A completed contract immediately extinguishing the decree constitutes an adjustment, while an agreement to adjust the decree on the fulfilment of a future condition does not constitute an adjustment.

This second appeal at the instance of the decree-holder stems from an application under Order 21, Rule 2. Civil Procedure Code, made by the judgment-debtor to record full satisfaction of the decree passed against him. The decree itself was one for arrears of rent and also for removal of certain kuzhikkoors planted in Item 1 of the plaint schedule by the defendant. The judgment-debtor, it appears, wanted to file an appeal, but instead he avers that the parties came to an agreement. Ext.A-3, pursuant to which he applied for the recording of the adjustment of the decree. The terms of Ext.A-3 were so construed by the decree-holder as to furnish a defence for him against the certification of the adjustment. The courts below recorded part satisfaction of the decree on the strength of Ext.A-3 and dissatisfied with the order the decree-holder has come up in second appeal contending that Ext.A-3 did not actually amount to an adjustment of the decree, but envisaged such adjustment on the fulfilment of certain conditions which remain yet to be fulfilled. Thus, the sole question that falls for decision is as to whether Ext.A-3 operates as an adjustment of the decree in part or only contemplates such adjustment on the performance of certain conditions.

2. The law on the point is clear and does not admit of any contrary lines of thought. Counsel on both sides have cited various rulings and I see no divergence in the ratio contained in these decisions. In Udham Singh v. Atma Singh, AIR 1941 Lah 149 (FB) a Full Bench of that court took the view that a completed contract which immediately extinguishes the decree operates as an adjustment within the meaning of Order 21, Rule 2. Civil Procedure Code, but if there is only an agreement to adjust the decree on the fulfilment of a future condition and the decree is still left in existence pending the fulfilment of the condition, then there is no adjustment. Their Lordships emphasised that the question really turns on the intention to extinguish the decree in praesenti. In Gulam Mohamed v. Narendranath, AIR 1963 Mad 261 a Division Bench of that court stated the same proposition in different words. The particular agreement which their Lordships dealt with stated that in case the parties did not comply with the conditions stipulated there, the decree would be executable. Obviously, that agreement did not immediately extinguish the decree, but did so only on the fulfilment of a condition. The court, therefore, directed the Subordinate Judge to ascertain whether the condition had been

fulfilled and whether the decretal liability had thereby been extinguished.

Another Full Bench of the Rangoon High Court affirmed this proposition in Arunachallam Chettyar v. V.M.R.P. Firm, AIR 1938 Rang 202. Their Lordships made it perfectly plain that a promise to do something in future is legal consideration, and if the decree-holder chooses to accept such a promise by the judgment-debtor, there is nothing in law to prevent him from doing so, and such a promise by the judgment-debtor and acceptance thereof by the decree-holder is a legal adjustment of the decree. Dunkley J. explained the correct law by an example: "If A holds a decree against B and B offers to transfer certain property to A. and A accepts that promise to transfer in whole or part satisfaction of his decree, that is a binding contract which constitutes an adjustment of the decree in whole or in part, and can be pleaded by B in bar of execution. But if A, as is usually the case agrees to accept the transfer of the property in whole or part satisfaction of his decree, at that stage there is no concluded agreement between the parties, but A has really made a counter-offer which can be accepted by B only by performance, i.e. by the actual transfer of the property. In this latter case there is no adjustment until the property has been actually transferred. The question referred will be answered in the above sense." Again, Braund J. pointed out the dis