Case: VAISHNO DEVI CONSTRUCTION Rep. Thr. Sole Proprietor (D) Thr. LRs &amp; Anr Vs. UNION OF INDIA &amp; ORS

2. In order to appreciate the controversy, relevant facts are being set out. On 29.12.1995, a contract was awarded by the Union of India to one Surendra Nath Kanungo @ S.N. Kanungo for executing the work of extension of runway at Port Blair Airport (hereinafter referred to as Works). Shri S.N. Kanungo passed away in the year 2012 and is represented by legal heirs in the present proceedings as respondent Nos.2 to 7, while respondent No.1 is the contract awarding authority.3. Shri S.N. Kanungo entered into an arrangement whereby the Works were assigned to Vaishno Devi Constructions, a sole proprietorship concern of Prabhat Bhushan Kanungo (appellant No.1 in CA No. 18278 of 2017). It appears that appellant No.2, Surya Prakash Kanungo was also taking care of the work. A different part of the work was assigned to BeeDee Builders, a sole proprietorship of Swapna Das and, once again, apparently her husband Bijoy Kumar Das was playing a role in executing the Works as the said two parties are impleaded as appellant Nos.1 and 2 in CA No. 18279/2017. Shri S.N. Kanungo was a special class contractor and it appears from the case set up by the appellants that they were to act on behalf of S.N. Kanungo to carry out the Works for which they were to be paid monthly remuneration and hiring charges of certain equipment that was to be provided by the appellants herein. The appellants claim to have supervised the work of extension of runway on behalf of Shri S.N. Kanungo but apparently some part of their dues were not paid. Shri S.N. Kanungo is stated to have executed an Assignment Deed along with a cheque in favour of Mr. Prabhat Bhushan Kanungo for Rs.1 crore as security on 27.10.1999 to secure payment of such dues. The claims were in respect of both the appellants.4. It appears that some disputes arose between Shri S.N. Kanungo and respondent No.1 which were referred to arbitration and an award was passed in his favour on 22.03.1999. Shri S.N. Kanungo received the money under the award on 28.01.2001.5. Another reference was made in respect of another set of non-payments claimed by Shri S.N. Kanungo from respondent No.1.The dispute was referred to the sole arbitration of Shri T.K. Mishra, who passed an award in favour of S.N. Kanungo on 31.10.2006. Respondent No.1 filed proceedings before the High Court of Calcutta to set aside the award under Section 34 of the A&C Act. The proceedings succeeded in terms of an order of the learned single Judge of the High Court dated 28.09.2007. On appeal being preferred before the Division Bench of the High Court, the judgment of the learned single Judge was reversed by a judgment dated 03.03.2008 and the appeal was allowed.6. Shri S.N. Kanungo, in order to recover the amount, filed an execution case before the District Judge, Port Blair, being Other Execution Case No.01/2008.During the pendency of the execution proceedings, respondent No.1 filed an SLP in the Supreme Court, being SLP(C) No.21507/2008, challenging the judgment of the Division Bench dated 03.03.2008 and seeking stay of the execution proceedings. Notice was issued and stay of execution proceedings was granted in his favour. During the pendency of the SLP, Shri S.N. Kanungo passed away in 2012 and was substituted by his legal heirs in both the SLP and the execution proceedings. The Supreme Court ultimately dismissed the SLP vide order dated 19.01.2016 making only an alteration of the rate of interest while observing that the interest awarded was on the higher side and, therefore modifying it to 8% (simple interest) from the date of the bill.7. It is at that stage that the appellants in the two appeals before us came into the proceedings by filing objections in the form of an application under Section 47 read with Order 22 Rules 1&2 of the CPC read with Sections 2(1)(g) and 36 of the A&C Act.8. The claims made by the appellants were on the basis of an assignment made by Shri S.N. Kanungo and, thus, sought to keep any order for release of the amount in abeyance in full or in part to protect their interests. It appears that the prayer for interim relief did not succeed as the applications were dismissed on 08.04.2016.Ultimately on 26.12.2016, both sets of objections claiming a right in the decretal amount were also rejected by the executing court on the basis that the Assignment Deed and cheque had not been proved in those proceedings to establish the fact of assignment. It may, however, be noted that there was no trial in this matter before the executing court.9. The aforesaid order was then sought to be assailed before the Calcutta High Court by filing a civil revision petition which was dismissed vide impugned judgment dated 13.02.2017. On the SLP being preferred, notice was issued on 17.04.2017 and a direction to maintain status quo was also simultaneously issued pending disposal of the matter. Since the dispute between the two sets of private parties would cause liability of interest on respondent No.1, in terms of order dated 06.03.2018, the request of respondent No.1 to deposit the decretal amount in the executing court was accepted. One would presuppose that this amount would be kept in an interest-bearing deposit.

Court's reasoning:
23. On analysis of the submissions there is little doubt that the impugned judgments would have been completely in accordance with law if the amendments were not made in 1976 and would have been fully covered by the judgment in Jugalkishore Saraf (supra). Thus, the only aspect which we have to consider is whether that amendment made any difference to the legal position as enunciated in the said judgment.24. It is an admitted position that the explanation was added to Order XXI Rule 16 which did not exist earlier, pursuant to the recommendations made by the Law Commission of India in its 54th Report on the Code of Civil Procedure, 1908. The Explanation was so added due to conflicting High Courts decisions on the question, i.e., whether a person who does not have a written assignment of the decree, but who has succeeded to a decree holders right, is entitled to such decree under Section 146 of the CPC.25. In Penniah Pillai v. T. Natarajan Asari AIR 1968 Mad 190  the Madras High Court decided this question in the affirmative. The high court gave liberty to the transferees to avail of Section 146 if they did not fall within the provisions of Order XXI Rule 16 of the CPC and, thus, would cover transferees of a property after the decree was passed. In this behalf the learned Judge disagreed with an earlier judgment of the Madras High Court in K.N. Sampath Mudaliar v. Sakunthala Ammal 1964 2 MLJ 563 opining that Section 146 of the CPC could not have the effect of overriding Order XXI Rule 16 of the CPC. The Law Commission agreed with the view taken in the former judgment (which was delivered at a later point of time) and further noted that this view was supported by the High Courts of Andhra Pradesh Satyanarayana v. Arun Maik AIR 1955 AP 81, Patna Ramnath v. Anardei Devi AIR 1964 Pat 311  and Kerala Mani Devasia v. Varkey Scaria (1960) Ker. LT 1077.as well. Thus, the Law Commission recommended amending Order XXI Rule 16 to clarify that it does not affect the provisions of Section 146 and that a transferee of rights in the subject matter of the suit can obtain execution of a decree without separate assignment of the decree. The objective appears to be to not have multifarious proceedings to determine the issue of assignment, but to determine the issue of assignment in the execution proceedings itself.26. In the conspectus of the aforesaid we are of the view that the objective of amending Order XXI Rule 16 of the CPC by adding the Explanation was to deal with the scenario as exists in the present case, to avoid separate suit proceedings being filed therefrom and to that extent removing the distinction between an assignment pre the decree and an assignment post the decree. Thus, what has been discussed even in the judgment in Jugalkishore Saraf(supra) as a view based on the equitable principle was sought to be incorporated in Order XXI Rule 16 of the CPC by adding the Explanation, something which had not been done earlier. Once the legislative intent is clear, and the law is amended, then the earlier position of law cannot be said to prevail post the amendment and it is not in doubt that the present case is one post the amendment.27. We may further add that while considering the divergent views of the High Courts, the Law Commission took note of the fact that two different interpretations of Jugalkishore Saraf (supra) had been adopted. Thus, the Law Commission really sought to clarify the legal position so that the conflicting interpretation of the Supreme Court judgment would not survive. The Explanation clearly stipulates that nothing in Order XXI Rule 16 of the CPC would affect the provisions of Section 146 and the transferee of the right in property which is subject matter of a suit may apply for execution of the decree without separate assignment of the decree as required by law. No doubt the appellants are not parties in the suit proceedings but they claim as assignees of the decree holder.