2000 Supreme(SC) 1446

2000(6) Supreme 125
SUPREME COURT OF INDIA
(From Madras High Court)
S.S. Mohammed Quadri and Y.K. Sabharwal, JJ.
Lakshmi Narayanan -Appellant
versus
S.S. Pandian -Respondent
Civil Appeal Nos. 7809-7810 of 1997
Decided on 4-9-2000.
Counsel for the Parties :
For the Appellant : T.L.V. Iyer, Sr. Advocate, Ms. N. Annapoorani and Nagbhushan, Advocates.
For the Respondent : S. Sivasubramaniam, Sr. Advocate, Ramasubbaraju, S. Srinivasan, P.R. Salvaraj, J.B. Ravi, Advocates.

Headnote:(i) Code of Civil Procedure, 1908 -Order 21 Rules 2 and 3-Payment or adjustment out of Court-Condition precedent to recognise-When decree can be said to be extinguished and became inexecutable-Recording of compromise as contemplated in Rule is a must-Effect of compromise on executability of decree depends upon intention of parties-It is a mixed question of law and fact and has to be determined by executing Court on an application under Section 47.

       After the rights of the parties are crystallised on passing of a decree by a competent court, in law they are not precluded from settling their disputes outside the court. But to have the compromise recognised by a Court, it has to be recorded under Rule 2 of Order 21, C.P.C. The consequence of not having it so recorded is contained in Rule 3 of Order 21 of the C.P.C. Sub-rules 1 and 2 requires that where any money payable under a decree is paid out of Court or the decree of any kind is otherwise adjusted in whole or in part to the satisfaction of the decree-holder, he shall certify that payment or adjustment in the Court which is to execute the decree and the Court is enjoined to record the same. Sub-rule (2) thereof enables the judgment-debtor or a person who has become surety for him to inform the Court of such payment or adjustment and prescribes the procedure to have it recorded. Rule 3 prohibits every Court executing the decree from recognising a payment or adjustment which has not been certified or recorded by the Court under the aforementioned sub-rules. (Paras 7 & 8)

       Where in any execution proceedings objection to executability a decree is taken under Section 47 of the C.P.C. on the ground that by virtue of a compromise, the decree got extinguished and became inexecutable, the germane question that should be asked is whether the compromise was recorded by the court whose duty it is to execute the decree. (Para 10)

       In a case where parties compromise after the decree in a case has been passed, the effect of the compromise on the executability of the decree depends upon the intention of the parties, which is a mixed question of law and fact and has to be determined by the executing court on an application under Section 47 of the C.P.C. on interpretation of the decree and the compromise in the light of the facts and circumstances of each case. If on such determination it is gathered that the intention of the parties is to extinguish the decree and either the decree holder or the judgment-debtor got the compromise recorded under Rule 2 of Order 21 of the C.P.C. by the court whose duty it is to execute the decree, the execution of the decree cannot be proceeded with by the executing court. But if the intention of the parties is to keep the decree alive and to give effect to it in the manner agreed upon between the parties in the compromise, the decree will be given effect to accordingly or executed as it is depending upon whether the compromise is recorded by the court as aforementioned or not. (Para 12)

       (ii) Code of Civil Procedure, 1908 -Order 21, Rules 2 and 3-Compromise out of Court-Effect of-Eviction decree-Execution proceedings-Compromise-Part of premises given to landlord-Three years time given under compromise to vacate remaining portion-On filing compromise E.P. dismissed as not pressed-No recording of compromised as contemplated under Rule 2 of Order 21- Court cannot recognise compromise. (Para 12)

       (iii) Code of Civil Procedure, 1908-Order 21, Rules 2 and 3-Compromise-Recording of-Compromise outside Court-On filing compromise in Court execution petition dismissed as not pressed-No specific order recording compromise -Order dismissing execution petition cannot be taken as recording of compromise by executing Court. (Para 16)

       (iv) Code of Civil Procedure, 1908-Order 21, Rules 2 and 3- Compromise execution of eviction decree-Parties entering into compromise outside Court-Tenant giving possession of part of premises and landlord giving 3 years time to vacate rest of premises-Compromise stipulating that landlord could execute decree on failure of tenant to vacate and handover possession after three years-Existing decree not extinguished but time of enforcement of decree by satisfying decree in part and postponing execution of decree in respect of remaining part by three years-No bar for execution of decree in view of proviso of Rule 3 of Order 21. (Paras 13, 14, 15 & 16)