State of Kerala, represented by the District Collector, Ernakulam v. Saramma Varghese, Sheeja Saji, and Vinu Saji Varghese

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **MONDAY, THE 4TH DAY OF DECEMBER 2017/13TH AGRAHAYANA, 1939** ## **OP(C).No. 3458 of 2017 (O)** ## **---------------------------** **E.P.NO.94/2013 IN IA.NO.1662/2012 IN LAR 313/1996.** **---------------** **PETITIONER(S)/JUDGMENT DEBTOR/RESPONDENT.: ---------------------------------------------------------------------------** **THE STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, ERNAKULAM.** **BY PUBLIC PROSECUTOR SRI.SAIGI JACOB PALATTY** ## **RESPONDENT(S)/DECREE HOLDERS/CLAIMANTS.:** **-------------------------------------------------------------------------** **,** ## **1. SARAMMA VARGHESE,** - **CHETTIYAMKUDIYIL, POTHANICAD PO, MUVATTUPUZHA, (POWER OF ATTORNEY HOLDER OF SAJI VARGHESE, DECEASED CLAIMANT) [2ND PETITIONER IN LAR, SAJI VARGHESE,** - **CHETTIYAMKUDIYIL, POTHANICAD PO, MUVATTUPUZHA (DIED). (LEGAL HEIRS RESPONDENT 2 AND RESPONDENTS 3)].** ## **2. SHEEJA SAJI,** - **W/O SAJI VARGHESE, CHETTIYAMKUDIYIL, POTHANICAD PO, MUVATTUPUZHA.** **3. VINU SAJI VARGHESE, S/O SAJI VARGHESE, CHETTIYAMKUDIYIL, POTHANICAD PO, MUVATTUPUZHA.** **THIS OP (CIVIL) HAVING COME UP FOR ADMISSION ON 04-12-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **TS** ## **OP(C).No. 3458 of 2017 (O)** ## **-------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **--------------------------------------** - **EXHIBIT P1 TRUE COPY OF THE DECREE IN LAR NO.313/96 OF THE SUB COURT, MUVATTUPUZHA DATED 12.10.2004** - **EXHIBIT P2 TRUE COPY OF THE DECREE IN LAA NO.248/05 OF THIS HON'BLE COURT,DT.12.3.2010.** - **EXHIBIT P3 TRUE COPY OF THE ORDER IN E.P NO.225/10 IN LAR 313/1996 THE SUB COURT, MUVATTUPUZHA DT.23.11.2011.** - **EXHIBIT P4 TRUE COPY OF THE ORDER IN I.A NO.1662/12 IN LAR 313/96 DATED 01.04.2013 THE SUB COURT, MUVATTUPUZHA DATED 09.04.2013** - **EXHIBIT P5 TRUE COPY OF E.P 94/13 IN LAR 313/96 OF THE SUB COURT, MUVATTUPUZHA.** - **EXHIBIT P6 TRUE COPY OF AFFIDAVIT WITH STATEMENT OF ACCOUNTS FILED IN LAR 313/96 OF THE SUB COURT, MUVATTUPUZHA.** - **EXHIBIT P7 TRUE COPY OF THE COMMON JUDGMENT IN 2591 & 2592 OF 2016 OF THIS HON'BLE COURT DATED 30.1.2017.** - **EXHIBIT P8 CERTIFIED COPY OF THE IMPUGNED ORDER DATED 25.9.2017 IN EP 94/2013 IN I.A NO.1662/2012 IN LAR 313/96 OF THE SUB COURT, MUVATTUPUZHA.** ## **RESPONDENT(S)' EXHIBITS - NIL** **------------------------------------------------** **/TRUE COPY/** **PS TO JUDGE** **TS** ## **ALEXANDER THOMAS, J** . ------------------------------------------------- O.P. (C) No. 3458 of 2017 ------------------------------------------------Dated this the 4[th] day of December, 2017 ## **JUDGMENT** The order under challenge in this original petition instituted at the behest of the judgment debtor-State of Kerala represented by the District Collector, Ernakulam is Ext.P8 order passed by the Sub Court, Muvattupuzha on the basis of the remission by this Court as per Ext.P4 common judgment rendered on 30.01.2017 in O.P.(C) Nos.2591/2015 and 2592/2015. 2. Heard Sri.Saigi Jacob Palatty, learned Senior Government Pleader appearing for the petitioner-State of Kerala. This Court as per Ext.P4 common judgment rendered on 30.01.2017 in O.P.(C) Nos.2591/2015 and 2592/2015 filed by the State of Kerala had found that no notice was served on the decree holder in the execution proceedings regarding the deposit made by the State pursuant to the Land Acquisition award. The only question before this Court in those matter was whether the judgment debtor (State of Kerala) had deposited the amount calculating the interest subsequent to the deposit of the amount. According to the State, they had paid interest for the subsequent period also. They had placed reliance on the OP(C) : 3458 of 2017 -:2:- calculation statement which was marked as Ext.P5 in O.P.(C) No.2592/2016 referred to in Ext.P7 herein. The State had filed an application for review of the earlier order and the same was dismissed and those orders of the court below were the subject matter of challenge in Ext.P7 in O.P.(C) Nos.2591/2015 and 2592/2015. This Court as perExt.P7 judgment directed the court below to reconsider the matter after adverting to the calculation statement made as per Ext.P5 therein submitted by the State and pass appropriate orders thereon after hearing both the sides. It is pursuant to the remission made by this Court as per Ext.P7 judgment that the impugned order at Ext.P8 herein dated 25.09.2017 has been rendered by the court below. 3. In the impugned order the court below has found that in the counter affidavit filed by the judgment debtor (State) it has been stated that the amount due to the decree holder as per the LAR award was deposited on 07.02.2006 and hence there is no amount due to the decree holder. The court below found that the amount deposited on 07.02.2006 is Rs.78,775/- and also noted the contention of the decree holder that since there was no notice to the claimant/decree holder about the said deposit made before the court, he could not withdraw the amount in time hence, the amount became lapsed on OP(C) : 3458 of 2017 -:3:- 31.03.2009. It is in view of this, the claimant had filed I.A. No. 1662/2012 for getting interest for the aforesaid period which was allowed by the court below. 4. It is by now well settled by the decision of the Apex Court reported in _**Mathunni Mathai v. Hindusthan Organic Chemicals Ltd.**_ [(1995) 4 SCC 26], cessation of interest under sub-rule (4) of Rule(1) of Order XXI CPC takes place not by payment alone but from the date of service of the notice referred to in sub-rule (2). It would be profitable to refer to paragraphs 3 and 4 of the above said judgment of the Apex Court in **Mathunni Mathai** 's case (supra) which read as follows: (See KLT report) “3. The right of the decree holder to appropriate the amount deposited by the judgment debtor, either in court or paid outside, towards interest and other expenses is founded both on fairness and necessity. The courts and the law have not looked upon favourably where the judgment debtor does not pay or deposit the decretal amount within the time granted as one cannot be permitted to take advantage of his own default. Therefore, the normal rule that is followed is to allow the deposit or payment if it is in part to be adjusted towards the interest due etc. In Meka Venkatadri Appa Rao Bahadur Zamindar Gam and Others, v. Raja Parthasarathy Appa Rao Bahadur Zamindar Garu, AIR 1922 PC 233 the rationale was explained thus: OP(C) : 3458 of 2017 -:4:- "There are moneys that are received without a definite appropriation on the one side or on the other, and the rule which is well established in ordinary cases is that in those circumstances the money is first applied in payment of interest and then when that is satisfied in payment of the capital". But the law or even the agreement entered between the parties may provide for adjustment of payment in a particular manner. S.60 of the Contract Act provides that, "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 limitation of suits". The words of the Section are clear. It has been construed broadly by the courts. The right of the creditor was further explained judicially in Rao Bahadur Seth Nemichand v. Seth Radha Kishen and Others, AIR 1922 PC 76 and it was held that the creditor was not bound to accept a payment on condition of the judgment debtor. For the decrees passed by courts, the provision was made in unamended O.XXI R.1 prior to 1976 and it was provided that the amount be deposited in the 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-r.(1) notice of such payment was to be given to the decree holder. It was this rule which was construed in Meghraj's case (supra). The court 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 evidence that 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 Meka Venkatadri OP(C) : 3458 of 2017 -:5:- case (supra). It may now be seen if the principle laid down in this decision stands diluted by amendment of R.1. The relevant portion of the amended Rule reads as under: ## " **O.XXI R.1.- Modes of paying money under decree** . (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 me decree, directs. (2) Where any payment is made under clause (a) or clause (c) of sub-r.(1), the judgment debtor shall give notice thereof to the decree holder either through the Court or directly to him by registered post, acknowledgment due. (3) ................................. (4) On any amount paid under clause (a) or clause (c) of sub-r.(1), interest, if any, shall cease to run from the date of service of the notice referred to in sub-r.(2)". The amended sub-r.(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 of 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 (supra) applies now with greater rigour. The reason for the rule both in the unamended and amended provision appears to be that if the judgment debtor intends that the running of interest should cease then he must intimate in writing and ensure that it is served on the OP(C) : 3458 of 2017 ## -:6:- decree holder. Sub-rules (4) and (5) added in 1976 to protect the judgment debtor provide for censure of interest from the date of deposit or payment. But the cessation of interest under sub-r.(4) takes place not by payment alone but from the date of service of the notice referred to in sub-r.(2). It is not necessary for purposes of this case to decide whether the creditor was bound to appropriate the amount towards principal once it was deposited in court and intimation of the deposit was served on the decree holder as it does not appear that the respondent ever served any notice on the appellant about the deposit. It is true that the amount, was deposited in January, 1988. But in absence of any intimation as required by sub-r.(2) and indication of manner of appropriation, the payment could not be deemed to have been appropriated towards principal unless the decree holder admits it to be so. The reasoning of the High Court that since the deposit was made in pursuance of order of this Court it would be deemed that the deposit was towards principal does not appear to be correct. Factually, there was no direction to deposit. The court only granted an interim order in respect of escalation. Therefore, the judgment debtor was bound to deposit the decretal amount in accordance with law. And that is provided for by O.21, R.1 of the Civil Procedure Code. But mere deposit in absence of any notice and intimation that it was being deposited towards principal it was for the decree holder to appropriate it towards the dues. That is what was laid down in Meghraj case (supra). 4. There is yet another reason for setting aside the order of the High Court. Once the appeal was decided and it was held that the amount awarded under the , amended Act, 1984 did not suffer from any error of law except the amount under S.23 (1-A), the parties were relegated to the same position as they were on the date when the interim order was granted. In other words, the amount due was to be paid on the OP(C) : 3458 of 2017 ## -:7:- principal amount and it cannot be urged that since the respondent had deposited the amount the principal stood paid and, therefore, no interest or solatium could be calculated on the principal amount.” 5. The court below has reiterated the admitted facts that no notice was served on the decree holder regarding the deposit. Therefore, the decree holder is entitled to get interest, if notice is not issued to the decree holder (claimant). As per the records, the amount was deposited before the court below only on 23.11.2011 and that the decree holder is entitled to get interest from 08.02.2006 onwards and that the judgment debtor (State) has failed to prove that they have paid the said interest to the decree holder (claimant). The judgment debtor failed to prove that they have deposited the amount to the subsequent period also. The Statement showing the balance amount, filed by the State, is silent about the payment of interest for the said period and the Statement only shows about the interest due till the date of deposit. It is on this basis the court below has come to the considered conclusion that the decree holder is entitled to get the amount as claimed in the execution petition and the State was directed to pay the said amount with a finding that the calculation statement filed by the decree holder (claimant) is correct in respect of OP(C) : 3458 of 2017 -:8:- the period of interest due from the date of deposit till the amount came before the court in the Execution Petition. 6. The aspect that no notice was served on the decree holder (claimant) has become a conclusive and final in the light of Ext.P4 judgment passed by this Court. It is also settled that the cessation of interest takes place only from the date of service of notice of the deposit as mentioned herein above. No factual details are given by the State to explain as to how the above said facts findings made by the court below that as per records the amount was deposited before the court below only on 23.11.2011 is wrong. Therefore, there is no point in entertaining this Original Petition. In the light of the above aspects it is ordered that this Original Petition (Civil) will stand dismissed. Sd/- **ALEXANDER THOMAS, JUDGE** ttb