K G JACOB Vs. ITTYAVIRA GEORGE

JUDGEMENT

(1.) The vendee of the judgement debtor is the appellant. The defendants property was sold in execution of the decree and on the applicants 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. 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. 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.