The interpretation of the term 'decree-holder' and the effect of adjustment of a decree between the judgment-debtor and the transferor prior to the transferee's application for execution of the decree.

Cornish, J.

1. The petitioner in this Civil Revision Petition is the judgment-debtor in a suit, S.C. No. 563 of 1933. The decree-holder in that suit was judgment-debtor of the present petitioner in another suit, Section C. No. 1112 of 1923. The decree-holder in the first of these suits transferred his decree to the present respondent on 5th July 1933. But on 17th August 1933 the petitioner and the decree-holder, apparently without the knowledge or consent of the transferee, made an adjustment of the decrees which they had obtained against one another. This adjustment was duly certified to the Court. An agreement was drawn up between the petitioner and the transferor which recited that the decree in Section C. No. 563 of 1933 had been transferred, and that as this transfer had not been recognized, the transferor "should file full satisfaction memo for the present". When, one year later, the transferee applied under Order 21, Rule 16 for execution of the decree in S.C. No. 563 of 1933, he was met with the objection of the judgment-debtor that the decree had been adjusted. The question is whether in the circumstances the objection can prevail. I think it must. The lower Court in coming to an opposite conclusion has proceeded on the authority in Sadagopachariar v. Raghunathachariar (1909) 33 Mad 62, where it was held that transfer of a decree is effective to pass the property in the decree without any formal recognition of it by the Court.

2. But that case, as well as the two other cases cited by the learned counsel for the respondent, Balakrishna Pillai v. Muni Reddi (1912) 14 IC 702 and Dharani Mudali v. Meenamba Bai (1912) 17 IC 617, which are in his favour, belong to a period when the definition of decree-holder" in the Code included the transferee of the decree. The present definition of "decree-holder" is more limited. It means the person in whose favour a decree has been passed. This is the meaning which the word must bear in Order 21, Rule 2, providing for the recording of satisfaction or adjustment of decree between the decree-holder and the judgment-debtor. Until the transferee has taken steps under Order 21, Rule 16, for sanction to execute the decree, the executing Court cannot recognize any other person than the decree-holder on record: Jayanarayana v. Polayya AIR 1935 Mad 383. This may involve the position that a judgment-debtor cannot safely settle his debt with the transferee prior to the transferees application under Rule 16, or that the transferee on applying to execute his decree may find, as in the present instance, that the debtor and the decree-holder have since the transfer composed the matter. But these are the risks attendant upon taking an assignment of a decree. No doubt a transferee who finds that the decree cannot be executed because the decree has already been satisfied or adjusted has his remedy by way of suit against his transferor. But this is a matter with which the executing Court has no concern. In the result, therefore, I must allow the revision petition with costs throughout.