Wilful Concealment of Property Attracts Punishment, the Code of Civil Procedure Code, 1908: High Court of Jammu & Kashmir and Ladakh at Srinagar

The issue of wilful concealment of possession of property, attracting the punishment of imprisonment for a term, was examined by the HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR, before a bench consisting of Hon’ble Mr. Justice Javed Iqbal Wani, in the matter of Mohammad Rafiq Ganie vs. Aijaz Ahmad Thoker [MA No. 45/2016], on 14.12.21.

The present Civil Miscellaneous Appeal was preferred against the judgment and orders dated 4.4.2016 and 5.4.2016 passed by the learned Principal District Judge, Anantnag in proceedings under Order XXI (A) of the Code of Civil Procedure, 1908 (CPC). The appellant is a judgment debtor against whom a decree for an amount of Rs. 4,52,677/- with interest @ 9% was allowed. The appellant herein challenged the aforementioned judgment and decree in appeal, which, however, came to be dismissed. In the appeal, the appellant had not taken the plea of insolvency.

However, during the execution proceedings, an application came to be filed by the appellant under Order XX1 (A) CPC, claiming insolvency. The appellant, along with an application, filed a schedule of property wherein he stated that he possessed some apparels, shoes, a two storied residential house stated to have been damaged during floods. The said information was provided on oath and solemnly affirmed by the appellant. The court below came to a conclusion that between 2nd of September, 2013 to 4th of March, 2016, i.e., after the presentation of the application under Order XX1 (A) CPC, the appellant had made transactions for an amount of Rs. 11,72,894/- from the aforementioned account number and thus, returned a finding that the appellant had concealed his account number and falsely stated that he was living like a destitute since 2008.

The appellant also appears to have admitted the revenue extracts, which supported the factum of inheritance of the land by the appellant after the death of his father, according to which, 15 marlas of land was inherited by him, which too, was stated to have been concealed from the court. In that view of the matter, while dismissing the application for declaring the appellant as an insolvent, by virtue of judgment and order dated 4.4.2016, the appellant was asked to show cause as to why he should not be sentenced to one year imprisonment for concealing material facts. Accordingly, an order came to be passed on 5.4.2016 by the learned Principal District Judge, Anantnag wherein the appellant has been sentenced to one year imprisonment in terms of Rule 16 of Order XX1 (A) CPC as was then applicable in the erstwhile State of J&K.

The Learned Counsel for the Appellants, emphasised that the appellant ought to have been asked to pay the amount in instalments with a view to satisfy the decretal amount and the appellant should not be imprisoned on the basis that he has not given details of his saving bank account.

The Learned Counsel for the Respondents, pointed out that objections filed to the application by the decree holder highlighted that the appellant had concealed material facts with regard to the property which had been inherited by him from his father. It was alleged that the appellant was constructing a residential house at Krandigham Tehsil Bijbehara District Anantnag wherein huge amount had already been spent. It was also alleged that the appellant had an account in the J&K Bank Branch Jablipora bearing No. 11228 and another account maintained in the name of his daughter, which had not been reflected in the schedule of property.

The High Court of Jammu & Kashmir and Ladakh at Srinagar, observed that on a bare perusal of the judgments and orders impugned, it can be seen that there was in fact a clear attempt made by the appellant to conceal material facts from the court with a view to avoid the judgment and decree passed against the appellant. The Court held that while it may be open to a judgment debtor, who has been arrested or imprisoned in execution of a decree for money, to claim that he be declared insolvent, it is incumbent upon such a judgment debtor to ensure that there is no concealment in regard to the property which belongs to him whether actually in his possession or the property which is expected to inherit or is held for him in trust. Any such wilful concealment would certainly attract the punishment of imprisonment for a term, which may extend to one year. In the present case, it was noted that there was sufficient material on record to suggest that the appellant had in fact concealed material facts with regard to the property and assets owned by him with a view to somehow defeat the execution of the decree obtained by the decree holder. The Court however directed the reduction of sentence to a term of one month in view of various circumstances including the power of the lower court, and the condition that the entire decretal amount is liquidated by the appellant within one month. Thus, the appeal was disposed of.

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Judgement reviewed by Bhargavi

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