1. This second appeal raises an important, though technical, question as to whether a judgment-debtor under Or. XXI rule 2(2) C.P.C has to put in a distinct application for entering up satisfaction or whether it would suffice if the plea of discharge is raised in a counter affidavit filed in the course of pending execution proceedings within the limit of time permitted under Art. 174 of the Limitation Act, i.e 90 days.

2. In this case, a decree for costs was passed in favour of defendants 4 and 5. They filed an execution petition. Plaintiff-as the Judgment-debtor resisted the proceedings and filed a counter affidavit pleading inter alia that a settlement was arrived at between the parties on 14-9-1952 to the effect that Rs. 200/- should be paid by the Judgment-debtors in full satisfaction of the claim for costs. The counter was filed on 4-10-1952, i.e, in about three weeks after the agreement. The question arose as to whether the averments in the counter affidavit were tantamount to an application for entering up satisfaction. Both the courts agreed relying on Budruddin v. Gulam Moiddeen . I.L.L 36 Mad. 357. that the counter affidavit was sufficient now that the need for a separate application was obviated. Hence this Second Appeal.

3. In the aforesaid case, Sundara Ayyar and Ayling, JJ. observed:

“We have been invited by the learned vakil for the appellants to treat the judgment-debtors counter-petition as an application to compel the judgment-debtors to certify the adjustment. We might be inclined to accede to this request if there was anything before us to show that the counter-petition was put in within the time allowed to the judgment-debtors by the Limitation Act.”

4. It so transpired in that case that even the counter was out of time and hence the equitable relief which the court was inclined to grant was not possible. This case came up for notice in Lodd Govind Doss v. Ramdoss Vishnu Doss . 34 M.L.J 88. where the counter affidavit was put in within the time allowed by Art. 174 of the Limitation Act. Sir Arnold White, Chief Justice, and Oldfield, J., said:

“…………but, we do not feel disposed to grant the indulgence to the judgment debtor of treating his counter affidavit as a substantive application under Order XXI Rule 2(ii). The observations of the learned judges in Alathoor Badrudeen v. Gulam Moideen (I.L.R 36 Mad. 357) has reference to the facts of that particular case. To treat the affidavit as an application is to ignore the express language of Order XXI Rule 2(ii) which requires a notice to show cause against recording satisfaction of the decree.”

5. Kalyanji Dhana v. Dharamsi Dhana & Co. following the earlier decisions of that court held in favour of an equitable construction of the rule concerned.

6. The latest case cited is Akbar Ali v. Dr. Eswar Saran where two judges differed and a third judge held in favour of the technical interpretation.

7. The rule requires an application asking for a notice to be issued to the decree holder to show cause against entering up satisfaction. The Application has no reference to the fact of informing the court of such payment or adjustment. The wording stands:

“………may inform the Court of such payment or adjustment, and apply to the court to issue a notice…………”

8. The question would arise whether there should be an express application for the issue of a notice, say when the decree-holder waives notice, and puts in appearance voluntarily. In this particular case, the decree-holder was before the court and a copy of the counter-affidavit must have been served on him. Whether in such circumstances a separate application for the issue of a notice is necessary and whether the counter affidavit does not suffice may also have to be considered. I feel, however, that the question by reason of its importance would better be decided by a Bench, particularly in view of the divergence of judicial opinion on the interpretation of Order XXI Rule 2(ii) C.P.C The matter will be placed before the learned Chief Justice for consideration for posting before a Bench.

9. In pursuance of the above order of reference this Appeal came for hearing before the Hon'ble the Chief Justice, and the Hon'ble Mr. Justice Munikanniah.

10. For the reason stated in the order of reference, we think it is better that the matter is decided by a Full Bench.

JUDGMENT

(Judgment of the Court delivered by the Hon'ble the Chief Justice).

11. The question to be answered by the Full Bench is:—

“Whether a counter filed by the judgment-debtor within go days, in answer to an execution petition of the decree holder, raising a plea of satisfaction or adjustment of a decree would fulfil the requirements of Or. XXI Rule 2 C.P.C”

12. The facts material for the purpose of this enquiry may be stated briefly. The respondent laid an action for the recovery of certain items of property from the appellants, who are defendants 4 and 5 and some others. The suit was dismissed with costs of the appellants and this was affirmed on appeal. The appellants put into execution the decree for costs in their favour. This was resisted by the respondent on the ground that there was an adjustment of the decree on 14-9-1952 when the 4th defendant for himself and as representing his brother the 5th defendant received Rs. 1200/-, Rs. 1000/- being the price of two items of property to be conveyed to them and Rs. 200/-, to words full satisfaction of the costs in the suit and executed Ex. B-1 as evidencing this agreement. The agreement was assailed as a forged document. This objection was overruled by the trial Court, which found that Ex. B-1 was a genuine document and that the adjustment pleaded was true. In the result; the trial Court dismissed the petition. In the appeal filed by the aggrieved plaintiff, a further contention was raised on his behalf that the alleged payment could not be called in aid by the judgment-debtors since there was no application for recording satisfaction or adjustment within the meaning of Order XXI Rule 2 C.P.C The lower appellate court disallowed this plea as also the one bearing on the truth of the agreement. It is that Order that is now under appeal now.

13. In this appeal, the view of the District Judge as regards the construction of Order XXI Rule 2 is canvassed. It is urged that there is no scope for treating an objection petition as an application within the ambit of Order XXI Rule 2 C.P.C, having regard to its language. A judgment-debtor, who seeks certification of the payments made by him, should conform to the provisions of that order strictly. In the absence of an application in that behalf the Court is precluded from enquiring into the truth or otherwise of the alleged satisfaction or adjustment of the decree, continues learned Counsel. The answer of the counsel for the respondent is that the objections embodying the plea of satisfaction would serve the purpose of Order XXI Rule 2 and when once it is brought to the notice of the Court, it is bound to investigate into the matter.

14. In order to appreciate the relative contentions, it is necessary to read the terms of Rule 2 of Order XXI C.P.C: Order XXI Rule 2 as amended in Madras runs thus:

“1. Where any money payable under a decree of any kind is paid out of Court, or the decree is otherwise adjusted in whole or in part to the satisfaction of the decree-holder, the decree-holder, shall certify such payment or adjustment to the court whose duty it is to execute the decree, and the court shall record the same accordingly.

2. Any party to the suit or his legal representative or any person who has become surety for the decree debt also may inform the Court of such payment or adjustment, and apply to the Court to issue a notice to the decree-holder to show cause; on a day to be fixed by the Court, why such payment or adjustment should not be recorded as certified; and if, after service of such notice, the decree-holder fails to show cause why the payment or adjustment should not be recorded as certified, the Court shall record the same accordingly.

3. A payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognised by any court executing the decree.”

15. Thus, where money payable under a decree is paid out of court, an obligation is cast on the decree-holder to certify the payment. If, however, he fails to carry out his duty, the judgment-debtor is provided an opportunity by sub-rule 2 to inform the court of the payment made by him or of any adjustment effected. But the procedure indicated in this sub-rule is different from that of Sub-rule 1. Sub-rule (1) lays down a simple procedure of certification of payment by decree-holder, whereas under sub-rule 2 notice must issue to the decree-holder to afford an opportunity to him to appear and to contest the request for certification. If the payments are not recorded as contemplated by Sub-rule 1 or 2, the execution Court is precluded from recognising such payments or adjustments by reason of sub-rule 3.

16. It is seen that sub-rule 2 only talks of the judgment-debtor informing the court of the payments or adjustments. No particular mode of giving the information in that regard is prescribed by that rule. All that is needed is that he should bring the payments or the adjustments to the notice of the Court within the time prescribed by Art. 174 of the Limitation Act, which fixes 90 days for that purpose. The object of this rule, read with Art. 174 of the Limitation Act, is to discourage judgment-debtors from prolonging execution petitions by setting up old payments. Disputes regarding adjustment or satisfaction should be settled as early as possible to avoid stale claims being advanced by a judgment-debtor in that regard. It is to ensure that the executing Court is not troubled with controversies relating to payments or adjustments, which are not certified or recorded, that this rule was enacted. It is significant that Art. 174 governs only Or. XXI Rule 2(2). There is no specific provision for certification to be made by a decree-holder within a given time. That, in our opinion, denotes the aim and object of the provisions of Or. XXI Rule 2. If, therefore, a judgment-debtor gives information to the Court about the payments or adjustments made by him within the time allowed by law, the Court has to hold an enquiry into the matter and issue notice to the decree-holder. Notice to the decree-holder is imperative since any determination behind his back is not valid.

17. Therefore, the two essential conditions of this Order are that intimation should be given to the Court within the specified time and that the decree-holder is given an opportunity to put his case before Court. We do not find anything in the language of that rule which prevents the information envisaged in that rule being presented by means of an objection petition. Nor is any form prescribed for applying to a Court to issue a notice to the decree-holder for the purpose set out in that rule. There is no definition of ‘application’ in the Civil Procedure Code. ‘Application’ as defined in Rule 3 sub-rule 2 of the Civil Rules of Practice and Circular Orders, Vol. 1, contemplates an oral application also. Be that as it may, as we have already indicated, the intendment of that rule is that the decree-holder should have notice of the request of the judgment-debtor to have the payments or adjustments recorded by the Court. Therefore, when a counter contains a plea of satisfaction or adjustment of the decree and that is served on the decree-holder, who is thus afforded an opportunity to show cause against such certification, there is substantial compliance with the terms of Or. XXI Rule 2 C.P.C If these two essential elements are present, it could be treated as a substantive application.

18. These provisions were the subject of judicial scrutiny. A Bench of the Madras High Court expressed the opinion in Alathoor Badruddin v. Gulam Moideen that section 258(3), which corresponds to Order XXI Rule 2(2) was applicable where in answer to an application for execution an adjustment was set up by the judgment-debtor. It is true that it was obiter since the learned Judges disallowed the plea of the judgment-debtor in view of the fact that it was raised long after the lapse of 90 days. All the same the principle is stated there which is useful in this inquiry. It is indicated in the judgment that it was open to the judgment-debtor to take steps to compel the judgment-creditor to certify the adjustment within 90 days allowed to him by law.

19. As embodying a proposition contrary to this, Lodd Govindoss v. Ramadoss Vishnu Doss is cited to us by the Counsel for the appellants. The learned Judges, who decided it, distinguished Alathoor Badrudeen v. Gulam Moideen on the ground that the observations therein had reference to the facts of the particular case. They felt that to treat an affidavit as an application was to ignore the language of Order XXI Rule 2(2) which required notice to show cause against recording satisfaction of the decree. They then remarked that they did not feel disposed to grant an indulgence to the judgment-debtor of treating his counter-affidavit as a substantive application under Order XXI Rule 2 C.P.C which implies that the Court has got power to treat such a counter-affidavit as a substantive application, which power could be exercised in deserving cases. What seems to have weighed with them in refusing to grant such an indulgence seems to be that the judgment-debtor in that case was still in time and could take action if he thought it fit. Thus, this case cannot be said to be a definite pronouncement on the other side of the line.

20. The principle enunciated by Sundara Aiyar and Ayling, JJ., in Alathoor Badrudeen v. Gulam Moideen was affirmed by Govinda Menon and Panchapakesa Aiyar, JJ., in Kandaswami v. Narasimha Aiyar . A.I.R 1952 Mad. 582.. There is a very instructive discussion on the subject in Chandi Charan v. Panchanan . A.I.R 1930 Pat. 526.. The Bench consisting of Jwala Prasad and Dhavle, JJ., ruled that the Judgment-debtor could set up satisfaction or adjustment of the decree by way of a counter-petition as a bar to the execution petition filed by the decree-holder, provided it was done with in the prescribed period. In the judgment of their Lordships, when once the Court is informed of such payments or adjustments, it is not only open to the Court but also incumbent upon it to treat the judgment-debtor's petition of objection as an application under sub-rule 2 so that Sub-rule 3, the purport of which had already been given, may not come into play. The observations of the learned Judges occurring at page 527 are apposite in this context.

“It is not as if the law had left the decree-holder free from any obligation in the matter. Sub-rule I imperatively required him to certify the payment, and if no specific period of limitation is prescribed for this—as there is under Art. 174 Limitation Act, for the Judgment-debtor's application for the issue of a notice to the decree-holder-the decree-holder was required under sub-rule 2 item (e) of Order XXI Rule II, to mention the payment in his application for execution. The decree-holder therefore acted contrary to law in omitting to mention the payment in his application for execution. It is the duty of a court to oppose a fraud…………..”

21. This view is shared by the Rangoon High Court in P.R.P.L Chetty v. Lon Pow and Maunglin v. Ma Mi.

22. The rulings of the Bombay High Court also are in consonance with the above statement law. In Kalyani v. Dharamsi Broomfield, J., opined that a written statement filed by a judgment-debtor objecting to the execution of the decree was sufficient compliance with the terms of Order XXI Rule 2(2), provided it was filed within 90 days.

23. Other instances of this principle are furnished by Ganga Dihal Rai v. Ram Oudh; Abid Hussain v. Kunj Behari Lal . A.I.R 1939 All. 581.. In the first of the two cases, Sulaiman Offg., C.J, held that an application by a Judgment-debtor praying for an adjustment to be recorded need not be a document separate from the objections filed by him on the ground of such adjustment. This was followed in the second of the two cases. In this connection it may be mentioned that a much earlier decision of that court in Kushal Singh v. Midal Lal . 1881 All. W.N 168., which interpreted Section 258 of the Code of 1882 corresponding to Order XXI Rule 2, embodied the same rule. The following observations occurring in the judgment there are pertinent:

“It would lead to a failure of justice to refuse to give effect to the application under section 258 and to recognise the payment, merely because the application did not, in express words, ask that notice to the respondent should issue, and a formal notice had not been served. The lower appellate Court must determine on the merit whether the payment has been made, and is therefore fit to be recorded as certified and to be recognised and whether the decree has been satisfied.”

24. A decision of the Calcutta High Court in Bajrang Behari Lal v. Lachmi Narain . 13 Indian Cases 944. called in aid by the appellants, is in conflict with the rule stated above. It was there held that the objections of the Judgment-debtor could not be treated as an application under Section 258 corresponding to Order XXI Rule 2(2) C.P.C Another case cited by the Counsel for the appellants in support of his argument is Shri Prakash v. Allahabad Bank Ltd. According to the Counsel for the appellants, the following passage substantiates his proposition.

“Sub rule a therefore does contemplate an application by the judgment debtor; further, it provides for notice being given to the decree-holder, it affords an opportunity for the decree-holder to appear and it involves a judicial decision by the court whether the payment should be recorded.”

25. We do not think that this pronouncement of the Privy Council renders any assistance to the appellants. The question that arose for consideration there was whether a certification of payment by a decree-holder under Order XXI Rule 2(1) would amount to a step in aid of execution within the scope of Article 181 of the Limitation Act and would save limitation. The judicial Committee answered it in the negative. Their Lordships pointed out that Sub-rule 1 of Rule 2 of Order XXI did not contemplate any application and that the fact that the certification was made in a document styled ‘an application’ and was in the form of a petition would not alter the real nature of the procedure and convert what was really an are certificate of payment into an application within the ambit of Art. 181 of Limitation Act. The remarks extracted above have to be understood in the context of the question that fell to be decided there. It was only in contrasting the procedure indicated in Sub Rule 2 with that in Sub-rule 1 that these remarks were made. These do not indicate that their Lordships laid down any proposition different from the one enunciated above.

26. Reliance is also placed by the Counsel for the appellants on Akbar Ali Khan v. Dr. Ishwar Saran where, on a difference of opinion between Beg, J., and Desai, J., Mukerji, J., concurred with Desai, J. The problem to be solved there was whether an objection petition in answer to an execution petition under Section 47 C.P.C should be treated as an application under Order XXI Rule 2 C.P.C The objection petition contained a prayer that the execution proceedings taken by the decree-holder should be dismissed by recording full satisfaction of the entire decree. The controversy there was whether the two conditions of Order XXI Rule 2 were fulfilled. Beg., J., thought that, to the extent to which information was given regarding the adjustment of the decree, the first part of that rule was complied with and that as regards the second requirement the only thing that was lacking was that the words ‘by issue of notice’ were not expressly used therein. The absence of these words in the opinion of the learned Judge would not constitute a serious lacuna since notice of this objection petition was served on the decree-holder.

27. Desai, J., differed from Beg, J., on the question as to the necessity for applying to the Court to issue notice. The learned Judge remarked that the judgment-debtor not only omitted to refer to Order XXI Rule 2(2) C.P.C but also expressly filed the petition under Section 47 C.P.C and that no notice was issued to the respondent asking him to show cause why the payment should not be certified. He distinguished all the cases which laid down the principle that a counter-petition informing the court of the adjustment was governed by Order XXI Rule 2 C.P.C on the ground that they contained a prayer for certification. According to the learned Judge, if it contained a prayer for certification, the court would go into the question of payment and decide whether it should be certified or not but if it did not contain a prayer, the Court was not required to treat it as an application for certification. Mukerji, J., concurred with Desai, J.

28. We express our respectful dissent from the opinion of Desai, J., and Mukerji, J. We feel that there is no warrant for the conclusion that a prayer for recording adjustment is an essential ingredient of Order XXI Rule 2(2) C.P.C What is contemplated by this provision of law is that the judgment-debtor should notify to the Court about the adjustment within 90 days and that the decree-holder should be served with notice of it, so that the could file his objections to it.

29. It is not contended by the Counsel for the appellants that the failure to ask the Court for the issue of notice to the decree-holder has vitiated the application and rightly in our opinion. The judgment-creditor is already before Court. When a copy of the objections is served on the decree-holder, there is no longer any need to apply to the Court for the issue of a notice to the decree-holder. To insist upon an application by the judgment-debtor for the issue of a notice to the decree-holder would be to pay undue regard to the form rather than to the substance. In construing these provisions, we should take into account the purpose and the object of the legislation. In our judgment, a literal interpretation placed on these provisions of law would deprive the judgment-debtor of the right given to him by that rule. We are in agreement with the opinion of Beg, J., as it accords more with the spirit of the law.

30. Mulla in his Commentary on the Civil Procedure Code sums up the position on this subject at page 757, 12th edition, thus:

“The law allows the judgment-debtor 90 days to apply to have the payment or adjustment certified (Limitation Act, Schedule 1, Art. 174.) If he does not make the application and the decree-holder applies for execution within that period, he may in answer to the application for execution apply to have the payment or adjustment certified, but this must be within 90 days. And it has been held that objections filed by a judgment-debtor to the decree-holder's application for execution may be treated as an application to certify the payment or adjustment, provided the objections are filed within 90 days of the adjustment.”

31. This doctrine is also illustrated by the decision in Ramaswami v. Muthi Ralayee. In that decision, rendered by one of us, the question was whether a counter-affidavit of the respondent in an application for passing a decree in terms of an award filed within 30 days of the service of the notice of the petition could be regarded as an application within the meaning of Section 17 of the Arbitration Act. The answer was in the affirmative. That case furnishes an analogy here.

32. A judgment of the Bench of the Madras High Court in Bangarayya v. Ramabhadri Raju is in consonance with this view. It was held there that the objections of the defendant in substance amounted to an application to set aside an award within the purview of Section 33 of the Arbitration Act.

33. To a like effect is a ruling of a Bench of this Court in Veera Swami Chetty v. Varadiah Chetty. Thus, the current of judicial opinion is preponderatingly in favour of the theory propounded above. It is seen that both on principle and on authority, the counter-petition filed by the judgment-debtor within 90 days, which informs the Court of the satisfaction or adjustment of the decree in answer to an execution petition, could be treated as an application under Order XXI Rule 2(2) C.P.C as it constitutes substantial compliance with the terms of that rule.

34. We answer the reference accordingly and dismiss the Civil Miscellaneous Second Appeal with costs.

K.S.R

35. Reference answered.