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Showing contexts for: compromise decree is executable in The Sangli Bank Limited vs M/S. Timblo Pvt. Ltd. & Others on 6 August, 1999Matching Fragments
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.
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-