Holding

A decree remains executable unless the adjustment is certified under Order XXI Rule 2 of the CPC; absent such certification, no conscious waiver exists.

Summary

The appellants obtained a decree for eviction of the respondents. While the respondents' appeal was pending, the parties entered into an agreement to withdraw the appeal and not to execute the decree, conditional upon the execution of a sale deed. The appellants later filed an execution application; the executing court allowed it, holding that the adjustment was not certified under Order XXI Rule 2 of the CPC. The respondents obtained a revision from the High Court, which held that the agreement amounted to a conscious waiver making the decree in‑executable. The Supreme Court held that an adjustment of a decree must be recorded and certified under Order XXI Rule 2; in the absence of such certification the decree remains executable, and no conscious waiver can be inferred. Consequently, the High Court order was set aside and the appeal was allowed.

Issues considered

The effect of an agreement between parties to withdraw an appeal and not execute a decree on the executability of the decree.
Whether Section 47 of the CPC overrides Order XXI Rule 2 CPC concerning adjustment of a decree.
Whether an adjustment of a decree must be certified under Order XXI Rule 2 to be recognised.
The existence of a conscious waiver of the decree‑holder’s rights in the absence of a certified adjustment.
The method of harmoniously construing apparently conflicting provisions of the CPC.

Legislation cited

Code of Civil Procedure, 1908s. 115, s. 38, s. 39, s. 40, s. 42, s. 47

Subjects

execution of decreeadjustmentwaiverSection 47 CPCOrder XXI Rule 2 CPCcertificationspecific performancecivil procedureharmonious construction

Judgment

A PADMA BEN BANUSHALI AND ANR.
v.
YOGENDRA RA THO RE AND ORS.

APRIL 25. 2006

B [ARIJIT PASAYAT ANDTARUN CHATTERJEE, JJ.]

Code of Civil Procedure, 1908--Section 47 and Order XX! Rule 2--
Execution of decree--Decree-holder entered into an agreement of acfjustment
C with oppostive party--Decree-holder filed application for execution of decree
before executing Court when the agreement fell through-Opposite party
contended that the decree has become in-executable in pursuance of the
agreement--Executing Court allowed the application on the ground that the
adjustment was not certified by it under the Code-High Court in Revision
held in favour of opposite party by holding that there was conscious waiver
D b_v the decree-holder under the agreement--Correctness of-Held, the
provisions within a statute must be harmoniously construed-- Adjustment out
of Court will not be recognised unless it is certified by executing court-On
facts, the adjustment was nut certified by executing Court and there was no
conscious waiver by the decree-hulder--Hence, the decree is executable.

E Appellants filed a suit for eviction before trial court against
respondents which was decreed in favour of the appellants. The respondents
filed an appeal before Appellate Court. When the appeal was pending, the
parties entered into an agreement and hence filed an application to withdraw
the appeal under Order XXII Rule I CPC before the Appellate Court, which
F dismissed the appeal as withdrawn accordingly. Subsequently, the appellants
filed an application to execute the decree before Executing Court. The
application was resisted by the respondents on the ground that the decree
has become inexecutable since the appellants have given up their rights to
execute the decree in pursuance of the agreement; that since the appellants
were not ready and willing to perform their part of the agreement, suit for
G specific performance had been instituted against the appellants, which is
pending. The Executi!1g Court allowed the application of the appellants holding
that the adjustment purported to have been made under the agreement by the
respondents cannot be considered since the adjustment was not certified by
the Executing Court. The respondents filed a Revision before High Court
H 250
PAD MA BEN BANUSHALI v. YOGENDRA RA THO RE 251

. under section 115 CPC. The High Court allowed the Revision holding that A
there was no adjustment between the parties; and that there was a conscious
waiver by the appellants not be execute the decree under the agreement.

In appeal to this Court, the appellants contended that the applicaticfn for
withdrawal of the appeal under Order XXIII Rule 1 CPC on the basis of the
agreement entered into with the respondents would not make the decree in B
their favour in-executable; that the adjustment made with the respondents
under the agreement was not certified by the Executing Court as required
under Order XXI Rule 2 CPC; that Section 47 CPC would prevail over Order
XXI Rule 2; that there was no conscious waiver by them to execute the decree
- under the agreement; and that the suit for specific performance filed by the
respondents before the trial court itself shows that the conditional acceptance
c
not to execute the decree was not fulfilled by the respondents.

The respondents contended that the agreement between the parties was
withdrawal of appeal by them and non-execution of the decree by the appellants;
that there was no adjustment under the agreement as claimed by the appellants; D
and that there was conscious waiver by the appellant to execute the decree.

Allowing the appeal, the Court

HELD: I. The rule of interpretation requires that while interpreting
two inconsistent or obviously repugnant provisions of an Act, Courts should E
make an effort to so interpret the provisions as to harmoise them so that the
purpose of the Act may be given effect to and both the provisions may be allowed
to operate without rendering either of them otiose. The statute has to be read
as a whole to find out the real jntention of the legislature. This rule of
construction which is also spoken of as 'ex visceribus actus' helps in avoiding
any inconsistency either within a section or between two different sections F
or provisions of a same statute. [256-E-F; 257-8-C]

Pentiah v. Muddala Veeramallappa, AIR (1961) SC 1107; Gammon
India Ltd. v. Union of India, (1974) 1 SCC 596; Mysore SRTC v. Mirja Khasim
Ali Beg, (1977) 2 SCC 457; V Tulasamma v. Sesha Reddy, (1977) 3 SCC 99;
G
Punjab Beverages (P) Ltd. v. Suresh Chand, (1978) 2 SCC 144; CIT v.
National Taj Traders, (1980) l SCC 370; Calcutta Gas Co. (Proprietary) Ltd.
v. State of West Bengal, AIR (1962) SC 1044 and J.K. Cotton Spg. & Wvg.
Mills Co. Ltd. v. State of U.P., AIR (1961) SC 1170, referred to.

- Canada Sugar Refining Co. v. R,. (1988) AC 735: 67 LJPC 126, H
252 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A referred to.
2.1. Section 47 and Order XXI Rule 2 CPC deal with execution of
decree. Interpreting both the provisions, there does not appear to be any
anlfthesis between the two provisions. Section 47 CPC deals with the power
of the court executing the decree while Order XXI Rule 2 deals with the
B procedurt which a court whose duty it is to execute the decree has to follow
in a limited class of cases relating to the discharge or satisfication of decrees
either by payment of money payable under the decree out of court or adjustment
in any other manner by consensual arrangement. Since Section 47 CPC
provides that the question relating to the execution, discharge or satisfaction
C of the decrees shall be determined by the court executing the decree, it clearly
confers a specific jurisdiction for the determination of those questions on
the executing court. (257-G-H; 258-A-Bl

2.2. The expression "or a decree of any kind is otherwise adjusted" in
Order XXI Rule 2 CPC are of wide amplitude. It is open to the parties, namely
D the decree-holder and the judgment-debtor, to enter into a contract or
compromise in regard to their rights and obligations under the decree. If such
contract or compromise amounts to an adjustment of the decree, it has to be
recorded by the court. An agreement, contract or compromise which has the
effect of extinguishing the decree in whole or in part on account of decree
being satisfied to that extent will amount to an adjustment of the decree within
E the meaning of the Rule and the Court, if approached, will issue the certificate
of adjustment. An adjustment which is not recorded by the court under Order
XXI Rule 2 CPC cannot be recognised by the executing court. If the executing
court comes to the conclusion that the decree was adjusted wholly or in part
but the compromise or adjustment or satisfaction was not recorded and/or
p certified by the court, the executing court would recognise them and will
proceed to execute the decree. (258-G-H; 259-A, B, q

2.3. The general provision under Section 47 CPC has to yield to the
special provision contained in Order XXI Rule 2 CPC which have been enacted
to prevent a judgment-debtor from setting up false or cooked-up pleas so as
G to prolong or delay the execution proceedings. The agreement not to execute
the decree by the appellants was dependent upon the execction of the sale-
deed by the respondents. Undisputedly, the same has not been executed and a
suit for specific performance of the agreement has been filed, which is pending.
The fact remains that there was no certificate of Executing Court as needed
H under Order XXI Rule 2 CPC. The question of conscious waiver, in the
...
PAD MA BEN BANUSHALI v. YOGENDRA RATHO RE [PASA YAT, J.] 253

circumstances does not arise. On the facts, the rights had not been A
surrendered by the appellants and the decree remained preserved.
(259-F-G-H; 260-A, B, CJ

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3831 of2000.

From the Final Judgment and Order dated 8.9.1997 of the High Court of B
Madhya Pradesh at Jabalpur in C.R. No. 1415/1997.

S.S. Khanduja and Yash Pal Dhingra for the Appellants.

Prakash Srivastava for the Respondents.

The Judgment of the Court was delivered by
c
ARJJIT PASAYAT, J. Challenge in this appeal is to the order passed by
a learned Single Judge of the Madhya Pradesh High Court at Jabalpur in a
Civil Revision filed under Section 115 of the Code of Civil Procedure, 1908 (in
short 'CPC'). By the impugned order the High Court held that the petitioner D
who was the plaintiff in the suit and the decree-holder in an earlier suit was
not entitled to execute the same.

Background facts in a nutshell are as follows:

The plaintiffs had filed a civil suit for eviction of the father ofrespondents E
(Sri Narayanbhai) who was the tenant in the disputed premises. In the suit,
pleadings were to the effect that suit property originally belonged to one
Dhanji Bhai. Narayan had taken suit premises on rent from Dhanji Bhai.
Appellant No.2 Kanji Bhai purchased the suit property in the name of his wife
Padma Ben (Appellant No. I), by registered sale deed on 25.8.1980. Decree was
granted in favour of the landlords. Tenant filed an appeal before the District F
Judge. Before the matter could be decided on merits an application purported
to be under Order XXIll Rule 1 CPC was filed before the Appellate Court. The
application was signed by the plaintiff-landlord and the defendant. The appeal
was dismissed in tenns of the application. Later on, the present appellants
tried to execute the decree which was resisted by the defendants on the G
ground that ( 1) the decree has become in-executable; (2) the landlords were
not ready and willing to perform their part of the contract and (3) a suit for
specific perfonnance had already been instituted. The execution application
filed was pressed by the present appellants on the grounds that adjustments
in tenns of Order XX! Rule 2 CPC was not recorded. In any event the Court
H
254 SUPREME COURT REPORTS (2006] SUPP. I S.C.R.

A cannot take cognizance of the adjustment under Sub-rule (3) of Rule 2, Order
XXI CPC and there was never any readiness or willingness to perfonn their
part of the defendants and as such the decree was executable. The respondents
raised another plea that since the landlords have given up their rights to
execute the decree, the same amounted to conscious waiver on their part and,
therefore, the decree had become in-executable. The Executing Court came to
B hold that the application filed under Order XXIII Rule I CPC was an application
for withdrawal of the appeal, it led to adjustment and as said adjustment was
not certified by the Executing Court, no claim of adjustment can be taken note
of. No question regarding executability of the decree would arise for
consideration under Section 47 CPC. Said order was challenged in Civil Revision
C by the present respondents. In the Civil Revision, the stand taken before the
Executing Court were reiterated by the parties.

The High Court came to hold that there was no adjustment between the
parties. In fact it was a case where in view of the agreement between the
parties, the decree became in-executable as there was a conscious waiver.
D
In support of the appeal, learned counsel for the appellants submitted
that the High Court proceeded to examine the issue involved on erroneous
premises. The application which was filed under Order XXIll Rule I CPC did
not in essence make the decree passed in favour of the decree-holder in-
executable. Strong reliance was placed on a decision of this Court in Sultan
E Begum v. Prem Chand Jain, (1997] 1 SCC 373 to contend that there was no
question of any conscious waiver as concluded by the High Court. There was
in reality adjustment which was required to be certified. The suit for specific
perfonnance filed by the respondents has already been dismissed and appeal
is pending. That itself shows that the conditional acceptance not to execute
p the decree was not fulfilled.

In response, learned counsel for the respondent submitted that the
High Court's judgment suffers from no infinnity. In any event, there were two
parts of the agreement - one was withdrawal of the appeal filed by the present
respondents and the second was the agreement by the present appellants not
G to execute the decree. There was no question of any adjustment as claimed
by the appellants, and the High Court has rightly observed that there was
conscious waiver.

The scope and ambit of Section 47 and Order XXI Rule 2 CPC need to
be noted:
H
PADMABENBANUSHALlv. YOGENDRARATHORE[PASAYAT,J.] 255

"47. Questions to be determined by the Court executing decree. - A
(I) All questions arising between the parties to the suit in which the
decree was passed, or their representatives, and 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.
B
(2) * * *

(3) Where a question arises as to whether any person is or is not the
representative of a party, such question shall, for the purposes of this
section, be determined by the Court.

Explanation I. - For the purposes of this section, a plaintiff whose suit C
has been dismissed and a defendant against whom a suit has been
dismissed are parties to the suit.

Explanation II. - (a) For the purposes of this section, a purchaser of
property at a sale in execution of a decree shall be deemed to be a D
party to the suit in which the decree is passed; and

(b) all questions relating to the delivery of possession of such property
to such purchaser or his representative shall be deemed to be questions
relating to the execution, discharge or satisfaction of the decree within
the meaning of this section.
E
ORDER XX! - EXECUTION OF DECREES AND ORDERS

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

(2) The judgment-debtor or any person who has become surely for the
judgment-debtor also may inform the Court of such payment or
adjustment, and apply to the Court to issue a notice to the decree- G
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. H
256 SUPREME COURT REPORTS [2006] SUPP. I S.C.R.

A (2-A) No payment or adjustment shall be recorded at the instance of
the judgment-debtor unless -

(a) the payment is made in the manner provided in Rule I; or

(b) the payment or adjustment is proved by documentary evidence;
or
B
(c) the payment or adjustment is admitted by, or on behalf or, the
decree-holder in his reply to the notice given under sub-rule (2) of
Rule I, or before the Court.

(3) A payment or adjustment, which has not been certified or recorded
c as aforesaid, shall not be recognised by any Court executing the
decree."

It is contended by the learned counsel for the appellants that since it
is specifically provided by Section 47 that questions relating to the execution,
D discharge or satisfaction of the decree shall be determined by the executing
court, it would prevail over Order XX! Rule 2 including sub-rule (3) which
prohibits the executing court from recognising any payment or adjustment
which has not been certified or recorded under Order XX! Rule 2.

Part ll of the Code of Civil Procedure, comprising Sections 36 to 74, as
E also the whole of Order XX! consisting of Rules I to 106, deal w!th the
execution of decree. Section 47, as also Order XX! Rule 2 are, therefore, part
of the same legal or statutory system dealing with the same subject, namely,
execution of decree. That being so, the rule of interpretation requires that
while interpreting two inconsistent, or, obviously repugnant provisions of an
Act, Courts should make an effort to so interpret the provisions as to harmonise
F them so that the purpose of the Act may be given effect to and both the
provisions may be allowed to operate without rendering either of them otiose.

The statute has to be read as a whole to find out the real intention of
the legislature.

G In Canada Sugar Refining Co. v. R., (1898) AC 735 : 67 LJPC 126], Lord
Davy observed :

"Every clause of a statute should be construed with reference to the
context and other clauses of the Act, so as, as far as possible, to make
a consistent enactment of the whole statute or series of statutes
H relating to the subject-matter."
PADMABENBANUSHAL!v. YOGENDRARATHORE[PASAYAT,J.) 257

The Court has adopted the same rule in M. Pentiah v. Muddala A
Veeramallappa, AIR (I 961) SC 1107; Gammon India Ltd. v. Union of India,
[1974] l SCC 596, Mysore SRTC v. Mirja Khasim Ali Beg, [1977] 2 SCC 457,
V. Tulasamma v. Sesha Reddy, [1977] 3 SCC 99, Punjab Beverages (P) Ltd.
v. Suresh Chand, [1978] 2 SCC 144, CITv. National Taj Traders, (1980] l SCC
370, Calcutta Gas Co. (Proprietary) Ltd. v. State ofW.B., AIR (1962) SC 1044 B
and J.K. Cotton Spg. & Wvg. Mills Co. Ltd. v. State of U.P .. AIR (1961) SC
1170.

This rule of construction which is also spoken of as "ex visceribus
actus" helps in avoiding any inconsistency either within a section or between
two different sections or provisions of the same statute. C
On a conspectus of the case-law indicated above, the following principles
are clearly discernible :

( 1) It is the duty of the courts to avoid a head-on clash between two
sections of the Act and to construe the provisions which appear to be in D
conflict with each other in such a manner as to harmonise them.

(2) The provisions of one section of a statute cannot be used to defeat
the other provisions unless the court, in spite of its efforts, finds it impossible
to effect reconciliation between them.
E
(3) It has to be borne in mind by all the courts all the time that when
there are two conflicting provisions in an Act, which cannot be reconciled
with each other, they should be so interpreted that, if possible, effect should
be given to both. That is the essence of the rule of"harmonious construction".

(4) The courts have also to keep in mind that an interpretation which F
reduces one of the provisions as a "dead letter" or "useless lumber" is not
harmonious construction.

(5) To harmonise is not to destroy any statutory provision or to render
it otiose.
G
Interpreting the provisions of Section 47 and Order XX! Rule 2 in the
light of the above principles, there does not appear to be any antithesis
between the two provisions. Section 4 7 deals with the power of the court
executing the decree while Order XX! Rule 2 deals with the procedure which
a court whose duty it is to execute the decree has to follow in a limited class
H
258 SUPREME COURT REPORTS (20061 SUPP. I S.C.R.
-
A of cases relating to the discharge or satisfaction of decrees either by payment
of money (payable under the decree) out of court or adjustment in any other
manner by consensual arrangement.

Since Section 47 provides that the question relating to the execution,
discharge or satisfaction of the decrees shall be determined by the court
B executing the decree, it clearly confers a specific jurisdiction for the
determination of those questions on the executing court.

Under Section 38 CPC, a decree may be executed either by the court
which passed it or by the court to which it is sent for execution. The court
C which passed the decree has been defined in Section 37. Transfer of decree
to another court for its execution has been provided for in Section 39. Section
40 provides for transfer of decree to a court in another State. Section 42 lays
down that the court to which a decree is transferred for execution shall have
the same powers in executing that decree as ifthe decree was passed by itself.
These provisions including Section 37 thus clearly speak of the powers and
D jurisdiction of the court executing the decree.

Order XX! Rule 2 applies to a specific set of circumstances. If any
money is payable under a decree, irrespective of the nature of decree, and
such money is paid out of court, the decree-holder, has to certify such
payment to the court whose duty it is to execute the decree and that court
E has to record the same accordingly. Similarly if a decree, irrespective of its
nature, is adjusted in whole or in part to the satisfaction of the decree-holder,
the decree-holder has to certify such adjustment to that court which has to
record the adjustment accordingly. If the payment or adjustment is not reported
by the decree-holder, the judgment-debtor has been given the right to inform
F the court of such payment or adjustment and to apply to that court for
certifying that payment or adjustment after notice to the decree-holder. Then
comes sub-rule (3) which provides that a payment or adjustment which has
not been certified or recorded under sub-rule ( 1) or (2), shall not be recognised
by the court executing decree.

G The expression ·'or the decree of any kind is otherwise adjusted" are
of wide amplitude. It is open to the parties namely, the decree-holder and the
judgment-debtor to enter into a contract or compromise in regard to their
rights and obligations under the decree. If such contract or ·compromise
amounts to an adjustment of the decree, it has to be recorded by the court
under Rule 2 of Order XXL It may be pointed out that an agreement, contract
H
PADMA BEN BANUSI-IALI v. YOGENDRA RATHORE (PASA YAT, J.] 259

or compromise which has the effect of extinguishing the decree in whole or A
in part on account of decree being satisfied to that extent wil! amount to an
adjustment of the decree within the meaning of the Rule and the Court, if
approached, will issue the certificate of adjustment. An uncertified payment
of money or adjustment which is not recorded by the court under Order XX!
Rule 2 cannot be recognised by the executing court. In a situation like this, B
the only enquiry that the executing court can do is to find out whether the
plea taken on its face value, amounts to adjustment or satisfaction of decree,
wholly or in part, and whether such adjustment or satisfaction had the effect
of extinguishing the decree to that extent. If the executing court comes to the
conclusion that the decree was adjusted wholly or in part but the compromise
or adjustment or satisfaction was not recorded and/or certified by the court, C
the executing c_ourt would not recognise them and will proceed to execurE the
decree.

The problem can be looked into from another angle on the basis of the
maxim "generalia specialibus non derogant".
D
Section 47, as pointed out earlier, gives full jurisdiction and power to
the executing cou11 to decide all questions relating to execution, discharge
and satisfaction ofthe decree. Order XXI Rule 3, however, places a restraint
on the exercise of that power by providing that the executing court shall not
recognise or look into any uncertified payment of money or any adjustment
of decree. If any such adjustment or payment is pleaded by the judgment- E
debtor before the executing cou11, the latter, in view of the legislative mandate,
has to ignore it if it has not been certified or recorded by the court.

The general power of deciding questions relating to execution, discharge
or satisfaction of decree under Section 4 7 can thus be exercised subject to F
the restriction piaced by Order XX! Rule 2 including sub-ruie (3) containing
special provisions regulating payment of money due under a decree outside
the court or in any other manner adjusting the decree. The general provision
under Section 4 7 has, therefore, to yield to that extent to the special provisions
contained in Order XX! Rule 2 which have been enacted to prevent a judgmcnt-
debtor from setting up false or cooked-up pleas so as to prolong or delay the G
execution proceedings.

The aforesaid aspects were highlighted in Sultan Begum's case (supra).

As emphasized by learned counsel for the appellants, the agreement of
the appellants who were respondents in the earlier appeal not to execute the H
260 SUPREME COURT REPORTS [2006) SUPP. I S.C.R.

A decree was conditional on the appellants in the said appeal executing a sale-
deed after receiving the amounts agreed upon. In other words, there were two
components of the agreement. Second part related to the agreement not to
execute the decree which was dependant upon the execution of the sale-deed.
Undisputedly, the same has not been executed and on the other hand suit for
B specific performance of the agreement has been filed, and that matter is
pending in appeal.

We do not think it necessary to express any opinion on the merits of
the said suit. But the facts remain that there was no certificate as needed
under Order XXI Rule 2 CPC. The question of conscious waiver, in the
C circumstances does not arise. Ultimately, it has to be decided on the facts and
circumstances of this case as to what was the intention of the parties and to
determine as to whether rights on the decree were given up or not. On the
facts, the rights had not been surrendered and the decree remained preserved.

That being so, the High Court's order is indefensible and set aside. The
D appeal is allowed but with no order as to costs.
B.S. Appeal allowed.