The Delhi High Court has held that the execution of the 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 favour on account of inordinate delay.
The Court has issued a slew of directions to the SDM/Recovery Officer/ Appropriate Authority and also constituted a six-member committee to supervise the implementation of its directions.
A single-judge bench of Justice J.R. Midha has directed the Government of NCT of Delhi to bear the necessary expenditure for the functioning of the committee. The Court has passed its directions in an appeal, which was originally filed by one Santosh Kumar Jha in 2016, who was aggrieved by the non-implementation of the award passed by the Industrial Tribunal in 2012 in his favour for reinstatement with back wages. The Delhi High Court had noted that time that there was no prescribed procedure for the implementation of the awards.
That the Recovery Officers were not holding proceedings in open court, daily cause lists were not being displayed outside the Court room and the orders passed were not released on the website of the Court. Time to time the Court had passed its directions and previously too constitute the Committee which had submitted its reports. The Court had passed its guidelines based on the Judgment dated 05/12/2019, in case of M/s Bhandari Engineers & Builders Pvt Ltd vs M/s Maharia Raj Joint Venture, 266 (2020) DLT 106 which was subsequently modified vide judgment dated 05/12/2020, and which was subsequently modified vide Judgment dated 24/06/2021. On 24/06/2021, the High Court has noted that in view of the matter, the guidelines issued by this Court on 27th March, 2017 modified by the order dated 13th December, 2019, warrant further modifications. The Court has also incorporated the suggestions given by the Amicus Curiae Advocates Rajiv Agarwal, Saurabh Prakash and SP Jain, in the guidelines.
The Delhi High Court has passed the following directions to be followed by the SDM/Recovery Officer/ Appropriate Authority for the execution of the Recovery Certificates:
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 favour 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 Bhandari Engineers–II (supra) 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 Bhandari Engineers–II (supra).
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 Bhandari Engineers – II (supra).
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.
VIII. The SDM/Recovery Officer/Appropriate Authority shall issue the notice to the respondent in Format – I. Where the respondent is Central Government/State Government/Municipal Corporation/PSU or State/Central Government Entity such as DJB/DDA etc., the notice shall be issued in Format – II.
IX. In pending execution cases, if the respondent has not already filed the affidavit of assets and income, the SDM/Recovery Officer/ Appropriate Authority shall direct the respondent to file the affidavits of his assets and income in terms of this judgment within 30 days of the receipt of the notice. In case the respondent is Central Government/State Government/Municipal Corporation/PSU or State/Central Government Entity such as DJB/DDA etc., the concerned respondent entity be directed to disclose the particulars of its bank account(s) in which there is sufficient amount to satisfy the Recovery Certificate. These directions be issued to the respondent in all pending cases within four weeks.
X. In the event of failure of the respondent to deposit the amount due under the Recovery Certificate, the SDM/Recovery Officer/ Appropriate Authority shall recover the amount by attachment of the assets of the respondent.
XI. Sections 51(b), 60 to 64 and Order XXI Rules 41 to 57 of the Code of Civil Procedure contain the provisions for attachment of properties in execution. Before attaching a property, the SDM/Recovery Officer/ Appropriate Authority shall ensure that the property does not fall in the list of properties which are exempted from attachment/sale under the proviso to Section 60(1) of the Code of Civil Procedure. The SDM/Recovery Officer/Appropriate Authority shall ensure the compliance of Sections 60 to 64 and Order XXI Rules 41 to 57 of the Code of Civil Procedure with respect to the attachment of properties.
XII. Upon the aforesaid affidavit being filed, the SDM/Recovery Officer/Appropriate Authority may examine the respondent and/or conduct an inquiry to examine whether the respondent has truly disclosed his assets and income in the affidavit.
XIII. With respect to the power to detain the respondent, the SDM/Recovery Officer/Appropriate Authority shall follow the principles of natural justice by affording a reasonable opportunity to the respondent before passing the detention order.
XIV. All proceedings before the SDM/Recovery Officer/Appropriate Authority shall be held in open Court.
XV. The daily cause list of the cases shall be displayed outside the Court Room as well as on the website.
XVI. The orders passed by the SDM/Recovery Officer/Appropriate Authority shall be released on the website of the respective SDM/E-Courts portal within one week.
XVII. The SDM/Recovery Officer/Appropriate Authority 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 empower the SDM/Recovery Officer/Appropriate Authority to execute the Recover Certificate.
XVIII. These guidelines shall apply to all pending cases as well as new cases.
The Delhi High Court has directed that these above given guidelines be implemented with effect from 02nd August, 2021. Government of NCT of Delhi shall publish these modified guidelines on its website and shall circulate it to all concerned SDMs/Recovery Officers/Appropriate Authorities.
“The successful implementation of this Scheme requires strict compliance by SDMs/ Recovery Officers/Appropriate Authorities and thus, a Committee is constituted to supervise the implementation of these directions,” it said.
“This Committee shall comprise of the following members: (i) Principal Secretary (Law, Justice & Legislative Affairs), GNCTD as Convenor. (ii) Principal Secretary (Revenue), GNCTD. (iii) Secretary-cum-Commissioner (Labour), GNCTD. (iv) Member Secretary, DSLSA. (v) Ms. Nandita Rao, Additional Standing Counsel, GNCTD. (vi) Mr. Akshay Chowdhary, Advocate,” it added.
Further it directed the SDMs/Recovery Officers/Appropriate Authorities shall expedite the execution proceedings and shall make an endeavour to enforce the Recovery Certificates as expeditiously as possible. The SDMs/Recovery Officers/ Appropriate Authorities shall send the Status Report containing list of all pending cases to the Implementation Committee. The list shall contain the name of the case; date of receipt of the Recovery Certificate; date of issuance of notice to the respondent; date of service of notice on the respondent; whether the respondent has filed the affidavit of assets; number of hearings that have taken place; and the reasons for delay in disposal. List be prepared according to the seniority i.e. the oldest case shall be mentioned first. The SDMs/Recovery Officers/Appropriate Authorities shall also send a list of execution cases decided in the last six months. The first list of cases as on 01st August, 2021 be sent by 16th August, 2021 and thereafter, every six months.
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“The SDMs/Recovery Officers/Appropriate Authorities shall also file quarterly compliance report before the Implementation Committee with respect to the compliance of this Scheme. The first compliance report for the quarter 02nd August, 2021 to 31st October, 2021 be filed by 30th November, 2021 and thereafter by 30th of each quarter. The same shall be placed before the Implementation Committee for consideration within four weeks. In the event of non-compliance of the directions, the Committee shall direct their comments to be placed in the ACR file of the concerned officer. The status report shall contain the following information:- (i) Number of cases/Recovery Certificates pending as on 02nd August, 2021. (ii) Number of cases in which the respondent has been directed to file the affidavit of assets. (iii) Number of cases in which the respondents have filed the affidavit of assets and income. (iv) Number of cases in which the action has been initiated against the respondent for non-appearance and failure to file the affidavit of assets and income. (v) Whether the SDMs/Recovery Officers/Appropriate Authorities are holding proceedings in open Court. (vi) Whether the daily cause list is being displayed outside the Court room and also on the website. (vii) Whether the SDMs/Recovery Officers/Appropriate Authorities are releasing the orders on their website within one week. (viii) In the event of non-compliance of any of the aforesaid directions, the reasons for non-compliance be disclosed in the status report,” the Court said.