SANJIB BANERJEE, J.


The answers to the common questions that have arisen in these three matters may decide the fate of a clutch of matters where arbitral awards have been put into execution before this court. Though every matter should be dealt with on its merits, the larger picture cannot be lost sight of. These three execution applications cannot be seen in isolation. The decree-holder in each case is a finance company. Two of the awards have been passed by the same arbitrator.


Over the last few months there has been a proliferation of execution proceedings filed by finance companies for implementation of arbitral awards. In most cases the finance company would have granted facilities for the acquisition of a vehicle or an agricultural equipment or an industrial implement. Generally, the agreements would be in the nature of hire-purchase transactions where monthly rentals would be payable over a period of time. Typically, the case of the finance company would be that the hirer had failed in making the installment payments whereupon the arbitration clause contained in the agreement had been invoked; and, more often than not, the reference would be before a select band of arbitrators. In a number of cases there would be proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 before this court either before or in course of the reference and in some of such cases the financier would have obtained an order for a receiver being appointed in respect of the asset. In most cases, the hirers would not be present to contest the arbitral proceedings and awards would come to be made, upholding the claim; often by providing for the penal rate of interest and exorbitant costs recognised in the agreements. Armed with ex parte awards, and on the basis of assertions that copies thereof had been served by the arbitrators on the hirers and the guarantors, the financiers would present the deemed decrees for execution by relying on Section 2(1)(e) of the 1996 Act, sometimes read with Section 42 thereof, for the implementation of the awards by this court.


The usual refrain of the deemed judgment-debtors, if they bothered to turn up in court, would be that they had no inkling of the arbitral reference, with the extended assertion in some cases that they had neither a copy of the agreement nor any knowledge that there was an arbitration clause contained therein. In many matters the judgment-debtors would not find it profitable to even come and protest; it may not be worth their while to travel from far-flung Kozhikode or Kolhapur or Kohima or Kapurthala, particularly, if a receiver or the finance company?s repossession agents had already taken custody of the asset. Few have stood their ground to challenge the routine awards that are passed in most cases. One set of hirer-guarantor duo did. That resulted not only in the award being set aside by this court under Section 34 of the 1996 Act but in strictures being passed against the arbitrator. That judgment in Srei Infrastructure Finance Ltd v. Rasal Dilip Damodar reported at (2010) 3 Cal LT 1 was carried in appeal and, by consent of the parties before the appellate court, some parts of the judgment were expunged with the appellate court observing as follows in the order dated August 6, 2010:


?In view of that we only state that since the parties have jointly submitted before us that the said observations should be expunged from the order and/or judgment, we only keep it on record that on the undertaking of the learned Advocate for the parties against whom the said observations were made that they will not further act in such a manner when such an order could be passed by the Court. Accordingly, we record a caution to the said learned Advocates and expunge the said observations from the said order/judgment. But we keep it on record that in future if occasion arises we will deal sternly against them.?


The irony of that matter cannot be missed. The paragraph next following of the appellate court order recorded payment being made by the financier to the hirer.


Two of the awards which form the subject-matter of the present proceedings come from the same stable. But it is the more disturbing case of the matter relating to EC No. 142 of 2009 that has acted as the unbearable straw on the camel?s back. The second judgement-debtor in that case was apparently detained in custody for 22 days on the strength of a warrant of arrest issued by this court requiring such judgment-debtor to be presented before the court for being examined as to how the decretal debt would be discharged. The pugnacity with which the decree-holder proceeded to cross-examine this person, despite the constant request by court to be more humane, smacked of the arrogance of the influence that finance companies wield that had resulted in a man being detained for 22 days when the warrant of arrest required him to be present in court on a particular date with no mandate to take him into custody during the interregnum. Such judgment-debtor has applied by way of GA No. 20 of 2011 for appropriate steps being taken against the decree-holder in its using the machinery of the police as a tool for extortion and for compensation. A part of the prayer made by the second judgment-debtor in EC No. 142 of 2009 is now irrelevant since the decree-holder has unequivocally abandoned its claim against such judgment-debtor and has undertaken to proceed only against the first judgment-debtor hirer.


The tabular statement relating to EC No. 142 of 2009 records the address of the judgement-debtors to be in Guwahati. The principal sum awarded is indicated to be in excess of Rs.46 lakh. Interest is claimed at the rate of 18% per annum from the date of the award. The award appended to the application records that despite notices being duly received ?by and/or on behalf of the respondents,? they failed to participate in the reference. The facility provided by the financier was Rs.50.05 lakh, inclusive of interest, that was to be repaid in installments of staggered amounts over nearly three years. The award notices that the first six installment payments were made and there was default thereafter. The award declares the financier to be the owner of the assets and requires possession thereof to be made over to the financier. In lieu of possession, the value of the assets has been assessed at Rs.32 lakh. In addition, the judgment-debtors have been found liable in a sum of Rs.46,65,785/- with interest at 18% per annum from the date of the award till realisation. The additional quantum assessed includes, in addition to the outstanding installment amounts, overdue charges to the tune of Rs.8,36,785/. Finally, the arbitrator has awarded costs of Rs.10,000/-.


The anomaly is in the tabular statement disregarding the initial part of the award and proceeding on the basis of the entire decretal debt being the sum of Rs.46,65,785/- and the interest thereon as would be evident from the first prayer in column 10 thereof which seeks the sale of the assets and the proceeds being adjudged in pro tanto satisfaction of the decretal debt.


As to the basis for carrying the award for implementation to this court, paragraph 12 of the affidavit in support of the tabular statement claims that the ?arbitration agreement? was executed within the jurisdiction of this court and there is a forum selection clause vesting exclusive jurisdiction in this court. There are further, irrelevant averments that the arbitration meetings were held across the street from this court within jurisdiction and that the parent agreement ?was substantially performed? from the decree-holder?s the then corporate office within jurisdiction and cheques were also received at such office. It is evident from the application that the judgment-debtors do not reside or work for gain or carry on business within jurisdiction. There is no assertion that any property of the judgment-debtors may be within jurisdiction. In EC No. 179 of 2009, the amount claimed in the tabular statement is Rs.12,79,694/- together with interest, costs and mesne profits. The order sought is for the appointment of a receiver over the truck; for examination of the three judgment-debtors as to their assets; and, for the judgement-debtors to be detained in civil prison. The award records that none appeared on behalf of the respondents to the reference ?despite repeated directions and opportunities.? In addition to the award on account of the missed installments, the financier has been declared to be entitled to the vehicle and an amount of Rs.7.5 lakh has been assessed in lieu of possession. Mesne profits of Rs. 500 per diem have been awarded from the date following the termination of the agreement till possession is recovered by the financier. Interest has been awarded on the failed installments at 36% per annum and further interest at 24% per annum has been provided on the awarded sum from the date of the award till payment. Again, the anomaly is evident in the decree-holders not incorporating the amount awarded in lieu of possession in the tabular statement but seeking sale of the vehicle and for the proceeds being retained in pro tanto satisfaction of the decretal debt insofar as the award provides on account of failed installments, interest, costs and mesne profits.


The affidavit-in-support of the tabular statement claims at paragraph 24 that this is the appropriate court in terms of Section 2(1)(e) of 1996 Act. The decree-holder claims that the agreement was executed within jurisdiction; that it was to be performed and was partly performed within jurisdiction; that it was terminated within jurisdiction; and, that the agreement contains a forum selection clause to the effect that courts at Calcutta would have exclusive jurisdiction to entertain matters arising out of the agreement. Neither the judgment-debtors nor their properties are claimed to be available within jurisdiction.


The tabular statement in EC No. 3558 of 2010 claims the principal awarded amount to be Rs.12,33,520/- and seeks interest as awarded and costs. The award appended to the application provides for interest at 24% per annum on the defaulted installments and a further 18% per annum on the awarded sum till the date of payment. The award records that the respondents to the reference did not respond to any notice or participate in the reference. The jurisdiction of this court has been invoked on the basis of the decree-holders? understanding that this is the court of competent jurisdiction within the meaning of Section 2(1)(e) of the 1996 Act. The agreement is said to have been executed within jurisdiction; the agreement was to be performed and was partly performed within jurisdiction; and, the termination thereof was made within jurisdiction. The prayers in column 10 include the appointment of a receiver to take possession of the vehicle, sell the same and make over the proceeds to be adjusted in pro tanto satisfaction of the decretal debt; for the judgment-debtors to be examined as to how the decretal debt would be discharged; and, for their detention in civil prison. The judgment-debtors and their properties are not shown to be available within jurisdiction.


Only in respect of the reference culminating in EC No. 142 of 2009 was there a previous application to this court under Section 9 of the 1996 Act. An ex parte order was made on such application on December 10, 2007, granting an injunction and appointing a receiver for the purpose of making an inventory of the assets. A subsequent order of February 19, 2008 on the same application noticed that the whereabouts of the assets could not be ascertained. The receiver was permitted to appoint an agent to trace out the assets. Such application remains pending. The affidavits in support of the tabular statements in EC No. 179 of 2009 and in EC No. 358 of 2010 do not refer to any previous application under Section 9 of the 1996 Act having been carried to this court. Two broad questions arise in these proceedings. The first relates to the court which can execute an arbitral award that is a deemed decree under the 1996 Act. The second is as to the authority of a court to execute a decree where neither the person nor the property against which execution is directed is within the jurisdiction of such court. As a corollary to the second issue, there is the question as to whether this court as a chartered High Court exercises additional authority that would permit the execution of a decree beyond its territorial limits. Section 34 of the 1996 Act provides for recourse against an arbitral award and limits the time within which a challenge may be made. Section 35 of the Act provides that an arbitral award shall be final and binding on the parties and persons claiming under them, respectively. Section 36 of the Act mandates that where the time for making an application to set aside the arbitral award under Section 34 thereof has expired, or such application has been rejected, ?the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.? Section 42 of the 1996 Act pertains to jurisdiction and stipulates that once any application relating to an arbitration agreement under the first part of such Act has been made in a court, ?that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court." The section has a sweeping nonobstante clause in its opening words. There is nothing in the 1996 Act save Section 2(1)(e), if applicable at all, that would cover the choice of forum for executing an arbitral award that is to be regarded as a deemed decree. Section 2(1)(e) of the Act provides:


?2. Definitions. -(1) In this Part, unless the context otherwise requires,- ?


(e) ?Court? means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;?


The Code of Civil Procedure contemplates the execution of decrees (and orders) that would have been made by civil courts. Every decree has a home court, so to say, which is referred to as the decree-passing court in a large number of judgments. The genesis of the legal problem faced in the present proceedings is in the deemed decree that is an arbitral award not having a home court. Neither the 1996 Act nor the Code expressly provides for the home of an arbitral award for the execution thereof to be begun thereat.


Under the Code, it is only before the court that passes the decree before which execution proceedings can be commenced. It is possible that the decreepassing court may not have the authority to grant certain reliefs sought in the execution, but it is the decree-passing court which has to be approached even for the purpose of transferring a decree to a court that may be able to effectively execute the decree. The choice, therefore, is made prior to the decree being passed. That is to say, the appropriateness of a civil suit being carried to a particular court is decided before the decree is passed; upon the decree being passed, the first step in execution has to be launched in such court or in the surrogate or deemed decree-passing court as recognised in Section 37 of the Code. Under Section 38 of the Code, a decree may be executed either by the court which passed it or by the court to which it is sent for execution. The concept of a deemed decree is foreign to the Code. Strictly speaking, the subject-matter of an arbitration, which is the basis for assessing the jurisdiction of a principal civil court under Section 2(1)(e) of the 1996 Act, should be irrelevant in respect of an award since the subject-matter of the arbitration, or the cause of action relevant for the purpose, would have merged in the arbitral award. Similarly, the expressions, ?subsequent applications arising out of that agreement? and ?the arbitral proceedings?, in Section 42 of the Act should apply to matters pertaining to the reference and prior to the award since the award signifies the termination of the reference. But in the absence of anything more specific in the 1996 Act, the extended expression ?subsequent applications arising out of that agreement and the arbitral proceedings? in Section 42 of the Act should be understood to also cover execution applications arising out of the arbitration agreements. Again, for want of anything better, the expression, ?subject-matter of the arbitration,? appearing in Section 2(1)(e) of the 1996 Act will also be the guide in ascertaining the court before which the arbitral award may be implemented. That would imply that in case of an arbitral award where the execution application is the first application pertaining to the reference that is brought to a civil court, every principal civil court of original jurisdiction other than those excluded in Section 2(1)(e) of the Act would have the authority to receive the execution if a suit covering the subject-matter of the arbitration could have been received by such court. In case of an arbitral award where a previous application relating to the arbitral reference has been carried to a particular court, such court alone would have the authority to entertain the execution proceedings. Thus, where no previous application pertaining to the arbitral reference has been made to any court, the execution of the arbitral award can be launched, at the decree-holder?s choice, before any of the several courts that could have received the subject-matter of the arbitration had it been a suit. But when a previous application pertaining to the arbitral reference has been made to a particular court (obviously of competent jurisdiction or where the possible objection has been waived) it is such court before which the execution of the arbitral award has to be commenced. Such court in either case would be the deemed decree-passing court which would be entitled to execute the deemed decree according to the rules laid down in the Code and even transfer the deemed decree to another court for effective execution.


There is another reason why such should be the position. Except the concept of a deemed decree, the position has not altered much from what it was under the Arbitration Act, 1940. Section 2(c) of the 1940 Act, in its essential part, was the previous version of Section 2(1)(e) of the 1996 Act. Similarly, Section 31(4) of the 1940 Act was the forerunner to Section 42 of the 1996 Act. Section 17 of the 1940 Act required every arbitral award to receive the imprimatur of court before it could become enforceable. Just as it is possible under the 1996 Act that the execution application is the first application pertaining to an arbitral reference that reaches court, it was possible under the 1940 Act for an arbitral reference to be commenced and concluded without the intervention of court. The only difference was that the award under the 1940 Act could not be enforced without the stamp of approval of a civil court. To ascertain which civil court could have received the award under the 1940 Act to render judgment in terms thereof, the award-holder had to take recourse to Section 2(c) of that Act. And, Section 2(c) of the 1940 Act, like Section 2(1)(e) of the 1996 Act, provided the answer on the basis of assessing the subject-matter of the arbitral reference, notwithstanding the cause of action having already merged in the award. The only difference is that if a reference under the 1940 Act was started with the intervention of court (under Section 20 of that Act), the application under Section 17 of the old Act had to be carried to the court where the arbitration agreement had been filed under Section 20 thereof; but under the 1996 Act the initiation of a reference with the intervention of a Chief Justice or his designate under Section 11 of the Act would be irrelevant in assessing the court that would be authorized to receive the execution application following the award if no other application pertaining to the reference had been made to any court. Again, the principle is supported by the Code. Though the concept of a deemed decree is not recognised in the Code, the concept of a deemed decreepassing court is. If the court which passed the decree ceases to exist or have jurisdiction to execute the decree, the court which has received the jurisdiction of the former court shall also have the jurisdiction to execute the decree. That latter court has to be ascertained on the basis of whether the suit in which the decree was passed, if instituted then, could have been instituted in such court, notwithstanding the cause of action in the suit having already merged in the decree.


On such aspect of the matter the parties have referred to the judgments reported at (2004) 1 CHN 660 (Gour Chandra Dutta v. State of West Bengal); AIR 2001 Kant 364 (ICDS Ltd v. Mangala Builders Pvt. Ltd); (2002) 4 RAJ 488 (Tata International Ltd v. Trisuns Chemical Industry Ltd); and, 2003 (2) Arb LR 431 (Ankati Satyamaiah v. Sallangula Lalaiah). In Gour Chandra Dutta, a Division Bench of this court considered an order passed by a civil judge (sr division), holding that such civil judge had no jurisdiction to entertain an application for enforcement of any award since he was not a principal civil judge as mentioned in Section 2(1)(e) of the 1996 Act. The Division Bench held, having regard to Section 18 of the Bengal, Agra and Assam Civil Courts Act, 1887, that the civil judge could execute the award since that court would have ordinary jurisdiction to entertain the suit covering the subject-matter of the arbitration agreement. In ICDS Ltd, a learned Judge determined with reference to Section 2(1)(e) of the 1996 Act, Section 38 of the Code read with Sections 15 to 20 thereof and Section 14 of the Karnataka Civil Courts Act, that it was the District Court which was the principal civil court of original jurisdiction within the local limits of its jurisdiction and the civil judge (sr division) had rightly dismissed the execution proceedings as that court was not a principal civil court of original jurisdiction.


In Tata International Ltd, a learned Judge of the Bombay High Court applied Clause 12 of the Letters Patent in assessing whether that court had the jurisdiction to entertain an application for enforcement of a foreign award. The decision hinged on the distinction between the expression, ?the subject-matter of the award,? that appears in the explanation to Section 47 of the 1996 Act and the expression, ?the subject-matter of the arbitration,? in Section 2(1)(e) of the 1996 Act. In Ankati Satyamaiah, a learned Judge of the Andhra Pradesh High Court held that only a court meeting the requirements under Section 2(1)(e) of the 1996 Act would have the authority to receive the execution proceedings relating to an arbitral award.


On the basis of the averments in the three sets of execution proceedings in the present case, it has to be assessed whether this court in its ordinary original civil jurisdiction could have received the suits arising out of the three agreements if either the agreements did not contain any arbitration clause or such arbitration clause was not adhered to. As to the authority of this court to receive an action in its original jurisdiction, Clause 12 of the Letters Patent is the governing factor. Clause 12 has three limbs. A suit for land can only be entertained on the Original Side of this court, if the immovable property or a part thereof or any of the immovable properties forming the subject-matter of the action is situate within jurisdiction. In suits not being suits for land, the territorial jurisdiction of this court on its Original Side can be invoked either on the basis of the situs of the defendant or on the basis of the situs of the cause of action, unless a special Act (like the Copyright Act, 1957 or the Trade Marks Act, 1999) provides otherwise. Since these matters cannot be regarded as suits for land and since the judgement-debtors in the three matters are not said to reside or carry on business or voluntarily work for gain within jurisdiction, it is on the basis of the situs of the cause of action relating to the subject-matter of the arbitration that these applications have been filed in this court. It is well established that if any part of the plaintiff?s cause of action in a suit, however infinitesimal, arises within jurisdiction, this court would have the authority to receive the action. On the basis of the averments in the affidavits in support of the three matters, these execution applications could, indeed, be launched and received in this court.


It is the question as to whether effective execution can be obtained in this court that is of greater significance. To assess such matter, one has now to pass from the 1996 Act to the Code or, to the rules on the Original Side of this court, if they are at variance with the Code. On behalf of the judgment-debtors it is submitted that the authority of the court to execute a decree as recognised in Section 38 of the Code should be read together with the limitation in Section 39 thereof, particularly after the 2002 amendment. The judgment-debtors suggest that a court cannot execute a decree against either a person or property outside its territorial limits. They contend that the lack of jurisdiction to execute a decree is a disability of the court and there is a distinction between the court which passed the decree having the authority to receive the execution proceedings and possessing the powers to effectively execute the same. They refer to judgments that pronounce that the court selling immovable property outside its jurisdiction in course of execution proceedings cannot give title to the purchaser. They refer to Section 21(3) of the Code that provides for an objection as to ?the competence of the executing court with reference to the local limits of its jurisdiction.? In dealing with the decree-holders? argument that the appointment of a receiver in execution proceedings is a form of equitable execution that would depend on the practice of this court, the judgment-debtors say that since the appointment of a receiver is a recognized form of execution under Section 51 of the Code it should be no different from the other forms of execution. In any event, the judgment-debtors say that in this country equity follows the law and the English principle of equity prevailing over law cannot be applied. They refer to the 144th report of the Law Commission that was the basis for the incorporation of sub-section (4) in Section 39 of the Code and submit that the amendment is the legislative assent to the Bombay High Court view noticed in the Law Commission report. On how to read precedents, the judgment-debtors say that the earlier judgment of a bench of coordinate strength should prevail over the later one, if there is a difference of opinion between the two.


Both sides have referred to judgments dating back to the initial years of this court. The decree-holders have primarily relied on the practice that has developed in this court and have exhorted that such long-standing practice be respected and not be discontinued.


Though this court in exercise of its ordinary original civil jurisdiction is subject to the provisions of the Code and is quite like any other civil court functioning under the Code, yet as a chartered High Court its rules would prevail over the provisions of the Code if the two are in conflict. Such question has long been settled. The decree-holders have referred to several judgments on such point. In the judgment reported at AIR 1964 SC 538 (Badat & Co v. East India Trading Co.), it was held that English common law was applicable ?as nearly as the circumstances of the place as the inhabitants admit? by virtue of Clause 19 of the Letters Patent applicable to the Bombay High Court. Clause 19 of the Letters Patent applicable to this court ordains that with respect to the law or equity to be applied to each case coming before this court, in exercise of its ordinary original civil jurisdiction, ?such law or equity shall be the law or equity which would have been applied if these Letters Patent had not been issued.? In Sharda Debi v. State of Bihar [2002 (3) SCC 705] the Supreme Court recognised that the Letters Patent under which a High Court is established is a charter that gives powers to the relevant High Court akin to the constitutional powers of such court. The observation was made in the context of a finding that when a Letters Patent granted a High Court a power of appeal against the judgment of a single Judge, the right to entertain the appeal would not get obliterated unless expressly excluded by statute. In the judgment reported at 2009 (5) SCC 791 (Commissioner of Customs & Central Excise v. Hongo India Pvt. Ltd), it was repeated that powers given to a High Court under the Letters Patent are akin to the constitutional powers of such court. In P.S. Sathappan v. Andhra Bank Ltd [2004 (11) SCC 672], again in the context of appellability, a Constitution Bench held that in the absence of an amendment to the Letters Patent or a contrary provision in a statute, the Letters Patent could not be ignored since, for the relevant High Court, it is the Letters Patent under which it derives its power. At paragraph 32 of the report, it was laid down that if there was any conflict between a Letters Patent and the Civil Procedure Code then the provisions of the Letters Patent would always prevail unless there was a specific exclusion. Reference was also made to Section 4 of the Code which provides that nothing in the Code shall limit or affect any special law. At paragraph 34 of the report it was held that a District Court could not be compared to a High Court which has special powers by virtue of its Letters Patent. In Iridium India Telecom Ltd v. Motorolia Inc [(2005) 2 SCC 145] the question that was posed was whether the rules obtaining on the Original Side of the Bombay High Court stood overridden by the Code to the extent of the conflict. A Full Bench judgment of this court reported at AIR 1961 Cal 483 (Manickchand Durgaprasad v. Pratabmull Rameswar) was approved that a rule framed under Clause 37 of the Letters Patent, even though inconsistent with the Code, would prevail over the corresponding provisions of the Code. The Supreme Court observed that Section 16 of the Amending Act of 2002 had left unscathed Section 129 of the Code and what follows therefrom. In Vidyawati Gupta v. Bhakti Hari Nayak [(2006) 2 SCC 777] the primacy of the rules on the Original Side of this court when in conflict with the provisions of the Code was affirmed. In the decision reported at [(2006) 11 SCC 521] (Jindal Vijayanagar Steel @ JSW Steel Ltd v. Jindal Praxair Oxygen Company Ltd) it was held that there ?cannot be any rule of uniformity applied between the unlikes.? The question, therefore, is no longer res integra: if the provisions of the Code are at variance with the rules on the Original Side of this court, it is the rules which would prevail.


At the heart of the present matter is the introduction of sub-section (4) to Section 39 of the Code. Section 39(1) of the Code permits the court which passed a decree to send it for execution to another court of competent jurisdiction subject to certain conditions. The authority of the court which passed the decree to send it, of its own motion, for execution to any other court is limited, under sub-section (2), to a court of competent jurisdiction subordinate to the court which passed the decree. Sub-section (4) provides as follows:


?39. Transfer of decree.-(1)..


2?


3?


4. Nothing in the Section shall be deemed to authorise the court which passed the decree to execute such decree against any person or property outside the local limits of its jurisdiction.?


The prohibition, in the opening words of sub-section, is restricted to the section itself and does not stretch beyond it. Yet, some judicial pronouncements on the sub-section have been perceived to give such provision an extended meaning.


In Salem Advocate Bar Assn v. Union of India [(2005) 6 SCC 344] amended Section 39 of the Code fell for consideration. The question raised was whether the newly-introduced sub-section prohibited the executing court from executing a decree against a person or property outside its jurisdiction. However, the issue was dealt with in the narrow compass of its effect on Order XXI Rule 3 and Order XXI Rule 48 of the Code and it was held that the amendment did not affect the aforesaid other provisions. In Mohit Bhargava v. Bharat Bhusan Bhargava reported at (2007) 4 SCC 795, the matter was discussed at greater length. Both the judgment-debtor and decree-holder instituted special leave petitions before the Supreme Court: the judgment-debtor aggrieved by certain orders in the execution proceedings not being set aside by the High Court in his application under Article 227 of the Constitution; the decree-holder dissatisfied with the High Court having upheld the judgment-debtor?s objection as to jurisdiction in the executing court seeking to sell a property outside its territorial limits. The court recorded the submission, at paragraph 5 of the report, that in terms of Section 39(1) of the Code a discretion was vested in the court either to proceed with the execution of the decree or to transfer the same. The judgment in Salem Advocate Bar Assn was noticed. The opinion rendered was that there could not be any dispute that the court which passed the decree was entitled to execute it but the 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 XXI Rule 3 or Order XXI 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.? It was observed that the previous judicial conflict was set at rest upon the 2002 Amendment ?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 authorize the Court to proceed with the execution.? The Supreme Court added that ?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.? It was also recognised that a protective or freezing order, not being a final order, could be passed by the court which passed the decree even if the property or the person concerned were outside the jurisdiction of the court. There are two recent judgments of this court that now need to be considered. In a judgment reported at AIR 2007 Cal 38 (Birla Corporation Ltd v. Prasad Trading Company), a learned Single Judge of this court revised the view taken by the same Bench in the judgment reported at AIR 2003 Cal 162 (Smt. Uma Kanoria v. Pradip Kumar Daga). A number of the judgments that the parties herein have relied on in course of the present proceedings, came to be considered in Birla Corporation. The finding rendered in that case was that the practice followed by this court over a long period of time partook the character of law by virtue of Rule 3 of the Chapter XL of the rules on the Original Side of this court. That rule provides that where no provisions are made by the Code or by the rules, the present procedure and practice shall remain in force. Particular stress in Birla Corporation was laid on a judgment reported at AIR 1961 Cal 422 (Benaras Ice Factory Ltd v. Sukhlal Amarchand Vadnagra). The conclusion in Birla Corporation was that this court would not ordinarily execute a decree against a property or a judgment-debtor if they were outside jurisdiction, but in exceptional cases it still could. Another recent Division Bench judgment of this court reported at AIR 2009 Cal 227 (DVM Construction v. Srei Infrastructure Finance Ltd) has also been placed for the proposition that an objection as to territorial jurisdiction of this court to execute a decree would arise upon examination of the judgment-debtor on the question as to whether the judgment-debtor holds any property or debts within the territorial jurisdiction of this court. The rival sides in the present proceedings have referred to a number of cases beginning with a decision rendered in 1880. The decree-holders rely on the practice on the Original Side of this court and have referred to the judgments reported at AIR 1930 Cal 502 (Promothanath Malia v. H.V. Low); (1993) 1 Cal LJ 163 (Adhish Ch. Sinha v. Gobardhan Chandra Chandra); and, (1994) 2 Cal LJ 246 (Hindustan Gas & Industries Ltd v. Adhish Chandra Sinha) for such purpose. In particular, they rely on the Division Bench decision reported at AIR 1939 Cal 403 (Sakti Nath Roy Choudhury v. Jessore United Bank Ltd) for its interpretation of the previous judgments of this court as to the powers of the executing court. They have also relied on a judgment reported at ILR 15 Cal 667 (Kartick Nath Pandey v. Tilukdhari Lall). The judgment-debtors have relied on several of the judgments that the decree-holders have placed and, in addition, to the judgments reported at ILR 6 Cal 513 (Latchman Pundeh v. Maddan Mohun Shye), ILR 17 Cal 700 (Prem Chand Dey v. Mokhoda Debi), ILR 39 Cal 104 (Begg, Dunlop v. Jagannath Marwari), AIR 1929 Cal 818 (Ambika Ranjan Majumdar v. Manikganj Loan Office, Ltd), AIR 1931 Cal 312 (Sreenath Chakravarti v. Priyanath Bandopadhya), AIR 1985 Bom 79 (Shaba Yeshwant Naik v. Vinod Kumar Gosalia), AIR 1949 Mad 347 (Sivalinga Thevar v. Srinivasa Mudaliar), AIR 1961 Cal 183 (Jugal Charan Mondal v. Sm. Pankajini Dasi), and AIR 1942 Cal 321 (Masrab Khan v. Debnath Mali alias Abhu Mali).


The judgement-debtors have placed the relevant recommendations in the 144th report of the Law Commission in 1992 that dwelt on Section 39 and the execution of decrees outside jurisdiction. The Law Commission relied on the Bombay judgment in Shaba Yeshwant Naik for the proposition that a court could not execute a decree ?in which the subject-matter of the suit or application for execution is situated entirely outside its jurisdiction.? The report referred to the Prem Chand Dey judgment of this court of the year 1890 and read it to imply that it had said that a court could not execute a decree against any property outside its jurisdiction. The report then referred to a single bench judgment of this court noted in AIR 1982 NOC 42 (Cal) (Arati Rani Paul v. Balai Chandra Paul) which had distinguished the decisions in Begg, Dunlop and Hari Das Basu v. National Insurance Company, Ltd (AIR 1932 Cal 213) and relied on the reasoning in Sakti Nath Roy Choudhury. The decree-holders have placed the full text of such judgment that considered several previous judgments of this court to interpret the word ?may? in Section 39(1) of the Code. While such dictum in Arati Rani Paul may no longer hold good in view of the 2002 Amendment, the interpretation of the amended provision cannot be made on the basis of any report or recommendation that preceded the amendment unless the provision is unintelligible as it stands. Section 39(1) of the Code has three operative features. In a matter pertaining to the transfer of a decree, the application for the initial transfer has to be made to the court which passed the decree; such application has to be made by the decree-holder (the only exception being when under sub-section (2) it can be sent suo motu to a court of competent jurisdiction subordinate to the court which passed the decree); and, the identification of a court of competent jurisdiction for it to send the decree to such court for execution thereof. The word ?may? was varyingly interpreted prior to the 2002 Amendment. In other words, there was a view that despite an application of the decree-holder for transfer of the decree and despite such application identifying a court of competent jurisdiction where the decree could be sent, the court which passed the decree still had a discretion in the matter. The effect of sub-section (4) is that once the decree-holder has applied to the decree-passing court for transfer of the decree and has identified a court of competent jurisdiction where the decree can be sent for execution, the decreepassing court would not have the authority to execute the decree against any person or property outside the limits of its jurisdiction. The opening words of sub-section (4) are ?Nothing in this section? and that would limit the operation of the embargo under sub-section (4) to that section itself and not spill on to the other provisions of the Code. There appears, therefore, to be little ambiguity or room for doubt that would require any report or recommendation that preceded the amendment to be used for the purpose of making a construction which is other than the plain meaning of the provision.


There is no contrary provision in the rules on the Original Side of this court that would undo the prohibition under Section 39(4) of the Code. However, there may be a long-standing practice prevalent in this court from which authority may be derived to travel beyond the local limits of the jurisdiction of this court to execute a decree. Though there does not appear to be any express provision in the rules on the Original Side of this court that permits the execution of a decree beyond i

ts territorial limits, Birla Corporation has found that the long-standing practice has assumed the character of a rule. The matter has to rest there for the moment. But if the holder of a decree passed by this court applies to this court for transferring the decree to a court which is assessed to possess the competent jurisdiction to execute the same, no rule of practice in this court would permit this court to insist that, notwithstanding the decree-holder?s request and the identification of a competent court where the decree may be sent for execution, this court would proceed to execute the decree against any person or property outside its territorial jurisdiction. A number of the older judgments that the parties have cited are decisions rendered on the Appellate Side of this court or other High Courts while considering the general authority of an executing court under the Code. In Benaras Ice Factory and Adhish Chandra Sinha, among a few of the cases cited, the authority of this court to execute a decree passed by it has been considered, prior to the more recent judgments in Birla Corporation and DVM Construction. Since a view has been taken in Birla Corporation that the long-standing practice of this court partakes the character of a rule, the same is binding on a bench of coordinate jurisdiction unless expressly disagreed, when a reference may be sought to a Division Bench. All the decrees that fall for consideration now are money decrees. In DVM Construction, the Division Bench opined that necessary direction under Order XXI Rule 41(1) of the Code could be issued, if only to discover where the assets of the judgment-debtors may be lying. Again, such decision is binding on this court. The authority of the decree-passing court to receive an application for execution of the decree is recognised in Section 38 of the Code. Both Section 38 and Section 39 of the Code, among others, contemplate the transfer of a decree, but the transfer appears to be restricted to the volition of the decree-holder. Rules 3 and 48 of Order XXI of the Code indicate that both in respect of immovable and movable assets of the judgment-debtor, such assets should be within the jurisdiction of the executing court for it to proceed against it. Birla Corporation says that it is only in the exceptional case that this court would chase a property or person outside its jurisdiction in course of executing a decree. DVM Construction instructs that this court would have the authority to pass a direction for examination of the judgment-debtor, but does not lay down that it is bound to do so. There are problems on either side. Some of the awards that the finance companies carry for execution to this court, as in the present matters, are so harsh that notwithstanding the principle that the executing court would not look behind the decree, it would be inequitable to subject the judgment-debtors to examination in this court since some of them may be way beyond the territorial limits of this court. On the other hand, the decree-holders seek execution against moveable assets, some of which are literally on wheels and cannot be expected to remain within the jurisdiction of a particular court. Since the practice of this court has been found in Birla Corporation to permit a level of discretion in course of execution to stretch out beyond this court?s territorial limits only in exceptional cases, in the routine matters as those now under consideration, this court should decline the oppressive prayers for summoning the judgment-debtors to this court since no exceptional ground has been made out. The court cannot throw out the execution proceedings since by virtue of it being the deemed decree passing-court it has the authority and obligation to entertain them; but the court will merely wait for the decree-holders to apply for transfer of the deemed decrees to the appropriate executing fora and decline all other orders. EC No. 142 of 2009, EC No. 179 of 2009, and EC No. 358 of 2010 will have to languish in this court till such time that appropriate applications are made for transfer thereof without the court acceding to any of the prayers now made. They will next appear as ?Chamber Applications for Final Disposal? in the monthly list of July, 2011. GA No. 20 of 2011 is disposed of by recording that the decree-holder therein has abandoned the claim against the second judgment-debtor. The decree-holder in such case will pay costs assessed at 6,000 GM to the second judgment-debtor. Urgent certified photocopies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.