Karnataka High Court
Seetharamakrishnaiah Setty vs Satyanarayana Setty on 8 January, 1987
Equivalent citations: ILR1987KAR579
JUDGMENT Kulkarni, J.
1. This is a revision by the Legal Representatives (LRs) of the Decree-Holder against the order dated 21-4-83 passed by the Civil Judge, Bellary, in Ex. Petition No. 336/79 closing the execution petition on the ground that it is fully satisfied.
2. The deceased Seetharamakrishnaiah Setty and J. Drs. 1 to 4 are brothers. The deceased Decree-Holder instituted O.S. 44/74 against the J.Drs. for recovery of money. The decree was passed for Rs. 27,877-53 along with costs and future interest. The said decree has been put into execution by the L. Rs of the Decree-Holder in the present case.
3. Judgment-Debtor 2 (JDr.2) by his counter and JDr. No. 3 by adopting the counter filed by JDr. 2 resisted the execution petition. The Court-below closed the execution by entering full satisfaction. Hence, the revision.
4. Present J.Drs. had filed a suit O.S. 1/75 against the Decree-Holder for partition and possession of their share in the house. That suit came to be compromised by entering into an agreement Ex. D4, dated 1-5-76. According to the J. Drs., while compromising O.S. 1/75, the liability under the present decree also was adjusted and the value of their share in the house to the extent of Rs. 12,900/- was deducted from the liability under this decree and it was agreed between them in the settlement deed, Ex.D4 dated 1-5-76 that J.Drs should pay only Rs. 18,100/- as due under this decree. According to them, they have paid off the said amount of Rs. 18,100/- and nothing is due. The Trial Court accepted the contentions of the J.Drs. and held that the decree was fully satisfied and taking the said view it closed the execution by entering full satisfaction. Hence this revision by the L.Rs. of the Decree-Holder.
5. That the decree sought to be sued out in this execution was obtained by the deceased Decree Holder against them, is undisputed. That the decree was passed for Rs. 27,877-53 along with costs and future interest against the J.Drs. is also not disputed. It is also undisputed that the present J. Drs had filed a suit O.S. 1/75 against the Decree-Holder for partition and possession of their share in the suit house and regarding some other monetary liabilities. It is also undisputed that the present, Decree-Holder and the J.Drs. arrived at a compromise in O.S. 1/75 by executing the settlement deed Ex. D4. It is also undisputed that on account of the execution of this settlement deed Ex.D4, a memo was filed in O.S. 1/75 that the matter was settled out of Court and the suit may be dismissed. Accordingly, O.S. 1/75 was dismissed as settled out of Court. It is also undisputed that the settlement deed Ex. D4 laid down that the amount remaining due to the tune of Rs. 18,100/- under the decree should be paid by the J. Drs. at the rate of Rs. 300/-- per month without interest.
6. As found out by the trial Court and as can be seen from Exs D5 and D6 and D5(a) to D5(t) a total sum of Rs. 10,000/-was paid in instalments by the J.Drs. to the Decree-Holder during the period from 3-6-76 to 4-1-78. This mode of payment at the rate of Rs. 300/-- per month is mentioned in the agreement Ex.D4 itself. The evidence of D.W.1 and Ex. D6(a) prove that on 9-3-78 Revathi P.W. 1 has received Rs. 200/- in cash and has signed the entry in the cash book at page 45 marked as Ex. D6(a). P.W. 1, Revathi has also admitted that Rs. 1337-40 were paid to her on 22-1-78. The evidence of the J.Dr. shows that Rs. 2000/-were paid to Varalaxmamma and Rs. 2500/- was paid to Viswanath by the J.Drs. at the instance of Revathi, P.W. 1. According to the J.Drs. the balance had thus remained at Rs. 5762-10. The entry showing the balance of Rs. 5762-10 has been signed by P. W. 1 Revathi and she has also admitted the signature. The evidence on record also bears out that a sum of Rs. 5000/- was deposited in S.B. account in the name of P. Sreenivasulu, the minor son of Revathi under the Children Welfare Scheme in the Syndicate Bank, Bellary. Out of the balance sum of Rs. 762-10, a sum of Rs. 710/- has been deposited in the S. B. A/c in the name of Smt. Revathi in Syndicate Bank, Bellary in A/c No. 17029. The balance of Rs. 52-10 was paid in cash to Smt. Revathi. The J. Drs have also deposited Rs. 100/- in the Court as the amount which ultimately had remained due after the said payments made by them. It is undisputed that the said payments were made. In view of this abundant proof of payments, the evidence of P.W.1 that the said amounts were towards some other liability and were not towards the dues under the present decree, cannot be accepted. The said payments, as rightly held by the Court-below, were all towards the liability under this decree, which has been referred to under the agreement Ex. D4. Therefore, the argument of learned Counsel Sri Rao that the said payments were towards some other liability, cannot be accepted.
7. Now the only hurdle and the main plank of argument advanced by learned Counsel Sri Rao for the revision petitioners is that even if these payments are assumed for a moment to have been made towards the satisfaction of the decree, they all amounted to an adjustment of the decree under the provisions of Order 21, Rule 2 C.P.C. and as they were uncertified they cannot be recognised and the right to recover the decree amount ever again remains infact. According to him, the only remedy for the J.Drs. even if they have paid off the entire decretal amount, is to take out a separate proceedings for the recovery of the said amount.
8. According to learned Counsel Ramachandra Rao for the J.Drs. the settlement Deed Ex. D4 superseded the decree sought to be executed in the present execution and the decree sought to be executed had become ineffective and unexecutable by virtue of Settlement Deed Ex. D4 and, therefore, whatever payments were made by the J.Drs. were all towards the liability freshly created under the Settlement Deed under Ex. D4. According to him, the Settlement deed Ex. D4 did not and could not amount to an adjustment of the decree and thus the provisions of Order 21, Rule 2 C.P.C. were not attracted.
9. The Settlement Deed Ex. D4 appears to be in Telugu. The material portion of the translation of Ex. D4 reads as :
"I have filed suit 44/74 against you in the Civil Judge's Court, Bellary, and obtained a decree. But, all the 3 of you filed a suit O.S 1/75 against me and other brothers in the Civil Judge's Court, Bellary and the said suit is still pending. But, we have decided that it is not desirable to go on with the litigation. Hence, we have entered into this Agreement and given in writing with the following conditions by way of compromise.
My late father has executed Gift Deed of a house standing in his name, in my favour and got it registered with absolute rights to me only. With regard to this matter, O.S. 1/75 has been filed. The house has been valued by us fit Rs. 30,000/-. Out of the your 3 shares will be Rs. 12,900/-.
In O.S. 44/74, I have to get Rs. 31,000/-. Out of this your share of Rs. 12,900/-, being the value of your 3 shares in that house covered under the Girt Deed was deducted and the balance of amount I had to get under the said decree is Rs. 18,100/-. For this Rs. 18,100 - without interest, you have to pay me at the rate of Rs. 300/- per month from 1-6-76. With these conditions, we, both the parties, have agreed and accepted, got this Agreement in duplicate and signed the same and one copy is kept with me and the other is given to you. In this manner, the decree in O.S. 44/74 and our rights in O.S. 1/75 have beep settled under this agreement."
Learned Counsel Ramachandra Rao relied on the last portion of the Settlement Deed and contended that the Settlement Deed Ex. D4 superseded the liability under the decree and a fresh agreement was entered into between the parties and whatever payments had been made by his clients, the J.Drs. ware all towards the liability created under the agreement Ex.D4. The said argument of learned Counsel Ramachandra Rao proceeds on the basis that the agreement Ex.D4 has superseded the decree. There is nothing in the said Settlement Deed Ex. D4 to indicate that the agreement has rendered the decree ineffective or had superseded the decree. What was sought to be done by the Settlement Deed was that the value of the share of these J Drs. in the house which was Rs. 12,900/- was adjusted towards the decree liability in O.S. 49/74 and that the balance amount of Rs. 18,100/- was still due under the decree. This amount of Rs. 18,100/- was stipulated to be paid at the rate of Rs. 300/- per month. The settlement deed only recorded the procedure of the payment. It did not vary the terms of the decree or did not create any fresh liability under the agreement. Order 21 Rule 2 C.P.C. reads :
"2. (1) Payment out of Court to decree-holder :
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.
(2) 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 a 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.
(2A) No payment or adjustment shall be recorded at the instance of the judgment-debtor unless-
(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.
(3) A payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognised by any Court executing the decree."
Adjustment contemplated by Order 21, Rule 2 C.P.C. is a mutual agreement between the parties. Any arrangement or composition or agreement between the J.Drs. and the Decree-holder would be an adjustment within the meaning of Rule 2 and would require certification. Even if the agreement varies the mode of payment and even if there is in agreement reducing the quantum for liability of the J.Drs. it would be an adjustment within the meaning of Rule 2 and without certification such payment or adjustment cannot be recognised by the executing Court at all.
10. In Mulla's C. P.C. 14th edition, page 1350 it has been stated as:
"An oral agreement not to proceed against the judgment-debtor beyond a certain limit is an agreement varying the terms of the decree and is, therefore, an adjustment which cannot be proved if not certified."
It has been further stated at page 1351 as:
In a Full Bench decision, the Lahore High Court held that if there is a completed contract, which immediately extinguishes and takes the place of the decree, that contract is an adjustment within the meaning of this rule, but if there is only an agreement to adjust the decree in fulfilment of a future condition and the decree is still left in existence, then there is no adjustment. In each case it is a question of fact to be decided by the executing Court."
Nagpur High Court in Meghraj v. Kesarimal, AIR 1947 Nagpur 197, summed up the law thus :
"Agreements to compromise a claim to execute a decree may be divided into three classes. In the first class of agreement, the decree-holder agrees to give up all his rights under the decree on the judgment-debtor's doing something or other, and there is no adjustment until the judgment-debtor has done whatever he promised. The second-class of agreement is where the decree-holder agrees to give up all his rights under the decree in return for a promise by the judgment-debtor to do something or the other ; on the recording of such an adjustment the decree becomes fully satisfied and the decree-holder can enforce the fulfilment of the judgment-debtor's promise only by a separate suit. It has in some cases been doubted whether such an agreement termed as an 'executory agreement' could amount to an adjustment of the decree but it is now well settled that it can. The third class of agreement is one in which the parties agreed that the decree shall be modified in some way of other and that the decree-holder shall be entitled to execute the decree as modified but not the original decree."
Learned Author has further said at page 1351 as :
This rule applies even where there is payment of a portion of the decree, and adjustment as regards the rest."
In this case what Ex. D4 has done is that it has adjusted Rs. 12,900/-- towards the liability and recognised the balance of Rs. 18,100/- as still due to be paid by the J.Drs. under the present decree. Therefore, it is a clear case of adjustment and partial satisfaction of the decree. Ex. D4 still recognised that the liability of the J.Drs under the decree remained at Rs. 18,100/-. Therefore, the argument of Learned Counsel Sri. Ramachandra Rao that this agreement under Ex. D4 superseded the decree and rendered the decree unexecutable, cannot be accepted at all. On the other hand, it still recognised the liability of the J.Drs. atleast to the tune of Rs. 18,100/-. Therefore, whatever payments had been made and as already held to have been made, were towards the satisfaction of the decree sought to be executed in the execution. Therefore, the adjustment of Rs. 12,900/- evidenced by Ex. D4 and the subsequent payments above referred to are all towards the adjustment or the settlement of the liability under the decree sought to be executed. Order 21, Rule 2(3) makes it clear that any payment or adjustment which has not been certified or recorded, cannot be recognised by any Court executing the decree. Therefore, it is an unfortunate case where the J.Drs. though they have paid off practically the money due under the decree, still have to suffer the execution of the decree on account of the legal defects staring at their faces.
11. Learned Counsel Ramachandra Rao referred me to M.P. Shreevastava v. Veena, . It has been held in the said case as :
"Order 21, Rule 2 contemplates adjustment of the decree consent, express or implied. Where there is no evidence of any consent on the part of the appellant who was never willing to take back the wife and resume conjugal rights, Order 21, Rule 2 does not apply."
In the present case the J.Drs. as well as the deceased Decree-Holder are parties. As already stated above, what Ex. D4 did was to adjust the liability to the extant of Rs. 12,900/-in the present execution and the J.Drs. in the present execution were still required to pay the remaining amount of Rs. 18,100/-. Therefore, the fact in the said Supreme Court case appear to be different from the facts involved in the present case.
12. Learned Counsel Ramachandra then referred me to Chitra Talkies v. Durga Dass Mehta, . In the said case the landlord had obtained an order of eviction against the tenant. Thereafter a new tenancy was created between the parties. In the said case it was held that the creation of fresh tenancy did not amount to an adjustment of the decree and it was a fresh agreement between the parties. Therefore, the fresh agreement which did not amount to an adjustment of a decree was not required to be certified within the meaning of Order 21 Rule 2 CPC. The creation of a fresh tenancy which was involved in the said Allahabad case, was a fresh agreement between the parties. The creation of a fresh agreement rendered ineffective the eviction decree already passed. Therefore, the Allahabad High Court concluded that creation of a fresh tenancy did not amount to an adjustment of the decree within the meaning of Order 21 Rule 2 C.P.C. and, therefore, it did not require certification. Therefore, the facts involved in the said case are altogether different.
13. In Sri Ram v. Lekhraj, AIR 1982 Allahabad 814 the following facts were involved:
"Suit by A, the reversioner against B the vendee of house from widow, for possession decreed - In execution agreement between A and B, that A should sell the house to B for Rs. 5,000, and that money lying in deposit to credit of B should be withdrawn by A as part consideration - Balance deposited by B in Court - Contract is a completed one and amounts to adjustment of decree which can be certified".
Therefore, as already stated by me above, the settlement deed Ex.D4 has brought about an adjustment of the liability of the present J.Drs. under the decree sought to be executed. It does not create any fresh agreement between the parties Ex. D4 cannot be said to supersede the decree sought to be executed. Therefore, it only amounts to an adjustment Within the meaning of Order 21, Rule 2 CPC. Admittedly, the said payments are not certified. Therefore, as laid down by Order 21, Rule 2(3), the said payments which are not certified, cannot be recognised and taken into account by the executing Court at all.
14. Learned Counsel Sri Ramachandra then stated that this Court should be very slow in exercising its revisional jurisdiction under Section 115 CPC. The proviso to Section 115 CPC reads as:
"Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of any suit or other proceeding, except where :--
(a) xxx xxx xxx
(b) the Order, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it was made."
According to him, the issue relating to the payment or adjustment of the decretal amount having been decided by the executing Court in his favour, if set aside by this Court would occasion a failure of justice or cause irreparable injury to the respondents. In short, he contended that O.S. 1/75 had been compromised in view of Ex. D4, the agreement, and their clients in view of the compromise decree in O.S. 1/75 lost their right in respect of the house on account of the adjustment entered into between the parties under Ex. D4. According to him, the amount of Rs. 12,900/- which was the value of the share of the respondents in the house and which was adjusted to the decretal amount in O. S. 44/74, will have to be paid again by them. According to him the payments made by him are all beyond three years and he cannot even file a suit for recovering the same from the L.Rs. of the Decree-Holder. I understand the mischief that would work out against the J.Drs. Merely because the J.Drs. would be required to pay over again all the amounts and merely because they would stand to lose all their rights in the house it does not follow that the order which is illegal and in contravention of Order 21, Rule 2(3) must be allowed to stand. Order 21, Rule 2(3) makes it clear that under no circumstances the Court shall recognise the payments made without certification. Therefore, merely because the J.Drs. would be put to the risk of making the payments over again, I do not think that the order impugned in this revision should be allowed to stand.
15. In the result, the order impugned in this revision is set aside ; the revision is allowed and the execution petition is restored to file. The trial Court is directed to proceed with the execution.