Shariful-Hussain vs Kadirbhai

V.R. Newaskar, J.—The second appeal arises out of execution proceedings and raises a question as to the validity of an agreement whereby the parties provide for payment of the amount of purchase price and costs as per decree not in cash but by means of a cheque

The facts are that a decree for pre-emption granted in favour of the pre-emptor and against the vendee provided that the pre-emptor should deposit Rs. 4,000 minus the costs decreed in his favour within two months from the decree namely 21-9-1953. On default being committed in making such deposit pre-emptor''s suit should stand dismissed. In case the deposit was made as per decree the pre-emptor would obtain possession and the vendee should execute a duly registered sale-deed in his favour. On 19-11-1953 the pre-emptor filed an execution petition mentioning the fact that he was submitting in Court a cheque for Rs. 3,425 drawn by one Khalilul Rehman for payment to the vendee Rs. 4,000 minus costs Rs 575. 1-3 i. e. Rs. 3,424-14-9. The vendee objected to the execution on the ground that this was not valid payment as provided by law. The pre-emptor replied contending that the deposit was made as per agreement between the parties under which the vendee induced the pre-emptor to pay him Rs. 500 in cash to cover the expenses of sale-deed including necessary stamps and to deposit amount payable to him in the shape of a cheque. The vendee could not then turn round and lake advantage of his own fraud.

The executing Court without going into the question whether the alleged agreement under the aforesaid representation and conduct was made or not, held, relying upon AIR 1956 Lah 249 Abul Fatteh v. Fatteh Ali that in the absence of certification of the alleged agreement or adjustment or payment into Court the amount of the decree within two months from the date of the decree the pre-emptor''s rights under the decree had come to an end. The execution petition was accordingly dismissed.

On appeal the appellate Court confirmed this decision further holding that a decree for pre-emption cannot be varied by consent between the parties. The appeal was consequently dismissed.

In this second appeal Mr. Patel for the decree-holder contended that the pre emptor decree-holder had relied upon an agreement whereby the rently had accepted Rs. 500 in cash for defraying expenses for the sale-deed and had authorised payment by cheque into Court. The Courts below without recording evidence proceeded to hold that since the payment into Court was not in current coins there was no payment and that the alleged agreement not having been certified by the vendee before the expiry of ninety days the pre-emptor''s rights had come to an end. This view, it was urged, was wrong. The learned Counsel relied upon the decision reported in S.S. Nirmalchand and Another Vs. Smt. Parmeshwari Devi and Others, , in support of his contention that Order 21, Rule 2 C. P. C. applies to a adjustment of a decree and not to any other contract which affect its terms, and that C P. Code puts no restrictions on parties'' liberty of contract with reference to their rights and obligations under the decree. It was conceded that ordinarily the payment of the purchase price has to be made by depositing money in current coin into Court but it is urged that it was competent for the parties to provide for payment into Court the requisite amount in any other shape which is commercially recognisable. There was also sufficient certification of the payment by the decree-holder by referring to the said payment in the execution petition filed before the expiry of two months. The trial Court therefore was bound to record evidence regarding the agreement alleged by the pre-emptor and no finding adverse to him could have been given in the absence of any evidence.

On the other hand it was contended for the vendee that the only mode of payment permissible by law is that made into Court in current coins. When this is not done the terms of the decree and the provisions of Section 21 of the Gwalior Law of Pre-emption were not satisfied. There was no adjustment of the decree under agreement because, according to the learned Counsel, there could be no adjustment if the rights under the original decree subsist and are not satisfied. No agreement of executory character it was pointed out could have been called in aid by the pre-emptor. Reliance was also placed upon the cases reported in AIR 1916 Lah 249, Sukhpal Singh Vs. Haji Abdur Rahman and Others, and AIR 1937 Sind 219 Ramibal Jethmal v. Rewachand Santokram, in his support on behalf of the Respondent.

In order to appreciate these contentions it is necessary first to consider the provisions of Section 21 of the Gwalior Law of Pre-emption which was applicable when the suit was filed in the year 1946. According to it the Court at the time of passing a decree for preemption has to fix a date for payment into Court of the purchase money, in case the deposit of the same has already not been made in court and further has to direct that in case the payment is not made before the said date the said of the amount and costs if any of the suit shall be dismissed but that on making such payment the defendent shall deliver possession of the property to the Plaintiff and the Plaintiff shall be deemed to be in possession from the date of such payment and further that the Defendant shall execute at once a lawful document. These provisions are similar at least on the point of payment into Court of the purchase money to those contained in Order 20, Rule 14 (1). The only difference between the two provisions is that whereas, under the CPC execution of registered document is not necessary and the acquisition of title is automatic on making payment into Court within the specified period, under the Gwalior law on making payment there is constructive delivery of property to the pre emptor but there has to be a registered deed of transfer. But as already observed above the provisions regarding the payment are indentical. Under both the provisions the payment has to be made into Court before the date fixed by the decree for such payment. Since payment is to be made ''into Court'' ordinarily that could only be in the shape of what may be a legal tender i.e., either in current coins or currency notes. Any other mode of payment recognizable in commercial transactions, such as by bills of exchange, cheques, pronotes etc., or even by Government promissory notes, cannot be taken as good The reason is obvious. The act of making payment, as provided by law and the terms of the decree, results in the acquisition of certain rights by the decree holder and failure in that respect results in dismissal of the suit by reason of the mandatory provisions of law (vide Naguba Appa Vs. Namdev, ) Since the acquisition of rights or the dismissal of the suit cannot be made to depend upon a possible uncertain event of the bills of exchange, cheques or pronotes being honoured, it is clear that strict adherence to the legal provisions is necessary. A bill of exchange is an order for payment and a cheque is an order for payment to the banker while a promissory note is a promise to pay. All these serve a good purpose as media of exchange in commerce but their efficacy lies in their capacity to ensure payment in current coins or currency notes. The second reason why the payment has to be in current coins or currency notes is that it is competent for the vendor to make payment into Court at any time before the date fixed. The Court in that event must be in a position to accept the payment as good even in the absence of the party for whose benefit it is made and to whom the Court is bound to pay. This will happen only when the payment is in current coins or currency notes. But it might be urged that under Order 21, Rule 1 money payable under a decree can be paid into the Court whose duty it is to execute the decree or out of Court to the decree holder or otherwise as per directions in the decree and that under Order 21, R. 2 where any money payable under a decree of any kind is paid out of Court to the satisfaction of the decree-bolder i.e., the person who is entitled to receive the same then either certification by such decree-holder or the recording of certification by Court at the instance of the judgment debtor on an application made within 90 days from such payment is proper payment for satisfying the decree and has to be recognized by the Court executing the decree as good. Therefore when the payment is made, though not into Court, but to the vendee direct at the instance of the pre-emptor and is duly certified by the vendee it is sufficient to give rise to the right of the pre-emptor under the decree. The decision in Sukhpal Singh Vs. Haji Abdur Rahman and Others, no doubt is to that effect. It is however not necessary to go into that question closely as in the present case there is no payment alleged to the vendee direct. What is alleged is that the pre-emptor has paid the amount by cheque as desired by the decree-holder. But it seems that in the aforesaid Allahabad case it is not sufficiently realised that Order 21, Rule 1 will have no application because the position of the vendee in a decree for pre emptor is not that of a decree-holder so for as price is concerned. He cannot apply for execution of the amount. The reason is obvious. Before the date fixed for payment he cannot apply for execution as in that case his petition would be premature. After the date fixed for payment also he need not or cannot apply because either the payment is already made to his credit in Court or the suit stands dismissed. Thus to my mind considerations as to payment outside the Court to the vendee and certificate on by him prima facie do not appear to be sufficient compliance of the decree both because the provisions of law in that respect are mandatory also because the vendee cannot be called a decree-holder.

Mr. Patel for the Appellant urged that the agreement relied upon by him provides merely for a mode of payment and does not purport to affect rights under the decree. This contention is untenable because under the terms of statute payment into Court of the required sum before the fixed date has the effect of bringing into existence a certain right in the property in suit and failure to do so results in the dismissal of the suit and any variation in the condition is bound to affect right of either party. Moreover the provision being mandatory parties cannot contract out of statute. The decision in 1958 JLJ 427 upon which Mr. Patel relied upon has no application under the circumstances of the present case. In AIR 1916 Lah 249 the facts were that two rival pre emptors secured a joint decree for pre-emption the rights of one being entitled to a preference over those of the other. The decree provided for payment by the fist decree holder, entitled to preferential claim by a specified date and on his failure to do so his claim to pre-emption would stand dismissed and the other decree-holder then was entitled to make the payment before another specified date and to obtain possession. Before the specified date for the first decree-holder he filed in Court a receipt signed by the Defendant vendee accepting receipt of the appropriate amount. He also applied for its certification. Notice was issued to the vendee but before he could be served the date for payment into Court by the first decree holder had passed. The second decree-holder made the requisite payment within time fixed for him and applied for execution. The first Court he d that the second decree-holder was entitled to ex cute the decree for pre-emption and that the rights of the first decree-holder had come to an end as there was neither payment into Court by him before the date fixed for him nor any certified payment before that date. The first appellate Court relying upon (1889) 21 PR 1889 Sher Shah v. Sher Janh, held that the first decree-holder was entitled to execure and that there was sufficient payment by him for enabling him to do so. The High Court on second appeal restored the decision of the first Court. The decision in Sher Shah''s case was distinguished on the ground that that case went no further than holding that ''action on the part of the pre-emptor and the vendee completed before the due date and calculated to put the Court into a position to issue an immediate warrant for possession may be taken at equivalent to payment into Court.'' Thus according to this case unless there is payment to vendee and certification completed before the due date it cannot be considered to be sufficient ''payment into Court'' as required by law. In that case the certification proceeding had been delayed until the rights of the first decree holder had come to an end by the force of the decree. In Sukhpal Singh Vs. Haji Abdur Rahman and Others, the High Court of Allahabad on examination of the terms of the decree for pre-emption were inclined to hold that the decree did not require payment into Court but that even if it were held to provide for such payment the payment by the pre-emptor outside the Court and the certification by the recipient judgment-debtor before the due date was considered as sufficient payment to satisfy the letter as well as the spirit of the decree.

In the present (sic)mere is no certification by the vendee, who authorised payment by cheque before the due date, regarding the alleged adjustment. On the view taken in AIR 1916 Lah 249 and Sukhpal Singh Vs. Haji Abdur Rahman and Others, , such depositing of cheque on the basis of an agreement which was not certified by the vendee before due date was not sufficient. Mere application for execution by the pre-emptor before due date mentioning the fact of agreement between him and the vendee is not enough. Such application by the pre-emptor cannot put the Court into position to issue immediate warrant for possession until the certification proceedings are complete. In the present case the Court had no deposit in current coin or currency notes which would be the legal tender. It was merely possessed of an order by a third party to his bankar to make the requisite payment. That order for payment depended for its efficacy upon certain contigent events viz., existence of sufficient fund in the bank belonging to the drawer and the honouring of the same by the banker. The cheque had a contigent capacity to secure current coins or currency notes but was not identical with them. Mr. Patel suggested that there was certification by the pre-emptor before the due date. This is clearly erroneous. Such certification has to be by the person entitled to receive (i. e., by the vendee).

For the aforesaid reasons the contention of Mr. Patel for the Appellant that the first Court could not have refused to execute the decree without enquiring into the fact of alleged agreement dated 18-11-1953 is clearly erroneous even on the assumption that Order 21, Rule 2 applies to agreement in the nature of adjustment of a decree and not to any other agreement affecting manner or mode of payment as suggested in 1958 JLJ 427.

The appeal consequently is without force and is dismissed with costs.