Dina Misra and Others vs Ramdas Tiwary and Another

Courtney-Terrell, C.J.—This is an appeal from a decision of the District Judge of Shahabad allowing an appeal from the Munsif in an execution case. According to the decision under appeal the execution petition was dismissed. Execution was sought by an assignee of the original decree-holder. The decree was for a sum of Rs. 1,642 and against certain of the persons who had been defendants in the suit the decree had been put into execution successfully. In the present proceedings execution was sought against the present respondents out of the total number of the original judgment-debtors for their share of the financial liability. They however resisted the execution on various grounds and for the purpose of this appeal the material ground was that they had been discharged from liability under an agreement with the original decree-holder who, they said, had agreed for good consideration not to put the decree into execution against them.

The assignee however replied that he was not a party to the alleged agreement and moreover that the agreement had not been recorded under Order 21, Rule 2(3), Civil P.C. The agreement in question concerning which there appears to be no doubt was brought about in the following way:

It appears that in some connected litigation the decree-holder had sued the present appellants together with a number of other persons for possession, the mesne profits suit already mentioned being a separate affair. The suit had been dismissed by the trial Court but the lower appellate Court had reversed that decision and decreed the suit and the respondents before us together with some of the other plaintiffs had instituted a second appeal to the High Court.

The mesne profits suit had been instituted by the decree-holder during the pendency of the appeal. These respondents compromised the second appeal and agreed in writing not to press their appeal on the terms that the decree-holder should not execute against them the decree which he had already obtained in the mesne profits dispute. Accordingly they did not appear when the appeal was called on and as none of their other co-defendants appeared the appeal was dismissed. By a direction of the High Court which heard the appeal the compromise had been directed to be filed in the High Court so that there is no doubt about its existence. It is contended on behalf of the assignee of the decree-holder that the compromise in question was an "adjustment" of the decree within the meaning of para. (3), Rule 2, Order 21, Civil P.C., and as it admittedly had not been recorded by the Courts which passed the decree or by the Court which was executing the decree it could not be recognized.

There is no evidence that the assignee of the decree-holder was aware of the existence of the compromise but he relies upon the rule and suggests that if the judgment-debtors are damaged they should seek their remedy by a suit against the original decree-holder who has failed to carry out his part of the contract to relieve them of their liability.

The argument on behalf of the respondents before us is that the compromise in question was certainly not a payment of the decree nor was it an adjustment; because it left the decree unaltered in amount and it could be put into execution against the other judgment-debtors and it is said that the words "payment or adjustment" are merely limited to a step which reduces or eliminates the amount for which the decree was passed, and therefore that the agreement can be used to bar the execution.

On the other hand it is, I think, rightly contended that the word "adjustment" includes any step which alters the liability under the decree whether by reducing the amount recoverable or by reducing the number of persons against whom the decree would otherwise be executed. It is I think clear that to hold otherwise would offend against public policy which is the basis of the rule requiring a formal certifying or recording by the Court. An assignee of a decree by reason of such record is fixed with knowledge of its value as an asset. Although this point was taken before the Munsif and rejected by him it does not appear to have been taken before the District Judge. The Munsif and the District Judge rejected the petition on other grounds into which it is unnecessary to enter.

The ultimate conclusion however at which they arrived was in my opinion right and this appeal must be dismissed with costs.

Saunders, J.

I agree.