Parth Credit And Capital Market Pvt. Ltd. vs Ideal Electronics Pvt. Ltd., Through Director Pavankumar Chopara

Headnote:(A) Code of Civil Procedure, 1908 - Order XXI Rule 1 and 2 - Section 47 - General principles of satisfaction of decree - Validity of payment by cheque - Where a compromise decree stipulates payment of a sum within a specific period but does not prescribe the mode of payment, tendering a cheque constitutes a valid tender. Unless it is specifically mentioned that payment must be in cash, payment by cheque, which is subsequently encashed in the ordinary course or not dishonoured, is considered due payment and relates back to the date of delivery of the cheque. (Paras 28, 32, 36)

(B) Doctrine of Res Judicata - Application in execution proceedings - If a specific application under Order XXI Rule 2 of the Code of Civil Procedure is not adjudicated upon by the executing court in previous orders of the same proceeding, a subsequent petition challenging the rejection of such application is not barred by res judicata. (Paras 21, 23, 37)

(C) Constitution of India - Article 227 - Scope of supervisory jurisdiction - Interference is warranted when the executing court commits an error resulting in a failure of justice or travels beyond the scope of execution by introducing conditions not agreed upon by the parties in the decree. (Paras 40, 41)

Facts of the case:
A compromise decree was passed requiring the judgment debtor to pay a total sum of Rs. 5,32,38,000/- within one year. The terms provided that if the amount was not paid within the year, the decree holder would be entitled to seek execution of a sale deed through the court. The judgment debtor deposited cheques for the full amount in court within the stipulated one-year period. However, the decree holder refused to accept the cheques and initiated execution proceedings for the sale deed. The executing court rejected the judgment debtor's application under Order XXI Rule 2 of the Code of Civil Procedure, holding that payment by cheque was not a valid tender.

Findings of Court:
The court found that the compromise decree did not prescribe any specific mode of payment (such as cash) nor did it contemplate payment of interest. Since the cheques were deposited within the stipulated period and were never dishonoured, they constituted a valid tender under the law. The decree holder's refusal to encash the cheques does not render the tender ineffective, and the respondent cannot benefit from its own fault in not presenting the cheques for encashment.

Issues: (i) Whether the petition is barred by the principle of res judicata? (ii) Whether the cheques tendered within the stipulated time in satisfaction of a compromise decree constitute a valid tender and whether such submission complied with the terms of the decree to avoid execution for specific performance.

Ratio Decidendi: Tendering a cheque is a valid form of payment unless cash is specifically required by a court order or agreement. A cheque, being a negotiable instrument, constitutes payment under Order XXI Rule 1 of the Code of Civil Procedure. Once a cheque is presented and not dishonoured, the payment relates back to the date of delivery. Therefore, depositing a cheque in court within the stipulated time satisfies the conditions of the compromise decree.

Result: Miscellaneous Petition allowed; impugned order quashed.

Legal Category Hierarchy

1. Execution proceedings — Satisfaction of compromise decree — Validity of tender by cheque — Order XXI Rule 2 CPC. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 )

2. Cheque as valid tender — Direct payment requirement — Res judicata bar. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 )

3. Petition allowed — Impugned order quashed — Judgment debtor directed to deposit decretal amount with interest. (Para 42 , 43 , 44 , 45 )

4. Is a petition under Article 227 barred by res judicata due to a prior order rejecting an application under Order XXI Rule 2 CPC?

No, because the prior order did not decide the same application; it only rejected an objection, not the application under Order XXI Rule 2. (Para 21 , 22 , 23 , 37 )

5. Does payment by cheque constitute a valid tender under a compromise decree when no specific mode of payment is prescribed?

Yes, payment by cheque is a valid tender. Unless cash is specifically required, a cheque, if honoured, relates back to the date of delivery and satisfies the decree. (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 39 , 40 )

6. Can an executing court impose conditions or require a specific mode of payment not stated in the compromise decree?

No, an executing court cannot travel beyond the terms of the decree. It must enforce the decree as agreed and cannot introduce new conditions like interest or mode of payment. (Para 25 , 40 , 41 )

ORDER :

ALOK AWASTHI, J.

With the consent of the parties, heard finally.

2. This petition has been filed by the petitioner/judgment debtor being aggrieved by the order dated 12.04.2025 in Execution Case No. 44/2023 pending before XIIIth District Judge, Indore by which the executing Court rejected the application filed by the petitioner under Order XXI Rule 2 read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter to be referred as "CPC").

3. Brief undisputed facts of the case that are necessary for the disposal of the present petition are that a land sale agreement between the respondent and the petitioner for Rs. 35,50,000/- was executed as security against the loan, for which a case No. 69A/2016 was filed for the enforcement of a specific agreement and another Case No. 97/2020 for the amount of Rs. 1,10,73,972/- was filed for the recovery of the money. During the said period, a compromise was reached on 20.07.2021 for Rs. 5,32,38,000/-, in which, compromise order was passed by the Court below.

4. It was stated that the petitioner had agreed to pay Rs. 5,32,38,000/- to the respondent for the settlement of both the cases and the respondent himself who wanted assistance under a specific agreement, had given up the said assistance and accepted the money and had sought the right to assistance under a specific agreement on the land in lieu of security for receiving the money. Upon settlement, the petitioner promptly paid Rs. 5,00,000/- as an installment.

5. In the compromise application (Annexure-P/1) dated 19.07.2021, in Point No. 6, it is clearly mentioned that "that if the defendant does not pay the entire amount within one year as per the mutual agreement, then in such a situation, the plaintiff will be entitled to get the sale deed of the agricultural land mentioned in the plaint situated at Badiyakima, whose details have been given in step 2, executed through the court. But the condition will be that the plaintiff will release the agricultural land in proportion to the amount paid by the defendant to the plaintiff within one year, and in respect of the remaining land, the plaintiff will be entitled to get the sale deed registered from the defendant. And if the sale deed is not registered by the defendant, then the plaintiff will be entitled to get the sale deed registered with the help of the Hon'ble Court."

6. Further, vide order dated 31.07.2023 passed in M.P. 4318/2023 by this Court, it has been held that “Heard the counsel for both the parties and perused the record. Annexure P-2 is compromise order between both the parties passed by IV District Judge, Indore in Case No.69A/2016. According to the terms and conditions of compromise that judgment debtor paid the total amount in installment of four months within a year and if total amount is not paid within a year, then the decree holder may file execution of sale deed before the Court and have right to execute sale deed through Court. But it is the duty of the plaintiff to release the land in proportion to the amount deposited by the defendant in one year."

7. In compliance with the compromise dated 20.07.2021, the petitioner satisfied the order by submitting separate cheques of Rs. 5,32,38,000/- in the name of the Court and Rs. 5,32,38,000/- in the name of the respondent in the Court of the Fourth District Judge, Indore, within one year under Order XXI Rule 1 of CPC. It is an admitted fact that the amount has been deposited by the petitioners through cheque on 18.07.2022 within one year and on 25.07.2022, the Court informed the petitioners that the respondent refused to accept the cheque within 90 days which is mentioned in the order sheet dated 24.07.2023 and the cheque has not been dishonoured till date and under Section 266 of the Income Tax Act, any transaction of more than Rs. 20,000/- shall be done through cheque and not in cash.

8. The decree holder himself has accepted on 04.10.2023 in response to the application dated 20.09.2023 submitted by the judgment d

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2026 Supreme(MP) 621

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE
ALOK AWASTHI, J.
Parth Credit And Capital Market Pvt. Ltd. And Others – Petitioners
Versus
Ideal Electronics Pvt. Ltd., Through Director Pavankumar Chopara – Respondent
MISC. Petition No. 2145 of 2025
Decided On : 27-01-2026

Payment by cheque constitutes a valid discharge of a decretal obligation unless payment in cash is specifically mandated. Provided the cheque is not dishonoured, the payment relates back to the date of delivery/tender, satisfying the conditions of the decree.

Legal Category Hierarchy

Table of Contents

4. Is a petition under Article 227 barred by res judicata due to a prior order rejecting an application under Order XXI Rule 2 CPC?

5. Does payment by cheque constitute a valid tender under a compromise decree when no specific mode of payment is prescribed?

6. Can an executing court impose conditions or require a specific mode of payment not stated in the compromise decree?

Judicial Analysis

2026 Supreme(MP) 621

IN THE HIGH COURT OF MADHYA PRADESH AT INDOREALOK AWASTHI, J.Parth Credit And Capital Market Pvt. Ltd. And Others – Petitioners Versus Ideal Electronics Pvt. Ltd., Through Director Pavankumar Chopara – RespondentMISC. Petition No. 2145 of 2025Decided On : 27-01-2026

Payment by cheque constitutes a valid discharge of a decretal obligation unless payment in cash is specifically mandated. Provided the cheque is not dishonoured, the payment relates back to the date of delivery/tender, satisfying the conditions of the decree.

Legal Category Hierarchy

Table of Contents

4. Is a petition under Article 227 barred by res judicata due to a prior order rejecting an application under Order XXI Rule 2 CPC?

5. Does payment by cheque constitute a valid tender under a compromise decree when no specific mode of payment is prescribed?

6. Can an executing court impose conditions or require a specific mode of payment not stated in the compromise decree?

Cases Referred (6)

Judicial Analysis

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE
ALOK AWASTHI, J.
Parth Credit And Capital Market Pvt. Ltd. And Others – Petitioners
Versus
Ideal Electronics Pvt. Ltd., Through Director Pavankumar Chopara – Respondent
MISC. Petition No. 2145 of 2025
Decided On : 27-01-2026