PETITIONER: SOLANA RAMACHANDRA RAO & ORS. Vs. RESPONDENT: MADDI KUTUMBA RAO & ANR. DATE OF JUDGMENT: 19/04/1967 BENCH: MITTER, G.K. BENCH: MITTER, G.K. WANCHOO, K.N. (CJ) BHARGAVA, VISHISHTHA CITATION: 1967 AIR 1637 1967 SCR (3) 703 ACT: Code of Civil Procedure (Act 5 of 1908), O.XXI, r. 89 (b)- Deposit of amounts to be paid to decree-holder-When can be dispensed with. HEADNOTE: Properties belonging to a 'trust were sold in execution of a decree obtained by the second respondent against the trust and were purchased by the first respondent. Thereafter, a suit was filed under s. 92, C.P.C. for the removal of the trustees wherein it was prayed that the sale in favour of the first respondent may be set aside and adequate provision for discharging the decree of the second respondent be made in the scheme to he framed for managing the trust. The second respondent agreed to such a course and thereupon, the appellant, who was appointed a receiver in the suit under s. 92, applied to the Court under O.XXI, r. 89 C.P.C. for setting aside the sale. He deposited certain amounts for payment to the first respondent purchaser. He did not, however, deposit the amount specified in the Proclamation of sale for payment to the second respondent decree-holder, as required under O.XXI, r. 89(b), but instead, prayed that the Court may dispense with such deposit. The Court allowed the application, but on appeal by the purchaser the High Court set aside the order. In appeal, by the receiver, to this Court, HELD : If at the time when the application under O.XXI, r. 89 is made by the judgment-debtor, the decree has been satisfied or adjusted, the deposit of any money for payment to the decree-holder is not called for. But a mere promise on the part of the judgment-debtor to take steps to ensure payment of the decretal amount, even if acceded to by the decree-holder would not have the same effect. In the present case, the decree was kept alive and the decree- holder had merely agreed to postpone realising the decretal amount in case satisfactory provision for payment of his dues was made in the suit. There was no adjustment of the decree which could be recorded under O.XXI, r. 2; neither had the decree been satisfied. Therefore, the necessity for the judgment-debtor making a deposit under the provisions of O.XXI, r. 89(b) was not obviated. [706 B-C, E-H; 707'A-B] JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 805 of
1964.
Appeal from the judgment and order dated March 4, 1963 of
the Andhra Pradesh High Court in Appeal against order No. 4
of 1960.
A. K. Sen, and T. Satyanarayana, for the appellants
Dishan Narain, A. Vedavalli and A. V. Rangam, for respondent
No. 1.
R. Thiagarajan, for respondent No. 2.
704
The Judgment of the Court was delivered by –
Nitter, J. This is an appeal by a certificate granted by the
High Court of Andhra Pradesh against a judgment and order of
that court dated March 4, 1963. The appeal is by a receiver
appointed in a suit under the provisions of s. 92 of the
Code of Civil Procedure with the object of applying for
setting aside a sale of certain properties belonging to a
choultry.
The facts shortly are as follows :-The second respondent
before, this Court obtained a decree in O. S. No. 116 of
1949 of Sub-Court, Vijayawada against Tammana Tatayya and
Narayana Murty Annapurna Satram and put some property to
execution sale. The properties of the Satram were sold in
court auction on July 1, 1957 and the first respondent,
Maddi Kutumbarao became the purchaser for Rs. 24,600. O.S.
No. 60 of 1957 was instituted in the same court for the
removal of the two trustees on the ground of mismanagement.
The decree holder was made a party to this suit filed under
s. 92, Civil Procedure Code and one of the reliefs prayed
for in the suit was that the sale above-mentioned be set
aside and’ provision be made for payment of the decree
amount in O.S. No. 116 of 1949 under the scheme to be
settled by the court. To quote that from paragraph 11 of
the plaint in that suit, the plaintiff asked
“all proceedings in execution of the decree
obtained by the 3rd defendant against the
Satram be stayed pending the framing of the
scheme and that the sale in favour of the 4th
defendant held on 1-7-1957 by the Sub-Court,
Gudivada in E.P. No. 37 of 1956 in O.S.
116,./49 Sub-Court, Vijayawada, be set aside
and that adequate provision for the discharge
of the same be made.”
The plaint bears the date 22nd July 1957. The
decree-holder, the third defendant, was a
minor represented by his mother and guardian,
Lakshmikantamma. It appears that on July 30,
1957 a memorandum was filed on his behalf in
the court of the Subordinate Judge. It was
stated therein that
“As the plaintiff in O. S. No. 60 of 1957 have
filed that suit for framing a scheme for the
management of the choultry, etc. and have
asked in that suit for a proper provision to
be made for the amount due to the third
respondent in this petition, under the decree
in O.S. No. 116/1949, this third respondent
agrees to the same.
Therefore, this 3rd respondent has no
objection. for allowing the petition that has
been filed for setting
7 0 5
aside the sale held on 1-7-1957 in this suit
without the necessity of depositing the sale
warrant amount.”
The receiver appointed in O.S. No. 60/1957 filed an
application under O. XXI r. 89 in the court of the
Subordinate Judge to set aside the court sale. He deposited
Rs. 1,230 representing 5% of the purchase money for payment
to the purchaser; RS. 410-15-0 as poundage and Rs. 123 for
interest. No deposit was made for payment to the decree-
holder and it was stated in paragraph 6 of the petition
that:
“The 3rd respondent represented by his mother
is impleaded as third respondent in the Scheme
Suit O.S. No. 60 of 1957, Sub-Court,
Vijayawada, wherein necessary provision for
the discharge of the decree debt due to him
from the choultry is prayed for and has to be
made. At the request of the petitioner to
keep up the fair name and prestige of the
founders of the choultry, the 3rd respondent’s
mother as guardian and executor agreed to the
said course and is willing for an adequate
provision for the discharge of the decree debt
being made in the said suit and has agreed to
postpone realising the decree debt in O.S. 116
of 1949, Sub-Court, Vijayawada, till then in
case the existing trustees, respondents and 2
do not choose to discharge the same in the
meanwhile. Under the circumstances, the
petitioner submits that the Hon’ble Court may
be pleased to dispense, with the deposit of
the amount specified in the proclamation of
sale for payment to the decree-holder as
required by cl. (b) of r. 89 of O. XXI C.P.C.”
The prayer- in the petition was that, the sale of the
properties in. favour of the fourth respondent be set aside
and that respondents 1 and 2 do pay the expenses to be
incurred by the petitioner. The Subordinate Judge allowed
the application observing:
“Where there is an arrangement between the
decree-holder and the judgment-debtor for the
satisfaction of the decree and the decree-
holder does not want any deposit to be made
into court, it is perfectly open to the
judgment-debtor to come forward with a
petition under O. XXI, r. 89 without
depositing the amount required to be deposited
under cl. (b).”
This was upset in appeal by the High Court. According to
the High Court, O. XXI, r. 89 permits the decree-holder and
the judgment-debtor to mutually cancel the decree debt and
the cancellation of the debt may be either by an adjustment
on a constructive payment or by waiver by the decree-holder.
The High Court however found itself unable to agree with the
con
706
clusion of the Subordinate Judge that on the facts of the
case the decree-holder could be said to have received the
amount shown in the proclamation of sale for the purpose of
O. XXI, T. 8 9.
There can be no doubt that if at the time when an applica-
tion under O. XXI, r. 89 is made by the judgment-debtor, the
,decree has been satisfied or adjusted, the deposit of any
money for payment to the decree-holder is not called for.
It was argued on behalf of the appellants that a mere
promise on the part of the judgment-debtor to take steps to
ensure payment of the decretal debt if acceded to by the
decree-holder would have the same effect. Reliance was
placed on a judgment of this ‘Court in The Union of India v.
Kishorilal Gupta and Bros.(1). There it was pointed out that
“One of the modes by which a contract can be
discharged is by the same process which
created it, i.e. by mutual agreement; the
parties to the original contract may enter
into a new contract in substitution of the old
one.”
Reference was also made to the rule as stated by Cheshire
and Fifoot in their Law of Contract, 3rd Edn. at p. 453: “if
What the creditor has accepted in satisfaction is merely his
debtor’s promise to give consideration, and not the
performance of that promise, the original cause of action is
discharged from the date when the agreement is made.”
Relying on the above decision, it was contended on behalf of
the appellants that even an executory agreement between the
decree-holder and the judgment-debtor would have the same
effect as the adjustment of a decree. It is necessary to
bear in mind that a decree. for payment of money is not a
contract between the parties although it is possible for the
parties to agree upon a course of payment or lo have the
decree satisfied otherwise than by payment of money. For
the purpose of this appeal, it is not necessary to go into
that question. Assuming that the proposition put forward on
behalf of the appellants is correct, it must be shown that
there was an agreement between the parties by which the
decree-holder agreed to forego his rights under the decree.
Paragraph 6 of the petition under O. XXI, r. 89 which has
been quoted above shows that the decree-holder had merely
agreed to postpone realising the decretal amount in case
respondents 1 and 2 did not choose to discharge the same.
That petition shows clearly that it was anticipated that the
court would be in a position to make a provision for the
discharge of the decretal debt. The decree was kept alive
and not touched upon in any manner much less ex-‘ tingu
ished. The decree-holder was prepared to stay his
hands in
(1) [1960] 1 S.C.R. 493, 502.
70 7
case satisfactory provision for payment of his dues was made
in the suit. There was no adjustment of the decree which
could be recorded under the provisions of O. XXI, r. 2;
neither had the decree been satisfied. The High Court was
therefore right in its conclusion that the situation was not
one which obviated the necessity for the judgment-debtor
making a deposit under the provisions of O. XXI, r. 89(b).
On behalf of the appellants. reference was also made to the
fact that the auction purchaser had been permitted by the
court to withdraw the sum of Rs. 24,600 deposited in court.
We were informed that such withdrawal had been permitted but
the auction purchaser had once more made the necessary
deposit under the orders of the court. This cannot after
the position in law under O. XXI, r. 89.
In the result, the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
708