LexDHANI RAM GUPTA & ORS. versus LALA SRI RAM & ANR.
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. ' J --·· • ' 4 G9 DHANI RAM GUPTA & ORS. A v. LALA SRI RAM & ANR. December 7, 1979 (V. R. KRISHNA fYER, R. S. PATHAK AND 0. CHINNAPPA REDDY, JJ.] B Code of Civil Procedure 1908 (V of 1908), Order XLYI Ruh• 16-Assign- nzent of <lecrce-Application for execution of decree by assignee-Adjustmient between judgment-debtor and orig,inal decree-holder after notice of such appli- cation-Exe'Cution of decree whether barred. The appe1lants who were the assignees of a decree for specific performance C of an agreement to reconvey property, filed an applica.tion for execution of the decree under Order XXI, rule 16 of the Code of Civil Procedure. Notice of the application was issued to the respondent-judgment-debtor as well as the original decree-holder. The judgment-debtor filed objections contending that the execution application was not maintainable. The application was adjourned from time to time. In the meanwhile the original decree-holder and _the judge- ment--debtor moved the executing court to record full satisfaction of the decree, D stating that they had entered into a compromise and that the decree was pro- posed to be satisfied by payment of a fixed sum of money in cash. The n1oney was paid in cash by the judgment-debtor to the original decree-holder in open court and satisfaction of the decree was recorded by the Executing Court which also observed that the compromise would not have ab.y effect whatsoever on the rights, if any, of the transferee decree-holder who had already filed the execution application pursuant_ to the deed of assignment. The execution appli- E cation filed by the appellants was thereafter taken up and dismissed on the ground that the assignees had no right to execute the decree after the judgment- debtor had satisfied the original decree-holder by entering into a compromise wit& him. In the appeal, the District Court held that the appellants had the right to execute the decree and that their right could not be defeated by the collusive F compromise entered into between the judgment-debtor and. the original decree- holder subsequent to the date of assignment and with notice of assignment. Jn the further appeal to the High Court by the judgment-debtor, it was held that the assignee of the decree had no right to execute the decree until the assignment was recognised by the Court and until that was done, it was open to the original decree holder to put the decree in execution and it was also open to the judgment-debtor to satisfy the decree fully by payment to the decree holder or by other adjustment. In the appeal to this Court by the assignees of the decree on the question whether the adjustment of the· decree between the judgment debtor and the tran~feror-decree-holder barred execution of the decree by .the transferee : HEfD: l. The High Court was wrong in holding that the adjustment G __.i between the judgment-debtor and the transferor-decree-holder even after notice 470 SUPREME COURT REPORTS [1980] 2 s.c.R, A of the application under Order XX!, rule 16 had been served on the transferor and the judgment debtor barred execution of the decree by the transferee. [ 475 DJ 2. Property in a decree must pass to the transferee under a deed of assign- ment when the parties to the deed of assignment intend such property to pass. It does not depend on the Court's recognition of the transfer. Order XXt rule 16 neither expressly nor by implication provides that assignment of a decree B does not t&ke effect until rcognized by the Court. [473 DJ c D E F 3. While Order XX! rule 16 enables the transferee to apply for executioa of the decree, the first proviso to Order XXI rule 16 enjoins that notice of such application shall be given to the transferor and the judgment debtor a:ftd that the decree shall not be executed until the court has heard their objections, if ny, to its execution. [473 El 4. The transfer as between the original decree-holder and the tramferee is effected by the deed of assignment. If the judgment-debtor has notice of lhe transfer, he cannot be permitted to defeat the rights of the transferee by CAter~ ing into an adjustment with the transferor. H the judgment-debtor bas -no \notice of the transfer and enters into an adjustment with the transferor before the transferee serves him with notice under Order XXI Rule 16 the judgment~ debtor is protected. [473 GJ In the instant case, the original decree-holder and
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