Execution auction may include the decree-holder’s voluntary stake alongside judgment-debtors’ shares.

The applicants were decree holders under a 2014 arbitral Consent Award, later followed by Consent Terms recorded in execution proceedings in 2018.

The respondents defaulted on the agreed payments and undertook not to obstruct execution or the Court Receiver’s sale of properties.

The Supreme Court dismissed the Kakades’ challenge to the execution orders; it recorded that they could not pay even the principal amount and stated that the Receiver should proceed in accordance with law.

Two auctions of attached properties failed for want of bidders, after which the decree holders sought directions for a third auction involving the respondents’ 65% shareholding in Kakade Construction Company, the opportunity to offer their own 35% holding for sale alongside it, and permission to participate in the auction.

Whether the Court should permit the proposed auction arrangements, including inviting offers for the entire 100% shareholding in the respondent company by combining the respondents’ 65% holding with the decree holders’ 35% holding.

Whether the decree holders should be permitted to participate in the third-round auction, and whether the respondents could resist the proposed execution steps by renewing their FEMA-related objections.

Order XXI Rule 72 of the Code of Civil Procedure, 1908, was invoked in the application as the basis for seeking leave for the decree holders to participate in the auction.

The Court also relied on the 2018 Consent Terms, under which the respondents undertook not to obstruct the Receiver’s possession or sale of property or execution in the event of default, and agreed that the Receiver could sell property to recover the decretal amount.

The Supreme Court’s dismissal of the respondents’ challenge left execution to proceed in accordance with law; it had also recorded the respondents’ inability to pay and the Receiver’s role in recovering the amount through sale.

The Court held that the respondents could not re-agitate the FEMA objection after it had been rejected by the Supreme Court in the Kakades’ SLP and the company’s SLP had been withdrawn.

The Court treated the respondents’ default and their express non-obstruction undertakings as central to the execution application.

In light of the Supreme Court’s direction that the Receiver proceed, and the failure of two property auctions, it accepted the decree holders’ proposed share-sale arrangements as a means of pursuing recovery.

It rejected the renewed FEMA objection because the issue had already been addressed in the Supreme Court proceedings, and considered the authorities cited by the respondents inapplicable to the facts before it.

The order permits the specified auction-related relief sought by the decree holders, including the proposed sale arrangements involving the respondent company’s shareholding; the formal disposition is limited to the prayer clauses identified by the Court.