Transfer of decree to Court in another State.

Transfer of Decree to Court in Another State under the Code of Civil Procedure (CPC)

When a decree is passed by a court, the decree-holder has the right to execute that decree to recover the judgment debt or enforce the orders contained within the decree. Often, the judgment debtor's property or assets are located outside the territorial jurisdiction of the court that passed the decree. In such situations, the decree-holder can seek the transfer of the decree to a court in another state where the judgment debtor’s property is located. This process is governed by Section 39 of the Code of Civil Procedure (CPC), 1908.

Understanding Section 39 of the CPC

Section 39 of the CPC provides the legal framework for the transfer of a decree for execution to another court, including courts located in different states. This ensures that the decree-holder is not unduly burdened by jurisdictional limitations and can effectively pursue the execution of the decree.

Section 39(1) of the CPC outlines the circumstances under which a court may transfer a decree to another court for execution:

(a) If the judgment-debtor actually and voluntarily resides or carries on business, or personally works for gain, within the local limits of the jurisdiction of such other Court: This implies that if the judgment debtor resides, works, or conducts business within the jurisdiction of another court, the decree can be transferred there for execution.
(b) If the judgment-debtor does not have sufficient property within the local limits of the jurisdiction of the Court which passed the decree to satisfy such decree and has property within the local limits of the jurisdiction of such other Court: This is the most common ground for transferring a decree to another state. If the assets of the judgment debtor within the jurisdiction of the original court are insufficient to satisfy the decree, and the judgment debtor owns property in another state, the decree can be transferred to a court in that other state.
(c) If the Court which passed the decree considers for any other reason, which it shall record in writing, that the decree should be executed by such other Court: This provides a residuary power to the court to transfer the decree for other justifiable reasons, which must be documented in writing. This allows for flexibility in situations not covered by the above two clauses, ensuring that the decree can be executed effectively.

Procedure for Transferring a Decree

The procedure for transferring a decree to a court in another state involves several steps:

Application for Transfer: The decree-holder must file an application before the court that passed the decree, requesting the transfer of the decree to a specified court in another state. The application should clearly state the reasons for seeking the transfer, such as the location of the judgment debtor’s property or business.
Supporting Documents: The application should be supported by relevant documents, including:
- A certified copy of the decree.
- A certificate stating the amount, if any, still due under the decree.
- Details of the properties of the judgment debtor located within the jurisdiction of the court to which the transfer is sought.
- An affidavit verifying the facts stated in the application.
Notice to the Judgment Debtor: Before transferring the decree, the court is required to issue a notice to the judgment debtor, giving them an opportunity to raise any objections to the transfer. The principle of natural justice requires that the judgment debtor be heard before any adverse order is passed against them.
Order of Transfer: After considering the application, supporting documents, and any objections raised by the judgment debtor, the court may pass an order transferring the decree to the specified court in another state. The order must specify the reasons for the transfer, particularly if the transfer is based on reason (c) of Section 39(1).
Transmission of Decree: Once the order of transfer is passed, the court that passed the decree transmits the following documents to the transferee court:
- A certified copy of the decree.
- A certificate stating the amount, if any, still due under the decree.
- A copy of any order for the execution of the decree which may have been passed.
- A copy of any certificate of payment or adjustment.
Execution by the Transferee Court: Upon receipt of the transferred documents, the transferee court proceeds to execute the decree as if it had been passed by that court. The transferee court has the same powers in executing the decree as the court that originally passed it.

Powers of the Transferee Court

Section 42 of the CPC outlines the powers of the court to which a decree is transferred for execution. According to this section, the transferee court has the same powers in executing the decree as if it had been passed by that court. This includes the power to:

Order attachment and sale of the judgment debtor’s property.
Arrest and detention of the judgment debtor in civil prison (subject to the provisions of Section 51 of the CPC).
Appoint a receiver to manage the judgment debtor’s property.
Order the sale of the judgment debtor’s property.

However, the transferee court cannot execute the decree against any person or property not specified in the order of transfer. Also, the transferee court cannot question the validity of the decree passed by the transferring court. Any challenge to the validity of the decree must be made before the court that passed the decree.

Limitations on Transfer of Decree

While Section 39 provides for the transfer of decrees, there are certain limitations to this power. These limitations are primarily aimed at preventing abuse of the process and ensuring fairness to the judgment debtor:

No Transfer if Decree is Inexecutable: A decree that is inexecutable due to legal reasons cannot be transferred. For instance, a decree barred by limitation cannot be transferred for execution.
Jurisdictional Issues: The court to which the decree is sought to be transferred must have the territorial and pecuniary jurisdiction to execute the decree. The value of the subject matter and the location of the property must fall within the jurisdiction of the transferee court.
Consent of the Transferor Court: The transfer of a decree is at the discretion of the court that passed the decree. The court must be satisfied that the transfer is necessary and justified.
No Transfer of Decree Against a Foreign Government: A decree cannot be transferred for execution against a foreign government without the consent of the Central Government, as provided under Section 86 of the CPC.

Important Considerations

Due Diligence: Before applying for the transfer of a decree, the decree-holder should conduct thorough due diligence to ascertain the location and ownership of the judgment debtor’s property. This helps in identifying the appropriate court to which the decree should be transferred.
Legal Representation: It is advisable to engage a lawyer familiar with the laws and procedures of the state to which the decree is sought to be transferred. This ensures that the execution process is handled efficiently and effectively.
Compliance with Rules: Strict compliance with the procedural rules is essential for a successful transfer and execution of the decree. Any non-compliance can lead to delays and complications.

Several landmark judgments have clarified the provisions relating to the transfer of decrees under Section 39 of the CPC. Some of these are:

Gajraj Singh v. State Transport Authority, Rajasthan (1997): In this case, the Supreme Court held that the executing court cannot go behind the decree, and its role is limited to executing the decree as it stands. The validity of the decree can only be challenged before the court that passed it.
Prem Lata Agarwal v. Lakshman Prasad Gupta (2015): The Supreme Court reiterated the principle that the executing court cannot question the decree’s validity and must execute it as per its terms.
Mohit Bhargava v. Bharat Bhushan Bhargava (2007): The Delhi High Court emphasized the importance of providing notice to the judgment debtor before transferring the decree to another court, upholding the principles of natural justice.

Conclusion

The transfer of a decree to a court in another state under Section 39 of the CPC is a vital mechanism for ensuring that decree-holders can effectively enforce their rights, irrespective of the location of the judgment debtor’s assets. By adhering to the prescribed procedures and legal principles, decree-holders can navigate jurisdictional limitations and pursue the execution of their decrees across state lines. Understanding the provisions of Section 39, the powers of the transferee court, and the limitations on the transfer is crucial for both decree-holders and judgment debtors in ensuring a fair and efficient execution process. Seeking legal guidance is advisable to ensure compliance with all applicable laws and procedures, thereby maximizing the chances of a successful outcome.