1. This is an appeal by the first defendant from an order passed in execution by the learned Subordinate Judge of Dindigul. The appellant was the 1st defendant in O.S. No. 44 of 1929 which was a suit upon a promissory note. He was one of the executants of the promissory note. The decree in the suit was passed on the 18th March, 1930. On the 22nd December, 1935 the decree was assigned to the respondent and E. P. No. 85 of 1938 was filed by the respondent to execute the decree by arrest of the 1st defendant, the present appellant. The first defendant objected to execution against him. The learned Subordinate Judge overruled his objections and hence this appeal.
2. The learned Subordinate Judge has held that the defendant's plea was barred by limitation. He has taken the defendant's plea as being one of satisfaction or adjustment of the decree and since he finds that the adjustment or satisfaction had not been certified under Order 21, Rule 2, Civil Procedure Code within ninety days, he has held that the plea was barred by limitation. The appeal is based upon the plea that the learned Subordinate Judge was wrong in holding that the defendant's case was merely one of adjustment of the decree and that therefore the learned Subordinate Judge was wrong in basing his decision on the question of limitation alone.
3. The plea of the appellant before the learned Subordinate Judge was that the assignment of the decree to the respondent on the 22nd December, 1935 was virtually an assignment to himself (the 1st defendant). He said that he had found the money to purchase the decree from the original decree-holder and that Periappa Rowther the nominal transferee was merely a benamidar for himself. He said that he had entered into an agreement with Periappa Rowther by which Periappa. Rowther undertook not to execute the. decree against him (the first judgment-debtor) but against the other defendants only. The respondent also agreed, he said, that whenever the 1st defendant should consider it undesirable or unsafe to keep the decree alive any longer, the respondent would put in an application to enter up satisfaction of the decree. The time had come, the appellant thought when he filed his counter-statement before the learned Subordinate Judge, for the fulfilment of this agreement and he therefore called upon the assignee decree-holder to enter up satisfaction of the decree forthwith on the ground that he (the 1st defendant) now considered it unsafe and inexpedient to keep the decree subsisting. He prayed therefore that the Court would be pleased to record satisfaction of the decree and dismiss the execution petition.
4. I am of opinion that the decision of the learned Subordinate Judge is correct, although I do not think it should have been based upon the question of limitation. It is quite true that the counter-statement filed by the appellant in the Sub-Court contained the allegation that he (the appellant) had paid to the original decree-holder the value of the decree. If there were a payment of which the appellant desired the executing Court to take notice, such a plea would of course have been barred by Order 21, Rule 2 which says that no payment out of Court shall be recognised by the Court executing the decree unless it has been certified by the decree-holder or unless the judgment-debtor has within the proper time taken the necessary steps to have it certified. The judgment-debtor therefore could not plead that the decree had been satisfied by his payment of the money to the original decree-holder. He was therefore obliged to fall back upon his plea that he had arranged with his nominee to enter up satisfaction whenever he should think fit. Now this is an agreement which in my opinion no Court should recognise. The second proviso to Order 21, Rule 16 says that where a decree for the payment of money against two or more persons has been transferred to one of them, it shall not be executed against the others. The agreement which the appellant pleads that he made between himself and his nominee was an agreement that his decree should be executed against the remaining defendants in O.S. No. 44 of 1929. It was therefore an agreement in contravention of the express provisions of Order 21, Rule 16, second proviso, and as such it was an agreement which cannot be enforced by any Court.
5. Learned Counsel for the appellant has attempted to contend that his objection to execution was really an objection to the competence of the transferee decree-holder. He has referred to the cases in which it has been held that a judgment-debtor against whom a transferee decree-holder seeks execution is entitled in execution to show that the transferee decree-holder is a mere benamidar and even a mere benamidar for himself. He has therefore attempted to show that his objection was not that the decree had been satisfied but that the transferee decree-holder had no authority to execute it.
6. I have already shown however that that was not the plea which he raised in the Sub-Court where he devoted himself wholly to an attempt to show that his transferee had agreed with him, firstly, to execute the decree against the other judgment-debtors and secondly to enter up satisfaction of it whenever he should be called upon. I am therefore clearly of opinion that that agreement is one which no Court ought to be asked to recognise or to enforce, and therefore think that the learned Subordinate Judge was right in rejecting the appellant's objections to execution, although I think that his decision was not based upon proper grounds. I would therefore dismiss this appeal with costs.
7. I entirely agree. The decision in Srirama Rao v. Bapayya (1922) 18 L.W. 453 has been cited to us and the observations relevant to this inquiry are to be found at pages 463 and 464. In that particular case an assignment had been recognised and the learned Judges referring to the remarks of Lindley, L.J., in Scott v. Brown, Doering, McNab & Co. (1892) 2 Q.B.D. 724 pointed out that when fraud was within the knowledge of the Court it should not allow a party participating in it to benefit by it. This case is wholly unlike that case. On the face of it there was nothing wrong with those proceedings but the appellant is asking us to allow the machinery of this Court to be used for the purpose of an elaborate inquiry which will enable him to establish that he has entered into a fraudulent arrangement with the decree-holder which we are to recognise and in conformity therewith to record satisfaction of the decree. It seems to me that that is in direct conflict with the principle that the Court will not allow its processes to be used for the purpose of enforcing frauds at the hands of parties who participated in them.