SYED NAJAM-UL-HASSAN KAZMI, J.---This judgment will dispose of E.F.A. No, 622 of 1999 which arises from order, dated 14-12-1999 of the learned Judge, Banking Court No, IV, Lahore.
2. In a suit for recovery of Rs,5,99,996, with additional lease rentals, filed by the respondent (Grays Leasing Limited), the parties reached a settlement, in terms whereof a decree was passed on 17-11- 1998 for the recovery of Rs,7,01,924 against the appellants who were made jointly and severally liable for the payment as per terms of the settlement in the compromise decree. Later an execution petition was filed to enforce the decree when the appellants raised certain objections. The objections were rejected vide impugned order of the learned Judge Banking Court and simultaneously, non-bailable warrants of arrest of judgment-debtors were ordered to be issued.
3. Learned counsel for the appellants contended that in terms of the compromise, the appellants were not defaulter, the execution application was premature, the respondent unilaterally terminated the lease took over the. Machinery and that the parties should be subsequently governed by the original terms' of the lease. It was added that the appellants objection to the extent of adjustment of advance money was allowed but the remaining claim for the adjustment of loss value of the leased equipment as envisaged in the schedule of lease agreement was declined. It was maintained that due to premature termination of the lease agreement, appellant suffered immensely. Concluding it was submitted that the pre-condition of section 51 and Order XXI, Rule 37 of C.P.C. Were non-existent hence, the order of issuing non-bailable warrants of arrest was untenable.
4. Learned counsel for the respondent, contended that even if the execution petition was premature, the cause matured during the pendency of the execution proceedings as the appellant admittedly did not pay a single instalment and that the possession was taken over after the maturity of cause of action and also that the executing Court could not go beyond the terms of the compromise decree. Learned counsel submitted that the claim of alleged losses due to termination of lease could not be entertained in execution proceedings. Learned counsel, however, did not oppose the argument that the warrants of arrest could not be issued without satisfying the preconditions of section 51 of C.P.C., though other mode of execution could be followed.
5. On deeper scrutiny of the record, it is observed, that the suit was decreed in terms of the compromise which provided that the appellants would pay Rs,5,99,996 along with mark-up at the rate of Rs,22% from the date of decree till the realization and at the rate of Rs,15% from the date of institution of the suit till the date of decree. The total amount agreed to be paid in 15 equal monthly instalments was Rs,7,01,924, as on 21-9-1998. It was agreed that in case of default in payment of two consecutive instalments, the total amount of Rs,7.01,924, as on 21-9-1998 would be payable with mark-up at the rate of Rs,22% and in such eventuality, the decree-holder would have a right to forego the future lease rented as per original agreement and repossess the leased assets. First instalment was payable by 20th of January, 1999.
6. Admittedly the suit was decreed on 17-11-1998, in terms of the compromise Exh.P/A while execution petition was filed on 10th of February, 1999. In terms of the consent decree, the first instalment was payable on or before 20th. Of January, 1999 and the appellant could be deemed as defaulter on non-payment of two consecutive instalments. It would, thus, mean that the default could occur after 20th of February, .1999 which could permit the decree-holder to exercise option of foregoing the future lease rentals and repossessing the lease assets. This being so, the execution petition was premature as it was admittedly filed on 10th of February, 1999. Be that as it may, the possession was taken over on 14-4-1999, on the maturity of cause. On being asked, learned counsel for the appellant did not deny that no instalment was paid in terms of the compromise decree. In this situation, the decree-holder could possibly enforce its option to repossess lease assets on 14-4-1999. It is a settled rule that even if the proceedings are initiated premature, the Court is not denuded of its jurisdiction to grant relief, if the cause matures during the pendency of the proceedings. Reference can be made to Abdur Razaq v. Abdul Hamid 1979 SCM R 534.
7. Since two instalments were not paid consecutively, by 20th of February, 1999, therefore, the decree-holder was rightly allowed in execution to take over the leased assets.
8. As regards the argument that the action was premature, there was no justification for termination of the lease agreement and that the appellant suffered immensely, such questions could not be raised or decided in execution proceedings as the same do not pertain to the execution, discharge or satisfaction of the decree. If the appellant claims to be aggrieved of the premature termination of lease agreement and feel that some losses were caused on account of any unwarranted action by not continuing the lease agreement, they can, if so desire, avail independent remedy of a suit to enforce the claim of damages. Nevertheless the executing Court could not go beyond the compromise decree and had to enforce the decree as it is. Since in terms of the decree the two instalments were note paid till 20th of February, 1999, the executing Court rightfully proceeded with the enforcement of the decree. It is also observed that the learned Judge Banking Court did allow the adjustment of the advance amount and rightly so, as the appellant could validly ask for the adjustment of the said amount towards partial satisfaction of the decree.
9. In so far as the order of the Banking Court regarding issuance of warrants of arrest is, concerned, the same cannot possibly be affirmed. Order XXI, Rule 37 of C.P.C. Contemplates that where an application is for the execution of decree for payment of money by arrest and detention in prison of the judgment-debtor who is liable to be arrested, the Court shall, instead of issuing a warrant for arrest, issue a notice calling upon the judgment-debtor(s) to appear in Court and to show cause, why he should not be detained in prison. Notice can be dispensed with only if the Court is satisfied by affidavit or otherwise that with the object of delaying execution of decree, the judgment-debtor was likely to abscond or leave the local limits of jurisdiction of the Court. Sub-rule (2) of Rule 37 of C.P.C. Provides that if appearance is not made in obedience of the notice, the Court shall, if the decree-holder so requires, issue a warrant for the arrest of the judgment-debtor. Under Rule 40 or 41 of Order 21, C.P.C. When the judgment-debtor appears before the Court in obedience of the notice or is brought before the Court, after being arrested in execution of decree, the Court is required to proceed for hearing of decree-holder and to take such evidence as may be produced by it in support of the application for execution, where-after the judgment-debtor has to be given an opportunity of showing cause why he should not be detained in prison. Pending inquiry, the Court has the discretion to order that the judgment-debtor be detained in custody of an officer of the Court or be released on furnishing of security to the satisfaction of the Court, for appearance when required. It is only after the conclusion of inquiry that the Court can order for detention of judgment-debtor in prison, which order will be subject to the satisfaction of pre-conditions of section 51 of C.P.C. Section 51 of C.P.C. Requires existence of certain preconditions to detain the judgment-debtor in prison. Proviso to section 51 of C.P.C. Contemplates that the execution by detention in prison shall not be ordered, unless after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons to be recorded in writing, if satisfied that the judgment-debtor, with the object of obstructing or delaying execution of decree, is likely to abscond or leave the local limits of jurisdiction of the Court or has, after the institution of the suit, in which decree was passed, dishonestly transferred, concealed or removed any part of his property or committed any other act of bad faith in relation to his property or the judgment-debtor has, or has had since the date of decree the means to pay the amounts of decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same or that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account.
10. Deeper analysis of the rules referred to hereinabove, makes it obvious that in the first instance, notice has to be given to the judgment-debtor to explain as to why he should not be detained in prison. On his appearance the Court has to make an inquiry, record evidence, give opportunity of evidence in rebuttal and thereafter to pass an order on the request for detention in prison, in accordance with law. During these proceedings the judgment-debtor can be asked to furnish security for appearance, which does not mean security for the payment of decretal amount.
Without making any inquiry the Court cannot straightaway order detention in civil prison. Likewise, unless the prerequisites of section 51 of C.P.C. Are proved to exist, detention in prison cannot be ordered. The preconditions, as highlighted hereinabove, are that judgment-debtor should be proved to have made attempt to leave the limits of Court, to obstruct the decree or execution thereof or dishonestly transferred the property after the institution of the suit to avoid the decree or had the means to pay the decree and neglected to do the same. Without satisfaction of these preconditions, no mechanical order for detention in prison can be passed.
11. In the present case the order for arrest of the judgment-debtor was passed mechanically without attending to the real spirit of provision of law. The order of the learned Judge, Banking Court, to the extent of issuing warrant of arrest cannot be affirmed. The appellants are entitled to join the proceedings by furnishing simple security for appearance in the Banking Court. Application for detention in prison of the judgment-debtors will have to be decided by the learned Judge, Banking Court after necessary inquiry and satisfaction of the conditions highlighted hereinabove.
12. For the reasons above, this appeal is partly allowed, the impugned order to the extent of issuing warrant of arrest of the petitioners is set aside, however, the order to the extent of rejecting objections, is not disturbed, subject to the observations hereinabove. Appellants are allowed to join execution proceedings on furnishing of simple security of third person, for their appearance in the proceedings. The application. Under Order XXI, Rule 37 read with section 51, C.P.C. Shall be decided by the learned Judge, Banking Court, in accordance with law and on its own merit after making necessary inquiry and allowing opportunity of evidence, in the light of the observations hereinabove.