24 September 2004
Supreme Court
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M/S. NANDI INVESTMENTS & ENTERPRISES Vs L.M. SARVAMANGALA

Bench: ARIJIT PASAYAT,C.K. THAKKER
Case number: C.A. No.-006274-006274 / 2004
Diary number: 11317 / 2003
Advocates: N. L. GANAPATHI Vs MINAKSHI VIJ


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CASE NO.: Appeal (civil)  6274 of 2004

PETITIONER: M/S NANDI INVESTENTS & ENTERPRISES

RESPONDENT: L.M. SARAVAMANGALA

DATE OF JUDGMENT: 24/09/2004

BENCH: Arijit Pasayat & C.K. Thakker

JUDGMENT: J U D G M E N T

(Arising from Special Leave Petition (civil) No. 12737 of 2003)

Thakker, J.

                Leave granted.

Heard the learned counsel for the parties.

       The present appeal is filed against the judgment and order  passed by the High Court of Karnataka in Review Petition No. 804 of  2002 on 26th March, 2003 partly reviewing the order dated July 5,  2002 in C.R.P. No. 4299 of 2001.

The case has a chequered history.  On September 14, 1987, the  respondent herein filed a suit being O.S. No. 460 of 1987 in the Court  of the Civil Judge at Mysore against the appellant-firm and its  partners for recovery of a sum of Rs.2,20,000/- with interest.  On June  23, 1989, the Court of the IInd Additional Civil Judge, Mysore passed  a judgment in the said suit based on admission.  However, before the  decree was drawn up, the parties to the said suit filed a Joint Memo  praying that the judgment be confirmed only to the Principal amount  of Rs.2,20,000/- and that other matters be left open for final  adjudication.  Accordingly on January 6, 1990, the Court of IInd  Additional Civil Judge, Mysore passed a partial decree for the  principal amount of Rs.2,20,000/-.  The II Additional City Civil  Judge, Mysore, after trial, passed a judgment on February 2, 1993 on  the rest of the issues and a decree was accordingly drawn up.   

On October 5, 1993, the respondent herein filed Execution Case  No.1514 of 1993 in the Court of the City Civil Judge at Bangalore  against the appellant firm and its partners claiming even the suit  amount with interest payable as on the date of the Execution Case to  be Rs.4,22,269.5 ps. (i.e. Rs. 2,20,000/- towards principal and  Rs.2,02,269.05 towards interest @ 12% p.a. from June 30, 1979 to  September 14, 1987, after deducting Rs.14,430.95 as per the decree).   In the course of the execution proceedings, it is stated that the  appellant paid Rs.6,54,566/- to the respondent.  On January 23, 1999,  the respondent filed a Memo of Calculation in Execution Case No.  1514 of 1993 claiming that as on that date a sum of Rs.3,72,204.10  was still payable by the appellant towards satisfaction of the decree.   In the said Memo, contended the appellant, that the respondent  claimed Rs.4,15,767.25 in excess by adding interest twice on the  principal amount of Rs.2,20,000/- from June 30, 1979 to September  14, 1987 and also adding interest on the interest.  The Executing Court  passed an order on April 16, 1999 accepting the Memo of Calculation

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of the respondent.  Aggrieved thereby, the appellant filed Civil  Revision Petition No.1572 of 1999 in the High Court of Karnataka at  Bangalore.  The High Court granted interim stay of execution  proceedings on July 7, 1999 subject to the appellant depositing  Rs.50,000/- in the Executing Court which was complied with by the  appellant.  The respondent-decree-holder withdrew the said amount of  Rs.50,000/- taking the total payment made by the appellant/judgment- debtor to the respondent/decree-holder in the execution proceedings to  Rs.7,04,566/-.  On July 7, 1999, the High Court disposed of the C.R.P.  No.1572 of 1999 with a direction to the Executing Court to calculate  the amounts afresh.  Accordingly, the Executing Court prepared a  Memo of Calculation which showed Rs.3,97,380.81 as balance  amount payable by the appellant to the respondent.   

It is alleged by the appellant that in the Memo of Calculation, a  claim of Rs.4,15,767.25 at serial Nos. 2 and 3 were also included,  despite the payment made by the appellant and in spite of objection of  the appellant in that regard.  It was also alleged that as per the  direction of the High Court, the amount of Rs.50,000/- had already  been paid by the appellant to the respondent on August 27, 1997  which had not been taken into consideration.  Hence, on November 8,  1999, the appellant filed written arguments in Execution Case  No.1514 of 1993 along with a Memo of Calculation showing the  excess liability of the appellant under the decree.   

The Executing Court, by an order dated September 14, 2001,  accepted the Memo of Calculation prepared by its office and held that  a sum of Rs.3,97,380.81 was still payable by the appellant to the  respondent.  Aggrieved thereby, the appellant preferred a Civil  Revision Petition before the High Court being C.R.P. No. 4299 of  2001.  The High Court dismissed the said C.R.P. vide order dated July  5, 2002.  Pursuant to the dismissal of the said C.R.P., the Executing  Court passed an order dated August 29, 2002 for attachment of the  movables of the appellant in Execution Case No.1514 of 1993.   Against the order dated July 5, 2002 passed by the High Court in  C.R.P. No. 4299 of 2001, the appellant approached this Court by  filing Special Leave Petition (Civil) NO.12737 of 2003 which was  dismissed as withdrawn with liberty to move the High Court.   Thereupon the appellant filed Review Petition No.804 of 2002 in  C.R.P. No.4299 of 2001 before the High Court.   

Appellant’s grievance was that:- (1)     interest on the principal was added twice. (2)     Interest on interest was added, and (3)     Rs.58,300/- paid towards income-tax had not been  deducted.

By the impugned order dated March 26, 2003, the High Court  partly allowed the Review Petition.  With regard to calculation of  interest, the Court held that the same was in accordance with the  judgment and decree, therefore, the Executing Court could not have  gone beyond it.  So far as the amount paid towards Income Tax was  concerned, the decree-holder conceded before the Court to give  deduction to the same from the decretal amount.  Hence, the appellant  has preferred the present appeal by special leave. We have heard the learned counsel for the parties. The learned counsel for the appellant submitted that when  specific contentions have been raised before the High Court after an  order passed by this Court by which the appellant was allowed to  withdraw the Special Leave Petition with a view to approach the High  Court, the High Court ought to have considered the contentions raised  before it.  It was submitted that it was specific case of the appellant  that interest on the principal amount was added twice; interest on  interest was also added and Rs.58,300/- paid towards income tax had  not been adjusted.  It is true, submitted the counsel, that adjustment of

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Rs.58,300/- had been taken into account while deciding Review  Petition, but in respect of the remaining two items, no relief was  granted by the High Court inter alia observing that an order was  passed by the Executing Court which was legal and valid and was  confirmed in Civil Revision Petition by the High Court.  The counsel  urged that in view of the order passed by this Court permitting  withdrawal of Special Leave Petition, it was incumbent on the High  Court to consider the submission also and to record a finding as to  whether the contentions raised by the petitioner-judgment-debtor were  well founded.

The learned counsel for the respondent, on the other hand,  submitted that the scope of review was limited and the High Court did  not commit any error of law or of jurisdiction in rejecting it.  The  order passed by the High Court was proper and in accordance with  law which is clear from the fact that adjustment in respect of an  amount paid towards income tax had been deducted.

Having heard the learned counsel for the parties, in our opinion,  the appeal deserves to be partly allowed. An adjustment of  Rs.58,300/- was granted to the appellant-judgment debtor.  But, when  the assertion of the appellant-petitioner before the High Court was that  interest on principal was added twice and that interest on interest was  also added, the High Court should have considered the fact and should  not have disposed of the Review Petition merely by observing that the  Executing Court had passed the order and it could not go behind the  decree.  In our opinion, the learned counsel for the appellant is also  right in submitting that when the appellant withdrew the Special  Leave Petition with a view to approach the High Court by filing  Review Petition, the High Court ought to have recorded a finding  whether or not the interest on principal was added twice and whether  interest on interest was claimed by the plaintiff-decree-holder.

For the foregoing reasons, in our opinion, the appeal deserves  to be partly allowed and is allowed by setting aside the order passed  by the High Court to the extent that it has rejected the claim of the  appellant.  The matter is remitted to the High Court for fresh decision  in accordance with law.  In the facts and circumstances of the case,  however, there shall be no order as to costs.