The Judgment of the Court was as follows:—

Mukerji, J.:— The facts which have given rise to this appeal shortly stated are these:—

There was a decree obtained by one Khali Mahmud against the father of the Appellants and two other persons for a sum of Rs. 1,303-10-9 pies on the 2nd May 1922. The decretal amount together with interest less certain amounts paid by the judgment-debtors came up to Rs. 843-5-9 pies. The decree was put into execution in execution case No. 158 of 1922 and the lands and homestead of the judgment-debtors were all attached. On the 12th April 1923 the Respondent obtained an assignment of the decree in his favour. On the 16th April 1923 execution case No. 158 of 1922 was struck off. On the 12th June 1923 the Respondent applied for execution of the decree. Execution case No. 97 of 1923 was started and 8 pakhis of land belonging to the Appellants were put up to sale and purchased by the Respondent for Rs. 500. On the 15th September 1924 the Respondent again applied for execution for the balance of the amount due, i.e, Rs. 343-5-9 pies. On this execution case No. 145 of 1924 was started. The Appellants put in an objection which was given effect to by the Court of first instance but was overruled by the District Judge. Hence this appeal.

The objection that was taken to the execution of the decree was as follows:—When the lands and homestead of the judgment-debtors had been under attachment in execution case No. 158 of 1922 at the instance of the decree-holder Khali Mahmud as stated above, there was a settlement in which three parties took part, viz., the judgment-debtor, the decree-holder Khali Mahmud and the Respondent, The position at that time was that there were several creditors who had to be paid off. Some of them, rather all with the exception of only five—one of those five being Khali Mahmud—were paid off by sale of some of the properties belonging to the Appellant, the sale being made by the Appellants' mother acting as guardian on their behalf and on the strength of a permission obtained from the Judge. Khali Mahmud in execution of his decree had now attached some lands as well as the homestead of the Appellants. Finding the helpless plight of the Appellants he took pity on them and agreed to receive Rs. 325 in full satisfaction of his decree. For this amount he was prepared to assign his decree over to the Respondent, who agreed to pay off also four other creditors of the Appellants, and for all this the Respondent agreed to have from the Appellants only 8 pakhis of land. By adopting this course it was expected that the homestead of the Appellants would be saved to them. The Appellants' case is that the Respondent paid Rs. 325 to Khali Mahmud and obtained an assignment of the decree, but since then paid none of the other creditors. As an apprehension was entertained as to whether the District Judge would grant permission for the sale of the minors' properties a second time, it was arranged that the Respondent would execute the decree against the 8 pakhis of land. This was done and the Respondent purchased the same himself. Thereafter in breach of the agreement the Respondent again put the decree to execution and this time for the balance, that is to say, for Rs. 344-5-9 pies which represents the difference between the decretal dues with interest less the sale-price Rs. 500 for which he had purchased the 8 pakhis of land, and against the homestead of the Appellants. This substantially is the Appellants' case and both the Courts below have found that it has been established upon the evidence. The only point on which there may be a doubt is as regards the stipulation to pay off the other four creditors.

The District Judge has held that the objection cannot be given effect to as the arrangement amounted to an adjustment which was not certified in accordance with Or. 21, r. 2 and consequently cannot be recognised by an executing Court.

Two grounds have been urged on behalf of the Appellants in this appeal: the first is to the effect that the Court was not the Court which was executing the decree and therefore the objection was capable of being recognised by it; and the second, that the arrangement required no certification under Or. 21, r. 2, Civil Procedure Code.

To take the first contention first. The decree was passed by the same Court in which it was being executed. The Appellants' argument is that as the application for execution was made not by the original decree-holder but by the assignee, his application must be regarded as one made under Or. 21, r. 16, Civil Procedure Code, and as such an application lies only in the Court which passed the decree. It should be held that the Court was dealing with it in the latter capacity, and consequently under the first proviso to that rule the decree cannot be executed until the judgment-debtors' objection, if any, to its execution has been heard. It is an ingenious argument, but I am afraid it is without any substance. The rule evidently contemplates the occasion when for the first time the assignee comes before the Court to apply for execution. The Respondent did this when he applied on the 12th June 1923 and execution case No. 97 of 1923 was started. The object of issuing notices under that rule to the transferor and the judgment-debtor is to determine once for all and in the presence of all parties concerned the validity of the assignment. It cannot be said that each time the assignee comes to get the decree executed he should come in under this ride. The application filed on the 15th September 1924 is a simple tabular statement for the execution of the decree. It neither is nor can be regarded as an application under Or. 21, r. 16, Civil Procedure Code. The cases of Tameshar Prasad v. Thakur Prasad (1) and Raghunth Gobind Mayekar v. Gangaram Tesu Mayekar (2) upon which reliance has been placed on behalf of the Appellants do not assist them. This contention therefore has no substance.

As regards the second contention, it rests upon two grounds. The first ground is that Or. 21, r. 2 is restricted by its terms to original decree-holders and does not extend to an assignee of a decree, who steps into their shoes, as it were, under the assignment. For this contention reference has been made to the amendment that was made by the Code of 1908 to the definition of “decree-holder” as given in the Code of 1882. The alteration is noteworthy, but it is not necessary to enquire into the object of the change, for the proposition in the broad form in which it has been put before us cannot be supported. Once the assignee comes in under Or. 21, r. 16 “the decree may be executed in the same manner and subject to the same conditions as if the application were made by the decree-holder.” This provision means that the rules relating to execution would apply in all their integrity to the case of an assignee. In a simple case where there has been an adjustment or satisfaction as between the judgment-debtor and an assignee who has attained the status of a decree-holder by an order made under Or. 21, r. 16, Civil Procedure Code, Or. 21, r. 2 would be clearly applicable. The other ground on which the contention rests is not quite so plain and must be carefully considered. It is obvious that the agreement that is pleaded as a bar to the execution was reached at a time when the decree had not yet been assigned to the Respondent and long before he applied under Or. 21, r. 16. The question is whether this agreement requires certification under Or. 21, r. 2. On behalf of the Respondent it has been urged that it was a tripartes agreement to which admittedly the original decree-holder was a party, and therefore it does come under that rule. The real nature of the arrangement to my mind was this: the original decree-holder was satisfied with Rs. 325 and for that consideration he assigned the entire decree together with all his rights thereunder to the Respondent: The agreement between the judgment-debtors and the Respondent was that the latter would pay Rs. 325 and perhaps also some other amounts due to the other creditors and for all this he would get 8 pakhis of land and nothing more, and that although he was getting an assignment of the decree he would not be able to execute it except for the purpose of obtaining the 8 pakhis of land. This agreement took place at a time when the Respondent was not before the Court at all, and so so application by him nor any by the judgment-debtors for its certification would have been entertained by the Court until the Respondent had taken the steps necessary under Or. 21, r. 16, Civil Procedure Code. This view, to my mind, seems reasonable and has some authority in its support.

In the case of Rama Ayyan v. Sreenivasa Pattar , the facts were these: A judgment-debtor alleged that he had transferred certain immovable property to another person in consideration of his paying the judgment-debt to the original decree-holder. That person accordingly discharged the debt and subsequently got the decree transferred to himself and thus becoming the assignee, instead of entering satisfaction thereof fraudulently applied for its execution. It was held by Subramaniya Ayyar, J., that this adjustment could be pleaded notwithstanding sec. 258, Civil Procedure Code. It is true that there are several points of distinction between that case and the one we are dealing with, e.g, there it was a question whether the decree having been satisfied, the assignee acquired any interest by the assignment; and also, the Objection was taken before the Court which had passed the decree and at a stage when the transferee had applied to that Court for execution, and therein fore the objection was such as would have come within Or. 21, r. 16 of the present Code and would have been entertainable thereunder, and so on. But these points of difference do not really matter, for it is the view of sec. 258 of the Code of 1882 that was taken by the learned Judge that is really material for our present purposes. That section was much in the same words as Or. 21, r. 2 of the Code of 1908, and the slight variation in cl. 3, if at all, only makes the rule more stringent. Referring to the three paragraphs of the section the learned Judge observed thus: “Manifestly therefore the enquiry under the said second paragraph can take place only between parties standing in the relation of judgment-debtor and judgment-creditor. If the former has entered into a contract, not with the latter, but with a third party with reference to the satisfaction or adjustment of a decree, the judgment-creditor cannot make any application against such third party under sec. 258 and consequently the latter cannot on principle be permitted to take advantage of the prohibition imposed by the concluding paragraph of that section as a penalty for the judgment-debtor's omission to apply to the Court under the previous paragraph or for his failure to prove his case if he did apply. The circumstances that the third party, subsequently to the contract, becomes the transferee of the decree which he contracted to satisfy, can have no retrospective effect, so as to deprive the judgment-debtor of his right to establish that the transferee is, by the anterior contract, precluded from realising the judgment-debt.” These observations, in my opinion, apply equally well to the present case. It has been urged that in this case the adjustment of the decree with the original decree-holder and the agreement with the Respondent and the assignment were all at one and the same time, and all the three parties were parties to the whole arrangement and that the whole arrangement was effected at one and the same time. I am, however, of opinion that the agreement between the judgment debtors and the Respondent; must have been reached before the assignment, however short the interval may have been is not material; and in the agreement that the Defendant would get nothing more than 8 pakhis of land, the original decree-holder was not interested, though it was to his knowledge.

Subramaniya Avyar, J., himself had occasion to refer to this case in Periatambi Udayan v. Vallava Goundan (4) and there he and Benson, J., said: “In the case of Rama Ayyan v. Sreenivasa Pattur the person relying on the adjustment was not entitled fo make any application …. as against the person who denied the payment inasmuch as the latter was not then an assignee.” In the case of Ponnusami Nadar v. Letchmanan Chettiar , Abdur Rahim, J., was unable to accept the dictum as a correct exposition of sec. 258 of the Code, and sought to support the decision of the case on the ground of fraud committed by the assignee and also on the ground that when a question arises as to whether the assignee is a benamdar of the original decree-holder, the question of adjustment or satisfaction of the decree does not really arise. In the same case Sundara Ayyar, J., referred to the dictum with approval and observed: “It may perhaps be contended that the anterior contract is no reason for depriving the assignee of his rights under the transfer, that he is entitled to all the rights of his transferor and therefore has the right to execute the decree which has not been satisfied on the record of the Court. But to such an argument it may well be replied that, alter entering into the contract he should not be allowed to set up any right in opposition to that contract by virtue of an assignment.” In a later decision of the same Court, Arunongam Pillai v. Krishnasami Naidu (6) in which, however, the dictum was hardly of any relevancy, Oldfield, J., passed it over as being the decision of a single Judge.

I am of opinion that the dictum does apply to this case and the observations of Sundara Avyar, J., in Ponnusami Nadar v. Letchnianan Chettiar do also apply to it.

In my opinion the agreement upon which the judgment-debtors relied as a bar to the execution of the decree was fit to be entertained by the executing Court, Or. 21, r. 2 notwithstanding.

The appeal accordingly should be allowed, the order by the District Judge set aside and that of the Subordinate Judge restored with costs in this Court and the lower Appellate Court. Hearing-fee of this appeal is assessed at 2 gold mohurs.

Graham, J.:— I agree.

P.C