How to Execute a Money Decree Against a Company

Can you execute a decree against a company, and against what?

Yes. A company is a person in law, and a money decree against it is executed like any other money decree: under Sections 38 to 74 and Order 21 of the Code of Civil Procedure 1908. Section 51 gives the court the modes of execution, and Section 60 lists what can be attached: land, buildings, goods, money, bank notes, cheques, debts, shares in a corporation and other saleable property belonging to the judgment debtor. For a company, almost everything it owns falls on that list, because the exemptions in Section 60 (clothing, tools of artisans, a part of salary) are written for individuals.

What you cannot reach, as a rule, is the property of its directors and shareholders. The company is separate from the people who run it. A Rs 3 crore decree against XYZ Infratech Private Limited does not let you attach the managing director's flat in Vasant Kunj, however much he controls the company. The exceptions are real but narrow, and they are covered below.

The same rules apply to an arbitral award. Section 36 of the Arbitration and Conciliation Act 1996 makes a domestic award enforceable as a decree once the Section 34 challenge period has expired or the challenge has failed, and our guide on enforcing an arbitral award in Delhi covers the steps peculiar to awards. Everything in this guide about finding and attaching company assets applies equally to award holders.

Decree execution in Delhi: which court and which case number

Decree execution in Delhi happens in the court that passed the decree. A decree of the Delhi High Court on its original side (suits valued above Rs 2 crore at present; a proposal to raise that limit is pending, so check the current figure) is executed by filing an execution petition in the High Court, usually registered as EX.P. Decrees of a district court, including the district commercial courts at Saket, Tis Hazari, Patiala House, Karkardooma, Rohini and Dwarka, are executed in that district court. Our page on execution of decrees and awards in the Delhi High Court explains the High Court procedure in full.

On the High Court's original side, many routine steps in an execution petition are taken before a Joint Registrar: service of notice, filing of the affidavit of assets, replies of banks and garnishees. Contested questions, such as objections by the company or a third party, go to the judge. Our guide on the original side of the Delhi High Court explains how that division of work operates.

If the company's assets are outside Delhi, say a factory in Bhiwadi or a warehouse in Sonipat, the Delhi court can transfer the decree under Section 39 CPC to the court where the property is. Since the 2002 amendment, Section 39(4) makes clear that a court cannot execute against property outside its own territorial limits. Bank accounts are an exception in practice: a prohibitory order served on a bank's branch in Delhi, or on its head office, is usually enough to freeze the account.

Before you file: what the MCA portal tells you

Every company is registered with the Ministry of Corporate Affairs, and its master data, directors, charges and filings are visible on the MCA portal. Spend an hour there before you draft anything. The company's status will read Active, Strike Off, Under Process of Striking Off, Under CIRP, Under Liquidation, Amalgamated or Dissolved, and each status changes your route.

The charge register is the most useful page. It shows which banks have lent to the company against security, the amount secured and often the property or assets charged. A company with a registered charge in favour of a bank on its Okhla factory has told you two things: it owns that factory, and the bank stands ahead of you for its value. The annual return and financial statements, if the company has filed them, list fixed assets, trade receivables, investments in subsidiaries and bank balances as on the year end.

Look up the directors too. A director on the board of three new companies with similar names is a warning sign of assets being shifted. Print what you find, with the date; it becomes an annexure to your petition.

Where a company's money usually sits and how it is attached

How to execute a decree against a company, step by step

The order below is how a well-prepared execution petition against a company usually runs in Delhi. Some steps run side by side.

1. Get the decree and calculate what is due

   Obtain a certified copy of the decree or the signed award, and prepare an interest calculation up to the date of filing at the rate the decree allows. Our guide on getting a certified copy of a Delhi High Court order explains the copying process.

2. Confirm there is no stay

   Check the appeal court's record. An appeal by itself does not stay a decree (Order 41 Rule 5 CPC); only a specific stay order does. If there is a conditional stay, check whether the condition, often a deposit, was complied with.

3. Check the company's status and assets

   Search the MCA portal for status, charges and filings, and build a schedule of assets with bank names and branches, customers, vehicle numbers and property addresses.

4. File the execution petition under Order 21 Rule 11

   The petition states the decree, the amount due, payments received, the mode of execution sought and the specific assets. Ask in the same petition for an affidavit of assets from the company and for examination of a named director under Order 21 Rule 41.

5. Seek urgent attachment where money may move

   Ask the court to issue warrants of attachment to banks and garnishees at the first hearing, before the company has time to empty accounts after receiving notice.

6. Answer objections and pursue disclosure

   The company or third parties may file objections under Section 47 or Order 21 Rule 58. Reply quickly and insist on a complete affidavit of assets; where it is evasive, ask for the director's examination in court.

7. Realise the money

   Attached bank balances and garnishee payments are deposited in court and released to you on application. Property goes to auction only if other assets do not satisfy the decree, and the sale proceeds are paid out after costs.

Keep a running statement of every rupee received through the court and from the company directly. The decree is satisfied only when the full amount with interest and costs is paid, and you will need to certify part payments to the court under Order 21 Rule 2.

Attachment of company assets: start with bank accounts and receivables

Attachment of company assets works fastest against money, not property. A prohibitory order to a bank operates the day it is served: the bank must stop debits up to the decretal amount and tell the court what it holds. For a trading or services company that lives on its current account, this alone often brings the directors to court with a settlement proposal within weeks.

Receivables come next. Under Order 21 Rules 46A to 46I, the court can issue a notice to a person who owes money to the company, the garnishee, asking him to pay the debt into court or to show cause why he should not. If the garnishee does not dispute the debt, the court orders payment; if he pays the company after notice, he risks paying twice. A Noida IT company with three large clients can be brought to a halt by three garnishee notices, which is exactly why they work.

Two cautions. First, an account already marked as security to a bank for a loan may be subject to the bank's own right of set-off, and the bank will say so in its reply. Second, if other decree holders have already applied for execution against the same company, Section 73 CPC requires money realised to be shared rateably among all decree holders who applied before the court received the assets. Speed matters.

Making the company disclose: affidavit of assets and examination of directors

Order 21 Rule 41 lets the court examine the judgment debtor about its property and, in the case of a company, any officer of the company. Rule 41(2) allows the court to order the debtor to file an affidavit of its assets, and Rule 41(3) allows the court to detain in civil prison, for up to three months, a person who disobeys that order. For a company, the person examined and exposed to detention is the director or officer who was directed to disclose, not the company itself.

The Delhi High Court laid down a detailed format of affidavit of assets for money executions in Bhandari Engineers and Builders v. Maharia Raj Joint Venture (2016) and later updated its directions. The format asks for bank accounts, immovable and movable property, investments, receivables, assets transferred after the suit was filed and more. In Rahul S. Shah v. Jinendra Kumar Gandhi (2021), the Supreme Court directed executing courts across India to call for such affidavits and to decide execution petitions within six months, and in Periyammal v. V. Rajamani (2025) it repeated those directions and asked High Courts to monitor compliance.

In practice, the affidavit is where many company executions turn. A director who swears that the company has Rs 40,000 in one account, while its GST returns show crores of turnover in the same year, has a problem: a false affidavit invites perjury proceedings and contempt. When Advocate B.K. Singh receives an affidavit of assets from a company, he compares it line by line with the last two balance sheets on the MCA portal and the company's GST registration details, and lists every gap in a short reply. Courts act on specific contradictions far more readily than on a general allegation that the company is hiding money.

Property, vehicles and shares: attachment and sale

Immovable property is attached by a prohibitory order under Order 21 Rule 54, which forbids the company from transferring or charging it and is proclaimed at the property and in the court. After attachment, Section 64 makes any private transfer void against the decree holder. Sale follows under Rules 64 to 73 and 82 to 94: the court settles a proclamation of sale with the property's description, known encumbrances and an estimated value, and the auction is held by an officer of the court or a court-appointed auctioneer.

Property that is mortgaged to a bank is attachable, but you get only what is left after the bank. Section 26E of the SARFAESI Act 1993, inserted in 2016, gives secured creditors registered with CERSAI priority over other debts. If the company's Rs 5 crore warehouse secures a Rs 4.5 crore bank loan, an auction may leave very little for an unsecured decree holder, and the bank may start its own SARFAESI sale. Check the charge register before spending time and money on an auction.

Vehicles, machinery and stock are attached by actual seizure through the court's bailiff, and perishable or costly-to-store goods can be sold quickly under the court's directions. Shares held by the company in a subsidiary are attached by a prohibitory order on the subsidiary, which then cannot register a transfer. Unlisted shares are hard to sell well, but the attachment blocks any sale or restructuring the directors want.

Can you go after the directors personally?

Usually not, and decree holders lose a lot of time finding this out. The directors are liable personally only in a few situations, and you should identify which, if any, applies before you spend money on it.

The first and most common is a personal guarantee. If the managing director signed a guarantee for the company's dues and was impleaded in the suit, the decree runs against him too, and his assets can be attached directly. If he signed a guarantee but was not named in the suit, the decree against the company does not reach him, and a separate suit on the guarantee may be needed within limitation. The second situation is where the court lifts the corporate veil because the company was used as a sham to defeat creditors. The Supreme Court did this in Delhi Development Authority v. Skipper Construction Co. (1996), directing attachment of properties held by the company's controlling family members and associated concerns. It is an exceptional remedy, granted on strong evidence of fraud, not because the company is small or closely held.

The third situation arises when the company is dissolved by the Registrar. Section 248(7) of the Companies Act 2013 says the liability of every director, officer and member of a company struck off continues and may be enforced as if the company had not been dissolved. Separately, in a winding up or insolvency, the National Company Law Tribunal can hold directors personally liable for fraudulent or wrongful trading (Section 339 of the Companies Act and Section 66 of the Insolvency and Bankruptcy Code), but that is an order of the Tribunal on the liquidator's or resolution professional's application, not something the executing court does.

Directors who disobey the executing court's orders on disclosure are exposed to detention under Order 21 Rule 41(3) and to contempt. That is personal exposure for their conduct in the execution, not for the company's debt, but in practice it is often what brings a settlement.

When the company is struck off, in insolvency or being wound up

A company shown as struck off on the MCA portal no longer exists as a company for most purposes, and an execution petition against it runs into that difficulty at once. Section 252(3) of the Companies Act 2013 allows a creditor, among others, to apply to the National Company Law Tribunal within 20 years of the company's name being struck off for restoration, where the Tribunal finds it just. Restoration brings the company back as if it had never been struck off, and the execution can then proceed. Where restoration is not worth it, Section 248(7) on continuing liability of directors and members may give another route.

If the company is under the corporate insolvency resolution process, the moratorium under Section 14 of the Insolvency and Bankruptcy Code 2016 bars the continuation of execution proceedings against it from the date the NCLT admits the application. Your remedy is to file your claim with the interim resolution professional in the prescribed form, with the decree attached. Attachments you obtained earlier generally do not give you priority over other creditors in the resolution plan.

If the company is being wound up under the Companies Act 2013, Section 279 bars suits and legal proceedings against it, once a winding up order is passed or a provisional liquidator is appointed, except with leave of the Tribunal. Companies in liquidation under the IBC are subject to a similar bar. In both, you prove your claim before the liquidator and wait for distribution in the order the statute fixes. For companies before the NCLT at New Delhi, our page on NCLT New Delhi explains where these cases are heard.

Execution or an insolvency application: which pressure works better?

A decree holder whose claim is Rs 1 crore or more has a second option: an application to the NCLT under Section 7 (financial creditors) or Section 9 (operational creditors) of the IBC to start the insolvency process against the company. The Supreme Court in Dena Bank v. C. Shivakumar Reddy (2021) treated a Debts Recovery Tribunal recovery certificate as giving a fresh starting point for limitation for such an application, and decree holders have relied on similar reasoning; whether it fits your decree should be checked on the facts.

An insolvency application is a heavy weapon. A solvent company that has simply chosen not to pay will often settle rather than lose control to a resolution professional. But once the NCLT admits the application, the process belongs to all creditors: you become one of many in the committee or the claims list, and a resolution plan may pay unsecured creditors a small fraction of their claim. If the company is genuinely insolvent, you may recover less through the IBC than through a quick bank attachment obtained earlier.

So the choice depends on the company. A company with healthy bank balances and customers is usually better pursued through execution, because attachment of company assets reaches money directly. A company that has visibly stopped trading but has a valuable asset, or whose directors are moving money, may respond to an insolvency application faster. The NCLT process has its own procedure and timelines; our sister site ncltlawyers.in explains it in more depth.

Typical time and cost in a company execution

Documents to collect before filing

Objections companies raise, and how they are answered

Section 47 CPC requires all questions about execution, discharge or satisfaction of the decree between the parties to be decided by the executing court, and that court cannot go behind the decree. Companies still object that an appeal is pending, that interest is wrongly calculated, that part was paid, or that limitation has run.

A pending appeal is not a stay. Under Order 41 Rule 5, the appeal court may stay execution, usually on condition that the decretal amount is deposited or secured, and in commercial appeals the court commonly asks for a deposit. If the company has not obtained a stay, or has not complied with the deposit condition, the execution proceeds. Our page on commercial appeals explains how stays are granted in the appeal court.

Third-party objections under Order 21 Rule 58 are the bigger nuisance. A sister company claims the attached bank account is its own; a director's wife claims the attached car was bought by her; a buyer produces an agreement to sell dated before the attachment. The executing court decides these claims itself, with evidence if needed. Answer them with documents: who paid for the asset, whose books show it, when the agreement was registered or notarised, whether the transferee is related to the directors. A transfer to a related party for nominal value after the suit was filed can be challenged under Section 53 of the Transfer of Property Act as a fraudulent transfer.

Mistakes decree holders make with companies

• Waiting for the company to pay. Every month of waiting is a month in which accounts can be emptied and assets moved to a new entity.
• Filing a vague petition. A prayer to attach 'all movable and immovable properties of the judgment debtor' without specifics gives the court nothing to act on.
• Forgetting the guarantor. If a director guaranteed the debt but was not made a party to the suit, the decree cannot be executed against him.
• Ignoring the MCA status. Executing against a company already under the insolvency process wastes months and the proceedings will be stopped.
• Chasing mortgaged property. An auction of property fully charged to a bank produces little for an unsecured decree holder.
• Settling informally. A settlement not recorded in court leaves you to start again if the company defaults on the second instalment.

If your company is the judgment debtor

Do not ignore the notice. The court can attach accounts and order disclosure in your absence, and a director who fails to file an ordered affidavit of assets is personally exposed. File a response that raises genuine points only: payments already made, an incorrect interest calculation, assets that belong to someone else with documents to prove it.

If an appeal is pending, pursue the stay application in the appeal court and comply with any deposit condition; the executing court will not wait for you otherwise. If the company accepts the debt but cannot pay at once, propose a written schedule with security. Courts and decree holders often prefer a credible plan to a long auction. Advocate B.K. Singh's practical tip for directors is to make the first offer in writing before the affidavit of assets is due, because an offer made after a weak affidavit is filed carries far less credibility.

What to do this week

Get the certified copy of the decree, confirm that no stay is in force, and work out the amount due with interest. Search the MCA portal and print the company's master data, charges and directors. Make an asset list, however incomplete, with bank details, customers, vehicles and property addresses. If the decree came from a suit that is still being framed or defended, our pages on money recovery suits above Rs 2 crore and summary suits in the Delhi High Court explain how to frame a claim so that the decree is easier to execute, and our page on execution petitions in the Delhi High Court covers the filing itself.

For advice on your decree and the company's papers, or for updates on execution law, contact Advocate B.K. Singh.