Pummy Devi & Anr vs Naresh Kumar Jain & Others

The judgment debtor/petitioners have invoked the jurisdiction of this Court under Article 227 of the Constitution of India challenging the order dated

19.3.2012, by which their objection, regarding adjustment of the judgment and decree of the civil court dated 23.9.1995 has been rejected on the

ground of delay and also on account of not having its certification as contemplated under Order 21 Rule 2(3) of the Code of Civil Procedure (for short

'CPC').

To deal with the controversy, the facts unfolded to file the present case are required to be referred. A suit bearing No. 20A/1990 was filed seeking

eviction on the ground of bonafide need and arrears of rent by Babulal Jain (dead) against the judgment debtors/petitioners. The said suit was decreed

by the trial court vide judgment and decree dated 23.9.1995 directing ejectment on the ground of bonafide need and arrears of rent. The defendant

filed an appeal, which was renumbered as Civil Appeal No. 15A/2006 and upon hearing it was dismissed on 8.9.2006 confirming the findings of the

Trial Court. Its execution was filed on 5.1.2007 by Munnibai, Pradeep Kumar Jain and Madhvi Jain being legal heirs of the decree holder (deceased).

The respondent No.1 Naresh Kumar Jain was later joined as party being son of the decree holder.

An application was filed by the judgment debtors to dismiss the execution proceedings on account of adjustment of the decree due to payment of

arrears of rent to Naresh Kumar Jain as per the receipts Annexures P/9 and P/11. It is also said that Naresh Kumar Jain executed a fresh registered

rent note in favour of the petitioner and Mukesh Wadhwani for the suit shop on 12th January, 2007, therefore, decree of the arrears of rent is satisfied

on account of payment of arrears to Naresh Kumar Jain and due to execution of the fresh registered rent agreement in their favour.

The respondent No.1 Naresh Kumar Jain filed reply on 1.2.2007 and admitted the contents of the application under Order 21 Rule 2 of CPC. Later

he filed the objection under Section 47 read with Order 21 Rule 2 of CPC denying contents of earlier reply inter-alia contending that neither the

judgment debtor nor the decree holder have adjusted the decree as specified under Order 21 Rule 1 of CPC having its certification as contemplated

under Order 21 Rule 2(3) of CPC. In addition, the decree has not been satisfied within the period of one month as specified under Article 125 of the

Limitation Act, therefore, application for adjustment of decree by the judgment debtor may be set aside. The subsequent reply filed by respondent

No.1 Naresh Kumar Jain is supported by an affidavit whereas the previous was not supported by the affidavit.

Learned Trial Court while deciding the said objection held that payment of decree has not been made within a period of thirty days as contemplated

under Article 125 of the Limitation Act and in absence of its certification, the application for adjustment of decree cannot be allowed dismissing the

execution on full satisfaction.

Learned counsel for the petitioners/judgment debtors submits that on filing the execution on 5.1.2007 the adjustment was made receiving the arrears

of rent and by execution of the fresh rent note on 12th January, 2007 within a period of one month and it is reported to the Court by filing application

on 15.1.2007 which was acknowledged by one of the legal heirs of the deceased decree holder, in his reply dated 1.2.2007, however, it would be

treated to be a certification of the judgment and decree for adjustment, therefore, execution case may be dismissed in full satisfaction due to

adjustment of the decree and certification may be directed by the Court.

Per contra, learned counsel for the respondents/decree holders contend that even filing an application and its admission in the reply by one of the

legal representative of the decree holder would not sufficient until the adjustment would not be recorded by the Court after certification by the decree

holder. One of the legal representatives who gave the consent and executed a rent note himself objected subsequently before the court, therefore, in

absence of the certification, the issue of adjustment of the decree does not arise. The Trial Court has rightly rejected the application filed by the

judgment debtors, however, the order impugned passed by the Trial Court do not warrant interference in this petition. In support of the said contention,

reliance has been placed on a Full Bench Judgment of this Court in the case of Rajeev Khandelwal vs. Arun Pannalal â€" AIR 1987 Madhya Pradesh

262 (Full Bench). Reliance has also been placed on the judgment of the Apex Court in the case of Sultana Begum v. Prem Chand Jain â€" AIR 1997

SC 1006 and Padma Ben Banushali & Anr. v. Yogendra Rathore & ors â€" AIR 2006 SC 2167. In view of the said submission, it is urged that

interference in the petition under Article 227 of the Constitution of India is not warranted.

Upon hearing learned counsel for both the parties, first of all it is required to be seen, if the payment is made out of the court to the decree holder

then it may be deemed to be adjustment of the decree and the execution may be dismissed on the said objection. To deal the said issue, the relevant

provisions contemplated under Order 21 Rule 2 of CPC is required to be referred, which is reproduced as under:

21 (2). Payment out of court to decree holder.- (1) Where any money payable under a decree of any kind is paid out of the court, or a decree of any

kind is otherwise adjusted in 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.

(2) The judgment debtor or any person who has become surety for 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 certified; and if, after service of such notice, the decree holder fails to show cause why the payment or adjustment should not be

recorded as certified, the court shall record the same accordingly.

(2A) No payment or adjustment shall be recorded at the instance of the judgment debtor unlessâ€

(a) the payment is made in the manner, provided in rule 1; or

(b) the payment or adjustment is proved by documentary evidence; or

(c) the payment or adjustment, is admitted by, or on behalf of, the decree holder in his reply to the notice given under sub-rule (2) of rule 1, or before

the court.

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

On perusal of the aforesaid it is clear that in case money part of the decree payable or of other kind to the decree holder if paid out of the court or a

decree of any kind that includes the decree of eviction in whole or in part to which its satisfaction of decree holder is there, it is required to be certified

by the decree holder to the court who is executing the decree and the Court is required to record such satisfaction accordingly. It is the duty of the

judgment debtor or its surety to inform the court regarding such adjustment whereupon the court shall issue notice to the decree holder, and may

record such satisfaction certifying the adjustment. Rule (2A) contemplates that such adjustment shall not be recorded merely on the instance of the

judgment debtor unless the payment is made in the manner provided in Rule 1 and such payment or adjustment should be proved by documentary

evidence or admitted by the decree holder in reply to the notice. Thereafter, as per Order 21 Rule 2 (3) of CPC a payment or adjustment shall not be

recognized by the court executing the decree, until certified by the decree holder. Under Order 21 Rule 1 the mode of payment of the money under

decree has been specified by which the money decree can be satisfied by depositing the amount of decree in the executing court or through postal

money order or through bank. In addition, in case of out of court adjustment, it may be by a postal money order or through a bank or by any other

mode wherein the payment is evidence in writing or otherwise the court may direct for satisfaction of the said money decree.

In view of the foregoing legal proposition and in the facts of the present case it is apparent that a decree of eviction and arrears of rent is against

the judgment debtors. The execution was filed on 5.1.2007 by respondents No. 2, 3 and 4 and not by the respondent No.1. The judgment debtor on

15.1.2007 applied to the court to certify the adjustment of the decree, filed by one of the legal representatives of the decree holder Babulal Jain

(deceased) and without issuing notice by the court, the respondent No.1 has filed the reply by his own on 1.2.2007, later he himself filed the objection

on 21.4.2010 alongwith an affidavit and rebutted all the said facts, however, the objection of the judgment debtors to satisfy the decree by adjustment

and on payment of the money is rejected by the order impugned.

The Full Bench of this High Court in the case of Rajeev Khandelwal (supra) has considered the said issue somewhat in similar circumstances. In

para-15, 16 and 17 the Full Bench held as under:-

We would like to add one word about the decision of the Supreme Court in the case of M. P. Shreevastava (AIR 1967 SC 1193) (supra) also.

This case has been relied on even in the case of Bherulal (AIR 1981 Madh Pra 181) (supra). What is of significance to be noticed in this case is that it

was not a case where notwithstanding the fact that there was an adjustment as contemplated by Order XXI, Rule 2, Code of Civil Procedure, it was

held that the agreement amounting to such adjustment could be made the basis of an objection under Section 47, C.P.C. even without getting the

adjustment recorded as certified under Order XXI, Rule 2. On the other hand, it was a case where there was no such adjustment at all. It was pointed

out in that case :

Order 21, Rule 2 prescribes the procedure for recording payment of money under any decree or for adjustment of any decree to the satisfaction of

the decree-holder. If any money payable under a decree of any kind is paid out of Court, or the decree is otherwise adjusted in whole or in part to the

satisfaction of the decree-holder, the decreeholder is enjoined by Rule 2(1) of Order 21 to certify such payment or adjustment to the Court; the

judgmentdebtor may also inform the Court of such payment or adjustment, and it may be recorded after enquiry; Rule 2(2) of Order 21. In the present

case, however, there is no adjustment. Adjustment contemplates mutual agreement, and in the present case, there is no evidence of any consent on

the part of the appellant who was never willing to take back the wife and resume conjugal relations. Order 21, Rule 2 contemplates adjustment of the

decree by consent-express or implied-of the parties; where there is no such consent, Order 21, Rule 2 does not apply.

In view of the foregoing discussion, we are of the opinion that the agreement set up by the respondent in the instant case came within the purview

of the term 'adjustment' and since the said agreement had not been got recorded as certified by the respondent under Order XXI, Rule 2, Code of Civil

Procedure, his objection could not be recognised by the Court executing the decree in view of Rule 3 of Order XXI of the Code of Civil Procedure.

The view taken by the Court executing the decree and dismissing the objection filed by the respondent was correct and the District Judge

committed  a manifest error of law in the revision filed against the  order of the executing Court in taking a contrary view .

In the result, this writ petition succeeds and is allowed with costs and the impugned order of the District Judge, dated 16th July 1985, a copy

whereof has been filed as Annexure-B to the writ petition, is quashed. The outstanding amount of security be refunded to the petitioner.

In view of the full Bench judgment it is apparent that if any adjustment has been made by the parties, it must be recognized by the court executing the

decree as contemplated under Order 21 Rule 2(3) of CPC and required to be certified; while in the present case the court has not certified adjustment

by passing the order, in terms of the Order 21 Rule 2(3) of CPC.

The Apex Court in the case of Sultana Begum (supra) has considered the similar issue in para-13, 21, 24, 25 and has held as under:-

Interpreting the provisions of Section 47 and Order XXI Rule 2 in the light of the above principles, there does not appear to be any antithesis

between the two provisions. Section 47 deals with the power of the court executing the decree with Order XXI Rule 2 deals with the procedure which

a court whose duty it is to execute the decree has to follow in a limited class of cases relating to the discharge or satisfaction of decrees either by

payment of money (payable under the decree) out of court or adjustment in any other manner by consensual arrangement.

21 If Section 47 and Order XXI Rule 2 are read together, as has been done by us in this case, the so-called conflict (we say ""so-called"" as, in fact,

there is none) stands dispelled by employing the rule of `harmonious construction' or the other rule that the general provision must yield to the special

provision.

P. Narsaiah vs. P. Rajoo Reddy AIR 1989 AP 164, Bhabani Dasya vs. Tulsi Ram Keot AIR 1990 Guwahati 90 as also a full Bench decision of

the Madhya Pradesh High Court in Rajeev Khandelwal vs. Arun Pannalal AIR 1987 MP 262 are cases which have taken the view that uncertified

payment or adjustment cannot be entertained under Section 47. The High Courts have gone to the extent of saying that even if judgment-debtor

pleaded fraud, the executing court would not look into a payment or adjustment which had not been recorded or certified under Order XXI Rule 2.

Same view was also taken in Krishna Gobind Patil vs. Moolchand AIR 1941 Bombay 302, and by the Calcutta High Court in Sham Lal Chatterjee &

Ors. vs. Hazarimal Babu 15 Calcutta Law Journal 451 and in Biroo Gorain & Ors. vs. Musstt, Jaimurat Koer 16 Calcutta Weekly Notes

Even this Court in Moti Lal Bankers vs. Mohd. Hassan Khan AIR 1968 SC 1087 was of the same opinion as it laid down as under:

It is open to the parties to enter into a compromise with reference to their rights and obligations under a decree. There is nothing in the Code of Civil

Procedure which prevents the parties from entering into such a compromise. If the compromise amounts to an adjustment of the decree, it must be

recorded under 0.21, R.2 and if not so recorded, it cannot be recognised by any Court executing the decree.

Where an application is given by a decree-holder for certification of payment or recording an adjustment. Order XXI Rule 2 presents no difficulty.

Where, however, an application is given by the judgment-debtor to the court for the certification, the court has to act judicially. It was observed by the

Privy Council in Shri Prakash Singh vs. Allahabad Bank Ltd. AIR 1929 PC 19 as under:

Sub-rule 2 therefore does contemplate an application by the judgment-debtor; further, it provides for notice being given to the decree-holder, it affords

an opportunity for the decree-holder to appear, and it involves a judicial decision by the Court whether the payment should be recorded.

Proceedings under Order XXI Rule 2 are, therefore, not mere empty formality as contended by the respondent, but they are judicial proceedings.

The High Court has relied upon its own decision in Indra vs. Narayan Chand 1979 (2) RCR 1 and a decision of the Allahabad High Court in M/s

Chitra Talkies vs. Durga Dass Mehta AIR 1973 Allahabad 40. In both the cases, it was a fresh tenancy which was granted to the judgmentdebtor and

not a licence as in the instant case. That apart, on principles of law, both the decisions, in our opinion, have not been correctly decided. As observed by

us earlier, it is no doubt open to the parties to adjust or compromise their rights under the decree, but if it amounts to adjustment of decree, it must be

reported to the court whose duty it is to execute the decree so that that court may record or certify the same. If it is not done, the court before whom

the execution proceedings are initiated will proceed to execute the decree. It is not every time that the decree-holder and judgment-debtor enter into a

compromise after the decree. The judgment-debtor may even set up a false case of compromise and creation of fresh tenancy after the decree. It is

in order to prevent such judgment-debtors that Order XXI Rule 2 has been enacted so that if such compromise or creation of fresh tenancy has not

been recorded, the judgment-debtor be not encouraged to initiate another round of litigation under Section 47 CPC.

The decision of this court in M.P. Shreevastava vs. Mrs. Veena 1967(1) SCR 147 was a case where the husband had obtained a decree for

restitution of conjugal rights against his wife, who, after the decree, returned to the residence of the appellant and offered to live with him. She also

wrote letters to the appellant requesting him to allow her to go to his house and live with him as his wife. Even the attempts of certain friends of the

family to persuade the appellant to take the respondent back into the marital home also proved to be unsuccessful. The wife then moved an application

under Order XXI Rule 2 that the decree be recorded as satisfied as the appellant had failed to allow the respondent to resume conjugal relations even

after she went to his house, which was allowed and it was held by the District Judge, Delhi, that the decree stood satisfied. This order was upheld by

the High Court. In this Court, the principal question raised was that the application filed by the wife was not maintainable because an application for

execution of the decree had not, till then, been filed by the appellant and, therefore, the court was not the executing court. This was not accepted by

this Court and it was laid down that the application was maintainable under Section 47 CPC even though execution proceedings had not been initiated.

The court held that even objection under Section 47 could be filed before the court even though application for execution had not been filed.

The Full Bench of the Madhya Pradesh High Court has already considered this decision and, in our opinion, has rightly distinguished and explained it.

On perusal of the aforesaid, it would reveal that the Apex Court while interpreting the provisions of Section 47 and Order 21 Rule 2 of CPC has made

a clear distinction that general provisions under Section 47 to raise an objection is permissible, but Order 21 Rule 2 of CPC is a special provision

enacted to prevent the judgment debtor from setting up a false and a cooked up plea so as to prolong or delay the execution proceedings. The Apex

Court held that it is open to the parties to adjust the decree by way of compromise, but it is the duty of the court who is executing the decree to record

it and certify the same. If it is not done, the court before whom the execution proceedings are initiated will proceed to execute the decree.

The Apex Court further in the case of Padma Ben Banushali (supra) relied upon the said judgment and in para-17 and 18 has held as under:

Order XXI Rule 2 applies to a specific set of circumstances. If any money is payable under a decree, irrespective of the nature of decree, and

such money is paid out of court, the decree-holder, has to certify such payment to the court whose duty it is to execute the decree and that court has

to record the same accordingly. Similarly if a decree, irrespective of its nature, is adjusted in whole or in part to the satisfaction of the decree-holder,

the decree-holder has to certify such adjustment to that court which has to record the adjustment accordingly. If the payment or adjustment is not

reported by the decreeholder, the judgment-debtor has been given the right to inform the court of such payment or adjustment and to apply to that

court for certifying that payment or adjustment after notice to the decree-holder. Then comes sub-rule (3) which provides that a payment or

adjustment which has not been certified or recorded under sub-rule (1) or (2), shall not be recognised by the court executing decree.

“The expression ""or the decree of any kind is otherwise adjusted"" are of wide amplitude. It is open to the parties namely, the decree-holder and

the judgmentdebtor to enter into a contract or compromise in regard to their rights and obligations under the decree. If such contract or compromise

amounts to an adjustment of the decree, it has to be recorded by the court under Rule 2 of Order XXI. It may be pointed out that an agreement,

contract or compromise which has the effect of extinguishing the decree in whole or in part on account of decree being satisfied to that extent will

amount to an adjustment of the decree within the meaning of the Rule and the Court, if approached, will issue the certificate of adjustment. An

uncertified payment of money or adjustment which is not recorded by the court under Order XXI Rule 2 cannot be recognised by the executing court.

In a situation like this, the only enquiry that the executing court can do is to find out whether the plea taken on its face value, amounts to adjustment or

satisfaction of decree, wholly or in part, and whether such adjustment or satisfaction had the effect of extinguishing the decree to that extent. If the

executing court comes to the conclusion that the decree was adjusted wholly or in part but the compromise or adjustment or satisfaction was not

recorded and/or certified by the court, the executing court would not recognise them and will proceed to execute the decree.â€​

In the context of the elaborate discussion of the provision of Order 21 Rule 2(3) of CPC and as interpreted by the Apex Court in the various

judgments, and on analyzing of the facts of the case, it is to clarify that for execution of the judgment and decree dated 23.9.1995 the execution was

filed on 5.1.2007 and the adjustment of the claim was reported by the judgment debtor to the Court on 15.1.2007 contending to receive the rent by one

of the legal representatives of the decree holder and the fresh registered rent note executed in his favour by him. The trial court recorded the finding

in the context of Article 125 of the Limitation Act treating it as time barred and the adjustment of the decree is not in accordance with law, however,

denied for certification. It is to be noted here that after filing adjustment of the claim by the petitioners the legal representative of the decree holder

who initially acknowledged the application, but later objected the same by filing the objection alongwith affidavit, however, after the application has not

been certified by the order impugned passed by the Executing Court and denied the adjustment of the judgment and decree, in the present case the

execution was filed by the other L.Rs. of the deceased decree holder, in which application for adjustment of decree was filed, however, it may be an

additional reason for rejection of the application for adjustment filed by the judgment debtor and to refuse certification under Order 21 Rule 2(3) of the

CPC to the Court. In view of the said discussion, in my considered opinion, the court has not committed any error to reject such objection and to

refuse the certification for the adjustment of the decree as sought by the judgment debtor by passing the order impugned.

At this stage it is relevant to point out that scope of interference under Article 227 of the Constitution of India conferred to the High Court is

limited. In this regard, guidance can be taken from the judgments of the Apex Court in the case of Shalini Shyam Shetty and another vs. Rajendra

Shankar Patil â€" (2010) 8 SCC 329 by which it is clear that if the court committed the error of jurisdiction and gross illegality or the findings are

perverse, in the exceptional cases, interference may be called for, otherwise it is beyond the scope of supervisory jurisdiction of the High Court.

In view of the foregoing discussion, in my considered opinion, the executing court has not committed any error to reject the application filed by the

judgment debtor under Order 21 Rule 2 of CPC refusing to record the adjustment of the decree and denied its certification, however, in the facts of

the case interference by this Court under Article 227 of the Constitution of India is not warranted. Consequent to it, this petition is meritless, hence

dismissed. The executing court is directed to execute the decree as early as possible not later than six months from the date of production of the

certified copy of the order.