJAB NATIONAL BANK & 243 ANR.
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adjusting the sum of Rs.SO, 000/- out of the F.D.Rs. and balance, if any, could be returned to him. The High Court disposed of the revision petition, inter alia, directing that the amount of Rs.SO, 000/- out of the guarantor's Fixed Deposit Receipts could be adjusted in the first instance. It also directed that on the vehicle being furnished along with solvent security before the Executing Court, the remaining amount under the Fixed Deposit Receipt would be released to the guarantor. Aggrieved, the guarantor filed a Review Petition, which was dismissed in /imine by the High Court. Hence the present appeals•
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Appellant, int~r alia, contended that it was clearly the intention of the trial Court that the sale proceeds of the hypothecated vehicle should first be utilized for realization of the decretal amount before touching the other properties of the defendants for recovery of the said dues.
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On behalf of the Bank, it was submitted that despite several attempts having been made to locate the vehicle; the same could not be traced and the Bank, therefore, had. E no alternative but to proceed against the appellant in his capacity as the guarantor for recovery of the dues; that· the provision of proviso (g) to Section 60(1) C.P.C. would· apply only to the source of the amounts received by way of retiral benefit, such as pension and gratuity, but not to, F payments made in respect thereof; and that once the monies covered by the provisions of the proviso to · Section 60(1) of the Code had been paid to the concerned · employee, they no longer retained their original character , and were, therefore, amenable to attachment.
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Allowing the appeals, the Court
HELD: 1.1. The order impugned in the revision petition before the High Court did not attract the bar of · the proviso to sub-section (1) of Section 11 S of the Civil H
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A Procedure Code as it sought to finally decide the manner in·which the decree passed in the Suit in question by the trial Court, was to be satisfied. However, this Court is also of the view that having regard to proviso (g) to. Section 60 (1) of the Civil Procedure Code, the High Court B committed a jurisdictional error. in directing that a portion of the decretal amount be satisfied from the fixed deposit receipts of the appellant held by the Bank and in placing. the onus on the· appellant to produce the. vehicle iri question for being auctioned for recovery of the decretal c dues. In other words, the High Court erred in altering the decree of the Trial Court in its revisional jurisdiction, particularly when the pension and gratuity of the appellant, which had been converted info Fixed Deposits, could not be attached under the, provisions of the Code 0of Civil Procedure. [Para 24] [224-G-H; 225-A-B]
Calcutta Dock Labour Board and Anr. v. Smt. Sandhya Mitra and Ors., [1985j 2 sec 1: Union of India v. Wing Commander R. R. Hingorani, (1987) 1 SCC 551; Gorakhpur University and Ors. v. Dr. Shit/a Prasad Nagendera and Ors., E [2001] 6 sec 591 and Union of India v. Jyoti Chit Fund and Finance and Ors., [1976] 3 sec 607, relied on.
1.2. The High Court could not have gone behind the decree in the execution procee~ings and the alteration F in the manner of recove..Y ·of the decretal amount was . erroneous and cannot be sustained. Even after the retiral benefits,such as pension and gratuity, had been received by the appellant, they· did not lose their character and continued to be covered by proviso (g) to Section 6·0(1) G of the Code. [Para 25) [225-D-E]
1 ~3. The High Court, erroneously proceeded on the basis that a concession had been made by the appellant that he was willing to have the decretal amount adjusted partly from his fixed deposits, which represented his H retiral benefits and that he had also volunteered to
RADHEY SHYAM GUPTA v. PUNJAB NATIONAL BANK & 24$ ANR.
produce the vehicle before the Bank so that the same A could be sold to recover the major portion of the dues. Further-more, although the Bank was entitled to proceed! both against the principal-debtor and the guarantor for recovery of its dues, the mode of recovery was1 prescribed by the Trial Court, which clearly indicates that 8 the Bank should at first recover whatever amount it can , from .the sale of the vehicle. The right of the Bank to proceed against either the principal-debtor or the guarantor stood restricted by the directions of the Trial ' Court. Except for recording that the vehicle was not c traceable, nothing is recorded in the impugned judgment ' of the High Court as to what steps were actually taken by the Bank for recovery of the vehicle for sale in order , to recover its decretal dues. [Para 26] [255-G-H; 256-A-C]
Union of India v. Jyoti Chit Fund and Finance and Ors., [1976] 3 sec 607' referred to.
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1.4. Instead of disturbing the order of the Executing Court, which was passed in consonance with the provisions of the Code of Civil Procedure, the High Court E should have directed the respondent Bank and the Executing Court to seriously pursue the recovery of the vehicle or against any other property of the principaldebtor, having particular regard to the finding of the ' Executing Court that the said fixed deposits represented F the retiral benefits of the appellant. Hence, the order ' passed by the High Court is set aside and that of the Executing Court is restored. [Paras 26 and 27] [256-C-E]
Case Law Reference :
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[1985] 2 sec 1 relied on Para 15 [19871 1 sec 551 relied on Para 16 c20011 6 sec 591 relied on Para 16 [19761 3 sec 607 relied on Para 17
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A [19761 3 sec so1 refer~ed to Para 17
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CIVIL APPELLATE JURISDIOTION : Civil Appeal Nos. 6440-6441 of 2008.
From the final Judgment and Order dated 28.2.2005 & B 24.8.2005 of the High Court of Rajasthan at Jaipur in SBCRP Nos. 26 of 2005 & 2008 of 2003 respectively.
Shobha, Harish Sharma and R.P. Yadav for the Appellant.
C Dhruv Mehta, Harshvardhan Jha, Yashrah Singh Deora and T.S. Sabarish (for M/s K.L. Mehta & Co.) for the Respondents.
The Judgment of the Court was delivered by
Al TAMAS KABIR, J. 1. Leave granted.
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E 3. As the loan was not repaid by the Principal Debtor, Durga Prasad, the Bank in 1992 ,filed Suit No.66 of 1992 for recovery of its dues against the respondent No.2 in his capacity as the loanee and against the appellant in his capacity as guarantor. The suit was decreed on 19th December, 1994, by F the learned Additional District and Sessions Judge, Bayana, District-Bharatpur, in favour of the respondent No.1 'Bank for a sum of Rs.1, 10,360/-, together with interest at the rate of 12.5% per annum from the date of institution of the suit till realization. While decreeing the suit, the trial Court directed as G follows:-
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"The plaintiff shall be entitled to recover this amount by auction sale of the hypothecated Matador Mahindra FC RRD/1851. The plaintiff shall also be entitled for cost of litigation~ If any amount remains to be paid even after
RADHEY SHYAM GUPTA v. PUNJAB NATIONAL BANK & 247 ANR. [AL TAMAS KABIR, J.]
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auction sale of the Matador, then the same shall be recovered from other properties of the defendants. The suit of the plaintiff is hereby decreed against the defendants in the aforesaid terms."
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A with the Bank. He was also directed to furnish the complete detai!s of the movable and 1 immovable properties of the principal debtor with the stipulation that in the event the Bank's revision petition failed, the amount to be deposited by the appellant herein would be refunded to him with interest at the Brateof 9%per annum.lnst~i3dof complying with the said direction, the appellant herein' moved an application indjcating · that two Fixed Deposit Receipts belonging to him of over a total value of Rs.50,000/- were lying with the Bank and instead of cash deposit of Rs.50,000/-- the said two Fixed Deposit cReceiptscouldbeadjustedagainstthesaidsumtobe deposited and the balance, if any, could be returned to the appellant herein.
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RADHEY SHYAM GUPTA v. PUNJAB NATIONAL BANK &249 ANR. [ALTAMAS KABIR, J.]
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through the solvent security to be furnished by the appellant herein, the Fixed Deposit Receipts, which were accepted to be the appellant's retirement benefits, were to be returned to him.
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11'. Ms. Shobha, learned advocate, who appeared for the appellant, questioned the judgment and order of the High Court mainly on three grounds. Her first ground for challenge was that the. direction of the trial Court in its decree was quite clear and there was no ambiguity whatsoever which called for any F clarification by the High Court. She submitted that the direction of the trial Court entitled the decree holder Bank to recover the decretal amount as well as the cost of litigation by auction sale of the hypothecated vehicle, and if any amount remained to be paid even after the auction sale of the Matador, then the same G could be recovered from the other properties of the defendants. According to Ms. Shobha, the plain meaning which emerges from such direction entails the sale of the Matador first and after adjustment of the sale price with the amount to be recovered under the decree, any amount still unpaid, could, at the second stage, be recovered from the other properties of the defendantH
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A Ms. Shobha submitted that. it was clearly the intention of the trial Court that the sale proceed of the hypothecated vehicle should first be utilized. for realization of the decretal amount before touching the other properties of the defendants for recovery of · the said dues.
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E 13. The second ground urged by Ms. Shobha was that although initially the appellant's Fixed Deposit Receipts. were attached by the Executing Court, ultimately, on objections being filed on behalf of the appellant, the Executing Court by its order dated 1, 11.2002 came to the finding that the appellant's Fixed F Deposit Receipts could not be attached in view of proviso (g) to Sub-Section (1) of Section 60 of the Code of Civil Procedure (hereinafter referr~d to as 'the Code'). Ms. Shobha submitted that in the revision filed. by the Bank against the said order of the Executing Court.it W()S erroneously rec6rded by the High Court tha·t the .appellant hc;ld undertaken to produce the G Matador before the.Bank so th(lt the same could be sold for
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recovery of the Bank's dues and the balance dues, if any, could then be recovered from a solventsecurity to be provided by the appellant. It was submitted that since such an undertaking had not been given to th.e High Court;a Review Petition was filed
RADHEY SHYAM GUPTA v. PUNJAB NATIONAL BANK & 251 ANR. [AL TAMAS KABIR, J.]
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on behalf of the appellant which was dismissed in limine. Ms. Shobha also added that without making any attempt to locate the Matador, so that the same could be sold in keeping with the directions given by the Trial Court for satisfaction of the decree, the Decree Holder proceeded only against the appellant since it held the Fixed Deposit Receipts of the 8 appellant in respect of the fixed deposit made out of the retiral benefits, including gratuity received by the appellant at the time of his retirement from service. Ms. Shobha reiterated her submission that, as had been rightly held by the Executing Court, the appellant's Fixed Deposits which represented his retiral c benefits could not be attached or sold to satisfy the decree obtained by the Decree Holder Bank. She urged that even after the retiral benefits obtained by the appellant had been converted into Fixed Deposits it did not lose its essential character of comprising the retiral benefits of the appellant, and D could not, therefore, be attached in view of proviso (g) to Section 60(1) of the Code.
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A reaffirmed that gratuity payabl~ to dock workers under a scheme in absence of a Notification under Section 5 of the I Payment of Gratuity Act, 1972, would . . • . I not be liable to attachment ~ •. for satisfaction of a Court's decree. - -
B- 16. The same principle wa~ reiterated by this Court in - Union of India v. Wing Commander R.R. Hingorani, [1987] 1 SCC 5~1 ~fld- Gorakhpµr University and Ors. v Dr. Shit/a Prasad Nagendera and Ors., [2001) 6 SCC 591.
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18.' In addition to her two afqresaid grounds, Ms. Shobha lastly submitted that the revision petition filed by the Bank before the High Court was in itse'.lf not maintainable in view of the provisions of Section 115 of the Code, as amended, which makes it clear that if an order in favour of a party applying for G revision decides the matter finally then only a revision would be maintainable, but if the same did not decide the suit or other proceeding finally, then such revision would not be maintainable. Ms. Shobha urged that in the instant case the Bank had filed a revision against an interlocutory order which did not have the H effect of finally disposing of the execution proceedings and
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RADHEY SHYAM GUPTA v. PUNJAB NATIONAL BANK &253 ANR. [AL TAMAS KABIR, J.]
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consequently the revision filed on behalf of the Bank should have been dismissed by the High Court. Jn this regard, Ms. Shobha referred to the decision of this Court in Shiv Shakti Coop. Housing Society, Nagpur v. Swaraj Developer$ and Ors., [2003] 6 SCC 659 and also in Surya Dev Rai v. Ram Chander Rai and Ors., [2003] 6 sec 675 reported in the same volume at page 675.
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A urged that when the hypotheticated vehicle was not traceable, the Bank could not be left without remedy and it could not have been the intention of the Trial· Cou'rt that even. if the vehicle could not be apprehended the decree of the Bank would remain unsatisfied. If a pragmatic meaning is to be given to the Blanguage of the decree, it wouldaveto be interpreted to mean that an attempt should first be made to realise the decretal dues · by sale of the Matador, and, thereafter, to realise the balanc.z dues, if any, from the solvent security to be·produced by the appellant herein. The decree dos not indicate that in the event cthe Matador could notbesold Ithe decree could notbe executed at all against the other assets either of the Judgment Debtor or the guarantor.
. 24. Having considered the submissions made on behalf of the respective parties, we are inclined to accept Mr. Mehta's . submission that the :order impugned in the revision petition before the High Court did notattractthe bar of the proviso to G subsection (1) of Section 1.15.ofthe. Code as it sought to finally decide the manner in which the decree passed in Suit No.66 of 1992 by the learned Additional. and. Sessions Judge, Bayana, Rajasthan; was to be: satisfied. However, wear also ·of the view that having regard to proviso (g) .to Section 60(1) H of the Code, the High court ceimmitted a jurisdictional error in
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RADHEY SHYAM GUPTA v, PUNJAB NATIONAL BANK & 255 ANR. [AL TAMAS KABIR, J.]
directing that a portion of the decretal amount be satisfied from the fixed deposit receipts of the appellant held by the Bank. The High Court also erred in placing the onus on the appellant to produce. the Matador in question for being auctioned for recovery of the decretal dues. In other words, the High Court erred in altering the decree of the Trial Court in its revisional jurisdiction, particularly when the pension and gratuity of the appellant, which had been converted into Fixed Deposits, could not be attached under the provisions of the Code of Civil Procedure. The decision in the Jyoti Chit Fund case (supra) has been considerably watered down by later decisions which have been indicated in paragraphs 15 and 16 hereinbefore and it has been held that gratuity payable would not be liable to . attachment for satisfaction of a Court decree in view of proviso (g) to Section 60(1) of the Code·.
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A portion of the dues. Further-more, although, the Bank was entitled to proceed both against the principal-debtor and the guarantor for reco/1ery of its due$, the mode of recovery was prescribed by the Trial Court, whic~, in our view, clearly indicates that the Bank should at first recover whatever amount it can from 8thesale of theMatador.Theright of theBanktoproceed against either the principal..:..debtot or the guarantor stood restricted by the directions of ,the .Trial Court. Except for recording that the vehicle was not .traceable, nothing is recorded in the impugned jucjgment of the, High Court as to what steps cwere actually taken by the Bank fpr recovery of the Matador for sale in order to recover its decretal.dues.Jn our view, instead of disturbing the order of the Executing Court, which was passed in consonance with the provisions of the Code of Civil Procedure, the High Court should have directed the respondent DBank and the Executing Court to 1 seriously pursue the recovery of the Matador or against any other property of.the principaldebtor, having particular regard to the finding of the Executing Court that the said fixed depbsits represented the retiral benefits of the appellant.
E 27. We, therefore, allow the appeal, set aside the order passed by the High Court and, restore that of the Executing Court. The respondent • Bank may I take appropriate steps for recovery of the Matador for recovery of its dues in the manner indicated in the judgment and il'l the decree of the Trial Court. F Consequently, released to him let as the per fixed the deposit directions of I receipts the of Executing the appellant Court be while disposing of the appllcation dated 6.2.1999 and 27.7.2001 by its order dated 1: 11.02.
S.K.S.
Appeals allowed.
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2 issues framed by the court
Whether fixed deposits made from pension and gratuity received by a guarantor could be attached under proviso (g) to Section 60(1) CPC.
Whether the High Court could alter the trial court's decree prescribing the mode of recovery in exercise of revisional jurisdiction.
Colour shows how this judgement treated each authority
Calcutta Dock Labour Board and Anr. v. Smt. Sandhya Mitra and Ors.Relied on¶15
[1985] 2 SCC 1 · Who else cites this
Union of India v. Wing Commander R.R. HingoraniRelied on¶16
(1987) 1 SCC 551 · Who else cites this
Gorakhpur University and Ors. v. Dr. Shitla Prasad Nagendera and Ors.Relied on¶16
[2001] 6 SCC 591 · Who else cites this
Union of India v. Jyoti Chit Fund and Finance and Ors.Distinguished¶17
[1976] 3 SCC 607 · Who else cites this
Industrial Credit and Development Syndicate v. Smithaben H. Patel and Ors.Referred¶12
[1999] 3 SCC 80 · Who else cites this
Rajasthan Financial Corporation v. Man Industrial Corporation LimitedReferred¶14
[2003] 7 SCC 522 · Who else cites this
State Bank of India v. M/s. Indexport Registered and Ors.Referred¶14
[1992] 3 SCC 159 · Who else cites this
Shiv Shakti Coop. Housing Society, Nagpur v. Swaraj Developers and Ors.Referred¶18
[2003] 6 SCC 659 · Who else cites this
Surya Dev Rai v. Ram Chander Rai and Ors.Referred¶18
[2003] 6 SCC 675 · Who else cites this
2 provisions across 1 enactments
Radhey Shyam Gupta
Punjab National Bank
Durga Prasad
Altamas Kabir
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
