Order XXI Rule 26 CPC | Court Not Bound To Decide Application For Stay Of Execution On First Day, Entitled To Seek Reply Of Decree Holder: Delhi HC

The Delhi High Court has observed that there is no mandate, in law or otherwise, requiring the executing court to decide the application under Order XXI Rule 26 of Code of Civil Procedure for stay of execution proceedings, on the very first day.

Justice C Hari Shankar added that the Executing Court is entitled to call upon the Decree Holder to file a reply to the application before taking a decision thereon.

The Court made the said observations while dismissing a plea challenging the order dated 24th March, 2022, passed by the District Judge (Commercial Court) in an execution plea.

In the said matter, the petitioners were Judgment Debtors 1 and 3 against whom award dated 31st July, 2020 was passed by the arbitrator in an Arbitration Case and they were directed to pay, to the respondent, Rs. 15,24,168 along with interest and penal interest @ 18.6 % p.a. with effect from 18th July, 2020 till realisation of the principal amount.

The respondent, as the successful claimant in the arbitral proceedings, sought execution of the aforesaid award. The petitioners moved an application, in the said execution proceedings, under Order XXI Rule 26 read with sec. 151 of the CPC seeking stay of the execution proceedings.

The High Court observed that the Commercial Court had called upon the respondent to file a reply to the application within three weeks and had, in the interregnum, required the petitioners to file details of their assets.

"I am, frankly, completely befuddled as to how the petitioners have at all chosen to challenge this order under Article 227 of the Constitution of India," the Court said.

It added that the order was, ex-facie, innocuous and did not result in any prejudice to the petitioners at all.

The Court noted that it was not the contention of the petitioners that the learned Commercial Court did not possess the jurisdiction or authority to call upon them to file details of their assets.

"Indeed, Order XXI Rule 26 of the CPC specifically empowers the court to issue such a direction. This position also stands recognised by the Supreme Court in its decision in Rahul S. Shah v. Jinendra Kumar Gandhi," it noted at the outset.

The Court said "There is no mandate, in law, or otherwise, requiring the executing court to decide the application under Order XXI Rule 26 on the very first day. It is entitled to call upon the Decree Holder to file a reply to the application before taking a decision thereon."

The Court thus found no erroneous exercise of jurisdiction, by the Commercial Court, as would call for supervisory correction by High Court, in exercise of its powers under Article 227 of the Constitution of India.

"This petition is accordingly completely misconceived and is dismissed in limine, with no order as to costs," the Court concluded while dismissing the plea.

Case Title: SMT BABITA SHARMA & ANR. v. THE SHANKAR COOP. URBAN T/C SOCIETY

Citation: 2022 LiveLaw (Del) 535

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