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Muthu Vaithilinga Mudaliar Vs. Subbaraya Chettiar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1930Mad410
AppellantMuthu Vaithilinga Mudaliar
RespondentSubbaraya Chettiar
Cases ReferredLodd Govindoss v. Ramdoss
Excerpt:
- - the agreement is an adjustment of the debt due, though it cannot be enforced unless certified and payment in terms of the adjustment will be under the terms of-its full satisfaction for the debt, 4. and again an adjustment is clearly not the same thing as satisfaction. 225 it is again impossible to ascertain what the precise facts were, but all that is laid down is that a transaction which extinguishes a decree is an adjustment under order 21, rule 2. that would apply as well to an executed contract as to an agreement still to be executed......reconvey it in one year at the price of rs. 2,750, and that the further balance due under the decree debt should be discharged by the sale of other property by the judgment-debtor to a third person who was to give a promissory note for rs. 900 to the decree-holder. when notice was issued to the latter, he stated that the compromise had fallen through and resisted the adjustment of the decree on the footing of this alleged agreement. both the lower courts have come to the conclusion that an agreement of this nature, even if true, will not amount to an 'adjustment' and i think upon the authorities cited to me that this view is correct. a closely similar case was dealt with in lachman das v. ramnath kalikamliwala a.i.r. 1922 all. 13 in which piggott, j. observed:it seams to me fairly.....
Judgment:

Curgenven, J.

1. The question arising in this case is whether the word 'adjustment' in 0. 21, Rule 2, Civil P.C., embraces an agreement to discharge the decree which the parties have still to carry out. The respondent had obtained a mortgage decree and the mortgaged property had been sold under it. While the sale was awaiting confirmation, the appellant here, who was the judgment-debtor, having filed a petition under 'O. 2l Rule 90, the parties put in a joint statement to the effect that a compromise was impending and a few days later the appellant filed another petition in which he alleged that the respondent had agreed to an arrangement whereby the auctioned property should be conveyed to him for a sum of Rs. 2,600 on condition that he should reconvey it in one year at the price of Rs. 2,750, and that the further balance due under the decree debt should be discharged by the sale of other property by the judgment-debtor to a third person who was to give a promissory note for Rs. 900 to the decree-holder. When notice was issued to the latter, he stated that the compromise had fallen through and resisted the adjustment of the decree on the footing of this alleged agreement. Both the lower Courts have come to the conclusion that an agreement of this nature, even if true, will not amount to an 'adjustment' and I think upon the authorities cited to me that this view is correct. A closely similar case was dealt with in Lachman Das v. Ramnath Kalikamliwala A.I.R. 1922 All. 13 in which Piggott, J. observed:

It seams to me fairly clear that an oral agreement, not as yet performed by either party Could not successfully be set up so as to prevent a decree-holder from proceeding with the execution of his decree. On the facts stated in the judgment-debtor's own petition, the decree-holder had not bound himself by anything more than an oral agreement; whether it was or was not open to him to reconsider his position, whether he was not justified in doing so by facts ascertained by him subsequently to the date of the alleged oral agreement, these and other similar questions might arise, if this were a suit for specific performance of the alleged oral agreement of 3rd July 1920, or a claim for damages against the decree-holder for having refused to abide by that agreement.

2. That I think is a consideration which should weigh, namely that the executing Court would be compelled to try issues which would properly arise in a suit for specific performance of a contract, Walsh, J., who concurred with Piggott, J., expresses the principle in a formula which has been adopted in some other of the cases.

An inchoate contract, which if completed if completed would bar execution of a decree, cannot be pleaded as a bar to execution under O. '21, Rule 2 and the judgment-debtor cannot claim that the contract should be completed and then be invoked in bar of execution.

3. Besides two cases from Lahore decided by single Judges, Karam Chand Madan and Sons v. Dunlop Rubber Co. Ltd. A.I.R. 1922 All. 13 : A.I.R. 1927 Lah. 537 and Maiadat Swami v. Ram Sarup A.I.R. 1930 Lah. 231, where the Allahabad case was followed, we have a Madras case Ramakrishna Kadirveluswami Naicker v. Eastern Development Corporation, Ltd. [1918] 43 I.C. 537.' It is doubtful from the report in that case how far the agreement to compromise had actually gone, but I think there is no doubt that the learned Judges acted upon the principle that so long as it remains executory and has not been fully executed, it cannot amount to an adjustment under Order 21, Rule 2; for they say that whatever may be the appellant's rights to claim specific performance and other remedies in a suit they cannot avail him in execution. A judgment of Wallace, J., in Venkataswami v. Kotilingam A.I.R. 1926 Mad. 184, has been cited as adopting the contrary view. It is true that it contains some observations which encourage this opinion, as for instance, where on p. 733, the learned Judge says:

The agreement is an adjustment of the debt due, though it cannot be enforced unless certified and payment in terms of the adjustment will be under the terms of-its full satisfaction for the debt,

4. And again

An adjustment is clearly not the same thing as satisfaction.

5. It was 'a case where the judgment debtor entered into a composition, with.a number of creditors and the question was whether the composition amounted to an adjustment where the creditor was a decree-holder. It is, however, to be observed that not only had the composition been entered into but the actual money had been paid under it so that it was not really a case of an executory contract at all. This is made clear by a closing passage in the judgment, where the learned Judge observes.

In this case I think it is clear that the decree-holder agreed under a mutual composition scheme to accept payment of 80 per cent of his-debt in full satisfaction of his debt, if paid within a reasonable time; and the money was paid within a reasonable time. This, there fore was an adjustment of the debt tantamount to full satisfaction of the decree.

6. In the other Madras case cited for the appellant Lodd Govindoss v. Ramdoss [1915] M.W.N. 225 it is again impossible to ascertain what the precise facts were, but all that is laid down is that a transaction which extinguishes a decree is an adjustment under Order 21, Rule 2. That would apply as well to an executed contract as to an agreement still to be executed. I think from these decisions that it is clear that an adjustment must be settlement which extinguishes the decree debt and not one which if carried into effect will extinguish it. To hold to the contrary would, put the decree-holder in a very unfortunate position if satisfaction is recorded and the judgment-debtor then resiles from the agreement he had entered into. I consider that the view taken by the lower Courts is correct and I dismiss this Civil Miscellanous Second Appeal with costs.


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