DELHI HIGH COURT ISSUES DIRECTIONS FOR IMPLEMENTATION OF GUIDELINES FOR EXECUTION OF RECOVERY CERTIFICATES

 

The Hon’ble #HighCourt of #Delhi in the case of Santosh Kumar Jha v. The Deputy Labour Commissioner (South) [W.P.(C) 8092/2016] vide its Judgment dated 24-06-2021 modified the #Guidelines issued in the case of M/s Bhandari Engineers & Builders Pvt. Ltd. v. M/s Maharia Raj Joint Venture, 270 (2020) DLT 582 for #execution of #RecoveryCertificates by the Sub-Divisional Magistrate (#SDM)/Recovery Officer/Appropriate Authority and thereby, #recovery of #dues or #arrears, etc.

In this case the Industrial Tribunal passed an Award dated 16-05-2012 in favour of the Petitioner and directed reinstatement of the Petitioner with back wages. The Recovery Certificate was issued to the Petitioner, however no proper implementation of the Award was executed by the Recovery Officers/SDMs.

As a result, the Petitioner filed a Writ Petition before the Delhi High Court for proper implementation of the Award dated 16-05-2012. The Court noticed that there was no prescribed procedure for implementation of awards, therefore it constituted a committee to formulate the procedure for the proceedings before the Recovery Officer (Committee).

The Committee submitted its Report on 27-03-2017. The High Court considered and accepted the guidelines recommended by the Committee in its Report with certain conditions and further, passed the following directions/guidelines (Guidelines):

“…

1.1 The SDM shall direct the respondent to be present in Court (and even ensure his presence by coercive process) to receive such information or documents as will aid in the execution of the decree.

1.2 The most important aspect in execution proceedings is to ascertain the assets/means of the respondent to satisfy the award/order and, therefore, in fresh cases the SDM shall direct the respondent on the very first hearing to file an affidavit of his assets, income and expenditure in the form attached hereto as Annexure-A within 30 days of the receipt of the notice. With respect to the pending matters, direction to file the affidavit of assets, income and expenditure be issued within 15 days of the commencement of these guidelines.

1.3 The notice issued to the respondent shall indicate the direction to file the aforesaid affidavit within 30 days of the receipt of the notice and Annexure-A shall be attached to the notice. The notice shall also indicate that the proceedings for detention of the respondent may be initiated in the event of the non-filing of the affidavit within 30 days of the receipt of the notice. The notice shall also indicate that the respondent shall remain present before the Court.

1.4 If the respondent files the affidavit but is not willing to satisfy the award/order, the SDM shall proceed to attach the assets of the respondent in accordance with law.

1.5 Upon the aforesaid affidavit being filed, the SDM may examine the respondent and/or conduct an inquiry to examine whether the respondent has truly disclosed his assets, income and expenditure in his affidavit.

1.6 If the respondent fails to appear and file the affidavit of his assets, income and expenditure, the SDM may initiate proceedings for his detention in accordance with law.

1.7 The SDM shall follow the principles of natural justice by affording a reasonable opportunity to the respondent.

1.8 All proceedings before the SDM shall be held in open Court. The daily cause list of the cases shall be displayed outside the Court Room and the orders passed by the SDM shall be released on the website of the respective SDM/E-Courts portal within one week.

1.9 The SDM shall follow this procedure in respect of the proceedings under Industrial Disputes Act, Employee’s Compensation Act, Motor Vehicles Act as well as other statutes which provides for the recovery as arrears of land-revenue.

1.10 These guidelines shall apply to all pending cases as well as the new cases to be instituted after 1st May 2017.”

However, the High Court partially modified the said Guidelines vide its Order dated 13-12-2019. Subsequently, the High Court further modified and substituted the said Guidelines with the following directions. The High Court issued following procedure to be followed by the SDM/Recovery Officer/Appropriate Authority for execution of the Recovery Certificates (Modified Directions):-

“…

I. The execution of Recovery Certificate deserves special attention considering that any delay in execution proceedings would frustrate the winning party from reaping the benefits of the award/order in their favor on account of inordinate delay.

II. Upon receipt of the Recovery Certificate, the SDM/Recovery Officer/Appropriate Authority shall list the matter in open Court within one week of the receipt of the Recovery Certificate.

III. On the first date of hearing, the SDM/Recovery Officer/Appropriate Authority shall issue notice to the respondent and direct the respondent to deposit the due amount within thirty days of the receipt of the notice with a further direction that if the amount is not deposited, the respondent shall file an affidavit of his assets on the date of cause of action, date of the award as well as on the date of the swearing of the affidavit in Form 16A of Appendix E of the Code of Civil Procedure within 30 days of the receipt of the notice.

IV. The SDM/ Recovery Officer/Appropriate Authority shall also direct the respondent that if the amount is not deposited within 30 days, the respondent shall file additional affidavit in terms of the formats of Annexure A1 / Annexure B1 attached to the judgment of M/s Bhandari Engineers & Builders Pvt. Ltd. v. M/s Maharia Raj Joint Venture, 270 (2020) DLT 582 within thirty days of the receipt of notice.

V. If the respondent is an individual, the additional affidavit of his assets and income shall be in the format of Annexure A1 attached to the judgment of M/s Bhandari Engineers & Builders Pvt. Ltd. v. M/s Maharia Raj Joint Venture, 270 (2020) DLT 582.

VI. If the respondent is a proprietor of a proprietorship firm/partner of a partnership firm/member of an HUF/Director/Promoter of a company/Managing Trustee of a Trust, the additional affidavit in respect of the assets and income of the firm/HUF /Company/Trust, as the case may be, shall be in the format of Annexure B1 attached to the judgment of M/s Bhandari Engineers & Builders Pvt. Ltd. v. M/s Maharia Raj Joint Venture, 270 (2020) DLT 582.

VII. If the respondent is Central Government/State Government/ Municipal Corporation/ PSU/ State/ Central Government Entity such as DJB/DDA etc., the direction to file the affidavit/ additional affidavit is not necessary in the first instance. In such cases, the SDM/ Recovery Officer/Appropriate Authority shall direct the respondent to disclose the particulars of its bank account(s) in which there is sufficient amount to satisfy the amount under the Recovery Certificate. Upon disclosure of the bank account(s), the SDM/Recovery Officer/ Appropriate Authority shall attach the bank account to recover the due amount. However, if the amount in the bank account(s) is not sufficient to satisfy the award, the SDM/ Recovery Officer/ Appropriate Authority shall direct the respondent to file the affidavit of assets in Form 16A, Appendix E under Order XXI Rule 41(2) of the Code of Civil Procedure. The additional affidavit in formats of Annexure A-1/B-1 is not necessary in such cases.”

 

In this regard, 3 Judges Bench of the Hon’ble Supreme Court of India in the case of Rahul S. Shah v. Jinendra Kumar Gandhi & Ors. [CA No. 1659-1660/2021], in its Order dated 22-04-2021 had also laid down the mandatory directions to be followed by all Executing Courts.

 

Lakshmi Vishwakarma

Senior Legal Associate

The Indian Lawyer & Allied Services