JIWALAL Vs. BUDHA
LAWS(RAJ)-1952-8-12
HIGH COURT OF RAJASTHAN
Decided on August 08,1952

JIWALAL Appellant
VERSUS
BUDHA Respondents


Referred Judgements :-

GOPALA SWAMI NAICK VS. NAMALWAR NAICH [REFERRED TO]
MITSUI BUSSAN KAISHA VS. PADAMRAJ PHULCHAND [REFERRED TO]
KARIM BUX VS. DEBI [REFERRED TO]
RAMDAS SAHU VS. SUKHDEO RAM [REFERRED TO]
RAMAUTAR SINGH VS. THAKUR PRASAD SINGH [REFERRED TO]
MAHLUB ALI VS. MUHHAMMAD HUSSAIN [REFERRED TO]
AZIM KHAN VS. MST. SAHIB JAN [REFERRED TO]
DURGADIN VS. RAMSEWAK [REFERRED TO]


JUDGEMENT

- (1.)THIS second appeal arises out of a suit filed by Budha against Jiwa Lal, Bansidhar, Gainda Lal and Gyarsi Lal for Rs. 370/-in the Court of the Munsif, Nim-ka-Thana. Gyarsi Lal, defendant No. 5, was also made a pro forma defendant.
(2.)THE facts of the case are that Jiwa Lal obtained a decree against Budha and Gyarsi for Rs. 446-/ and towards the full satisfaction of this decree Budha and Gyarsi paid an amount of Rs. 370/- to Gainda Lal and Gyarsi Lal on the 31st of August, 1945, and it is said that Gainda Lal and Gyarsi Lal gave a discharge of the decretal amount to the judgment-debtors. THEy also credited the amount on the decree itself, and gave the papers relating to the decree to the judgment-debtors. Some time later, Jiwa Lal filed an execution application against both Budha and Gyarsi for recovery of the decretal amount, including the amount alleged to have been paid to Gainda Lal and Gyarsi Lal. THE judgment-debtors pleaded full satisfaction of the decree, but as the payment was not certified under Order XXI, rule 2, of the Code of Civil Procedure, the Court executing the decree did not take notice of the payment. THE judgment-debtor, Budha, thereupon, filed this suit against Jiwa Lal decree-holder and Bansidhar, Gainda Lal and Gyarsi Lal were also joined as defendants, as they were members of joint family of Jiwa Lal. Gyarsi, who was one of the judgment-debtors, did not become a plaintiff, and he was, therefore, joined as a pro forma defendant. THE case of the plaintiff was that he had paid the decretal amount to Gainda Lal and Gyarsi Lal, who were authorised to give a discharge of the decree to the judgment-debtors on behalf of Jiwa Lal. It was also said that Jiwa Lal, Gainda Lal, Bansidhar, and Gyarsi Lal were all members of a joint Hindu family, and that Gainda Lal and Gyarsi Lal acted on behalf of the joint Hindu family, and they were thus authorised to receive payments on behalf of the family. THE plaintiff claimed a refund of the full decretal amount, which was due at the time of the payment made by the plaintiff, consisting of the amount paid and the amount relinquished.
On behalf of Jiwa Lal and the other contesting defendants it was stated that no payment whatsoever was made by Budha Lal and Gyarsi to Gainda Lal or Gyarsilal, and it was contended that even if any payment had been made, as the decree stood in the name of Jiwa Lal, Gainda Lal and Gyarsi Lal could not give a discharge to the judgment-debtors. It was further pleaded that the decree in favour of Jiwa Lal was a personal decree and it had nothing to do with the joint family business.

The trial court held that Budha. and Gyarsi had paid Rs. 370/-to Gainda Lal and Gyarsi Lal towards the full satisfaction of the decree, and that they were authorised to receive the amount. A decree for Rs. 185/- was, therefore, passed in favour of Budha against Jiwa Lal, Bansidhar, Gainda Lal and Gyarsi Lal, being the share of Budha. The amount of the share of Gyarsi was not decreed as Gyarsi did not choose to become a plaintiff.

On appeal, the Civil Judge, Nim-ka-Thana, confirmed the decree passed by the first court. Against the judgment of the Civil Judge, Jiwa Lal, Bansidhar, Gainda Lal and Gyarsi Lal have filed this appeal, and their chief grounds are - (1) that Gainda Lal and Gyarsi Lal were not authorised to receive payment of the decree passed in favour of Jiwa Lal only; and (2) that even if Gainda Lal and Gyarsi Lal are held to have received the payment of the decretal amount on behalf of Jiwa Lal, the plaintiff has no cause of action to file this suit, as Jiwa Lal had not collected the amount twice over in execution proceedings.

This appeal was first heard by a single Judge, and the case was referred to a Division Bench as one of the points involved in the decision of the case was an important one.

As regards point No. 1, the learned counsel, who appeared on behalf of the appellants, conceded that payment to Gainda Lal and Gyarsi Lal may be treated as payment to Jiwa Lal. He, however, concentrated his arguments over the second point.

As regards the fact of payment by Budha and Gyarsi to Gainda Lal, both the courts have given a concurrent finding which cannot be agitated in second appeal. The appellants have also not raised any objection on that ground. The learned counsel for the appellants, moreover, conceded that he had nothing to say in this appeal as regards the fact of payment or as regards the point relating to the question whether Gainda Lak and Gyarsi Lal were authorised to receive payment towards the decree and to give a discharge thereof. It is, therefore, not necessary for us to go into the first question which has been abandoned.

Coming to the next question, the learned counsel for the appellants put his reliance on a decision reported as Karim Bux vs. Debi and another (1), Durgadin Hubal Sutar vs. Ramsevak and another (2), Mitsui Bussan Kaisha vs. Padamraj Fulchand and others (3) (A. I. R. 1923 Nag. 219.), and Ram Das Sahu and others vs. Sukhdeo Ram (4) have also been cited in support of the argument of the appellants. It is urged that payment towards the 'decree does not create any contractual obligation on the parties thereof, and unless a decree-holder recovers the decretal amount, which had already been paid out of the court, he cannot be sued for refund of the amount simply because an execution application is filed on his behalf. In Karim Bux vs. Debi and another (1) (A. I. R. 1933 All. 511.) the facts were similar. In that case, a payment had been made out of the court by a judgment-debtor to the decree-holder, and the decree-holder, disregarding the fact of payment, and without certifying the payment under Order XXI, Rule 2, C. P. C. , filed an execution petition for recovery of the decretal amount. It was held by a single Judge of the Allahabad High Court that "in order to create a valid contract, there must be consideration, and if a debtor pays his creditor some portion of the amount which is due, that payment cannot amount to consideration. The mere fact that the Civil Procedure Code casts upon the decree-holder a duty of certifying any such payment would not amount to consideration for the mere receipt of money which is due. " No contractual obligation was, therefore, held to exist between the parties, and the suit for refund of the amount paid out of court was, therefore, dismissed even when the decree-holder had realised the same amount over again by executing the decree. The principle laid down by this judgment has been followed in Durgadin Hubal Sutar vs. Ramsevak another (2) (A. I. R. 1950 M. B. 15.), Ram Das Sahu and others vs. Sukhdeo Ram (4) (A. I. R. 1939 Patna 156.) & Ramautar Singh vs. Thakur Prasad Singh (5) have also been referred on this point; but they do not directly deal with the question which is at issue in the present appeal. Ram Das Sahu and others vs. Sukhdeo Ram (4) is on the point of limitation, and in deciding the starting point of limitation in such a case, it has been held that the cause of action arises on the filing of an execution application. In Ramautar Singh vs. Thakur Prasad Singh (5) (A. I. R. 1935 Patna 65.) it has been held that "where a judgment-debtor has made payments but they are not certified by the opposite party, he can file a suit for recovery of such amount. " In the judgment of the aforesaid Patna case the point has not been throughly discussed, and the learned Judge who decided the case simply referred to the decisions in Viraraghava Reddi vs. Subbakka (1) ( (1892) 5 Mad. 397.) and Mahbub Ali vs. Muhammad Hussain (2) (A I R. 1927 All. 710.), and on the strength of these rulings he gave his decision. In Gopalaswami Naick vs. Nammalwar Naick (3) (A. I. R. 1919 Mad. 773.), it has been observed that - "where a decree-holder does not certify a payment made to him out of Court by the judgment-debtor towards the satisfaction of the decree under the provisions of O. 21, R. 2, Civil P. C. , and takes out execution without giving credit for such payment, the judgment-debtor has a right to sue the decree-holier for any damage he may have suffered by the latter's neglect to certify and by the proceedings in execution. " It has further been observed in the same judgment that - "in such a case the filing of the execution petition in itself gives a cause of action though no money may have been realized, and successive applications may give rise to successive breaches and fresh causes of action. If money is subsequently realized that will give a fresh cause of action as a further breach of the covenant and the amount recovered will form the main portion of the damages; but where money is not realized, the damages awarded can only be by way of compensation for any injury caused to the judgment-debtor and for any loss he may have been put to by the attempted execution of a satisfied decree. " According to this Madras decision, even though a judgment-debtor may have a cause of action to file a suit for damages on the filing of an execution petition, even though nothing is realised thereby, the amount paid out of Court towards the satisfaction of the decree can form part of the damages only when it is paid twice over to the decree-holder. In Azim Khan s/o Akhtar Khan vs. Mst. Sahib Jan w/o Ghulam Mohd. (4) (A. I. R. 1943 Pashawar 13.), Karim Bux vs. Debi (5) (A. I. R. 1933 All. 511.) has been disapproved, and it has been held that the filing of an execution application by a decree-holder against a judgment-debtor who alleges that he has paid off the decree-holder privately in itself gives the judgment-debtor a cause of action to bring a suit for relief and for doing so the judgment-debtor need not wait till he is made to pay twice over or suffer some damage. It has further been observed that - "a private payment of the decretal amount by the judgment-debtor to the decree-holder brings into existence a contract casting a duty on the decree-holder to certify that payment in Court and relieve the judgment-debtor of his responsibility to that, extent, and implies his liability to pay back the whole amount to the judgment-debtor if he fails to do so. The breach of such contract entitles the judgment-debtor to ask that the decree-holder should be made to carry out his implied promise that he shall return the money paid to him if he fails to certify the payment. The filing of execution for recovery of the whole sum due under the decree connotes the fact that the Courts would in due course recover the money from the judgment-debtor in toto. Consequently, there is no reason why the plaintiff should not be presumed to have suffered loss to the extent of the amount paid by him privately and should not be paid that amount in full with costs. The worry and expense of litigation should not be overlooked which such judgment-debtor wanted to avoid when paying the decree-holder in private. " We have also been referred to two decisions of the former Jaipur High Court in Ramkunwar vs. Lachmi Narain (6) (12 Jaipur Law Reports 79.) and Nathu Lal and another vs. Madanlal and others (7) (1948 Jaipur Law Reports 343 ). In 12 Jaipur Law Reports 79, A. I. R. 1919 Madras 773 has been followed, and the case was remanded for holding an enquiry as regards the amount of the money paid by the judgment-debtor to the decree-holder in excess of the amount credited by him towards the decree. As regards the fact whether the amount paid privately to the decree-holder should form part of the damages or not, there is no discussion in the judgment; but the fact that this case was sent back for further enquiry goes to show that the Court assumed that such an amount should form part of the damages to be claimed by the judgment-debtor. This point has been more fully discussed in 1948 Jaipur Law Reports 343 and it has been held that the cause of action in such a case arises on the filing of an execution petition for recovery of the amount already paid out of Court. A. I. R. 1943 Peshawar 13 has been referred to in this judgment with approval, and it has been held that the amount paid privately to the decree-holder should form part of the damages to be awarded to the judgment-debtor in such a case. A review of these decisions would show that there is some difference of opinion between the decisions of the High Courts in India on the question which is at issue in the present appeal. On the one side, the opinion of the Allahabad High Court is that the cause of action for refund of the amount paid to the decree-holder out of court arises only when the decree-holder in execution recovers the amount twice over. This view is supported by Madhya Bharat (A. I. R. 1950 M. B. 15) and Nagpur (A. I. R. 1923 Nag. 219) High Courts. The Madras view is that the cause of action in such a case arises on the filing of the execution application for recovery of amount already paid out of court. But in such a case the refund of the amount paid out of court would form part of the damages only when it is paid twice over to the decree-holder. The Peshawar decision goes still further and holds that the cause of action in such cases arises on the filing of an execution petition as held by the Madras High Court, and the amount already paid out of court may properly form part of the damages to be awarded to the judgment-debtor. The former Jaipur High Court also followed the Peshawar view. In our opinion, the. logic of the Allahabad decision does not appear to be sound. When a payment is made by the judgment-debtor to the decree-holder, there is an implied understanding between the parties that the decree-holder shall credit that amount towards his decree and in case of his not giving a credit of that amount towards the decree, he shall refund the amount to the judgment-debtor. This understanding cannot be regarded otherwise than by way of a contract. Receiving of ready money, where only a right to realise a decree existed, is in the nature of a good consideration for the decree-holder to give such an implied undertaking to the judgment-debtor. The fact of payment out of court carries with it the necessary implications mentioned above, and a breach of such an implied covenant should ordinarily afford a good ground for a judgment-debtor to file a suit for damages. The Madras and Peshawar decisions, which have been referred to above, have adopted the view that there is atleast an implied covenant between the parties for refund of the amount paid out of the court by a judgment-debtor to the decree-holder in the event of the latter not giving a credit thereof towards the decree. We are in agreement with this view, and, in our opinion, the amount paid out of court may form part of the damages, as has been held by the Peshawar judgment referred to above. A decree-holder by not giving a credit of the amount received by him out of court and by filing an execution petition for the recovery of such amount contravenes the implied understanding of the parties, and there is no reason why he should not be mad* to refund the amount in the event of his not giving a credit towards the decree. The judgment-debtor need not wait till the decree-holder recovers the amount twice over in order to entitle him to file a suit for the refund of the amount already paid by him. On breach of a contract a party is entitled to such damages as he suffers on account of the breach. Sec. 73 of the Contract Act lays down the rule that when a contract has been broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract, compensation for any loss or any damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew when they made the contract to be likely to result from the breach of it. In the present case, when the decree-holder received the payment, he is supposed to have given an understanding to the judgment-debtor that he would give credit of the payment towards the decree, and when the decree-holder contrary to his undertaking filed an execution petition for the recovery of the same amount which he received out of court, he shall be deemed to have broken the implied contract, affording a good ground for the judgment-debtor to claim damages from him. The amount already paid by the judgment-debtor to the decree-holder for which the latter did not give him a credit towards the decree should form part of the damages as the judgment-debtor should be supposed to have suffered loss of that amount by the decree-holder's breaking the implied contract. The view that such amount should not form part of the damages arises from the principle that there is no contract or implied covenant between the parties regarding refund of the amount paid out of court. This is the view which underlies the decision in A. I. R. 1933 Allahabad 511. We have not followed the principles laid down by the Allahabad decision, and on the assumption that there is a contract or an implied contract between the parties for the refund of the amount paid out of court by a judgment-debtor to the decree-holder for giving a credit of that amount towards the decree, it follows that on breach of such a contract or implied contract a party would be entitled to compensation for the loss or damage suffered by it. The amount already paid may be regarded as loss sustained by the judgment-debtor in such a case, and it may, therefore, form part of the damages which may be awarded to the judgment-debtor.

(3.)THIS appeal fails and is dismissed with costs. .


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