Confiscation is the act of forcibly placing the defendant’s assets in a state of custody based on the court order. The legal norms which arranged the confiscation contained in Article 227 paragraph 1 HIR (Het Herziene Indonesisch Reglement) as stated:
“If there is a reasonable assumption, which someone is in debt, as long as a verdict of the debt or as long as the verdict which defeated cannot be implemented, find a way to embezzle or take away the object, both movable and immovable, to keep the object away from the debt collector, then, based on an application from a concerned party, the chairman of the district court can give an order that the object be confiscated to protect the rights of the person that applying, and the concerned person must be notified that they will attend to the district court to advance and strengthen their claim.”
In a civil suit case relating to default in connection with debt and receivable issues, the aim of the plaintiff’s lawsuit is absolutely to get a return of the funds that the plaintiff has given, thus, if the plaintiff knows the defendant’s assets so that would provide more certainty to the plaintiff regarding debt’s return if the plaintiff’s lawsuit is granted. Therefore, in a default lawsuit is often found that the plaintiff submits a collateral confiscation application (conservatoir beslag) that coincide with the lawsuit.
Nonetheless, the purpose of collateral confiscation is to force the defendant to carry out the verdict and prevent the defendant from transferring their assets while the lawsuit process is ongoing. If the defendant apparently does not heed the verdict which has been legal and binding (inkracht van gewijsde) then the confiscated object can be executed, in other words, the confiscated object will be auctioned to pay off the defendant’s debt to the plaintiff.
However, it is common found in practice, sometimes the defendant’s property is unrare found to have been previously mortgaged as collateral to another party (e.g. to a bank) or other creditor or it could be that the property has already been confiscated in another case. Hence, the question is often arise whether the property object that is being requested to be confiscated can be carried out under the conditions as described above.
In accordance with applicable legal provisions, there are actions that can be made by the plaintiff regarding property objects that have been mortgaged or confiscated first, where the plaintiff can request an equity/adjustment confiscation (vergelijkende beslag). The legal basis regarding to equity/adjustment confiscation (vergelijkende beslag) is contained in Article 463 Rv (Regulation op de Rechtsvordering) which states:
“If the bailiff is going to confiscate and finds that the object to be confiscated have previously been confiscated, then the bailiff cannot confiscate again. However, the bailiff has the authority to equate the confiscated object with the Confiscation Minutes which must be shown to that confiscated party. Then, the bailiff can confiscate the object that are not mentioned in the Minutes and immediately sell the object to the first confiscator simultaneously within the time specified in Article 466 Rv. This Equity Confiscation Minutes acts as a form of preventing the auction proceeds from going to the first confiscator.”
The legal norms above basically determine that if an object is confiscated which has apparently been confiscated in another case, the object must be subject to equity/adjustment confiscation. Therefore, it can be seen that in fact the equity/adjustment confiscation has been around for a long time, even though initially the provisions of Article 463 RV (Reglement op de Rechtsvordering) were only placed on movable objects, however, along with development and practical needs, Article 463 RV (Reglement op de Rechtsvordering) is also applied to immovable objects (Rumusan Rakernas/2007/Perdata/II).
Other than that, in accordance with the provisions of Article 463 Rv jo. Article 34 of the Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Number 13 of 2017 concerning Procedures for Blocking and Confiscating (hereinafter referred to as “Permen ATR Procedures for Blocking and Confiscating“), without having to ask for a similar equity/adjustment confiscation are made by the plaintiff in the application, based to legal provisions of equity/adjustment confiscation it can automatically be given to the confiscated object as collateral, if it turns out that the confiscated object has previously been confiscated and/or has been mortgaged as collateral to another party.
Furthermore, in the legal doctrine scale, the existence of equity/adjustment confiscated can also be seen in the opinion of Yahya Harahap, in his book “Hukum Acara Perdata” (Fourth printing, May 2006, p. 321) which stated the position of the confiscation or mortgaged holder is in the first place, while the holder of equity/adjustment confiscation is below it. If there is a condition where the debtor/defendant has paid off his debt to the third party as mortgaged holder so that reconveyance has been made or a condition where the object has been confiscated in another case has been removed from confiscation status, thus, the equity/adjustment confiscation position will automatically change to collateral confiscation.
Moreover, Yahya Harahap is also viewed that in essence, if it turns out that the mortgaged or confiscated object has been auctioned or sold, the proceeds of the sale will be prioritized to pay off the debt of the debtor/defendant to the mortgaged or confiscation holder, and if there is any remainder from the auction or sale proceeds after all the rights of the mortgaged or confiscation holder has been fulfilled, then the remaining excess becomes part of the equity/adjustment confiscation holder.
In connection with the matters above, here is some jurisprudences that recognize the existence of equity/adjustment confiscations, including the Supreme Court’s Verdict Number 1326 K/Sip/1981 dated August 19th 1982 which stipulated that if the object is going to be subject of Collateral Confiscation is already confiscated, or in the case of the object already confiscated to others or being the confiscated execution, the district court only have the right to give an Equity/Adjustment Confiscation (Vergelijkende Beslag) with register in the minutes that the concerned object is currently under confiscation or mortgaged as guarantees to other party. In addition, a similar verdict is found in the Supreme Court’s Verdict Number 394K/Pdt/1984 which emphasized the object that have been used as guarantees for credit to the creditor cannot be subject to Collateral Confiscation (Conservatoir Beslag). In order to create the legal certainty to the plaintiff that undertake a confiscation application, thus, it only an Equity/Adjustment Confiscation that can be placed instead.
Then, at this time also in Article 34 paragraphs (2) and (3) Regulation of the Permen ATR Procedures for Blocking and Confiscating determines that in principle, for land objects that are encumbered with mortgage rights and for land objects that are subject to confiscation due to cases, the land is recorded as equity/adjustment confiscation. Apart from that, toward the objects that have been mortgaged as collateral can also be seen in the District Court’s Verdict Number 22/Pdt.G/2022/PN.Kln at the Kutacane District Court which granted the plaintiff’s application who applied for a Equity/Adjustment Confiscation of the object that have been mortgaged. Here’s the determination of the Panel of Judges at p. 26:
“Considering, that the exhibit of letter marked P-8 it is very clearly stated that what is collateral for the debt of the Defendants to the Plaintiff is not the entire value of the object but only the remainder from the auction or sale and repayment of the debt of the Defendant to the Co-Defendant in advance because the Co-Defendants stated in the agreement with the Defendants having previously bound these objects with mortgage rights…”
Whereas in connection with the matter above, in the consideration of the Panel of Judges also determinate the existence of the mortgage right holder to the object that going to be grant as the Equity/Adjustment Confiscation, which in essence states that the rights of the mortgage right holder are still protected even though the Equity/Adjustment Confiscation is placed, thus, that is the reason for the Panel of Judges to grant the Equity/Adjustment Confiscation application though the object that have been mortgaged. The quote as follow:
“Considering, that in the general explanation number 3 and the explanation Article 4 paragraph (1) letter a Law Number 4 of 1996 of Mortgage Rights give the priority position to the creditors which the mortgage right holder rather than other creditors. In other words, the competency of the Co-Defendant as the mortgage holder toward the land object and the building belonging to the Defendants above is as the preferred creditor and has the priority position of their payment rather than other creditors, thus, the view of the Panel of Judges in this case is there is no the Co-Defendant’s right that has been breached though the Plaintiff already submit the Equity/Adjustment Confiscation application…”
“Considering, that regarding the fifth petitum of the Plaintiff’s lawsuit, which requests to declare the Equity/Adjustment Confiscation (Vergelijkende beslag) which was placed/recorded by the Kutacane District Court is valid, in accordance with the Equity/Adjustment Confiscation (Vergelijkende beslag) application which requested by the Plaintiff in the process at the trial and since the Panel of Judges granted the Plaintiff’s request by issuing a Determination of Equity Confiscation (Vergelijkende beslag) with Register Number: 22/Pdt.G/2022/PN Ktn which has been recorded with the minutes and registered at the Civil Registry of the Kutacane District Court, “Therefore, the Panel of Judges is of the opinion that the plaintiff’s fifth petition can be granted.”
Based on the description above, it can be concluded that Equity/Adjustment Confiscation is a legal action that can be taken with the plaintiff to make a request for confiscation that in case it turns out that the object already requested to be confiscated which still under a mortgage or still being confiscated in another case. That’s the discussion in this article, if there is anything you want to discuss regarding confiscation in a civil suit case that you may be facing, then you can contact us at TRNP Law Firm to get further information.
