Sankara Ayyar vs Vellayya Moopan

Jagadisan, J.—The appellant in this second appeal obtained a decree for arrears of Pattom due to him against the respondent in O. S. No.

233 of 1950 on the file of the District Munsif Court, Shencottah. The date of that decree, a copy of which has been marked as Ex. P.2, is 8-2-

1954. On 7-9-1954 the appellant executed a receipt in favour of the respondent, Ex. P. 1 in the case, in which he admitted having received a sum

of Rs. 275 in full satisfaction of the decree.

The respondent filed a petition in the District Munsif Court, Shencottah, on 3-11-1954, to enter up satisfaction of the decree alleging that he had

paid Rs. 275 to the appellant in full satisfaction of the decree and that the appellant having undertaken to report satisfaction of the decree unlawfully

failed to do so. The appellant resisted this application. The learned District Munsif of Shencottah dismissed the application of the respondent on

21-12-1954.

The matter was taken up in appeal to the District Court, Quilon, but without success. The suit, out of which this second appeal arises, was

therefore filed by the respondent seeking to recover from the appellant the sum of Rs. 338-12-6 as damages caused by reason of his failure to

report satisfaction of the decree in O. S. No. 233 of 1950, though he received the sum of Rs. 275 in full satisfaction of the decree.

This suit was resisted by the appellant on the ground that he did not in fact receive any money, that he executed the receipt Ex. P. 1 at the instance

of some arbitrators who promised to show the receipt to the respondent and bring money but who never returned. The suit was also resisted on

the ground that it was premature as in fact no execution petition was filed by him to execute the decree in O. S. No. 233 of 1950 and as in fact no

damages were suffered by the respondent.

The learned District Munsif of Shencotta held that the suit was premature and non-suited the respondent. He did not record any finding on the

issue whether in fact the appellant received any money from the respondent.

There was an appeal to the District Court of Tirunelveli in A. S. No. 262 of 1957 by the respondent and the learned District Judge reversed the

judgment and decree of the trial court. He held on a review of the evidence, that the appellant received a sum of Rs. 275 from the respondent as

per the receipt Ex. P. 1 and that he failed to report satisfaction of the decree in O. S. No. 233 of 1950 improperly.

But the learned District Judge was of opinion that the institution of the suit was not premature and that the cause of action for the suit arose by

reason of the mere failure on the part of the appellant to report satisfaction of the decree, as it was incumbent upon him to do so under the

provisions of Order XXI, Rule 2 C. P. C. He accordingly granted a decree in favour of the respondent for a sum of Rs. 275, the amount which the

appellant had received in terms of Ex. P. 1, together with interest thereon at 6 per cent per annum from 7-9-1954 till date of payment. Hence this

second appeal has been preferred by the defendant in the suit.

The finding of the learned District Judge that the appellant received a sum of Rs. 275 as per Ex. P. 1 in full satisfaction of the decree in O. S.

No. 233 of 1950 is correct and is supported by the evidence on record. The learned counsel for the appellant was not able to challenge this finding

of fact successfully. I am of opinion that on the evidence on record the only conclusion possible is that the appellant received a sum of Rs. 275

from the respondent and passed the receipt Ex. P. 1. I affirm that finding of fact recorded by the teamed District Judge,

The short point for consideration is whether the suit can be maintained on the facts admitted or proved. It is now common ground that the

appellant has not taken any steps to execute the decree in his favour in O. S. No. 233 of 1950; The defendant (appellant) averred in the written

statement that the decree in O. S. No. 233 of 1950 itself is the subject matter of an appeal. It is not known whether the appeal has been disposed

of or not. But as stated already the appellant has not put the machinery of the executing court in motion to collect the decree amount in O. S. No.

233 of 1950 from the respondent taking advantage of the fact that the payment of Rs. 275 remains uncertified.

The judicial opinion on this question of maintainability of a suit by an aggrieved judgment debtor, who finds himself in the unhappy predicament

of having paid the money due under the decree but the payment not certified to the court by the decree-holder, is conflicting. One view that has

been taken is that he can sue for damages against the decree-holder the moment the decree-holder files an execution petition ignoring the payment

received by him.

The other view on the question is that the mere filing of the execution petition by the decree-holder will not clothe the judgment debtor with a cause

of action to file a suit for damages. But he will get a cause of action only if he suffers damages, which will happen if the decree-holder successfully

realises the decree amount from him.

In Viraraghava Reddi v. Subbakka, ILR Mad 697 a Full Bench of three Judges of this court considered the question as regards the proper legal

basis of suits of this description. Kindersley J. observed as follows at p. 400:

But Section 258 of the Code expressly makes it the duty of the decree-holder to certify to the court any payment made out of court in satisfaction

of a decree, and if the decree-holder, either by fraud or by negligence, fails to discharge that duty, and by reason of such failure the debtor has to

pay his debt a second time, I am of opinion that a suit would lie against the decree-holder on the ground of his fraud or negligence.

The other two learned Judges, Turner C. J. and Muttuswami Aiyar J. put the position thus:

It is a suit to recover damages for the breach of the implied promise to certify the payment to the court and thereby make it effectual in execution.

The consideration for which the delivery was made has wholly failed owing to the negligence or misconduct of the decree-holder.

In Sriramulu v. Dalayya, 16 M.L.J. 54 the headnote is as follows :

An agreement was entered into between the decree-holder and the judgment-debtor by which the decree-holder undertook to certify satisfaction

of the decree to court on receipt of a certain amount from the judgment debtor. The judgment debtor paid the amount to the decree-holder, but the

decree-holder without entering satisfaction on the decree applied for execution. As soon as notice of the application was served on the judgment

debtor, but before any steps were actually taken to execute the decree, the judgment debtor instituted the suit for recovery of the sum paid by him

to the decree-holder in terms of the agreement;

Held : that the suit was not maintainable.

The judgment of the High Court merely-affirmed the view taken by the learned Subordinate Judge whose judgment is reported in full. It is

pointed out by the learned Subordinate Judge in that case that the mere filing of an execution petition will not afford a cause of action to the

disappointed and aggrieved judgment debtor. The following observation of the learned Subordinate Judge which was approved by the High Court

may be quoted :

The defendant has merely applied for execution but he may not execute the decree at all; by mere application for execution he derived no benefit;

nor had the plaintiff incurred any loss. It may be that before the defendant seriously attempts to-recover the decree debt again, plaintiff may

become insolvent and the defendant may be able to recover nothing. The case would be different if there was an agreement on the part of the

defendant to pay back the sum to the plaintiff, if the payment were not certified to the court but no such agreement is alleged for the plaintiff.

Plaintiff is not without other remedy as he may bring a suit for a declaration that the decree has been completely satisfied.

This case clearly lays down that even the filing of an execution petition will not be sufficient as the gist of the cause of action for the suit is damages

and no plaintiff can recover damages from the defendant unless he proves actual loss or injury. In ''In the matter of Medai Thalavoi Kaliani Anni'',

ILR Mad 545 the facts were as follows. The defendant obtained a decree against the plaintiff''s father. The plaintiff sent to the defendant Rs. 200

by money order stating in the coupon attached thereto that the amount should be credited towards the debt due by the plaintiff''s father.

The defendant received the amount but fraudulently applied to execute the decree for the whole amount. The plaintiff objected to such execution,

but his objection was resisted on the ground of limitation. Hence the plaintiff sued to recover from defendant Rs. 214 being the principle and

interest due. The High Court held that the suit was maintainable. At p. 546 Subrahmania Aiyar J. observed as follows:

In the present case, after receiving payment, out of court, the judgment creditor not only did not certify payment but also applied for the execution

of the decree as if there had been no payment out of court. I must, therefore, hold that there was a cause of action,

In Gopalasami Naick v. Nammalwar Naick, 80 M.L.J. 175 : (A.I.R. 1919 Mad. 773), the Full Bench decision in ILR Mad 397 & 16 Mad

LJ 54, were considered. The view taken was that) when a decree-holder omits to certify payment received outside court to the court; and applies

to execute the decree, he commits a breach of the implied contract which gives rise to a cause of action to a suit for damages by the judgment

debtor and that the filing of the execution petition in itself gives rise to a cause of action, though no money may have been realised. It must be

pointed out that this view is in conflict with the view taken by the Bench in 16 M.L.J. 54 : (At p. 774 of AIR), Krishnan J. observed as follows:

The nature of a suit like the one before us was considered by a Full Bench of this High Court in ILR Mad 397, and though Kindersley J. was of

opinion that the suit should be taken as based on the ground of fraud or negligence on the part of the decree-holder in not certifying the payment to

court as he was under a statutory obligation to do, the majority consisting of Turner C. J. and Muthu swami Aiyyar J. considered it to be a suit to

recover damages for the breach of the implied promise to certify the payment to the court and thereby make it effectual in execution. I am

prepared to follow the view of the majority that the suit is really one for damages for breach of implied contract. When a decree-holder receives

from the judgment debtor money outside court in payment of the decree amount, if there is no express agreement between the parties at the time, it

may properly be held that the decree-holder does so under an implied promise that he would certify that payment as required by law and that he

would not execute the decree any more for the amount op realise the amount again in execution. If this is the implied contract, as I think it is, the

breach will give rise to a cause of action; and it is clear that the decree-holder commits a breach as soon as he files his execution petition claiming

the same amount again. It seems to me therefore that the filing of the execution petition in itself gives a cause of action though no money may have

been realised; and successive applications will give rise to successive breaches and fresh causes of action......

It is not necessary for me to decide in this case as to which of the views, whether the view expressed in 16 M.L.J. 54 or the view expressed in

36 M.L.J. 175 : (A.I.R. 1919 Mad. 773) is correct. In this case the decree-holder admittedly has not even filed an execution petition. It is

therefore obvious that the respondent can have no cause of action at all to maintain the suit at this stage. It may be that the appellant may not

choose to execute the decree hereafter or it may be that even if he files an execution petition he will not be able to recover anything from the

respondent.

It is inconceivable that a suit for damages can be maintained without proving any loss or injury. ""Damages are the recompense given by process of

law to a person for the wrong that another has done him."" Halsbury Vol. II, 3rd Edn. P. 216. I have no hesitation in holding that on the principle of

the decided cases set out above, the present suit is not maintainable. There is not even a threatened or apprehended injury to furnish a cause of

action for the suit.

In the result, the second appeal is allowed. The judgment and decree of the learned District Judge are set aside and those of the learned

District Munsif are restored. The parties will bear their respective costs throughout.