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P. Kunhikannan Nair Vs. N. Krishnan - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKerala High Court
Decided On
Case NumberSecond Appeal No. 397 of 1969
Judge
Reported inAIR1972Ker90
ActsCode of Civil Procedure (CPC) , 1908 - Order 21, Rule 2
AppellantP. Kunhikannan Nair
RespondentN. Krishnan
Appellant Advocate V.R. Venkitakrishnan, Adv.
Respondent Advocate K.N. Karunakaran, Adv.
DispositionAppeal dismissed
Cases ReferredVenkatasubba Reddi v. Peddasubbarcddi
Excerpt:
.....their stand should be in regard to the implementation of..........decree as such in whole or in part and results in a satisfaction of the whole or a portion of the decree is an adjustment of the decree even if the contract stipulates that the judgment-debtor is to do something in future.the last ruling, and a recent one, cited at the bar is the case reported in venkatasubba reddi v. peddasubbarcddi, air 1964 andh pra 458. nothing new except a review of the precedents is seen here. of course, in that case the executory part of the contract was agreed to be executed by the judgment-debtor and so time was given by the court for the parties to report fulfilment of the condition. but it must be noted that that was done by consent of the parties. it follows that if there is a mere offer which has not been accepted, no completed contract is born andobviously.....
Judgment:

V.R. Krishna Iyer, J.

1. This second appeal atthe instance of the decree-holder stems from an application under Order 21, Rule 2, Civil Procedure Code, made by the judgment-debtor to record full satisfaction of the decree passed against him. The decree itself was one for arrears of rent and also for removal of certain kuzhikkoors planted in Item 1 of the plaint schedule by the defendant. The judgment-debtor, it appears, wanted to file an appeal, but instead he avers that the parties came to an agreement, Ext. A-3, pursuant to which he applied for the recording of the adjustment of the decree. The terms of Ext. A-3 were so construed by the decree-holder as to furnish a defence for him against the certification of the adjustment. The courts below recorded part satisfaction of the decree on the strength of Ext. A-3 and dissatisfied with the order, the decree-holder has come up in second appeal contending that Ext. A-3 did not actually amount to an adjustment of the decree, but envisaged such adjustment on the fulfilment of certain conditionswhich remain yet to be fulfilled. Thus, the sole question that falls for decision is as to whether Ext. A-3 operates as an adjustment of the decree in part or only contemplates such adjustment on the performance of certain conditions.

2. The law on the point is clear and does not admit of any contrary lines of thought. Counsel on both sides have cited various rulings and I see no divergence in the ratio contained in these decisions. In Udham Singh v. Atma Singh, AIR 1941 Lah 149 (FB) a Full Bench of that court took the view that a completed contract which immediately extinguishes the decree operates as an adjustment within the meaning of Order 21, Rule 2, Civil Procedure Code, but if there is only an agreement to adjust the decree on the fulfilment of a future condition and the decree is still left in existence pending the fulfilment of the condition, then there is no adjustment. Their Lordships emphasised that the question really turns on the intention to extinguish the decree in praesenti. In Gulam Mohamed v. Narendranath, AIR 1963 Mad 261 a Division Bench of that court stated the same proposition in different words. The particular agreement which their Lordships dealt with stated that in case the parties did not comply with the conditions stipulated there, the decree would be executable. Obviously, that agreement did not immediately extinguish the decree, but did so only on the fulfilment of a condition. The court, therefore, directed the Subordinate Judge to ascertain whether the condition had been fulfilled and whether the decretal liability had thereby been extinguished.

Another Full Bench of the Rangoon High Court affirmed this proposition in Arunachallam Chettyar v. V M. R. P. Firm, AIR 1938 Rang 202. Their Lordships made it perfectly plain that a promise to do something in future is legal consideration, and if the decree-holder chooses to accept such a promise by the judgment-debtor, there Is nothing in law to prevent him from doing so, and such a promise by the judgment-debtor and acceptance thereof by the decree-holder is a legal adjustment of the decree. Dunkley J. explained the correct law by an example: 'If A holds a decree against B and B offers to transfer certain property to A. and A accepts that promise to transfer in whole or part satisfaction of his decree, that is a binding contract which constitutes an adjustment of the decree in whole or in part, and can be pleaded by B in bar of execution. But if A, as is usually the case agrees to accept the transfer of the property in whole or part satisfaction ol his decree, at that stage there is noconcluded agreement between the parties, but A has really made a counter-offer which can be accepted by B only by performance, i. e. by the actual transfer of the property. In this latter case there is no adjustment until the property has been actually transferred. The question referred will be answered in the above sense.' Again, Braund J. pointed out the distinction between an Inchoate contract (which is really a contradiction in terms), an executory contract (which leaves some promise to be executed in future) and an executed contract (by which everything contemplated has been executed). In the first case, there is no contract at all and so no adjustment of the decree. In the second case, there can be an adjustment unless the fulfilment of executory part is made a condition of the adjustment of the decree. In other case, even a promissory contract may extinguish a decree. Of course, the third case thus operates as an adjustment of the decree.

The learned Judge observed 'In short, there are I think two questions always to be considered. The first is whether there has been a concluded contract at all. The second is whether or not it is a term of that concluded contract that the decree shall be immediately extinguished or whether its extinguishment is made conditional upon the previous execution by the judgment-debtor of his promise. In the former case there has been an 'adjustment'. In the latter, there has not. I think that the reference, having regard to the terms in which it is framed, should, as to the first part, be answered in the affirmative, and, as to its alternative, in the negative.' In Ramanarasu v. Venkata Reddi, AIR 1933 Mad 28, the same pro-position which I have set out earlier was reiterated and the learned Judges held that any transaction which extinguishes the decree as such in whole or In part and results in a satisfaction of the whole or a portion of the decree is an adjustment of the decree even if the contract stipulates that the judgment-debtor is to do something in future.

The last ruling, and a recent one, cited at the bar is the case reported in Venkatasubba Reddi v. Peddasubbarcddi, AIR 1964 Andh Pra 458. Nothing new except a review of the precedents is seen here. Of course, in that case the executory part of the contract was agreed to be executed by the judgment-debtor and so time was given by the Court for the parties to report fulfilment of the condition. But it must be noted that that was done by consent of the parties. It follows that if there is a mere offer which has not been accepted, no completed contract is born andobviously no adjustment of the decree takes place. In the present case, the stage is far beyond that. What we find from Ext. A-3 is that both sides stated that they have reached an agreement. So, the next question is whether it is an executory contract or an executed one. The terms make it clear that the parties were to execute assignments whereby the property covered by the lease to the defendant was to be divided and each was to become the full owner of the part which was set apart to him. Thus, if there were promises to be fulfilled, the next enquiry is as to whether the fulfilment of those conditions alone could operate as an adjustment or whether there was an immediate extinguishment of the decree (in part) the decree-holder having accepted the promise as good consideration for the adjustment of the decree, I am satisfied that Ext. A-3 amounts to an adjustment of the decree and this is notwithstanding the executory Part of the contract. It follows that the order challenged in appeal is correct and must stand.

3. Act I of 1964 as amended by Act 35 of 1969 produced the perplexing consequence of both sides not being able to state clearly what their stand should be in regard to the implementation of Ext. A-3 in the light of the various provisions of the Land Reforms Act. Anyway, I am concerned with the subject-matter of the appeal only and while I dismiss the appeal. I make it clear that nothing stated here affects the rights of the parties under Act 1 of 1964 if they have any. The parties will bear their costs in this appeal which I hereby dismiss.


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