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Judgment
King, J.—This is an appeal filed jointly by the judgment-debtor in O.S. No. 61 of 1936 and a surety who gave a bond for his appearance
on the 4th October, 1939.
The facts of the case are that on the 1st August, 1939, the judgment-debtor was arrested in execution of the decree in O.S. No. 61 of 1936
and was brought before the Court which had given him time for three days for making some attempt at paying off part of the decree. The inquiry
contemplated by Order 21, Rule 40 was adjourned for those three days. On the second of August, the judgment-debtor informed the Court that
he had made an application to the Debt Conciliation Board and applied for two reliefs:
(1) that the execution proceedings against him might be stayed in accordance with the provisions of Section 25 of the Debt Conciliation Act, and
(2) that he might be released from custody.
On the 4th August, the Court passed orders granting stay and granting release from custody upon the production by the judgment-debtor of
security for his appearance on the 4th October. As already stated, the second appellant, the surety executed a bond pledging himself that the
judgment-debtor would appear on that date. The judgment-debtor was accordingly released.
In this, appeal it is argued that the order calling upon the judgment-debtor to furnish security for his appearance was ultra vires the executing Court.
It is argued that u/s 25 of the Debt Conciliation Act, stay of proceedings must be unconditional and that, in the present case, the fact that two
orders were passed on the same day, one granting stay and the other calling for security meant in effect that the stay granted was not unconditional.
On that assumption with regard to the facts, our attention was directed to a judgment of Horwill, J., reported in Dara Tripura Sundaralingam Vs.
Vinjamuri Venkataramanayya, in which the learned Judge'' has pointed out that when a conditional order of stay is passed that necessarily involves
the power, of the Court to, refuse a stay in case, the condition is not satisfied) and therefore, it must be directly contrary to the provisions of
Section 25 of the Act which, peremptorily directs that stay shall be granted. We are of opinion that this decision has no bearing upon the facts of
the present case however, as there is no sign here in the Court''s order of the grant of stay being conditional.
It was however argued further that, when an application is made u/s 25 of the Act to the Court to stay proceedings; the Court has no power to
pass any order whatever. From the moment it is apprised of the application to the Debt Conciliation Board its powers are completely paralysed.
We are not prepared to accept that argument and indeed would point out that, if it were accepted, it amounts to this: that the appellant is
contending that the very orders which procured his release, were ultra vires the Court. We consider that Section 25 necessitates/only that
execution proceedings should be stayed and can have no prohibitive effect upon the power of the Court to make provision for continuing execution
proceedings. in case necessity should arise in the future. The Court must be able to appoint a date for further proceedings, should they become
necessary. And we think the Court must be able to take such action as Rule 40 contemplates in order to dispose of the urgent question whether
the judgment-debtor shall remain in custody or be released. If the argument of the appellant is pushed to its logical conclusion, it can only mean this
: that when a judgment-debtor is under arrest according to the provisions of Rule 40 and brings to the notice of the Court) the fact that he has
applied to the Debt Conciliation Board, he must remain under arrest inevitably until the Debt Conciliation Board has finished with his application.
We think that an order of the Court passed under Rule 40, Sub-rule (2) is in no sense prohibited by Section 25 of the Debt Conciliation Act. And
if that is so, the power of the Court to order the release of the judgment-debtor necessarily involves the power of the Court to call upon him to
furnish security. We see no reason, therefore, to interfere with the order of the learned Subordinate Judge and dismiss this appeal with costs.