More Than a Formality: Delhi HC on Asset Affidavits and the Officer Who Files Them

Does filing an asset affidavit in execution proceedings protect a company officer from coercive action, even if the affidavit leaves out a bank account that was still in use? The Delhi High Court said no in Syed Farhan Ali v. M/s ABB India Limited,¹ upholding arrest warrants against the authorised representative of a judgment-debtor company. Justice Ajay Digpaul held that the filing of an affidavit under Order XXI Rule 41(2) of the Code of Civil Procedure² 1908, “cannot, therefore, be treated as a mere formality,” and that an officer who withholds material particulars within his knowledge cannot claim compliance merely because an affidavit was filed. The Court was careful to add that the officer was not being made liable under the arbitral award itself, the consequence flowed from his own non-compliance with the disclosure direction. For decree-holders, and for company officers asked to swear such affidavits, the judgment is a useful statement of what complete disclosure requires.

ABB India Limited obtained an arbitral award on 28 February 2019 against Techno Aircon Industries Pvt. Ltd., directing the company to pay Rs 92,29,230 with interest and costs of Rs 3,75,000. The dispute arose from a 2008 purchase order under which Techno Aircon was to manufacture goods using raw materials supplied by ABB. ABB began execution in May 2019. The company’s challenges did not succeed: its Section 34³ petition was dismissed in December 2023, a Division Bench dismissed its Section 37⁴ appeal in August 2025, and the Supreme Court dismissed the further challenge in December 2025.

Meanwhile, the executing court directed the company on 12 January 2024 to file an affidavit of its assets. Syed Farhan Ali, its authorised representative, filed affidavits on 1 February 2024 and 17 December 2024. Both mentioned only one bank account, with HDFC Bank in Greater Noida. When the executing court asked on 17 December 2024 whether the company held any bank account in Delhi, he said it did not. The court then called for three years of bank statements and tax returns. These, filed on 3 February 2025, revealed an ICICI Bank account that neither affidavit had mentioned, with a balance of Rs 65,27,798.37 as on 1 February 2025. A later report from the bank showed that the account was closed only on 23 July 2025, after 13 withdrawals totalling Rs 12,51,719 on 17 July 2025.

ABB applied for Ali’s civil imprisonment under Order XXI Rule 30⁵ read with Rule 41(3).⁶ The executing court issued arrest warrants on 11 May 2026 and, after they came back unserved, fresh warrants on 23 July 2026. Ali challenged that order before the High Court under Article 227 of the Constitution.⁷

The Officer’s Own Duty, Not the Company’s Debt

Ali argued that he was only the company’s authorised representative, was not a party to the arbitration or the execution, and could not be made personally liable without lifting the corporate veil. The Court held that this argument “proceeds on a premise which does not accurately capture the nature of the proceedings.” Ali was not being proceeded against as the judgment-debtor, and the decree was not being enforced against his personal assets: “The award is against the JD Company.” 

The Court explained that Rule 41(2) contemplates that where the judgment-debtor is a corporation, an officer may be directed to file an affidavit disclosing its assets, and Rule 41(3) provides the consequence of disobedience. It drew a line between two situations. Imposing the company’s decree of liability on the officer would be one thing, and the executing court had not done that. Holding him to the consequences of his own conduct in filing affidavits without disclosing material particulars was another. The Court also noted that Ali did not say the company had given him inadequate information, and held that “the separate legal personality of the JD Company cannot, therefore, be invoked to defeat an obligation personally undertaken by its officer pursuant to a judicial direction.” ABB had argued that Ali was a former director who stayed closely involved with management, but the Court proceeded on his admitted position as the company’s authorised representative.

An Affidavit Is Not a Formality

On the purpose of Rule 41(2), the Court said its “true import” is “to secure a complete and meaningful disclosure of all material particulars of the assets of the judgment-debtor, so that the decree-holder and the executing court are placed in a position to effectively pursue satisfaction of the decree.” An affidavit that withholds material particulars, “particularly information within the knowledge of the officer furnishing it,” cannot be compliance in substance, and is punishable under Rule 41(3).

Applying this, the Court looked at the chronology. A material bank account within the knowledge of Ali and the company was not disclosed in either affidavit, was not disclosed even when the executing court specifically enquired, and came to light only through bank records produced on the court’s direction. Because the account was closed only in July 2025, it was still operating when both affidavits were filed. The Court held that the executing court “could reasonably construe” the 13 withdrawals shortly before closure “as indicative of an attempt to frustrate or impede the execution of the decree.” Ali had relied on a 2023 closure letter, but the Court held it could not, “in the face of the bank’s own subsequent records,” make the executing court’s finding perverse.

The Limits of Article 227

The Court reminded itself that under Article 227 it does not sit as a court of appeal, and that interference is warranted where the exercise of discretion is “vitiated by perversity, patent illegality or a manifest jurisdictional error.” It found none. Ali’s challenge to the executing court’s reading of the bank records, it held, “essentially seeks a reappreciation of material already considered,” which is beyond the scope of Article 227. Concluding that Ali was “rightly being proceeded under Rule 41(3) for failing to substantially comply with the directions under Rule 41(2),” the Court dismissed the petition.

Three points stand out. First, the judgment separates the company’s liability under the decree from the officer’s own duty under a Rule 41(2) direction, so the company’s separate legal personality does not answer a direction addressed to the officer personally. Second, it applies a substance test to compliance: an affidavit that omits particulars within the officer’s knowledge does not comply merely because it was filed, and an explanation such as a closure letter will be weighed against the bank’s own records. Third, it is a decision about the limits of supervisory review. The High Court upheld the warrants and the executing court’s exercise of discretion, but it did not itself decide what consequence, if any, should follow under Rule 41(3), where ABB had sought civil imprisonment for three months. ABB told the Court that it had been unable to recover “a single paisa” in seven years of execution, a reminder of why executing courts may press for full disclosure.

Citations

1. Syed Farhan Ali v. M/s ABB India Limited, CM(M) 1689/2026 & CM APPL. 50213/2026 ↩︎
2. Code of Civil Procedure, 1908, Order XXI Rule 41(2) ↩︎
3. Arbitration and Conciliation Act, 1996, s.34 ↩︎
4. Arbitration and Conciliation Act, 1996, s.37 ↩︎
5. Code of Civil Procedure, 1908, Order XXI Rule 30 ↩︎
6. Code of Civil Procedure, 1908, Order XXI Rule 41(3) ↩︎
7. Constitution of India, art. 227. ↩︎

Expositor(s): Adv. Pratistha Dahiya