Civil Revision No.6486 of 2011(O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Civil Revision No.6486 of 2011(O&M) Date of Decision: November 2, 2011 Haryana Power Generation Corporation Limited and another .....Petitioners v. M/s Satluj Construction Limited .....Respondent CORAM: HON'BLE MR.JUSTICE RAM CHAND GUPTA Present: Mr.Vikas Suri, Advocate for the petitioners. ..... RAM CHAND GUPTA, J.(Oral) The present revision petition has been filed under Article 227 of the Constitution of India for quashing of impugned orders dated 26.9.2011, Annexure P19, dated 30.9.2011 Annexure P20, dated 1.10.2011 Annexure P23, and order dated 10.10.2011 Annexure P24 passed by learned Executing Court. I have heard learned counsel for the petitioners and have gone through the whole record carefully including the impugned orders passed by learned Executing Court. Admitted facts are that award was passed by Arbitrator on 6.1.1998 in favour of respondent-decree holder and against the present petitioners-judgment debtors. Vide the said award an amount of `2,35,27,995/- was awarded to the decree holder alongwith interest @ 18% per annum w.e.f. 1.1.1990 till the date of payment or the decree, whichever is earlier. The award was made rule of the Court vide judgment and decree dated 9.1.2001 by dismissing objections of present petitioners-judgment Civil Revision No.6486 of 2011(O&M) -2- debtors. It was also held that respondent-decree holder shall also be entitled to claim interest @18% per annum on the awarded amount from the date of award till actual realisation. Order dated 9.1.2001 was challenged by the present petitioners, however the same was dismissed upto Hon'ble Apex Court except that the interest was reduced to 9% per annum instead of 18% per annum, as awarded by Additional Civil Judge, (Senior Division), Jagadhri. Thereafter, execution petition was filed. In the execution petition as well, objections were preferred from time to time by the present petitioners-judgment debtors, which were also dismissed by learned Executing Court. Ultimately warrants of sale with regard to the attached property of judgment-debtors were ordered to be issued. The said order was challenged by the petitioners before this Court by filing revision petition primarily on the ground that warrant of sale of property of petitioners- judgment debtors has been ordered to be issued without deciding the point as to how much amount by way of interest is to be recovered by respondent- decree holder from present petitioners-judgment debtors and the revision petition was disposed of by this Court with direction to learned Executing Court to consider and decide the contention of both the parties as to how much amount by way of interest is recoverable from the petitioners- judgment debtors by respondent-decree holder, as per order passed by various courts including Hon'ble Apex Court, before proceeding further for attachment and sale of property of petitioners-judgment debtors. In compliance with the order of this Court, learned Executing Court passed impugned order dated 26.9.2011, Annexure P19, and directed the parties to re-calculate the amount of interest on the awarded amount in the light of said order and the case was adjourned for filing re-calculation. Civil Revision No.6486 of 2011(O&M) -3- However, as calculations were not filed by the parties, and as the case was old one, the calculations were made by the Court itself in pursuant to the said order, vide order dated 30.9.2011, Annexure P20, and the net amount payable on 30.9.2011 came to `4,67,71,342/-. A statement was also given by Shri S.L.Gupta, XEN, Yamuna Nagar on behalf of the petitioners- judgment debtors before the Executing Court on 1.10.2011 that the payment would be deposited by the department while reserving its right to file revision against the order passed by the Court and that the amount would be deposited positively by 10.10.2011. Hence, order dated 1.10.2011, Anenxure P23 was also passed by learned Executing Court. Fresh calculations were also furnished on behalf of petitioners-judgment debtors. The calculations furnished by the petitioners-judgment debtors were compared with the order passed by the Court of learned Executing Court. There was only slight difference in the two amounts and hence petitioners requested a date to re-calculate the same and file fresh calculations upto 10.10.2011, failing which the department would be liable to pay penal interest. Another order was passed by learned Executing Court on 10.10.2011, Annexure P24, by observing that payment of decretal amount as calculated on the last date of hearing was not made by the JD nor any fresh calculations was filed and hence order was passed for issuing warrant of sale of property of judgment debtors. It has been contended by learned counsel for the petitioners- judgment debtors that petitioners-judgments debtors are aggrieved against impugned order dated 26.9.2011 Annexure P19, passed by learned Executing Court only to the extent that decree holders were held entitled to appropriate the amount paid by judgment debtors first towards cost, then Civil Revision No.6486 of 2011(O&M) -4- towards interest and lastly towards the principal amount. It has been contended that whereas the amount should have been first appropriated towards principal and the interest should have been calculated on the remaining amount. It has been contended that the amount was deposited by petitioners-judgment debtors, as per order of the Court during pendency of appeal and that as per order of the Court 60% of the amount of principal was deposited and hence, it is contended that the amount deposited should be first appropriated towards principal amount only. He has also placed reliance upon a judgment rendered by Hon'ble Apex Court in Prem Nath Kapur and another v. National Fertilizers Corporation of India Limited and others, (1996) 2 Supreme Court Cases 71 and another judgment rendered by Hon'ble Andhra Pradesh High Court in The Oriental Insurance Company Limited v. Smt. V.Kala Bharathi and others, AIR 2006 Andhra Pradesh 31. Learned Executing Court has ordered for appropriating the deposited amount first towards cost, then towards interest and then towards principal amount by placing reliance upon Mathunni Mathai v. Hindustan Organic Chemicals Ltd., AIR 1995 SC 1572 and another judgment of this Court rendered in Bank of India v. M/s Delhi Faridabad Textiles, 1996(1) PLR 61 (P&H). Operative part of Order dated 15.1.2002, Annexure P25, passed by learned Additional District Judge, Yamuna Nagar, at Jagadhri, reads as under:- “14......So keeping in mind the totality of circumstances, I hereby order that let the appellant/applicant Civil Revision No.6486 of 2011(O&M) -5- shall deposit the net principle amount awarded by the Arbitrator in award dated 6.1.1998 which has been made rule of the Court, in the executing court within the period of one month from the date of passing of this order and the same would be withdrawn by respondent no.1/DH on furnishing adequate security for its restitution to the satisfaction of the trial Court. Security shall be accepted after giving due notice to the appellants. The amount of interest shall be calculated and deposited after the decision of appeal on merit as direction will be given by the Court at that time. However, it is made clear over here that nothing contained in this order shall be taken as my expression or opinion on the merit of the case and the same will not affect the decision on merit of appeal. With the abovesaid observations, the application for stay as moved by the appellants/applicants stands disposed of accordingly.” Against the said order passed by learned Additional District Judge, Yamuna Nagar at Jagadhri for staying execution of the decree passed in favour of respondent-decree holder, revision was filed before this Court by the present petitioners-judgment debtors on which order dated 29.1.2002, Annexure P26 was passed by this Court, which reads as under:- “Heard and perused the order of learned Additional District Judge dated 15.1.2002. I agree with the findings of the learned Additional District Judge. There is no illegality in the order. Hence, the revision is dismissed. However, as Civil Revision No.6486 of 2011(O&M) -6- per request, the petitioners are directed to deposit 60% of the amount as ordered by the learned Additional District Judge, which may be released to the respondents on furnishing adequate security. The said condition will operate till the disposal of the appeal.” The contention of learned counsel for the petitioners-judgment debtors is that as the amount was ordered to be deposited as 60% of the principal amount by learned Additional District Judge and by this Court, the same is to be taken as deposit towards principal and the interest would run only on the remaining amount, though there is no dispute that on the date when the amount was deposited as per order of the Court, interest has already been accrued and there was no order of the Court, i.e., either by Additional District Judge or by this Court that the amount so deposited would be first appropriated towards principal, if ultimately appeal filed by present petitioners-judgments debtors is dismissed. It is also pertinent to refer to order dated 7.3.2002 passed by learned Additional Civil Judge, (Senior Division), Jagadhari, Annexure P32, vide which the amount as deposited by present petitioners-judgment debtors was ordered to be delivered to respondent-decree holder wherein it was observed that amount of `1,38,28,810/- was ordered to be released to the respondent-decree holder without prejudice to the right of recovery of the balance amount, if any, though objection was taken on behalf of the present petitioners for releasing the amount given. The amount was released subject to furnishing security. Hence, in view of this background, the amount in this case was not voluntarily paid by petitioners-judgment debtors towards satisfaction of Civil Revision No.6486 of 2011(O&M) -7- the decree passed in favour respondent-decree holder. The amount was paid only as security as per order of the Court pending appeal, as it was a money decree and stay was sought by present petitioners-judgment debtors of the money decree. Hence, in my view the deposit is as per Order 41 Rule 1(3) of the Code of Civil Procedure (for short `the Code') as a condition for staying execution of the money decree. There is no specific order either by Additional District Judge or by this Court that the amount so deposited would be first appropriated towards principal amount. Law has been well settled by Hon'ble Apex Court in Meghraj and others v. Bayabai and others, 1970 AIR (SC) 161: 1970(1) SCR 523: 1969(2) SCC 274 by placing reliance upon Parr's Banking Co. v. Yates 1898(2) QB 460 and Venkatadri Appa Row v. Parthasarathi Appa Row, 48 Ind App 150. Relevant paragraphs of the judgment read as under:- “4.Under the preliminary decree an amount of `42,430- 2-6 was declared due upto June 23, 1941 towards principal and interest. The mortgagors made no payments under the decree directly to the mortgagees. But from time to time they claim to have made deposits in the Court under 0rder 21 Rule 1 of the Code of Civil Procedure, and in depositing some of the amounts they stated that the payments were towards the principal due. But there is no evidence on the record that the mortgagees were informed that the amounts were deposited towards the principal due, nor is there evidence that the mortgagees accepted the amounts towards the principal. For quite a long time the Civil Revision No.6486 of 2011(O&M) -8- mortgagees did not withdraw the amount lying in Court. Unless the mortgagees were informed that the mortgagors had deposited the amount only towards the principal and not towards the interest, and the mortgagees agreed to withdraw the money from the Court accepting the conditional deposit, the normal rule that the amounts deposited in Court should first be applied towards satisfaction of the interest and costs and thereafter towards the principal would apply. 5. In Venkatadri Appa Row v. Parthasarathi Appa Row 48 Ind App 150 the Judicial Committee of the Privy Council observed that upon taking an account of principal and interest due, the ordinary rule with regard to payments by the debtor appropriated either to principal or interest is that they are first to be applied to the discharge of interest.Lord Buchmaster delivering the judgment of the Board observed : "There is a debt due that carries interest. There are moneys that are received without a definite appropriation on the one side or on the other, and the rule which is well established in ordinary cases is that in those circumstances the money is first applied in payment of interest and then when that is satisfied in payment of the capital. That rule is referred to by Rigby, L. J., in the case of Parr's Barking Co. v. Yates 1898 2 Q.B. 460 in these words : "The defendant's counsel relied on the old rule that does no doubt apply to many cases, Civil Revision No.6486 of 2011(O&M) -9- namely, that, where both principal and interest are due, the sums paid on account must be applied first to interest. That rule, where it is applicable, is only common justice. To apply the sums paid to principal where interest has accrued upon the debt, and is not paid, would be depriving the creditor of the benefit to which he is entitled under his contract." Similar point came before this Court in Bank of India v. M/s Delhi Faridabad Textiles Pvt.Ltd., 1996(1) PLR 61: 1996(10 RRR 317 and this Court while placing reliance upon Meghraj's case (supra) and also taking into consideration the amended provision of Order 21 Rule 1 of the Code held that under Order 21 Rule 1 sub Rules (2) and (3) of the Code, judgment debtor is duty bond to give a notice or intimation to the decree holder stating the manner of appropriation of the amount deposited and if he failed to do so the decree holder within his right appropriate it first towards interest due and then towards principal. There is force in the arguments of learned counsel for the petitioners that Mathunni Mathai's case (supra), on which reliance has been placed by learned Executing Court has since been over ruled by Hon'ble Apex Court in Prem Nath Kapur's case (supra). However, neither Mathunni Mathai's case (supra) nor Prem Nath Kapur's case (supra) is applicable to the facts of present case as the said judgments were rendered under Land Acquisition Act, 1894 (for short the `Act') and it was specifically held by Hon'ble Apex Court that Order 21 Rule 1 of the Code being inconsistent with the express provision contained in Sections 34 and 28 of the Act, cannot stand extended to the cases covered by the Act. Civil Revision No.6486 of 2011(O&M) -10- However, learned Apex Court in Prem Nath Kapur's case(supra) also discussed Meghraj's case(supra) and observed that ratio of Meghraj's case (supra) is applicable to a debtor and creditor in an ordinary civil suit governed by provisions of Code. Relevant paragraph of the judgment reads as under:- “16.The ratio in Megharaj case is equally inapplicable to the appropriation of debt under the Act. It is seen that by operation of Section 53 of the Act, Order 21, Rule 1 being inconsistent with the express provisions contained in Sections 34 and 28, stands excluded. The ratio therein, therefore, is applicable only to a debtor and creditor in an ordinary civil suit governed by the provisions of the CPC. Order 21 Rule 1 being inconsistent with the express provisions contained in Sections 34 and 28 of the Act, it cannot stand extended to the cases covered by the Act. It is unfortunate that these provisions were not brought to the attention of this Court when it decided Mathunni Mathai case, which make all the deference. With due respect to our learned brethren who decided that case, we are, therefore, constrained to observe that Mathunni Mathai case cannot be taken to have laid down the correct law.” The present case is execution of ordinary money decree passed in favour of respondent-decree holder and against present petitioners- judgment debtors on the basis of award given by the Arbitrator and hence, ratio of Meghraj's case (supra) is applicable to the facts of present case. Civil Revision No.6486 of 2011(O&M) -11- It has been further contended by learned counsel for the petitioners that in view of amendment to Order 21 Rule 1 of the Code, after decision of Meghraj's case (supra), the deposited amount is to be first appropriated towards principal and then towards interest as has been held by Hon'ble Andhra Pradesh High Court in The Oriental Insurance Company's case (supra). However, the said judgment was also rendered by Hon'ble Andhra Pradesh High Court in a case for realising compensation awarded under Motor Vehicle Act, 1988, and the said judgment is also having no applicability to the peculiar facts of present case. It is pertinent to reproduce Order 21 Rule 1 of the Code, which reads as under:- “Order 21 Rule 1- Modes of paying money under decree:- (1) All money, payable under a decree shall be paid as follows, namely:- (a) by deposit into the Court whose duty it is to execute the decree, or sent to that Court by postal money order or through a bank; or (b) out of Court, to the decree-holder by postal money order or through a bank or by any other mode wherein payment is evidenced in writing; or (c) otherwise, as the Court which made the decree, directs. (2) Where any payment is made under clause (a) or clause (c) of sub-rule (1), the judgment-debtor shall give notice thereof to the decree-holder either through the Court or directly to him by registered post, acknowledgment due. (3) Where money is paid by postal money order or through a bank under clause (a) or clause (b) of sub-rule (1), the money order or payment through bank, as the case may be, shall accurately state the following particulars, namely:- (a) the number of the original suit; (b) the names of the parties or where there are more than Civil Revision No.6486 of 2011(O&M) -12- two plaintiffs or more than two defendants, as the case may be, the names of the first two plaintiffs and the first two defendants; (c ) how the money remitted is to be adjusted, that is to say, whether it is towards the principal, interest or costs; (d) the number of the execution case of the Court, where such case is pending; and (e) the name and address of the payer. (4) On any amount paid under clause (a) or clause (c) of sub- rule (1), interest, if any, shall cease to run from the date of service of the notice referred to in sub-rule (2). (5) On any amount paid under Clause (b) of sub-rule (1), interest, if any, shall cease to run from the date of such payment: Provided that, where the decree-holder refused to accept the postal money order or payment through a bank, interest shall cease to run from the date on which the money was tendered to him, or where he avoids acceptance of the postal money order or payment through bank, interest shall cease to run from the date on which the money would have been tendered to him in the ordinary course of business of the postal authorities or the bank, as the case may be.” It has been contended by learned counsel for the petitioners- judgment debtors that present case is covered under Sub Clause 3(c ) of the said Rule as the amount was deposited towards principal only. However, the plea cannot be accepted as in this case there is no specific averment on the part of petitioners-judgment debtors while depositing 60% of the principal amount that the same would be appropriated towards principal in case appeal filed by petitioners-judgment debtors is dismissed. Rather the amount was paid as per order of the Court and even no order was passed by any of the Court that the amount would be appropriated first towards principal in case appeal filed by present Civil Revision No.6486 of 2011(O&M) -13- petitioners-judgment debtors is dismissed. Hence, it cannot be said that the amount was paid under sub Clause 3(c) by petitioners-judgment debtors by making clear that the same is to be adjusted towards principal and that notice of the same was given to respondent-decree holder which was accepted by them. Rather the amount was withdrawn by respondent-decree holder without prejudice to their rights to recover the remaining amount, as has also been observed by learned Additional Civil Judge in his order dated 7.3.2002. Hence, in view of my aforementioned discussion, it cannot be said that any illegality or material irregularity has been committed by learned Court in passing the impugned orders or that a grave injustice or gross failure of justice has occasioned thereby, warranting interference by this Court. Moreover, law has been well settled by Hon'ble Apex Court in Surya Dev Rai v. Ram Chander Rai and others, 2003(6) SCC 675 : AIR 2003 SC 3044: 2004(1) RCR (Civil) 147, that supervisory jurisdiction is not available to be exercised for indulging in re-appreciation or evaluation of evidence or correcting the errors for drawing inference like a Court of appeal. It has been observed as under:- “Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied : (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby.” Civil Revision No.6486 of 2011(O&M) -14- Hence, the present revision petition is, hereby, dismissed being devoid of any merit. 2.11.2011 (Ram Chand Gupta) meenu Judge Note: Whether to be referred to Reporter? Yes/No.