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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]

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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

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             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.

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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