Solana Ramachandra Rao & Ors Vs.
Maddi Kutumba Rao & ANR  INSC 117 (19 April 1967)
19/04/1967 MITTER, G.K.
WANCHOO, K.N. (CJ) BHARGAVA, VISHISHTHA
CITATION: 1967 AIR 1637 1967 SCR (3) 703
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
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 decreeholder 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;
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
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
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 decreeholder 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 prayerin
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 decreeholder 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 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.
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
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 extingu ished. The decree-holder was prepared to stay
his hands in (1)  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.