Kaikei Dei vs Debendra Lenka

G.K. Misra, C.J.—The Petitioner is the decree-holder. He obtained a preliminary decree for foreclosure on 8-7-1971 against the opposite party for Rs. 2154. 85. As no payment was made, he filed an application for final decree on 19-1-1973. On 27-7-1973 the opposite party filed objection alleging that on 21.11.1971 there was a compromise between the husband of the Petitioner and the opposite party that only a sum of Rs. 2100. 00 would be paid towards the decretal dues. Rs. 1900/ - was paid to the Petitioner''s husband on that date and a receipt was granted by him. The opposite party accordingly prayed that the compromise would be recorded and the amount of Rs. 1900/ - would be deducted from the decretal dues. The learned Munsif of Bhubaneswar made an enquiry and accepted the version of the opposite party that there was a compromise and payment. It is against the order dated 24-6-1974 upholding the adjustment that this civil revision has been filed by the decree-holder.

The finding of the learned Munsif that there was an adjustment out of Court between the husband of the Petitioner and the opposite party is a pure finding of fact which cannot be assailed in civil revision. Mr. Rao accordingly advanced the sole contention that in a final decree proceeding foreclosure there cannot be any adjustment out of Court and the alleged compromise is hit by the Orissa amendment to Order 23, Rule 3, Code of Civil Procedure.

Order 34, Rule 3, Sub-rule (1), so far as material, runs thus:

3, Final decree in foreclosure suit.- (1) Where, before a final decree debarring the Defendant from all right to redeem the mortgaged property has been passed, the Defendant makes payment into Court of all amounts due from him under Sub-rule (1) of Rule 2, the Court shall, on application made by the Defendant in this behalf, pass a final decree

x x x

The italic expression "makes payment into Court" was construed by several High Courts in India and there was conflict of decisions. Some of the High Courts held that the judgment-debtor must make the payment in the Court itself and there cannot be any payment outside Court. Order 23, Rule 3, CPC covers a wider field and adjustment outside Court is taken into consideration for affecting the decretal dues. Those High Courts held that Order 23, Rule 3. CPC has no application to payments to be made into Court under Order 34, Rule 3. Code of Civil Procedure. Other High Courts took the contrary view and held that the ambit of Order 23, Rule 3. CPC was wide enough to cover payments made under Order 34, Rule 3 and consequently adjustments out of Court would be taken into consideration by the Court in a final decree proceeding.

The matter was finally settled by AIR 1945 152 (Privy Council) where their Lordships held that Order 23, Rule 3, CPC will have application to payments under Order 34, Rule 3, CPC Code.

Order 23, Rule 3. CPC was amended by the Orissa High Court on 30-3-1954. After amendment it stands thus:

Compromise of suit: Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, in writing and signed by the parties in the token of their consent to such agreement or compromise, or where the Defendant satisfies the Plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded and shall pass a decree in accordance there- with so far as it relates to the suit.

Provided that the provisions of this rule shall not apply to or in any way affect the provisions of Order 34, Rules 3, 5 and 8.

The Orissa amendment clearly purported to nullify the effect of the Privy Council decision. In clear terms it said that Order 23, Rule 3. CPC has no application to Order 34, Rule 3, Code of Civil Procedure. Moreover to be operative Order 23, Rule 3, CPC it self enjoins that the lawful agreement or compromise must be in writing and signed by the parties in token of their consent to such agreement.

In this case by virtue of the proviso the adjustment made out of Court cannot be recognised and there is also no agreement of compromise in writing signed by both the parties. The result, therefore, is that though factually the case of the opposite party that he made payment of Rs. 1900/ - out of Court is acceptable, legally it cannot be recognised for the purpose of adjustment of the preliminary decree in the final decree proceeding. The contention of Mr. Rao on this score must be upheld.

In the result, the impugned order dated 24-6-1974 is set aside and the civil revision is allowed. This point was not canvassed before the Court below. In the circumstances, parties to bear their own costs.

Mr. Misra prays that the opposite party may be granted time for three months to pay up the decretal dues. Time for three months is granted. It is open to the Opposite'' party to recover Rs. 1900/ - if it is admissible in law.