K. G. Jacob v. Ittyavira George — 1950 DIGILAW 9 (KER)

Judgment :- 1. The vendee of the judgement-debtor is the appellant. The defendant's property was sold in execution of the decree and on the applicant's application, the sale was set aside. As a condition precedent to the setting aside of the sale, this court directed him to deposit Rs. 15,000 without determining the actual amount due. Accordingly Rs. 15,000 was deposited by the appellant. He then filed a petition stating that the amount deposited was in excess of the decree-amount and that such excess should be refunded to him. There was dispute between the parties as to the mode of calculation made by the contesting parties and so the court directed a calculation to be made by the office. The statement thus prepared was objected to by both the sides and the present order upholding some of the objections of the parties was passed. It gave further direction as to how the calculation was to be made. The appeal is against this order. One of the decree-holders, i.e. the 2nd plaintiff has filed an objection to some of the directions given in the order. 2. Taking the appeal and the objection memorandum, the points that would arise for consideration are: (1) whether the court was justified in allowing interest on costs of both the courts exceeding a moiety; (ii) what is the sum adjudged under the decree as contemplated in S.31 clause 3 of the C.P.C. and (iii) whether the direction to the judgement-debtor to realise only half of the excess amount from the 2nd plaintiff is proper. 3. Point (i). The trial court decree was modified by the High Court so that the amount found due was a little less than that decreed by the trial court. The High Court decree had also directed that the interest on costs of the trial and appellate courts was not to exceed a moiety of the principal. The learned judge seems to think that he can ignore this provision as the new C.C. Guide does not prescribe any limit to the interest on costs. The C.C. Guide does not by that restrict the discretion of the court in passing appropriate orders regarding the interest that is to accrue on sums adjudged. The learned judge seems to think that he can ignore this provision as the new C.C. Guide does not prescribe any limit to the interest on costs. The C.C. Guide does not by that restrict the discretion of the court in passing appropriate orders regarding the interest that is to accrue on sums adjudged. When the decree provided that the interest was not to exceed a moiety of the costs awarded, the execution court is only bound to follow that direction and not to attempt to circumvent the direction and to pass orders which in effect would go against the direction given by the High Court. When the High Court definitely stated that the interest was not to exceed a moiety of the principal, the execution court was only bound to follow the same. Thus the decree-holder would not be entitled to interest on costs exceeding one-half of the principal. At any rate as regards the costs of the trial court, there would be no difficulty, for 6.4.1105 the debtor had paid 52012 fanams - 2 chs. to the decree-holder. It is open to the decree-holder to appropriate the costs of the trial court from this amount. As the appellate decree was passed only subsequently no appropriation of the High Court costs from this amount was possible. It was argued, and this argument found favour with the lower court, that since the decree-holder had not made such an appropriation before, he was not entitled to do so. This goes against the principles laid down in Padmanabha Panicker v. Padmanabha Menon (31 TLJ 68) Govindan v. Velutha Kunju (30 TLJ 9) and Damodara Shenoi v. Mohammed Rowther (57 TLR 1259). The law gives considerable latitude to the creditors in making appropriations of payments made by debtors. As pointed out in the 57 TLR case, the creditors have the right of election up to the last payment. But they may do so only when debtors do not themselves make appropriations of the payments they make at the time when the payments are made. Even under the provisions of S. 58 of the Indian Contract Act the time for the debtor to intimate the creditor how the amounts should be appropriated is at the time when he makes the payment. Even under the provisions of S. 58 of the Indian Contract Act the time for the debtor to intimate the creditor how the amounts should be appropriated is at the time when he makes the payment. When the debtor paid the amount on 6.4.1105 he had not intimated to the court or to the decree holder how the sum was to be appropriated. Besides, in the case of one composite judgment debt consisting of a principal, interest thereon, and costs of the suit, there is only one judgment debt and it does not matter whether an appropriation of payment is made by the decree-holder to the one or the other of the three component debts. The decree-holder is entitled to appropriate the payment to any one of them and he is not bound to appropriate the same to the specific component debt named by the judgment-debtor. Thus, if the trial court costs are appropriated on 6.4.1105, then the question of allowing interest over a moiety will not arise as the interest on costs had not exceeded half the costs on 6.4.1105. In regard to the High Court costs it does not appear that any appropriation has been made or pleaded. As regards this amount the lower court will allow the decree-holder only interest up to a moiety of the same. In calculating the interest on costs the lower court will bear the directions given below. 4. (Point ii). As per the High Court decree, the principal and interest till the date of the District Court decree came to 88261 fanams - O chs.15 cash and interest. The debtor had paid 52000 and odd fanams on 6.4.1105 and a balance had been struck. This came to 41842 fanams - 2 chs. 4 cash. The appellant's argument was that this latter sum should be found to be the principal due or this is to be the aggregate sum adjudged within the purview of clause 3 of S. 31 C.P.C. That clause says that it is competent for the court to decree future interest on the aggregate sum adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit, provided however, that the amount of interest accruing from the date of the decree shall not exceed the aggregate sum adjudged. It was abundantly clear that the aggregate sum adjudged was the sum found due on the date of the decree and not any balance, that remained unpaid after crediting payment subsequent to the decree. The plaintiff-decreeholder is therefore entitled to claim interest after decree of the trial court an amount equal to the aggregate sum adjudged. Such sum, according to the High Court decree came to 88261 fs. ochs 15 cash. The argument of the appellant's learned Advocate on the contrary is not acceptable. The view of the execution court in this matter is correct and it is upheld. 5. Point (iii). The decree amount in this case was due to plaintiffs 2 and 3. The 3rd plaintiff filed a petition under S.16 of the Debt Relief Act showing one half of this decree-amount as his assets. The present appellant was one of the major creditors of the 3rd plaintiff and was the counter-petitioner in the Debt Relief Act proceedings. On the motion of the 3rd plaintiff one-half of the amount held in deposit in this case on the date of the Debt Relief Act application ie. one-half of 15,000 rupees was secured to the credit of the Debt Relief Petition. Treating the same to be the assets of the 3rd plaintiff-petitioner the amount was distributed among the creditors and the present appellant got a good share out of the same. He had no objection then that the 3rd plaintiff's share would not come to Rs. 7500. On the other hand he stood by and obtained a good share out of the same. He could not now therefore say that if any excess amount is due to him the whole of that must be recovered from the amount still held in deposit in the present case. The lower court over-ruled this objection of the appellant and directed him to realise one-half of the excess amount, if any, out of the amount, if any, in that D.R. Act proceedings. This will stand. 6. No other matter was argued before us. The lower court will make a fresh calculation of the amount due under the decree and then pass appropriate orders. The appellant will get only half of any excess amount that would be due to him on a proper calculation out of Rs. 7500 held in deposit in this case. 6. No other matter was argued before us. The lower court will make a fresh calculation of the amount due under the decree and then pass appropriate orders. The appellant will get only half of any excess amount that would be due to him on a proper calculation out of Rs. 7500 held in deposit in this case. Since both the parties raised untenable contentions to some extent, we direct them to suffer their cost of this appeal.