S. K. Mahajan ( 1 ) THIS order will dispose of the application of the judgment- debtor for recording of satisfaction of the decree. Facts relevant for deciding this application are: In the matter of disputes between the parties, the Arbitrator made and published his award on 5/12/1989. In terms of the award, the decree holder was entitled to recover a sum of Rs. 45,61,435. 00. 00 alongwith interest @ 15% p. a. from the date of award till payment. The award was filed in Court and by a judgment and decree dated 31/03/1994 the award was made a Rule of the Court and a decree in terms of the award was passed. Under the decree, the decree- holder was entitled to interest @ 15% p. a. from the date of award till payment. Decree was challenged by way of appeal in the High Court. When the appeal was pending, the High Court of Madhya Pradesh in the first instance stayed the judgment and decree by its order dated 11/05/1994. This order was modified on 21/09/1995. By this order dated 21/09/1995, the Court modified the stay order with the direction that the appellant may deposit the decretal amount in the Court below within two months and the respondent could withdraw the same on furnishing a bank guarantee to the satisfaction of the District Judge. ( 2 ) THOUGH, the aforesaid order was passed on 21/09/1995, the judgment-debtor deposited a sum of Rs. 44,98,659. 00 in Court only on 20/05/1996. This amount was deposited along with the application dated 16/03/1996. It was not stated in the application that the amount deposited in Court was towards the principal amount. What was stated in the application was that in compliance of the orders of the High Court, defendant was depositing an amount of Rs. 44,98,659. 00 after deducting tax of Rs. 45,441. 00 from the decretal amount. The amount thus deposited by the judgment-debtor was not the entire decretal amount. Before this amount was deposited and before the High Court had stayed the execution of the decree, the decree-holder had filed an execution application in the Court of the Second Additional District Judge, Sidhi, Madhya Pradesh. The decree was transferred to this Court by order dated 5/04/1994. During the pendency of the execution petition, the judgment debtor had deposited the aforesaid amount of Rs. 44,98,659. The decree was transferred to this Court by order dated 5/04/1994. During the pendency of the execution petition, the judgment debtor had deposited the aforesaid amount of Rs. 44,98,659. 00 ( 3 ) BY judgment dated 1st December, 1998, the d decree was modified to the extent that the decree-holder was not held entitled to Claim No. 2 of the value of Rs. 1. 50 lacs. The High Court also directed that from the date of the decree, the decree- holder will be entitled to interest @ 6% p. a. on the decretal amount instead of 15% awarded by the Second Additional District Judge, Sidhi, Madhya Pradesh. After the decree was modified by the High Court, the judgment-debtor paid another sum of Rs. 35,67,045. 00 to the decree-holder after deducting tax at source of Rs. 65,833. 00. This amount, according to the judgment-debtor, included the balance sum of Rs. 32,25,792. 00 towards the decree, a sum of Rs. 2,91,253. 00 towards refund of security and a sum of Rs. 50,000. 00 towards refund of earnest money. The decree-holder was not satisfied with the payment of this amount and he, therefore, persisted with the execution of the decree as, according to it, a sum of Rs. 19,07,062. 00 still remained due and payable by the judgment-debtor to the decree-holder. ( 4 ) JUDGMENT-DEBTOR filed an application for satisfaction of the decree as, according to it, on payment of the aforesaid sum of Rs. 35,67,045. 00 nothing remained due and payable by the judgment-debtor to the decree-holder. It is submitted by the judgment-debtor that payment having been made in terms of Order 21, Rule 1, the decree stands satisfied and nothing is payable under the decree to the decree-holder. Order 21, Rule 1, Civil Procedure Code reliance on which has been placed by the judgment debtor reads as under : "under Rule 1 all money, payable under a decree shall be paid as follows, namely: (a) by deposit into the Court whose duty it is to execute the decree, or sent to that Court by postal money order or through a Bank; or (b) out of Court, to the decree-holder by postal money order or through a Bank or by any other mode wherein payment is evidenced in writing; or (c) otherwise, as the Court which made the decree directs. (2) Where any payment is made under Clause (a) or Clause (c) of Sub-rule (1), the judgment-debtor shall give notice thereof to the decree-holder either through the Court or directly to him by registered post acknowledgement due. (3) Where money is paid by postal money order or through a Bank under , Clause (a) or Clause (b) of Sub-rule (1), the money order or payment through Bank, as the case may be, shall accurately state the following particulars, namely: (a) the number of the original suit; (b) the names of the parties or where there are more than two plaintiffs or more than two defendants, as the case may be, the names of the first two plaintiffs and the first two defendants; (d) the number of the execution case of the Court, where such case is pending; and (e) the name and address of the prayer. (4) On any amount paid under Clause (a) or Clause (c) of Sub-rule (1), interest, if any, shall cease to run from the date of service of the notice referred to in Sub-rule (2 ). (5) On any amount paid under Clause (b) of Sub-rule (1), if any, shall cease to run from the date of such payment: Provided that, where the decree holder refuses to accept the postal money order or payment through a Bank, interest shall cease to run from the date on which the money was tendered to him, or where he avoids acceptance of the postal money order or payment through Bank, interest shall cease to run from the date on which the money would have been tendered to him in the ordinary course of business of the Postal Authorities or the Bank, as the case may be. " ( 5 ) AT the outset, learned Counsel for the decree-holder concedes that there is a mistake in the calculations made by him in his reply inasmuch as the sum of Rs. 5 lacs which has been mentioned by him in his calculations was not awarded separately but was part of the award of Rs. 44,11,425. 00. " ( 5 ) AT the outset, learned Counsel for the decree-holder concedes that there is a mistake in the calculations made by him in his reply inasmuch as the sum of Rs. 5 lacs which has been mentioned by him in his calculations was not awarded separately but was part of the award of Rs. 44,11,425. 00. The decree-holder,however, submits that in terms of Sections 59 and 60 of the Contract Act, the decree-holder was entitled to adjust the amount deposited in Court first towards the cost awarded by the Court and then towards interest which had accrued on the awarded amount and only the balance amount left was to be adjusted towards the principal amount of the decree and on the balance principal amount the decree-holder will be entitled to interest at the rate of 6% p. a. from the date of the decree. According to the decree- holder, after adjusting the amount of Rs. 44,98,659. 00 first to wards the costs and then towards interest and after the payment of Rs. 32,25,792. 00 was made towards the balance decretal amount, a sum of more than Rs. 9. 20 lacs still remained due and payable from the judgment-debtor to the decree-holder. Sections 59 and 60 of the Contract Act under which the decree-holder claims to have made adjustment read as under: "section 59 Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation, or under circumstances implying, that the payment is to be applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly. " "section 60 Where the debtor has omitted to intimate, and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debtor, whether its recovery is or is not barred by the law in force for the time being as to the limitations of suits. " ( 6 ) THE contention of Mr. Singla appearing on behalf of the judgment-debtor is that the judment-debtor is not liable to pay any amount and the decree-holder is not entitled to adjust the amount deposited by the judgment-debtor first towards costs and then towards interest. " ( 6 ) THE contention of Mr. Singla appearing on behalf of the judgment-debtor is that the judment-debtor is not liable to pay any amount and the decree-holder is not entitled to adjust the amount deposited by the judgment-debtor first towards costs and then towards interest. It is submitted by him that under Order XXI, Rule 1, Civil Procedure Code whenever any money has been deposited in Court under a decree, interest will cease to run on the decretal amount from the date of service of notice of deposit upon the decree-holder. He, therefore, submits that a sum of Rs. 44,98,659. 00 having been deposited in Court on 20/05/1996, interest will cease to run on this amount and no further amount is, therefore, liable to be paid by the judgment-debtor to the decree-holder. Reliance for this is placed by him upon a judgment of the Supreme Court in Industrial Credit and Development Syndicate v. Smithaben H. Patel and Ors. , (1999) 3 SCC 80 =11 (1999) SLT 22. Referring to paragraph 9 of the judgment, Mr. Singla contends that Sections 59 and 60 of the Contract Act would not be applicable to the facts and circumstances of the present case as they are applicable only at a predecretal stage and not thereafter. ( 7 ) IN my view, the judgment of the Supreme Court is not of any assistance to the judgment-debtor. On the contrary it supports the case of the decree-holder. The Supreme Court in this case was dealing with almost a similar situation where a decree for Rs. 5,25,451. 07 paise together with costs, current and future interest @ 18% p. a. was passed from the date of the suit till the date of payment. The decree was to be paid in monthly instalments of Rs. 20,000. 00 each commencing from 1/09/1983. In case of default, the decree-holder was entitled to seek execution of the decree. The judgment-debtors having not paid the full amount, execution pennon was filed for attachment and sale of the property. The assertion of the judgment-debtors that the full payments towards the decretal amount had been made was not accepted by the Executing Court nor did the Executing Court accepted his assertion that the payments made by him were in liquidation of the principal amount and not towards costs and interest. The assertion of the judgment-debtors that the full payments towards the decretal amount had been made was not accepted by the Executing Court nor did the Executing Court accepted his assertion that the payments made by him were in liquidation of the principal amount and not towards costs and interest. Against this judgment of the Executing Court, appeal was filed in the High Court. The appeal was accepted and the order of the Trial Court was set aside. This is how the matter went upto the Supreme Court. The Supreme Court while dealing with Order XXI, Rule 1 (1), Civil Procedure Code and Order XXI, Rule 1 (4), Civil Procedure Code and dealing with Sections 59 and 60 of the Contract Act did observe that Sections 59 and 60 of the Contract Act would be applicable only in pre-decretal stage and not thereafter. However, this observation of the Supreme Court cannot be considered in isolation. The Supreme Court has further observed in this judgment that predecretal payments have to be made either in terms of the decree or in terms of the agreement arrived at between the parties, though on the general principles as mentioned in Sections 59 and 60 of the Contract Act. The Court further held that the creditor was not bound to accept the payment on condition of the judgment-debtor. For the decrees passed by the Courts, the provision was made in unamended Order XXI, Rule 1 prior to 1976 and it was provided that the amount be deposited in Court whose duty it was to execute the decree. It was further provided by Sub-rule (2) that where any payment was made under Clause (a) of Sub-rule (1) notice of such payment was to be given to the decree-holder. It was this rule which was construed in the case reported as Meghraj v. Bayabai, (1969) 2 SCC 274 . The Court in that case held that even though the judgment-debtor while depositing decretal amount from time-to-time stated that payments were being made towards the principal due but in absence of any evidencethat the decree-holder was informed about the nature of deposit or the decree-holder appropriated it towards the principal, the ordinary rule applied and the payments by the judgment-debtor could be appropriated towards interest and cost as held in Venkatadri Appa Row v. Parthasarathi Appa Row, AIR 1922 Privy Council 233. It was further held that the amended Sub-rule (2) removes the doubt, if there was any, that the judgment-debtor is not absolved of the obligation of informing the decree-holder by written notice even in respect of deposit in Court either directly or by registered post. The purpose or addition of the expression either through Court directly or by registered post acknowledgement due is that the judgment-debtor should not only give notice of payment but he must ensure that the decree-holder has been served with the notice. The ratio laid down in Meghraj case applies now with greater rigour. ( 8 ) IT is thus clear from the judgment of the Supreme Court that unless the Court has accepted the amount deposited by the judgment-debtor towards the principal amount and the judgment-debtor has withdrawn the decretal amount knowing fully that the payment was made towards the principal amount, the decree-holder is entitled to adjust the amount deposited by the judgment-debtor first towards costs and then towards interest in accordance with the provisions of Sections 59 and 60 of the Contract Act. Madhya Pradesh High Court had permitted the judgment-debtor to deposit me decretal amount in Court but the judgment-debtor deposited only a part of the decretal amount. Decretal amount comprised of not only the principal sum awarded by the Arbitrator but also costs and interest. Judgment- debtor has nowhere in his application for deposit of a part of the decretal amount in Court mentioned that the amount being deposited was towards the principal amount of the decree. All that has been said is that in terms of the orders of the Division Bench, an amount of 44,98,659. 00 was being deposited in Court. The order of the Division Bench is clear that the decretal amount has to be deposited in Court. Entire decretal amount having not been deposited the decree-holder was entitled to aajust this amount first towards costs and then towards interest. In case the argument of learned Counsel for the judgment-debtor is accepted, it may lead to absurdity and against the provisions of law. Take for instance a case where the Court passes a decree for Rs. 40,00,000. 00 with interest. If the amount is not paid for, say, ten years, the decretal amount may swell to more than Rs. 80,00,000. 00 If the judgment-debtor deposits the sum of Rs. 40,00,000. Take for instance a case where the Court passes a decree for Rs. 40,00,000. 00 with interest. If the amount is not paid for, say, ten years, the decretal amount may swell to more than Rs. 80,00,000. 00 If the judgment-debtor deposits the sum of Rs. 40,00,000. 00 in Court after ten years and raises an argument that the principal amount of decree having been paid, he would not be liable to pay any further interest, the decree-holder, in case the contention of the judgment-debtor is accepted, may not be entitled to any further amount even if the balance sum of Rs. 40,00,000. 00 is not paid for the next ten or twenty years. That will be clearly against public policy. Insisting upon such a course would result in unnecessary burden upon the financial institutions and conferment of unwanted unilateral discretion in favour of the defaulters. Acceptance of the plea that the amount paid first should be adjusted towards the principal amount would not only be against the provisions of law but against the public policy as well. I am, therefore, of the opinion that the decree-holder has rightly adjusted the amount deposited by the judgment-debtor first towards costs, then towards interest and the balance towards principal. Application in my view is wholly misconceived and is accordingly dismissed. Ex. No. 184/95:. ( 9 ) KEEPING in view the above observations, the decree-holder may file fresh calculations as to how much amount will be due to him under the decree. Let a chart indicating the amount due from the judgment-debtor be filed within two weeks. Put up on 18/01/2001. Application dismissed.