Code of Civil Procedure, 1908 (CPC)
Execution of a Money Decree under the CPC
Most decrees are for money, and most execution proceedings are therefore about finding assets and turning them into payment. The Code of Civil Procedure, 1908 gives the decree-holder of a money decree three routes: attachment and sale of the judgment-debtor's property, arrest and detention of the judgment-debtor himself, and the appointment of a receiver over property that yields income. These notes draw the money-decree material together: the modes available, the property that can and cannot be reached, garnishee proceedings, payment and adjustment, interest and costs, rateable distribution, and limitation.
The architecture of execution, as it applies to a money decree
1. The Three Modes for a Money Decree
Mode | Provision | When it is used |
|---|---|---|
Attachment and sale of property | Section 51(b); Sections 60 to 64; Order XXI Rules 41 to 57 and 64 to 94 | The ordinary and primary route: the judgment-debtor's property is attached and sold, and the proceeds applied to the decree |
Arrest and detention in civil prison | Section 51(c) with the proviso; Sections 55 to 59; Order XXI Rules 37 to 40 | Where the judgment-debtor has means and refuses to pay, or is likely to abscond, or the decree is for a sum for which he was bound in a fiduciary capacity to account |
Appointment of a receiver | Section 51(d); Order XL | Where the property yields income that can satisfy the decree, or cannot readily be sold, so that a forced sale would be wasteful |
§ Finding the assets: the disclosure tools Order XXI Rule 41(1) allows the court, where a decree is for the payment of money, to order the judgment-debtor to be orally examined as to whether any and what debts are owing to him and whether he has any and what other property or means of satisfying the decree. Rule 41(2) allows the court to require him to attend and answer such interrogatories, or to produce such books or documents, as it thinks fit. Rule 41(3), inserted in 1976, goes further: where a decree for the payment of money remains unsatisfied for thirty days, the court may, on the decree-holder's application, require the judgment-debtor to make an affidavit stating the particulars of his assets, and on his failure to comply may detain him in civil prison for a term not exceeding three months. These provisions matter because the practical difficulty in executing a money decree is rarely the law; it is discovering what the judgment-debtor owns. |
2. What Can Be Reached, and What Cannot
i. The general rule: Section 60(1). All saleable property belonging to the judgment-debtor, or over which he has a disposing power exercisable for his own benefit, is liable to attachment and sale, including property held in another's name in trust for him or on his behalf.
ii. The exemptions: the proviso to Section 60(1). Necessary wearing apparel, cooking vessels and beds; tools of artisans and an agriculturist's implements, cattle and seed-grain; houses of agriculturists, labourers and domestic servants; books of account; a mere right to sue for damages; pensions and gratuities; wages of labourers and domestic servants; the protected portion of salary, being the first one thousand rupees and two-thirds of the remainder; provident funds; and rights to future maintenance and expectancies of succession.
iii. Exemptions cannot be waived. By the second proviso to Section 60(1), an agreement by which a judgment-debtor waives the benefit of an exemption is void.
iv. Salary in a maintenance decree. The ordinary protection is reduced where the decree is for maintenance, one-third of the salary then being attachable.
v. Money received is not protected. By Section 60(2), the exemption for pensions, wages, salary and similar sums does not survive their receipt by the judgment-debtor; the protection attaches to the fund in the payer's hands.
3. Reaching Money Owed to the Judgment-Debtor: Garnishee Proceedings
§ Order XXI Rules 46A to 46-I in outline Where a debt is owed to the judgment-debtor by a third person, the garnishee, the court may on the decree-holder's application issue a notice under Rule 46A calling on the garnishee to pay the debt into court or to appear and show cause why he should not. If the garnishee does not dispute the debt, or does not appear, the court may order him to pay the amount into court, and that order is enforceable as a decree against him: Rule 46B. If he disputes liability, the court may order the question to be tried as if it were an issue in a suit, and determines it: Rule 46C. Where a third party claims an interest in the debt, the court may order the question to be tried: Rule 46D. Payment made by the garnishee under the order discharges him as against the judgment-debtor to that extent: Rule 46E. Costs are in the court's discretion under Rule 46H. The device reaches bank balances, rents payable to the judgment-debtor, salary due from an employer and trade debts, which are frequently the only assets that can be found. |
4. Payment, Adjustment and Satisfaction
§ Order XXI Rule 2, CPC 1908 (in substance) (1) Where any money payable under a decree is paid out of Court, or the decree is otherwise adjusted in whole or in part to the satisfaction of the decree-holder, the decree-holder shall certify such payment or adjustment to the Court, and the Court shall record the same accordingly. (2) The judgment-debtor also may inform the Court of such payment or adjustment, and apply to the Court to issue a notice to the decree-holder to show cause why the payment or adjustment should not be recorded as certified; and if, after service of such notice, the decree-holder fails to show cause, the Court shall record the same accordingly. (3) A payment or adjustment which has not been certified or recorded as aforesaid shall not be recognised by any Court executing the decree. |
Sub-rule (3) is the sting. A judgment-debtor who pays the decree-holder privately and takes no certification pays, in the eyes of the executing court, nothing at all; the decree may be executed for the full amount, and his remedy against the decree-holder lies elsewhere. The lesson for a judgment-debtor is to insist on certification, or to apply himself under sub-rule (2). Note also the limitation: an application by the judgment-debtor to record an uncertified payment must be made within thirty days under Article 125 of the Limitation Act, 1963. When the decree is fully satisfied, the court records full satisfaction under Order XXI Rule 15 and the connected rules, and questions of discharge and satisfaction are decided under Section 47.
5. What the Decree-Holder May Recover
i. The principal sum adjudged, as stated in the decree.
ii. Interest. Pre-suit interest as awarded on substantive law; pendente lite interest at the rate the court fixed; and future interest from the decree to payment, not exceeding six per cent unless the liability arose out of a commercial transaction, under Section 34. Where the decree is silent as to interest after the decree, Section 34(2) deems it refused and no separate suit lies.
iii. Costs. The costs awarded under Section 35, with interest on costs under Section 35(3), and any costs ordered under Section 35A or Section 35B, the latter being separately executable if unpaid.
iv. Costs of execution, which are added to the decretal amount, including the subsistence money paid under Order XXI Rule 39 where the judgment-debtor is detained.
v. Nothing beyond the decree. The executing court cannot go behind the decree, so a decree-holder cannot recover more than the decree gives him, however clear he is that the decree was too small.
6. Competing Decree-Holders: Rateable Distribution
§ Section 73 in brief Where assets are held by a court and more decree-holders than one have applied to it for execution of money decrees against the same judgment-debtor before the receipt of the assets, the assets, after deducting the costs of realisation, are rateably distributed among them in proportion to the amounts due. There is no priority by date of decree or attachment among those who qualify. A creditor without a decree, one who applied to a different court, and one who applied after the assets were received all take nothing from the fund. A secured creditor stands outside the pool as regards his security, and the provisos govern property sold subject to, or free from, a mortgage or charge. |
7. The Course of a Money Execution
Step | Provision | What happens |
|---|---|---|
Application for execution | Order XXI Rules 10 and 11 | In writing, signed and verified, stating the ten particulars in tabular form and the mode of execution sought |
Notice where required | Order XXI Rule 22 | Where execution is sought more than two years after the decree, or against a legal representative, or by an assignee |
Discovery of assets | Order XXI Rule 41 | Oral examination of the judgment-debtor, interrogatories, and after thirty days an affidavit of assets, with detention up to three months for non-compliance |
Attachment | Sections 60 to 64; Order XXI Rules 41 to 57 | Property attached in the manner prescribed for its kind; a private transfer contrary to the attachment is void under Section 64 |
Objections and claims | Order XXI Rule 58; Section 47 | Strangers' claims to attached property under Rule 58; questions between the parties under Section 47 |
Proclamation and sale | Order XXI Rules 64 to 73 | A proclamation under Rule 66, then public auction, with deposit and payment under Rules 84 to 86 |
Setting aside and confirmation | Order XXI Rules 89 to 92 and 94 | Deposit, material irregularity with substantial injury, or want of saleable interest; otherwise confirmation and a sale certificate |
Distribution | Section 73 | Rateable distribution among qualifying decree-holders, subject to secured claims |
Satisfaction | Order XXI Rule 2; Section 47 | Payment or adjustment certified and recorded; full satisfaction entered; disputes decided under Section 47 |
8. Limitation
An application to execute a money decree must be made within twelve years under Article 136 of the Limitation Act, 1963, running from the date the decree became enforceable, or, where the decree directs payment at a stated date or at recurring periods, from the date of default. Section 5 of that Act does not apply to execution applications, so delay beyond the period cannot be condoned on sufficient cause, though the exclusions in Sections 12 to 15 apply. A related and shorter period governs the judgment-debtor's application to record an uncertified payment: thirty days under Article 125.
9. Landmark Points
- Section 51 with its proviso. The modes available for a money decree, and the conditions on detention: means and refusal, likelihood of absconding, or a fiduciary liability.
- Order XXI Rule 41(3). Where a money decree remains unsatisfied for thirty days, the judgment-debtor may be required to file an affidavit of assets, and may be detained up to three months for non-compliance.
- Section 60 with its provisos. All saleable property is liable, subject to the enumerated exemptions, which cannot be waived; and the exemption does not survive receipt of the money.
- Order XXI Rules 46A to 46-I. Garnishee proceedings, which reach bank balances, rents, salary and trade debts owed to the judgment-debtor.
- Order XXI Rule 2(3). A payment or adjustment not certified or recorded shall not be recognised by any court executing the decree.
- Section 73. Rateable distribution among money decree-holders who applied to the court holding the assets before their receipt.
- Article 136, Limitation Act, 1963. Twelve years from the date the decree becomes enforceable, with Section 5 inapplicable.
10. Frequently Asked Questions
How is a money decree executed?
By attachment and sale of the judgment-debtor's property, by his arrest and detention in civil prison where the conditions in the proviso to Section 51 are satisfied, or by the appointment of a receiver under Section 51(d) and Order XL. The decree-holder elects the mode, and may pursue more than one.
How does a decree-holder find the judgment-debtor's assets?
Under Order XXI Rule 41, by having the judgment-debtor orally examined as to his debts and property, by interrogatories and production of books, and, where a money decree remains unsatisfied for thirty days, by requiring him to file an affidavit of his assets, non-compliance being punishable with detention for up to three months.
How much of a salary can be attached for a money decree?
The first one thousand rupees and two-thirds of the remainder are exempt under the proviso to Section 60(1), so only the balance is attachable. Where the decree is for maintenance, the protection is reduced and one-third of the salary may be attached.
Can money owed to the judgment-debtor by a third party be attached?
Yes, through garnishee proceedings under Order XXI Rules 46A to 46-I. The garnishee is called on to pay into court or show cause; if he does not dispute the debt the order to pay is enforceable against him as a decree, and if he disputes it the question is tried by the court.
What happens if the judgment-debtor pays the decree-holder privately?
The payment must be certified to the court under Order XXI Rule 2, either by the decree-holder or on the judgment-debtor's application within thirty days under Article 125 of the Limitation Act. An uncertified payment shall not be recognised by any court executing the decree.
Can the decree-holder recover interest and costs in execution?
Yes, so far as the decree provides for them. Interest is governed by Section 34, including the rule that silence in the decree as to interest after the decree is deemed a refusal; costs are those awarded under Sections 35, 35A and 35B, and the costs of execution are added to the decretal amount.
What happens when several decree-holders claim the same fund?
Section 73 applies: the assets, after deducting the costs of realisation, are rateably distributed among those holding money decrees against the same judgment-debtor who applied for execution to the court holding the assets before their receipt, in proportion to the amounts due, with secured creditors standing outside the pool.
11. Related Topics in This CPC Series
- Application for Execution under Order XXI
- Attachment in Execution: Sections 60 to 64 and Order XXI
- Rateable Distribution under Section 73
- Arrest and Detention in Civil Prison in Execution