The Challenges and Ironies of Executing Money Decrees in India
-- Ms. Beenashaw N. Soni , Advocate --

The Challenges and Ironies of Executing Money Decrees in India

It is a well-known adage in legal circles that obtaining a money decree from an Indian court is often easier than actually executing it and recovering the awarded sum from the Judgment Debtor (hereinafter referred to as the JD). The JD can ultimately prevail by failing to pay the decreed amount, leaving the Decree Holder (hereinafter referred to as the DH) unable to recover the money they are legally entitled to.

In a significant number of cases, even after successfully obtaining a money decree, the DH faces substantial challenges in the execution proceedings, resulting in the decree remaining largely on paper. The process of executing a decree is often prolonged, expensive, and exhausting, leading many DHs to abandon their efforts out of frustration. Execution of a money decree is an arduous task, requiring great effort and perseverance on the part of the DH to recover the sum they are entitled to as per the court's judgment.

The procedure for executing money decrees is governed by Order 21 of the Code of Civil Procedure (CPC). As per Order 21 Rule 11(2) CPC, the DH must file a written execution petition accompanied by a certified copy of the decree. The DH is also required to provide details of the JD's movable assets, bank account particulars, and immovable properties that can be attached by the executing court.

Order 21 Rule 22 CPC provides that if the execution petition is filed within 2 years from the date of the decree, the executing court can issue attachment warrants without prior notice to the JD. However, if the execution petition is filed after 2 years, notice must be served upon the JD before proceeding with the attachment.

The executing court, upon receiving a report of non-satisfaction of the decree, issues warrants for attachment of the JD's movable properties. A court-appointed bailiff then visits the JD's premises to attach the movable assets as per the list provided by the DH, if they are found at the given address.

If the DH manages to obtain the JD's bank account details, the executing court may issue warrants for attachment of the balance funds in the account. However, if the specific account number is not available to the DH, attachment of the bank account becomes impossible.

After the court attaches the movable assets, objections may be raised to seek the release of properties not owned by the JD.

However, the execution process is rarely straightforward, as JDs often employ various means to prevent the successful execution of the decree.

Individual as Judgment Debtors

When the JD is an individual, they may relocate to a different place after the decree is passed, making it challenging for the DH to trace their whereabouts. Even if some movable assets are found at the JD's premises, they are often of little value, being mostly household items. If the JD moves outside the jurisdiction of the executing court or to another state, the DH faces even greater difficulty in recovering the money, as the decree must then be transferred to the court having jurisdiction over the JD's new place of residence or business.

Salaried Person as Judgment Debtors

In cases where the JD is a salaried employee, the executing court can attach a maximum of one-third of their salary for a period of up to 2 years under Order 21 Rule 48 read with Section 60 CPC. However, this process often fails to recover substantial amounts.

Company as Judgment Debtors

When the JD is a private limited company, the DH faces significant challenges in recovering the money. Private limited companies often have few assets of value, usually limited to furniture, computers, or air conditioners. The companies typically maintain current accounts with banks, which rarely hold significant funds. Moreover, the shares held by the directors are often of little market value, as they are not easily sold in the open market.

It is a common occurrence that by the time a money decree is passed against a company, the directors or shareholders have already rendered the company defunct, leaving it devoid of assets. As directors cannot be held personally liable for the company's debts, the money decree against the company remains largely unenforceable.

Furthermore, companies often have overdraft accounts with banks, allowing them to continue business operations despite maintaining a negative balance. Such overdraft accounts cannot be attached, making it nearly impossible for the DH to recover the decreed sum.

In cases where the company is undergoing insolvency proceedings before the National Company Law Tribunal (NCLT) or is in liquidation, or a moratorium has been imposed, it becomes exceedingly difficult for the DH to recover any money.

Partnership Firm as Judgment Debtors

When a money decree is passed against a partnership firm, it can be executed against the partners' personal assets. However, it is common for business owners to have already pledged their personal properties, plant and machinery, and stock to secure business loans from banks. In such cases, these assets cannot be attached to satisfy the money decree, leaving the DH unable to recover the sum.

Judgment Debtors Outside Court's Jurisdiction

If the JD resides or is situated outside the jurisdiction of the court that passed the decree and their assets are located within another state or court's jurisdiction, the DH faces additional hurdles in recovering the money. As per Order 21 Rule 5 & 6 CPC, the DH must obtain a transfer certificate and approach the court having jurisdiction over the JD's assets. This requires the DH to travel to another state, engage a new advocate, and incur further expenses to execute the decree.

Executing a money decree in another state is a time-consuming and exhausting process, as the procedure varies from state to state. The DH must make multiple visits, arrange for accommodation, and navigate the lengthy execution process. If the JD relocates to different cities within the same state, fresh transfer certificates must be obtained each time. These factors make it extremely challenging for the DH to recover the money from the JD.

Various recourses available in law with the courts to execute the Decree..

Attachment of Immovable Property

If the DH is unable to recover the decreed amount by attaching the JD's movable properties, they may seek attachment of the JD's immovable property under Order 21 Rule 54 CPC. However, if the JD only owns a single dwelling house, it cannot be attached in execution of a money decree.

Even if the JD owns multiple properties, if they are in the name of their parents, spouse, or children, who are not parties to the decree, these properties cannot be attached or sold to satisfy the decree.

Moreover, if the JD's immovable property is mortgaged to a bank, which has a secured charge over the property, the DH will be unable to sell the property to recover the money, as the bank's claim will take precedence.

In most cases, JDs reside in rented properties, making it impossible for the DH to attach any immovable property.

Civil Arrest of the Judgment Debtor

When the JD fails to satisfy the decree, the DH may seek civil arrest of the JD under Order 21 Rule 37 CPC. However, even at this stage, the JD may plead a lack of assets or funds, making it difficult for the executing court to order civil imprisonment. Even if the JD is imprisoned, it is only for a maximum period of 30 days, during which the DH must bear the cost of the JD's subsistence allowance. This process rarely results in the recovery of money, as the JD can be released from prison after 30 days without making any payment towards the decree.

Court Auction Process

Attached movable assets are initially given to the DH on 'supardari' (safe custody) and then sold by the court through an auction under Order 21 Rule 64 CPC. The court auction process is complex and time-consuming, and the DH must incur additional expenses for the auction to take place. Rarely is a significant amount recovered unless the DH manages to attach valuable assets such as vehicles or jewelry from bank lockers. JDs often transfer or withdraw funds from their bank accounts after the decree is passed, making it difficult for the DH to recover money through the attachment of bank accounts. Furthermore, obtaining details of the JD's bank lockers is a challenging task.

The DH must be fortunate to find valuable assets or substantial funds in the JD's bank account for the court to attach them and enable recovery of the decreed sum. Therefore, executing a money decree is an arduous and time-consuming process, often resulting in the decree remaining unsatisfied.

Piercing the Corporate Veil

In cases against a company where the facts warranting the lifting of the corporate veil have been established at the time of drafting the suit, and the decree is passed against the directors after piercing the corporate veil, the executing court may attach the directors' personal assets to satisfy the decree. As companies are separate legal entities, directors are not personally liable for the company's debts unless they have been made personally liable. However, courts are generally reluctant to lift the corporate veil, allowing directors to evade personal liability.

Comparative Analysis with Singapore

In contrast to the challenges faced by DHs in India, the enforcement of money decrees in Singapore is more streamlined and efficient. The Singapore government has established various sources for obtaining information that can be used for the enforcement of money decrees. These include:

1. E-services of the Ministry of Law's Insolvency Office, which provide information on the bankruptcy and solvency status of individuals and body corporates.

2. The Accounting and Corporate Regulatory Authority (ACRA) Business Information database, which offers details on an individual's past and present businesses, offices held, shareholdings, and financial information for companies.

In Singapore, DHs can approach the court to obtain information on the assets of JDs prior to the initiation of legal action. Applications can be filed for pre-action discovery and interrogatories to identify potential assets of the JD. Moreover, applications can be made to prevent a party from disposing of its assets.

The enforcement of money decrees in Singapore is governed by the new Rules of Court 2021 and Singapore International Commercial Court Rules 2021, which came into effect on April 1, 2022. These rules provide multiple methods of enforcement and require a single application to be filed, specifying the sequence in which the enforcement methods are to be carried out. The enforcement process is conducted by the Sheriff, and the process has been simplified, typically taking between two to eight months to enforce a judgment. The JD can be burdened with legal costs, court filing fees, and expenses related to execution, such as advertising fees, auction fees, and the Sheriff's commission, as per Order 22 Rule 9 of the 2021 Rules.


The current procedure for executing money decrees under Order 21 CPC in India is exhaustive and time-consuming. Order 21 Rule 11(1) CPC empowers the court to order the arrest of the JD at the time of passing the decree if the JD is present in court. However, this provision is rarely invoked, as most decrees are passed in the JD's absence, allowing them sufficient time to dispose of their assets or move beyond the court's jurisdiction.

To address these challenges, the Supreme Court of India, in its order dated 22.04.2021 in Rahul S Shah v. Jitendra Kumar (Civil Appeal No. 1659-1660 of 2021), has mandated courts to exercise their powers under Order 21 Rule 11 CPC to ensure immediate execution of money decrees upon an oral application. The Court has also directed that before the settlement of issues in a suit for payment of money, the defendant may be required to disclose their assets on oath to the extent of their liability. Furthermore, courts may, at any stage during the suit's pendency, demand security from the defendant to ensure the satisfaction of any decree that may be passed.

Unfortunately, courts are often hesitant to exercise these powers, and there are few instances where defendants have been compelled to disclose assets or provide security for the decretal amount during the pendency of the suit.

Although Order 21 Rule 41 CPC empowers the court to examine the JD and compel disclosure of assets, the absence of a centralized asset database accessible to the public makes it easy for JDs to conceal their true assets.

To effectively execute money decrees, trial courts must exercise their powers in terms of the Supreme Court's ruling in Rahul S Shah v. Jitendra Kumar and compel defendants to disclose their assets or furnish security for the suit amount, especially when the defendant's case appears weak and a decree is likely to be passed against them.

During the trial of a money suit, courts should carefully examine the defendant's defense and assess the likelihood of success, similar to their approach in summary suits filed under Order 37 CPC. If the court finds the defendant's defense to be weak, it should direct the defendant to provide security for the suit amount, disclose their assets, and restrain them from disposing of those assets during the pendency of the suit. The trial court must protect the plaintiff's interests and, at the time of passing the decree, secure the defendant's presence and immediately initiate execution proceedings upon an oral application to ensure the decree's satisfaction.

To further aid the execution of money decrees, the Indian Parliament can draw inspiration from the efficient enforcement mechanisms in place in Singapore. Establishing centralized databases for accessing information on the assets and financial status of individuals and companies, as well as streamlining the enforcement process, can significantly improve the success rate of money decree executions in India.

Until such reforms are implemented, DHs will continue to face a laborious and often futile process of executing money decrees, with many decrees remaining unsatisfied due to the challenges posed by uncooperative JDs and the limitations of the current legal framework. By adopting best practices from jurisdictions like Singapore, India can work towards ensuring that money decrees are effectively enforced, providing much-needed relief to DHs and strengthening the integrity of the judicial system.

Ms. Beenashaw N. Soni


238, Lawyers Chamber,

Delhi High Court,

New Delhi -110003

Mobile no. 9810046611

Enrolment  no D/529/93

03 Apr 2024


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