1. The question of law that is involved in this revision petition is whether payment of the decretal amount by the Judgement-debtor to one of the decree-holders of a joint decree outside the Court can be treated as payment in full satisfaction of the decree.
2. Sri P. V. R. Sarma, the learned Counsel for the petitioners, contends that such a payment can operate a valid discharge of the entire decree, while Sri M. Chandrasekhara Rao, the learned Counsel for the respondents, contends that payment to one of the decree-holders of a joint decree does not bind the other decree-holders and consequently does not give a valid discharge of the decree.
3. The plaintiff's suit in S. C. No. 119/1960 on the file of the Subordinate Judge's Court, Narasaraopet was dismissed with costs. The plaintiff was required to pay to the defendants 1 to 3 the suit costs of Rs. 592-95. Hence the defendants filed E. P. No. 101/72 on 4-7-1972 for arrest of the petitioner-plaintiff who is the judgement-debtor. While the E. P. was still pending, the plaintiff-judgement-debtor paid Rs. 592/- to the 3rd defendant on 30-7-1972 in full satisfaction of the decree. Having received the said amount, the 3rd defendant passed a receipt to the judgement-debtor. In the said receipt, 3rd defendant stated that he was receiving the amount on behalf of all the other defendants and he would distribute to them their shares from the amount. Then the judgement-debtor-plaintiff filed E. A. No. 362/72 in E. P. No. 101/1972 under O. 21 R. 2 requesting the Court to record full satisfaction of the decree in E. P. No. 101/1972. The executing Court did not record full satisfaction of the decree but gave credit only to 1/3rd of the decretal amount and ordered execution for the balance. According to the learned Subordinate Judge, 3rd defendant has no power to receive the entire decretal amount except to the extent of his share and the receipt passed by him does not bind the other decree-holders. It is this finding and the order for payment of the balance amount that are now assailed by the judgement-debtor in this revision.
4. Sri Sarma contends that as the three defendants who are the decree-holders filed the execution petition jointly and the execution petition was laid for the execution of the joint decree passed against the judgement-debtor-plaintiff and as the Court did not express any doubt or suspicion about the genuineness of the receipt passed by the 3rd defendant, one of the decree-holders, and as the receipt clearly mentions that the 3rd defendant, one of the decree-holders received the decretal amount of Rs. 592/- stating that he would distribute to defendants 1 and 2 their shares from out of the amount received by him in discharge of the decretal amount, the Executing Court ought to have held that the receipt passed by defendants 1 and 2, the remaining decree-holders and ought to have recorded full satisfaction of the decretal amount under O. 21 R. 2 and his finding that the receipt passed by the 3rd defendant does not bind defendants 1 and 2 and his order that the judgement-debtor has to pay the balance amount is vitiated with material irregularity.
5. From the contentions of defendants 1 and 2 and also from the fact that the third defendant who passed receipt stating that he would distribute to defendants 1 and 2 their shares from the decretal amount did not choose to come into the box to explain that he was authorised by the defendants 1 and 2 to receive the entire decretal amount, it is clear that defendants 1 and 2 did not authorise the 3rd defendant to receive their shares on their behalf.
6. When it is so clear that defendants 1 and 2 did not authorise the 3rd defendant to receive their shares in the decretal amount, payment of the entire decretal amount to the third defendant does not give valid discharge of the decree except to the extent of his share and defendants 1 and 2 are entitled to recover their shares in the decretal amount and the judgement-debtor is bound to pay to them their shares. This is based on the principle that one of several joint decree-holders is not competent to grant full discharge of the decree, out of Court or to certify to the Court complete satisfaction of more than his own share of the decree without the concurrence of the other decree-holders. In other words the legal position may be stated thus: If there are two or more decree-holders and the decree is passed jointly in favour of all of them, then obviously payment must be made to each of them his respective share from out of the decretal amount or all of them should receive the decretal amount jointly in order to give a valid discharge of the decree. It follows that if the entire decretal amount is paid to one of them such a payment does not bind the other decree-holders and as such it does not give a valid discharge of the decree. But if the decree-holder, receives it, with the authorisation of the other decree-holders, such a payment can give a valid discharge, since it can be treated as payment to all.
7. Rajmannar, C. J., and Viswanatha Sastri, J. in Hanumanthappa v. Sethayya & Co. (AIR 1949 Mad 790) (FB) considered the scope and effect of O. 21 R. 2 and also the question whether the payment made to one of the decree-holders out of the several decree-holders can give a valid discharge. Their Lordships held that when there are two or more decree-holders and the decree is passed jointly in favour of them all. A payment to one of them cannot give a valid discharge. Rajamannar, C. J., held that 'money due under a decree can be paid out of Court to the decree-holder, who presumably can give a valid discharge. Only R. 2 insists that such payment shall be certified and recorded. Obviously the payment to an authorised agent of the decree-holder i.e., a person authorised by the decree-holder to receive the decree amount and give a discharge would also be a payment to the decree-holder. When there are two or more decree-holders and the decree is passed jointly in favour of them all, then obviously payment must be to all of them, because the word 'decree-holder' must mean 'decree-holders' when there is a plurality of decree-holders. It follows that when there are two or more decree-holders, a payment to one of them cannot be a valid payment under R. 1 of O. 21 which can be certified or recorded under R. 2. This is, of course, subject to the qualification that if one of two or more decree-holders happens to be also the authorised agent of the other decree-holder or decree-holder, then he can give a valid discharge on behalf of himself and the others.
8. Viswanatha Sastri, J., in his separate judgement held on this aspect that O. 21 R. 1 directs that all money payable under a decree shall be paid (a) into the Court whose duty is to execute the decree; (b) out of Court to the decree-holder; or (c) otherwise as the Court which made the decree directs. By virtue of 3. 13 Cl. 92), General Clauses Act, words in the singular shall include the plural. Therefore, the term 'decree-holder' in O. 21. R. 1 cl. (b) means 'decree-holders', if there are two or more of them. Similarly in O. 21 R. 2 Cl. 91) which speaks of a payment out of Court or adjustment to the satisfaction of the decree-holder, the expression 'decree-holder' means 'decree-holders' if there are two or more of them. It may readily be granted that where a joint decree is passed in favour of two or more persons not related as partners, a payment out of Court, in order to be binding on all, must be made to all the joint decree-holders and that one of several joint decree-holders cannot give a valid discharge of the entire decree without the concurrence of the others.
9. Their Lordships as well as Raghava Rao, J., who constituted a Full Bench in the above case had to consider the question 'when a decree is passed in favour of a firm, can payment outside the Court to one partner-decree-holder bind the other partner-decree-holders?' While deciding this question, their Lordships Rajamannnar, C. J., and Viswanatha Sastri, J., discussed the general law with reference to O. 21 Rules 1 and 2 laid down the legal position as enunciated above. Raghava Rao, J., did not advert to this aspect in his judgement. Rajamannar, C. J., and Viswanatha Sastri, J., ultimately held on the question before them that the general rule that payment out of Court to one decree-holder out of the several joint decree-holders is not applicable to a decree passed in favour of a firm, as a payment outside the Court to one partner-decree-holder binds the other partner-decree-holders provided that the other partner-decree-holders would be at liberty to establish special circumstances why such payment should not bind them.
10. The Division Bench of the Bombay High Court consisting of Rajadhyaksha and Vyas, JJ., in Valchand V. Manekbal : AIR1953Bom137 approved the view taken by Mr. Justice Shah who held that a payment of one of several joint decree holders is not a payment at all and such a payment cannot deprive the other decree-holders of their right to enforce the decree because obviously if a right is given to several decree-holders to enforce compliance with the terms of the decree, it cannot be said that there has been a sufficient compliance with the terms of the decree when satisfaction has been rendered to one of the decree- holders, but not to all. The rule, however, is subject to well recognised exceptions (1) when the decree-holder receiving the money has authority to receive payment on behalf of all, such authority being either express or implied. This is no more than an application of the rule of law of agency: 'Qui facit per alium facit per se'. The authority may arise by reason of the decree; as for instance, by a power of attorney from other decree-holders or even may exist by relation which subsisted between the decree-holders prior to the date of the decree, but in all cases such authority not being contrary to the provisions of an express statute like O. 32 R. 7 C.P.C. (2) when distinct shares of the decree-holders are determined and known, payment to one of the decree-holders of his share satisfies the decree to that extent. Strictly speaking a decree envisaged by the second exception is not a joint decree ; and a decree -holder who is entitled to obtain satisfaction of his right can claim it without reference to the rights of the other decree-holders. However, if a case does not fall within either of the two exceptions, the payment to one of the several decree-holders cannot be recognised as payment to all or even to the extent of the share of the decree-holder in the property received by him ( that is even to the extent of the share of the decree-holder in the whole decree). The reason for the rule is clear. If the judgement-debtor is required to pay any amount on the joint decree-holders whose shares are not specified one of them cannot say apart from special authority traceable to the relation subsisting or arising under or after the decree that payment to him is payment to all.
11. The learned Judges held that in their opinion the view taken by Mr. Justice Shah is correct. They further observed that the essence of the matter is that the decree sought to be executed is a joint decree and has to be executed as such. If the shares of the decree-holders are apparent on the fact of the decree either expressly or by necessary implication, it is not strictly speaking a joint decree. In such a case, as Mr. Justice Shah pointed out, each decree-holder can take out execution, in respect of his own share, but where the shares of the respective decree-holders are not apparent on the face of the decree, either expressly or by necessary implication, the decree which is sought to be executed is a joint decree and the judgement-debtors must render satisfaction to the whole body of the decree-holders. Where one of the decree-holders is authorised to receive payment on behalf of all, the payment to him is obviously payment to the whole body of the decree-holders. But save in such cases satisfaction must be rendered to the whole body of the judgement-creditors.
12. The Nagpur High Court in Ramakrishna V. Shankar (AIR 1935 Nag 25) held that ' Where out of four joint decree-holders two decree-holders have themselves applied for execution and the third decree-holder has admitted payment, and the remaining decree-holder has taken no interest in the proceedings, the Court is fully justified in permitting the execution by the decree-holders without making any order as to calling the other decree-holders. In the case of joint decree-holders a payment made out of them can only absolve the judgement-debtor in respect of the share of that particular decree-holders.'
13. Similar view was also taken by the Madhya Bharat High Court in Kavarlal v. Shivchand (AIR 1954 Madh B. 140) and held that ' Where the payment has been made outside the Court to a decree-holder who has subsisting right, to the knowledge of the judgement-debtors, to represent others by reason of his position under the substantive law, that payment and consequent certification or adjustment would bind the rest. On the other hand, if he is not entitled so to represent them, then he cannot give a valid discharge and his action cannot prejudicially affect the rights of others under the decree in any way or to any extent.
14. From the above rulings it is clear that the payment made to one of the decree-holders does not bind the other decree-holders in the absence of proof of authorisation and the discharge will be recorded only to the extent of his share and the judgement-debtor is liable to pay the shares of other decree-holders and the judgement-debtor is entitled to recover the shares of the other decree-holders from the decree-holder who received the entire decretal amount from him.
15. But Sri Sarma relied upon the ruling rendered by Justice Chandra Sekhara Sastry, in P. Suryachandra Rao V. T. Topendas (1966 (2) Andh
276) in support of his contention mentioned above. But that ruling was rendered with reference to the executors. Sec. 311 of the Indian Succession Act provides that if one of the executors make judgement, it binds the other executors. Sec. 311 of the Indian Succession Act reads as follows:
'When there are several executors or administrators the powers of all may, in the absence of any direction to the contrary, be exercised by any one of them who has proved the will or taken out administration.'
The first illustration states that one of several executors has power to release a debt due to the deceased. Hence, the learned Judge held that since the adjustment was agreed to by one of the executors, it is binding on the other two executors also. This decision, therefore, does not assist the respondents in any way in support of their contention.
16. I, therefore, hold that the learned subordinate Judge has not committed any material irregularity in ordering the petitioner to make payments to the other sharers defendants 1 and 2 so far as their shares are concerned. Thus, I find no merits in the revision petition and it is, therefore, dismissed, but in the circumstances of the case without costs.
17. Revision dismissed.