THE HON'BLE MR JUSTICE V ESWARAIAH THE HON’BLE MR JUSTICE K.S. APPA RAO C.R.P. NO. 3015 OF 2001 DT. 09.12.2011 Between: M Srinivas Rao … Petitioner And Ogirala hanumantha Rao … Respondent Counsel for the Petitioner: Sri G Pedda Babu Counsel for respondent: Sri M V S Suresh Kumar The Court made the following ORDER: THE HON'BLE MR JUSTICE V ESWARAIAH THE HON’BLE MR JUSTICE K.S. APPA RAO C R P NO. 3015 OF 2001 ORDER : (Per Sri Justice V Eswaraiah) The petitioner herein is respondent/judgment debtor in E.A.No. 187 of 1999 in O.S. No. 12 of 1993 on the ﬁle of the Additional Subordinate Judge, Ongole ﬁled by the decree holder/respondent herein for recovery of an amount of Rs.34,400/- with subsequent interest at 24 % p.a. from the date of the suit to the date of decree and thereafter at 6% pr annum till the date of realization with costs of Rs.4,400.50. For the sake of convenience the parties are referred to as they are referred before the Court below. 2. The trial Court on 8.7.1997 passed the following judgment and decree; i) that the defendant do pay to the plaintiﬀ a sum of Rs.34,400/- with subsequent interest at 24 % p.a. from the date of the suit to date of decree and thereafter at 6 % p.a. till date of realization on the adjudged sum of Rs.34,400/- ii) that the defendant is do also pay to the plaintiﬀ a sum of Rs.4.400.50 Ps towards costs of this suit and do bear his own costs Rs.2/-(C.M & F.C not filed). 3. On 24.3.1999 the decree holder initiated execution proceedings and ﬁled E.P. No.84 of 1999 stating that the judgment debtor has paid a sum of Rs.30,000/- in instalments i.e.,Rs.20,000/- on 2.9.1998, Rs.6,000/- on 26.10.19998 and Rs.4,000/- on 16.12.1998 towards part payment of the decree, and still the balance amount of Rs.49,369.32 plus costs of Rs.5,017/- is payable and since the said balance amount is not being paid, prayed the Court to conduct enquiry under Order XXI Rule 37 (1) CPC and issue arrest warrant against the judgment debtor under Order XXI Rule 37 (2) CPC. 4. The judgment debtor/revision petitioner ﬁled an application in E.A. No. 187 of 1999 on 13.3.1999 stating that subsequent to passing of the decree dated 8.7.1997, he made payment of Rs.30,000/- in instalments and the matter was settled and the decree holder agreed to record full satisfaction of the decree and prayed the Court to record full satisfaction in the suit as per ‘Full Satisfaction Memo’ ﬁled by the advocate for decree holder. The said petition was ﬁled under Order 21 Rule 2 (2) of CPC together with a copy of the Full Satisfaction Memo issued by the advocate for decree holder in favour of judgment debtor and Xerox copy of the decree. The Full Satisfaction Memo said to have been issued by the counsel for decree holder reads as under; “As the decree debt with expenses have been received out of Court the Decree Holder prays that full satisfaction may be recorded since D.H.R. already received Rs.30,000/- by instalments as per the compromise.” 5. The decree holder has ﬁled his counter aﬃdavit dt 12.8.1999 in said E.A. 187 of 1999 inter-alia denying the settlement stated to have been arrived at and objected for recording the full satisfaction of the decree. Further he states that the judgment debtor has made payments of Rs.20,000/- on 2.9.1998, Rs.6,000/- on 26.10.19998 and Rs.4,000/- on 16.12.1998 and thus made a total payment of Rs.30,000/- and did not choose to pay the balance amount in terms of the decree, as such he ﬁled E.P. He speciﬁcally states that he never entered into any settlement with the judgment debtor/defendant and did not agree to ﬁle to record full satisfaction of the decree. He further states that the above referred payments were received by passing receipts and if the same are produced they would clearly disclose that there was no ﬁnal settlement arrived at. That he never knew about ﬁling of a decree copy and full satisfaction memo by his counsel into Court and even if any such copy of decree and memo is ﬁled into the Court, the same is not with his approval, consent or knowledge. He contends that a petition under Order 21 Rule 2 (2-A) cannot be entertained because the payments made by the judgment debtor/defendant are not in accordance with clauses ‘a, b and c’ of sub Rule 2-A. That after deduction of the payments made, the judgment debtor/defendant is liable to pay a balance amount of Rs.49,369.32 with interest in terms of the decree. 6. The decree holder ﬁled an additional counter stating that judgment debtor having failed to get the alleged payments dated 24.1.1999 and 29.1.1999 certiﬁed by Court within one month from the date of payment is not entitled to maintain the petition to record full satisfaction and the petition is barred by Limitation under Article 125 of Limitation Act and the Court cannot recognize the uncertified payment. 7. The Court below on consideration of the matter, dismissed the application of the judgment debtor to record full settlement, holding that the payments are to be established in accordance with Rule 2 (2-A) of the Order 21 but not by F.S. Memo signed by the counsel and that contention of the petitioner is far away from the reality and also artiﬁcial and on the strength of Ex.A.1, payment cannot be accepted and in fact P.W.2 also did not support the case of the petitioner. Hence, the present revision. 8. The learned Single Judge of this Court, on consideration of the matter and particularly the judgment of the Supreme Court in BAIRAM PESTONJI GARIALA Vs. UNION BANK OF INDIA[1] opined as under and referred the matter to the bench. “…………. Though the abovementioned judgment deals with the construction of Order 23 Rule 3 wherein their Lordships have interpreted the words ‘in writing and signed by the parties’ occurring in the abovementioned Rule to mean and include duly authorized representative and counsel, there is substantial force in the submission made by the leaned counsel for the petitioner. From the scheme of Order XXI Rule 2, it appears that either of the parties to the decree can ﬁle such an application. However, when such an application is ﬁled by the judgment debtor under Sub Rule (2) of Rule 2 of Order XXI, an enquiry is contemplated. From the language of the Rule, it appears that it is still open to the decree holder to satisfy the Court on valid grounds that such a payment or adjustment should not be recorded. In such an event, even assuming that the principle laid down by the Supreme Court in the abovementioned decision applies to the construction of sub rule (1) of Order XXI, Rule 2, then, though the decree holder comes forward to dispute the genuineness of the memo ﬁled by his counsel, whether the Court is still bound to record full satisfaction of the decree ignoring the objections raised by the decree holder.” 9. In the above background, the revision is referred to this Bench. 10. Mr. G. Pedda Babu, learned counsel appearing for revision petitioner/judgment debtor mainly submitted that subsequent to the decree dated 8.7.1997 the parties have settled the matter and in terms of the said settlement the judgment debtor has paid an amount of Rs.30,000/- in instalments and pursuant thereto the learned counsel for decree holder has ﬁled the full settlement memo and the Court below erred in dismissing the application to record the full settlement. He submits that the party includes the counsel and the memo ﬁled by the counsel in the Court is valid and it did not come under Order 21 Rule 2 (2) of CPC and that the decree holder/respondent herein and his counsel colluded together with a malaﬁde intention to cause pecuniary loss to the judgment debtor. In support of his contentions, he placed reliance on the judgment of the Supreme Court in BYRAM PESTONJI GARIWALA Vs. UNION BANK OF INDIA AND OTHERS [2] and the judgment of the Privy Council in RAJA SHRI PRAKASH SINGH Vs. THE ALLAHABAD BANK LTD[3]. 11. On the other hand, the learned counsel for respondent-decree holder while supporting the order under revision submitted that there is no settlement arrived between the parties and the Court below has rightly dismissed the application with costs holding that the petitioner-judgment debtor failed to establish the payment and settlement as pleaded. 12. Heard both sides. 13. To appreciate the rival contentions, the relevant provisions are required to be noticed; Section 47 (1) of CPC 47. Questions to be determined by the Court executing decree:-- (1) 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. (2)…..(xxx) 3)…… Order 21 Rule 2 of CPC; 2: Payment out of Court to decree-holder; (1) Where any money payable under a decree of any kind is paid out of Court 3(1) 1. Subs. by Act No. 104 of 1976, Sec. 72, for the words, "or the decree is otherwise adjusted". [or the decree of any kind is otherwise adjusted] in whole or in part to the satisfactory 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) The judgment-debtor [or any person who has become surety 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-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. (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 1; or (b) the payment or adjustment is proved by documentary evidence; or (c) the payment of adjustment is admitted by, or on behalf of, 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 as aforesaid, shall not be recognized by any Court executing the decree. 14. Under Order 21 Rule (1) the judgment debtor shall pay the decretal amount by depositing into the Court or if he wants to pay the same outside the Court, he can send it to the decree holder by postal money order or through bank or in other mode wherein payment is evidenced in writing. Under Order 21 Rule 2 such payment made under Rule 1 shall be intimated to the decree holder by giving notice either through the Court or directly to him by registered post acknowledgment. Under Order 21 Rule 3 the payment shall contain the particulars such as number of the suit, name of the parties, manner of remittance of money to be adjusted as to whether it is towards the principal, interest or costs, the number of the execution case of the Court, where such case is pending and name and address of the payer. Under Order 21 Rule 4 the interest shall cease to run from the date of service of the notice referred to in sub rule 2 evidencing the payment of money paid either into the Court or outside the Court in the manner indicated above. If any money is paid outside the Court by postal money order or through bank and if the decree holders refused to receive the same, the interest shall cease to run from the date on which the money was tendered to the decree holder. 15. Under Order 21 Rule 2, where any money payable under a decree is paid into the Court in whole or in part to the satisfaction of the decree holder, the decree holder shall certify such payment or adjustment and the same shall be recorded by the executing Court. Under sub rule (2) of Order 21 Rule 2, if the judgment debtor informs the Court of such payment or adjustment and apply to the Court to issue a notice to the decree holder as to why such payment or adjustment should not be recorded as certiﬁed, 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. Under Sub Rule 2 (2-A) no payment shall be recorded at the instance of judgment debtor; unless a) the payment is made in the manner, provided in Rule 1; or b) the payment or adjustment is proved by documentary evidence; or c) the payment or adjustment is admitted by or on behalf of, the decree holder in his reply to the notice given under sub-rule (2) of rule 1 or before the Court. 16. Under Sub Rule 3 of Rule 2 of Order 21, a payment or adjustment which is not been certiﬁed or recorded as aforesaid shall not be recognized by any Court executing the decree. 17. In the instant case, the decree was passed on 8.7.1997 and according to the decree holder Rs.30,000/- was paid in three instalments i.e., Rs.20,000/- on 2.9.1998, Rs.6,000/- on 26.10.19998 and Rs.4,000/- on 16.12.1998 towards part payment of the decree, for which receipts were issued and for the balance amount he ﬁled execution petition on 24.3.1999. Just before ﬁling the E.P., the judgment debtor ﬁled a petition under Order 21 Rule 2 in E.A. No.187 of 1999 on 13.3.1999 to record the full satisfaction memo said to have been issued by the advocate of the decree holder. The judgment debtor did not furnish the particulars of the payment of Rs.30,000/- and admittedly the said full satisfaction memo has not been signed by the decree holder and the manner and method of payment of the said amounts also has not been stated either in the full satisfaction memo or in the petition and therefore the decree holder ﬁled a counter and an additional counter to reject the said E.A. ﬁled for recording the full satisfaction. 18. It is further contended that the decree holder never entered into any settlement and he did not agree to record the full satisfaction of the decree and that for the amount received he has issued receipts and if the said receipts are produced the same would disclose the fact that there was no ﬁnal settlement arrived at between the parties and the amount was received towards part payment. The judgment debtor failed to establish that the said payments are towards full satisfaction. He further contended that under Article 125 of the Limitation Act, to record an adjustment or satisfaction of a decree an application has to be ﬁled within 30 days from the date of the payment or the adjustment is made. In the instant case, Rs.30,000/- was paid in instalments i.e., Rs.20,000/- on 2.9.1998, Rs.6,000/- on 26.10.19998 and Rs.4,000/- on 16.12.1998, therefore any application for recording of adjustment or satisfaction of the decree shall be made by 15.1.1999 i.e., within 30 days from 16.12.1998 i.e., the date of last payment, but in the present case the application has been ﬁled only on 13.3.1999 i.e., with delay of about 2 months. It is further contended that once the decree is passed, it cannot be said that the same Advocate is holding the vakalath or authorization to pass on full satisfaction memo. 19. The judgment debtor who examined as P.W.1 stated that the decree holder did not pass on any receipts for payment of Rs.30,000/- and he did not remember as to when the said amount was paid in three instalments and there is no speciﬁc proof of such payment. But he states that on 24.1.99 he paid Rs.10,000/- and on 29.1.1999 he paid Rs.20,000/- and though the said amounts were received, no receipts were issued. 20. The Advocate of the decree holder was examined as P.W.2, he identiﬁed his signature on F.S. Memo /Ex.A.1 but he states that he did not ﬁle the same into the Court along with decree copy. He admits that he put his signature on Ex.A.1 without looking into the document and without asking the particulars. 21. The decree holder was examined as R.W.1 and accepted the payment of Rs.30,000/- as part payment alone and the last payment received on 16.12.1998 and thereafter he never received any payment and that he never informed his advocate either about the payment or about the settlement. He states that he never accepted for the full settlement nor authorized his counsel to pass on Ex.A.1/F S Memo. 22. No doubt, as per the aforesaid judgment in BAIRAM PESTONJI GARIALA, under Order 23 Rule 3, if the Court satisﬁes that the claim has been adjusted only or in part and such compromise in writing and signed by the parties can be recorded and the written compromise signed by the parties means the authorized representative and counsel, that means, a counsel can also enter into a written compromise signed by him on behalf of the party and it is stated that the full satisfaction memo issued by the counsel of the decree holder is a suﬃcient proof of payment of the said part money towards full satisfaction. 23. In the instant case, the Advocate of the decree holder who has signed the F.S. memo /Ex.A1 did not support the case of the judgment debtor and Ex.A.1 was not proved as admittedly the amount was not paid in accordance with the provisions of Order 21 Rules 1 and 2, therefore, it is open for the decree holder to dispute the said full satisfaction memo signed by his Advocate after passing the decree and that too without any payment particulars under Order 21 Rule 2 of CPC. 24. Therefore, we are of the opinion that when an application is ﬁled under Sub Rule 2 of Rule 2 of Order 21 CPC , it is open for the decree holder to ﬁle objection for recording the Full Satisfaction on the ground that such payment was not established as a ﬁnal and full satisfaction of the decree. In fact, the learned single Judge of this Court, while referring the matter has rightly observed that even assuming that the principle laid down by the Supreme Court in BAIRAM PESTONJI GARIALA case applies to the construction of sub-rule (1) of Order XXI Rule 2, it is open for the decree holder to dispute the genuineness of the memo ﬁled by his counsel and the Court is not bound to record the full satisfaction ignoring the objections raised by the decree holder. 25. Further, our view is supported by and is squarely covered by the judgments of the Supreme Court in SULTANA BEGUM Vs. PREM CHAND JAIN[4] and PADMA BEN BANUSHALI Vs. YOGENDRA RATHORE[5]. The relevant portion in Sultana Begum case (cited supra), reads as under; ( 19. ) Section 47, as pointed out earlier, gives full jurisdiction and power to the executing Court to decide all questions relating to execution, discharge and satisfaction of the 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-debtor before the executing Court, the latter, in view of the legislative mandate, has to ignore it if it has not been certiﬁed or recorded by the Court. ( 20. ) The general power of deciding questions relating to execution, discharge or satisfaction of decree under Section 47 can thus be exercised subject to the restriction placed by Order XXI, Rule 2 including sub-rule (3) which contains 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 47 has, therefore, to yield to that extent to the special provisions contained in Order XXI, Rule 2 which have been enacted to prevent a judgment - debtor from setting up false, or cooked-up pleas so as to prolong or delay the execution proceedings. ( 21. ) If Section 47 and Order XXI, Rule 2 are read together, as has been done by us in this case, the so-called conﬂict (we say "so called" as, in fact, there is none) stands dispelled by employing the rule of 'harmonious construction' or the other rule that the general provision must yield to the special provision. 26. Further, the Supreme Court in Padma Ben case (cited supra) held as under; ( 16.) Order XXI 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 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 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. ( 17.) 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 XXI. It may be pointed out that 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 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 XXI Rule 2 cannot be recognised by the executing court. In a situation like this, 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, the executing court would not recognise them and will proceed to execute the decree. ( 18. ) The problem can be looked into from another angle on the basis of the maxim "generalia specialibus non derogant". ( 19. ) Section 47, as pointed out earlier, gives full jurisdiction and power to the executing court to decide all questions relating to execution, discharge and satisfaction of the decree. Order XXI Rule 3, however, places a restraint on