BARNES INVESTMENTS LTD. AND ORS. versus RAJ K. GUPTA AND ORS.

Citation: [2001] SUPP. 1 S.C.R. 328 · Decided: 06-08-2001 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
BARNES INVESTMENTS LTD. AND ORS. 
v. 
RAJK. GUPTA AND ORS. 
AUGUST 6, 2001 
B 
[V.N. KHARE AND MRS. RUMA PAL, JJ.] 
Code of Civil Procedure 1908: 
Section 151-0rder 21 Rules 54, 55 and 58-0rder of attachment of 
C immovable property issued in execution of decree against respondent-
Modification of attachment by an interim order permitting respondent to 
construct multi-storey building on the property-Held, modification of 
attachment order improper. 
D 
Appellants obtained a decree in their favour from Queen's Bench 
Division of the High Court in England against Respondent l for a sum 
equivalent to Rs. 3.60 crores in US dollars with interest at 15% per annum 
from the date of judgment. Appellant filed an execution application in a High 
Court in India requiring attachment of property and share holding of 
respondent l in the companies ofrespondents 2 to 7, in execution of the decree. 
E As none of the respondents appeared before the High Court on issuing notice, 
the Court issued orders for attachment of property. Subsequently, an 
application was filed by respondent l under Order 21 Rule 58 CPC objecting 
to the attachment of property. Another application was filed by respondent 
l under Section 151 CPC for recalling the warrants of attachment. 
F 
While these applications were pending, respondent l filed a suit against 
the appellants in the High Court praying for a declaration that the judgment 
passed by the Queen's Bench Division in favour of the appellants was void 
and sought for a permanent injunction restraining the appellants from 
executing the judgment and decree. An interim order was passed by the High 
G Court staying the execution of the decree. 
Meanwhile, respondent 8 filed an application before the High Court 
seeking impleadment to the appellant's execution proceedings and also for 
recalling and setting aside the warrants of attachment. Another application 
was filed by respondent l under Section 151 CPC seeking same reliefs as 
H claimed earlier. An interim order was passed by Single Judge of the High 
328 
4 , 
BARNES INVESTMENTS LTD. v. RAJK. GUPTA 
329 
Court accepting the offer of respondent 8 and modifying the attachment order A 
subject to the condition that respondent 8 should file an affidavit undertaking 
not to sell 3000 sq. ft. of the covered area in the multi-storey building, which 
is proposed to be constructed on the property by respondent 8 and that it 
shall remain attached till the disposal of the main execution petition. An appeal 
was filed before the Division Bench of the High Court by the appellants which B 
was dismissed. 
• 
Allowing the appeal, the Court 
HELD : I.I. There is nothing on record to show that the prayer of 
respondent 8 for being impleaded as a party in the execution proceedings had 
been allowed and yet the Single Judge of the High Court accepted the offer C 
of respondent 8 and partially allowed the application of the respondent 8 in 
terms of such offer. By the interm orders, the attachment has been directed 
to be effected on non-existent property. The building is proposed to be 
constructed by respondent 8 on the property. It has not been decided whether 
respondent 8 has any right to construct on the property. According to the D 
High Court's order, if and when the proposed building is constructed an 
attachment will be effected of an area of 3000 sq. ft. in an unspecified area of 
the building. The High Court has, in effect, removed the attachment for the 
present to be operative at an un-determined point of time in the future on 
property which is not and may never come into existence. As per Order 21 
Rule 54 CPC, pending the determination of the validity of the order of E 
attachment and ultimate disposal of the execution applications, the High Court 
should not have allowed the attachment to be rendered infructuous. 
(332-C, D, E, F( 
1.2. If the High Court thought of lifting the attachment temporarily, it 
should have at ll'ast secured the decretal amount. In any case, the High Court 
. could not have passed an interim order virtually granting the final relief in 
execution applications without any decision on the merits of the case. (333-B] 
1.3. Without any determination of the questions under Order 21 Rule 
F 
58 sub-Rule (2) CPC, the High Court did not have the jurisdiction to pass G 
any order varying the orders of the attachmei:it. The Single Judge observed 
that in the suit filed by respondent 1 an order has been passed staying the 
exe

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