Apex Court remits matter to Executing Court; Clarifies that Explanation was added to Order XXI Rule 16 of CPC to avoid separate suit proceedings

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Read Judgment: Vaishno Devi Construction vs. Union of India

Pankaj Bajpai

New Delhi, October 22, 2021:The Supreme Court has observed that nothing in Order XXI Rule 16 of the CPC would affect the provisions of Section 146 of CPC and the transferee of the right in property which is subject matter of a suit may apply for execution of the decree without separate assignment of the decree as required by law. 

The observation came pursuant to an appeal arising out of an application for execution by transferee of decree. 

Going by the background of the case, during the pendency of execution proceedings, the decree holder died. Thereafter, an application was filed before the executing court u/s 47 r/w Order 22 Rules 1&2 of the CPC, on the basis of an assignment made by the deceased decree holder. 

Such application was however dismissed initially by the Trial Court, and later by the High Court. Aggrieved by the same, present appeal came to be filed before the Apex Court. 

After considering the submissions and evidence, the Apex Court found that the objective of amending Order XXI Rule 16 of the CPC by adding the Explanation was to deal with the scenario as it existed in the present case, to avoid separate suit proceedings being filed therefrom and to that extent removing the distinction between an assignment pre the decree and an assignment post the decree. 

Once the legislative intent is clear, and the law is amended, then the earlier position of law cannot be said to prevail post the amendment and it is not in doubt that the present case is one post the amendment, added the Court. 

The Division Bench of Justice Sanjay Kishan Kaul and Justice B.R.Gavai pointed out that the Law Commission recommended amending Order XXI Rule 16 to clarify that it does not affect the provisions of Section 146 and that a transferee of rights in the subject matter of the suit can obtain execution of a decree without separate assignment of the decree. 

The objective appears to be to not have multifarious proceedings to determine the issue of assignment, but to determine the issue of assignment in the execution proceedings itself, added the Bench. 

The Apex Court therefore remitted the matter back to the executing court, however made it clear that without going into the validity of the document, i.e., the Assignment Deed or the cheque as that would be a matter to be decided by the executing court.

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