Mathevan Pillai Mathevan Pillai vs Subramonia Pillai Krishna Pillai

Sankaran, J.—The 4th Defendant in O.S. No. 27 of 1112 on the file of the Nagercoil District Court is the Appellant. To the execution petition No. 9 dated 1-2-1125 filed by the assignee-decree-holder in this case for realising the amount due under the decree, the 4th Defendant raised an objection and contended that the amount due under the decree was paid out of court to the assignee-decree-holder on 1-11-1118 and a receipt obtained from him and thus the claim had been satisfied. The execution Court overruled this objection for the reason that the alleged payment has not been certified or recorded as contemplated by Rule 2 of Order 21 of the CPC within the time prescribed by law. The correctness of that order is challenged in this appeal by the 4th Defendant.

It is contended on behalf of the Appellant 4th Defendant that the procedure prescribed under Clauses 1 and 2 of Rule 2 of Order 21, CPC was not complied with so far as the payment pleaded by him is concerned. Clause 1 of Rule 2 lays down that where any money payable under a decree of any kind is paid out of Court, or the decree is otherwise adjusted to 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. The certification contemplated by Clause 1 of Rule 2 is undoubtedly intended for the protection of the judgment-debtor. Naturally therefore it is to his interests to see that the payment or adjustment made out of Court is certified to the Court within the prescribed period. If the decree-holder fails to certify such payment or adjustment, the judgment-debtor himself can intimate the execution Court the fact of such payment or adjustment and apply to have the same recorded. Such a right is conferred on the judgment-debtor by Clause 2 of Rule 2 which lays down that

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 satisfied; and if, after service of such notice, the decree-holder fails to show cause why the payment or adjustment should not be recorded and certified, that court shall record the same accordingly.

Article 174, Limitation Act, governs such an application by the judgment-debtor and he has to file the application contemplated by Clause 2 of Rule 2 within a period of 90 days from the date of the payment or adjustment. Clause 3 of the same rule lays down that

A payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognised by any court executing the decree.

The payment pleaded by the 4th Defendant in this case clearly comes within this prohibition. But it is argued by his learned advocate that the provisions of Clauses 1 to 3 of Rule 2 of Order 21, CPC apply only to cases where the payments are made to or the adjustments made with the decree-holder himself and not to cases where the payments are made to or adjustments made with the decree-holder''s assignee before the recognition of such assignment by the executing Court. The rulings in - Paddisetti Rangayya Setti Vs. Guduru Venkata Subba Reddi and Others, and in - Radhakisan v. Daudas AIR 1935 Nag 230 are relied on in support of this position. In the first of these cases the question whether the judgment-debtor is bound to take necessary steps to have payments made by him to the assignee-decree-holder certified or recorded within the prescribed time, did not arise for decision. What was decided in that case was that until the assignee applies under Order 21 Rule 16 for permission to execute the decree, the executing court is bound to recognise only the decree-holder himself as the person competent to execute the decree arid that therefore all payments made in the meanwhile by the judgment-debtor to the original decree-holder will have, to be accepted as proper and valid. Incidentally it was observed that the expression "decree-holder as used in Order 21 Rule 2 does not include a transferee from him." In the other case it was held that the decree-holder''s assignee can be deemed to be a decree-holder as contemplated by Order 21 Rule 2 only after the assignment is recognised by the execution court by allowing the assignee''s application under Order 21 Rule 16. It was also held that the judgment-debtor is not bound to have the payment made to or the adjustment made with such assignee prior to the recognition of the assignment by the execution court, certified or recorded under Order 21 Rule 2 and that he can successfully plead such uncertified payment or adjustment as a bar to the assignee''s application under Order 21 Rule 16 for execution of the decree. We have to respectfully dissent from this view. There appears to be no justification for construing the provisions of Order 21 Rule 2 in such a narrow and restricted manner.

The several provisions of Order 21 relate to execution of decrees and orders. It cannot be said that these provisions are confined exclusively to execution by the original decree-holders. Undoubtedly these provisions govern execution of decrees and orders by all persons who have in law acquired the rights under the decrees or orders sought to be executed. This is obvious from the provision contained in Rule 16. This rule lays down that

Where a decree or, if a decree has been passed jointly in favour of two or more persons, the interest of any decree-holder in the decree is transferred by assignment in writing or by operation of law, the transferee may apply for execution of the decree; and the decree may be executed in the same manner and subject to the same conditions as if the application were made by such decree-bolder.

The first proviso to this rule is to the effect that in the case of an application for the execution of a decree by the assignee, the decree shall not be executed until the Court has heard the objections, if any, of the assignor as well of the judgment-debtor. Beyond this there is no provision in the Code making it obligatory on the part of the assignee to have the assignment in his favour recognised by the execution court as a condition precedent to his becoming entitled to the rights under the decree. The acquisition of such rights does not depend upon the recognition of the assignment by the court. The transfer of the rights under the decree becomes complete with the assignment in writing of such rights by the decree-holder and thereafter it will be open to the assignee to receive payments of the amounts due under the decree from the judgment-debtor. There is nothing to prevent the judgment-debtor from recognising the rights of the assignee as the person entitled to the rights under the decree and to make payments to him out of court. But it will be to his interests to see that such payments are duly certified in court within the prescribed time.

In - ''Balakrishna Pillai v. Mini Reddi 14 Ind Cas 702 it was held that the judgment-debtor''s application to have such payments recorded as certified cannot be refused by the execution court merely on the ground that the payments were made prior to the recognition by the Court of the assignment of the decree and that the judgment-debtor is entitled to prove that the payments were made to a person entitled to execute the decree and that therefore the payments have to be recorded as certified. The assignee-decree-holder''s right to apply to the execution Court to certify payments to him by the judgment-debtor even before the filing of an application for execution under Order 21 Rule 16 has been recognised in - Dharani Mudali v. Meenamba Bai 17 Ind Cas 617 All such applications for certification are governed by the provisions of Order 21 Rule 2. When the application to have the payments or adjustments recorded as certified is by the judgment-debtor, notice of such application will be given to the decree-holder to show cause why the application should not be allowed. The notice issued under Clause 2 of Rule 2 to the decree-holder is to show cause why the payments of adjustments as contemplated by Clause 1 of the same rule should not be recorded as certified. Clause 1 of Rule 2 is not confined to payment made to or adjustment 4 made with the decree-holder. The clause refers to payment or adjustment of the decree in whole or in part to the satisfaction of the decree-holder. The payment to the assignee of the decree could also be payment to the satisfaction of the decree-holder.

As already pointed out, the expression "decree-holder" used in this rule is used in the wider sense so as to include all persons in whom the rights under the decree may have become vested by assignment in writing or by operation of law. Payments by the judgment-debtor to the decree-holder''s nominee or transferee are undoubtedly payments towards the discharge of the obligations under the decree and it is to evidence the fact of such discharge to the satisfaction of the decree-holder that the certification or recording under Rule 2 is insisted on. The judgment-debtor must be deemed to have accepted the transferee of the decree as the person entitled to enforce the claim under it when payments are made to him out of court. There is no reason to place the judgment-debtor in a more advantageous position in respect of such payments than in respect of similar payments made to the original decree-holder himself. In fact the judgment-debtor dealing with the transferee of the decree is really undertaking a risk in view of the possibility of the executing Court, for some proper and valid reason, refusing recognition of the transfer and sanction for execution of the decree by the transferee. Thus such payments or adjustments stand in greater need of certification or recording than payments to or adjustments with the original decree-holder. Clause 2 of Rule 2 enables the judgment-debtor to apply to the execution Court within the prescribed time to have all payments made by him towards the discharge of the claim under the decree recorded and certified. If the payments are to the transferee of the decree before he has been permitted by the Court to execute f the decree, notice of the judgment-debtor''s application for recording the payments made by him will be issued to the decree-holder as well as to his transferee and on their failing to show cause why the payments or adjustments should not be recorded, the executing court is bound to record as certified such payments or adjustments. When such a right is available to the judgment-debtor, his refusal to exercise that right for his own protection within the time allowed by law will result in the prohibition contained in Clause 3 of Rule 2 operating as against him. There is nothing in this clause to indicate that the transferee of the decree is not entitled to the benefit of this prohibition. So far as the execution of the decree is concerned, the transferee cannot be in a better or worse position than the decree-holder himself. The transferee''s rights are the same as those of the transferor himself.

It is expressly provided in Order 21 Rule 16 that the decree may be executed by the transferee "in the same manner and subject to the same conditions as if the application were made by such decree-holder". This means that the provisions contained in Clauses 1 to 3 of Rule 2 are to govern the rights of the decree-holder and his transferee in the same manner and to the same extent. To construe these provisions in a narrow sense so as to exclude the transferee of the decree from the scope of those provisions would be to defeat the very purpose of these provisions. These provisions are obviously intended to prevent unnecessary obstruction and delay in the matter of execution of decrees, by limiting the scope of an enquiry into alleged payments or adjustments out of Court. As the provisions stand, they are comprehensive enough to cover payments or adjustments made out of Court, no matter whether such payments or adjustments have been to or with the decree-holder or his transferee. Any such payment or adjustment not certified within the prescribed time cannot be allowed to be pleaded by the judgment-debtor in answer to an application for execution under Order 21 Rule 16 by the transferee of the decree. Clause 3 of Rule 2 prohibits the recognition of any such uncertified payment or adjustment. The Full Bench ruling of the Madras High Court in - Subramanian v. Ramaswami 55 Mad 720 (FB) is in support of this position. In the present case the payment pleaded by the 4th Defendant was under a receipt dated 1-11-1118 and admittedly such payment was not certified or recorded as contemplated by Clauses 1 and 2 of Rule 2 of Order 21 within the time allowed by law. It was in answer to the execution petition filed on 1-2-1125 that he pleaded such payments as amounting to a discharge and satisfaction of the decree. The lower Court was right in refusing to recognise the alleged payment which had not been certified or recorded in time.

No other point was argued in the appeal.

In the result the order of the lower Court is confirmed and this appeal is dismissed with costs.