[Cites 14, Cited by 0]
Madhya Pradesh High Court
Parth Credit And Capital Market Pvt. ... vs Ideal Electronics Pvt. Ltd. Through ... on 27 January, 2026
NEUTRAL CITATION NO. 2026:MPHC-IND:2495
1 MP-2145-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE ALOK AWASTHI
MISC. PETITION No. 2145 of 2025
PARTH CREDIT AND CAPITAL MARKET PVT. LTD. AND OTHERS
Versus
IDEAL ELECTRONICS PVT. LTD. THROUGH DIRECTOR
PAVANKUMAR CHOPARA
Appearance:
Shri Mini Ravindran, learned counsel for the petitioners.
Shri Abhay Chand Jain, learned counsel for the respondent [CAVEAT].
Reserved on : 03.12.2025
Pronounced on : 27.01.2026
ORDER
With the consent of the parties, heard finally.
2. This petition has been filed by the petitioner/judgment debtor
being aggrieved by the order dated 12.04.2025 in Execution Case No.
44/2023 pending before XIIIth District Judge, Indore by which the executing
Court rejected the application filed by the petitioner under Order XXI Rule 2
read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter to
be referred as "CPC").
3. Brief undisputed facts of the case that are necessary for the
disposal of the present petition are that a land sale agreement between the
respondent and the petitioner for Rs. 35,50,000/- was executed as security
against the loan, for which a case No. 69A/2016 was filed for the
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enforcement of a specific agreement and another Case No. 97/2020 for the
amount of Rs. 1,10,73,972/- was filed for the recovery of the money. During
the said period, a compromise was reached on 20.07.2021 for Rs.
5,32,38,000/-, in which, compromise order was passed by the Court below.
4. It was stated that the petitioner had agreed to pay Rs.
5,32,38,000/- to the respondent for the settlement of both the cases and the
respondent himself who wanted assistance under a specific agreement, had
given up the said assistance and accepted the money and had sought the right
to assistance under a specific agreement on the land in lieu of security for
receiving the money. Upon settlement, the petitioner promptly paid Rs.
5,00,000/- as an installment.
5. In the compromise application (Annexure-P/1) dated 19.07.2021, in
Point No. 6, it is clearly mentioned that "that if the defendant does not pay
the entire amount within one year as per the mutual agreement, then in such a
situation, the plaintiff will be entitled to get the sale deed of the agricultural
land mentioned in the plaint situated at Badiyakima, whose details have been
given in step 2, executed through the court. But the condition will be that the
plaintiff will release the agricultural land in proportion to the amount paid by
the defendant to the plaintiff within one year, and in respect of the remaining
land, the plaintiff will be entitled to get the sale deed registered from the
defendant. And if the sale deed is not registered by the defendant, then the
plaintiff will be entitled to get the sale deed registered with the help of the
Hon'ble Court."
6. Further, vide order dated 31.07.2023 passed in M.P. 4318/2023 by
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this Court, it has been held that "Heard the counsel for both the parties and
perused the record. Annexure P-2 is compromise order between both the
parties passed by IV District Judge, Indore in Case No.69A/2016. According
to the terms and conditions of compromise that judgment debtor paid the
total amount in installment of four months within a year and if total amount
is not paid within a year, then the decree holder may file execution of sale
deed before the Court and have right to execute sale deed through Court. But
it is the duty of the plaintiff to release the land in proportion to the amount
deposited by the defendant in one year."
7. In compliance with the compromise dated 20.07.2021, the
petitioner satisfied the order by submitting separate cheques of Rs.
5,32,38,000/- in the name of the Court and Rs. 5,32,38,000/- in the name of
the respondent in the Court of the Fourth District Judge, Indore, within one
year under Order XXI Rule 1 of CPC. It is an admitted fact that the amount
has been deposited by the petitioners through cheque on 18.07.2022 within
one year and on 25.07.2022, the Court informed the petitioners that the
respondent refused to accept the cheque within 90 days which is mentioned
in the order sheet dated 24.07.2023 and the cheque has not been dishonoured
till date and under Section 266 of the Income Tax Act, any transaction of
more than Rs. 20,000/- shall be done through cheque and not in cash.
8. The decree holder himself has accepted on 04.10.2023 in
response to the application dated 20.09.2023 submitted by the judgment
debtor that on 18.07.2022, a cheque of Rs. 5,32,38,000/- has been deposited
by the judgment debtor and has also accepted that the petitioner had given a
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facility to the debtor on humanitarian grounds that if the judgment debtor
pays the amount of the last installment of Khasra No. 8/1/2 and 11/1/2
through Demand Draft with interest @ 12% from the date of decree within
three days, then in such a situation, he was ready and willing to release the
land of both the above mentioned Khasra numbers in lieu of the amount of
the last installment.
9. It was also stated that the respondent had demanded interest
from the decree dated 18.07.2021 but there was no condition fixed in the
agreement regarding interest, yet the decree holder had requested the court
that the question of interest does not arise from 20.07.2021, then if the Court
wishes, the judgment debtor is ready and willing to pay interest from
20.07.2021.
10. That, the petitioner has filed an application under Section 47 of
CPC before Trial Court in respect of execution filed by the respondent,
which was to be resolved first, but the Trial Court did not consider it passed
an order in aid of a specific agreement, not treating the cheque deposited by
the petitioner as payment in accordance with law, being aggrieved with the
aforesaid, present petition is filed.
11. Learned counsel for the petitioner argued that two civil suits
were instituted between the parties, first Civil Suit No. 69A/2016 for specific
performance of contract and another Civil Suit No. 97B/2020 for recovery of
money. During the pendency of the said suits, the parties arrived at a
settlement on 19.07.2021, pursuant to which a compromise decree was
passed on 20.07.2021. As per the terms of the compromise decree, a total
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sum of Rs. 5,32,38,000/- was agreed to be paid by the petitioner to the
respondent within a period of one year, in three installments at intervals of
four months each. It was further agreed that the land in question would be
released in favour of the petitioner in proportion to the amount paid out of
the decretal amount within one year. It was also agreed that in the event of
failure to pay the said amount within the stipulated period of one year, the
Decree Holder would be entitled to seek execution of the sale deed through
the Court and have the same executed in his favour, in terms of compromise
decree.
12. It is further argued that the compromise decree did not stipulate
the payment of interest or the mode by which the Decree Holder was to
receive the payment. Hence, under the terms of the compromise, the
Judgment Debtor had the discretion to deposit the said amount in Court
either by cheque or in cash and the only requirement was that the whole
amount was to be deposited within a period of one year. The Judgment
Debtor/petitioner also had the discretion to get the land released mentioned
in the decree by paying the entire amount within one year.
13. It is also submitted that on 04.05.2022, the Decree
Holder/Respondent filed execution proceedings in Execution Case No. EX A
35/2022, which was a premature execution, as under the terms of the
compromise decree, the Decree Holder/Respondent could file for execution
only after the lapse of one year in case of non-payment of the compromise
amount. It is submitted that on 18.07.2022, the Judgment Debtor/Petitioner
filed an application under Order XXI Rule 2 of CPC, stating that the entire
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amount under the compromise decree had been tendered by way of cheques
in the name of the Court and the Decree Holder/Respondent, and the same
was also informed to the Decree Holder, as reflected in the proceedings dated
18.07.2022 and 25.07.2022. An application was also filed in Execution Case
No. EX A 44/2023 for the release of the land, as the amount under the
compromise decree had been deposited by cheques in Court. However, in
Execution Case No. EX A 35/2022, after the expiry of 90 days, on
25.07.2023, the Decree Holder refused to accept the cheques tendered by the
Judgment Debtor/petitioner before the Trial Court.
14. Learned Trial Court has erred in holding that payment by
cheque is not a valid tender, it constitutes a valid tender, equivalent to
Demand Draft, challan, or any other valid mode of payment. Even after the
Court recognized the validity of the cheque, the petitioner remains ready and
willing to pay the compromise decree amount. The petitioner also submitted
that he is willing to deposit the decretal amount before the Court by way of
Demand Draft along with interest from cheque tendered date 18.07.2022.
15. In support of his submission, counsel for the petitioner has
relied upon the judgment of Hon'ble Supreme Court in the case of K.
Saraswathy Vs. Somasundaram Chettiar reported in AIR 1989 SC 1553,
Commissioner of Income Tax, Bombay Vs. Messrs Ogale Glass Works Ltd.
Ogale Wadi reported in AIR 1954 S.C. 429 and Damadilal and Others vs
Parashram and Others reported in AIR 1976 SC 2229 , to contend that cheque
is a valid tender and the encashment of the payment dates back to the date of
issue of Cheque.
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16. Per Contra, learned counsel for the respondent opposed the
submissions made by counsel for the petitioner and contended that as per the
conditions under the compromise decree, total amount Rs. 5,32,38,000/- was
to be paid in three installments of 4-4 months, within a period of one year
and not by the way of cheque in the court. Also, in execution proceeding
Case No. EX A 35/2022, an application under order XXI Rule 2 of CPC
filed by the judgment debtor was decided along with several other
application by the Court below vide order dated 20.02.2023. Hence, the
present petition is barred on the ground of doctrine of res judicata as the
petitioner did not challenge order dated 20.02.2023 as has also been recorded
in order dated 31.07.2023 passed in M.P. No. 4318/2023.
17. To bolster of his argument, he has relied upon the judgment of
Hon'ble Apex Court in Satyadhyan Ghosal and Ors. Vs Sm. Deorajin Debi
and Anr. AIR 1960 SC 941, Smt. J. Yashoda Vs.Smt. K. Shobha Rani, AIR
2007 SC 1721, Hariom Agrawal Vs. Prakash Chand Malviya, AIR 2008
Supreme Court 166 and Rashid Khan Vs. State of M.P., 2011 (3) MPLJ.
18. He further contended that there is a limited scope of interference
under Article 227 of Constitution of India and the interference can only be
made when there is a jurisdictional error in the order. Where, there is a
speaking order, it cannot be challenged under Article 227 of Constitution of
India. It has been further argued that judgment debtor had to give the
compromise decree amount directly to the decree holder and not to deposit
before the Court. Only if there was no other option left then only the decree
holder could have deposited the amount in the court.
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19. Heard the counsel for both parties and perused the record.
20. From the perusal of record and arguments advanced by the
learned counsel for the parties, following issues arise for consideration
before this Court:-
(i) Whether the present petition cannot
be entertained on account of being barred by
the principle of res judicata ?
(ii) Whether the cheques tendered by the
petitioner on 18.07.2021 in satisfaction of the
compromise decree dated 20.07.2021
constitutes valid tender? If yes, Whether on
account of such submission of cheque, the
petitioner had satisfactorily complied with
the terms and condition of the compromise
decree so as to avoid execution of
compromise decree for specific performance
initiated by the respondent ?
21. So far as issue relating to doctrine of res judicata of the petition
is concerned, learned counsel for the respondent has drawn attention of this
Court towards order dated 20.02.2023 passed in Case No. EX A 35/2022 to
contend that vide this order application under Order XXI Rule 2 of CPC of
the petitioner had already been rejected and the same was not challenged by
the petitioner and now, he is filing petition against rejection of application
under Order XXI Rule 2 of CPC in Execution Case No. EX A No.44/2023,
and hence the petition cannot be entertained on account of doctrine of res
judicata.
22. To appreciate the argument of the respondent, relevant excerpt
of order sheet dated 20.02.2023 are being reproduced as hereunder :-
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"अिभलेख के अवलोकन से प है क ड धार ारा यह
िन पादन आवेदन प दनांक 21.05.22 को इस आशय का तुत
कया है क समझौता आदे श दनां कत 20.07.21 के पालन म 8 माह
हो चुके है , कंतु िनण तऋणी ने कोई भी क त अदा नह ं क है । अतः
ड धार के प म व य प का िन पादन कराया जावे। िन पादन
आवेदन प म सव नंबर 13/2 का भाग रकबा 0.60 सव नंबर 13/2
का रकबा 1.40, सव नंबर 11/2/2 का पाट रकबा 0.92 तथा सव नंबर
12 पाट रकबा 0.47 सव नंबर 11/2/1 का रकबा 0.50 को सेल लेटर
जार कया जावे, य क उ व णत सव नु बर क कृ ष भूिमय क
8 माह क कुल रािश 3,26,25,000/- पये होती है तथा 8 माह क
क त को रािश 3,54,52, 000/- अदा क जानी थी, जो अदा नह ं क
गई है । इस कारण सेल लेटर जार कर उ व णत कृ ष भूिमय का
क जा ड धार को दलाया जावे।
िनण तऋणी ारा दनांक 11.02.23 को एक आप इस
आशय क तुत क क आपसी राजीनामे म क त क रािश तय
नह ं हुई है और ड धार ारा मनमाने ढं ग से क त का पैमाना
तय करते हुये यह समय पूव िन पादन आवेदन तुत कर दया है ।
अजदार ारा वयं बजावर म 5 लाख पये क रािश मुकदमा नंबर
695/16 के पेटे दया जाना वीकृ त कया है । अतः इस िन पादन
करण को िनर त कया जावे, जसका जवाब ड धार ारा इस
आशय का तुत कया गया है क शी तौर पर िनण तऋणी ारा
5,32,38,000/- चेक दनांक]18.07.22 को यायालय के सम
तत कया, कंतु उ रािश को चार-चार माह क तीन क म
दया जाना था। अतः वकय प का िन पादन कराया जाये।
पुनः दनांक 11.02.23 को िनण तऋणी ारा यह आवेदन प
तुत कया गया क क त म रािश दे ना तय नह ं हुआ था, ब क
एक वष के भीतर रािश भुगतान का तय हुआ था। अतः िन पादन
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आवेदन प िनर त कया जावे।
अिभलेख के अवलोकन से यह प है क राजीनामा आदे श
दनांक 20.07.21एवं पा रत ड के अनुसार चार-चार माह क तीन
क त म 5.32.38,000/- पया क रािश दया जाना उभयप के
म य तय हुआ, कंतु उ रािश क त म नह ं द गई है , ब क
वलंब से द गई है , इस कारण यह प है क उ राजीनामा आ ि
का पालन िनण तऋणी ारा नह ं कया गया है ।
उपरो प र थित को गत रख िनण तऋणी क आप
िनर त क जाती है । 5 लाख पया का जो चेक दया जाना बतलाया
गया है , उसे डक धार ने वीकार कया है । अतः आदे िशत कया
जाता है क ड धार आगामी पेशी दनांक तक जन भूिम खसरा
नंबर का िन पादन करना चाहता है , उनका व य का ा प
यायालय म तुत कर दे ।
करण व य प के ा प क तुित हे तु दनांक 27.
02.23 को तुत हो।"
23. Having perused the order sheet (Annexure P/3) and in light of
arguments advanced by the respondent and from bare perusal of order-sheet
dated 20.02.2023, it is ascertained that there is no mention of application
under Order XXI Rule 2 of CPC which was filed by the petitioner on
18.07.2022. On the contrary, it is apparent from the order dated 20.02.2023
that the executing merely rejected objection of petitioner filed on 11.02.2023,
but application under Order XXI Rule 2 of CPC was not decided. Thus, it is
established that application under Order XXI Rule 2 of CPC is still pending
in the Case No. EX A 35/2022, the present petition is in no way barred from
being entertained on account of principle of res judicata.
24. Now, coming for determination of the issue No. 2, application
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under Order XXIII Rule 3 of CPC and Compromise Decree dated 02.07.2021
(Annexure P/2) have been perused and it is found that it was agreed that the
Judgment Debtor/Petitioner shall pay the total amount of Rs. 5,32,38,000/-
in four installments in four months each and it was also agreed on the point
that total amount was to be paid within a year, and if the total amount is not
paid within a year, then, after a lapse of one year, the Decree
Holder/Respondent may file for execution of the sale deed before the Court
and shall have the right to execute the sale deed through the Court with
respect to land with regards to which amount remained unpaid. It was agreed
too that it was the duty of the Decree Holder/Respondent to release the land
in proportion to the amount deposited by the Judgment Debtor/Petitioner
within a period of one year.
25. This Court also finds that under the said compromise application
and decree, installment amount has not been prescribed, no consequence
uponfailure to pay installment has been prescribed, no mode or manner of
payment has been precribed and it has also not been prescribed that Decree
Holder/ Respondent is entitled to any interest over the agreed amount in the
case that the installment is delayed. Hence, in the considered opinion of this
court the only material condition under the said compromise deed is that the
total amount of Rs. 5,32,38,000/- which was to be paid under the
compromise decree was to be paid within one year and only thereafter the
respondent became entitled to seek execution of the compromise decree for
specific performance with respect to land in regards to which the amount
remained unpaid. At the same time, it remained the duty of the
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respondent/Decree Holder to release the land in proportion to the amount
actually deposited by the Defendant/Petitioner within one year.
26. This Court, in the preceding paragraphs, has held that, under the
terms of the compromise decree, the Decree Holder/Respondent is entitled to
seek specific performance from the Executing Court only after the expiry of
one year. Furthermore, prior to seeking specific performance, the Decree
Holder/Respondent may take recourse to the Executing Court for specific
performance only in respect of the proportion of the land corresponding to
the amount which has not been received by him. In the case at hand, it is
evident from a perusal of the record that, undisputedly within the stipulated
period of one year, on 18.07.2022, the Judgment Debtor/Petitioner deposited
a sum of Rs. 5,32,38,000/- before the learned Court below by way of a
cheque drawn in the name of the Court and the Decree Holder/Respondent
came to the knowledge regarding the same on 25.07.2022 as is evident from
order-sheet dated 25.07.2022. The record further reveals that the said cheques
were never dishonored. However, the Decree Holder did not collect the
cheques from the Court within a period of 90 days despite having knowledge
of the same, whereas, he refused to accept the same, while demanding
payment of the decretal amount along with interest at the rate of 12% per
annum from the date of the decree in his reply to Execution filed by the
petitioner in Case of EX A No. 26/2023.
27. In the aforesaid factual matrix, it is apposite to refer to following
judgments of Hon'ble Apex court, to adjudicate the issue that whether such
submission of cheques satisfied the condition stipulated in the compromise
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decree for payment of compromise amount within one year.
28. On this aspect, the law laid down by A Three-Judge Bench of
Hon'ble Apex Court in the case of K. Saraswathy Alias K. Kalpana (Dead)
By LRs Vs. P.S.S. Somasundaram Chettiar reported in AIR 1989 SC 1553
has been held as hereunder:-
"5. It is contended before us on behalf of the
appellant that the cheque for Rs.6,02,000 was
tendered in Court on 29 May, 1980 and that it
was duly honoured by the Bank and money
was realised under the cheque, and therefore
it must be taken that payment had been
effected by the appellant on 29 May, 1980
within the time stipulated by this Court in its
order dated 29 November, 1979. In
Commissioner of Income Tax, Bombay
South, Bombay v. Messrs Ogale Glass Works
Ltd. Ogale Wadi, AIR 1954 S.C. 429. It was
laid down by this Court that payment by
cheque realised subsequently on the cheque
being honoured and encashed relates back to
the date of the receipt of the cheque, and in
law the date of payment is the date of
delivery of the cheque. Payment by cheque is
an ordinary incident of present-day life,
whether commercial or private, and unless it
is specifically mentioned that payment must
be in cash there is no reason why payment by
cheque should not be taken to be due
payment if the cheque is subsequently
encashed in the ordinary course. There is
nothing in the order of this Court providing
that the deposit by the appellant was to be in
cash. The terms of the order dated 29
November, 1979 are conclusive in this
respect and it is the intent of that order which
will determine whether payment by cheque
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within the period stipulated in that order was
excluded as a mode in satisfaction of the
terms of that order. The time for payment is
governed by the order of this Court.''6. It is
alleged on behalf of the respondent that there
was no money on the date of delivery of the
cheque to support payment of it and that it
was subsequently when arrangements were
made that the cheque was realised. Now, the
High Court has not found that if the cheque
was presented for encash- ment on the date it
was delivered the cheque would not have
been encashed. There is nothing to suggest
also that the cheque was not honoured in due
course and that the Bank had at any time
declined to honour it for want of funds in the
ordinary course. In any event, there is
nothing to suggest that, under the
arrangements made for payment of the
cheque, even if it had been encashed on the
date it was delivered the cheque would not
have been encashed. There is no finding by
the High Court that on 29 May, 1980 the
cheque would not have been realised. That
being so, the question whether the appellant
had wrongly stated that her counsel had
offered to pay cash to the High Court office
on 29 May, 1980 ceases to be relevant. We
also see no substance in the objection taken
before the High Court that in the letter dated
29 May, 1980 addressed by counsel for the
appellant forwarding the cheque for
Rs.6,02,000 there was a request for the return
of the cheque in case it was found that the
appellant was entitled to the set-off claimed
by her. The application of the appellant
claiming adjustment was pending in Court,
and no conclusion can be drawn against her
on the ground that she had requested a return
of the cheque in the event of the adjustment
being allowed by the Court."
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29. In a recent judgment delivered in the case of Vijay Laxmi Singh
& Ors. Vs. Registrar of Cooperative Societies, Govt. of NCT of Delhi &
Anr. decided on 20.04.2022 in W.P.(C) No. 6312/2022, the Division Bench
of High Court of Delhi has taken note of the dictum of Three Judges' Bench
of the Hon'ble Apex Court in the case of K. Saraswathy alias K. Kalpana
(Dead) By LRs (Supra) and observed as follows :-
"The learned counsel for the respondents
submits that since the payment was made
through cheques and the money has not been
realized, therefore, the petitioners were
deemed to be in arrears. The said argument
has only is stated to be rejected because
tendering of cheques by the petitioners for
the requisite amount and acceptance of the
same by the respondents is as good as cash
being tendered, in view of the provisions of
the Negotiable Instruments Act, 1881 as well
as the dicta of the Supreme Court in
Damadilal and Others v. Parashram and
Others, (1976) 4 SCC 855 and K. Saraswathy
alias K. Kalpana (Dead) By LRs v. P.S.S.
Somasundaram Chettiar, (1989) 4 SCC 527.
The latter held, inter alia, that, "...Payment
by cheque is an ordinary incident of present-
day life, whether commercial or private, and
unless it is specifically mentioned that
payment must be in cash there is no reason
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why payment by cheque should not be taken
to be due payment if the cheque is
subsequently encashed in the ordinary
course..."
I n Damadilal and Others v. Parashram and
Others (supra), the question before Supreme
Court was whether the payment by cheque
was a proper tender. The court held that it is
well-established that a cheque sent in
payment of a debt on the request of the
creditor, unless dishonoured, operates as a
valid discharge of the debt and if the cheque
was sent by post and was honoured on
presentation, the date of payment is the date
when the cheque was posted."
30. Similarly, in the case of Commissioner of Income Tax, Bombay
South, Bombay v. Messrs Ogale Glass Works Ltd. Ogale Wadi reported in
AIR 1954 SC 429 , Hon'ble Apex Court has observed as follows :-
"It is said in Benjamin on Sale, 8th Edition,
page 788:-
The payment takes effect from the delivery
of the bill, but is defeated by the happening
of the condition, i.e., non- payment at
maturity."
In Byles on Bills, 20th Edition, page 23, the
position is summarised pithily as follows:' A
cheque, unless dishonoured, is payment." To
the same effect are the passages to be found
in Hart on Banking, 4th Edition, Volume I,
page 342. In Felix Hadley & Co. v. Hadley
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(3), Byrne J. expressed the same idea in the
following passage in his judgment at page
682:
In this case I think what took place amounted
to a conditional payment of the debt; the
condition being that the cheque or bill should
be duly met or honoured at the proper date. If
that be the true view, then I think the position
is exactly as if an agreement had been
expressly made that the bill or cheque should
operate as payment unless defeated by
dishonour or by not being met; and I think
that that agreement is implied from giving
and taking the cheques and bills in question."
The following observations of Lord
Maugham in Bhokana Corporation v. Inland
Revenue, Commissioners are also apposite:
"Apart from the express terms of section 33,
sub-section 1, a similar conclusion might be
founded on the well known common law
rules as to the effect of the sending of a
cheque in payment of a debt, and in the fact
that though the payment is subject to the
condition subsequent that the cheque must be
met on presentation, the date of payment, if
the cheque is duly met, is the date when the
cheque was posted."
In the case before us none of the cheques has
been dishonoured on presentation and
payment cannot, therefore, be said to have
been defeated by the happening of the
condition subsequent, namely dishonour by
non-payment and that being so there can be
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no question, therefore, that the assessee did
not receive payment by the receipt of the
cheques. The position, therefore, is that in
one view of the matter there was, in the
circumstances of this case, an implied
agreement under which the cheques were
accepted unconditionally as payment and on
another view, even if the cheques were taken
conditionally, the cheques not having been
dishonoured but having been cashed, the
payment related back to the dates of the
receipt of the cheques and in law the dates of
payments were the dates of the delivery of
the cheques. On the footing, then, that the
assessee received payment as soon as the
cheques were delivered to it the question still
remains as to when and where the assessee
received such payment."
31. The following excerpts of the another case of Hon'ble Apex
Court, Damadilal And Others vs Parashram And Others reported in AIR
1976 SC 2229, is worth to be quoted here as under:-
"13. This is what the High Court held on the
validity of tender of rent by cheque:"
The question is as to whether, instead of
presenting the cash, if a cheque is sent to the
landlord, that is sufficient tender of the
arrears of rent or not.......
In the highly deve-loped society, payment by
cheque has become more convenient mode of
discharging one's obligation. If a cheque is an
instrument which represents and produces
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cash and is treated as such by businessmen,
there is no reason why the archaic principle
of the common law should be followed in
deciding the question as to whether the
handing over of the cheque is not a sufficient
tender of the arrears of rent if the cheque is
drawn for that amount. It is no doubt true that
the issuance of the cheque does not operate
as a discharge of the obligation unless it is
encased, and it is treated as a conditional
payment, yet, in my view, this is a sufficient
tender of the arrears if the cheque is not
dishonored. In the present day society, I am
of the view, an implied agreement should be
inferred that if the payment is made by a
cheque, that mode of payment would be
accepted." ..................
On the ground of default, it is not disputed
that the defendants tendered the amount in
arrears by cheque within the prescribed time.
The question is whether this was a lawful
tender. It is well established that a cheque
sent in payment of a debt on the request of
the creditor, unless dishonoured, operates as
valid discharge of the debt and, if the cheque
was sent by post and was met on
presentation, the date or payment is the date
when the cheque was posted. The question
however still remains whether in the absence
of an agreement between the parties, the
tender of rent by cheque amounts to a valid
discharge of the obligation. Earlier, we have
extracted a passage from the High Court's
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Judgment on this aspect of the case. We
agree with the view taken by the High Court
on the point. Rent is payable in the same
manner as any other debt and the debtor has
to pay his creditor in cash or other legal
tender, but there can be no dispute that the
mode of payment can be altered by
agreement. In the contemporary society it is
reasonable to suppose such agreement as
implied unless the circumstances of a case
indicate otherwise. In the circumstance of
this case, the High Court, in our opinion,
rightly held that the cheque sent to the
plaintiffs amounted to valid tender of rent.
The second contention urged on behalf of the
appellants must also be rejected."
32. In the case of K. Saraswathy (Supra), the law laid down by a
Three-Judges Bench of Hon'ble Apex Court, that tendering a cheque is a
valid form of payment unless cash is specifically required by a Court order.
When a cheque is encashed in the usual course, the payment is considered to
have been made on the date of the cheque was given.
33. In view of the law laid down by the Hon'ble Supreme Court in
Commissioner of Income Tax, Bombay v. Messrs Ogale Glass Works Ltd.,
Ogale Wadi (supra) , it stands conclusively established that where payment is
made by cheque pursuant to the creditor's request for remittance, the post
office acts as the agent of the creditor. Though a cheque constitutes a
conditional payment, upon its encashment the payment relates back to the
date and place of its delivery. Accordingly, the act of posting the cheque
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constitutes receipt of income at the place from which it is posted. Applying
this settled principle, the receipt of income in such circumstances is deemed
to have occurred at the place of posting of the cheque, and not at the place
where it is ultimately received by the assessee.
34. Similary, Hon'ble Apex Court in the case of Damadilal And
Others (Supra), has observed that tendering rent by cheque constitutes a valid
tender, especially in contemporary society where it is a standard business
practice. Unless a cheque is dishonoured or there is an express agreement to
the contrary, it is treated as a valid discharge of the debt.
35. In these judgments, observation has been made that when a
statute confers protection or rights, and the opposite party accepts benefits
arising from that relationship (such as rent or payment), the law recognizes
continuity of rights and obligations. Acceptance by conduct is sufficient to
establish legal recognition, even in the absence of a fresh agreement.
36. If the present case is tested on the anvil of dictum of law as laid
down in the cases cited hereinabove, it is clear that the petitioner/Judgment
Debtor, within the stipulated period of one year, deposited a sum of Rs.
5,32,38,000/- on 18.07.2022 before the learned Court below by way of a
cheques drawn in the name of the Court and the Decree Holder/Respondent.
The said cheques were never dishonoured. Since the compromise decree did
not prescribe cash payment as the mandatory mode, the cheque deposited by
the Judgment Debtor on 18.07.2022, in compliance of the decree, constitutes
a valid tender in terms of Order XXI Rule 1 of the CPC which expressly
provides for the deposit of the decretal amount before the Court, and a
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cheque, being a negotiable instrument, constitutes payment. Accordingly,
tender of payment by cheque through a banking mode amounts to a valid
tender in the eye of law. Thus, in the considered opinion of this Court, the
decree stood satisfied upon presentation of cheques before Executing Court
and respondent cannot get benefit of his own fault of not presenting the
cheques for encashment despite getting the knowledge of the same well
within time.
37. So far as the judgments relied by learned counsel for the
respondent are concerned, in the case of Satyadhan Ghosal (Supra) , Hon'ble
Apex Court has held that doctrine of res judicata does apply at different
stages of the same proceedings, but in the present case, on perusal of the
order-sheet dated 20.02.2023, it is evident that no application under Order
XXI Rule 2 of CPC has been decided. Hence, this petition is in no way
barred being entertained on account of doctrine of res judicata.
38. As far as the law relied upon by counsel for the respondent in
the cases of Smt. J. Yashoda (Supra), Hariom Agrawal (Supra) & Rashid
Khan (Supra) is concerned, the same are not applicable to this case as the
factual matrix in each of these cases, is materially and substantially different
from the facts of the instant case
39. Apart that the respondent was ready to before the trial Court to
take the amount with interest, but in the form of Demand Draft only. The
compromise decree dated 20.07.2021 does not prescribe any specific mode
of payment nor did it contemplate payment of interest. The only condition
stipulated was that the entire compromise amount was required to be paid
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within a period of one year. The material on record unequivocally
demonstrates that the petitioner tendered the entire decretal amount within
the stipulated period by way of cheques and duly informed the decree holder
thereof. The said tender was neither disputed nor shown to be invalid, nor
was the cheque dishonoured at any point of time.
40. The Executing Court failed to appreciate that payment by
cheque constitutes a valid tender in the eyes of law and that refusal by the
decree holder to accept such payment does not render the tender illegal or
ineffective. The impugned order further overlooks the binding terms of the
compromise decree and travels beyond the scope of execution by introducing
conditions not agreed upon between the parties. Such an approach is
impermissible in execution proceedings.
41. This Court also finds no merit in the objection raised on behalf
of the respondent regarding doctrine of res judicata or maintainability, as the
issue relating to satisfaction of the decree on account of lawful tender within
the stipulated time, was neither finally adjudicated earlier nor barred from
consideration. The Executing Court, therefore, committed an error resulting
in failure of justice, warranting interference under the supervisory
jurisdiction of this Court.
42. Accordingly, this Miscellaneous Petition succeeds and impugned
order dated 12.04.2025 passed in the Execution Case No. 44/2023 by the
XIIIth District Judge, Indore is hereby quashed.
43. The petitioner/judgment debtor is directed to deposit decretal
amount of Rs. 5,32,38,000/- before the Executing Court by way of new
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cheque alongwith simple interest at the rate of 12% per annum from
18.07.2022 within a period of 30 days from the date of passing of this order.
The petitioners' old cheque be returned to him by the concerned Executing
Court.
44. If the petitioner fails to comply with the aforementioned
directions, the executing Court shall proceed with execution proceedings in
accordance with law without further reference to this Court.
45. With the aforesaid observations and directions, this Miscellaneous
Petition stands allowed and disposed of.
(ALOK AWASTHI)
JUDGE
Vindesh
