P.S. Gulam Mohamed Rowther vs Narendranath Reddi and Others

Ganapatia Pillai, J.—These two appeals arise out of two orders made by the Subordinate Judge of Nilgiris at Ootacamund in two

applications made before him, E. A. Nos. 105 and 106 of 1958 for the purpose of setting aside two previous orders of the same Court recording

full satisfaction of two decrees O. S. No. 80 of 1955 and O. S. No. 184 of 1953. The third respondent (third defendant) is the appellant in both

these appeals. In O. S. No. 80 of 1955, a money decree was passed for Rs. 17,775 and odd against the appellant and others. In O. S. No. 184

of 1953 a money decree was passed against the appellant and others for Rs. 11,425-12-0, subsequent to the passing of both these decrees,

parties came together on 24-6-1956 and entered into an arrangement for the adjustment of both decree amounts. Under that arrangement Rs.

9000 had to be paid in cash to the decree-holder on or before the 24th July 1956 and four items of Immovable property had to be conveyed to

the decree-holder before that date. It was agreed that as soon as this agreement was carried out, the decree-holder should certify the adjustment

of the two decrees to Court. According to the appellant, this arrangement was carried out, but the decree-holder defaulted to certify the

adjustment to Court. On 24-10-1956 the judgment-debtor filed a memo asking for an order recording satisfaction of the two decrees based upon

carrying out of the agreement dated 24-6-1956. Unfortunately, the Court without issuing notice to the decree-holder on these memos, recorded

full satisfaction of both the decrees.

Sometime thereafter, the decree-holder applied for transfer of the decrees to the Palni District Munsif''s Court for execution. Transfer was ordered

without notice to the judgment-debtor, since the record of the Court showed no adjustment or payment. In the transferee Court objection was

taken by the judgment-debtor to the execution of the decrees passed upon the agreement of 24-6-1956. Since the transferee Court could not

decide this dispute, E. A. Nos. 105 and 106 of 1958 were filed by the decree-holder in the parent Court (Subordinate Judge of Ootacamund) for

setting aside the previous orders recording satisfaction. The judgment-debtors appeared and contested the proceeding and wanted the

Subordinate Judge to hold an enquiry into the truth of the allegation that the agreement had not been carried out as agreed upon. The Subordinate

Judge without making any enquiry into that question set aside the order recording satisfaction merely on the ground that the orders were passed

without notice to the decree-holder. The Subordinate Judge incidentally held that the memos were filed in time, though we find that the conclusion

may not be correct.

Anyway, Mr. Sangameswaran for the appellant in both the appeals contends that it was the duty of the Subordinate Judge to have gone into the

question whether the agreement dated 24-6-1956 was carried out as contended by the judgment-debtors, or was not carried out as contended by

the decree-holder. The argument was that though the application filed by the decree-holder was for a different purpose, namely, to set aside the

orders recording adjustments already made by the Sub Court, since the factum of the agreement regarding the adjustment was brought to the

notice of the executing Court by the decree-holder himself, there was no impediment of limitation of 90 days for the recording of adjustment, and

since the judgment-debtor made a request that the truth of the adjustment should be enquired into by the Court, the Court had every jurisdiction to

enquire into it. The learned Subordinate Judge declined to make an enquiry into the truth of the dispute between the parties taking the view that

such an enquiry would be outside the scope of the proceeding before him.

The question really falls to be decided on the narrow ground whether, when once the factum of adjustment is brought to the notice of the Court

by the decree-holder in whatever manner, it should be competent to the Court to enquire for that purpose. No period of limitation is fixed for a

report by the decree-holder to the Court recording payment or adjustment. In Chinna Mummidi Royal and Another Vs. Raja Somasekara Chikka

Royal, , the judgment-debtor pleaded adjustment in answer to an execution proceeding. The decree-holder admitted payment mentioned by the

judgment-debtor but sought to explain it away on the ground that it related to maintenance payable for a previous period. The question was

whether this adjustment though uncertified could be recognised by the executing Court. Relying upon the decision in Lodd Govinda Dass v. Rajah

of Karvetnagar, 29 MLJ 219 : AIR 1916 Mad 795 ), Jackson J. held that when once the fact of payment is accepted and sought to be explained

away by the decree-holder as appropriated not in the manner indicated by the judgment-debtor, the Court had jurisdiction to decide the question

which of the two versions was true. We agree with respect with the view of Jackson, J. and hold that in this case also when the performance of the

conditions imposed by the agreement dated 24-6-1956 is asserted by one party and denied by the other, it was the duty of the Court to have gone

into this dispute to find out if as a matter of fact the adjustment had taken place. Clause (5) of the agreement no doubt states thus:

In case we fail to comply with any of the above, you will be at liberty to execute the decree for the full amount due under the same and will not be

bound by the above terms"".

Clause (4) casts a duty of reporting full satisfaction of the two decrees upon the decree-holder. Certainly, unilaterally the decree-holder could not

decide whether the agreement had been carried out or not.

In this case, the decree-holder admits that Rs. 9000, the amount indicated in Clause (1) of the agreement, had been paid and the four properties

indicated in Clause (2) of the agreement had been transferred within the time mentioned in the agreement. The contention of the decree-holder is

that out of these four properties possession had not been transferred in respect of two and a marketable title had not been made out in respect of

one of them. This is denied by the judgment-debtor. How far on interpretation of the agreement the question of marketable title would arise is a

matter for consideration. Similarly, how far there was any agreement to transfer possession as part of the transaction of agreement would be a

question for consideration by the Subordinate Judge apart from the truth or otherwise of the assertion made by the decree-holder that possession

was not transferred. That is to say, the Subordinate Judge will have to decide first whether transfer of possession was part of the agreement

because it might be open to the parties to agree specifically as to the execution of the deeds, and registration of them but not as to transfer of

possession. When once title is transferred, right to possession follows. Equally, it would have been open to the parties to have agreed under the

agreement not only for transfer of title for the four kerns of properties but also for surrender of possession as a condition precedent to discharge of

the liability under the decrees. How far either version would be supported by the language of the agreement is a matter for consideration by the

Subordinate Judge. He must also go into the question how far the allegation of the decree-holder that possession was not given is made out

because we are told by counsel for the appellant that possession of all the items of properties had been transferred.

The orders passed by the Subordinae Judge are therefore set aside. The two execution applications will be restored to file and the Subordinate

Judge will proceed to enquire into the main question in dispute between the parties, namely, the carrying out of the agreement dated 24-6-1956

and how far such carrying out extinguished the liability under the two decrees. The Subordinate Judge should also bear in mind the fact that the

cash payment of Rs. 9000 admittedly paid towards the decree amount has not been returned by the decree- holder till now but has been retained

by him. Under the circumstances, it will be for him to decide whether this attention would not amount to acceptance of the same in part payment of

the decree at least even though the rest of the terms might not have been carried out. There will be no order as to costs.