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Present: Ennis A.C.J. and Da Sampayo J.
VELUPILLAI v. STJNDABAPANDIANPTJLLE et ol.
228—D, G. Colombo, 52,018.
Adjustment of decree—Agreement before decree—Decree silent as toagreement—Civil Procedure Code, s. 844.
An agreement entered into by the parties to an action beforethe decree and not embodied in the decree cannot be given effectto on an application by the judgment-debtor under section 344 ofthe Civil Procedure Code for adjustment of the decree. KuppeKanny v. Caliappa Pillai 1 referred to.
^JpHE "Tacts appear from the judgment.
A. St. V. Jayewardene, for plaintiff, appellant.—Kuppe Kanny v.Caliappa Pillai, 1 on which the District Judge relies, it is respectfullysubmitted, has been wrongly decreed. Laldas Narandas v. KishordasDevi das,2 on which the Supreme Court based its judgment in(1916) 19 N. L. R. 253, had at that time been dissented from bythe High Court of Calcutta in Benode Lai Pakrashi v. BrajendraKumar Saha3 and Hassen Ati v. Gauzi Ati Mir.4 These laterdecisions it is submitted', express a sounder view than that of22 Bom. 463, and explain its true scope and effect. The learnedDistrict Judge himself ventured to double the judgment in (1916)19 N. L. R. 253, but felt bound to follow it, as the facts of thepresent case, in his opinion, were on all fours with those of the casein (1916) 19 N. L. R. 253. Any agreement affecting the decreeentered into prior to, and not embodied in, the decree cannot belooked at, much less given effect to. Otherwise decrees-will loseall their force and validity. It will open a wide door to fraud.
Tisseverasinghe, for respondents.—The faots in this case cannotbe distinguished from those in (1916) 19 N. L. R. 253. That judg-ment therefore, is binding on this Court as at present constituted.The fact that this Court having pome to a certain decisionsupported it by a judgment of an Indian High Court, which hadbeen dissented from by later judgments of another High Court,does not affect the judgment of the Supreme Court. Thatjudgment stands till it is over-ruled by a Full Bench of this Court.The agreement found by the District Judge and given effect todoes not vary or in any way affect the decree, for therespondents’ case is that the decree has been rightly entered, and is
1 (1916) 19 N. L. R. 253.
* (1896) I. L. R. 22 Bom. 463.
(1902) J. L. R. 29 Oal. 810.
(1903) I. L. R. 31 Cal.-179.
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in fact part of the agreement found by the District Judge. Theother part of the agreement now in question is confined to thesatisfaction of that decree. The Court can and should take noticeof an agreement relating to the satisfaction of a decree, althoughthat agreement had been prior to, and not embodied in, the decree.There is the authority, not of an Indian High Court, but of thePrivy Council for that proposition, Prosunno Goomwr v. Kasidaa.1To execute the decree as it stands in the face of the .agreement isfraud, and the Court is bound to inquire into it and give effect tothe real intention of the parties. If it is fraud, then ordinarily theremedy of the respondents is an action. But section 344 barssuch an action, and the only course open to him is an inquiry underthis section. The case in (1916) 19 N. L. B. 253 has, it is submitted,been rightly decided.
A. St. V. Jayewardene, in reply.
November 4, 1919. Ennis A.C.J.—
This is an appeal from an order granting an application undersection 344 of the Civil Procedure Code to have an adjustment onan agreement of a decree in the following circumstances:—Byconsent a judgment was entered on April 11, 1919, for the plaintifffor Bs. 1,750 and interest from December 19, 1918, till payment.Writ issued for the full amount. On application by- the plaintifffor execution, the defendants asserted that prior to the decree theplaintiff entered into an agreement to accept Bs. 500 in full satis-faction.
The terms of this agreement were not embodied in the decree,but the learned Judge, after inquiry, found that such an agreementhad been entered, and on the authority of the case of Kuppe Kannyv. Galiappa Pillai 2 he directed the writ to be recalled upon Bs. 500being paid into Court, and satisfaction of .the decree to be enteredin favour of the first, second, third, and eighth defendants. Theappeal is from this order.
In my opinion the case of Kuppe Kanny v. Galiappa Pillai is nota sufficient authority for the proposition that an agreement enteredinto before the decree and not embodied in the decree can be giveneffect to on an application under section 344. The circumstances ofthat case were special. The plaintiff there, in his application underthe head of " adjustment (of decree), if any,” set out an agreementto accept a definite sum in satisfaction if paid before a certain date.It appears that the sum had been paid into Court in the case beforethat date although the plaintiff was unaware of it when he appliedafter the date. The judgment dealt with the question of law, butthe decision was arrived at expressly in the circumstances of thecase. The agreement there was entered into before the decree, *
1 L. R. 191. A. 166.
* (1916) 19 N. L. R. 253.
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and was not embodied in its terms, but the plaintiff appears tohave undertaken, after the decree, to abide by it; in fact, took outwrit because he was unaware that the agreement had been compliedWith by the defendant. The application itsepf gave rise to jtheinference that there had been an adjustment after the decree. Ontire law the Indian case of Laldaa Narandas v. Kishordas Devidas 1was discussed. That case decided that the Court, on an applicationto execute a decree, could go into an inquiry as to the existenceand validity of an agreement entered into before the decree relatingto the satisfaction of the decree to be entered after the decree, andthere can be no doubt that section .344 is wide enough to admitof such an inquiry, as. was indicated by the Privy Council in theease of Prosunno Coomar v. Kasidas,2 but there is involved also thequestion, as to tbe effect which can be given to such an agreement.In Kuppe Kanny v. Caliappa Pillai the agreement before decreeappears to have* been carried forward by the act of the plaintiffhimself and ratified after the decree, but in the present case thereis no such circumstance, the plaintiff refused to accept any compo-sition in satisfaction after the decree. By the term of section 344the existence of a decree is a preliminary to any action under thesection and no agreement prior to the decree which is inconsistentwith it can ordinarily be given effect to on an application in execu-tion. This principle was enunciated in the Indian case of B.enodeLai Pakrashi v. Brajendra Kumar Saha.2
In Laldas Narandas v. Kishordas Devidas the prior agreement wasas to costs, and effected the manner of the execution of the decreeas to costs, and was inconsistent with the decree.
I would accordingly allow the appeal, with costs, in both Courts,and send the case back for further proceedings in execution.
De Sampayo J.—
The District Judge had to consider the question whether anadjustment of the decree on the basis of an agreement between theparties prior to the decree could be certified under section 344 ofthe Civil Procedure Code. In allowing the application for thatpurpose (the District Judge relied on Kuppe Kanny v. Caliappa. PillaiThe decision in that case depended largely on its specialcircumstances. In my judgment in that case, dealing with theconstruction of section 344, I referred to the Indian case LaIdasNarandas v. Kishordas Devidas.1 The later Indian decisions werenot cited to me, nor was I aware of the existence of any. Mr. A. St."V. Jayewardene has now referred us to Benode Lai Pakrashi v.Brajendra Kumar Saha 3 and Hassan Ali v. Gauzi Ali Mir, 5 in which,in the first place, it was pointed out that in the Bombay case the
2(1896) I. L. B. 22 Bom. 463.2 (1902) I. L. B. 29 Cal. 810
* L. B. 19 1. A. 166.* (1916) 19 N. L. B. 253.
• (1903) I. L. B. 31 Cal. 179.
Court was merely concerned with the question whether the existenceand validity of an agreement between the parties before an arbitrationdecree was made ought to be determined in execution qf the decreeunder the provisions of section 244 of the Indian Code of CivilProcedure (corresponding to our section 344) or in a separate suit,and not with the question whether such an agreement could begiven effect to at all; and, in the second place, the decision, so faras it intended .to hold that the Court could under section 244 go intothe question of a bargain anterior to the deoree and not inserted inthe decree, was dissented from. I think that these later Indiandecisions express a sounder view as regards the scope of the r.Tovisionin question, and that Kuppe Kanny v. Oaliappa Pilin'! (supra)should not be regarded as an authority for the order which theDistrict Judge made in this case.
I agree that this appeal should be allowed.
VELUPILLAI v. SUNDARAPANDIANPULLE et al