1. When a Receiver is appointed in execution under Section 51(d) of the Code of Civil Procedure 1908 (“CPC”), is that appointment territorially constrained by Section 39 of the CPC, and, specifically by Section 39(4) In other words, is the power of the Court to appoint a Receiver in execution limited or restricted to properties within the territorial jurisdiction of the Executing Court alone This is the question that arises in the present matter in execution. I have heard Mr Chinoy and Mr Kamdar for the Decree Holder (“Vistra”) and Mr Kapadia, Mr Sancheti and Mr Godbole for the answering Respondents at quite considerable length.

2. The proposition canvassed by Mr Chinoy and Mr Kamdar is that Section 51(d) only provides for modes of execution of a decree. The appointment of a Receiver is one such mode, but that appointment is not one to which every decree holder is entitled as a matter of right. At least on this there is no controversy: that intment of a Receiver even in execution is controlled by the provisions of Order 40 of the CPC. Specifically, Mr Chinoy agrees that a Receiver is not to be appointed, even in execution, merely for thethe appo asking.

3. In response, the case placed by Mr Kapadia, Mr Sancheti and Mr Godbole is that all acts of a Civil Court are governed by territoriality, and that this is true whether one looks at Section 16 to Section 20 of the CPC or Clauses 12 and 14 of the Letters Patent. It is their case, broadly stated, that Section 39 is a controlling provision. Mr Kapadia submits that when this Court on its Original Side, or, for that matter, any Civil Court, takes up execution, it is necessarily limited to execution against persons or properties within its jurisdiction. Section 39(4), in his submission, imposes a restraint or limitation not on what an Executing Court can do so much as against what and against whom it can legitimately proceed. While there is a slight differentiation in the submissions that Mr Sancheti and Mr Godbole make while supplementing Mr Kapadia’s lead arguments, but very broadly stated all three Respondents are in agreement on this.

4. What is before me today is, first, a Commercial Execution Application No. 1599 of 2018. It seeks execution of a Consent Order dated 22nd February 2018. Paragraphs 1 to 14 of my order of 22nd February 2018 read thus:

“1. Handwritten Consent Terms were signed and tendered yesterday. I took those on record. I now have final typed version signed by the representative of the Applicant, Respondent No. 1 for himself and on behalf of Respondent No. 3 as its director. Respondent No. 2 is currently out of India expected to return on Wednesday, 28th February 2018. She will countersign the final Consent Terms on 1st March 2018.

2. Annexed to these Consent Terms is a photocopy of a map that was exchanged yesterday. Mr Sathe who is on record for the Respondents says that a more accurate and certified map may be used in addition. Mr Joshi is agreeable to this.

3. The Consent Terms were negotiated and arrived at yesterday as noted in my order passed last evening. The final terms are signed in Court before me after a brief hearing on two clauses, to which I will turn presently.

4. The Respondent No. 1 and Mr Ashok Yadav, fellow director are also present in Court and they have signed these Consent Terms on behalf of the 3rd Respondent (apart from the 1st Respondent signing for himself). To the Consent Terms the updated or more accurate map is attached. What is bounded in green is excluded. What is shown in red is included for the purposes specifically of Clauses 4 of these Minutes.

5. To put the matter beyond controversy, there are undertakings contained specifically in Clauses 2, 3, 5 and 8 and these are accepted as undertakings to the Court. In addition, the statements made in Clauses 1 and 9 are also accepted as undertakings to the Court. There is a long history of undertakings being given and statements made to Court, only to be breached. I am, therefore, making it clear that the slightest breach of any of these undertakings will not only result in the default provisions in these Consent Terms but will immediately, whether or not the Applicants filed an appropriate proceeding, be viewed as conduct contumacious and an interference with or obstruction to the administration of justice apart from a breach of the undertakings themselves and will be dealt with as such immediately. This observation is necessary because these Consent Terms were evolved in a factual context last evening.

6. Clause 4 of the Consent Terms appoints a Receiver of two tracts of land described in Schedule “1” and Schedule “2” and he is required to take possession. The same clause also specifically provides that if there is a default by the Respondents in paying the amounts mentioned in Clause 5, the Receiver can then proceed to sell these lands in Schedule “1” and Schedule “2”. Clause 12 of the Consent Terms gives the Respondents liberty to approach this Hon’ble Court for a mortgage or sale of what Page 6 of 42 24th August 2018 is described as “aforesaid properties”, i.e. the properties in respect of which the Court Receiver stands appointed, and this liberty is for making payment of the decretal claim or the amount noted in Clause 5 as the case may be. The distinction is that in Clause 5 the decree holder has agreed to receive a reduced claim in full and final satisfaction of the decree upon the amounts being paid in terms of the schedule to the Clause 5; in default, the decretal debt is to be recovered in full with all interest.

7. Mr Mody, freshly engaged on behalf of the Respondents, is instructed to make a submission that the appointment of a Receiver of the Schedule “1” properties will result in a depressed value. He specifically states that there is no objection to the Receivership in respect of Schedule “2” properties. However, the Respondents have a proposed buyer or Joint Venture partner for a sale or development (or joint development) of the Schedule “1” properties and this transaction is likely to be hampered or impaired, or it transaction value depressed, by the appointment of a Receiver. I do not think this is correct. The appointment of a Receiver does not necessarily or invariably result in such a consequence. If there is indeed a potential Joint Venture partner, he should take comfort in knowing that the appointment of the Receiver of the Schedule “1” property will operate for his benefit as there is no question of any third party rights intervening to compromise any transaction or negotiations with the Respondents. The appointment of the Receiver will not interfere with any negotiations between the Respondents and the JV potential partner. If these negotiations are brought to fruition, with the JV partner and the Respondents both being before this Court, a suitable order will be fashioned to ensure that title appropriately passes without any hindrance whatsoever and without any clog on it. Thus, the Court Receiver will serve to ensure a doubt and clutter-free clear transaction. The consideration, of course, under any such transaction must be first applied towards the purposes and payments mentioned in these Consent Terms. Indeed, the introduction of a Joint Venture partner might well result in the acceleration of the settlement by payment of the decree holder’s dues.

8. It goes without saying that since the Court Receiver is appointed, any transaction between the Respondents and a potential partner will be with the supervision of this Court in the interest of all concerned to ensure, inter alia, that the decree holder’s claim is not left unsatisfied and, equally, the Joint Venture partner has complete confidence in regard to the lands in respect of which he is transacting with the Respondents.

9. This is not to suggest that the Respondents are in any way restrained from negotiating with the Joint Venture partner, finalizing the terms or arriving even at an inprinciple understanding; provided they make clear the continuance of this order, disclose to the JV partner these Consent Terms; and clarify that any transaction for the Schedule “1” lands with a Joint Venture partner is subject to an appropriate order of this Court following today’s order. Now that the property is in custodia legis, these transactions or negotiations will remain in-principle and cannot and will not result in the creation of any rights in favour of the Joint Venture partner over the Schedule “1” lands.

10. The Consent Terms with the annexures including the revised map are taken on record and marked “X” for identification with today’s date.

11. A scanned copy of the Consent Terms (without annexures) will be provided and will be uploaded as Order No. 2 in this matter.

12. It is noted that Mr Sathe has personally explained the Consent Terms in Marathi to the Respondents.

13. Respondent Nos. 2 will sign for himself and as a Promoter-Director for Respondent No. 3. It is in light of this signature, and since Respondent No.1 has also signed for himself and for Respondent No. 3 and since Respondent No.2 will also do so by 1st March 2018, that a formal resolution of the Board of Directors of Respondent No. 3 is dispensed with.

14. With these observations, and subject to these terms, there will be an order on the Judge’s Order in terms of the Consent Terms marked ‘X’ for identification. The Judge’s Order is disposed of accordingly. Liberty to the parties to apply.”

5. Schedule I to the Consent Terms was a map or a plan of certain land at a site known as Kakade City near Pune. Schedule II was a description of some land in the Khadki Cantonment. At this stage, I must note that the original Consent Arbitral Award against the Respondent was in an aggregate amount of Rs. 178 crores with an Internal Rate of Return (“IRR”) specified at 21% per annum from 30th September 2014 until payment. Prior to my 22nd February 2018 order, I appointed the Court Receiver in execution of some land at Kothrud, Pune admeasuring 22.95 acres.

6. The important aspect of the 22nd February 2018 Consent Terms is that there was an undertaking by the Respondents of an amount of Rs. 260 crores, a renegotiated amount. This was payable in four instalments set out in Clause 5 of the Consent Terms filed that day. The Respondents filed three separate Appeals and inter alia alleged that even these Consent Terms are contrary to Foreign Exchange Management Act, 1999 (“FEMA”). I was told that the Appeal Court declined interim reliefs. In the present Execution Application, reliefs are sought in regard to the assets of Sanjay Kakade (“Sanjay”) and Usha Kakade (“Usha”), specifically their properties, both movable and immovable located in Pune. Column “J” of the Execution Application lists very many properties said to belong to Sanjay and Usha. These include not only motor vehicles, shares and other movables, but also immovable properties including agricultural and non-agricultural land in and around Pune. I need not go into the details of each of these properties. It is sufficient to note that not a single one of the immovable properties in question is within the jurisdiction of this Court. Hence, the present controversy.

7. The Execution Application in Column “J” has a series of prayers numbered from (i) to (vi). Clause (i) is the usual prayer for the issue of a warrant of attachment of sale of the properties listed in sub-paragraphs that follow thereafter. Clause (ii) is for appointment of a Commissioner. Clause (iii) is for an attachment and sale of movables separately listed. Clause (iv) is again for appointment of a Court Commissioner on failure of the 2nd Respondent to transfer these properties. Clause (v) then seeks appointment of a Receiver in execution. Finally, Clause (vi) worded in the alternative to clause (v) seeks a transfer of the Award or the decree to the District Court at Pune for further steps in execution. This is the frame of the Execution Application.

8. On 27th June 2018, in the present Chamber Summons (L) No. 911 of 2018 in the existing Execution Application No. 1599 of 2018, I granted an ad-interim injunction in respect of the properties covered by the Execution Application and the Chamber Summons.

9. The starting point of this discussion as to the frame of Section 51 and the ambit of the Court’s powers in appointing a Receiver in execution are of course the three crucial provisions of the CPC which I will set out below for convenient immediate reference:1

“39. Transfer of decree (1) The Court which passed a decree may, on the application of the decree-holder, send it for execution to another Court of competent jurisdiction—

(a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain, within the local limits of the jurisdiction of such other Court, or

(b) if such person has not property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property within the local limits of the jurisdiction of such other Court, or

(c) if the decree directs the sale or delivery of immovable property situate outside the local limits of the jurisdiction of the Court which passed it, or

1 I am not reproducing the whole of the paragraph of Order 40 since the entirety of the discussion has actually revolved around an interpretation of Order 40 Rule 1 when read with Section 39 and Section 51.

(d) if the Court which passed the decree considers for any other reason, which it shall record in writing, that the decree should be executed by such other Court.

(2) The Court which passed a decree may of its own motion send it for execution to any subordinate Court of competent jurisdiction.

(3) For the purposes of this section, a Court shall be deemed to be a Court of competent jurisdiction if, at the time of making the application for the transfer of decree to it, such Court would have jurisdiction to try the suit in which such decree was passed.

(4) Nothing in this section shall be deemed to authorise the Court which passed a decree to execute such decree against any person or property outside the local limits of its jurisdiction.

51. Powers of Court to enforce execution.

Subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree-holder, order execution of the decree—

(a) by delivery of any property specifically decreed;

(b) by attachment and sale or by the sale without attachment of any property;

(c) by 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;

(d) by appointing a receiver; or

(e) in such other manner as the nature of the relief granted may require :

Provided that, 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—

(a) that the judgment-debtor, with the object or effect of obstructing or delaying the execution of the decree,—

(i) is likely to abscond or leave the local limits of the jurisdiction of the Court, or

(ii) 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

(b) 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, or

(c) that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account.

Explanation.—In the calculation of the means of the judgment-debtor for the purposes of clause (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.

ORDER 40

Appointment of Receivers

1. Appointment of receivers—

(1) Where it appears to the Court to be just and convenient, the Court may by order—

(a) appoint a receiver of any property, whether before or after decree;

(b) remove any person from the possession or custody of the property;

(c) commit the same to the possession, custody or management of the receiver; and

(d) confer upon the receiver all such powers, as to bringing and defending suits and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Court thinks fit.”

10. Mr Chinoy in support of his submission relies on the decision of a learned Single Judge of this Court in ICICI Ltd v Kothri Industrial Corporation Ltd & Ors. (2005) 5 Bom CR 213 : 2005 SCC OnLine Bom 484. He submits that this very issue was addressed and answered in favour of the decree holder in that case. He draws my attention to the fact that in paragraph 11, this was 2 (2005) 5 Bom CR 213 : 2005 SCC OnLine Bom 484. precisely the question raised, i.e. whether Section 39(4) of the CPC forbade the execution of a decree by any mode, even by appointment of a Receiver, in regard to persons or properties outside the local limits of the jurisdiction of the Executing Court. Mr Chinoy submits that, if there was any controversy about this at all, it is put to rest by paragraphs 21 and 22 of that judgment:

21. This leads me to the main contention between the parties that whether the provisions of s. 39 of CPC are at all applicable. In my opinion the provisions of S. 39 of the CPC are not applicable in cases of execution of the decree via the court receiver under clause (d) of section 51 of the CPC. The CPC in part II provides for the provisions of a decree under section 38 therein provides that the execution of a decree can be done either by the court passing the decree itself or by transmitting to other court of competent jurisdiction. Thus the power of execution of the decree by the court which has passed the decree is intact till the court decides that in the facts of a case the transmission of the decree to other court is necessary for the purpose of execution. The provisions of s. 39 only applies when the said transfer of the decree to the court of competent jurisdiction is necessary. The said S. 39 provides four eventualities in which the decree has to be transferred to the court of competent jurisdiction.

We are concerned with sub-clause(b) and (d) of the S. 39. The said sub-clause(b) provides that if the person has property within the local limits of the jurisdiction of the court which has passed the decree to satisfy the decree then the property can be transferred to the local limits of that court where the properties are situated. Sub-clause (d) provides that if the court which passed the decree considers for any reason which may be stated in writing, that decree should be executed by other court then onlythe decree can be transmitted for the purpose of execution thereof. Thus in effect the transfer of the decree is provided where the decree has to be executed by a mode of attachment and sale in a court of local limits in whose jurisdiction the said property is situated. S. 46 of the said CPC provides for a precepts. Under the said section the court which has passed the decree issues a precepts to any court which would become competent to execute such a decree by attaching any property belonging to the judgment debtor as specified in the said precept. Now reading the provisions of s. 38, s.39 and 46 and 51 together there is no manner of doubt that the execution of the decree under s. 51 by attachment and sale ought to be transmission of the decree if the properties are situated outside the local limits of the court passing the decree. However when the execution of the decree is sought by a mode of execution via the court receiver under subclause(d) of s. 51 then in that event the said decree cam be executed by the court passing the decree itself even if the properties are not situated within the local limits of the said court. It is now well settled that the receiver can be appointed by the court passing the decree with all powers under order 40 rule 1 in execution of a decree and once the said receiver is appointed it has all powers conferred by the court for the purpose of execution of the said decree under clause 1(d) of s. 51 the court passing the decree retains with itself power and jurisdiction to execute the said decree.

22. Once the court puts a decree in execution by adopting one of the mode prescribed under S. 51 of the CPC then the provisions of order 21 would apply in so far as it relates to the said mode of execution. The provisions are different for execution of a decree under different modes as provided under S. 51 of the CPC. In my opinion when the decree is put in execution the provisions of order 21 would be applicable which are in so far as applicable to the said mode of execution. The aforesaid view taken is supported by the judgment of the apex court in the case of Tarinikamal Pandit (supra) in which the apex court has held that he provisions of order 21 rule 92 as well as S. 66 of the CPC is not applicable when execution of decree is via the mode of appointment of the court receiver in execution. Similar view has been taken by another judgment cited by the learned counsel for the plaintiff decree holder wherein also the supreme court has held that it is permissible that the receiver can be appointed in execution of the proceedings under s. 51 and conferred with the powers under order 40 rule 1 of the CPC. However the broad contention raised by the learned counsel for the plaintiff decree holder that no provisions of order 21 are applicable when execution of a decree is by mode of Court Receiver under S. 51(d) of the Code are required to be rejected because the apex court in para 9 of the aforesaid judgment in the case of Jibon Krishna(supra) has held that there can be some provisions of the Order 21 of CPC which would be applicable though they restrained themselves from identifying each of the provision of Order 21 which would be applicable in execution of decree by a mode of Court Receiver. Thus the broad proposition advanced by the learned counsel for the plaintiff decree holder that no part of order 21 is applicable cannot be accepted. However the question that remains is whether s. 39 applies, In my view the said provision of s. 39 do not apply in a case of a execution of the decree through the court receiver because under s. 38 of the CPC the court passing the decree is empowered to execute its own decree and only if the courts deems fit and necessary that the decree must be transmitted for the purpose of execution in respect of the properties which are outside the local limits of that court that the provisions of s. 39 would be applicable and this question arises in execution of decree via attachment and sale in respect of the properties which are outside the jurisdiction of the said court. In my opinion the provisions of s. 39 do not apply in cases where the court desires to execute the decree by following the mode of execution prescribed under sub-clause (d) of s. 51 of CPC. The contention of the learned counsel for the defendant judgment debtor that the words "subject to such condition and limitation as may be prescribed under 51" must be read and mean one of the conditions as contemplated under s. 39 of the CPC also cannot be accepted because the provisions of s. 39 are not the limitation prescribed for mode of execution under s. 51. The limitations are prescribed under the provisions of order 21 and the said limitation is prescribed under order 21 must apply to each mode of the execution as contemplated and are as applicable to the said mode of execution under s. 51. It is not possible to accept the contention that sub-section 4 of s.39 is a limitation on execution of a decree by a court receiver because the provisions of s. 39 do not in any manner suggest of an execution of a decree by a way of appointment of the court receiver. On the contrary the provisions of s. 39 do suggest that the provisions are applicable only when the decree is sought to be executed by attachment and sale. In view of the aforesaid I do not find any substance in the contention advanced by the learned counsel for the defendant judgment debtor that by virtue of sub-section 4 of s. 39 of CPC the execution of the decree by the plaintiff is bad in law and consequent auction sale conducted and the sale being effected in favour of third party purchaser is invalid and/or there are any material irregularities therein. In my opinion the provisions of sub-section 4 of S. 39 do not apply and has no application when the execution of the decree is via the mode of the court receiver under s. 51(d) of the said code.

11. This decision was carried in Appeal No. 500 of 2005. That Appeal was decided on 6th July 2015. It was rejected in limine. It was argued before the Appeal Court (ironically, by Mr Chinoy who is arguing the opposite today) that when a Receiver is appointed in execution, he could take charge of, and act in respect of, only those properties within the limits of the original jurisdiction of that Executing Court. It was argued that the principle set out in the Supreme Court decision in Jibon Krishna Mukherjee & Anr v New Beerbhum Coal Ltd AIR 1960 SC 297 [LQ/SC/1959/203] ; see also: Raja Pramothanath Malia v HV Low & Co AIR 1930 Cal 520 [LQ/CalHC/1929/248] . that a sale by the Court Receiver is not a sale “by the Court” (as held by the learned Single Judge) was not attracted. The appeals court extracted the relevant portions of the decision of the Supreme Court in Jibon Krishna Mukherjee. I believe it is best to set out paragraphs 6, 7 and 8 of the appellate order:

“6. We have no hesitation in observing that the appointment of the Court Receiver as set out in clause (c) and power to him to sell the aforementioned properties and to satisfy the decree amounts to an appointment of Court Receiver in execution of the decree under Section 51(d) of the Code of Civil Procedure. The power conferred upon the Receiver in consent decree is in conformity with the provisions of Order 40 Rule I(d). The legal position is well settled that the sale by the Court Receiver is not the sale by the Court and such sale cannot be said to be sale in execution by the Court. In Jibon Krishna Mukherjee, the Supreme Court in para 7, 8, 9 and 10 held thus:

‘7. It is common ground that the receiver was appointed with power to him to get in and collect the outstanding debts and claims due in respect of the charged property and 3 AIR 1960 SC 297; see also: Raja Pramothanath Malia v HV Low & Co AIR 1930 Cal 520 [LQ/CalHC/1929/248] . with all powers provided for in O.40, R.I Cl.(d) of the Code of Civil Procedure’. The order appointing the receiver also expressly directed that the receiver shall be at liberty to sell the said property charged in favour of respondent 1 either by private treaty or by private auction to the best purchaser or purchasers that can be got for the sale but he shall not hold such sale before the 18th day of August 1956. In other words, the receiver was appointed in execution proceedings under S. 51 and was given all the powers under O.40, R.1 (d) of the Code. It is by virtue of these powers that he entered into the agreement of sale with respondent 2 and sold the property to him and gave him its possession. Section 51 which deals with the powers of the court to enforce execution provides for the execution of the decree by five alternative modes specified in Cls.(a) to (e). One of the modes of execution is the appointment of a receiver which means that a decree for the payment of money can be executed by the appointment of a receiver. He may either collect the income of the property belonging to the judgment-debtor and thereby satisfy the decree, or if so authorised he may sell the property of the judgment-debtor and thereby arrange for the satisfaction of the decree. Thus, in dealing with the question as to whether sale held by the receiver is a sale ordered by the court to which O.21 R.89 applies it is necessary to remember that the appointment of the receiver itself is a mode of execution of the decree.

8. When the receiver so appointed is given all the powers under O.40 R.I(d) it is these powers which he seeks to exercise when selling the judgment-debtor’s property in execution of the decree. The sale held by the receiver under such conditions would no doubt be governed by the provisions of O.40 and the court may supervise or issue directions in respect of such a sale under the provisions of the said order. Prima facie the sale held by the receiver appointed in execution proceedings in pursuance of the powers conferred on him under O.40, R.1(d) would be governed by the powers conferred on him and the terms and conditions on which the said powers may have been conferred and by other relevant provisions of O.40. It does not seem to attract the provisions of O.21.

9. Courts have had occasion to consider questions about the applicability of several provisions of O.21 to sales held by receivers and opinions expressed on such questions have differed more particularly in the Calcutta High Court as we will presently indicate. In the present appeal we do not propose to consider or decide the general question about the character of the sale held by the receiver nor do we propose to attempt to specify which provisions of O.21 will apply to such sales and which will not. We are dealing with the narrow question as to whether O.21, R.69 applies to such a sale; and it is to the decision of this narrow question that we will address ourselves in the present appeal.

10. Order 21, R. 89 enables the persons specified in Sub-r (1) to apply to have the sale held in execution proceedings set aside on two conditions, (a) the applicant must deposit for payment to the purchaser a sum equal to 5 per cent of the purchase money, and (b) for payment to the decree-holder the amount specified in the proclamation of sale as that for the recovery of which the sale was ordered less any amount which may since the date of such proclamation of sale have been received by the decree-holder. The second requirement immediately raises the question as to whether it is necessary for the receiver in selling immoveable property in execution proceedings to issue a proclamation as required by O.21, R.66 of the Code. In our opinion there can be no doubt that the provisions of the said rule do not apply to sales held by receivers. No decision has been cited before us where a contrary view has been expressed. The provisions of the said rule apply where property is ordered to be sold by public auction in execution by the court, and the order for the sale of such property must be made by any court other than the Court of Small Causes as provided by R.82. Where the court appoints a receiver and gives him liberty to sell the property the receiver may either well, the property and thereby realise the money for the satisfaction of the decree, or he may, even without selling the property, seek to satisfy the decree by the collection of rents due from the property or other ways open to him under the law. In such a case it is difficult to hold that by the very appointment of the receiver clothing him with the power to sell the property if he thought it necessary to do so the court has ordered the sale of the said property within the meaning of O.21, R. 82. If the provisions of R.66 of O. 21, are inapplicable to sales held by receivers it is obvious that the second condition prescribed by R.89(1)(b) is equally inapplicable and it is undoubtedly one of the two essential conditions for the successful rule. In our opinion this fact clearly emphasises the inapplicability of the whole rule to sales held by receivers. We are, therefore, satisfied that the High Court was right in refusing to entertain the appellants’ application under O.21 R.89.’

7. It is thus clear that one of the modes of execution is the appointment of the Receiver. When the Receiver is appointed in execution proceedings under Section 51 and is given the powers under Order 40 Rule I(d) of the Code, it does not attract the provisions of Order 21. In the facts and circumstances of the present case, we have no doubt in holding that the appointment of the Court Receiver in aforesaid clause (C) of the consent decree was nothing but an appointment in execution proceedings under Section 51 and the appointment of the Court Receiver has to be treated as appointment under Section 51(d). The power to the Court Receiver to take possession of the properties and for its sale by public auction or private sale to satisfy the decree is the power under Order 40 Rule I(d). We hold that the sale being effected by the Court Receiver is not a sale by the court and the provisions of Order 21 are not attracted.

8 Relying upon para 10 of the judgment of the Supreme Court in the case of Jibon Krishna Mukherjee, it was urged by the learned senior counsel that if the Court directs sale of the property, Order 21 is clearly attracted and in the present case clause (c) reflects that it was the Court that has directed the Court Receiver for sale of the property. Para 10 of the judgment of the Supreme Court in the facts and circumstances of the present case does not help the case of the appellant at all. The sale by the Court Receiver pursuant to the power given to him in the consent terms is not the sale by the Court nor it is under the order of the Court. That being so, Order 21 has no application.”

12. It is, therefore, the submission by Mr Chinoy that the appointment of a Receiver is one of the permissible modes of execution, a matter on which the Supreme Court’s decision in Jibon Krishna Mukherjee is unambiguous. What the Supreme Court held in paragraph 8 of Jibon Krishna Mukherjee is that the Receiver then exercises powers under Order 40 Rule 1 and not under Section 39, Section 51 or Order XXI of the CPC. The Supreme Court clearly said that the provisions of Order XXI in regard to immovable property and particularly Order XXI Rule 66 do not apply to sales by a Receiver appointed in execution. In other words, a sale by the Receiver is not a sale by the Court.

13. If there was any ambiguity about this, it is completely eliminated by the first two sentences of paragraph 7 of the appellate court’s order in Kothri Industrial Corporation. This is not a factspecific finding. It is a pronouncement of the legal position. The appeal court said in the clearest possible terms that the appointment of a Court Receiver under Section 51(d), when conferred with the powers under Order 40, does not attract the provisions of Order XXI of the CPC. Therefore: while a Receiver may be appointed as a mode of execution, his functioning as a Receiver in execution is outside the frame of Order XXI of the CPC.

14. Mr Chinoy submits that the decision in Kothri Industrial is a binding precedent. The issue before me is, therefore, in his submission, no longer res integra.

15. On the other hand, Mr Kapadia submits that the equitable mode of execution under Section 51(d) is of restricted applicability. It is, in his submission, constrained by the provisions of Section 39. He places reliance on a recent Supreme Court decision in Sundaram Finance Ltd v Abdul Samad & Anr (2018) 3 SCC 622 [LQ/SC/2018/207] in regard to Section 39 and also on Section 42 of the CPC. In particular, he places emphasis on paragraph 20 of Sundaram Finance to submit that if the execution of an arbitral award can be made anywhere in the country, then this necessarily means that execution must be initiated in the court that has jurisdiction over the property against which execution is sought. There is no exclusivity that attaches to such filings and, in fact, the decree holder may well be entitled to file multiple execution applications in different courts, each such application relating to property within the jurisdiction of that court. We are, for the present purposes, not concerned with the position where property is spread over the jurisdiction of two or more Courts. That situation simply does not arise in the present case. Mr Kapadia submits that the word ‘may’ in Section 39 is to be read as ‘shall’; or, in other words, that Section 39(4) limits the operation of Section 39(1). He 4 (2018) 3 SCC 622 5 We are, for the present purposes, not concerned with the position where property is spread over the jurisdiction of two or more Courts. That situation simply does not arise in the present case.

also says that even the Rules of this Court on the Original Side in execution support this proposition. Mr Kapadia relies on the decision of the Supreme Court in Mohit Bhargava v Bharat Bhushan Bhargava & Ors (2007) 4 SCC 795 [LQ/SC/2007/535] . and in particular, he lays emphasis on paragraphs 5, 6 and 7:

“5. We shall first deal with the objection of the decreeholder to the transfer of the execution to the court at Indore having jurisdiction over the property sought to be brought to sale. The decree-holder who appeared in person as also the counsel who was appearing on his behalf in the petition for Special Leave to Appeal (Civil) No. 7742 of 2006 argued that Section 39(4) of the Code as amended in 2002, was not attracted since this was not a case to which Section 39(1) was applicable. It was contended that the court which passed the decree had the jurisdiction to execute the decree and the decree-holder had approached that court for execution of the decree. There was no defect in jurisdiction in seeking to enforce the decree through the court which passed the decree. It was submitted that the decree was being executed by the present court at Gwalior only because of the abolition of the court before which the execution petition was originally filed and the High Court misunderstood the factual position while coming to the conclusion that Section 39(4) was attracted. On behalf of the judgment-debtor it was pointed out that though normally it is correct to say that the court which passed the decree has the jurisdiction to execute the decree, the moment the decree-holder sought to execute such a decree against property lying outside the jurisdiction of that court, Section 39(4) of the Code was attracted and the court was obliged to transfer the decree for execution to the proper court. Section 42 of the Code was referred to. 6 (2007) 4 SCC 795 [LQ/SC/2007/535] . Counsel further contended that earlier, in terms of Section 39(1) of the Code, a discretion was vested in the court, either to proceed with the execution of the decree or to transfer the same to another court as understood by some of the decisions. There was a conflict of judicial opinion. The legislature had therefore stepped in with an amendment in the year 2002 curtailing that discretion and introducing sub-section (4) in Section 39 of the Code making it clear that any attempt of the court to proceed with the execution against a property outside the jurisdiction of that court, would be one without authority and this legislative intent had been properly understood by the High Court when it transferred the decree to another court. Both sides brought to our notice Salem Advocate Bar Assn. v. Union of India [(2005) 6 SCC 344] [LQ/SC/2005/750] with particular reference to paras 22 to 24 dealing with Section 39 of the Code.

6. In that decision, clarifying the fields of operation of Order 21 Rule 3, Order 21 Rule 48 and Section 39 of the Code, this Court stated: (SCC p. 365, para 24)

“24. Section 39 does not authorise the court to execute the decree outside its jurisdiction but it does not dilute the other provisions giving such power on compliance with the conditions stipulated in those provisions. Thus, the provisions, such as, Order 21 Rule 3 or Order 21 Rule 48 which provide differently, would not be affected by Section 39(4) of the Code.

” 7. There cannot be any dispute over the proposition that the court which passed the decree is entitled to execute the decree. This is clear from Section 38 of the Code which provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution. Section 42 of the Code indicates that the transferee court to which the decree is transferred for execution will have the same powers in executing that decree as if it had been passed by itself. A decree could be executed by the court which passed the decree so long as it is confined to the assets within its own jurisdiction or as authorised by Order 21 Rule 3 or Order 21 Rule 48 of the Code or the judgment-debtor is within its jurisdiction, if it is a decree for personal obedience by the judgment-debtor. But when the property sought to be proceeded against, is outside the jurisdiction of the court which passed the decree acting as the executing court, there was a conflict of views earlier, some courts taking the view that the court which passed the decree and which is approached for execution cannot proceed with execution but could only transmit the decree to the court having jurisdiction over the property and some other courts taking the view that it is a matter of discretion for the executing court and it could either proceed with the execution or send the decree for execution to another court. But this conflict was set at rest by Amendment Act 22 of 2002 with effect from 1-7-2002, by adopting the position that if the execution is sought to be proceeded against any person or property outside the local limits of the jurisdiction of the executing court, nothing in Section 39 of the Code shall be deemed to authorise the court to proceed with the execution. In the light of this, it may not be possible to accept the contention that it is a matter of discretion for the court either to proceed with the execution of the decree or to transfer it for execution to the court within the jurisdiction of which the property is situate.”

16. Section 39 of the CPC suffered an amendment in 2002 by which sub-section 4 was added. The 144th report of the Law Commission of India pointed out that there was some controversy about the use of the word ‘may’ in Section 39(1) and whether an executing Court had any discretion in regard to the transfer of a decree. In other words, could an executing Court refuse to send a decree for execution under Section 39(1)(a), (b) or (c) There were divergent views, including, importantly, a view of the Division Bench of this very Court in Shaba Yeshwant Naik v Vinod Kumar Gosalia & Ors.AIR 1985 Bom 79 [LQ/BomHC/1984/281] : 1984 Mah LJ 699 That view was accepted as the correct view (and, indeed, the decision in Mohit Bhargava says so as well). This, therefore, in Mr Kapadia’s submission, means that the word ‘may’ is not discretionary but is intended to cover Section 39(1)(d), which speaks of the transfer of a decree by the Court for execution ‘for any other reason’ and includes cases where there are circumstances in which execution as such is considered illegal.144th Report of the Law Commission, April 1992, Page 10, Clause 3.3.8.

17. The decision in Shaba Yeshwant Naik was an appeal that raised a question about the interpretation of Section 39. The appellant had obtained a money decree. He sought execution against certain immovable properties then situated at Quepem, Goa which were outside the territorial jurisdiction of the Margao Court, the court that granted the decree. The Margao Court on an application filed by the decree holder transferred the execution of the decree to the court in Quepem. The Quepem Court held that no right, title or interest had passed in the property to the purchasers since it had earlier been attached in execution. In a Letters Patent Appeal, after 7 AIR 1985 Bom 79: 1984 Mah LJ 699 8 144th Report of the Law Commission, April 1992, Page 10, Clause 3.3.8. considering the law at some length, the Court went on to hold that the word ‘may’ was not discretionary but was intended to prevent an abuse of the remedy. It held that it is a fundamental rule of jurisdiction that no Court can execute a decree in which the subject matter of the suit or the application for execution is outside the local limits of its jurisdiction. It went on to say that territorial jurisdiction is a condition precedent to an executing court exercising jurisdiction. This decision is actually the basis for the entire construct of the Respondents’ case. For, what they say is that this decision of the Division Bench was binding on the learned Single Judge in Kothri Industrial Corporation, and although it was cited before him and noted at the end of paragraph 12, the learned Single Judge did not discuss it and failed to appreciate that he was bound by it. Mr Kapadia submits that the decision of this Court in Shaba Yeshwant Naik was not noticed by the Appellate Court in Kothri Industrial Corporation, although the later Division Bench was bound by it. According to Mr Kapadia, the decision in Kothri Industrial Corporation is, therefore, not good law. Mr Godbole submits that, in any case, the law enunciated by the learned Single Judge and by the Division Bench in Kothri Industrial Corporation is pegged hand and foot to the Supreme Court decision in Jibon Krishna Mukherjee, a decision of 1960 — well before the 2002 amendment that added Section 39(4). Therefore, viewed from any perspective, in their submission, the twp decisions in Kothri Industrial Corporation are no longer good law. Mr Kapadia further supplements this by saying that in any case, one is now restricted to the rationale or reasoning in the appellate court’s order, the decision of the learned Single Judge having merged into it with the final decision in the appeal.

18. I will take up the submissions by Mr Sancheti and Mr Godbole before I return to Mr Chinoy’s response to this. Mr Sancheti submits that Section 39(4) from its plain wording does not address any particular mode of execution, but only speaks of execution in its most general sense. Section 51 is enabling or procedural, while Section 39 is substantive. I am unsure about the correctness of the breadth of this submission, but I will take it that the distinction that is being made is the one between an enabling provision such as Section 51 and a jurisdictionally limiting section, such as Section 39. Section 51 only tells us, Mr Sancheti says, what an executing court can do: it may follow one or more of the five modes of execution, although the fifth is worded in a generalized sense. The consequence, in his submission, is that the appointment of a receiver in execution is subject to all the constraints that apply to the other modes of execution. What happens in the appointment of a receiver in execution can be no different from what happens in any other mode of execution. If delivery of property or attachment of sale under Sections 51(a) and (b) are ruled by Section 39(4), then so should Section 51(d). There is nothing in Section 51(d) that warrants any departure from this. He draws my attention to Section 46 regarding precepts, which grants further powers to an executing court, and Section 136 of the CPC, which deals with the procedure when a person is to be arrested or a property is to be attached outside a district. Even there, the emphasis is on territoriality. There are thus limitations placed on what an executing court can do. I have understood this submission to be placed at an extremely broad level; to mean that no executing court can ever appoint, at any stage, a receiver in respect of any property outside the local limits of its jurisdiction.

19. Perhaps realising the over-breadth of this submission, Mr Godbole attempted to draw it back a little by saying that there is no power to appoint a receiver for the first time for extra-territorial property. An executing court may send a precept. It may transfer a decree. It could even grant an injunction. But other than an injunction and an application for transfer, there is no possibility of an executing court appointing a receiver of property outside its jurisdiction for the very first time in execution. The only manner in which this could be done is by continuation of an attachment before judgment under Order 38. In his submission, Mr Chinoy’s formulation leads to an inconsistency or an incongruity in that it would permit an executing court to do under Section 51(d) that which it could not do under, say, Section 51(b). A Court must avoid a situation where a sale by a receiver results in a nullity. He points out that the 1976 amendment brought about several amendments to the CPC, including the explanation to Section 37, adding the words “of competent jurisdiction” to Section 39, and adding Section 39(3), all of which led to conflicts that were then resolved by the 2002 amendment which inserted Section 39(4). He points out, somewhat unnecessarily in my view, that the High Court on its Original Side in execution has no subordinate Court, but nobody has any quarrel with that proposition nor am I being asked by Mr Chinoy to assume some sort of supervisory jurisdiction in any sense to the word.

20. Mr Godbole relied on the decision of the Calcutta High Court in Uma Kanoria v Pradipkumar Daga9 to support his submission. In paragraph 12 of that judgment, the learned single judge said that the 9 AIR 2003 Cal 162. object of providing for transfer of a decree was to ensure that the judgment debtors were not harassed by their being dragged from where their properties were located to some other court. The single judge also said that it is evident that execution is most “convenient” when done in the Court that has jurisdiction over the area where the property is situated. In Mr Godbole’s submission, therefore, Section 39(4) is a complete bar to an executing court entertaining any application for receivership of a property outside its jurisdiction, with the sole exception of a receiver appointed under Order 38 Rule 11 and the continuation of a pre-existing attachment.

21. Mr Godbole also relies on the decision in Salem Advocates Bar Association v Union of India AIR 2005 SCC 3353. (“Salem II”) where the Supreme Court said that Section 39 does not authorize a Court to execute a decree outside its jurisdiction but does not dilute other provisions. In Mr Godbole’s submission, the only exceptions to Section 39(4) are (i) Order XXI Rule 3, where a property straddles multiple local jurisdictions, and (ii) Order XXI Rule 48 which deals with attachment of salaries or allowances of government servants, railway companies or local authorities. In his submission, in any case, the decision of the learned Single Judge in Kothri Industrial Corporation is not only incorrect, but the proposition is not assisted by the division bench order which does not address Section 39(4) at all. Similarly, Rule 331 of the Bombay High Court (Original Side) Rules, in Chapter XXII that deals with the execution of decrees and orders, refers to the appointment of a receiver under Order 40 Rule 1. This presupposes that there is no territorial bar to the exercise of jurisdiction. AIR 2005 SCC 3353.

22. Having considered the rival submissions including the other authorities cited, it seems to me that it is difficult to accept the propositions advanced by the contesting Respondents. While on the one hand the Respondents’ Counsel assail the Decree Holders’ representation as being too broad and possibly leading to an ungovernable situation, their formulation seems to me to be one that would lead to a systematic frustration of the legitimate execution of decrees. There is also a fundamental conceptual discrepancy. The decisions relied on by the Respondents including the Division Bench judgment in Shaba Yeshwant Naik and Mohit Bhargava did not arise under Section 51(d) at all. Those were pure and simple cases of execution of a decree in regard to property outside the jurisdiction of the executing court.

23. Mr Chinoy has no quarrel with this proposition at all. In fact, there is no inconsistency between what the Division Bench said in Shaba Yeshwant Naik; what the learned Single Judge said in Kothri Industrial Corporation and what the Division Bench said in appeal. These decisions simply operate in different spheres. The Shaba Yeshwant Naik decision, one that found an echo in the 2002 amendment to the CPC, dealt squarely with a situation where although a decree ought to have been transferred, discretion was purportedly exercised against the intent of a statute. That decision had nothing at all to do with the appointment of a receiver.

24. The distinction perhaps lies in this, for, as Mr Chinoy points out, an application in execution whether under Order XXI or Section 39 or the two read together is every decree holder’s right. Nobody has a “right” to the appointment of a Court Receiver, whether under 40 or under Section 51(d). If there is anything that controls Section 51(d), it is not Order 39 but Order 40 Rule 1 and that is the only way to approach it. I believe this submission is completely correct and that there is intrinsic evidence within Section 51 and Order 40 to so indicate. First of all, Section 39 does not contain an omnibus non obstante clause. It says nothing in that section, i.e. in Section 39, authorizes a court to move extraterritorially. Section 51 on the other hand is clearly discretionary and a Court may in its discretion in execution adopt one or more of the various modes of execution set out in that section. It specifies that one such modes of execution is by appointing a receiver, that is to say that it is the appointment of the receiver that is the mode of execution, not what he does thereafter. The reason is simple. A receiver on his own has no power of sale inherently vested in him. That power is not even presumed. That power must be specially granted by a court, and a court whether in execution or otherwise may or may not grant that power. Now, Order 40 Rule 1 is clearly discretionary, and about this there is no controversy. This is wellsettled law. Further, it is not an uncontrolled exercise of discretion. That discretion must be both just and it must be convenient.

25. Significantly, and this is another way of approaching it, Order 40 Rule 1 sub-clause (a) says that a Court may appoint a Receiver of any property and this contains no territorial limitation; and it goes on to say that this may be done “whether before or after decree”. Perhaps, strictly speaking, Order 40 Rule 1(a) was itself sufficient and perhaps Section 51(d) is merely clarificatory, for I believe it is perfectly legitimate to urge that even if 51(d) did not exist on the statute book, Order 40 Rule 1(a) conferred sufficient power. There is no statutory exception to this and Order 40 Rule 1, therefore, empowers a court to appoint a receiver of any property anywhere and to allow the court-appointed receiver to effect the sale. Section 39(4) is what I might call ‘targeted execution’. There is nothing in Section 39 to indicate that there is a curtailment effected, or even intended, of the power to appoint a receiver. When a receiver, therefore, effects a sale, he does so not under Order 21 but in exercise of a court-conferred power under Order 40. This is clear in the decision of Tarini Kamal Pandit & Ors v Prafulla Kumar Chatterjee (Dead) by legal representatives (1979) 3 SCC 280 [LQ/SC/1979/146] . where the Supreme Court said that a sale by or through the receiver appointed by Court is not a sale under Order 21 in execution and, therefore, there is no question of territorial jurisdiction. The question is not the nature or effect of the appointment of a receiver and whether there is an equivalence between a sale by the receiver and a sale by the Court. The only question is whether a court in execution can, subject to the requirements of Order 40, extend its reach beyond its territorial jurisdiction to property that lies outside its jurisdiction. Unless the Respondents are able to show unequivocally that there is statutory intendment to limit this and that discretion of an executing Court under Order 40 is explicitly restricted or taken away, I do not think it is permissible to impose such an implicit restraint on the wide discretion under Order 40. The submission, therefore, that the Decree Holder cannot proceed in execution through this Court against the property of Respondents Nos. 1 and 2 in or around Pune is without substance. (1979) 3 SCC 280 [LQ/SC/1979/146] .

26. But this does not on its own mean that Mr Chinoy and Mr Kamdar are entitled to the appointment of a Receiver. They must show that it is just and convenient and on this they must be able to satisfy the Court as a Court of equity that circumstances arise that so warrant. There is no manner of doubt that the two words just and convenient, though used together, are slightly different in their connotation. The word “just” will speak to a question of equity and a demonstration that the conduct of the Judgment Debtor is such as to warrant the exercise of an extraordinary power. Convenience is not only a matter of administrative efficiency or speed or effecting an order but also a matter of demonstrating that there is a likelihood of properties being dissipated or wasted, if the Decree Holder is not allowed to move in execution expeditiously. The Decree Holder who applies for the appointment of a Receiver must bring his case within the parameters of Order 40 of the CPC. The Applicant must show that the appointment of a Receiver is “just and convenient”. This principle was enunciated by Supreme Court in Industrial Credit & Investment Corpn. of India Ltd. v Karnataka Ball Bearings Corpn. Ltd.:(1999) 7 SCC 488 [LQ/SC/1999/809] :

“11. In that view of the matter, the question of having restriction imposed on the court’s power to direct sale of immovable property prior to the passing of a decree does not and cannot arise. The words “just and convenient” have to be attributed a proper meaning and the intent of the legislature as regards the extent of the empowerment by the Code, is rather categorical in nature. The discretion empowered cannot thus be said to be non-existing, having due regard to the language of Order 40 Rule 1 though, however, the court shall have to 12 (1999) 7 SCC 488 Page 37 of 42 24th August 2018 be rather cautious in its approach and use proper circumspection as stated hereinbefore and it is only in the case, where the court feels it expedient that in the event property is not sold, the initiator of the action would be subject to perpetration of a great fraud: the diminution in value of the assets, wastage and wrongful entrants or trespassers’ attempt to make an inroad for their permanent settlement, (the factum of which is not very uncommon in the country presently) — are some such instances which may be taken into consideration. We, however, hasten to add that the instances noted above are only illustrative in nature and no hard and fast rule can be laid down in regard to the exercise of the court’s powers under Order 40 Rule 1, the same being dependent on the facts and circumstances of each case as is available before the court. A court may appoint a receiver not as a matter of course but as a matter of prudence having regard to the justice of the situation.

(Emphasis added)

27. This Court in State Bank of India v Trade Aid Paper and Allied Products (India) Pvt Ltd., AIR 1995 Bom 268 [LQ/BomHC/1995/296] : (1995) 4 Bom CR 278 (FB): (1995) 2 Mah LJ 81 (FB): (1996) 85 Comp Cas 453; followed in Indian Bank v Indian Farmers Pvt Ltd & Ors, AIR 2003 Bom 484 [LQ/BomHC/2003/143] : (2003) 4 Bom CR 99; ICICI Bank Ltd v Jkak Tradelinks Pvt Ltd & Anr, 2016 SCC OnLine Del 5544. considered the expression ‘just and convenient’:

5. ...Order 40, Rule 1 of Code of Civil Procedure provides for appointment of receiver, where it appears to the Court to be just and convenient. The power can be exercised both before and after decree. The power conferred upon the Receiver enables the Receiver to manage, protect and preserve the property and to collect 13 AIR 1995 Bom 268: (1995) 4 Bom CR 278 (FB): (1995) 2 Mah LJ 81 (FB): (1996) 85 Comp Cas 453; followed in Indian Bank v Indian Farmers Pvt Ltd & Ors, AIR 2003 Bom 484 [LQ/BomHC/2003/143] : (2003) 4 Bom CR 99; ICICI Bank Ltd v Jkak Tradelinks Pvt Ltd & Anr, 2016 SCC OnLine Del 5544. the rents and profits thereof and for realisation of profits. The principles to be borne in mind while exercising powers under Order 40, Rule 1 of the Code of Civil Procedure are well-settled by catena of decisions and as observed by Privy Council in AIR 1928 PC 49 [LQ/PC/1927/124] (Benoy Krishna Mukerjee v. Satish Chandra Giri) the Court has to consider whether special interference with the possession of the defendant was required, there being a well-founded fear that the property in question will be dissipated or that other irreparable mischief may be done unless the Court gives its protection. A Single Judge of the Madras High Court in a decision reported in AIR 1955 Mad 430 [LQ/MadHC/1954/363] (T. Krishnaswamy Chetty v. C. Thangavelu Chetty) set out five factors which the Court must consider before concluding that it is just and convenient to appoint Receiver. The five factors are:

(i) The appointment of the Court Receiver was a matter resting in the discretion of the Court,

(ii) The appointment should not be made unless plaintiff had prima facie excellent chance of succeeding in the suit,

(iii) The plaintiff establishes some emergency or danger or loss demanding immediate action.

(iv) The order would not be made if it had the effect of depriving the defendants of a ‘de facto’ possession, and

(v) The Court will look to the conduct of the party who made the application and would refuse to interfere if the conduct is not free from blame.”

28. Mr Kapadia and Mr Godbole point that there is an existing application for transfer and this should be sufficient. The transfer of the decree is a ministerial act. State of Maharashtra v Saeed Sohail Sheikh, (2012) 13 SCC 192 [LQ/SC/2012/981] ; Jamal Uddin Ahmad v Abu Saleh Najmuddin, (2003) 4 SCC 257 [LQ/SC/2003/294] . They submit that the Decree Holder must be able to satisfy the Court that the property that Decree Holder can move against is insufficient. They state that the property of the 1st Respondent is Rs. 750 crores and there is no statement that it is insufficient to satisfy the debt, or justifying action directed against the residential properties of Usha.

29. Mr Chinoy draws my attention to the Additional Affidavit where a complaint was made about the Court Receiver’s boards being removed. But what is more important is his submission that on at least three occasions the Respondents have filed Consent Terms starting from submitting to a Consent Award and on each occasion have gone back on their consent by claiming that they, apparently reputed builders with vast properties, were so thoroughly innocent of the law and so completely denuded of adequate legal representation — not a fact substantiated by the sophistication of argument of arguments at least before me — that they knew not what they were doing and did not realize that they were being forced by Vistra into a compromising FEMA-violation position. There is no question of even considering this submission because the Respondents themselves have made it and given it up only to make it and give up yet again. That in itself would not have been sufficient but for the fact that after they agreed to make available property outside Pune specified in the Consent Award, and of which I appointed a Receiver, they said that very property could not have 14 State of Maharashtra v Saeed Sohail Sheikh, (2012) 13 SCC 192 [LQ/SC/2012/981] ; Jamal Uddin Ahmad v Abu Saleh Najmuddin, (2003) 4 SCC 257 [LQ/SC/2003/294] . been subjected to Receivership or execution because it was of the ownership of the Government of Maharashtra. Again, in Appeal, the same grounds regarding FEMA violation were taken.

30. What this means is nothing more than this: to buy time these Respondents will sign anything and will agree to anything. They will make available large tracts of properties. They will sign Consent Terms before an Arbitral Tribunal. They will sign Consent Terms or Minutes before this Court. They will give undertakings to this Court. At the end of the day all of this counts for nothing, for these Respondents will then argue that all these Consent Terms were signed by them in complete innocence of their legal rights and they have now happened upon this jurisprudential enlightenment that they are in violation of FEMA. But this enlightenment seems altogether to be something that goes on and off like a fluorescent street light and it is more a matter of convenience than a matter of law. When nothing else worked, the Respondents then disclaim ownership of the very properties that they agreed to make available in execution. If this is not inequitable and if this does not cry out for equitable or judicial intervention in exercise of equitable discretion then nothing does. There is no question, therefore, on the facts of this case, of the Respondents being able to successfully contend that it is neither just nor equitable for these Decree Holders to proceed against the properties in question.

31. This means that there will have to be an order in terms of prayer clause (a) of the Chamber Summons in respect of the properties annexed at Annexure “B”, “C” and “D” at pages 35, 38 Page and 41 of the Affidavit in Support of the Chamber Summons. There will also be an injunction in terms of prayer clause (b).

32. I am making it clear that the Court Receiver is appointed with all powers under Order 40 including the power of sale. However, before the Court Receiver effects any sale, he will seek the necessary direction in regard to the valuation of the properties. The Receiver will be at liberty to place reports periodically for directions as and when necessary. The Receiver will take an order of this Court for fixing the reserve price for any property put to sale by public auction. In the ordinary course, the Receiver is not to put any property for sale by private treaty except with express permission of this Court.

33. The Chamber Summons is disposed of in these terms.

34. The Respondents seek a stay of the order appointing a Receiver for a period of six weeks from today. The order appointing the Receiver is stayed for a period of six weeks from the date this order is uploaded.

35. The Receiver to act on an authenticated copy of this order.