There is no prohibition for a decree-holder to seek an order of arrest of the judgment-debtor from the execution Court before seeking attachment of his properties, holds the Madras High Court

The Madras High Court Bench at Madurai has held that there is no prohibition under Code of Civil Procedure (C.P.C.) for a creditor bank to seek a court order for arresting loan defaulters even before exercising the option of filing an application in the court concerned to seek attachment of their properties.

Madras High Court

Justice M. Duraiswamy passed the judgment in a civil revision petition filed by noted television personality Mr. N.S.S. Nellai Kannan challenging the order of arrest passed by the lower Court in an Execution Petition filed by his creditor-bank. 

The judgment of the Court will clea the decks for the arrest of Mr. N.S.S. Nellai Kannan and his son N.K. Arumugam for failing to repay a personal loan of Rs 5 lakhs obtained from the Tamilnad Mercantile Bank in the year 2003.

Observing that the third Additional District Sessions Court in Tirunelveli had rightly ordered the arrest of the loan defaulter and his son, the guarantor, on April 30, 2012, the Court directed the lower court to complete the execution proceedings within three months. The bank’s counsel, V. Karthikeyan, said the orator had taken the loan on December 13, 2003, and agreed to repay it in 60 equated monthly instalments of Rs 11,784, including 14.5 per cent interest per annum. His wife and son were the guarantors.

When he defaulted, the bank filed a civil suit before the District Court in Tirunelveli in December 2006 for recovering the principal and interest totalling Rs 6.52 lakh. Mr. N.S.S. Nellai Kannan contested the suit by accusing the bank of charging an exorbitant interest rate.

The District Court on July 1, 2010, decreed the suit in favour of the bank and directed the noted television personality Mr. N.S.S. Nellai Kannan to repay the amount along with 17.75 per cent interest per annum from the date of filing of the suit. It also ordered him to pay Rs 58,061 towards litigation expenses.

When Mr. Nellai Kannan did not comply with the order, the bank filed an execution petition in 2012 and sought direction to arrest him and his son and lodge them in a civil prison for recovery of the loan amount which had risen to over Rs 10.62 lakh due to non-payment for years.

The District Court in an order passed in the said execution petition ordered their arrest and production before it on June 8, 2012. 

Immediately, the father-son duo filed a civil revision petition in the High Court Bench here in 2012 and obtained an order of stay of the impugned order thereby managing to keep the arrest order in abeyance until disposal of the civil revision petition.

 

Justice Duraiswamy before whom the revision came up, found the same to be devoid of merits and accordingly dismissed it by his judgment.