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A.V. Kannappa Mudaliar Vs. V.C. Chellakutti Udayar - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberA.A.A.O. No. 134 of 1969
Judge
Reported inAIR1972Mad287
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rule 57(1)
AppellantA.V. Kannappa Mudaliar
RespondentV.C. Chellakutti Udayar
Cases ReferredMohammed Mubarak Hussain v. Sahu Bimal Prasad
Excerpt:
.....mere use of words 'closed, dismissed or struck off' does not indicate default on the part of the decree-holder and that the question has to be determined only on the facts and circumstances of each case. 7. in my view the facts and circumstances in this case clearly indicate that there was default and that there was, consequently, a dismissal. 8. on the whole i am satisfied that the executing court had dismissed the execution petition for default on the part of the decree-holder, and it necessarily follows that the court was bound to have stated in the order itself that the attachment ceased. roshan mia, 1911 13 clj 621, a division bench of the calcutta high court has ruled that the decree-holder's failure for not applying under order 21, rule 66, c. , is clearly one of dismissal for..........district judge has held that this was a clear case of dismissal for default on the part of the decree-holder. he is of opinion that the production of decree-holder's accounts was necessary for the disposal of the matter in controversy in order to determine the question whether the decree debt got merged in the running account or not, and has relied upon the following passage in md. gaffar baig v. md. abdul khaleel khan air 1957 a p 991-'the default envisaged in rule 57 is not confined to non-appearance or non-payment of batta or failure to produce necessary documents. it also includes failure to do things for the successful execution of the decree.'i shall now take up for consideration the question whether the e. p. is not maintainable without a fresh prayer for attachment of the.....
Judgment:

1. E. P. No. 57 of 1968 in O. S. No. 296 of 1964 on the file of the District Munsif's Court, Vellore, out of which the appeal arises was filed by the appellant herein for realising a sum of Rs. 2133-70 the amount due to him from the respondent under the decree passed in the above suit on 24-6-1964 and subsequent costs of execution by sale of the properties described in the schedule to the petition attached on 21-10-1966 in E. P. No. 126 of 1966.

2. The material facts are shortly these: The appellant a wholesale dealer in vegetables in Vellore filed the suit in question against the respondent herein for recovery of Rs. 1574 made up of (1) Rs. 1338-64 the amount due from the respondent a retail dealer for the purchase of vegetables and (2) Rs. 235-36 due as interest at 12 per cent per annum from 26-10-1962 till the date of suit and obtained an ex parte decree on 24-6-1964. The decree was subsequently transferred to the Sub-Court, Vellore, for execution and the appellant filed E. P. No. 78 of 1966 for realising the decree amount by attachment and sale of the respondent's properties. Because of the misdescription of the village in the schedule, attachment could not be effected and the E. P. was consequently dismissed on 24-8-1966. Thereafter the appellant filed a second E. P. No. 126 of 1966 on 29-9-1966 for attachment and sale of the same properties, correctly describing the village as Vadamathimangalam. The respondent remained ex parte and the properties were attached on 7-12-1966 and the terms of proclamation were settled on 2-2-1967.

3. The respondent subsequently filed E. A. 95 of 1967 for setting aside the ex parte order in E. P. 126 of 1966 and, on the order being set aside, he filed a counter affidavit contending hat, soon after the decree was passed, he approached the appellant and requested the latter to accept payment of the decree amount in easy instalments, that the appellant agreed that the decree amount should be shown as a debit in the accounts, that the respondent could continue to have dealings with him and that the decree thus became fully satisfied by being merged in the running account and was therefore not executable. The respondent called upon the appellant to produce his accounts; but as the latter did not produce the same, the executing court passed an order on 11-1-1968 dismissing the E. P. but directing attachment to continue. Subsequently the appellant filed E. P. 57 of 1968 out of which the appeal arises on 31-3-1968, and the respondent raised the same objections to the enforceability of the decree which he had raised in the earlier E. A.; and an additional objection was raised, that, as E. P. 126 of 1966 was dismissed for default of the appellant, the attachment ceased to have effect and that the present E. P. without a prayer for fresh attachment was not maintainable.

4. The learned Subordinate Judge who heard the execution petition has held that the respondent's version in court that the appellant gave up his claim under the decree and told that respondent that he need not pay the decree amount at all and also agreed to report full satisfaction to the trial court, is at variance with the respondent's contention as set out in his counter statement and is absolutely false and that, in any event, as the adjustment spoken to has not been certified before the executing court, could not be pleaded in defence. The learned Judge has also held that the dismissal of the execution petition for non-production of the accounts by the appellant cannot be construed as a dismissal due to the default of the appellant to prosecute the same, that the production of accounts was not necessary for the prosecution of the execution petition and that the executing court could have gone on with the execution application without the production by the appellant of his accounts and could have drawn an adverse inference from the non-production of the accounts. According to the learned Judge, the disposal of the E. P. was only for statistical purposes and the attachment effected in the earlier E. P. 126 of 1966 and which was directed to continue would enure for the present execution application also.

5. In appeal the learned District Judge of North Arcot has taken a diametrically opposite view on both the points and, upholding the respondent's objections to the execution, dismissed the E. P. The learned District Judge has held that this was a clear case of dismissal for default on the part of the decree-holder. He is of opinion that the production of decree-holder's accounts was necessary for the disposal of the matter in controversy in order to determine the question whether the decree debt got merged in the running account or not, and has relied upon the following passage in Md. Gaffar Baig v. Md. Abdul Khaleel Khan AIR 1957 A P 991-

'The default envisaged in Rule 57 is not confined to non-appearance or non-payment of batta or failure to produce necessary documents. It also includes failure to do things for the successful execution of the decree.'

I shall now take up for consideration the question whether the E. P. is not maintainable without a fresh prayer for attachment of the properties. The executing court had dismissed the prior E. P. 126 of 1966 on 11-1-1968 with the following observations:

'Accounts not produced. E. P. is dismissed. Attachment to continue,'

The main contention of the respondent is that the order directing the continuance of the attachment is illegal in view of the proviso to Order 21, Rule 57(1), C. P. Code and is therefore inoperative. It is urged that the appellant-decree-holder committed default in producing the accounts, that the executing court had therefore dismissed the execution petition and that the court was wrong in directing the attachment to continue. On behalf of the appellant it is urged that there was no default on the part of the appellant-decree-holder, that the E. P. was not actually dismissed, though the order says so, that the disposal was one for statistical purposes only, that the order directing the attachment to continue is perfectly legal and that, at any rate, as the order cannot be said to be void for want of jurisdiction the attachment will legally continue to be in force till it is set aside by a subsequent order. Order 21, Rule 57(1), C. P. C. runs thus:--

'Where any property has been attached in execution of a decree and the court hearing the execution application either dismisses it or adjourns the proceedings to a future date it shall state whether the attachment continues or ceases;Provided that when the court dismisses such an application by reason of the decree-holder's default the order shall state that the attachment do cease.'

There is considerable controversy between the parties as to whether there was default on the part of the appellant-decree-holder and whether the executing petition as a consequence of such default. It is contended on behalf of the appellant based on the observations of Basheer Ahmed Sayeed J. in Govinda Padayachi v. Kannammal, 1957 1 MLJ 201 : AIR 1958 Mad 15, the observations of Natesan J. in Palaniappa Chettiar v. Muthu Veerappa Chettiar, : AIR1966Mad406 and the observations of Alagiriswami J. in Pachai Ammal v. Thirugnanasambandam : (1969)1MLJ277 , that the fact that there was a direction to continue the attachment would necessarily show that the court did not mean to regard the conduct of the decree-holder as defaulter or that the court dismissed the execution petition for default. The learned Judges have referred to some of the decisions of the Division Benches of this court.

6. On a survey of the earlier authorities including Bench decisions of this court, I regret my inability to subscribe fully to the proposition of law stated by these three learned Judges. In my view these decisions must be confined to the facts in those cases. The question whether the executing court dismissed the application and whether the dismissal was on the default of the decree-holder must be determined on the circumstances and facts of each case. The fact that the court had directed the attachment to continue, in my view, would not necessarily lead to the conclusion that the court did not mean to regard the conduct of the decree-holder as default or that the court did not dismiss the execution petition for default. I entirely agree with the following observations of Ramachandra Iyer J. (as he then was) in Krishnaswami Iyengar v. Vedavalli Ammal, : AIR1959Mad218 , that is it well settled that the mere use of words 'closed, dismissed or struck off' does not indicate default on the part of the decree-holder and that the question has to be determined only on the facts and circumstances of each case.

7. In my view the facts and circumstances in this case clearly indicate that there was default and that there was, consequently, a dismissal. I am unable to rule out the possibility that the executing Court in this case really held the conduct of the decree-holder to be default within the meaning of Order 21, Rule 57(1) and dismissed the execution petition and ordered the attachment to continue in the hope that the decree-holder will file a subsequent independent application for executing the decree. It is not unlikely that the provisions of Order 21, Rule 57(1) including the proviso and the illegality of continuing the attachment after terminating the execution petition were not specifically brought to the notice of the Court and that the Court had inadvertently directed the attachment to continue in spite of the dismissal of the execution petition for default on the part of the decree-holder. It is clear from the terms of the order that the execution petition was dismissed because the accounts were not produced by the decree-holder. I am unable to say that the production of the appellant's accounts was not necessary for an effective disposal of the matter in controversy. It may be that the Court could have penalised the appellant for the non-production of his accounts by drawing an adverse inference against him because of his default; but, I have no doubt in my mind that the Court had the power to call upon the appellant to produce his accounts and to punish the appellant by dismissing his execution petition for having disobeyed in any appeal and the legality of the Court's action cannot now be challenged.

8. On the whole I am satisfied that the executing Court had dismissed the execution petition for default on the part of the decree-holder, and it necessarily follows that the Court was bound to have stated in the order itself that the attachment ceased. The order, however, states that the attachment shall continue and is therefore wrong being contrary to the mandatory provisions of the proviso to O. 21, R. 57(1), C. P. C. as amended by this Court.

9. It is however contended on behalf of the respondent that the order directing the attachment to continue, though wrong, as being contrary to the provisions of Order 21, Rule 57(1), C. P. C., cannot be said to have been passed without jurisdiction and therefore void and that the attachment must therefore be deemed to be subsisting. There is considerable divergence of opinion among the Courts, as to whether an order directing the continuance of attachment, while dismissing the execution petition for default on the part of the decree-holder, is void or not.

10. In Namuna Bibi v. Roshan Mia, 1911 13 CLJ 621, a Division Bench of the Calcutta High Court has ruled that the decree-holder's failure for not applying under Order 21, Rule 66, C. P. C. for service of notice would amount to default under Order 21, Rule 57, C. P. Code, and that the effect of such dismissal was the cessation of attachment notwithstanding the Court's order that the properties would remain under attachment.

11. In Dildar Hussain v. Sheo Narain, AIR 1919 All 194, the executing Court made the following order:--'The sale is set aside. The application for execution is struck off. The attachment will remain'. It was held by a Division Bench of the Allahabad High Court that O. 21, Rule 57, C. P. Code applied to the case and that, in spite of the Court's order that the attachment should continue, it ceased to subsist.

12. Following the decision in Namuna Bibi's case, (1911) 13 CLJ 621, Pandalai J., has in Seshayya v. Sattiraju, : AIR1930Mad414 held that an attachment does not subsist when a decree-holder's execution petition is dismissed for his default, in spite of the fact that the Court ordered that the attachment should remain in force.

13. In Vijayadas v. Shekharappa, AIR 1941 Bom 395, Divatia, J. has observed that an order dismissing an execution petition on non-payment of process fees for notice under Order 21, Rule 66 C. P. C., is clearly one of dismissal for non-prosecution as well as one for non-payment of process fees and must be taken to have been passed under Order 21, Rule 57 with the result that an order of continuing the attachment after the dismissal of execution petition is invalid; and the decision is based upon an earlier decision of the same High Court in Baba v. Kisan, : AIR1938Bom18 . The same view has been taken by a Division Bench of the Andhra Pradesh High Court in Rama Goud v. Raju Bai, : AIR1971AP336 , and the learned Judges have observed that, 'when the Court passes an order dismissing an execution petition for the default of the decree-holder, the only proper and legal order which the court can pass is that the attachment shall cease. There is no discretion left in the Court to continue the attachment notwithstanding the dismissal of the execution petition'; and the learned Judges have followed the earlier decision of their High Court in Kangayya v. Reddayya, : AIR1960AP634 .

14. On the other hand, a single Judge of the Allahabad High Court has, in Mulay v. Balgovind, : AIR1925All456 , laid down that an order of Court directing an attachment to subsist even when the execution was ordered to be struck off on account of a default on the part of the decree-holder, though an improper order, is not a nullity and is binding on the parties. The learned Judge has followed a decision of the same High Court in Mohammed Mubarak Hussain v. Sahu Bimal Prasad, : AIR1922All62 in which the earlier decision of the same High Court in AIR 1919 All 194 was distinguished.

15. The same view has been taken by Alagiriswami, J. in : (1969)1MLJ277 . The learned Judge has observed was on account of the decree-holder's default, the order directing the attachment to continue may be a wrong order but cannot be said to be a void order passed without jurisdiction.

16. On the whole I am inclined to agree with the decision of Alagiriswami, J. Court. The order in question would certainly be wrong and improper but I am unable to say that the executing Court which passed that order had no jurisdiction to pass such a wrong order. The order will be binding on the parties thereto.

17. For the foregoing reasons I am unable to support the contention raised on behalf of the respondent that the execution petition in question is not maintainable in the absence of a prayer for fresh attachment of the property. The finding of the learned District Judge on this point is therefore set aside.

18. The second contention is that the decree is not executable because of a post-decretal arrangement entered into between the parties. There can be no doubt that the respondent's version in Court that the appellant gave up his claim under the decree and agreed to report full satisfaction to the trial Court is false. Admittedly no such plea was taken in the statement of objections he had filed. I am however satisfied from a perusal of the entries in the books of account maintained by the appellant relating to the decree amount that the appellant should have agreed that he would not enforce the decree in Court and that the decree amount should get merged in the running account and should be payable subsequently. It is true that no such agreement is available in writing; but the conduct of the parties as evidenced by the entries in the appellant's accounts tends to support the respondent's case very strongly. It is not disputed that, after the decree had been passed, the respondent was permitted by the appellant to have further dealings with him in spite of the non-payment of the decree amount, that though the principal sum of Rs. 1338-64 due as on 26-10-1962 was decreed ex parte with subsequent interest and costs on 26-4-1964, only the sum of Rs. 1338-64 was shown as due as per the subsequent entry dated 1-4-1964, that the account which was continued in September and October also was settled on 29th October 1964, for, a liability of Rs. 1643-29 (vide page 300 of ledger Ex. A-2) and that the running account had continued upto 11th March 1965 showing a debit entry of Rs. 2006-27. If the appellant had intended to execute the decree, there was no reason why he did not execute the decree and why the decree amount was instead merged in the running account standing in the name of the respondent. Again, if the appellant had really intended to recover the entire decree amount, one would have expected him to enter the entire decree amount including the subsequent interest and costs in the running account; but admittedly the entries do not show any debit of subsequent interest and costs which had been awarded under the decree. The fact that the respondent was permitted to continue his dealings with the appellant as before, that the accounts including the decree amount were subsequently settled and that the respondent's signature was taken in the ledger in token of the settlement leave no doubt in my mind that there was a post-decretal agreement between the parties that the decree should not be executed and that the moneys due to him should be realised by the appellant in the normal course without recourse to the decree.

19. The learned Subordinate Judge had dealt with only the point whether the respondent's evidence in Court that the appellant agreed to give up the entire amount is true or not and had missed the main point whether or not there was a post-decretal arrangement as pleaded in the counter affidavit of the respondent disabling the appellant from executing the decree. The conduct of the parties, the entries in the appellant's accounts, the circumstances and probabilities of the case leave no doubt in my mind that, while the respondent's version in Court that the appellant agreed to give up the entire amount is false, the appellant had entered into an agreement with the respondent subsequent to the passing of the decree that the decree will not be executed and that the decree amount will merge with the subsequent running account and should be realised in the normal course without recourse to the decree. The fact that this defence has not been taken in his counter to E. P. 126 of 1966 in my view, cannot be of any serious consequence in this case.

20. The next point for consideration is whether the post-decretal arrangement, even if true, could legally stay the hands of the appellant from executing the decree. Order 21, Rule 2, C. P. C. provides that, where a decree is otherwise adjusted in whole or in part to the satisfaction of the decree-holder, the decree-holder shall certify such adjustment to the Court whose duty it is to execute the decree and that, where the judgment-debtor informs and Court of such adjustment and the decree-holder failed to show cause why the adjustment should not be recorded as certified, the Court shall record the same accordingly. Order 21, Rule 2(2), (2(3)?) provides that an adjustment which has not been certified or recorded as aforesaid shall not be recognised by any Court executing the decree. The law is clear that O. 21, R. 2 applies to adjustment of the money decree as well and that the executing Court is bound to executive the decree even if the decree had been satisfied fully out of Court, unless the satisfaction had been certified or recorded by the executing court in the manner provided by Rule 2 of Order 21. The learned District Judge has completely lost sight of the provisions of Order 21, Rule 2 and has therefore wrongly held that the decree cannot be executed by the appellant-decree-holder, even though the satisfaction had not been recorded or certified as contemplated by Order 21, Rule 2.

21. In the result the appeal is allowed; but, under the circumstances, the parties will bear their own costs throughout. Leave granted.

22. Appeal allowed.


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