Periyamana Narayanan Potti vs Krishnaru Krishnaru

Defendant 1 in O.S. NO. 773 of 1114 on the Attingal Munsiff''s Court is the appellant . Daring the pendency of the suit, he had applied for permission to discharge the debt under Sections 8 and 9, Debt Relief Act (Acts II and III of 1116 of Travanoore). He has been accordingly paying the debt in instalments. By the decree passed in this case on 5-11-1117, it was expressly stated that he is entitled to have the debt discharged as prayed for by him in his Debt Relief Petition NO. 1531 of 1116. This Defendant had already filed two suits,O. S. Nos. 1021 and 1022 of 1113, against the Plaintiff in 0. S. NO. 773 of 1114. All the three suits were disposed of together on the same date. The decrees in those two suits, namely O. S. Nos. 1021 and 1022 of 1113, expressly directed that the amounts covered by those decrees should be set off out of the amount decreed against the present Defendant 1 in 0. S. No. 778 of 1114. On 16-11-1120, Defendant 1 filed 0 M.P. NO. 16091 praying that an account of all the deposits made by him under the Debt Relief Petition as well as of the amounts appropriated towards this decree debt as per the set-off ordered in O. S. Nos. 1021 and 1022 of 1113, may be taken and the decree in O. S. No. 773 of 1114 may be declared to have been discharged and the excess amount found to have been paid by him may be ordered to be refunded to him. The lower Court dismissed that petition. The appeal is against that order.

The lower Court dismissed Defendant''s 1 petition on two grounds. The first ground is that the set off pleaded by him cannot be allowed in the absence of pending excution petitions in all the three decrees as contemplated by Order 21, Rule 16, CPC (CPC) The second ground is that since the decree debt in O. S. No. 773 of 1114 is being paid in instalments under the provisions of the Debt Relief Act, the balance amount due under that decree is not an ascertained sum and hence also the set off claimed cannot be allowed. Both these grounds are unsustainable. It cannot be said that claims under cross decrees could be set off only in the manner contemplated by Order 21, Rule 16. Rule 16 can apply only when Such cross decrees are attempted to be executed. Even without filing any such execution petitions, the claims under cross decrees could be set off and adjusted by agreement of parties or under orders of Court. In the nature of the oross decress referred to above, the, set off should be deemed to have taken effect in respect of the mutual liabilities as they stood on the date of the decree. It was argued on behalf of the respondent that the decree in O. S. 773 of 1114, as it stands corrected as per the application of Defendant 1 himself, does not make any direction for set off. The absence of such a direction cannot stand in the way of the set off being allowed. Farther there is an express direction in the other two decrees, O. S. Nos. 1021 and 1022 of 1113, against the Plaintiff in O. S. No. 778 of 1114, that the amounts under those decrees should be set off against the amount payable under the decree in O. S. 773 of 1114. The Plaintiff in O. S. 773 of 1114 is bound by those directions. It is also significant to note that the decree in O.S. 1021 of 1113 states that after the set off directed by that decree there will be nothing for the Plaintiff in that suit to realise by way of execution of that decree. This means that the set off and adjustment were meant to be effected on the date of the decree itself. In a similar case in Hiralal Singh v. Ramji Ram AIR 1919 Pat 312 : 52 I. C. 746. it was held that set off should be allowed even though the cross decrees are not before Court for the purpose of execution. The objection that the amount that) was due under the decree in O. S. NO. 773 of 1114 was not an ascertained sum, is also without substance. On the date of the decree in that case a definite and ascertained amount was due from Defendant 1 to the Plaintiff, and the amount due under the other two decrees could be set off and adjusted out of such as certained amount.

Apart from the aspects mentioned above, it has to be pointed out that it is not strictly a claim for set off that has been made by defendant 1 in. the present instance. What be has prayed for is for ascertaining the amount paid by him towards the discharge of the decree in O. S. NO. 778 of 1114 and for declaring that the decree has been discharged and also for a refund of the excess amount found to have been paid by him, Since he has been paying the debt in instalments under the provisions of the Debt Relief Act, he is entitled to have such a settlement and the consequent relief. About the instalments paid or deposited by him, there is no dispute But It is argued by the learned advocate for the respondent that any amount adjusted by way of set off cannot be deemed to be amount paid under the provisions of the Debt Relief Act. We see no force in this argument. Any amount satisfied by the judgment-debtor towards discharge of the decree-debt during the course of the instalment payment under the Debt Relief Act has to be treated as amount paid by the judgment-debtor, The amounts covered by the decrees in O. S. NOS. 1021 and 1022 of 1113 were amounts belonging to the judgment-debtor in this case and such amounts were really in the hands of the Plaintiff in this case. The effect of those decrees being satisfied by set off and adjustment towards the decree in this case is nothing short of those amounts belonging to Defendant i having been paid on his behalf by the Plaintiff himself towards partial discharge of the decree in the present case. Accordingly we hold that those amounts also should be taken into account as having been paid towards the discharge of this decree-debt and such payments must be deemed to have been made on the date of the decree. To that extent the amount that remained due under the decree on that date must be deemed to have, become reduced. On this basis the total amount paid by the judgment-debtor inclusive of the instalment payments, has to be calculated and the question whether he has discharged the debt u/s 9, Debt Belief Act, has to be decided.

Then there remains only the question of refund of the excess amount, if any, paid by Defendant 1. The learned advocate for the Plaintiff-decree holder argues that even if there has been an excess payment, the same should be deemed to have been a voluntary payment and as such no refund can be allowed. Since the debt was being discharged in instalments and the question of final settlement of accounts has to be taken up only at the final stags as contemplated by Section 9, Debt Relief Act, it can not be said that the Defendant was making any voluntary payment. It follows, therefore, that any amount paid by him in excess of the amount required to be paid u/s 9, Debt Relief Act, to get a valid discharge of the decree, has to be refunded to Defendant 1 after a final settlement of the accounts, and we hold accordingly.

In the result this appeal is allowed and the order of the lower Court is set aside. The case is remanded to the lower Court for fresh disposal of Defendant 1st petition in accordance with law; and in the light of the observations made above. Costs of this appeal will abide the final result of the petition.