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Ramesh Book Depot and anr. Vs. Central Bank of India - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revision No. 3388 of 2002
Judge
Reported inII(2007)BC647; (2006)143PLR323
ActsContract Act, 1872 - Sections 59 to 61; Land Acquisition Act, 1894; Code of Civil Procedure (CPC) , 1908 - Sections 47 and 115 - Order 21, Rules 1, 1(2) and 2 - Order 37, Rules 1 and 2
AppellantRamesh Book Depot and anr.
RespondentCentral Bank of India
Appellant AdvocateNone
Respondent Advocate S.S. Aulakh, Adv.
DispositionAppeal dismissed
Cases ReferredPrem Nath v. National Fertilizder Corporation Ltd.
Excerpt:
.....the mode of calculation of principal amount as well as interest. aulakh, learned counsel for the decree holder-respondent has argued that the principle of adjusting interest first to the amount due as followed by the executing court is well settled by a catena of judgments of the supreme court. 5. after hearing the learned counsel for the parties, perusing the record as well as the grounds of the petition. the judgment debtor or any person who has become surety for the judgment debtor has a right to inform the court of any such payment or adjustment by moving the application for issuance of notice to the decree holder to show cause as to why such payment or adjustment be not recorded as certified and if the decree holder fails to show cause then such a payment of adjustment has to be..........to mention that a final decree was passed for recovery of sum of rs. 1,14,726.26 paise. the decree-holder-respondent was held entitled to future interest @ 16.15% per annum with quarterly rests. the judgment-debtor-petitioners had deposited an amount of rs.1,35,000/- representing the period january 1990 to march, 1992 at the rate of rs. 5,000/- per month. however, the balance amount was outstanding. the decree-holder respondent raised various objections. firstly, it was pointed out that the objection petition already filed by the judgment debtor-petitioners was dismissed having been not pressed on 23.8.1993 and, therefore, the application filed by the judgment debtor-petitioners for recording satisfaction of the decree was not maintainable. it was alleged that the aforementioned.....
Judgment:

M.M. Kumar, J.

1. Challenge in this petition is to Order dated 19.2.2002, passed by the learned Executing Court, Chandigarh, dismissing the application preferred by the petitioner-firm under Section 47 of the Code of Civil Procedure, 1908 (for brevity, 'the code'), for recording satisfaction of the judgment and decree dated 6.6.1988, passed in Civil Suit No. 97 of 1984, titled as Central Bank of India v. Ramesh Book Depot. It is appropriate to mention that a final decree was passed for recovery of sum of Rs. 1,14,726.26 paise. The Decree-Holder-respondent was held entitled to future interest @ 16.15% per annum with quarterly rests. The Judgment-Debtor-petitioners had deposited an amount of Rs.1,35,000/- representing the period January 1990 to March, 1992 at the rate of Rs. 5,000/- per month. However, the balance amount was outstanding. The Decree-Holder respondent raised various objections. Firstly, it was pointed out that the objection petition already filed by the Judgment Debtor-petitioners was dismissed having been not pressed on 23.8.1993 and, therefore, the application filed by the Judgment Debtor-petitioners for recording satisfaction of the decree was not maintainable. It was alleged that the aforementioned application was misuse of the process of law. However, on merits the decree was admitted and it was also accepted that an amount of Rs. 1,35,000/- was paid up to 3.3.1992 by the Judgment Debtor-petitioners. The principal question debated before the Executing Court was the mode of calculation of principal amount as well as interest. After hearing learned Counsel for the parties, the Executing Court recorded the conclusion that in law interest has to be first adjusted and thereafter the amount paid could be applied for satisfying the principal amount. The aforementioned conclusion is discernible from perusal of para 8, which read as under:

8. So far as the question of adjusting the payments made by the JDs from time to, time, firstly towards interest and not towards the principal is concerned, it is found that the DH-Bank was justified in doing so. Undisputedly, there was no directions of the Court, passing the decree or of the executing Court at any stage, as to how the part payments being made by the JD are to be adjusted. The JDs have also not brought anything on the file to show that they made the payments, with a request to the bank adjust the same towards the principal amount. There is even otherwise no agreement pleaded or produced on the file to show that the payments were to be adjusted firstly towards the principal amount. In the absence of all this, it was the sheer discretion of the DH-bank to adjust the payments made, as per its choice. So, it having adjusted the payments towards interest first and thereafter towards the principal, cannot be said to be wrong in its decision and the JD-appellant has no right to challenge this act of the DH, at this stage,

2. With regard to payment of interest, the plea raised by the Judgment Debtor-petitioners was also rejected in para 9 and the view of the Executing Court as reflected in para 9 reads as under:

9. So far as the question of granting of interest is concerned, it is found that the JD-applicant has erred in claiming that only 16.15% p.a. was granted, as per Ex.P-28. A further perusal of Ex.P-28 shows that the interest mentioned therein is @ 16.15% p.a. with monthly rests. The bank has claimed the interest @ 16.15% p.a. with quarterly rests and not qua monthly rests. A perusal of the main file, in which judgment dated 23.11.1985 was passed shows that the bank had claimed the amount, by calculating interest with quarterly rests. The said suit was accordingly decreed by the court, accepting the same to be correct. In case, the Court had intended to grant the interest @ 16.15% p.a. itself only, then it should have accordingly decreed the suit amount from Rs. 1,14,762.26 ps. also, by applying interest on annual basis and not with quarterly rests. One more point, which also deserves to be taken into consideration is that earlier also a similar objection petition/application was filed by the JD on 17.4.1993. The bank filed reply thereto and thereafter the said objection petition/application was filed by the JD on 17.4.1993. The bank filed reply thereto and thereafter the said objection petition/application was got dismissed, being not pressed. So, it shows that the JD was quite aware of the actual position and accordingly did not press the earlier objection petition and the present objection petition/application appears to be an afterthought one.

3. None has appeared for the Judgment Debtor-petitioners in support of the petition. However, I have heard Mr. S.S. Aulakh, learned Counsel for the Decree Holder-respondent.

4. Mr. S.S. Aulakh, learned Counsel for the Decree Holder-respondent has argued that the principle of adjusting interest first to the amount due as followed by the Executing Court is well settled by a catena of judgments of the Supreme Court. In support of his submission, learned Counsel has placed reliance in the cases of Meghraj v. Mst. Bavabai and Ors. : [1970]1SCR523 ; Mathunni Mathai v. Hindustan Organic Chemicals Limited and Anr. : [1995]3SCR765 and I.C.D.S. Ltd, v. Smithaben H. Patel : [1999]1SCR555 , and argued that in all the judgments it has been categorically held that payment made by a Judgment-Debtor has to be first applied to interest and then to the principal amount. Therefore, the learned Counsel has submitted that the revision petition is liable to be dismissed.

5. After hearing the learned Counsel for the parties, perusing the record as well as the grounds of the petition. I am of the considered view that the impugned order dated 19.2.2002 passed by the Executing Court does not suffer from any legal infirmity warranting interference of this Court in exercise of jurisdiction under Section 115 of the Code. In the case of Industrial Credit and Development Syndicate v. Smithaben H. Patel : [1999]1SCR555 , the Hon'ble Supreme Court has considered the provisions of Order XXI Rules 1 and 2, Order XXX Vll Rules 1 and 2 of the Code alongwith Sections 59 to 61 of the Contract Act, 1872. In Order XXI Rule 1 of the Code, the mode of paying (sic) amount has been provided and the payment made to the decree holder out of the Court is required to be certified for adjustment in terms of Order XXI Rule 2 of the Code. Whether any amount payable under the decree is paid out of the Court or is otherwise adjusted, whole or in part of the satisfaction of the decree, the decree holder is required to certify such payment and adjustment before the Court, which is to execute the decree. The judgment debtor or any person who has become surety for the judgment debtor has a right to inform the Court of any such payment or adjustment by moving the application for issuance of notice to the decree holder to show cause as to why such payment or adjustment be not recorded as certified and if the decree holder fails to show cause then such a payment of adjustment has to be considered to have satisfied the decree. However, no payment or adjustment can be recorded for satisfaction of the decree at the instance of judgment debtor unless it is made in the manner provided in Rule I of Order XXI of the Code or the payment or adjustment is proved by documentary evidence or it is admitted by or on behalf of the decree holder in reply to the notice given to him under Sub-rule 2 of Rule 1 of Order XXI of the Code. Otherwise, the judgment debtor cannot claim the benefit of adjustment. After detailed discussion, Hon'ble'the Supreme Court in para 14 has observed as under:

14. 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 the 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 is always upon the person pleading the agreement contrary to the general rule or the terms of the decree schedule. The provisions of Sections 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.

6. It is appropriate to mention that Hon'ble the Supreme Court in the case of Meghraj (supra) has also taken the same view, which reads as under:

But the account submitted by the mortgagees shows clearly that they had given credit for the amounts deposited towards the interest and costs in the first instance and the balance only towards the principal. The account submitted by the mortgages clearly negatives the plea of the mortgagors.

7. It is appropriate to mention that the judgment of the Supreme Court in the case of Mathunni Mathai (supra) has been overruled in the case of Prem Nath v. National Fertilizder Corporation Ltd. : (1996)2SCC71 , by holding that the principles laid down therein were not applicable to the cases where compensation under the Land Acquisition Act, 1894, is to be made. In fact, the provisions of Order XXI Rule 1 of the code have been made inapplicable to the cases of compensation under the Land Acquisition Act.

8. When the principles laid down in the judgment of the Supreme Court in Meghraj's case (supra) and Smithaben H. Patel (supra) are applied to the facts of the present case it becomes evident that the decree holder respondent is entitled to payment made by the judgment debtor-petitioner for adjustment of interest and costs in the first instance and the balance has to be applied to adjust the principal amount. The Executing Court, therefore, has taken the correct view which is in consonance with the view of the Hon'ble Supreme Court in various judgments referred to above. Therefore, there is no merit in this petition and the same is dismissed.

9. The parties through their counsel are directed to appear before the Executing Court on the date already fixed.


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