Thimma Reddi vs Subba Reddiar and Others

Sadasiya Aiyar, J.—The 3rd and 4th plaintiffs'' (decree-holders'') assignee is the appellant before us. The material facts may be shortly

stated thus. The 1st and the 2nd plaintiffs were partners of the joint decree holders with the appellant''s assignors, namely, the plaintiffs Nos. 3 and

The decree was passed in favour of all the four plaintiffs in 1908 for a certain sum of money. There was an adjustment of the decree amount

between the defendants and the plaintiffs at Rs 435 and that sum was paid up to all the four plaintiffs in 1909 by the defendants through one Muthia

Thevan, The decree was thus really satisfied but a certificate of satisfaction was not filed by all or any of the four plaintiffs till December 1911 and

hence the '' executing Court could not recognize the satisfaction till then.,

In 1910 the four plaintiffs dissolved the partnership and the plaintiffs Nos. 2 and 1 respectively executed release deeds in February 1910 and

February 1911 in respect of the partnership assets and liabilities. As all the four partners knew well that the decree debt due by the defendants had

been really satisfied in 1909, the plaintiffs Nos, 1 and 2 never could have thought when they executed their release deeds that the partnership

owned any interest in the decree and could not have intended to transfer any rights under the decree to the plaintiffs Nos, 3 and 4. (The release

deeds A and B have not been translated and printed.) Plaintiffs Nos. 3 and 4 treating the decree, however, as still alive and treating themselves as

the sole owners of the decree, fraudulently assigned the decree to the appellant (execution petitioner) for no consideration in May 1911. The

appellant first applied for execution in July 1911 (just within 3 years of the decree). The plaintiffs Nos. 1 and 2 got notice and filed counter-

petitions in December 1911, which contained certificates of satisfaction of the decree by payment of R3. 485 in 1909. The appellant did not

prosecute that petition and had it dismissed in 1912. Then he filed the present execution petition in November 1913 for a warrant of arrest against

the 1st defendant for recovery of the decree amount.

The lower Appellate Court (confirming the decision of the District Munsif) refused to recognize the appellant as transferee of the decree and

dismissed the execution application, on the above facts and on the view that the certificates of the plaintiffs Nos. 1 and 2 were legally valid

certificates of satisfaction which discharged the decree

The appellant''s learned Vakil (Mr. K. S. Ramabhadra Aiyar) strenuously argued the following points (each of which I shall deal with below

immediately after stating it).

First contention: The lower Appellate Court was wrong in going into the question of consideration for the assignment of the decree to the

appellant. This argument seems '' well-founded. See Chellam Chetti v. Seeni Chetti 43 Ind. Cas. 801 : (1918) M.W.N. 226, which decides that

provided the assignment is not a sham transaction,, the absence of consideration will not deprive the assignee of his right to execute the decree.

Second contention: The so-called certificates of plaintiffs Nos. 1 and 2 are not in proper form and ought not to be treated as certificates of

satisfaction under Order XXI, Rule 2. There is no substance in this contention as a certificate under Order XXI, Rule 2, of the decree holder need

not be in any particular form and even the mention of the payment to the Court at any time by the decree-holder, - say in his execution petition, is a

sufficient certificate. See Mohamed Silar Sahib & Co. v. Nabi Khan Sahib 35 Ind. Cas. 167 and Malhar Dravia Sahaya Ela Nidhi Co. Ltd. In re

40 Ind. Cas. 889 .

Third contention: As no record of satisfaction was made by, the Court on those certificates, they are legally useless. Mr. Ramabhadra Aiyar

relied on certain passages in the judgments in Moti Ram v. Hannu Prasad 1 A.L.J. 40and Pertasami v. Krishna Ayyan 12 M.L.J. 166 and other

oases for his contention that it is the record of satisfaction made by the Court on the decree holders certificate that discharges the decree and not

the certificate itself. In the old Civil Procedure Code, Section 258, paragraph 1, corresponding to Order XXI, Rule 2, Sub-rule (1), there was no

express provision for any record of the certificate of satisfaction when given by the decree-holder, though the Mofussil Courts usually endorsed,

recorded"" on such certificates. Where the decree-holder did not certify but the judgment-debtor applied within 90 days to the Court to send

notice to the decree-holder to show cause why payment or adjustment should not be recorded as certified, it was enacted that the Court, on his

failure to show cause, ''''shall record the same"" (that is as certified). The 3rd paragraph of Section 258, which was intended to provide for the

executing Court not recognizing payments out of Court except in the two oases referred to in the previous two paragraphs, mentions expressly one

of the cases, namely, the payment or adjustment being ""certified as aforesaid,"" that is, by the decree-holder under paragraph 1, and does not

expressly add ""or recorded by the Court as certified"" under paragraph 2. Evidently the word ""certified"" in the 3rd paragraph was intended to mean

certified"" or ''''recorded by Court as certified."" The new Code supplies in Sub-rule 3 the omitted words ""''or recorded."" Mr. Ramabhadra Aiyar''s

argument that because the 1st sub rule, in Order XXI, Rule 2, has added the words ""and the Court shall record the same"", that is, the decree-

holder''s certificate of adjustment, the words or recorded"" in Sub-rule 3 must be read as ""and recorded"" where there is a certificate by the decree-

holder under Sub-rule 1, is ingenious but wholly inadmissible. In the case of Sub-rule 2, there is no certificate at all but only a record by the Court

as certified, and the expression in Sub-rule 3 certified or recorded"", if read ""certified and'' recorded"", will make Sub-rule 2 wholly ineffectual to

protect the judgment-debtor. The neglect by the Court of the duty expressly imposed on it (under Sub-rule 1, Order XXI, Rule 2 of the new

Code) of recording the decree holder''s certificate cannot prejudice the judgment-debtor and it cannot be argued successfully that the record also

by the Court is required under Sub-rule 3 before the payment or adjustment could be recognized. The record by the Co art being a formal matter,

of course, may be made at any time or even be treated as having been made. In the cases of Mahomed Silar Sahib & Co. v. Nabi Khan Sahib 35

Ind. Cas. 167 and Mathar Dravia Sahaya Ela Nidhi Co., In re 40 Ind. Cas. 889, no such record by the Court of the certificate of payment could

have been made (as the payment was mentioned for the first time in the execution petition itself) and yet it was not argued in those oases that, in the

absence of such a formal record, the certificate alone would not enable the Court to recognize the payment, This contention of Mr. Ramabhadra

Aiyar, therefore, also fails.

Fourth contention: The certificates of the plaintiffs Nos. 2 and 1, after they had released all their rights in the decree in favour respectively of

plaintiffs Nos. 3 and 4, are useless.

The releases (as I said before) are not translated or printed. Admittedly, they do. not refer expressly to the decree amount due to the four

partners as joint decree-holders. Oldfield, J., and myself held in Mahomed Silar Sahib & Co. v. Nabi Khan Sahib 35 Ind. Cas. 167 : (1916) 1

M.W.N. 471, following Bashyam Aiyangar, J.''s statement of the law in Periasami v. Krishna Ayyan 12 M.L.J. 166, that a payment out of Court

to one only of several joint decree-holders cannot bind the others even if he and the others were partners. I think it follows on the same principle

that certificates given by two joint decree-holders cannot also bind the other decree-holders even if all of them were partners. Hence I am inclined

to hold that the certificates ''themselves--given by the plaintiffs Nos. 1 and 2 cannot be treated by the executing Court as having discharged the

decree passed in favour of all the four plaintiffs, unless 3rd and 4th plaintiffs had given authority (express or implied) to the plaintiffs Nos. 1 and 2

to certify satisfaction. Turning to the releases given by the plaintiffs Nos. 2 and 1, however, I do, not agree with, the appellant''s contention that

those releases had the effect of vesting the entire rights in the decree in the plaintiffs Nos 3 and 4 alone, In the first place, the decree has been

discharged except in the eye of an executing Court. In the second place, the plaintiffs Nos. 1 and 2 never intended to and never did transfer their

interests in the decree (to the extent that they remained alive in the eye of the executing Court) in favour of the plaintiffs Nos. 3 and 4, Hence, it

must be taken that, notwithstanding the releases, the decree was alive in favour of all the four decree-holders so far as the executing Court was

concerned.

The fifth and the last contention is that, in any event, the plaintiffs Nos. 3 and 4 owned some fractional interest in the decree and that at least

there was a transfer of that interest to the petitioner (appellant;) and as the holder of such a fractional share in the decree, he could apply for

execution of the whole decree on behalf of himself and of the plaintiffs Nos. 1 and 2.

I am inclined to hold (in answer to this contention) that the transfer by the plaintiffs Nos, 3 and 4 alone conveyed no title or interest in the

decree debt in favour of the petitioner. In Mahomed Silar Sahib Of Co. v. Nabi Khan Sahib 35 Ind. Cas. 167 : (1916) 1 M.W.N. 471 I observed

as follows: ""I am very doubtful whether two out of three partners"" (here it is ''two out of four partners) ""can, in their individual capacities, legally

claim definite shares in a particular decree debt belonging to themselves and the other partners jointly, such a decree debt being-only an asset out

of the numerous partnership assets. I think that they cannot make such a claim to own separate shares in a particular asset any more than a

member of a joint Hindu family can claim to receive in his individual capacity (or give a valid discharge for) his share of a particular debt due by-

one of the debtors of the joint Hindu family which possesses numerous other assets,'''' Neither a partner nor a member of a joint Hindu family can

claim and receive a definite share in a particular partnership debt or family debt as the case may be."" It follows that as all the joint, decree-holders

did not join in the transfer, the petitioner got no interest even in a fraction of the decree amount. Farther under Order XXI, Rule 15, even if the

petitioner by reason of the deed he obtained from plaintiffs N03. 3 and 4 secured the status of a joint decree holder with the plaintiffs Nos. I and 2,

he should have applied for the execution of the decree for the benefit of him-self and the plaintiffs Nos. 1 and 2 see Order XXI, Rule 15 (1)3

whereas the application which he actually made was for his individual benefit alone.

For the above reasons, I hold that the dismissal of the petitioner''s application for execution by the lower Courts ought to be upheld and this

appeal should be dismissed

Napier, J.

The facts out of which this appeal arises are found ""by the lower Appellate Court as follows: Plaintiffs Nos. 1 to 4 were partners and brought a

suit against the defendants upon a promissory note. In the Appellate Court, the suit was settled by the payment of Rs. 485. This money was paid

by one Muthia Thevan to the plaintiffs and credited in the partnership accounts. Subsequent to the payment, the plaintiffs dissolved the partnership,

the 3rd and 4th defendants taking over the assets and liabilities of the partnership and later on they assigned their interest to the petitioner without

any consideration passing. The petitioner now seeks to execute the decree against the defendants who have discharged their liability. The Court

having found that the amount was discharged and paid to all the plaintiffs, the claim has no merits, but it is argued that there has been no valid

discharge within the meaning of Order XXI, Rule ''2, Civil Procedure Code, and that, therefore, the decree is still capable of execution. The

proceedings taken under Order XXI, Rule 2, were as follows: The transferee decree-holder put in Execution Petition No. 407 of 1911 on the 5th

August 1911, Plaintiff. Nos. 1 and 2 put in separate counter-petitions on 19th December1 1911 and 6th December 1911 respectively, stating that

a sum of Rs. 500 or 485 had been settled in full discharge of the decree debt and credited in the plaintiffs'' partnership accounts-The District

Munsif took proceedings to. ascertain the truth of this statement, and partnership books were produced, but before further proceedings could be

taken, the 1st plaintiff and, then shortly afterwards, the 2nd plaintiff died. Notice was ordered to their representatives bat Batta was not paid and

the petition was dismissed, A subsequent petition was filed on the 2nd October 1912 and withdrawn. Another petition, Execution Petition No. 4 of

1913, was filed on the 20th November 1913, which is the petition out of which this appeal arises. The defendants rely on the counter-petitions by

the deceased 1st and 2 plaintiff as a bar to execution, while the petitioner contends that it is not a valid discharge. It is argued that there has been

no certificate and no record within the meaning of Order XXI, Rule 2. Reliment of Bashyam. Aiyangar, J., in a decision of the Fall Bench reported

as Periasami v. Krishna Ayyan 12 M.L.J. 166. The question for decision was one of limitation, but in expressing his opinion the learned Judge says

that a discharge not so recorded can* not be recognized by the Court executing the decree, for such record is by Statute made indispensable

evidence for proving the alleged discharge. At page 440, how; ever, the learned Judge uses this language: ""if payment be made out of Court such

payment will, of course, be a sufficient discharge of the decree debt, and it is not the act of the Court in recording such payment as certified that

operates as a discharge."" I do not think that the learned Judge meant to lay down that there must be a formal order of record, I think the real

question is whether there has in fact been a discharge, and whether the fact of the discharge his been brought to the notice of the Court for the

express purpose of staying farther proceedings. That'' was clearly done in this case, for the two counter ""petitions: were put in reply to an

application for execution by the transferee decree-holder, and it seems to me immaterial that the Court did not pass any Order on the counter-

petitions. There can be no doubt-that if the District Munsif-had been able to- proceed with the application, he"" would have found, on the evidence

as has now been found in these proceedings, that the money had been paid to the partnership, and he would have dismissed the petition on its

merits. I am, therefore, of opinion that the counter-petitions were good certificates in form. This view receives some support from the language

used by. the learned Judges in Alathoor Badrudeen v. Gulam Mohideen 12 Ind. Cas. 562 : (1911) 2 M.W.N. 473, where they say that they might

have been inclined to treat the judgment-debtor''s counter-peti-tion'' to an execution petition as an application to compel the judgment-creditors to

certify the adjustment, if that counter-petition had not been put in far too late. A still stronger case is that in Masila-matii Mudaliar v. Sethuswami

Aiyar 41 Ind. Cas. 701, where the Bench was considering an ""acknowledgment for the purpose of saving limitation. There the form of certificate

was a payment set out in column 5 of the execution petition showing payment on account. Ayling, J., says with reference to this: ""I see no reason

why this should not be accepted as a certificate- of payment under Clause (1) of the rule, for nothing '' is prescribed in the rule as to the time within

which or the manner in which the decree-holder must certify payment."" Ku-maraswami Sastri, J., says following the decision in Rajam Aiyar v.

Anantharatnam Aiyar 31 Ind. Cas. 318: 18 M.L.T. 475 : (1916) 1 M.W.N. 127: I do not think that the payments can be ignored as not certified if

they were as a matter of fact made"" (meaning of course thereby made and brought to the notice of the Court); These decisions seem to me to lay

down what I conceive to be the true principle, namely, that the object of the rule is not to require any particular form of proceeding, but only to

provide that the Court should be informed of the payment.

The next objection taken to the counter-'' petitions is that they were put in by plaintiffs Nos. 1 and 2 only after they had ceased to have any

interest in the debt. It Is contended. therefore, that there has been no certificate by the decree-holders, the argument, being that ""the word ""decree-

holder"" must mean'' all the decree-holders where there are more than one and that the* rule cannot be read as if it said ""the decree-holder or any

one of the several decree-holders."" There is a great deal of force in this contention. I have, however, ''held that the object of the rule is to'' inform

the Court, or putting it in the words of Bashyam Aiyangar, J., ""it is not the act of the Court in recording such payment as certified that operates as a

discharge."" The learned ""Vakil for the appellant relies on the decision of a Single Judge in Moti Ram v. Hannu Prasad 1 A.L.J. 40 : (1904)

A.W.N. 34. But in that case the joint decree-holder who had certified satisfaction did not certify it for the benefit of himself and the other decree

holders, and alleged only that he had received, the amount of the decree. The decision of the learned Judge was based on the proposition that, one

of the two joint decree holders cannot assume to himself power to give a discharge out of Court for the full amount of the decree. That is a

proposition which cannot be disputed and is expressly laid down in Periasami v. Krishna Ayyan 12 M.L.J. 166 and followed in a case reported as

Mahomed Silar Sahib & Co. v. Nabi Khan Sahib 35 Ind. Cas. 167. But here the amount has been paid to all the decree-holders though the

certificate is only by two of them. The question is not one of substantive rights but of procedure. In a case reported as Tarruck Chunder-

Bhuttacharjee v. Divendro Nath Sanyal 12 C.L.R. 586, one of the several joint decree-holders certified a payment to him of a 12-anna share in a

decree and the other decree-holders applied for execution in full. The Court recognized the fact that in two earlier oases of Ranee Nyna Kooer v.

Doolee Chund 22 W.R. 77 and Brojeswari Chowdhranee v. Tripoora Soonderee Debi 3 C.L.R. 513 the Court had held that where one of the

decree-holders had certified payment of the whole decree, the remaining decree-holders ought not to be allowed to take out execution again until

they had satisfied the Court, that they knew nothing of the payment. The Court was, however, not prepared to go ''quite so far as that; it decided

that the Court ought not to recognize payment made out of Court if certified by only one decree-holder unless made and certified for the benefit of

all. This view was based on the analogy of Section 2 31 of the old Code, which allowed one of several joint decree-holders to apply for execution

of the whole decree for the benefit of all. To my mind there is great force in this analogy and to allow one of several joint decree holders who have

already received payment to come in and apply for execution after the other decree holders have certified discharge of the debt would, in my

opinion, open the door to fraud and defeat the object of, the section, which is not aimed at the prevention of payment out of Court but merely

requires notice of it so as to prevent execution issuing. I can find no case in which such a certificate his been held to be bad where the amount has

in fact been received by all the joint decree-holders.

Therefore, in my opinion, this point also fails and the appeal must be dismissed with costs.