Bayyana Ramayya vs Nidamarti Krishnamurti and Others

The appellant who had obtained transfer of a decree against the first respondent and others applied under Order XXI, Rule 16, Civil Procedure

Code, for execution and to be recognized as transferee. The application was opposed by the third defendant (first respondent) on the ground that

the transfer was benami and that the decree had been satisfied by the first defendant paying the decree amount to the original plaintiff.

The finding of the lower Appellate Court was that the appellant did not pay any consideration for the transfer, and that, being only a benamidar

for the first defendant, by whom the decree amount had been paid, the Court could not recognize the appellant as transferee-decree-holder.

The only point argued in this appeal is that, as the payment was not certified to the Court, Order XXI, Rule 2(3), Civil Procedure Code,

operates as a bar to the first respondent''s plea of no title in the appellant, and that the first respondent was not entitled to prove the alleged

uncertified payment.

We have been referred to Ponnusami Nadar v. Lakshmana Chettiar ILR (1912) Mad. 659 (a case which is in some respects similar to the

present one, in which the learned Judges Abdur Rahim and Sundara Ayyar, JJ., differed as to the scope of Order XXI, Rule 2).

Mr. Justice Abdur Rahim held that, if the arrangements alleged amounts to an adjustment of the decree and is not certified to the Court, it cannot

be pleaded as a bar to execution, and that an assignment is none the less an adjustment or satisfaction of the decree because it is obtained in the

name of another person as a mere benamidar for the judgment-debtor.

On the other hand, Mr. Justice Sundara Ayyar was of opinion that Rule 2 of Order XXI, Civil Procedure Code, does not disentitle the

judgment-debtor to prove facts which will show that the applicant is not the real transferee, even if the facts he relies on show that the decree has

been adjusted.

Speaking with respect, it appears to us that the view taken by Sundara Ayyar, J., as to the applicability of Order XXI, Rule 2, Civil Procedure

Code, is the correct one, and that the section merely forbids effect being given to an uncertified payment when it is set up as a defence to an

application for the execution of a decree and when such application is made by a person who is admitted or proved to be the legal owner of the

decree-rights the question of payment towards or adjustment of the decree being left out of consideration for the moment, while deciding the

question of the legal ownership in the applicant of the rights to execute the decree. In other words, the alleged transferee has first to prove his right

under the transfer set up by him, and it is only after he has done so that the question of adjustment of the decree arises.

In so agreeing with Sundara Ayyar, J., we should add that we do not agree with the very wide observations found in Agra Bank v. Cripps ILR

(1885) Mad. 455 and Monmohan Karmokar v. Dwark Nath Karmokar (1910) 12 C.L.J. 312 (two of the cases referred to by Sundara Ayyar,

J., in his judgment) to the effect that uncertified payments can be treated as discharging a decree even when the subsequent transferee of the

decree is a transferee for value. Strictly speaking it was not necessary for the first respondent to do more than allege that the appellant was not the

real transferee in order to defeat the appellant''s claim to execute the decree and the addition of the allegation that the decree had been legally

satisfied might be treated as surplusage. The rule provides that a Court executing a decree shall not recognize a payment or adjustment which has

rot been certified for any purpose whatsoever. It seems to apply to cases where it is contended that the decree having been satisfied is not

executable and no question arises as to whether the applicant is the decree-holder or not. In this case the applicant''s right as transferee was denied

by the first respondent. We think that the Subordinate Judge was right in holding that the applicant was not entitled to apply to execute the decree

on the basis of an assignment in respect of which he is a benamidar for one of the judgment-debtors. In Annabattula Venkataratnam v. Annabattula

Nayudu (1915) 28 I.C. 906 Sankaran Nair and Spencer, JJ., express the opinion that when the alleged transferee of a decree is found to be the

benamidar of the judgment-debtor, the Court was bound by the second proviso to Order XXI, Rule 16, to refuse to allow the decree to be

executed in favour of the alleged transferee. This decision supports the view of Sundara Ayyar, J., above referred to.

The appeal is dismissed with costs.