1. The question involved in the determination of this appeal is the interpretation of Order 21, Rule 2, Civil P.C. The facts of the case are that respondent 1 obtained a decree in O.S. No. 115 of 1929 on the file of the Subordinate Judge of Devakottah. That decree provided for the payment to him of a sum of Rs. 25,000 and gave him a charge upon the Peralam rice mills. Respondent 1 proceeded to execute the decree and on 12th April 1940 brought these mills to sale. They were purchased at the court auction by the decree-holder himself for Rs. 38,125 and it is common ground that this amount completely or almost completely satisfies the claim of respondent 1 for the money due to him under the decree. This sale was confirmed on 16th October 1940 and the confirmation of the sale was subsequently, upheld on appeal by the High Court. After the disposal of the appeal, respondent 1 filed an application under Order 21, Rule 95 for delivery of the property which he had purchased. The appellant, who was the judgment-debtor under the decree, resisted the application of the decree-holder, and pleaded that he and the decree-holder and a third person had all entered into an agreement on 9th January 1941, one term of which was that the appellant was to be allowed to remain in possession of the mills. The learned Subordinate Judge of Mayavaram held that this plea could not be recognized under the provisions of Order 21, Rule 2, Clause (3), as it had not been certified or recorded under any earlier clause of that rule. The question is, whether this view of the learned Subordinate Judge is right or wrong
2. There is no direct authority on this question and we are not surprised at the absence of any such direct authority, for the pleading of a mutual agreement of any kind by a judgment-debtor at a time subsequent to the sale of his property and the confirmation of that sale must, in the nature of things, be a very rare occurrence. At the same time, it seems to us the task of interpreting Order 21, Rule 2 involves no great difficulty. What are the conditions under which alone the provisions of Order 21, Rule 2 become operative? They are clearly these that a decree-holder has a decree in his favour directing the payment of money to him, and that from the Court's point of view that decree has not yet been executed. Rule 2 amplifies the permission given to the decree-holder by 1 to receive his money or its equivalent out of Court, and if he has done so, lays upon him the duty of reporting the satisfaction or adjustment in whole or in part to the Court. Rule 2 provides also that the judgment-debtor or certain other persons interested may make a similar report. If the decree-holder reports this the Court must record satisfaction. If any one else reports it the Court must record satisfaction if it finds that cause has not been shown against it. Finally, in Clause (3), the rule provides that a payment or adjustment not so certified or recorded 'shall not be recognized by any Court executing the decree.' What now is the inevitable result of action being taken Under Clause (3)? It is this, that the decree has not been satisfied or adjusted, and therefore that the decree-holder can still proceed to recover his money by process of execution. An examination of the rule as a whole will thus show that it cannot possibly apply to a situation in which the decree-holder has realized his money by selling his judgment-debtor's property in execution and receiving the sale proceeds, either in cash if some one else has purchased the property or by set-off if he has purchased it himself.
3. We have already stated that there is no direct authority on this question; but learned counsel on both sides have called our attention to various decisions of the Madras High Court which bear indirectly upon the question, and we now proceed to consider these. The first set of these decisions deals primarily with the question of limitation. It has been held in Sultan Sahib Marakayar v. Chidambaram Chettiar (1909) 32 Mad. 136 and this has been confirmed by a Full Bench decision in Abdul Azim Sahib v. Chokkan Chettiar A.I.R. 1935 Mad. 803 that an application by a decree-holder who has purchased the property of his judgment-debtor in execution for delivery of that property to him is not an application for execution falling within Article 182, Limitation Act. Before Article 180 was enacted and no specific provision was made in the Limitation Act for applications of this kind, it was held that the residuary article corresponding to the present Article 181 would apply to such applications. Now that Article 180 has been included in the schedule of the Limitation Act, it is clear according to the Full Bench decision that Article 180 applies. These rulings have been cited before us by the learned counsel for the appellant. It seems to us that if any help were required they do materially help, in the interpretation of Order 21, Rule 2. These decisions depend upon an analysis of the precise nature of the application made by the decree-holder in these particular circumstances. It is stated in the former of these decisions on page 138:
It is clear that an application by a decree-holder for delivery of possession of property purchased in execution is not in strictness an application for execution of the decree, a direction for delivery of possession being no part of the decree..
4. The presumption therefore that may be drawn, from the principle of these rulings is that execution in the strict sense of the term is over before such an application can be made; and indeed it is clear that this is the correct view if we consider the alternative case of the purchase of the judgment-debtor's property not by the decree-holder but by some stranger purchaser. As against this, the learned counsel for the respondent has referred us to a line of cases culminating in the Full Bench decision in Sankara Menon v. Sundara Iyer A.I.R. 1943 Mad. 129 which lay down that an application of a decree-holder-purchaser for delivery of the property purchased by him in execution is a step in aid of execution within the meaning of that expression in Article 182, Limitation Act. It seems to us that this is quite irrelevant for the purpose of our present decision. It deals only with a situation in which a subsequent application for execution has been put in by the decree-holder and the question is whether that application is in time or not? If the application with which we have to deal is simply an application for delivery, and has not been followed by any fresh application in execution, obviously, under the authority of Abdul Azim Sahib v. Chokkan Chettiar A.I.R. 1935 Mad. 803 Article 180 must be applied. The interpretation of a certain application as a step in aid must necessarily be confined to certain circumstances, as is clear from the head-note to the latest Full Bench decision which runs as follows:
An application by a decree-holder for delivery of possession of the immovable property purchased by him in a sale held in execution of a decree is a step in aid of the execution of the decree within the meaning of Article 182 (5), Limitation Act, for the purpose of computing limitation in respect of a fresh application by him for execution of that decree against the judgment-debtor, for the balance of the decree amount.
5. Our attention has next been drawn to another Full Bench ruling of this High Court reported in Alagasundaram Pillai V. Pichuvier A.I.R. 1929 Mad. 757. The question there at issue was whether proceedings Under Rule 97 or Rule 100 of Order 21, Civil P.C., are proceedings to which Order 9 of the Code applied. It was held that Order 9 does not apply to these proceedings. The reason was that Order 9 does not apply to proceedings in execution, unless of course those proceedings are proceedings which fall within the terms of Section 47. In order to reach this decision, the learned Judges were constrained to hold that applications Under Rules 97 and 100 were applications in execution, the main reason for that decision being that they were applications provided for by the Civil Procedure Code in Order 21 which deals with the whole subject of execution of decrees and orders. It does not seem to us that this ruling either, directly touches the main question now at issue. There is, in our opinion, a clear distinction to be drawn between proceedings for execution of the decree and the proceedings in execution. In fact, the learned Judges themselves, in this ruling, point this out very clearly, and they say that proceedings Under Rules 97 and 100 follow as a
segueles on the execution of the decree (using the word 'execution' in its stricter sense) and on the court sale, and the Legislature has enacted that such proceedings shall be regarded in law as part of the execution proceedings.
6. This decision, therefore, in no way shakes the principle upon which it has been decided in Abdul Azim Sahib v. Chokkan Chettiar A.I.R. 1935 Mad. 803 that Article 180, Limitation Act, applies to an application of this kind on the ground that it is not an application for execution. Finally, it has been argued for the respondent that an application of this kind 'for delivery of property purchased by the decree-holder in execution of his decree falls within Section 47 and therefore we ought to hold that it falls within Rule 2 of Order 21 as well. It will be obvious, however, that the language of Section 47 is very different from the language of Rule 2. Section 47 directs that all questions relating to the execution, discharge or satisfaction of the decree shall be determined by the Court executing the decree and not by a separate suit. It is easy to see that applications which are filed after the execution of the decree in the strict sense of the word has been completed relate to such execution and, therefore, fall Under Section 47. But, as we pointed out at the outset of this judgment, Order 21, Rule 2 is concerned only with satisfaction and adjustment of a decree, and the manner in which such satisfaction or adjustment should be brought to the notice of the Court, and the inevitable result of the non-existence of any satisfaction or adjustment out of Court or the non-certification of such satisfaction or adjustment is that the decree remains unexecuted and the decree-holder still has a valid claim for his money. We return, therefore, to the interpretation of Rule 2 with which we started, and we hold that the learned Subordinate Judge was wrong in refusing to consider the plea of the appellant in this case on its merits. The learned Judge has formulated three points for determination in para. 6 of his judgment. He has determined only the first two points and we have had to disagree with him on these points. This appeal will accordingly be allowed. The application will be restored to file and the learned Subordinate Judge will be directed to dispose of it according to law after considering and giving his finding upon the third point for determination. The appellant's costs of this appeal will be paid by respondent 1.