(Delivered by Ganapatia Pillai, J.)
These two appeals arise out of two orders made by the Subordinate Judge of Nilgiris at Ootacamund in two applications made before him, E.A Nos. 105 and 106 of 1958 for the purpose of setting aside two previous orders of the same Court recording full satisfaction of two decrees O.S Nos. 80 of 1955 and O.S No. 184 of 1953. The third respondent (third defendant) is the appellant in both these appeals. In O.S No. 80 of 1955, a money decree was passed for Rs. 17,775 and odd against the appellant and others. In O.S No. 184 of 1953 a money decree was passed against the appellant and others for Rs. 11,425-12-0. Subsequent to the passing of both these decrees, parties came together on 24th June 1956 and entered into an arrangement for the adjustment of both decree amounts. Under that arrangement Rs. 9000 had to be paid in cash to the decree holder on or before the 24th July 1956 and four items of Immoveable property had to be conveyed by the decreeholder before that date. It was agreed that as soon as this agreement was carried out, the decreeholder should certify the adjustment of the two decrees to Court. According to the appellant, this arrangement was carried out, but the decree-holder defaulted to certify the adjustments Court. On 24th October 1956 the judgment debtor filed a memo asking for an order recording satisfaction of the two decrees based upon carrying out of the agreement dated 24th June 1956. Unfortunately, the Court without issuing notice to the decree-holder on these memos, recorded full satisfaction of both the decrees. Sometime thereafter, the decreeholder applied for transfer of the decrees to the Paini District Munsif's Court for execution. Transfer was ordered without notice to the judgment debtor, since the record of the Court showed no adjustment or payment. In the transferee Court objection was taken by the judgment debtor to the execution of the decrees passed upon the agreement of 24th June 1956. Since the transferee Court could not decide this dispute, E.A Nos. 105 and 106 of 1958 were filed by the decree-holder in the parent Court (Subordinate Judge of Ootamund) for setting aside the previous orders recording satisfaction. The judgment debtors appeared and contested the proceeding and wanted the Subordinate Judge to hold an enquiry into the truth of the allegation that the agreement had not been carried out as agreed upon. The Subordinate Judge without making any enquiry into that question set aside the order recording satisfaction merely on the ground that the orders were passed without notice to the decreeholder. The Sub-ordinate Judge incidentally held that the memos were filed in time, though we find that the conclusion may not be correct. Anyway, Mr. Sangameswaran for the appellant in both the appeals contends that it was the duty of the Subordinate Judge to have gone into the question whether the agreement dated 24th June 1956 was carried out as contended by the judgment debtors, or was not carried out as contended by the decreeholder. The argument was that though the application filed by the decreeholder was for a different purpose, namely, to set aside the orders recording adjustments already made by the Sub Court, since the factum of the agreement regarding the adjustment was brought to the notice of the executing Court by the decreeholder himself, there was no impediment of limitation of 90 days for the recording of adjustment, and since the judgment debtor made a request that the truth of the adjustment should be enquird into by the Court, the Court had every jurisdiction to enquire into it The learned Subordinate Judge declined to make an enquiry into the truth of the dispute between the parties taking the view that such an enquiry would be outside the scope of the proceeding before him.
The question really falls to be decided on the narrow ground whether, when once the factum of adjustment is brought to the notice of the Court by the decreeholder in whatever manner, it should be competent to the Court to enquire for that purpose. No period of limition is fixed for a report by the decreeholder to the Court recording payment or adjustment. In Chinna Mammidi Royal v. Raja Somasekhara Chokarayal(1), the judgment debtor pleaded adjustant in answer to an execution proceeding. The decreeholder admitted payment mentioned by the judgment debtor but sought to explain it away on the ground that it related to maintenance payable for a previous period. The question was whether this adjustment though uncertified could be recognised by the executing Court. Relying upon the decision in Lodd Govinda Doss v. Rajah of Karvetnagar(2). Jackson J. held that when once the fact of payment is accepted and sought to be explained away by the decreeholder as appropriated not in the manner indicated by the judgment debtor, the Court had jurisdiction to decide the question which of the two versions was true. We agree with respect with the view of Jackson J. and hold that in this case also when the performance of the conditions imposed by the agreement dated 24th June 1956 is asserted by one party and denied by the other, it was the duty of the Court to have gone into this dispute to find out if as a matter of fact the adjustment had taken place. Cl. 5 of the agreement no doubt states thus:
“In case we fail to comply with any of the above, you will be at liberty to execute the decree for the full amount due under the same and will not be bound by the above terms”
Clause 4 casts a duty of reporting full satisfaction of the two decrees upon the decreeholder. Certainly, unilaterally the decreeholder could not decide whether the agreement had been carried out or not. In this case, the decreeholder admits that Rs. 9000, the amount indicated in Cl. 1 of the agreement, had been paid and the four properties indicated in Cl. 2 of the agreement had been transferred within the time mentioned in the agreement. The contention of the decreeholder is that out of these four properties possession had not been transferred in respect of two and a marketable title had not been made out in respect of one of them. This is denied by the judgment debtor. How far on an interpretation of the agreement the question of marketable title would arise is a matter for consideration. Similarly, how far there was any agreement to transfer possession as part of the transaction of agreement would be a question for consideration by the Subordinate Judge apart from the truth or otherwise of the assertion made by the decreeholder that possession-was not transferred. That is to say, the Subordinate Judge will have to decide first whether transfer of possession was part of the agreement because it might be open to the parties to agree specifically as to the execution of the deeds, and registration of them but not as to transfer of possession. When once title is fransferred, right to possession follows. Equally, it would have been open to the parties to have agreed under the agreement not only for transfer of title for the four items of properties but also for surrender of possession as a condition precedent to discharge of the liability under the decrees. How far either version would be supported by the language of the agreement is a matter for consideration by the Subordinate Judge. He must also go into the question how far the allegation of the decree holder that possession was not given is made out because we are told by Counsel for the appellant that possession of all the items of properties had been transferred.
The orders passed by the Subordinate Judge are therefore set aside. The two execution applications will be restored to file and the Subordinate Judge will proceed to enquire into the main question in dispute between the parties, namely, the carrying out of the agreement dated 24th June 1956 and how far such carrying out extinguished the liability under the two decrees. The Subordinate Judge should also bear in mind the fact that the cash payment of Rs. 9000 admittedly paid towards the decree amount has not been returned by the decreeholder till now but has been retained by him. Under the circumstances, it will be for him to decide whether this retention would not amount to acceptance of the same in part payment of the decree at least even though the rest of the terms might not have been carried out. There will be no order as to costs.
V.C.S