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Debt Recovery
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In India, most of the execution of decrees and court orders for debt recovery are regulated under the CPC or civil procedure code. This order or decree is passed by the concerned court after completing the normal court proceeding of evidence, pleadings, arguments, etc., from both the debtor and creditor, and thus deciding based on proceeding records, the court shall pass its judgment or decree to the concerned parties in the debt recovery case. Several laws in India deal with the execution of decrees and court orders for debt recovery, such as DRT (Debt Recovery Tribunals), SARFAESI Act, and IBC (Insolvency and Bankruptcy Code). Debt recovery laws’ main objective is to maintain a balance between the rights of creditors and debtors. These laws provide a legitimate framework so that creditors don’t take advantage of a debtor or vice versa. A lawyer can help you after the execution of decrees and court orders for debt recovery and various other litigation proceedings of a company or organization. It is indeed a difficult task for the public or a company to understand the types of orders of the court. Do not worry. We shall guide you to understand the technicalities behind the court proceedings and execution of decrees and court orders for debt recovery.
Whenever a creditor files a civil suit according to the laws in India concerned, a court shall pass an order or a decree on the said claims made by the applicant. A company as a creditor that has sanctioned a loan to a concerned debtor when not repaid by the debtor within a stipulated time shall approach a concerned authority or a court to claim such debt. Such a claim before the court has a final judgment. Execution of decrees and court orders for debt recovery has to be performed by the decree-holder by following various procedures, or the judgment will only be a piece of paper. However, the execution of decrees and court orders for debt recovery can proceed only after the decree is passed by the concerned court; as such, there is a limitation of 12 years to file the execution of decrees and court orders for debt recovery from the date it passed.
Legal professionals who shall be guiding companies or individuals on the execution of decrees and court orders for debt recovery with the smooth functioning of the operations, ensuring that clients get the best results. The advocate will help the creditor or degree holder apply to the concerned authority or court that has passed the said order or degree on recovery of debt. This said application shall include the following details: suit number, amount value to be recovered from the judgment debtor, interest calculated on the outstanding amount, type of execution, etc. We know that the execution of decrees and court orders for debt recovery is the conclusive final step under Indian law to recover debt from the debtor.
Legal professionals shall first understand the court orders or a decree of a concerned company or a creditor, analyze the legal implications and laws that are applicable to proceed with the execution of decrees and court orders for debt recovery after due analysis by our in-house legal counsel shall accordingly prepare legal documentation that is necessary for execution of decrees and court orders for debt recovery. After collecting the required documents, he or she shall coordinate or connect with the concerned authority, such as a court that has passed the judgment, its officials, law enforcement agencies, etc., for starting the operation on the execution of decrees and court orders for debt recovery of the concerned decree holder. Next, he or she shall assist in fulfilling the compliance requirements, ensuring that all the legal requirements are aligned according to the laws and regulations in India.
India has a comprehensive law on debt recovery. With the increasing number of debt or NPA (non-performing assets) accounts, Indian financial institutions have been addressing this significant concern for the last decades. To fight against such challenges, the Indian legal system has introduced several laws and regulations to combat debt recovery matters. Some of the common methods for debt recovery in India are:
CPC is also commonly known as the Civil Procedure Code; under section 38 of the code, various procedures have been mentioned on how one can proceed with the execution of decrees and court orders. This execution includes attachment and sale of a concerned property of a debtor or by sale without attachment of any property. This rule is followed by sending a notice to the judgment debtor prohibiting him from transferring such property in any way. Order 21 of the CPC provides complete guidelines and provisions on the execution of decrees and court orders for debt recovery, along with several remedies to both judgment debtors and decree holders.
Well, execution is the last stage in any civil litigation. There are three stages in civil litigation: institution of litigation, adjudication of litigation, and implementation of litigation. It is a general law under the CPC that a court must follow the territorial jurisdiction in passing the order or a decree; no court shall pass or execute a decree with respect to properties that are situated in another jurisdiction. An inherent lack of jurisdiction of the court shall nullify the court order or decree. Thus, it is the applicant’s responsibility to make sure that the suit has been filed in a competent court.
Whenever an execution of decrees and court orders for debt recovery become inexecutable due to the operation of law, such degree may be executable by a subsequent amendment according to the law and thus could be executed after such amendment.
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The following person may apply for the execution of decrees and court orders for debt recovery
An Execution of decrees and court orders for debt recovery shall be made by the following person or a company within a stipulated time of 12 years from the date of the decree or order passed by the concerned court. This execution of decrees and court orders for debt recovery shall be filed before the concerned court with an application according to the laws applicable. Given below are the persons against whom the execution could be made:
Given below are the various modes of execution of decrees and court orders for debt recovery in India:
An application for execution of decrees and court orders for debt recovery by a decree-holder shall also attach the property of the judgment debtor in the execution proceeding before the concerned court. Accordingly, a proceeding continues. Section 60 of CPC has mentioned the list of properties that are eligible to be attached while executing the decree.
A judgment debtor can be arrested under section 55 of the civil procedure code (CPC) at any time of the day and could be brought before the concerned court jurisdictions. An arrested judgment debtor has the right to show cause notice on why one should not be arrested.
It is a command or order by the respective court that has passed the decree or order to a court that has jurisdiction over the property attached to the decree or with the judgment debtor.
It is a provision where the decree-holder recovers the money or property of a judgment debtor through a third party.
The execution of decrees and court orders for debt recovery can be executed by selling an attached property or without attachment. CPC has covered various provisions on how moveable and immovable property can be sold out. A court can sell out the attached property by appointing a representative officer to execute the sale of the property of a judgment debtor.
Civil Procedure Code has a provision where the judgment debtor can stay the execution of decrees and court orders for debt recovery if he shows a sufficient cause to the concerned court within a reasonable time and cause.
There are various methods or procedures for executing a decree through a concerned court, such as the delivery of possession, arrest, detection of the judgment debtor, attachment of property by sale, etc.
The time limit for execution of a decree in India is 12 years from the date of passing the decree or order by the concerned court.
Order 21 of the CPC provides the complete procedures for executing the decree or order passed by the concerned court.
This rule talks about the right given to the judgment debtor under the civil procedure code, on why a degree passed against the judgment debtor shall not be executed against him when an application for execution is filed after two years of the date of the decree. A notice shall be sent to the judgment debtor, and accordingly, he can reply the same, explaining the sufficient causes.
Section 51 of CPC provides various other provisions not limited to decree by attachment of property, arrest and detention, etc.
Section 42 of the civil procedure code gives the same right to the executing court if the court that has passed the decree order transferred to another court for executing the decree or judgment.
Execution of a decree for recovery of money means executing the enforcement of the decree on recovery of money through a court procedure.
A decree that is passed against the defendant by an Indian court against such defendant residing in a country hostile to India and the other one is under section 82(2) of CPC against the government or public servants unless it remains unsatisfied for three months from the date of the decree.
A decree from the court has to be passed before the execution proceeding. Hence, execution cannot be filed without obtaining a decree from the concerned court.
One may approach the concerned civil court under order 21 rule 26 of CPC by showing sufficient cause on why the execution of the decree has to be stayed within a reasonable time frame.
Under section 47 of the civil procedure code, a wide power is given to the civil courts to decide all the facts and questions between the parties to suit in which decree shall passed.
No, the executing court cannot go beyond the decree or judgment passed by the court in the jurisdiction.
A decree could be partly preliminary and partly final when further proceedings have to be taken when the suit can be completely disposed of. Then, such a decree is preliminary, whereas a decree is final when a suit adjudication is completely disposed of.
Yes, the decree is appealable in India until and unless it is explicitly prohibited by law.
Yes, a decree can be challenged in India through a CPC or civil procedure code under section 96 of CPC, a right to appeal from the decree passed by any court exercising the original jurisdiction to the court authorized to hear the appeals.
A decree can be executed by the court that has passed the decree of the suit filed by the parties after hearing and collecting evidence from both sides or by any court to whom the original court transferred the execution.
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