Varki Ouseph vs Narayanan Parameswara Panicker

Koshi, C.J.—This appeal arises out of the proceeding to execute the decree in O.S. 92 of 1115, or the file of the Alloppoy District Court. The said decree is one for payment of money and it awarded interest on the decretal amount until payment. On 20-8-1122 the present Appellant (judgment-debtor No. 2) deposited in Court an amount of Rs. 1,500/- for payment to the decree-holder toward the amounts due under the decree.

The court while directing credit to be given for the amount, ordered notice to be given to the decree-holder about the deposit. No notice was however issued as the judgment-debtor did not pay the process fees. The Appellant thereafter made three further payments into Court on different dates, but the petitions filed in that behalf contained no reference to the deposit made on 20-3-1122.

On 17-12-1129 (2-8-1954) the decree-holder filed an execution application claiming the amounts which according to him were still due. As the decree-holder was not aware of the deposit made on 20-3-1122 the balance claimed by him was without taking into account the amount of the said deposit. When the Appellant got notice of the execution application, he filed his objections, contending inter alia that the amount deposited on should be given credit towards the decree on the date of the deposit itself and that he was therefore liable only for the balance due after deducting the said sum with interest thereon from the amount shown in the execution application.

This objection was filed on 29-4-1130 (14-13-1954). The decree-holder contested the matter stating that the amount deposited on 20-3-1122 should cease to carry interest only from the dale of the judgment-debtor''s objection, on which date alone he had notice of the deposit. The learned District Judge accepted the decree-holder''s position, and held that the judgment-debtor was liable for interest on the amount of the deposit in question at the rate specified in the decree till the date he filed his objection viz., 14-12-1954. This order it is that is challenged in the appeal.

The question is whether in the case of a decree which awards interest on the decretal amount until payment, interest ceases to run from the date of deposit into Court, although notice of the deposit has not been given to the decree-holder. The decisions bearing on the point are not uniform, but as we shall presently show, there is large preponderance of opinion for the view that interest will cense to run only from the date the decree-holder has notice of the deposit.

The relevant provision of law on the matter is to be found in Order 21, Rule 1, Code of Civil Procedure, Act V of 1908. The said rule consists of 2 parts and the rule is in these terms:

(1) All money payable under a decree shall be paid as follows, namely:

(a) into the Court whose dirty it is to execute the decree; or

(b) out of Court to the decree-holder (by postal money order or on a registered receipt); or

(c) otherwise as the Court which made the decree directs.

(2) Where any payment is made under Clause (a) of Sub-rule (i), notice of such payment shall be given to the decree-holder.

In this case the mode of payment adopted by the judgment-debtor was that contemplated by Rule 1(1)(a) viz., payment into the Court of execution. With reference to such payment Clause (2) enjoins that notice of it shall be given to the decree-holder. It is not stated as to who should give the notice, but for reasons which are obvious the responsibility for it can only be that of the judgment-debtor.

Unlike the provision in Order 24, Rule 3, Order 21, Rule 1 does not state that when notice, of the deposit is given to the purty entitled to the money, interest shall cease to run on the amount deposited. However, reading the provision in Order 21, Rule 1(1)(a) together with Clause (2), it looks fairly clear that when a judgment-debtor chooses to deposit the amount due as per a decree into the court of execution, the payment becomes effective only from the date of the notice.

The reason for the provision as to notice is to enable the decree-holder to withdraw the money due to him, so that he may make use of it in the manner he deems proper. Where interest is awarded by the decrees on the decretal amount until payment, we cannot find any valid reason for refusing to pay the decree-holder the interest that is due to him until such time as he is in a position to receive the money into his hands and make use of it.

If the payment were made direct to the decree-holder he could make immediate use of the money and we cannot find any justification for depriving the decree-holder of the just compensation allowed to him by die decree for his being kept out of his money, because the judgment-debtor chooses a particular method of paying it to him. This is the view which commended itself to two learned judges of the Madras High Court (Oldfield and Seshagiri Ayyar, JJ. when the question came up be fore them in the case reported in - ''Ramaray Shanbogue v. Venkataramanayya'' AIR 1919 Mad 445 (A).

Seshagiri Ayyar, J. expressed the view that the principle behind Rule 3 of Order 24, can very well be applied to payments in the course of execution proceedings, especially as Order 21, Rule 1(1)(a) does not say that by the payment, satisfaction of the claim of the decree-holder is ipso facto entered.

To our minds the provision for notice in Clause (2) is sufficient indication that the decree-holder''s right cannot be affected until he is informed that the decree amount is available for h and that he can draw it out of Court. Unless the rule is understood in this light, Clause (2) will be rendered (sic)gatory. No sanction to compel the judgment- debtor to comply with Clause (2) will he there, unless the rule is so understood.

The Madras decision referred to above has been followed by the Calcutta High Court in -- Rangpur Raiyat Bank Ltd. Vs. Hesabuddin, by the Bombay High Court in - Special Land Acquisition Officer Vs. Ambalal Trikamlal, , (C), by the Saurashtra High Court in - ''Raichand Amulak v. Naimuddin Ismailji AIR 1954 San 119 (D), and by the Madhya Bharat High Court in- Vinayak Yeshwant v. Shri Kishan Chandmal'' (S) AIR 1955 MP 126 (E).

In - The South Indian Railway Company, Limited Vs. M.C. Mayilvahanan, after referring to the dissent elsewhere, the Madras High Court adhered to the view enunciated in AIR 1919 Mad 445 (A).

The dissenting view that, when the decree amount is deposited into the Court, interest thereon will ipso facto cease to run, was taken by the Nagpur Hihg Court in - ''Laxminaiayan v. Ghasiram'' AIR 1939 Nag 191 (G). The head-note to that case reads:

Where a decree orders the payment of a sum of money awarding interest until payment and the money is paid by payment into Court under the provision of Order 21, Rule 1, the interest does not run until notice has been given to the decree-holder under Order 21, Rule 1(2) but ceases to run from, the date of such payment.

The Madras decision in AIR 1919 Mad 445 (A), has been expressly dissented from by the learned Judges1 of the Nagpur High Court. The main reason the Nagpur High Court gives to differ from the Madras view is the decision of the Privy Council in the case reported in - ''Mahmed Rahimtulla v. Esmail Allarakhia'' AIR 1924 PC 133. (H).

In the Privy Council case, in a suit to set aside a sale, a conditional decree was passed, the condition being that the Plaintiffs should pay a certain sum within a certain time and if they did so they would recover possession of the disputed property, but if they did not, then the suit would stand dismissed. Instead of paying the money directly to the party concerned it was deposited in Court and that not by the Plaintiffs, but by their mortgagees. The Judicial Committee observed:

Their Lordships are clearly of opinion that while the condition would have been satisfied by a payment to the Appellant in person, which he accepted it was equally satisfied by a payment Into Court, and that the latter was in the circumstances, the appropriate mode of satisfying the condition.

No question of any interest after the deposit or of notice of deposit to the Appellant arose for decision in that case. Indeed it would appear that notice was duly given to the Appellant about the deposit. All that their Lordships said time, was that on the terms of the decree payment into Court was as good as payment into the hands of the Appellant, and that the payment did not cease to be good because it was made, not by the Plaintiffs as enjoined by the decree, but by their mortgagees.

Of the decisions we cite in this judgment, The South Indian Railway Company, Limited Vs. M.C. Mayilvahanan, AIR 1954 Sau 119 (D), and (S) AIR 1955 MP 126 (E), refer to this Privy Council decision and to the Nagpur case and those decisions point out that the learned Judges in the Nagpur case interpreted the Privy Council decision too broadly and that the observations Lord Salve-sen made there cannot be extended beyond the facts of that particular case. In this context it is instructive to quote the comments King J. (Kunht Raman J., concurring) made in The South Indian Railway Company, Limited Vs. M.C. Mayilvahanan, about those two cases: The passage reads as follows:

We have now been referred by the learned Advocate for the Appellant to a ruling from Nagpur AIR 1939 Nag 191 (G). in which AIR 1919 Mad 445 (A), is dissented from, mainly on the ground that in an intervening decision the Privy Council had laid It down that in a particular case payment into Court was equivalent to payment to the decree-holder. No doubt that was so upon the facts of the particular case which has been dealt with by the Privy Council.

But we do not think their Lordships were laying down any general principle to be applied to all kinds of deposits in all kinds of circumstances, and that ruling, we think, cannot be utilised as authority overruling AIR 1919 Mad 445 (A).

Earlier in this judgment we indicated our view that in the circumstances of the present case, interest on the amount of Rs. 1,500/- would cease to run only from the date the decree-holder had notice of its payment into court. The foregoing discussion shows that except for the Nagpur High Court, all the High Courts in India which had to deal with the question of the construction of Order 21, Rule 1 answered it in terms similar to our Interpretation of the Rule.

In an earlier case in Nagpur, a learned Single judge expressed the view that when a payment under Rule 1(1)(a) of Order 21 is brought to the notice of the Court, even if the judgment-debtor docs not take out notice to the decree-holder as ordered by the Court, the Court is bound to inform the decree-holder of the payment when next he appears to ask for the execution of the decree see - ''Narayan v. Ganpatrao'' AIR 1921 Nag 148 (I). We regret we cannot agree that there, is any such onerous responsibility on the Court, No doubt, if, the Court can do it, it is well and good; beyond that we are not prepared to go.

The Madhya Bharat decision cited earlier refers to a decision of this Court reported in - ''Janaki Amma v. Mathiri'' AIR 1952 TC 236 (J). That case related to the question, when the mortgagee''s liability for mesne profits arises with respect to a decree for redemption; whether from the date of the deposit of the price of redemption into Court, or only from the date of the service of the notice of the deposit on him? It was held that the latter date was the relevant one. The decision is helpful to the present case only by way of analogy and the learned Judge below has cited the decision in the order under appeal for that purpose.

Clearly the appeal fails. Before parting with it we think it necessary to refer to a decision of the Travancore High Court brought to our notice during the course of the argument. The case is that reported in 1946 TLR 155 (K). The question whether on the deposit of the decree, amount, interest thereon provided in the decree would cease to run from the date of the deposit or only from the date of the notice to the decree-holder, is left open there.

What we are concerned with now is the view held in that case that payment into Court that is contemplated by Order 21, Rule 1, is of the entire money due to the decree-holder. Krishnaswamy C.J. (Abraham, J., concurring) further held that when the full amount of the decree is not deposited, but parts of that amount are paid into court from time to time, the decree-holder is not bound to accept thorn in satisfaction of the decree-amount and that Order 21, Rule 1, Clause (2) does not say that interest should cease to run on the fractions of the decree-amount from the dates on which the deposits were made. In suport of the view, the learned Chief Justice said:

This question is directly decided in - ''Tooydun Singh v. Poono Chunder Shome'' 7 Suth WR 20 (L), and no authority subsequent to this decision has been brought to our notice where the correctness of that decision has been challenged. Before the decree, a creditor is not bound to receive part payment under the common law and there is reason to suppose that the obtaining of a decree puts him in a worse position.

In this present case the decree-holder has not chosen to dispute the proposition that when notice of a deposit is given to him, interest on that amount would cease to run even though the deposit is only of a part of the decree, debt. We shall therefore for the present content ourselves by pointing out that the view expressed in 1948 TLR 155 (K)'', is not one which has found favour with some other High Courts.

In - Amtul Habib Vs. Muhammad Yosuf, Sir Henry Richards, C.J. and Sir Pramada Charan Banerji, J. held that where money is paid into court by the judgment debtor in satisfaction of a decree, interest on the decree will cease from the date of payment in proportion to the amount paid, although such amount rimy not in fact be the whole amount due under the decree. No question of notice of the deposit to the decree holder arose there, because the deposit was made along with the objection to the execution application.

In - Gopalji Chaudhuri Vs. Sumrit Mandar, Macpherson and Fazl Ali, JJ. followed this Allahabad case. In repelling the contention that the words "all moneys payable under the decree"'' in Order 21, Rule 1, meant the entire amount payable under the decree, Fazl Ali, J. who delivered the leading judgment said:

Thus view, however, docs not find support in Amtul Habib Vs. Muhammad Yosuf, whole it was held Unit where money is paid into court by the judgment-debtor in satisfaction of a decree, interest on the decree will cease from the date of payment in proportion to the amount paid, although such amount may not in fact be the whole amount duo under the decree. This decision, clearly implies that even if a portion of the decretal amount is paid it will be valid payment.

In Sir Dinshah Mulla''s Commentaries on the CPC in commenting on Order 24, Rule 3, which provides that when notice of deposit is received by the Plaintiff, interest on the amount of deposit would cease to run, whether the sum deposited is in lull discharge of the claim or falls short thereof, the learned author has said that the principle of the rule applies to proceedings in execution and as authority for the view has cited Amtul Habib Vs. Muhammad Yosuf, (Page 995 foot-note (d) 12th Edition).

Commentary to Order 21, Rule 1, states that the word "all" does not imply that, payment must be of the entire amount and that payment of a portion of the decretal amount is valid to the extent of such payment-(page 749 foot-note (K)). The decision relied upon in support of the proposition is the decision of Fazl Ali, J. in Gopalji Chaudhuri Vs. Sumrit Mandar, These authorities show that there is faint support in decided cases for the view held in 1946 TLR 155 (K), that, for interest to cease to run on a decree debt, the payment into Court must he in full satisfaction of the decree.

However, as the decree-holder has conceded the position that when notice is served of a payment into court of a part of the decree-debt, interest will cease to run on that part with effect from the date of the notice, it is unnecessary for the purpose of the present appeal to pursue the question further.

The appeal will stand dismissed with costs.