IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal Nos 6440-41 of 2008 SPECIAL LEAVE PETITION (C) NOS.797-798 of 2006

Radhey Shyam Gupta                 ..Appellant

Vs.

Punjab National Bank & Anr.    …Respondents

J U D G M E N T  

ALTAMAS KABIR,J.

1. Leave granted.

2. On  28th May,  1986,  the  Respondent  No.1  Bank

sanctioned a loan of Rs.83,000/- to Shri Durga

Prasad,  the  Respondent  No.2  herein.   The

appellant  stood  guarantee  for  the  Principal

Debtor for repayment of the loan.

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3. As the loan was not repaid by the Principal

Debtor, Durga Prasad, the Bank in 1992 filed

Suit No.66 of 1992 for recovery of its dues

against the respondent No.2 in his capacity as

the loanee and against the appellant in his

capacity as guarantor.  The suit was decreed on

19th December, 1994, by the learned Additional

District and Sessions Judge, Bayana, District-

Bharatpur,  in  favour  of  the  respondent  No.1

`Bank for a sum of Rs.1,10,360/-, together with

interest at the rate of 12.5% per annum from

the  date  of  institution  of  the  suit  till

realization.   While  decreeing  the  suit,  the

trial Court directed as follows :-

“The  plaintiff  shall  be  entitled  to recover this amount by auction sale of the  hypothecated  Matador  Mahindra  FC RRD/1851.  The plaintiff shall also be entitled  for  cost  of  litigation.   If any  amount  remains  to  be  paid  even after auction sale of the Matador, then the same shall be recovered from other properties of the defendants.  The suit of  the  plaintiff  is  hereby  decreed against the defendants in the aforesaid terms.”

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4. The  aforesaid  directions  have  created  some

confusion in the execution of the decree.   

5. For the purpose of executing the decree the

respondent  No.1  Bank  initiated  execution

proceedings and though warrants for attachment

of the Matador were issued, the same were not

executed by the Bank on the ground that the

vehicle was not traceable and instead the Bank

sought  attachment  of  the  appellant’s  Fixed

Deposits  with  the  said  Bank  made  with  the

amounts received by him by way of pension and

gratuity.   The  Executing  Court  allowed  the

Bank’s  application and  ordered attachment  of

the  appellant’s  Fixed  Deposit  Receipts,

hereinafter  referred  to  as  “FDRs”.   The

appellant  moved  the  High  Court  against  the

order of attachment and the High Court while

allowing the appellant’s application, directed

the trial Court to pass appropriate orders in

the light of the specific directions given in

the  judgment  and  decree  dated  19th December,

1994, for recovery of the decretal amount.  The

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Executing  Court  by  its  order  dated  1st

November,  2002,  directed  release  of  the

appellant’s F.D.Rs and the pension amount with

a  further  direction  that  the  hypothecated

Matador was to be auctioned first in terms of

the directions contained in paragraph 11 of the

Judgment  dated  19th  December,  1994.   The

Executing Court also took the view that amounts

paid towards gratuity and pension could not be

attached in view of the provisions of proviso

(g)  of  Section  60(1)  of  the  Code  of  Civil

Procedure,  hereinafter  referred  to  as  “the

Code”.

6. The Bank filed a Revision Petition against the

said  order  of  the  Executing  Court  dated  1st

November, 2002, and also applied for interim

orders therein.  On 15th October, 2003, when

the matter came up before the High Court, the

appellant  herein  was  directed  to  forthwith

deposit a sum of Rs.50,000/- with the Bank.  He

was  also  directed  to  furnish  the  complete

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details of the movable and immovable properties

of the principal debtor with the stipulation

that in the event the Bank’s revision petition

failed,  the  amount  to  be  deposited  by  the

appellant herein would be refunded to him with

interest at the rate of 9% per annum.  Instead

of  complying  with  the  said  direction,  the

appellant  herein  moved  an  application

indicating  that  two  Fixed  Deposit  Receipts

belonging  to  him  of  over  a  total  value  of

Rs.50,000/-  were  lying  with  the  Bank  and

instead of cash deposit of Rs.50,000/- the said

two Fixed Deposit Receipts could be adjusted

against the said sum to be deposited and the

balance,  if  any,  could  be  returned  to  the

appellant herein.

7. While disposing of the Revision Petition of the

Bank, the High Court noted in its judgment that

the  appellant  herein  had  undertaken  that  he

would furnish the Matador in question to the

Bank for the purpose of auction within a period

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of  one  week  and  the  Bank  would  be  free  to

auction the same in accordance with the terms

of the decree.   It was also noted that the

appellant  herein  was  prepared  to  submit  a

solvent security for realization of the balance

decretal  amount,  which  may  still  remain  due

after the adjustment of 50,000/- and the sale

price that would be fetched from the sale of

the matador.

8.  In the light of the above, the order of the

Executing Court was set aside and in terms of

the decree as also the order passed by the High

Court  on  15th October,  2003,  the  amount  of

Rs.50,000/-  out  of  the  appellant’s  Fixed

Deposit Receipts was directed to be adjusted in

the first instance.  It was also directed that

on  the  Matador  being  furnished  along  with

solvent security before the learned Executing

Court by the appellant herein, the remaining

amount under the Fixed Deposit Receipt would be

released to him.  It was further directed that

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on  the  Matador  being  produced,  the  decree

holder Bank would be entitled to realize the

decretal  amount  by  sale  of  the  Matador  and

while  realizing  the  balance  of  the  decretal

amount, if any, through the solvent security to

be furnished by the appellant herein, the Fixed

Deposit Receipts, which were accepted to be the

appellant’s  retirement benefits, were to be

returned to him.

9. On  5th April,  2005,  the  appellant  filed  a

Review  Petition  before  the  High  Court  in

respect of the order dated 28th February, 2005,

on the ground that the Revisional Court had

wrongly  proceeded  on  the  basis  that  the

appellant had given an undertaking to furnish

the Matador to the Bank and that he would also

submit a solvent security for realization of

the decretal amount, if any amount remained to

be  recovered  by  the  Bank  after  sale  of  the

Matador.   The  Review  Petition  filed  by  the

appellant was dismissed in limine by the High

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Court  on  24th August,  2005,  holding  that  no

case had been made out in the Review Petition

for review of the order dated 28th February,

2005.

10. The Special Leave Petition is directed against

the said orders of the High Court dated 28th

February, 2005 and 24th August, 2005.

11. Ms. Shobha, learned advocate, who appeared for

the  appellant,  questioned  the  judgment  and

order  of  the  High  Court  mainly  on  three

grounds.  Her first ground for challenge was

that the direction of the trial Court in its

decree  was  quite  clear  and  there  was  no

ambiguity  whatsoever  which  called  for  any

clarification by the High Court.  She submitted

that the direction of the trial Court entitled

the decree holder Bank to recover the decretal

amount as well as the cost of litigation by

auction sale of the hypothecated vehicle, and

if any amount remained to be paid even after

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the auction sale of the Matador, then the same

could be recovered from the other properties of

the defendants. According to Ms. Shobha, the

plain meaning which emerges from such direction

entails the sale of the Matador first and after

adjustment of the sale price with the amount to

be recovered under the decree, any amount still

unpaid,  could,  at  the  second  stage,  be

recovered  from  the  other  properties  of  the

defendant.  Ms.  Shobha  submitted  that  it  was

clearly the intention of the trial Court that

the sale proceed of the hypothecated vehicle

should first be utilized for realization of the

decretal  amount  before  touching  the  other

properties of the defendants for recovery of

the said dues.  

12.   In  this  regard  Ms.Shobha  referred  to  and

relied upon the decision of this Court in the

case  of  Industrial  Credit  and  Development

Syndicate  vs.  Smithaben  H.  Patel  and  Ors.,

[1999  (3)  SCC  80},  wherein  faced  with  a

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situation  where  the  trial  Court  had  not

prescribed any mode for payment of the decretal

amount, except for fixing of instalments, it

was, inter alia, held that the general rule of

appropriation  of payments  towards a  decretal

amount  was  that  such  an  amount  has  to  be

adjusted firstly, directly in accordance with

the direction contained in the decree, and in

the absence of such direction, adjustments are

to be made firstly in payment of interest and

costs  and  thereafter  in  payment  of  the

principal amount, subject to the exception that

the parties could agree to the adjustment of

the payment in any other manner despite the

decree.

13. The second ground urged by Ms. Shobha was that

although  initially  the  appellant’s  Fixed

Deposit Receipts were attached by the Executing

Court, ultimately, on objections being filed on

behalf of the appellant, the Executing Court by

its order dated 1.11.2002 came to the finding

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that  the  appellant’s  Fixed  Deposit  Receipts

could not be attached in view of proviso (g) to

Sub-Section (1) of Section 60 of the Code of

Civil  Procedure  (hereinafter  referred  to  as

‘the Code’). Ms.Shobha submitted that in the

revision filed by the Bank against the said

order of the Executing Court it was erroneously

recorded by the High Court that the appellant

had undertaken to produce the Matador before

the Bank so that the same could be sold for

recovery of the Bank’s dues and the balance

dues, if any, could then be recovered from a

solvent  security  to  be  provided  by  the

appellant. It was submitted that since such an

undertaking  had  not  been  given  to  the  High

Court, a Review Petition was filed on behalf of

the appellant which was dismissed in limine.

Ms. Shobha also added that without making any

attempt to locate the Matador, so that the same

could be sold in keeping with the directions

given by the Trial Court for satisfaction of

the decree, the Decree Holder proceeded only

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against the appellant since it held the Fixed

Deposit Receipts of the appellant in respect of

the  fixed  deposit  made  out  of  the  retiral

benefits,  including gratuity  received by  the

appellant at the time of his retirement from

service.  Ms. Shobha reiterated her submission

that, as had been rightly held by the Executing

Court,  the  appellant’s  Fixed  Deposits  which

represented his retiral benefits could not be

attached or sold to satisfy the decree obtained

by the Decree Holder Bank. She urged that even

after  the  retiral  benefits  obtained  by  the

appellant  had  been  converted  into  Fixed

Deposits  it  did  not  lose  its  essential

character of comprising the retiral benefits of

the  appellant,  and  could  not,  therefore,  be

attached in view of proviso (g) to Section 60

(1) of the Code.

14. Although, the law is well-settled on the point,

various decisions were cited by Ms. Shobha in

support of her submission that the Executing

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Court  could  not  go  behind  the  decree  or  to

alter  the  provisions  thereof.   The  first

decision cited by her in this regard is the

decision of this Court in Rajasthan Financial

Corporation  v.  Man  Industrial  Corporation

Limited  [(2003)  7  SCC  522],  wherein  while

construing  the  provisions  of  Section  47  and

Order XXI of the Code, this Court held that an

Executing Court cannot go beyond the decree and

that the Executing Court must take the decree

according  to  its  tenor.  Ms.  Shobha  also

referred to the decision of this Court in State

Bank of India v M/s. Indexport Registered and

others [(1992) 3 SCC 159), wherein the same

principle had earlier been dealt with.

15. Ms. Shobha’s submission finds support in the

decision of this Court in Calcutta Dock Labour

Board  and  another  v  Smt.  Sandhya  Mitra  and

Others  [(1985)  2  SCC  1],  wherein  it  was

reaffirmed  that  gratuity  payable  to  dock

workers  under  a  scheme  in  absence  of  a

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Notification under Section 5 of the Payment of

Gratuity  Act,  1972,  would  not  be  liable  to

attachment  for  satisfaction  of  a  Court’s

decree.

16. The same principle was reiterated by this Court

in  Union  of  India  v  Wing  Commander  R.  R.

Hingorani  [(1987)  1  SCC  551]  and  Gorakhpur

University  and  others  v  Dr.  Shitla  Prasad

Nagendera and others [(2001) 6 SCC 591].

17. However, in all fairness, Ms. Shobha also cited

the decision of this Court in Union of India

vs.  Jyoti  Chit  Fund  and  Finance  and  Others

[(1976) 3 SCC 607], where while dealing with

the  provisions  of  Sections  3  and  4  of  the

Provident  Funds  Act,  1925,  prohibiting

attachment of sums held by the Government, as

well as proviso (g) to Section 60(1) of the

Code, this Court held that till such time as

amounts  payable  by  way  of  provident  fund,

compulsory deposits and pensionary benefits did

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not  reach  the  hands  of  the  employee  they

retained their character as such and could not,

therefore,  be  attached.  However,  once  the

amounts  were  received  by  the  employee  they

ceased to retain their original character and,

were, therefore, capable of being attached. Ms.

Shobha urged that the aforesaid decision had

been rendered long before the other decisions

cited by her and the subsequent decisions would

prevail over the earlier decision.

18. In addition to her two aforesaid grounds, Ms.

Shobha  lastly  submitted  that  the  revision

petition filed by the Bank  before the  High

Court was in itself not maintainable in view of

the provisions of Section 115 of the Code, as

amended, which makes it clear that if an order

in  favour  of  a  party  applying  for  revision

decides the matter finally then only a revision

would be maintainable, but if the same did not

decide the suit or other proceeding finally,

then such revision would not be maintainable.

15

Ms. Shobha urged that in the instant case the

Bank  had  filed  a  revision  against  an

interlocutory order  which did not have the

effect of finally disposing of the execution

proceedings   and  consequently  the  revision

filed on behalf of the Bank should have been

dismissed by the High Court. In this regard,

Ms. Shobha referred to the decision of this

Court  in  Shiv  Shakti  Coop.  Housing  Society,

Nagpur v Swaraj Developers and others [(2003) 6

SCC  659]  and  also  in  Surya  Dev  Rai  v  Ram

Chander  Rai  and  others  [(2003)  6   SCC  675]

reported in the same volume at page 675.

19. Ms. Shobha urged that the High Court had erred

in  interfering  with  the  judgment  and  order

passed by the Executing Court and its judgment

and order impugned in these proceedings  were

liable to be set aside.

20. On  behalf  of  the  Bank,  Mr.  Dhruv  Mehta

submitted that despite several attempts having

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been made to locate the Matador, the same could

not be traced and the Bank, therefore, had no

alternative  but  to  proceed  against  the

appellant in his capacity as the guarantor for

recovery of its dues. Mr. Mehta urged that the

provision of proviso (g) to Section 60(1) of

the Code would apply only to the source of the

amounts  received  by  way  of  retiral  benefit,

such  as  pension  and  gratuity,  but  not  to

payments made in respect thereof. On the other

hand,  once  such  payments  were  made,  their

character stood altered as they became mixed

with  the  other  assets  of  the  concerned

employee.  In  support  of  his  submission,  Mr.

Mehta also relied on the case of Wing Commander

R.R. Hingorani (supra) which had been referred

to by Ms. Shobha, wherein in the context of

Section 11 of the Pensions Act, 1871, which

provided  for  exemption  of  pension  from

attachment, this Court referred to the decision

in  the  Jyoti  Chit  Fund  case  (supra)  where

Krishna Iyer, J., speaking for the Bench, had

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indicated that once the monies covered by the

provisions of the proviso to Section 60(1) of

the  Code  had  been  paid  to  the  concerned

employee,  they  no  longer  retained  their

original  character  and  were,  therefore,

amenable to attachment.  

21. On the construction of the directions of the

trial Court, which were subsequently altered by

the High Court, Mr. Mehta urged that when the

hypotheticated  vehicle was not traceable, the

Bank could not be left without remedy and it

could not have been the intention of the Trial

Court  that even if the vehicle could not be

apprehended the decree of the Bank would remain

unsatisfied. If a pragmatic meaning is to be

given to the language of the decree, it would

have to be interpreted to mean that an attempt

should first be made to realise the decretal

dues by sale of the Matador, and, thereafter,

to realise the balance dues, if any, from the

solvent  security  to  be  produced  by  the

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appellant herein.  The decree does not indicate

that  in  the  event  the  Matador  could  not  be

sold, the decree could not be executed at all

against the other assets either of the Judgment

Debtor or the guarantor.

22. Mr.  Mehta  urged  that  in  Hingorani’s  case

(supra)  the  High  Court  was  considering  the

question  as  to  whether  the  Executing  Court

could go behind the decree in coming to the

finding  that  the  same  was  not  executable

against the appellant on account of proviso (g)

to  Section  60(1)  of  the  Code,  and  in  that

context the directions given by the High Court

in the revision petition were justified.

23. Mr.  Mehta  lastly  contended  that  the  order

passed by the learned Executing Court  on 1st

November,  2002,  impugned  in  revision  by  the

respondent Bank, was final in nature and did

not,  therefore,  attract  the  bar  under  the

proviso to Section 115(1) of the Code.

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24.  Having  considered  the  submissions  made  on

behalf  of  the  respective  parties,  we  are

inclined to accept Mr. Mehta’s submission that

the  order  impugned  in  the  revision  petition

before the High Court did not attract the bar

of the proviso to sub-section (1) of Section

115 of the Code as it  sought to finally decide

the manner in which the decree passed in Suit

No.66 of 1992 by the learned Additional and

Sessions Judge, Bayana, Rajasthan, was to be

satisfied. However, we are also of the view

that having regard to proviso (g) to Section 60

(1) of the Code, the High court committed a

jurisdictional  error  in  directing  that  a

portion  of  the  decretal  amount  be  satisfied

from  the  fixed  deposit  receipts  of  the

appellant held by the Bank.  The High Court

also erred in placing the onus on the appellant

to produce the Matador in question for being

auctioned for recovery of the decretal dues. In

other words, the High Court erred in altering

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the decree of the Trial Court in its revisional

jurisdiction, particularly when the pension and

gratuity  of  the  appellant,  which  had  been

converted  into  Fixed  Deposits,  could  not  be

attached under the provisions of the Code of

Civil Procedure. The decision in the Jyoti Chit

Fund case (supra)has been  considerably watered

down  by  later  decisions  which  have  been

indicated in paragraphs 15 and 16 hereinbefore

and  it  has  been  held  that  gratuity  payable

would  not  be  liable  to  attachment   for

satisfaction  of  a  Court  decree  in  view  of

proviso (g) to Section 60(1) of the Code.

25. We also agree with Ms. Shobha that the High

Court could not have gone behind the decree in

the execution proceedings and the alteration in

the manner of recovery of the decretal amount

was erroneous and cannot be sustained. We also

agree  with  Ms.  Shobha  that  even  after  the

retiral benefits, such as pension and gratuity,

had been received by the appellant, they did

not lose their character and continued to be

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covered by proviso (g) to Section 60(1) of the

Code. Except for the decision in the Jyoti Chit

Fund and Finance case (supra), where a contrary

view  was  taken,  the  consistent  view  taken

thereafter support the contention that merely

because  of  the  fact  that  gratuity  and

pensionary benefits had been received by the

appellant  in  cash,   it  could  no  longer  be

identified as such retiral benefits paid to the

appellant.

26. The  High  Court,  in  our  view,  erroneously

proceeded on the basis that  a concession had

been made by the appellant that he was willing

to  have  the  decretal  amount  adjusted  partly

from  his fixed deposits, which represented his

retiral  benefits  and  that  he  had  also

volunteered  to produce the vehicle before the

Bank so that the same could be sold to recover

the major portion of the dues.  Further-more,

although the Bank was entitled to proceed both

against the principal-debtor and the guarantor

for recovery of its dues, the mode of recovery

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was prescribed by the Trial Court, which, in

our  view,  clearly  indicates  that  the  Bank

should at first recover whatever amount it can

from the sale of the Matador. The right of the

Bank to proceed against either the principal-

debtor or the guarantor stood restricted by the

directions  of  the  Trial  Court.  Except  for

recording that the vehicle was not traceable,

nothing is recorded in the impugned judgment of

the High Court as to what steps were actually

taken by the Bank for recovery of the Matador

for  sale  in  order  to  recover   its  decretal

dues. In our view, instead of disturbing the

order of the Executing Court, which was passed

in consonance with the provisions of the Code

of Civil Procedure, the High Court should have

directed the respondent Bank and the Executing

Court to seriously pursue the recovery of the

Matador or against any other property of the

principal-debtor, having particular regard to

the finding of the Executing Court that the

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said  fixed  deposits  represented  the  retiral

benefits of the appellant.

27. We, therefore, allow the appeals, set aside the

order passed by the High Court and restore that

of the Executing Court. The respondent Bank may

take  appropriate  steps  for  recovery  of  the

Matador for recovery of its dues in the manner

indicated in the judgment and in the decree of

the Trial Court.  Consequently, let the fixed

deposit receipts of the appellant be released

to him as per the directions of the Executing

Court while disposing of the application dated

6.2.1999  and  27.7.2001  by  its  order  dated

1.11.02.

_________________J. (ALTAMAS KABIR)

_________________J. (MARKANDEY KATJU)

New Delhi Dated: 4th November, 2008

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