Consequences of Late Payment under Judgement and Decree

Consequences of Late Payment under Judgement and Decree Case Laws Civil Law Civil Revision Execution Judgement & Decree Knowledge - Civil Law Lahore High Court Litigation & Arbitration Solutions - Civil Law Mr. Justice Shahid Jamil Khan in his judgment has decided the issue regarding consequences of late payment under judgement and decree in Civil Revision No. 2832 of 2015.

1. This petition is filed against judgment dated 20.06.2015 passed by Additional District Judge, Chunian whereby appeal, against dismissal of execution petition, was also dismissed.

2. A compromise decree dated 05.03.2007, for specific performance, was passed against respondents No. 1, 2 & 4 on 05.03.2007. The decree was based on statement of defendant/respondent No.1 (Ihsan Ullah). One of the conditions, under the compromise, was that balance consideration of Rs.15,00,000/- shall be paid by the decree holder to the judgment debtor till 13.06.2007. Another condition was that 9 kanals 17 marlas of land would be retained by the defendants from khasra No.6037 and petitioner/decree holder would get the land leveled. The statement was signed by Ihsan Ullah and his sons Abu Hanifa and Muhammad Shafi, which was accepted by learned counsel for the petitioner/plaintiff and resulted into the compromise decree.

3. On the last date for payment of remaining consideration amount, petitioner moved an application, seeking permission to deposit the balance consideration with the Nazar Accounts. The permission was granted by the Duty Judge, with an observation that the amount may be deposited on petitioner/ applicant’s own risk. Admittedly, petition for execution of the decree was filed after deposit of the amount with Nazar. The respondent resisted the execution petition, raising objection through an application that petitioner/decree holder did not level the land to be retained by the respondent/judgment debtor, hence the compromise decree was not executable. The objection was opposed submitting that judgment debtor were creating hurdles in demarcation of the land. Executing Court appointed a local commission for report regarding leveling of the land and its demarcation. On submission of the report by local commission, respondent/judgment debtor moved an application for withdrawal of amount deposited with the Nazar. The application was allowed and plaintiff was directed to file proposed sale deed. It transpired that the Nazar Accounts (Noor Ahmad) had embezzled the deposited amount, hence on filing of an application, he appeared before the Executing Court and undertook to return the amount, however, the amount could not be recovered from him. The execution petition, being not maintainable, was dismissed vide order dated 08.12.2012. On appeal, the order of dismissal was upheld through impugned order, hence this petition.

4. Learned counsel for the petitioner submitted that the amount was deposited with permission of Court with the Nazar Accounts within the time stipulated in compromise decree, therefore, petitioner should not suffer for embezzlement of the amount by Nazar Accounts. He assailed the observations by both the Courts below that petitioner had failed to perform his part of compromise. He further contended that the Appellate Court was not justified to decline petitioner’s offer to deposit the remaining consideration of Rs.15,00,000/- at appellate stage. Learned counsel was confronted, specifically, to substantiate from record that any attempt was made by petitioner for payment of the agreed amount between the period 05.03.2007, when decree was passed, and 13.06.2007, which was last date for payment of consideration under the compromise decree; he could not reply satisfactorily.

5. Since the facts founds in the impugned orders and recapitulated ibid, are not disputed, therefore, legality of the order is examined at preliminary stage, without issuing notice to the respondents.

6. The text in Urdu from the statement of Ihsan Ullah, being gist of the compromise was emphasized by the Appellate Court part shows that remaining consideration amount was to be paid by petitioner/decree holder to the respondent/judgment debtor on or before 13.06.2007. Mere filing of an application for permission to deposit the amount with the Nazar Accounts, that too on last date, was not sufficient to fulfill the condition under the compromise decree, particularly when the application was allowed at petitioner’s own risk. Under the circumstances, the Appellate Court rightly placed reliance on Shah Wali v. Ghulam Din alias Gaman and another (PLD 1966 SC 983) to hold that after passing decree Court become functus officio, therefore, cannot change the mode of payment other than the one specified in the decree.

7. The case is also examined in light of relevant procedure, for deposit/payment of an amount under a decree. It is admitted fact that execution petition was filed after the application for depositing the amount with Nazar Accounts. Whereas, the petitioner should have first attempted to make payment to judgment debtor and on his  refusal should have filed execution petition along with an application for deposit of the amount in Court to establish his bonafide for performance of condition stipulated in compromise decree. Though the compromise decree was not a money decree, yet payment of the amount under the decree was required to be made as envisaged under Order 21 Rule 1 (1) (c) i.e., to the judgment debtor. However, on judgment debtor’s refusal to accept the amount, the application under Order 21 Rule 1 (1) (a) could be made for deposit of amount in the Court. Rule 2(3) of Order 21 of CPC clearly tells that “Any payment not made in the manner provided in rule 1 or any adjustment not made in writing shall not be recognized by the Court executing the decree”.

8. As the application for deposit of amount was filed on last date, that too without showing any effort for payment as required under the decree, hence the amount deposited in the Court cannot said to be the payment under decree. Payment of the amount, within stipulated period, was a condition precedent for execution of the compromise decree, therefore, both the Courts had rightly dismissed execution petition by holding that petitioner failed to perform his part under the compromise decree. Strength for this conclusion can be drawn from decisions by Hon’ble Supreme Court of Pakistan:

In Riaz Hussain v. Nazar Muhammad and others (2005 SCMR 1664) on preemptor’s failure to deposit the amount, under a compromise decree, the suit was held as dismissed, with the observation:

“High Court in revision non-suited pre-emptor on the ground that a valuable right had accrued in favour of vendee by non-deposit of decretal amount within time and filing of belated appeal”.

In Sheikh Attiq-ur-Rehman Sarwar v. Sajjad Hussain (2009 SCMR 684) the August Court while dealing with similar situation has held as under:

“5. The last date of the six months’ time so granted by the High Court expired on 23-3-2008 and the appellant neither paid the amount out of Court to the respondent nor deposited the same in the Court within the said period. He appeared in Court on 25-3-2008 with an application seeking permission to deposit the first installment of the decretal amount in the treasury.

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