Bombay High Court
The Sangli Bank Limited vs M/S. Timblo Pvt. Ltd. & Others on 6 August, 1999
Equivalent citations: AIR2000BOM195, 2000(2)BOMCR106, AIR 2000 BOMBAY 195, (2000) 2 MAH LJ 21, (1999) 2 BANKCAS 578, (2000) BANKJ 302, (2001) 1 CIVLJ 18, (2000) 2 BOM CR 106
Author: R.M.S. Khandeparkar
Bench: R.M.S. Khandeparkar
ORDER R.M.S. Khandeparkar, J.
1. Common questions of fact and law arise in both the revision applications and therefore the same were heard together and are being disposed of by this common judgment.
2. These revision applications arise from Order dated 13th August, 1997 passed by the First Addl. Civil Judge, S.D., Margao in Special Execution Nos. 3/92/I and 6/92/I. By the impugned order, the Executing Court has ordered that the Execution Applications stand duly satisfied and consequently the judgment debtors/respondents are discharged of their liabilities and further that the decree holders/petitioners are ordered to release/discharge/cancel hypothecated goods described in Exh. N to the decree and further to inform the Registrar of Companies to cancel the charge created and registered in the office of the Registrar of Companies under the Companies Act.
3. The facts in brief relevant for the decision are that the petitioners filed two Execution Applications bearing Nos. 3/92 and 6/92 for the recovery of the sum of Rs. 63,23,589.63 with interest thereon and Rs. 23,67,943.83 with interest thereon respectively against the respondents herein, who were judgment debtors in the said execution proceedings. During the pendency of the said execution proceedings by letters dated 14-1-94 and 19-1-94 the petitioners informed the respondents that it had been decided that the respondents have to agree for payment of the decreed amount plus 10% interest calculated upto date and the amount should be paid by the end of December, 1994 and the total liability of the respondents till date was calculated and worked out at Rs. 1,83,59,376.05 and that the respondents should ensure that the said dues were settled accordingly. On 30th December, 1994, the respondents paid the said sum of Rs. 1,83,59,376.05 to the petitioners against a receipt for the same issued by the petitioners and moved an application before the Executing Court for necessary order recording satisfaction of the decree and consequential relief. After hearing the parties the same was allowed by the Executing Court by the impugned order.
4. Upon hearing the learned Advocates for the parties, and on perusal of the records, it is seen that the Executing Court on analysis of the materials on record, held that the parties had arrived at settlement between themselves during the pendency of the execution proceedings and accordingly the total amount payable by the respondents to the petitioners was quantified at Rs. 1,83,59,376.00 to be paid by the respondents to the petitioners on or before 30th December, 1994 and the same was actually paid by the respondents to the petitioners.
5. At the outset, Shri S.K. Kakodkar, learned Senior Advocate, appearing for the respondents, sought to challenge the maintainability of the revision petition itself, on the ground that the petition is not accompanied by necessary affidavit as is otherwise required in terms of the provisions contained in the Bombay High Court (Appellate Side) Rules, 1960 and has submitted that the petition should be rejected in limine for non-compliance of the statutory provisions in the said Rules and in that regard has sought to place reliance upon the judgment of the Privy Council in the matter of Ohene Moore v. Akesseh Tayee, reported in A.I.R. 1935 P.C., 5. In the said case, it was held that all appeals exist merely by statute and unless the statutory conditions are fulfilled, no jurisdiction is given to any Court of Justice to entertain them. At the same time, it was also held therein that the Court should attempt to do substantial justice and to avoid technicalities; but they are bound by the statute law, and if the statute law says, there shall be no jurisdiction in a certain event, and that event has occurred, then it is impossible for them to have jurisdiction. That was a case wherein the leave to appeal was granted by the Court of first instance without insisting for due compliance by the appellant of the mandatory provision which required appellant either to pay or deposit costs in such Court or in the Court in which leave was taken before such leave was granted. Considering that the requirement of payment or deposit of costs was a mandatory pre-condition for exercising the powers of granting the leave by the Court of first instance, it was held in the said case that the Court of first instance had no jurisdiction to grant the leave.
The objection for maintainability of the petition in the absence of the affidavit is sought to be countered by Shri S.G. Dessai, the learned Senior Advocate for the petitioners, stating that the petitioners did file an affidavit in support of the revision applications, but the same was filed along with the application for interim relief and it was consolidated affidavit referring to a revision petition as well as miscellaneous application for stay. In any case, according to the learned Advocate the defect is merely of technical nature and does not go to the root of the jurisdiction of this Court to entertain the revision application. Be that as it may, it cannot be forgotten that a procedure is meant to advance the cause of justice and not to frustrate it. The procedural law is intended to facilitate and not to obstruct the course of substantial justice. Justice Krishna Iyer in Sushil Kumar Sen v. State of Bihar, has observed thus:-
"The humanist rule that procedure should be handmade, not the mistress, of legal justice compels consideration of vesting a residuary power in judges to act ex debito justiciae where the tragic sequel otherwise would be wholly inequitable.....
I must sound a pessimistic note that it is too puritanical for a legal system to sacrifice the end product of equity and good conscience at the altar of processual punctiliousness and it is not too radical to avert a breakdown of obvious justice by bending sharply, if need be, the prescriptions of procedure. The wages of procedural sin should never be the death of rights."
Indeed, fairness is what justice really is. Therefore, the contention regarding the non-maintainability of the petition is to be rejected.
6. Shri Kakodkar, learned Senior Advocate, thereupon sought to caution about the limited scope of the jurisdiction of this Court while considering a matter under section 115 of the Code of Civil Procedure and in that regard sought to rely upon the decision in the matter of State of Orissa and others v. Sibaram Baral (Simaram Barai), , Haji Suleman Haji Ayub Bhiwandiwala v. Narayan Sadashiv Ogale, reported in 1967(84) Bom.L.R. 122, Shah Jagmohandas Purshottamdas and another v. Jamnadas Vrajlal Gandhi and others, and Kempaiah v. Chikkaboramma (Smt) and others, . It is now well established that the scope of revisional jurisdiction under section 115 of C.P.C. is restricted and it is only when there is a jurisdictional error or illegality or material irregularity in exercise of jurisdiction, that the High Court can interfere. When the case is decided by the subordinate Court in irregular exercise or non-exercise of jurisdiction or illegal assumption of it, that the revisional powers can be exercised to remedy the failure of justice. Undoubtedly, while exercising the jurisdiction under section 115 it is not open for this Court to correct errors of fact, however, gross or even errors of law unless the said errors have relation to the jurisdiction of the Court to try the dispute itself. The decisions relied upon by the learned Advocate for the respondents are very clear in this regard. In Haji Suleman's case it was held that section 115 of the Code applies to jurisdiction alone, the irregular exercise or non-exercise of it or illegal assumption of it and that section is not directed against the conclusions of law or fact in which the question of jurisdiction is not involved and that the expression "illegally" or with material irregularity" in Clause (c) of section 115 means errors relating to material defects of procedure and not to errors of either law or fact after the formalities which the law prescribed have been complied with. In Shah Jagmohandas case it was held that the High Court will exercise its revisional powers only in aid of justice and not merely to give effect to technicality which will not further the ends of justice. In Sibaram Baral's case the Apex Court has held that the High Court has only to ascertain whether the trial Court properly considered the facts or the case calls for interference while exercising the revisional powers under section 115 of the C.P.C. In Kempaiah's case it has been ruled by the Apex Court that in case the High Court in exercise of its revisional powers does not find the lower Appellate Court having committed any error of jurisdiction or having acted with material irregularity affecting its jurisdiction, while arriving at the conclusions, then in such case the High Court should not reappreciate the evidence in exercise of powers under section 115 of C.P.C. Being so, there is no doubt that the matter is to be considered, bearing in mind the limited scope of jurisdiction under section 115 of C.P.C.
7. The impugned order is sought to be assailed firstly on the ground that the Executing Court has no jurisdiction to decide whether there is an agreement between the parties to settle the decretal amount. Reliance is sought to be placed in the judgment of the Full Bench of the Allahabad High Court in the matter of Maharaj Kumar Mahmood Hasam Khan v. Moti Lal Banker, . In the said case, it was held that the Executing Court has either to execute the decree or refuse to execute it, but it has no other power and that if the decree holder wants to enforce the liability other than the judgment debtor's decretal liability, then it would strictly be not a question of execution of the decree and not be within the jurisdiction of the Executing Court. It was further held that what is the effect of the compromise on the decree itself is not a matter within the cognizance of the Executing Court and it is not a question relating to execution, discharge or satisfaction of the decree. It was also held that if the compromise were to be treated as an adjustment within the meaning of Rule 2 of Order 21 of C.P.C., the decree holder would still not gain anything. So far as the decree is concerned, it would stand adjusted or satisfied and would no longer be open to execution. The decree holder may have some right under the adjustment, but so far as the decree obtained by him is concerned, it would be extinguished by it. He can enforce the agreement in any manner permitted by law and if he is granted relief under it, it is by enforcement of the agreement and not by execution of the decree. An Executing Court has jurisdiction only to execute the decree i.e. it can enforce only the decretal liability and it has jurisdiction conferred by section 47 to decide all questions relating to the execution, discharge or satisfaction of the decree, but it has no jurisdiction whatsoever over any other matter and cannot enforce any other liability. It would have no jurisdiction to enforce the liability arising out of the adjustment or to execute it or get it specifically performed. Section 47 confines its jurisdiction to the questions relating to the decree under execution and therefore it may execute the decree in whole or in part or may refuse to execute it in whole or in part, but has no other jurisdiction. Enforcing a liability not under the decree (because it would have stood extinguished by the adjustment), but under the adjustment itself, could not possibly amount to execut-
ing either the same decree or another decree. An adjustment of decree is not itself a decree; to hold otherwise would be to go against the very conceptions of an adjustment (which is extinction of the decree) and of a decree (which is a formal adjudication by a Court finally determining the rights of the parties). An executing Court is concerned only with the enforcing the decretal liability and not enforcing any other liability. An adjustment may substitute a decretal liability by another liability, but the Executing Court has no jurisdiction over the latter. However, this judgment of the Full Bench of the Allahabad High Court was subjected to appeal before the Apex Court in the matter of Moti Lal Banker (dead) by his legal representative v. Maharaj Kumar Mahmood Hasan Khan, who was the appellant before the Allahabad High Court and, and the Apex Court had set aside the judgment of the Full Bench of the Allahabad High Court. While setting aside the judgment of the Allahabad High Court, it was held by the Apex Court that the jurisdiction of the Executing Court to enforce a compromise is not taken away by Order 23, Rule 4 of C.P.C. The effect of Order 23, Rule 4 is that Order 23, Rule 3 does not apply to the execution proceedings. Independent of Order 23, Rule 3, the provisions of Order 21, Rule 1 which enables the Executing Court to record and enforce a compromise in execution proceedings. Nor does Order 20, Rule 11(2) affect this power of the Executing Court. Order 20, Rule 11 enables the Court passing the decree to order postponement of the payment of the decretal amount on such terms as to the payment of interest as it thinks fit on the application of the judgment-debtor and with the consent of the decree-holder. It does not affect the power of the Executing Court under section 47 and Order 21, Rule 2. It was also held therein that it is open to the parties to enter into a compromise with reference to their rights and obligations under the decree. There is nothing in the Code of Civil Procedure which prevents the party from entering into such a compromise. If the compromise amounts to adjustment of the decree, it must be recorded under Order 21, Rule 2 C.P.C. and if not so recorded, it cannot be recognised by any Court executing the decree. If the compromise amounts to adjustment of the decree, it would necessarily be relating to the matter pertaining to the execution of the decree.
8. Considering the law that the Executing Court has power to determine the rights arising between the parties relating to the execution of the decree and to give appropriate relief on such determination and that the exclusive powers to determine such questions having been given to the Executing Court under section 47 of C.P.C. certainly it will be within the domain of the Executing Court to give effect to the compromise arrived at between the parties in relation to the decretal amount. Any adjustment pertaining to the decretal amount shall also be a question relating to the execution of the decree and therefore if an agreement is arrived for adjustment in relation to the payment of the decretal amount, the question relating to enforcement of such adjustment would be within the jurisdiction of the Executing Court. It was also held by the Full Bench of Allahabad High Court in the matter of Chaube Mahendra Rao and others v. Bishambhar Nath and others, that an Executing Court has jurisdiction to record an adjustment entered into between the decree holder and the judgment debtor and to ascertain its legal effect and to order accordingly. No doubt, another Full Bench of the Allahabad High Court in the matter of Maharaj Kumar Mahmood's case had held that this was not a good law. However, the Apex Court in Sultana Begum v. Prem Chand Jain, referring to the expression "or the decree of any kind is otherwise adjusted" in Rule 2 of Order 21 held that the said words are of wide amplitude and it is open to the parties namely the decree holder and the judgment debtor to enter into compromise relating to their rights and obligations under the decree. Being the compromise, it has to be recorded by the Court under Rule 2 of Order 21. It was also held by the Apex Court that an agreement, contract or compromise which has the effect of extinguishing the decree in whole or in part on account of a decree being satisfied to that extent, will amount to adjustment of a decree within the meaning of the said rule and the Court, if approached, will issue & certificate of adjustment. Necessarily demand for money of adjustment which is not recorded by the Court under Order 21, Rule 2 cannot be recognised by the Executing Court. It was further held that in a situation of that type the Executing Court can hold inquiry to find out whether the plea taken on its face value amounts to adjustment or satisfaction of the decree wholly or in part and whether such adjustment had the effect of extinguishing the decree to that extent and if the Executing Court comes to the conclusion that the decree was adjusted wholly or in part but the compromise or adjustment or satisfaction was not recorded and or certified by the Court, the Executing Court may not recognize them and proceed to execute the decree. The Apex Court has further held therein that section 47 gives full jurisdiction and power to the Executing Court to decide all questions relating to execution, discharge and satisfaction of the decree and these general powers can be exercised subject to restrictions placed by Order 21, Rule 2 including sub-rule (3) which contains special provisions regulating payment of money due under the decree outside the Court or in any other manner adjusting the decree. At this stage, it is also worth noting that a party is not entitled to file a separate suit for declaration that a decree has been fully satisfied and is incapable of execution, as such a suit is barred under the provisions of section 47 of C.P.C. The decision of the Full Bench of the Lahore High Court in the matter of Ram Labhoya v. Firm Mukanda Mul-Kapur Chand through Balkishen, reported in A.I.R. 1922 Lahore, 428 is clear in that regard. Being so, there is no substance in the first contention sought to be raised by the petitioners.
9. It was next contended on behalf of the petitioners that it was for the decree holder to certify the payment or adjustment to the Court and only on such certificate the Executing Court could have recorded the satisfaction of the decree. The submission if accepted would virtually amount to repealing Rules 2(2) and (2-A) of Order 21 of C.P.C. Sub-rule (1) of Rule 1 of Order 21 of C.P.C. provides that all money payable under a decree shall be paid by depositing the same in the Court whose duty it is to execute the decree or by sending the decretal amount to the decree holder by Money Order or through the Bank or by any other mode wherein the demand is evidenced in writing or by some other method directed by the Court which has passed the decree. Sub-rule (2) of Rule 1 thereof provides that where the payment is made by depositing in the Court or by the mode specified under the decree itself, the judgment debtor shall give notice thereof to the decree-holder either through the Court or directly by post. Sub-rule (3) provides that when money is paid by postal Money Order or through the Bank, the judgment-debtor shall accurately state the number of the suit, names of the parties, etc., the money remitted is to be adjusted i.e. whether it is towards the principal or interest or cost, the number of the execution case and the name and address of the payor. Sub-rule (4) provides that on payment of money by depositing in the Court or in terms of the mode prescribed in the decree itself, the interest on the decretal amount if any shall cease to run from the date of service of notice in terms of sub-rule (2). Sub-rule (5) provides that on any money paid out of the Court, the interest, if any, shall ceases to run from the date of such payment.
10. Rule 2 of Order 21 of C.P.C., which is very relevant for the decision in the matter, deals with the provision relating to payment out of Court to the decree holder. Sub-rule (1) thereof provides that where any money payable under a decree of any kind is paid out of Court, or the decree of any kind is otherwise adjusted in whole or in part to the satisfaction of the decree-holder, the decree-holder shall certify such payment or adjustment to the Court whose duty it is to execute the decree, and the Court shall record the same accordingly. In other words, sub-rule (1) speaks about certificate by the decree-holder regarding the payment and adjustment to the Court in relation to the execution of the decree. There can be no doubt that in terms of this sub-rule (1) of Rule 2 it is for the decree holder to certify the payment or adjustment and only on such certificate by the decree holder, the Court can record the satisfaction of the decree.
11. Sub-rule (2) of Rule 2 provides that the judgment-debtor or any person who has become surety for the judgment-debtor also may inform the Court of such payment or adjustment, and apply to the Court to issue a notice to the decree-holder to show cause, on day to be fixed by the Court, why such payment or adjustment should not be recorded as certified; and if, after service of such notice, the decree-holder fails to show cause why the payment or adjustment should not be recorded as certified, the Court shall record the same accordingly. Further sub-rule (2-A) of Rule 2 provides that no payment or adjustment shall be recorded at the instance of the judgment-debtor un-less-(a) the payment is made in the manner, provided in Rule 1; or (b) the payment or adjustment is proved by documentary evidence; or (c) the payment or adjustment is admitted by, or on behalf of, the decree-holder in his reply to the notice given under sub-rule (2) of Rule 1 or before the Court. On plain reading of the provisions contained in sub-rule (2) and (2-A) of Rule 2 of Order 21 of C.P.C., it is abundantly clear that the Executing Court is fully empowered to record satisfaction of the decree at the instance of the judgment-debtor when the payment or adjustment or adjustment of the decretal amount is proved by documentary evidence or when such payment or adjustment is admitted by the decree-holder either in reply to the show cause notice in terms of sub-rule (2) of Rule 2 or in some other manner before the Executing Court or when the payment is proved to have been made in accordance with the manner prescribed under Rule 1 of Order 21. Being the contention of the petitioners the Executing Court cannot record satisfaction at the instances of the judgment debtor in the absence of certificate of such payment or adjustment to the Court by the decree holder is totally devoid of substance.
12. It was then sought to be contended that in any case, unless the payment or adjustment is proved to be made in terms of the provisions contained in Order 21, Rules 1 and 2 of C.P.C. the Executing Court could not have recorded execution of decree and that the correspondence on record based on which the Executing Court has held that the parties had arrived at settlement, does not disclose a contract as understood under the Contract Act and there was no proposal that was accepted for consideration in order to establish the contract and the Executing Court having failed to appreciate the same has acted with material irregularity while passing the impugned order. In this regard, reliance was also sought to be placed on the judgment of the Punjab High Court in the matter of Messrs. Sehgal Brothers and others v. Bharat Bank Ltd., . At this stage, it cannot be forgotten that in revisional jurisdiction, it is not permissible for this Court to reassess the materials on record unless it is disclosed that the findings arrived at by the Executing Court are either perverse or are not borne out from the record or are not supported by any material on record. Perusal of the impugned order discloses reference to the correspondence between the parties while arriving at the finding that the parties had arrived at a settlement. The Executing Court has referred to four letters namely letter dated 14-1-94, 19-1-94, both by the petitioners and letter dated 22-1-94 by the respondents as well as letter dated 10-3-94 by the Advocate for the petitioners. The impugned order also reproduced the contents of letter dated 14-1-94 by the petitioners and the same read thus.
"It has been decided that party has to agree for the payment of decreed amount plus 10% interest calculated upto date and the amount should be paid by the end of December 1994. Execution proceedings be taken vigorously against the parties."
The impugned order also refers to the fact that the contents of this letter were further confirmed by letter dated 19-1-94 by which letter the respondents were informed by the petitioners that the total liabilities of the respondents was crystallised from the date of the suit till date including the interest at Rs. 1,83,59,376.05. Perusal of the letters dated 14-1-94 and 19-1-94 along with the fact of deposit of the amount by the respondents clearly disclose that the proposal for adjustment and final settlement of the claim in both the execution applications was apparent from the said letters and the respondents had made payment in accordance with the said proposal, thereby accepting the said proposal and acting upon it. Being so, apparently no fault can be found, and the Executing Court cannot be accused of having arrived at a perverse finding to the effect that the proposal for final settlement was given by the petitioners by letter dated 14-1-94 read with letter dated 19-1-94 and as a consequence thereof the respondents had made payment within the stipulated period which payment was accepted by the decree-holder. Indeed, the amount was received without any reservation. The copy of the receipt acknowledging the payment of money issued by the petitioners on 30th December, 1994 reads thus:-
"Received from the above Judgment Debtors a sum of Rs. 1,83,59,376.05 by Pay Order No. 1368/94 dated 29-12-1994 issued by the Madgaum Urban Co-operative Bank Ltd. of the claim under Ex. Application No. 3/92/B and Ex. Application No. 6/92/B as per the application dated 30-12-94 filed by the Judgment Debtors in the said Execution Application."
13. Even in the said receipt there is no reservation whatsoever made by the petitioners and, on the contrary, it ex-facie discloses that the payment was "as per the application dated 30-12-94." This fact clearly discloses that the payment was made in accordance with the adjustment and final settlement arrived at between the petitioners and the respondents in relation to the execution of both the decrees and sought to be executed in Execution Applications No. 3/92 and 6/92. The application dated 30-12-94 clearly states that the payment of Rs. 1,83,59,376.05 was made in full and final settlement of all the dues to the petitioners in view of the settlement arrived at between the parties disclosed from the correspondence. Indeed paras 1, 2 and 3 of the said application which read as follows are clear in that regard:-
"1. That the Decree Holders by their letter No. 88/TPL/3027/94 dated 19th January, 1994 informed the Judgment Debtors that their total liabilities from the date of suit file, i.e. from 6-12-83 to till date calculated at 10% simple interest is as under:-
^^egkjk ekaxkps yksd tkLr ektysr R;kaP;kdMs igkos ykxsy**
2. The Judgment Debtors were asked to ensure the dues are settled by December, 1994 as intimated earlier. The Xerox copy of the said letter is annexed herewith for your Honours immediate perusal.
3. The Judgment Debtors are depositing today the said amount of Rs. 1,83,59,376.05 in this Hon'ble Court in full and final settlement of the Decree Holders under Execution Application No. 3/1992 and Execution Application No. 6/1992 by Pay Order No. 1368/94 dated 29-12-1994 issued by the Madgaum Urban Co-operative Bank Ltd."
14. It is true that by letter dated 12-1-94 the respondents had requested the petitioners to crystallise the total liability for Rs. 1,35,00,000/-. Moreover, the fact remains that by letter dated 10th March, 1994 by the Advocate for the petitioners, the respondents were reminded that the entire amount in terms of adjustment proposed by the petitioners was to be paid by December, 1994. It is also a matter of record that the respondents paid the amount on 30th December, 1994 in accordance with the adjustment proposed under letter dated 14-1-94 and 19-1-94 read with the said letter of the Advocate for the petitioners. Being so, the contention of the petitioners that there was no contract as understood under the contract inasmuch as there was no proposal that was accepted for consideration is totally devoid of substance.
15. Much grievance was sought to be made on behalf of the petitioners about reliance placed by the Executing Court in the judgment of the Madras High Court in Central Bank of India v. V. Guruviah Naidu and Sons (Leather) P.L and others, contending that the said decision was in relation to a compromise arrived at in a suit and therefore the ratio of the said decision could not have been applied to any adjustment or compromise in execution proceedings. There is no doubt that the decision of the Madras High Court in a suit. However, the same was in relation to the principle of law of contract as contemplated under section 63 of the Contract Act. In that regard referring to section 62 of the Indian Contract Act which provides that if the party to a contract agreed to substitute a new contract or to rescind or alter it, the original contract need not be performed and considering the provisions contained in section 63 of the Contract Act which states that every promisee may dispense with or may remit, wholly or, in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit, and bearing in mind Illustrations 'B' and 'C' to the said section 63, it was held by the learned Single Judge of the Madras High Court that accord and satisfaction is the purchase of a release from an obligation whether arising under contract or tort by means of any valuable consideration not being the actual performance of the obligation itself. The accord is the agreement by which the obligation is discharged and that for that there must be two minds ad idem. The real emphasis provided in this section is not on the acceptance of smaller sum, but on the debtors' condition that if the tendered money be at all accepted, it must be in discharge of the entire debt. The creditor cannot then claim his entire claim. Therefore, it was held that it follows that the accord and satisfaction simply means a method of discharge of a contract and that will not obliterate the contract, but only makes the contract arising from it unenforceable, implying an agreement take the money in satisfaction of the claim in respect of which it has been sent. Under those circumstances, it was observed that there could be a true accord under which the creditor may agree to accept a lesser sum satisfaction of the debt and acting upon that accord, if debtor pays the lesser sum and the creditor accepts it, then it is inequitable for the creditor to insist after-wards for the balance amount or so. The ratio of the said decision of the Madras High Court has been applied by analogy to the execution proceedings by the Executing Court. Bearing in mind the decision of the Apex Court in Sultana Begum's case referred to above wherein the Apex Court has held "It may be pointed out that an agreement, contract or compromise which has the effect of extinguishing the decree in whole or in part on account of the decree being satisfied to that extent will amount to an adjustment of decree within the meaning of this rule and that Court if approached, will issue certificate of adjustment, it cannot be said that the Executing Court has acted immaterial irregularity in placing reliance upon the judgment of the Madras High Court in the case of Central Bank of India v. Guruviah Naidu and Sons (supra) to hold that by the settlement arrived at pursuant to the correspondence entered into between the parties and consequently payment of money in accordance with the proposal for settlement by the petitioners themselves which has been accepted and acted upon by the respondents, the decrees against the respondents stood satisfied. The impugned order does suffer from any vice and does not disclose either illegal exercise of jurisdiction or improper exercise of jurisdiction or failure to exercise the jurisdiction by the Executing Court.
16. The decision in the matter of Messrs. Sehgal Bros. v. Bharat Bank Ltd., relied upon by the petitioners is of no assistance in the matter. The said decision was delivered in the peculiar set of facts of that particular case. That is apparent from the observations of the Punjab High Court in the said decision which read thus:-
"... The important question, therefore, in each such case is whether the parties intended that the existing decree will stand satisfied because of the new set of promises made between them, or whether the intention was merely to provide a mode in which the existing decree is to be executed and the compromise is not intended to wipe out the decree. In the present case the intention was made perfectly clear by the express terms of the compromise itself which said-
"In case of default of any one instalment the decree-holder shall be entitled to execute the decree for the principal amount then remaining due, with costs and future interest as provided in the decree and in this case, no rebate of interest after 15-4-1955 shall be allowed to the judgment-debtors."
Leaving alone these words and considering the substance of the compromise also it is clear that the intention never was that the existing decrees should be taken as satisfied by the promises made by the judgment-debtors in the compromise. As I have mentioned, the whole point of the compromise was this that the judgment-debtor instead of being required to pay the two decretal amounts at once were allowed a latitude in point of time and method of payment and a further concession in the form of a rebate on interest after 15th April, 1955, and the judgment-debtors in turn agreed to provide security for the payment of the amount by agreeing to a charge on some of their properties. I find it impossible to accept the suggestion that the decree-holder when agreeing to these terms intended or could have even contemplated that in case the judgment-debtors did not pay the agreed instalments at the agreed time, the decree-holder would seek his remedy against the judgment-debtors by a separate suit instead of executing the decrees in terms of the compromise. I, therefore, find myself in entire agreement with Mahajan, J., that the compromise was never intended to entirely supersede or satisfy the existing decrees but that its term merely provided a mode of executing the two decrees." .
In fact, from para 7 from which the above extracts have been quoted begins by saying that it is common ground that subsequent to the decree, the parties may arrive at a settlement and such settlement might have the effect of wholly satisfying the existing decree or it might not have such effect. Being so, the said decision does not in any manner assist the petitioners to buttress their contention regarding absence of settlement or contract for settlement between the parties to the execution proceedings.
17. The petitioners then complain of recording satisfaction of decree without affording opportunity to the petitioners of showing cause against such recording of satisfaction of decrees. The contention is based on the alleged failure on the part of the Executing Court to issue a show cause notice in terms of Order 21, Rule 2(2) of C.P.C. The said sub-rule provides that the judgment debtor may inform the Court about the payment or adjustment and apply to the Court for issue of notice to the decree holder to show cause as to why the payment or adjustment should not be recorded as certified and on issuance of such notice if the decree holder fails to show cause against recording of satisfaction of decree, the Court shall record the same accordingly. There is no doubt that on mere statement of the judgment debtor, the Court cannot record satisfaction of decree. Any order relating to the satisfaction of decree at the instance of the judgment debtor must be proceeded by proper opportunity to the decree-holder to show cause against recording of such satisfaction. In the case in hand, the respondents who are the judgment debtors herein filed their application dated 30th December, 1994 clearly informing the Court about the payment of the dues in accordance with the adjustment arrived at and further prayed for intimation to the decree holder about the said fact as well as of satisfaction of decree and also for consequential relief such as release of hypothecated machinery and cancellation of charge. The notice of the said application was duly received by the decree-holder, i.e. petitioners herein who filed their reply to the same on 4th February, 1995. It was only after duly considering the said reply and arguments advanced at the Bar, the Executing Court decided the matter by the impugned order dated 13th August, 1997. It is thus clear that there was sufficient and substantial compliance of the provisions of Order 21, Rule 2(2) of C.P.C. in the matter of giving opportunity to the petitioners to show cause against recording of satisfaction of the decrees in question. It is therefore clear that there is neither illegal exercise of jurisdiction nor there is refusal to exercise the jurisdiction by the Executing Court while deciding the case. The impugned judgment does not disclose either the Executing Court having exercised its jurisdiction improperly or having exceeded its jurisdiction while deciding the matter. The impugned order also does not disclose any failure of justice as such. The petitioners have not been able to make out any case of interference by this Court in exercise of its jurisdiction under section 11 of the Code of Civil Procedure in the impugned judgment
18. Both the petitions fail and are hereby dismissed with no order as to costs. Rule is accordingly discharged in both the petitions.
19. Petitions dismissed.