Supplemental Proceedings in CPC

Supplemental Proceedings in Section 94 of Civil Procedure Code

Overview:

Supplemental proceedings are legal actions initiated by a judgment creditor (the party who has obtained a judgment or decree) against a judgment debtor (the party obligated to fulfill the judgment or decree) when the latter fails to comply with the court's order. These proceedings are designed to compel the judgment debtor to satisfy the outstanding debt or obligation.

While Orders XXXIX and XL of the Code of Civil Procedure (CPC) provide specific frameworks for temporary injunctions and the appointment of receivers, respectively, their provisions are not exhaustive. The courts possess inherent powers beyond those expressly enumerated in the CPC. Generally, a receiver will not be appointed if the circumstances do not fall squarely within the purview of Order XL, and a temporary injunction may not be granted if the facts and circumstances of the case do not satisfy the criteria outlined in Order XXXIX. However, where the interests of justice so demand or compelling reasons necessitate such intervention, courts are not precluded from exercising their inherent powers. In such instances, the court may, in its discretion, grant relief by way of a temporary injunction or appoint a receiver to safeguard the rights of the parties involved. This inherent power allows courts to address situations that may not be perfectly encompassed within the specific provisions of the CPC, provided that the exercise of this power is consistent with the principles of justice, equity, and good conscience, and is not used arbitrarily.

Case Law: 2013  CLD 1965 Karachi

Where there are compelling reasons and interest of justice requires or demands, the courts are neither helpless nor are they fettered by the specific provisions of Order XXXIX or Order XL, C.P.C., and in the exercise of their inherent jurisdiction will certainly grant relief by way of temporary injunction or through the appointment of a Receiver to protect the rights of citizens. It is not possible and prudent to specify or identify the various situations or reasons where or when the courts will exercise their inherent powers under S.94 or S.151, C.P.C. for granting a temporary injunction or appointing a Receiver. In each case, the court evaluates the overall situation considering the peculiar facts and circumstances on record and then the decision is taken whether in the interest of justice inherent powers are to be exercised or not. Each case has its own different set of facts and again and again new situations come before the court and, therefore, it is not possible to lay down specific principles restricting the power of courts to exercise their inherent jurisdiction in certain specified situations or for certain reasons only. If this were done, it would only impede the administration of justice and restrict the development of law.

Under Clause (e) of S.94, C.P.C., in order to prevent ends of justice from being defeated, the court may, if it is so prescribed, make an interlocutory order as may appear to the court to be just and convenient. Passing of an interim order is on the part of the working of the judicial system and no separate or specific provision is necessary to empower a court to issue an interim order. The power to grant interim relief vests in a court as a necessary corollary to the power to grant main relief. Not only under O.XXXIX, Rr. 1, & 2, C.P.C. injunction can also be granted under Ss.94 and 151, C.P.C.

Relevant Provisions: 

Sections 94 and 95 of the Civil Procedure Code are relevant sections. They deal with the supplemental proceedings of the Code. 

Meaning of Supplemental Proceedings:

Supplemental proceedings mean to an end and not an end in themselves. Thus suit only for the appointment of a receiver is not maintainable under this section. [AIR 1983 Calcutta 6]

The judgment in AIR 1983 Calcutta 6 emphasizes that supplemental proceedings are a means to an end, not an end in themselves. This means that the primary purpose of these proceedings is to enforce an existing judgment or decree, not to initiate a fresh cause of action.

Consequently, the court ruled that a suit solely for the appointment of a receiver would not be maintainable under the provisions for supplemental proceedings.

The object of Supplemental Proceedings: 

Administration of justice to help the needy and aggrieved is the sole purpose for which the Courts are established, A civil Court has all the powers made available to it under the Code of Civil Procedure and in a suitable case passes an incidental or supplemental order following the procedure prescribed in the Code. Provisions of section 94 are supplemental and enabling, conferring general powers upon a Court to issue interlocutory orders as may appear just and convenient to prevent ends of justice from being defeated.

Inherent Powers of The Court under 151

Section 94 prescribes rules to enable the Court to administer justice to the parties. The primary object of framing the rules is to achieve the ends of justice and not to defeat it. Therefore,  the Court is vested with inherent power to rectify any error, or mistake and to cover an irregularity in the proceedings carried out by it. Once an omission is found to have been committed by the parties or by the Court, on the satisfaction that the omission, mistake, or irregularity is not malafide. It is enjoined upon the Court to rectify and cure the same in the exercise of its inherent powers contained in sections 94 and 151, of the Code of Civil Procedure. The court has inherent powers to order attachment even before an application is made for execution.

Case Law: PLD 1983 Karachi 303

Held: In this case the court held that if the provisions of section 94 were not there in the Code, the court could still issue temporary injunctions, but it could do that in the exercise of its inherent jurisdiction. it is in the incidence of the exercise of the power of the court to issue a temporary injunction that the provisions of section 94 of the code have then effect and not in taking away court to exercise its inherent power.

What is a supplemental Proceeding? 

Under section 94, the Court has the power to initiate supplemental proceedings as follows: 

1. Issue Warrant of Arrest:

For the production of a party, the Court can issue a warrant of arrest and the defendant may be asked to furnish the security for his appearance, and in case of default he may be sent into civil prison.

(i) Example: 

A is a defendant in certain civil proceedings before the Court and avoids appearing. The Court can issue his warrant of arrest through incharge of the police station and compel him to furnish the security for appearance.

(ii) Rules Regarding Procedure:

Order 36, rules 1 to 4, and section 136 are relevant to the above rule.

(a) Applicability of Section 136:

Section 136 of the Code of Civil Procedure applies specifically when an arrest or attachment order has been issued by a court under provisions of the Code that are not related to the execution of decrees. For example, this section would be applicable in cases where an arrest is ordered under Order 39 Rule 2 (relating to temporary injunctions). The key condition for the applicability of Section 136 is that the person to be arrested or the property to be attached is located outside the jurisdictional limits of the court that issued the original order. In such instances, the arrest or attachment must be carried out by the District Court or a subordinate court within whose jurisdiction the person resides or the property is situated.

(b) Arrest before Judgment:

Order 36, Rules 1 to 4 of the Code of Civil Procedure (CPC) outlines the procedure for arrest before judgment.

Rule 1: 

In order to prevent attempts on the part of the defendant to defeat the decree that they ultimately be passed against him the coercive process is available against a judgment-debtor only and that too after the passing of the decree.

The defendant is entitled to show that: 

• (i) He is not going to leave the local limits of the jurisdiction of the Court, or 
• (ii) He is not going to abscond or to leave the limits of the jurisdiction of the Court with the aim of obstructing the plaintiff, or 
• (iii) The suit is not bonafide 

Rules 2:

The security is to be furnished only for appearance during the pendency of the suit and the liability of the surety which arises on the failure of the defendant to appear is enforceable under section 145 The security should be limited to the amount claimed.

Rule 3:

A surety for the appearance of a defendant may at any time apply to the Court in which he became such surety to be discharged from his obligation.

Rule 4:

On failure to furnish security or to make a sufficient deposit or to find fresh security, the defendant can be committed to custody.

2. Furnish Security to Produce Property:

The court may direct the defendant to furnish the security to produce any property belonging to him which is under dispute before the Court and if the defendant fails the Court can issue the order of attachment of the property.

(i)Example:

A is a defendant in civil proceedings before the Court under dispute of A's property. In Order to meet the ends of justice the Court can demand security from the defendant that he will not dispose of the said property till the decree.

(ii) Relevant Provision Regarding Procedure:

Order 38 rules 5 to 12 and Order 39 rule 7 and section 136 are relevant provisions, 

(a) Order 38

Rule 1: 

The object of attachment before judgment is to prevent an attempt on the part of the defendant of defeating the realization of the decree which may ultimately be passed against him. The rule does not contemplate an immediate order of attachment, but the Court must first call upon the defendant to furnish security or to show cause why security should not be furnished. Attachment under this rule is ordered if the Court is satisfied that the defendant is about to dispose of the whole or any part of his property with intent to obstruct or delay the execution of the decree. 

Rule 6: 

A final order of attachment under rule 6 is issued after the defendant fails to show cause made absolute. Where the defendant shows cause or furnishes the required security the Court shall order the attachment to be withdrawn. 

Rule 7: 

The rule applies not only to property which is the subject matter of the suit but also to property as to which questions might arise in the suit. The Court can order for:

• (a) Inspection of Property 
• (b) Or to dig up buried property
• (c) Or to make inventories
• (d) Or to authorize a search

3. Grant of Injunction: 

Courts have the authority to issue temporary injunctions to prevent immediate harm. Disobedience of an injunction can result in penalties for the violating party. For a deeper understanding of this legal concept, please refer to our previous articles: 'The Role of Perpetual Injunctions,' 'Temporary Injunctions in Civil Proceedings,' 'Grant or Refusal of Injunctions in Civil Cases: General Principles,' and 'Injunctions in Civil Litigation: Understanding the Rules.

Example: 

A and B are in dispute before the Court in a suit of specific performance regarding the sale of a house. Order 39 rules 1 and 2 empower the Court to issue a temporary injunction to secure the transfer of property to any other person during the pendency of suit on the order of the Court and The defendant can be sent into a civil jail for Six months. 

Rules Regarding Procedure: 

Order 39 and rules 1 to 5 prescribe the procedure regarding a temporary injunction. These rules indicate how a Court can grant a temporary injunction.

Temporary injunction:

An injunction is a judicial process whereby a party is ordered to do or to refrain from doing a particular act and as such can either be mandatory or prohibitory in nature. Injunctions can further be divided into temporary and permanent. 

Rule 1: 

Rule 1 outlines the circumstances under which a court may grant a temporary injunction. The following conditions must be met before an injunction can be issued by the court under this rule:

• (a) The property in dispute is at risk of being wasted, damaged, or alienated by any party to the suit.
• (b) The property in dispute is in danger of being wrongfully sold in the execution of a decree.
• (c) The defendant threatens or intends to remove or dispose of the property with the intent to defraud their creditors.

Rule 2:

Rule 2 governs the issuance of temporary injunctions to prevent apprehended breaches of contract or other potential harms. Importantly, an injunction under this rule cannot be granted if the act complained of has already occurred. Furthermore, an injunction under Rule 2 can only be directed against a defendant.

Rule 3:

An injunction should not be issued ex-parte unless the very object of issuing the same is irreparable injury, injunction should not be issued without notice.

Rule 4:

Any order of an injunction may be discharged or varied, or set aside by the Court, on an application made thereto by any party dissatisfied with such order. Ordinarily, once a Court has passed an order granting or refusing to grant an injunction after hearing both the parties, it will not subsequently interfere with such an order. This rule provides an alternative to the filing on an appeal by way of approaching the same Court.

Case Law: 1994(0)MPLJ783 Madhya Pradesh High Court

The opening part of Rule 4 uses the terms - "discharged, varied or set aside" which cover all possible eventualities in which an order of injunction originally issued may be tampered with. What is enacted by Second Proviso is nothing but a reflection of the principles of res judicata/constructive res judicata and issue estoppel. In the leading case of Arjun Singh v. Mohindra Kumar, AIR 1964 SC 993, their Lordships of the Supreme Court have said :

"Though Section 11 of the Civil Procedure Code clearly contemplates the existence of two suits and the findings in the first being res judicata in the later suit, it is well established that the principle underlying it is equally applicable to the case of decisions rendered at successive stages of the same suit or proceeding."

Interlocutory orders are of various kinds; some like orders of stay, injunction, or receiver are designed to preserve the status quo pending the litigation and to ensure that the parties might not be prejudiced by the normal delay which the proceedings before the Court usually take. They do not, in that sense, decide in any manner the merits of the controversy in issue in the suit and do not, of course, put an end to it even in part. Such orders are certainly capable of being altered or varied by subsequent applications for the same relief, though normally only on proof of new facts or new situations that subsequently emerge. As they do not impinge upon the legal rights of parties to the litigation the principle of res judicata does not apply to the findings on which these orders are based, though if applications were made for relief on the same basis after the same has once been disposed of, the Court would be justified in rejecting the same as an abuse of the process of Court.

4. Powers of Punishment: 

If a party disobeys a court order regarding an injunction, the court has the authority to impose penalties on the offender. This may include imprisonment for up to six months in a civil jail.

5. Appointment of a Receiver: 

Appointing a receiver is a legal procedure where a court designates an impartial third party to oversee and safeguard property involved in a legal dispute. This action is typically implemented when there's a risk of the property being damaged, wasted, or mismanaged. For a comprehensive discussion on this topic, please refer to our previous article titled 'Appointment of Receiver: Powers and Duties'

The Court has the authority to appoint a receiver for any property as deemed necessary. For example, in a civil suit between A and B regarding the partition of property involving gardens, crops, and land, the court may appoint a receiver to safeguard the income and property in dispute.

Provisions regarding procedure: 

Order 40 rules 1 to 5 and section 51 describe the procedure for the appointment of a receiver.

Section 51 States: 

This is an equitable relief which is allowed on the ground that there is no effective remedy by execution at law. Receivers are usually appointed to realize debts or collect rents, or earnings. This is an equitable process for the execution of the decree and recourse to it is within the discretion of the Court. A receiver can be appointed by the Court suo motu.

Order 40 rule 1: 

Order 40 states the procedure to appoint a receiver. The object behind the appointment of a receiver is to preserve the status quo during the pendency of litigation and in terms of section 94 to prevent the ends of justice from being defeated. A receiver can only be appointed of property which is the subject matter of the suit.

(ii) Guiding Principles regarding Appointment of a Receiver: 

Whilst considering the question of appointing a receiver, the Court is guided by the following judicial principles:

• (a) That there is a prima facie title to the property. The applicant must make out a strong prima facie case. 
• (b) That the property is in danger of being wasted if a receiver is not appointed. A mere apprehension of mismanagement or misappropriation is not sufficient. 
• (c) That it is just and convenient to appoint a receiver. 

Rule 2:

Order 40 Rule 2 addresses the remuneration of a receiver. Typically, a receiver's remuneration is determined as a percentage of the assets managed. However, the Court retains the discretion to order a fixed remuneration amount. Moreover, the Court has the authority to adjust the remuneration amount as necessary.

Rule 3:

Rule 3 outlines the duties of a receiver. These include:

• (a) Providing any required security to the Court, ensuring proper accounting for all property received.
• (b) Submitting accounts to the Court at the specified intervals and in the required format.
• (c) Disbursing funds as directed by the Court.
• (d) Being held liable for any losses to the property resulting from willful default or gross negligence.

Rule 4: Enforcement of Receiver's Duties

Purpose: This rule outlines the court's powers to ensure that the receiver fulfills their responsibilities as outlined in Rule 3.

Rule 5: Appointment of Collector as Receiver

Purpose: This rule allows the court to appoint the Collector (a government official responsible for revenue collection and administration in a particular district) as a receiver in certain circumstances.

Circumstances: This is typically considered when:

The property in question is land or other immovable property subject to revenue laws. The court deems it necessary or expedient to appoint the Collector due to their expertise and authority in managing such properties.

Considerations: The court will carefully consider the specific circumstances of the case and the potential advantages and disadvantages of appointing the Collector before making this decision.

5. Interlocutory Orders:

An interlocutory order may be interpreted as one which does not finally determine a cause of action, but the same only decides some intervening matter pertaining to the cause, and which requires further steps to be taken in order to enable the court to adjudicate the cause on merits. Legislature, under S.94(e), C.P.C. has vested the court with vast powers to make such 'interlocutory order' as may appear to the Court to be just and convenient, in order to prevent the ends of justice from being defeated. An interlocutory order exists on file till the final determination of the cause, even after the same has been acted upon.

Orders, granting temporary injunction, appointing a receiver, attaching a property before judgment, and other interlocutory orders, passed by the court and acted upon during proceedings of a case, do not exhaust and the same survive on file of a case, till the final determination of the case by Trial Court---'Interlocutory order' exhausts and becomes merged into final order made in the case.

The court can also issue interlocutory (Interim) orders as may be reasonable and fit.

(i) Example: 

A and B are in dispute before the Court regarding a suit for possession of the property. B is a seriously sick person and cannot appear before the Court for the recording of evidence and his statement in his favor. The Court can appoint any person as local commissioner to record statements on behalf of plaintiff (B). 

(ii) Rules Regarding Procedure:

Order 39, Rules 6 through 10, outline the procedures for obtaining interlocutory orders.

Rule  6:

Rule 6 specifically addresses the court's authority to order the sale of perishable or rapidly deteriorating movable property that is the subject matter of a lawsuit or has been attached prior to judgment. The court has the discretion to determine the appropriate individual to conduct the sale, as well as the method and terms of the sale, based on the specific circumstances of the case.

This rule is applicable only where the property which is the subject matter of the suit has been attached before judgment in the suit.

Rule 7:

Rule 7 addresses the court's authority to issue orders for the preservation and inspection of property relevant to a lawsuit.

• (a) Upon application by a party, the court may, under appropriate conditions:
• (i) Order the detention, preservation, or inspection of any property involved in the suit.
• (ii) Authorize a designated individual to enter onto or into any land or building in the possession of another party for the purposes of inspection or preservation.
• (iii) Authorize the taking of samples, or the conducting of observations or experiments, to gather necessary information or evidence.
• (b) The provisions governing the execution of legal processes shall apply, with necessary modifications, to individuals authorized to enter property under this rule.

Rule 10:

Rule 10 pertains to situations where the subject matter of a lawsuit involves money or other deliverable items. If a party to the suit acknowledges holding such money or items as a trustee for another party or admits that the money or items rightfully belong to another party, the court may order the deposit of these items with the court or their direct delivery to the rightful party. This order may be accompanied by security measures as deemed necessary by the court. It's crucial to note that this rule applies only when the party explicitly admits to holding the property in question.

Conclusion

Section 94 of the Code of Civil Procedure (CPC) empowers courts with the authority to issue a range of interlocutory orders. These orders are designed to prevent the frustration of justice and ensure a fair and just outcome in legal proceedings.

When there is a genuine concern that the ends of justice may be obstructed, the court possesses the discretion to take necessary measures. This may include:

• Issuing an arrest warrant for the defendant.
• Requiring the defendant to provide security for their property.
• Granting a temporary injunction to prevent harm or interference.
• Appointing a receiver to manage and protect disputed property.
• Issuing any other order deemed necessary to ensure a just and equitable resolution to the case.

These powers are intended to be used judiciously and only when necessary to safeguard the integrity of the legal process and protect the rights of all parties involved.

Related Questions:

Q: Write a detailed note on “Supplemental Proceedings” as given in Section 94 C.P.c. 

Q: What are supplement proceedings that the Court is empowered to take to secure the ends of justice?