Prem Chand vs M/S. S.N. Bhatia & Co. & Ors
2001 Latest Caselaw 649 Del

ORDER

Sharda Aggarwal, J.

1. The present execution petition has arisen out of a compromise decree dated 3rd December, 1998 recorded in Suit No.611/82 filed by the judgment debtors for specific performance and refund/repayment of Rs.3,56,500/- with interest. The decree holder, during the pendency of the suit, had given up the relief of specific performance of agreement to sell in August, 1993 and had restricted his suit only to the recovery of Rs. 3,56,500/- along with interest and costs against the defendants had agreed to refund the amount of Rs. 3,56,500/- in August, 1993, the plaintiff had restricted his suit only to the recovery of Rs3,56,500/- along with interest and costs against the defendants. Accordingly, a decree for a sum of Rs.3,56,500/- along with costs of the suit was passed in favor of the plaintiff and against the defendants vide order dated 3rd December, 1998. The Court had also awarded interest on the principal amount of Rs.3,56,500/- at the rate of 10% per annum from the date of filing of the suit till the date of payment. As the judgment debtors had agreed to pay the amount within two months, the Court granted two moths time to the judgment debtors to make the payment and satisfy the decree. However, it was ordered that in case the payment was no made within two months, the plaintiff would be entitle to interest at the rate of 15% per annum instead of 10% per annum. The defendants/judgment debtors were also given liberty to deposit the decretal amount in the Court within the prescribed period. The relevant portion of the judgment is reproduced as under:-

"This suit is pending since 1982 and in view of the fact that the defendant has today agreed to refund the amount of Rs. 3,56,500/- which has been claimed by the plaintiff in the suit. I pass a decree for Rs. 3,56,500/- along with cost of the suit in favor of the plaintiff and against the defendants. Since the defendants have agreed to pay the decretal amount within two months. I, in the totality of the facts and circumstances of the case, also hold that the defendants will be liable to pay interest at the rate of 10% per annum on the principal amount of Rs.3,56,500/- from the date of filing of the suit till the date of decree. Plaintiff will also be entitled to interest on the same rate of 10% per annum on the principal amount of Rs. 3,56,500/- form the date of decree till date of the amount.

Defendants are given two months time to satisfy the decree. However, in case, the repayment under the decree is not made within two months, the plaintiff in place of 10% will be entitled to interest at the rate of 15% per annum. Defendants will be at liberty to deposit the decretal amount in Court within the prescribed period. Case pending filed by the father and attorney of the plaintiff will not be proceeded with by him. Plaintiff will be bound by the undertaking given to the Court today."

2. The judgment debtors deposit a sum of Rs.9,55,125/- by virtue of two pay orders dated 8Th January, 1999 and 27th January, 1999 for Rs.5,50,000/- and Rs.4,05,125/- respectively favoring the decree holder in the Court on 2nd February, 1999. The decree holder by moving an application being IA.No1511/99 dated 10th February, 1999 sought the realization of the pay orders deposited by the judgment debtors and vide orders dated 17th February, 1999, the said pay orders were ordered to be released in his favor. Admittedly, the amount of Rs. 9,55125 had ben released in favor of the decree holder. However, the decree being not satisfied with the same filed the present Execution Petition alleging that the judgment debtors had not made the payment of full decretal amount within two months from the date of decree and as such the decree holder became entitled to interest at the rate of 15% per annum instead of 10% per annum from the date of suit i.e.24th April, 1982 till realization. The decree holder also contends that the judgment debtors had failed to give notice of deposit of the amount in the Court as contemplated under Order 21 Rule 1(2) CPC and, therefore, he became entitled to interest at the rate of 15% per annum form the date of suit till payment to him. According to the decree holder on this basis, the decree remains unsatisfied to the extent of Rs.3,04,995.25 paise, execution of which has been sought, inter alia, by attachment and sale of house No.48-A, Jor Bagh, New Delhi.

3. Notice of the Execution Petition was given to the judgment debtors. The judgment debtors filed the reply and contested the matter.

4. Heard the learned counsel for the parties and perused the record. The main contention of learned counsel for the decree holder is that the judgment debtors failed to make full payment of the decretal amount within two months from the date of the decree and as such they have become liable to pay interest at the rate of 15% per annum on the principal amount of Rs.3,56,500/- from the date of suit i.e. 24th April, 1982 till realization. The submission of the learned counsel is that the amount of Rs.9,55,125/- paid by the judgment debtors in the Court has to be first adjusted against the interest and costs and thereafter towards the principal amount. Reliance in this regard has been placed on a decision , Industrial Credit & Development Syndicate (now called I.C.D.S. Ltd.) Vs. Smithaben H. Patel (Smt) & ors., where the Supreme Court has held as follows:-

"In view of what has been noticed hereinabove, we hold that the general rule of appropriation of payments towards a decretal amount is that such an amount is to be adjusted firstly, strictly in accordance with the directions contained in the decree and in absence of such direction, adjustments be made firstly in payment of interest and costs and thereafter in payment of the principal amount. Such a principle is, however, subject to one exception, i.e. that the parties may agree to the adjustment of the payment in any other manner despite the decree. As and when such an agreement is pleaded, the onus of proving in always upon the person pleading the agreement contrary to the general rule or the terms of the decree schedule. The provisions of Section 59 to 61 of the Contract Act are applicable in cases where a debtor owes several distinct debts to one person and do not deal with cases in which the principal and interest are due on a single debt."

5. There can be no quarrel with the proposition of law laid down by the Apex Court. Therefore, there can be no doubt that the amount of Rs.9,55,125/- deposited by the judgment debtors in Court on 2nd february, 1999 by way of two pay orders, has to be appropriated in the manner and order as laid down by the Hon'ble Supreme Court. The calculation of the decretal amount submitted by the learned counsel for the decree holder on 6th February,2001 shows that from 24th April, 1982 to 1st February, 1999 interest calculated at the rate of 10% per annum comes to Rs.5,98,028.50 paise. After adding the principal amount and costs, the total comes to rs.9,60,957.60 paise. The judgment debtors deposited a sum of Rs.9,55,125/- by way of two pay order. Calculated in the manner and order provided by the Apex Court, there is a shortfall of Rs. 5,832.60 paise as on 2nd February, 1999 has to be treated as principal. Admittedly, the decree holder has received the deposited amount. The question to be decided is as to what is the effect of this shortfall. After carefully considering the facts, I am of the considered view that extent even though notice under Order 21 Rule 1(2) is not given by the judgment debtors.

6. Mode of satisfaction of a money decree is provided in Order 21 Rule 1 CPC, which is reproduced as under:-

1. Modes of paying money under decree - (1) All money, payable under a decree shall be paid as follows, namely:-

(a) By deposit into the Court whose duty it is to execute the decree, or sent to that Court by postal money order or through a bank; or

(b) Out of Court, to the decree holder by postal money order or through a bank or by any other mode wherein payment is evidenced in writing; or

(c) Otherwise, as the Court which made the decree, directs.

(2) Where any payment is made under clause (a) or clause (c) of sub-rule (1), the judgment debtor shall give notice thereof to the decree holder either through the Court or directly to him by registered post, acknowledge due.

(3) XXXXXX

(4) On any paid under clause (a) or clause (c) of subrule (a), interest, in any, shall cease to run from the date of service of the notice referred to in sub-rule (2).

(5) XXXXX"

7. The payment in the present is in terms of Clause (c) of sub-rule (1) of Order 21 CPC. As per the decree, the judgment debtors deposited the amount of Rs.9,55,125/- by two pay orders in Court on 2nd February, 1999 i.e. within two months time given by the Court. It would be inequitable and hypertechnical to allow interest on the entire principal amount of Rs.3,6,500/- at the rate of 15% per annum from the date of the suit simply because there was a shortfall of a meager amount of Rs. 5,832.60 paise. The shortfall of Rs.5,832.60 paise appears to be on account of some calculation mistake on account of oversight. If the judgment debtors had suffered a decree by agreement and had paid a sum of Rs.9,55,125/-, they could have paid the shortfall of Rs.5,832.60 paise as well. Therefore, the contention of the learned counsel for the decree holder that the judgment debtors having failed to make full payment of the decretal amount within two months from the date of the decree, became liable to pay interest at the rate of 15% per annum on the principal amount Rs.3,56,500/- form the date of suit till realization, is mis-conceived and does not find favor with this Court. This prayer is accordingly rejected.

8. The judgment debtors have not filed any calculations despite the directions of the Court, which shows that admittedly, there was a shortfall of Rs.5,832.60 paise in the decretal amount as on 2nd February, 1999. Accordingly, the decree remained unsatisfied to the extent, within two months from the date of decree. Therefore, in accordance with the decree, on this unsatisfied amount of Rs.5,832.60 paise, interest became payable at the rate of 15% per annum form the date of suit till payment. The calculation given by the decree holder is reproduced as under:-

"Interest computed below:

24.4.82 to 1.2.99 @ on principal amount of Rs.3,56,500/- (16 years, 9 months and 9 days)

Rs.5,98,028.50 - Interest

(+) Rs.3,56,500.00 - Principal amount

Rs.9,54,528.50

(+) Rs. 6,429.10 - Cost Rs.9,60,957.60 - Total amount

Against which two pay orders deposited on 2.2.99 - Rs9,55,125.00

Amount under decree not satisfied."

9. This calculation shows interest at the rate of 10% per annum on the entire principal amount including the shortfall of Rs.5,832.60 paise up to 1st February, 1999. Accordingly, the judgment debtors are liable to pay the amount of Rs.5,832.60 paise with interest thereon at the rate of 5% per annum from the date of the suit till 1st February,1999 and at the rate of 15% per annum from 2nd February, 1999 till payment.

10. The second contention which requires consideration is that no notice was given by the judgment debtors to the decree holder of the deposit of Rs.9,55,125/- on 2nd February, 1999 in the Court by way of two pay orders and, therefore, it was not a proper deposit and it cannot be treated as payment of the decretal amount within two months from the date of decree to any extent and the judgment debtors became liable to pay interest at the rate of 15% per annum instead of 10% per annum on the principal amount from the date of suit. The contention is totally mis-conceived and devoid of any force. Order 21 Rule 1 sub-rule (2) CPC provides for a notice to be given by the judgment debtors to the decree order for the amount paid by him to the decree holder under Clause (a) or (c) of sub-rule (1). The effect of this rule is not that any deposit made in the Court becomes a nullity or non-existent in the absence of a notice. The consequence of not giving a notice of the deposit of the decretal amount by the judgment debtors flows form the provisions of Order 21 rule 1(2) and rule 1(4) CPC and not from the decree.

11. Order 21 rule 1 sub-rule (2) CPC makes it obligatory on the judgment debtors to notify the payment to the decree holder. As per sub-rule (4) of rule 1 of Order 21 CPC, on any amount paid under clauses (a) or (c) of sub-rule (1), interest, if any, shall cease to run from the date of service of the notice. This provision has been subject of judicial interpretation and the same is not res integra. In a recent judgment titled Rajasthan State Road Transport Corporation, Jaipur Vs. Smt. Poonam Pahwa & ors. the Supreme Court has interpreted this provision. The facts in short of that case are like this. In that case the Accident Claims Tribunal passed an award in favor of the claimants being the legal heirs of the deceased against the respondents including the appellant Rajasthan State Road Transport Corporation for a sum of Rs.2.5 lakhs with 12% interest from the date of filing the petition till realization. The appellant deposited a cheque of Rs.3,36,111.30 paise on 27th June, 1986 in the Executing Court towards decretal amount comprising of interest till the date of deposit. The judgment debtors did not give notice of the deposit to the decree holder, who later on came to know of the deposit only on 19th April, 1989. The decree holder made a claim for further interest at the rate of 12% from the date of deposit on the decretal amount till the decree holder got the information of the deposit. The Accident Claims Tribunal allowed the claim. The judgment debtors i.e. the appellant preferred a revision petition before the Punjab & Haryana High Court against the order passed by the Executing Court for depositing further sum on account of the interest to be paid by the judgment debtors from the date of deposit of the said decretal amount till the date, the decree holder had got the information of such deposit. The revision petition being dismissed by the High Court, the appellant/judgment debtor brought the matter to Supreme Court in appeal. While dismissing the appeal and upholding the order of the Tribunal, the Hon'ble Supreme Court held as under:--

"Order XXI Rule 1 Civil Procedure Code as amended in 1976 expressly provides that the judgment debtor shall given notice of the deposit of the decretal amount the decree holder either through the Court or directly to the decree holder. The obligation of giving the notice to the decree holder is not absolved by simply depositing the amount without taking steps to ensure service of the notice of such deposit to the decree holder thorough Court or otherwise. Therefore, the appellant cannot escape its liability to pay interest to the decree holder for the period between the date of deposit of the decretal amount and the date of notice of such deposit to the decree holder."

12. In the case in hand, the judgment debtors deposited the amount of Rs.9,55,125/- by way of two pay orders in the Court on 2nd February, 1999 but they failed to give notice of the deposit to the decree holder which was obligatory on them. The record shows that the decree holder moved an application being IA.No.1511/99 for release of the amount deposited by the judgment debtors on 10th February, 1999 and vide orders dated 17th February, 1999, the amount of Rs.9,55,125/- was ordered to be released in favor of the decree holder, who received the pay orders. This shows that the decree holder had not got the notice/information of the deposit of Rs.9,55,125/- in the Court at least on 10th February, 1999. The decree holder is, therefore, entitled to interest at the rate of 10% per annum on the amount of Rs.9,55,125/- from the date of deposit i.e. 2nd February, 1999 till 10th February, 1999, the date when he received the information of deposit.

13. Thus in view of the above discussion and in facts and circumstances of the case, in my view it would be expedient in the interest of justice to give time to the judgment debtors to pay the balance decretal amount. The judgment debtors are, therefore, given one month's time to pay to the decree holder an amount of Rs. 5,832.60 paise with interest thereon at the rate of 5% per annum from the date of suit till 1st February, 1999 and at the rate of 15% per annum from 2nd February, 1999 till payment, and, interest calculated at the rate of 10% per annum on the amount of Rs.9,55,125/- from 2nd February, 1999, the date of deposit in Court till 10th February, 1999 the date of information to the decree holder.