Delhi High Court
Daiichi Sankyo Company, Limited vs Malvinder Mohan Singh And Ors on 20 August, 2025
Author: Anup Jairam Bhambhani
Bench: Anup Jairam Bhambhani
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 20th August 2025
+ O.M.P.(EFA)(COMM.) 6/2016
DAIICHI SANKYO COMPANY LIMITED ..... Decree Holder
Through: Mr. Arvind K. Nigam, Senior
Advocate with Mr. Giriraj
Subramanium, Mr. Nabik Syam, Ms.
Samridhi Hota, Mr. Shivam Chanana,
Ms. Anindita Barman, Ms. Astha
Ahuja, Ms. Shyra Hoon, Mr. Tanmay
Arora, Mr. Kunal Chatterji and Mr.
Angish Aditya, Advocates.
versus
MALVINDER MOHAN SINGH AND ORS. ..... Judgement Debtors
Through: Mr. Harish Salve, Mr. Rajiv Nayyar
and Ms. Shyel Trehan, Senior
Advocates with Mr. Gaurav Vutts,
Mr. Pranav Sarthi, Ms. Krushi
Barfiwala, Mr. Hitesh Jain, Mr.
Vignesh Raj, Ms. Manjira Dasgupta,
Ms. Shivalika Rubrabatla, Ms. Vidhi
Jain, Ms. Apoorva Singh and Ms.
Prachi Dhingra, Advocates for
applicant/One Qube Realtors Pvt. Ltd.
CORAM:
HON‟BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
J U D GM E N T
ANUP JAIRAM BHAMBHANI J.
EX.APPL.(OS) 181/2024
By way of the present application filed under Order XXI Rules
58 & 59 read with section 151 of the Code of Civil Procedure 1908
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(„CPC‟), the applicant - M/s One Qube Realtors Pvt. Ltd. (formerly
Ashkit Properties Ltd.) („One Qube‟) - seeks stay, recall and/or
modification of order dated 15.12.2023 made in the present
proceedings. The applicant also seeks stay of Warrant of Sale of
Property dated 18.01.2024 issued by the learned Civil Judge (Senior
Division), Gurugram, Haryana pursuant to the aforesaid order based
on a precept issued by this court under section 46 of the CPC in
respect of property bearing Plot No. 20, Urban Estate, Sector-18,
Gurugram, Haryana („subject property‟). At present, the subject
property is a commercial building known as „One Qube‟.
2. Notice on this application was issued on 25.01.2024. Additional
documents filed by the applicant in support of the application were
taken on record vide order dated 14.02.2024.
3. Vide judgment dated 30.01.2024 passed by a Division Bench of this
court in EFA(OS)(COMM) No. 2/2024, the sale of the subject
property was restrained until disposal of the present application.
Additionally, the applicant was directed to maintain status-quo as
regards the sale or creation of any long-term lease (exceeding 30
years) in relation to the subject property.
4. The court has heard Mr. Arvind Nigam, learned senior counsel
appearing on behalf of the decree-holder; and Mr. Harish Salve, Mr.
Rajiv Nayyar, and Ms. Shyel Trehan, learned senior counsel
appearing on behalf of the applicant.
BRIEF FACTS
5. The present proceedings arise from a foreign arbitral award dated
29.04.2016 rendered by the International Chamber of Commerce at
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Singapore in proceedings filed by M/s Daiichi Sankyo Company Ltd.
against several entities, who are now judgment-debtors in the present
case. Objections under section 46 of the Arbitration & Conciliation
Act, 1996 („A&C Act‟) against this foreign award were dismissed by
a Predecessor Bench of this court vide judgment dated 31.01.2018,
which dismissal was upheld by the Supreme Court vide order dated
16.02.2018 in SLP (C) No. 4276/2018. The award has accordingly
attained finality and is to be executed as a decree of this court.
6. In the course of the execution proceedings, the decree-holder had
inter-alia sought to attach and property bearing Plot No. 20, Urban
Estate, Sector-18, Gurugram, Haryana ad-measuring about 13,519 sq.
meters, namely the subject property, towards satisfaction of the award
decree.
7. The present application has been filed by a company called M/s One
Qube Realtors Pvt. Ltd., which company claims to have purchased the
subject property from one M/s Torus Buildcon Pvt. Ltd („Torus‟). The
applicant seeks stay, recall and modification of order dated
15.12.2023 passed by a Predecessor Bench of this court, whereby the
subject property was „attached‟ towards satisfaction of the award
decree; and since the subject property is situate outside the territorial
jurisdiction of this court, precepts were directed to be issued under
section 46 CPC in relation to the subject property. Furthermore, the
applicant has also sought stay and setting-aside of Warrant of Sale of
Property dated 18.01.2024 issued by the learned Civil Judge (Senior
Division), Gurugram pursuant to the precepts so issued by the
Predecessor Benches of this court.
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APPLICANT'S SUBMISSIONS
8. The applicant‟s case before this court may be summarized as follows :
8.1. The applicant claims that it is neither a judgment-debtor nor a
garnishee nor is it in any way related to the judgment-debtors
or garnishees in the present execution proceedings, which relate
to the execution of a foreign arbitral award dated 29.04.2016.
The applicant claims to be a „third-party‟, who has had nothing
to do with the arbitral proceedings or with the arbitral award,
which is being sought to be enforced as an award decree by
way of the present proceedings.
8.2. The applicant claims that it purchased the subject property from
Torus vide Sale Deed dated 02.08.2017.
8.3. The applicant further claims that regardless of the fact that
Torus may be one amongst a „group of companies‟ and that
may be held by some of the judgment-debtors, the fact is that
Sale Deed dated 02.08.2017 was executed and the title to the
subject property was transferred to the applicant prior to status-
quo order dated 19.02.2018 having been passed in respect of
the properties of the judgment-debtors or any other injunction
having been issued in respect of the subject property. It is also
the applicant‟s contention that the subject property was not part
of any assurance extended by the judgment-debtors to this
court, whereby the judgment-debtors had assured the court that
their properties would be available for satisfaction of the award
decree.
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8.4. The applicant points-out that Torus was not even a party to the
present execution proceedings; and it was only vide order dated
23.10.2018 passed on an application bearing I.A.
No.14551/2018 filed by the decree-holder that Torus came to
be impleaded as a party-respondent in the matter for the first
time. It is further pointed-out, that yet again, order dated
23.10.2018 impleading the applicant as a party-respondent
came to be passed much after the subject property had already
been purchased by the applicant from Torus vide Sale Deed
dated 02.08.2017.
8.5. The applicant claims that it was not aware that proceedings
were being taken-out to enforce the award decree against the
subject property till the Warrant of Sale came to be issued in
respect of the subject property on 18.01.2024, which was the
first time that the applicant learned of the attachment
proceedings.
9. In the above backdrop, the applicant contends that the judgment-
debtors and the decree-holder have caused the following orders to be
passed by this court in respect of the subject property which are
wholly misconceived and illegal:
9.1. Order dated 22.03.2021 made on I.A. No. 660/2019, whereby
this court attached1 the subject property for the first time;
9.2. Order dated 10.12.2021, whereby this court re-affirmed order
dated 22.03.2021, proceeded to issue precepts to the learned
1
cf. para 3 of order dated 22.03.2021
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District Judge, Gurugram to attach 2 the subject property;
proceed to sell the same and remit the sale proceeds to this
court. It is pointed-out that order dated 10.12.2021 erroneously
recorded that the subject property was owned by one M/s
Meadows Buildtech Pvt. Ltd. („Meadows‟), which was not the
case;
9.3. Order dated 20.10.2023, whereby this court extended order
dated 10.12.2021 by another 03 months and erroneously
recorded that the subject property was owned by Torus, which
was again was not the case as of the date of that order;
9.4. Order dated 15.12.2023, whereby this court further extended
order dated 10.12.2021 by another 03 months, again
erroneously recording that the subject property was owned by
Torus; and
9.5. Order dated 11.01.2024, passed by the learned Civil Judge,
Senior Division, Gurugram, which order referred to order dated
22.03.2021 passed by this court and proceeded to attach the
subject property on the erroneous assumption that this court
had "... ... already attached the properties in question... ..." by
its order dated 22.03.2021. It is by this order that the learned
Civil Judge proceeded to issue the warrant of sale in respect of
the subject property.
10. It is argued that, other grounds apart, this court had no power to attach
or direct the sale of the subject property since the subject property is
2
cf. para 7of order dated 10.12.2021
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situate outside the territorial jurisdiction of this court; and at most,
this court could have „transferred‟ the award decree for execution to
the court of competent territorial jurisdiction where the subject
property is located.
11. Furthermore, it is argued that the learned Civil Judge, Gurugram has
proceeded on the basis that the subject property already stood
attached vide order dated 22.03.2021 passed by this court, which was
not the case, since order dated 22.03.2021 was modified by judgment
dated 30.01.2024 passed by a Division Bench of this court in which
the Division Bench said the following :
"12. Therefore, the appeal is disposed of, with the consent of
counsel for the parties, with the following directions:
(i) The learned Single Judge will afford an opportunity to the
contesting respondent, i.e. respondent No.1, to file a reply to the
application preferred by the appellant. Mr. Nigam says he would
require two (02) weeks.
(ii) The application would be listed for directions before the
learned Single Judge on Monday, i.e. 05.02.2024.
(iii) Till such time the application is not disposed of, the sale
of the subject property will not be carried out.
(iv) The appellant will also maintain status quo as to sale of
the subject property. Also, the appellant will not create a long term
lease qua the subject property, exceeding 30 years."
12. In support of its claims and contentions, the applicant has drawn
attention of this court to the following statutory framework :
12.1. The applicant draws attention to the provision of section 47 of
the A&C Act, as amended by Act 3 of 2016 with retrospective
effect from 23.10.2015, to point-out that the explanation to
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section 47 added by the said amendment provides, that within
the meaning of that chapter, "Court" means :
"... ... the High Court having original jurisdiction to
decide the questions forming the subject-matter of the
arbitral award if the same had been the subject-matter of a
suit on its original civil jurisdiction ... ..."
12.2. It is argued that as a sequitur to the Explanation to section 47,
execution proceedings in respect of a foreign award, like the
award in question, are required to be instituted before the High
Court having jurisdiction to execute such award, which
jurisdiction this court lacks.
12.3. It is further argued that a court executing a decree (or an award
decree) cannot attach immoveable property situate outside its
territorial jurisdiction; and the procedure for executing a decree
against immoveable property situate outside the territorial
jurisdiction of an executing court is contained in section 46 of
the CPC, which reads as follows :
46. Precepts.--(1) Upon the application of the
decree-holder the Court which passed the decree may,
whenever it thinks fit, issue a precept to any other Court
which would be competent to execute such decree to attach
any property belonging to the judgment-debtor and specified
in the precept.
(2) The Court to which a precept is sent shall
proceed to attach the property in the manner prescribed in
regard to the attachment of property in execution of a
decree:
Provided that no attachment under a precept shall
continue for more than two months unless the period of
attachment is extended by an order of the Court which
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passed the decree or unless before the determination of such
attachment the decree has been transferred to the Court by
which the attachment has been made and the decree-holder
has applied for an order for the sale of such property.
(emphasis supplied)
12.4. It is submitted that where execution of a decree requires the
sale of immovable property situate outside the local limits of
the territorial jurisdiction of the court passing the decree, the
court which passes the decree is required to transfer the decree
for execution to another court which has territorial jurisdiction
over the property in accordance with section 39 of the CPC,
which reads as under :
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 no 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
(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.
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(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.
(emphasis supplied)
12.5. It is pointed-out that section 39(4) CPC was introduced vide
Act 22 of 2002 with effect from 01.07.2002, to obviate any
doubt as to the power of a court to execute a decree against
property situate outside its territorial jurisdiction and settles the
proposition that nothing in section 39 authorises a court to
execute a decree against a property situate outside the local
limits of its territorial jurisdiction.
12.6. It is argued that if a court cannot execute a decree against
immoveable property situate outside its territorial jurisdiction,
such court also cannot pass orders of attachment in respect of
such property. It is submitted that the law provides a procedure
for attaching immovable property, which is contained in Order
XXI Rule 54 of the CPC, which reads as follows :
54. Attachment of immovable property.--(1) Where
the property is immovable, the attachment shall be made by
an order prohibiting the judgment-debtor from transferring
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or charging the property in any way, and all persons from
taking any benefit from such transfer or charge.
(1-A) The order shall also require the judgment-
debtor to attend Court on a specified date to take notice of
the date to be fixed for settling the terms of the proclamation
of sale.
(2) The order shall be proclaimed at some place on
or adjacent to such property by beat of drum or other
customary mode, and a copy of the order shall be affixed on
a conspicuous part of the property and then upon a
conspicuous part of the court house, and also, where the
property is land paying revenue to the Government, in the
office of the Collector of the district in which the land is
situate and, where the property is land situate in a village,
also in the office of the Gram Panchayat, if any, having
jurisdiction over that village.
(emphasis supplied)
13. In support of its challenge to attachment of the subject property, the
applicant has cited the following judicial precedents :
13.1. Citibank vs. Indo-American Electricals Ltd.,3 which interprets
section 39 of the CPC to hold that where immovable property
sought to be attached in execution of a decree is situate outside
the territorial jurisdiction of the court which passed the decree,
that court cannot attach such property but must transfer the
decree to the court within whose territorial limits the property is
situate. This judgment further clarifies that the word „may‟
appearing in section 39 is not intended to vest in the court any
discretion to either execute the decree itself or to transfer it to
3
1980 SCC OnLine Del 167
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another court; and the proper course available to the court is to
issue a transfer certificate to a court within the territorial
jurisdiction of which the property is situate;4
13.2. Karam Chand vs. Harwinder Singh,5 which held that a precept
issued under section 46 of the CPC is merely a request by an
executing court to another court to initiate execution
proceedings; and on receiving a precept the transferee court is
required to attach the property that is subject matter of the
precept. It is argued that this judgment lays down that upon
receiving a precept, a transferee court hasto attach the property
in respect of which the precept has been received; and that
attachment remains in force for a period of 02 months only,
unless extended by the court which had passed the decree, as
provided in section 46. It is submitted that after a decree is
transferred, the decree-holder is required to file a formal
execution petition in the transferee court seeking attachment
and sale of a property situate within the territorial jurisdiction
of the transferee court;
13.3. Mohit Bhargava vs. Bharat Bhushan Bhargava & Ors.,6 to
argue that section 42 of the CPC provides that a transferee
court has the same powers for executing a decree as if it had
passed the decree itself, so long as the execution is confined to
an asset within its own territorial jurisdiction. It is further
4
Citibank at para 7
5
2013SCC OnLine Del 3506
6
(2007) 4 SCC 795
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submitted that the earlier conflict of views between various
courts as to whether it was discretionary on the part of an
executing court to proceed to execute its decree against
properties outside its territorial jurisdiction or to send the
decree for execution to the court of competent territorial
jurisdiction, has been addressed by the Act 22 of 2002 with
effect from 01.07.2002. It is pointed-out that the Legislature
adopting a clear position that nothing in section 39 of the CPC
would be deemed to authorise the court to proceed with
execution of its decree against persons or properties situate
outside the local limits of its territorial jurisdiction, leaving the
court that passed the decree with no discretion in that regard
except to transfer the decree for execution to a court of
competent territorial jurisdiction;
13.4. Shaba Yeshwant Naik vs. Vinodkumar Gosalia & Ors., 7 to
submit that in this case the Bombay High Court has held that a
court cannot attach immoveable property which is outside its
territorial jurisdiction, and such attachment order, if passed,
would be null-and-void and would not affect the rights of a
purchaser of such property. It is pointed-out that the court has
held that having territorial jurisdiction is a condition precedent
to a court executing a decree; and that the court has further
clarified that if the word „may‟ appearing in section 39 CPC
was intended to confer any discretion on the court passing a
7
1984 SCC OnLine Bom 133
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decree to transfer or not to transfer a decree for execution
against immoveable properties outside its territorial
jurisdiction, then there was no necessity to make any provision
for transfer a decree to another court for execution. It is
submitted that the Bombay High Court has ruled that the use of
the word „may‟ in section 39 CPC only signifies, that to prevent
abuse of the remedy, a court has judicial discretion whether to
send the decree for execution to another court or not to send it
but the court has no discretion to execute the decree itself
against immoveable property situate outside its territorial
jurisdiction;
13.5. Rampalli Ramachandrudu vs. Sait Bakraj Gulabchand Firm
& Ors.,8 to submit that a precept issued under section 46 of the
CPC is not a step in the execution proceedings but is merely a
step taken to facilitate execution of a decree. It is submitted that
even if a precept has been issued, the decree-holder must still
apply to the court which passed the decree for transferring the
decree to a court having territorial jurisdiction; and thereafter,
the decree-holder is required to file an application under Order
21 Rule 1 CPC before the court to which the precept has been
directed for appropriate orders. It is accordingly argued, that
since in the present case, none of the aforesaid steps have been
taken by the decree-holder, the attachment of the subject
property and issuance of a sale proclamation in respect thereof
8
1952 SCC OnLine Mad 37
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are wholly without jurisdiction, illegal and of no effect or
consequence whatsoever.
14. The applicant has accordingly submitted that this court could not have
entertained a plea seeking attachment of the subject property, since
the property is situate outside its territorial jurisdiction; orders dated
10.12.2021, 20.10.2023 and 15.12.2023 issuing a precept and
directing attachment and sale of the subject property are required to
be set-aside since they were passed without jurisdiction.
15. To summarize therefore, the applicant‟s arguments are :
15.1. That this court has no jurisdiction to execute the award decree
against the subject property, since the property is situate outside
the territorial jurisdiction of this court;9
15.2. That by reason of lack of jurisdiction, this court had no power
to issue any precept or direction to the learned Civil Judge,
Gurugram to attach the subject property or to proceed with sale
thereof;10
15.3. That a precept or a direction for attachment of immovable
property is in any case valid only for 02 months from the date
of issuance, unless extended by the court issuing it
subsequently, which has not been done in the present case;
15.4. That the decree-holder has neither sought transfer of the decree
for execution from this court to the court of competent
territorial jurisdiction; nor has it moved any execution petition
9
section 39 & Order 21 Rule 54 CPC read with section 47 of the A&C Act
10
section 46 CPC
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before the learned Civil Judge, Gurugram for attachment and/or
sale of the subject property; and
15.5. That the learned Civil Judge, Gurugram has proceed to pass
order dated 11.01.2024 on the erroneous assumption that this
court had already attached the subject property vide order dated
22.03.2021; and has issued a sale proclamation on that same
erroneous basis.
16. It is accordingly submitted that orders dated 22.03.2021, 10.12.2021,
20.10.2023 and 15.12.2023 passed by this court in the present
proceedings deserve to be recalled and set-aside.
DECREE-HOLDER'S SUBMISSIONS
17. On the other hand, the decree-holder/Daiichi Sankyo Company
Limited has sought dismissal of the application, based on the
following principal submissions :
17.1. It is submitted on behalf of the decree-holder that the transfer
of the subject property in favour of the applicant is part of the
judgment-debtors‟ efforts to prevent sale of assets that the
judgment-debtors own and/or control; and that it is another step
by the judgment-debtors to defeat execution of the award
decree. It is submitted that the applicant - M/s One Qube
Realtors Pvt. Ltd. (formally known as M/s Ashkit Properties
Ltd.) - has purchased the subject property from M/s Torus
Buildcon Private Limited vide sale deed dated 02.08.2017
purportedly for a sum of Rs. 126 crores, which is a gross
undervaluation of the property. Furthermore, it is contended
that 100% shareholding of M/s One Qube Realtors Pvt. Ltd.
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was earlier held by M/s Indiabulls Real Estate Ltd.; and 100%
shareholding of M/s Indiabulls Real Estate Ltd. has
subsequently been transferred to entities controlled by the
Blackstone Group Inc. in September 2019.
17.2. It is pointed-out that the foreign arbitral award that is sought to
be enforced by way of the present execution proceedings dates
back to 29.04.2016;the award has long attained finality; and the
execution proceedings have been pending since 2016. It is
submitted that the decretal amount initially claimed in
execution was about Rs. 3,500 crores; and in or around 2016-17
the judgment-debtors, specifically judgment-debtors Nos.1 and
6, possessed substantial net-worth including significant
shareholding in the two main judgment-debtor entities, which
was estimated to be over Rs.10,000 crores; and that therefore,
judgment-debtors No.1 and 6 had sufficient assets to satisfy the
award decree at the time when the present execution
proceedings were instituted.
17.3. It is submitted however, that to forestalland evade passing of
any attachment or injunction orders in respect of their assets
and properties, judgment-debtors No.1 and 6 extended 06
„assurances‟ to this court, based on which assurances this court
exercised forbearance, and no attachment or injunction orders
were passed. The assurances that were extended by judgment-
debtors Nos. 1 and 6 are the following :
17.3.1. 1st Assurance : Letter dated 24.05.2016 issued by
learned counsel for the decree-holder recorded the oral
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assurance extended by learned senior counsel for the
judgment-debtors to the court at the hearing on
24.05.2016 that the interests of the decree-holder would
be protected, and an undertaking was given by learned
senior counsel for the judgment-debtors that they would
ensure that the decretal sum would always remain
available towards satisfaction of the award decree.
Though this assurance was not recorded in order dated
24.05.2016, it was made in the course of the present
proceedings by learned senior counsel appearing on
behalf of the judgment-debtors on that date while the
court was considering I.A. No. 6558/2016;
17.3.2. 2nd Assurance : learned senior counsel appearing on
behalf of the judgment-debtors extended another
assurance stating that their clients are not selling their
assets to any third-parties; and this came to be recorded
in order dated 22.08.2016 in the present proceedings;
17.3.3. 3rd Assurance : then again, learned senior counsel who
was appearing for the judgment-debtors reiterated the
assurance recorded in letter dated 24.05.2016; and the
reiteration was recorded in order dated 23.01.2017 in the
present proceedings;
17.3.4. 4th Assurance : going a step further, it came to be
recorded in order dated 06.03.2017, that the learned
senior counsel appearing for the judgment-debtors had
assured the court that the judgment-debtors would seek
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permission from this court before changing the status of
any unencumbered assets as disclosed by M/s Oscar
Investments Limited („OIL‟) and M/s RHC Holding
Private Limited („RHC‟), which companies were also
judgment-debtors;
17.3.5. 5th Assurance : as recorded in order dated 19.06.2017,
learned senior counsel appearing on behalf of OIL and
RHC extended a further assurance that none of the assets
of the said companies would be encumbered, nor would
they alter the shareholding of the said companies;
17.3.6. 6th Assurance : as recorded in order dated 21.06.2017,
learned senior counsel appearing on behalf of OIL and
RHC further assured the court that notwithstanding any
transaction, OIL and RHC would maintain between them
an amount equivalent to the decretal amount, by way of
assets available to the decree-holder.
17.4. It has been pointed-out on behalf of the decree-holder that the
1st, 2nd, and 3rd assurances referred-to above were general
assurances made on behalf of judgment-debtors Nos. 1 and 6 in
relation to their entire estate covering all their movable and
immovable assets; and the 4th, 5th, and 6th assurances related
to the movable assets and interests of judgment-debtors Nos. 1
and 6 in OIL and RHC.
17.5. It is pointed-out that the aforesaid 06 assurances came to be
recorded in judgment dated 24.04.2023 made by this court, in
which, while dealing with an application seeking withdrawal of
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funds which were remitted to this court, it was recorded that the
undertakings were taken on board to ensure that the liabilities
on the part of the judgment-debtors flowing from the arbitral
award were met.11
17.6. Thereafter the matter went before the Supreme Court; and
while dealing with the issue of contempt of court committed by
the judgment-debtors vidé its judgment dated 15.11.2019 the
Supreme Court noted as follows :
"43.We would, therefore, not read the orders of this
Court in isolation but along with the five solemn assurances
and undertakings given before the High Court. Directions
given by this Court and the orders passed were in light of the
fact that the contemnors always projected that the said
assurances and undertakings were binding and adhered."
(emphasis supplied)
17.7. It is contended on behalf of the decree-holder that in
contemptuous disregard and violation of the 06 assurances
extended to this court, as noted by the Supreme Court in its
judgment dated 15.11.2019, the judgment-debtors proceeded to
deplete their assets in various companies, which compelled the
decree-holder to commission KPMG to examine the
shareholding and cross-shareholding of the judgment-debtors in
various companies in order to trace their assets in various
downstream companies. Pursuant thereto KPMG rendered
report dated October 2018, tracing-out the web of companies
controlled by judgment-debtors Nos. 1 and 6 through their
11
cf. para 68 of judgment dated 24.04.2023
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private limited company M/s Shimal Healthcare Private Ltd.;
and it transpired that Torus was only the alter-ego of judgment-
debtors Nos. 1 and 6.
17.8. Subsequently, the decree-holder preferred I.A. No.14551/2018
in the present proceedings, placing before this court the
complete report prepared by KPMG; and being persuaded that
judgment-debtors Nos. 1 and 6 were depleting their assets, this
court passed order dated 17.12.2018 restraining judgment-
debtors Nos. 1 and 6 and all entities mentioned in that
application, including Torus, from alienating any of their
assets. Explaining the discrepancy in order dated 17.12.2018
however, learned senior counsel for the decree-holder has
submitted that, erroneously, in the said order M/s Torus
Buildcon Private Limited came to be mentioned as M/s.
Meadows Buildtech Pvt. Ltd.
17.9. Substantiating their submission that Torus is nothing but the
alter-ego of the judgment-debtors, the decree-holder points-out
that this fact stands admitted by judgment-debtors Nos. 1 and 6
in the following documents :
17.9.1. In order dated 22.03.2021 it is recorded that judgment-
debtors Nos. 1 and 6 admit that Torus is their group
company;
17.9.2. In proceedings relating to M/s Fortis Healthcare
Limited („FHL‟), in order dated 19.04.2022 passed by
the Securities & Exchange Board of India („SEBI‟) under
section 11 of the Securities & Exchange Board of India
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Act, 1992 („SEBI Act‟), Torus is described as an
„intermediate conduit entity‟, which was controlled by
the judgment-debtors, which order has not been
challenged by the judgment-debtors.
17.9.3. In proceedings relating to M/s Religare Enterprises
Limited („REL‟), in order dated 31.10.2022 passed by
the SEBI under section 15 of the SEBI Act, Torus has
been described as a „conduit entity‟ that "... ...was part
of an elaborate scheme of diversion and misutilisation of
funds... ...", which order has again not been challenged.
17.9.4. In judgment dated 24.04.2023, which also relies upon
the aforesaid SEBI orders, this court has observed that
"... ... SEBI also holds that MMS and SMS constituted
the controlling mind and will of these related entities...
..." 12 ; MMS and SMS being a reference to judgment-
debtor No.1 and judgment-debtor No.6 respectively.
18. In response to the legal objections raised by the applicant, the decree-
holder has responded as follows :
18.1. The decree-holder argues that this court has territorial
jurisdiction to pass orders for attachment and sale of the subject
property, seeking to support that submission on the following
basis :
18.1.1. It is submitted that where the properties of a judgment-
debtor are situate in different territorial jurisdictions,
12
cf. para 65
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concurrent execution is permissible in exceptional
circumstances; and in such situation, the court which
passed the decree, namely, in the present case this court,
retains control over the execution proceedings. Attention
in this behalf is drawn to the judgments in Saroda
Prosaud Mullick vs. Luchmeeput Sing Doogur 13 and
Maha Raja of Bobbili vs. Rajah Narasaraju Peda
Baliara Simhulu Bahadur Garu & Anr.14
18.1.2. Relying on a Full Bench decision of the Patna High
Court in Radheyshyam vs. Devendra, 15 it is submitted
that even otherwise, where a decree is transferred for
execution to another court, the "... ... transferor Court
retains jurisdiction to execute the decree except to the
extent that jurisdiction to execute the decree has been
given to the transferee Court."16
18.2. Most importantly, it is argued that in the present case, vide
judgment dated 22.09.2022 passed in Daiichi Sankyo Co. Ltd.
vs. Oscar Investments Ltd. & Ors.,17 the Supreme Court has
placed several assets and properties situate in different
territorial jurisdictions for disposal before this court; and
though the decree-holder is simultaneously pursuing execution
13
1872 SCC OnLine PC 8
14
1916 SCC OnLine PC 45
15
1951 SCC OnLine Pat 89
16
cf. page 83 of Radheyshyam
17
(2023) 7 SCC 641
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proceedings in multiple jurisdictions in India, this court
continues to remain in-seisin of the matter.
18.3. It is accordingly submitted that in this case, the decree-holder
has been permitted to pursue simultaneous execution
proceedings in different territorial jurisdictions, and yet, this
court is clothed with the power to issue precepts (under section
46 of the CPC) to ensure that the assets situate outside its
territorial jurisdiction are attached; and this court does cease to
be in-seisin of the present execution proceedings merely
because limited execution proceedings are taking place
simultaneously in other territorial jurisdictions.
18.4. It is submitted that it must not be ignored, that as of date, the
judgment-debtors owe about Rs. 5000 crores to the decree-
holder under the award decree, whereas the decretal-holder has
so far recovered less than Rs.100 crores.
18.5. Insofar as the 06 assurances extended by the judgment-debtors
are concerned, it is submitted that these assurances may be
broadly divided into 02 parts : (i) the first set of 03 assurances,
which covered the movable and immovable assets of judgment-
debtors No.1 and 6; and (ii) the second set of 03 assurances
which covered the shareholding of judgment-debtors Nos.1 and
6 in two listed companies namely OIL and RHC.
18.6. It is argued that it is now settled, that the corporate veil cannot
be used to commit illegalities or to defraud people, and it has
been held by the Supreme Court in Delhi Development
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Authority vs. Skipper Construction Co. (P) Ltd. &Anr.18 that
"... ... The fact that Tejwant Singh and members of his family
have created several corporate bodies does not prevent this
Court from treating all of them as one entity belonging to and
controlled by Tejwant Singh and family if it is found that these
corporate bodies are merely cloaks behind which lurks Tejwant
Singh and/or members of his family and that the device of
incorporation was really a ploy adopted for committing
illegalities and/or to defraud people."
18.7. Reference was also drawn in this behalf to the ruling of the
Bombay High Court in Bhatia Industries & Infrastructure
Ltd. vs. Asian Natural Resources (India) Ltd. & Anr.,19 where
it has been held that corporate veil can be pierced in execution
proceedings and the court may examine whether corporate
bodies are mere cloaks to conceal the actual individual.20
18.8. It is submitted, that in fact in the present case, it stands
admitted that Torus is the alter-ego of judgment-debtors Nos.1
and 6; and despite the solemn assurances and undertakings
extended by the said judgment-debtors to this court, they have
dissipated their assets in order to defeat the award decree.
18.9. It is reiterated that formal orders of attachment or sequestration
were not passed by this court to protect the decree-holder based
only on the assurances and undertakings offered by the
18
(1996) 4 SCC 622
19
2016 SCC OnLine Bom 10695
20
cf. paras 19 & 20
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judgment-debtors. It is pointed-out that the assurances and
undertakings offered by the judgment-debtors were in relation
to their entire asset base and therefore apply without
restriction or qualification, including to the assets of „Torus‟.
18.10. Besides, it is argued that Torus itself is also bound by the
assurances and undertakings in another manner, namely that in
affidavit dated 14.03.2017 filed by judgment-debtor No.14
(OIL) and judgment-debtor No.19 (RHC) they have represented
that the debt of Rs.126 crore owed by Torus to OIL and RHC
was an unencumbered asset, which was available in favour of
the decree-holder. It is submitted that this sum of Rs. 126
crores is also the sale consideration, as declared by Torus, for
which the subject property was sold by Torus to One Qube vide
sale deed dated 02.08.2017, alluding to a collusive transaction.
18.11. The argument on behalf of the decree-holder therefore is, that
since the subject property was part of the assurances and
undertakings extended by the judgement-debtors to this court,
the sale consideration received by Torus from One Qube under
sale deed dated 02.08.2017, namely the sum of Rs. 126 crores,
would also be covered by the assurances and undertakings. It is
pointed-out that the status of the subject property could not
have been altered or changed without the prior permission of
the court in view of order dated 06.03.2017. Further, it is
submitted that since the subject property was the only tangible
asset of Torus and was covered by undertaking dated
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06.03.2017 given by the judgment-debtors, it could not have
been alienated without prior permission of this court.
19. Other things apart, the decree-holder has also challenged the bona-
fidés of the applicant; and has disputed its claim that merely because
it is part of the well-known financial entity called the Blackstone
Group, the applicant is a bona-fidé purchaser of the subject property.
The decree-holder has challenged the bona fidés of the applicant on
the following basis :
19.1. That sale deed dated 02.08.2017, by which the applicant
acquired the subject property, was executed at a time when
100% shareholding of the applicant was owned by M/s
Indiabulls Real Estate Limited („IREL‟), which company was
fully aware of the pendency of the execution proceedings
concerning the judgment-debtors and was also aware of the fact
that Torus was the alter-ego of judgment-debtors Nos.1 and 6.
For this reason, the applicant‟s contention that 100% of its
shareholding is now owned by the Blackstone Group, which
(latter) entity was not aware of any undertakings or assurances
extended by the judgment-debtors, is nothing but a ruse; and
the correct position is that the Blackstone Group became 100%
shareholder of the applicant only in September 2019, i.e., much
after sale deed dated 02.08.2017 had been executed. It is further
pointed-out that notwithstanding the change in the shareholding
of the applicant, it is the applicant that is seeking to protect the
subject property from attachment and sale based on its title,
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while at the same time hiding behind a façade of the Blackstone
Group.
19.2. To substantiate the submission that IREL was fully aware of
the execution proceedings concerning the judgment-debtors, as
also of the fact that Torus was the alter-ego of judgment-
debtors Nos.1 and 6, the decree-holder points to the following
circumstances :
19.2.1. IREL, which was at the relevant time a 100%
shareholder of One Qube, is part of the Indiabulls Group;
and another company of that group, viz. Indiabulls
Housing Finance Limited („IHFL‟) had filed EA
No.1132/2019 and EA No. 885/2019 in the present
proceedings seeking modification of status-quo order
dated 17.12.2018, by which order the subject property
had been injuncted from alienation. It is accordingly
contended that the Indiabulls Group was fully aware of
the status-quo order and about the pendency of the
present proceedings.
19.2.2. In its pleadings, IHFL has acknowledged that Torus was
wholly owned and controlled by judgment-debtors Nos.
1 and 6 by stating that "The Respondent No. 28 submits
in the ordinary course of business from time to time,
IHFL had granted loans to RHC Holdings Pvt. Ltd., R.S.
Infrastructure Pvt. Ltd., and Torus Buildcon Pvt. Ltd., all
entities which are controlled by Malvinder Mohan Singh
and Shivender Mohan Singh (ex-promoters of Fortis
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Healthcare Limited). IHFL had in total extended loan
facilities for an amount of Rs. 1386 crores to these
entities."
19.3. In its judgment dated 15.11.2019, arising from the contempt
proceedings instituted against the judgment-debtors, the
Supreme Court has found that IHFL was made aware of the
pending execution proceedings on 16.08.2017. 21 The decree-
holder further contends that sale deed dated 02.08.2017 is
riddled with inconsistencies, which show the collusion between
the applicant and the judgment-debtors for the following
reasons :
19.3.1. The applicant‟s then group company, viz. IHFL, had
extended loans to companies owned and controlled by
the judgment-debtors, including to Torus, in the
cumulative sum of about Rs.1386 crores; and the subject
property was offered as collateral against such loans.
However, despite IHFL having a registered charge over
the subject property, with an outstanding amount of
Rs.616 crores recoverable from the judgment-debtors,
IHFL permitted One Qube, one of its sister companies, to
execute a sale-deed which narrates that the subject
property is free from all encumbrances.
19.3.2. The subject property was purchased by Torus in 2008
for Rs.101 crores but was sold by Torus to the applicant
21
cf. para 22 of judgment dated 15.11.2019
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in 2017, i.e. about 09 years later, only for Rs.126 crores,
which is evidently a highly discounted price.
Furthermore, the subject property came to be transferred
to the Blackstone Group in 2019 as part of sale of an
„enterprise‟ comprising 03 properties, for an aggregate
enterprise value of about Rs.3100 crores, but the sale
price of the subject property individually is declared only
as Rs.126 crore, which is evidently too small a
proportionate value for the subject property.
20. The decree-holder has further argued that the existence of sale deed
dated 02.08.2017 cannot come in the way of the present execution
proceedings, since that sale-deed is either void or voidable, or in the
alternative, it must be ignored. The decree-holder explains this
submission in the following manner:
20.1. It is argued that any rights or claims arising from an act that
violates an undertaking furnished to court, viz., a contemptuous
act, cannot be legally recognized; and since sale-deed dated
02.08.2017 was executed in breach of multiple assurances
offered by the judgment-debtors to this court, the document is
void in law. In support of this submission, reliance has been
placed on the decision of the Supreme Court in Balwantbhai
Somabhai Bhandari vs. Hiralal Somabhai Contractor 22 and
22
2023 SCC OnLine SC 1139, paras 69 & 72-73
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Vidur Impex and Traders Pvt. Ltd. & Ors. vs. Tosh
Apartments Pvt. Ltd. & Ors.23
20.2. Pressing its alternate argument that the sale deed is voidable,
the decree-holder has drawn attention to the provisions of
section 53 of the Transfer of Property Act, 1882 („TPA‟),
which reads as under :
53. Fraudulent transfer.--(1) Every transfer of
immoveable property made with intent to defeat or delay the
creditors of the transferor shall be voidable at the option of
any creditor so defeated or delayed.
Nothing in this sub-section shall impair the rights of
a transferee in good faith and for consideration.
Nothing in this sub-section shall affect any law for
the time being in force relating to insolvency.
A suit instituted by a creditor (which term includes a
decree-holder whether he has or has not applied for
execution of his decree) to avoid transfer on the ground that
it has been made with intent to defeat or delay the creditors
of the transferor, shall be instituted on behalf of, or for the
benefit of, all the creditors.
(2) Every transfer of immoveable property made
without consideration with intent to defraud a subsequent
transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, no transfer
made without consideration shall be deemed to have been
made with intent to defraud by reason only that a subsequent
transfer for consideration was made.
It is argued that section 53 of the TPA gives to a creditor
the right to challenge a transaction as voidable if the creditor
23
(2012) 8 SCC 384, para 42
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can show that the transaction was premised on an intent to
defeat the creditor. It is contended that though section 53
allows the transferee to raise a defense of „good-faith‟ and
„consideration‟ and formally envisages that a suit be filed by a
creditor, this position stands inverted when section 53 is
applied to execution proceedings. It has been argued that
section 53 TPA can be taken as a defence by a decree-holder in
response to an application filed by a judgment-debtor under
Order XXI Rule 58 CPC, as has been held by the Karnataka
High Court in S.K. Gangadhara vs. Ramachandra. 24 The
decree-holder has further argued that the transaction comprised
in sale deed dated 02.08.2017 was a device to defeat the decree-
holder‟s claim to the subject property, which is also evident
from the subsequent admission of the concerned parties, as well
as from the findings recorded by SEBI in its orders dated
19.04.2022 and 31.10.2022 referred-to above, where the SEBI
has concluded that Torus was an artifice and device used by the
judgment-debtors as an "intermediate conduit entity" and as
part of an elaborate scheme of diversion and mis-utilisation of
funds.
20.3. Lastly, the decree-holder has contended that sale deed dated
02.08.2017 may be ignored by this court based on the doctrine
of lis pendens, viz., the fact that the sale deed was executed
during the pendency of the present proceedings. It is argued
24
(2015) 3 KCCR 2449, paras14-16
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that the defence of being a bona-fidé purchaser is not available
to the applicant since the doctrine of bona-fidé purchaser is not
a defence to lis pendens. It is explained that section 19(b) of the
Specific Relief Act, 1963 („Specific Relief Act‟) which
contemplates that a plea for specific performance of a contract
is not tenable against a purchaser who has purchased a property
bona-fidé, for valuable consideration, and without notice of the
encumbrance on the property, only comes into effect prior to
initiation of litigation; but after commencement of litigation,
the concept of lis pendens under section 52 TPA applies. It is
argued that the alienation of immovable property pendente lite
is to be ignored by the court and it is immaterial whether the
alienee had notice of pending litigation or otherwise. The
decree-holder has sought to support this submission based on
the decisions in Guruswamy Nadar vs. P Lakshmi Amma.25
and Ram Peary & Ors. vs. Gauri & Ors.26
21. The last argument proffered by the decree-holder is that the link
between the applicant/One Qube, IREL and IHFL is clear - 100%
shareholding of One Qube was owned by IREL, which is a group
company of IHFL. One Qube came to be sold to the Blackstone
Group only in 2019, and therefore in 2017, when the sale-deed was
executed, One Qube was part of the Indiabulls Group of companies.
25
(2008) 5 SCC 796
26
AIR 1978 All 318
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22. The Indiabulls Group, in particular IHFL and IREL, had knowledge
of the passing of the arbitral award, since OIL and RHC had made the
requisite disclosures in that behalf to the Bombay Stock Exchange
way back on 04.05.2016; and at the very least, IHFL definitely had
knowledge of the matter as of 16.08.2017, since in its judgment dated
15.11.2019 the Supreme Court has recorded to the effect that IHFL
had been informed of the execution proceedings.
23. The decree-holder therefore argues, that from the facts and
circumstances of the case and from the run of events, it is evident that
the sale of the subject property by Torus (the alter-ego of judgment-
debtors Nos.1 and 6) to One Qube (a group company of the Indiabulls
group) was an act on the part of the judgment-debtors to dissipate
their assets in order to defeat the award decree, despite repeated
assurances and undertakings extended to this court, as also despite the
orders and directions contained in Supreme Court orders dated
15.11.2019 and 22.09.2022 in contempt proceedings initiated against
the judgment-debtors.
24. In the circumstances, it is prayed that the application under
consideration be dismissed; the subject property be attached and sold
in execution of the award decree through the agency of the court of
competent territorial jurisdiction.
DISCUSSION & CONCLUSIONS
25. Though, learned senior counsel appearing for the parties have made
elaborate submissions in support of their respective contentions, upon
a careful consideration of the legal position obtaining in the matter,
this court is of the view that a fundamental issue must be decided
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before any further directions relating to the subject property can be
passed. In fact, that vital issue would decide whether any further
directions in relation to the subject property can at all be passed by
this court.
26. The issue is of the powers that vest in this court under the CPC, in
particular under Order XXI thereof, relating to execution of decrees.
The relevant provisions read as follows :
Section 39
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) * * * * * , or
(b) if such person has no 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
(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.
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(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.
Section 46
46. Precepts.--(1) Upon the application of the decree-holder
the Court which passed the decree may, whenever it thinks fit, issue
a precept to any other Court which would be competent to execute
such decree to attach any property belonging to the judgment-
debtor and specified in the precept.
(2) The Court to which a precept is sent shall proceed to
attach the property in the manner prescribed in regard to the
attachment of property in execution of a decree:
Provided that no attachment under a precept shall continue
for more than two months unless the period of attachment is
extended by an order of the Court which passed the decree or unless
before the determination of such attachment the decree has been
transferred to the Court by which the attachment has been made and
the decree-holder has applied for an order for the sale of such
property.
Order 21 Rule 58
58. Adjudication of claims to, or objections to attachment
of, property.--(1) Where any claim is preferred to, or any objection
is made to the attachment of, any property attached in execution of a
decree on the ground that such property is not liable to such
attachment, the Court shall proceed to adjudicate upon the claim or
objection in accordance with the provisions herein contained:
Provided that no such claim or objection shall be
entertained--
(a) where, before the claim is preferred or objection
is made, the property attached has already been sold; or
(b) where the Court considers that the claim or
objection was designedly or unnecessarily delayed.
(2) All questions (including questions relating to right, title
or interest in the property attached) arising between the parties to
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a proceeding or their representatives under this rule and relevant
to the adjudication of the claim or objection, shall be determined
by the Court dealing with the claim or objection and not by a
separate suit.
(3) Upon the determination of the questions referred to in
sub-rule (2), the Court shall, in accordance with such
determination,--
(a) allow the claim or objection and release the property
from attachment either wholly or to such extent as it thinks
fit; or
(b) disallow the claim or objection; or
(c) continue the attachment subject to any mortgage, charge
or other interest in favour of any person; or
(d) pass such order as in the circumstances of the case it
deems fit.
(4) Where any claim or objection has been adjudicated upon
under this rule, the order made thereon shall have the same force
and be subject to the same conditions as to appeal or otherwise as if
it were a decree.
(5) Where a claim or an objection is preferred and the
Court, under the proviso to sub-rule (1), refuses to entertain it, the
party against whom such order is made may institute a suit to
establish the right which he claims to the property in dispute; but,
subject to the result of such suit, if any, an order so refusing to
entertain the claim or objection shall be conclusive.
(emphasis supplied)
27. On a plain reading of section 39, it is seen that if a decree directs, or if
the execution of a decree requires, the sale of an immovable property
situate outside the local limits of the territorial jurisdiction of the
court which passed the decree, such court is mandated to send it for
execution to another court of "competent jurisdiction", namely to the
court within whose territorial jurisdiction the concerned immovable
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property is situate. Section 39(4) expressly bars a court which passed
the decree to execute it against any property situate "outside the local
limits of its jurisdiction".
28. Furthermore, the very device of issuing a precept created in section 46
CPC is postulated on the circumstance that in the course of execution
proceedings, the executing court may find that some immovable
property that is required to be attached in execution of the decree is
situate outside its territorial jurisdiction. In such circumstance, section
46 empowers the court to issue a precept to any other court "which
would be competent to execute such decree", namely, the court within
whose territorial jurisdiction the immovable property is situate; and to
direct that court to attach "any property belonging to the judgment-
debtor and specified in the precept".
29. Upon receiving such precept, the court to which the precept is
addressed is mandated to proceed to attach the property that is subject
of that precept. However, an attachment made pursuant to a precept
cannot continue for more than 02 months unless the period of
attachment is extended by the court which passed the decree or the
decree is transferred to the court of competent territorial jurisdiction
by the court that passed the decree. Subject to the aforesaid, the court
to which a precept is addressed or a decree is transferred can take
forward the execution proceedings in relation to immovable property
situate within its territorial jurisdiction. Section 46 also provides that
the decree-holder may apply to the court to which a precept has been
sent, seeking an order for the sale of immovable property within its
territorial jurisdiction.
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30. However, an added complication arises when one seeks to apply the
phrase "attach any property belonging to the judgment-debtor" that
appears in section 46(1) CPC, in a case where there is a dispute as to
whether that property at all belongs to the judgment-debtor. This issue
finds its answer in Order XXI Rule 58(2), since it says that "All
questions (including questions relating to right, title or interest in the
property attached) arising between the parties to a proceeding or
their representatives under this rule and relevant to the adjudication
of the claim or objection, shall be determined by the Court dealing
with the claim or objection and not by a separate suit."
31. So, what would be the correct course of action where a party objects
or disputes that a property that is sought to be attached in execution,
belongs to it; and that the property is not liable for attachment for
certain reasons put-forth by the objecting party; and that property is
situate outside the territorial jurisdiction of the court that has passed
the decree? In such circumstances, since a separate suit is barred
under Order XXI Rule 58, would the court that passed the decree be
empowered to adjudicate the objection in the execution proceedings
in relation to immovable property situate outside its territorial
jurisdiction?
32. The above queries are answered by the Supreme Court which has
interpreted the scheme of sections 39 and 46 CPC in Mohit Bhargava
in the following way:
"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
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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.
"8. Pending a suit, the court approached with the suit, may
have jurisdiction to order attachment of a property even outside its
jurisdiction. In execution, under Order 21 Rule 54 of the Code, it
may also have jurisdiction to order attachment of the property
prohibiting the judgment-debtor from transferring or charging the
property in any way when it exercises its jurisdiction over the
judgment-debtor though not over the property itself. It could in
such a case issue a precept in terms of Section 46 of the Code and
thereupon, the court to which the precept is sent, has to actually
attach the property in the manner prescribed. Section 136 of the
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Code provides for an order of attachment in respect of a property
outside the jurisdiction of the court and sending the order of
attachment to the District Court within whose local limits the
property sought to be attached is situate, as provided for therein.
But Section 136 clearly excludes execution of decrees from within
its purview. An execution against immovable property lying outside
the jurisdiction of the executing court is possible in terms of Order
21 Rule 3 of the Code which governs a case where the particular
item of immovable property, forms one estate or tenure situate
within the local limits of jurisdiction of two or more courts, and
one of those courts is approached for execution of the decree
against that property. In a case where Order 21 Rule 3 has no
application, the position seems to be that if a decree-holder wants
to proceed against a property situate outside the jurisdiction of the
court which passed the decree, he has to get the decree transferred
to the appropriate court for execution on moving the executing
court in that behalf. Whatever doubts there might have been earlier
on this question, must be taken to have been resolved by the
introduction of sub-section (4) of Section 39 of the Code which is a
mandate to the executing court to desist from proceeding against a
property situate outside its jurisdiction, unless it be a case coming
under Order 21 Rule 3 of the Code."
(emphasis supplied)
33. In view of the articulation of the law by the Supreme Court as referred
to above, it is clear that the only correct, legal course of action for this
court in the present case is the following :
33.1. Though this court has passed the award decree, and the
principal execution proceedings are pending before this court,
since the subject property is situate outside its territorial
jurisdiction, this court is not empowered to attach the subject
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property. 27 Instead, the law empowers this court to issue a
precept28 to the court within the territorial jurisdiction of which
the subject property is situate, directing that court to attach the
property. This was the basis of orders dated 10.12.2021,
26.04.2022, 20.10.2023 and 15.12.2023 passed by this court in
the present proceedings, by which precepts were issued earlier;
33.2. Pursuant to a precept issued, the court of competent territorial
jurisdiction is required to attach the subject property. However,
the attachment so made would be valid only for 02 months,
whereafter the attachment would lapse. There is however no
bar in law for this court to issue fresh precepts, thereby
extending the attachment made by the court of competent
territorial jurisdiction for further periods of 02 months (at a
time);
33.3. The law further requires the decree-holder to file separate
execution proceedings before the court of competent territorial
jurisdiction, seeking the sale of the attached property through
the agency of that court, which execution proceedings could
carry-on simultaneously with the execution proceedings
pending before this court in relation to other assets of the
judgment-debtors;
33.4. If a party - say, the applicant/One Qube in the present case -
not being a judgment-debtor, claims itself to be title-holder of
27
cf. section 39(4) CPC
28
cf. section 46 CPC
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the subject property and raises an objection29 that the property
is not liable to be attached and sold since the title-holder of the
property is not liable for the award-decree, such objection is
required to be adjudicated by the court which has attached the
subject property, viz. the court of competent territorial
jurisdiction, which court would also be empowered to decide
the dispute as to the title to the subject property in the execution
proceedings filed by the decree-holder and not by way a
separate suit.
34. As a sequitur to the above, in the circumstances obtaining in the
present matter, this court is persuaded to issue the following
directions :
34.1. A precept is hereby issued under section 46 of the CPC to the
learned District & Sessions Judge, Gurugram, Haryana to
attach property bearing Plot No. 20, Urban Estate, Sector-18,
Gurugram, Haryana. The Registry is directed to ensure that the
precept is communicated to the concerned court expeditiously
through all modes, in the prescribed format;
34.2. As permissible under the Proviso to section 46 of the CPC, the
decree-holder is at liberty to file appropriate execution
proceedings and to seek further action in relation to the subject
property before the court of competent territorial jurisdiction,
which court shall proceed with the matter in accordance with
law;
29
cf. Order XXI Rule 58CPC
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34.3. In view of the fact that while disposing-of the execution first
appeal bearing EFA(OS)(COMM) No. 2/2024, vidé its order
dated 30.01.2024, the Division Bench of this court had
restrained the sale of the subject property and had also directed
the applicant - M/s One Qube Realtors Pvt. Ltd. (formerly
Ashkit Properties Ltd.) - to maintain status-quo as regards sale
of the subject property and to not create any long-term lease
exceeding 30 years qua the subject property during the
pendency of the present application, it is hereby directed that
the applicant shall stand restrained from selling, transferring,
alienating or creating any third-party rights, titles or interests,
in or to, the subject property (other than a lease for a term not
exceeding 30 years). This restraint order is necessary to prevent
the future course of action being rendered infructuous and shall
remain in force for a period of 02 (two) months from today.
Needless to add that the court of competent territorial
jurisdiction shall be at liberty to pass any other or further orders
or directions relating to the subject property in the execution
proceedings, as may come to be filed by the decree-holder
before that court.
35. The application is disposed-of in the above terms.
ANUP JAIRAM BHAMBHANI, J.
AUGUST 20, 2025
ds/ss
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