Payment out of Court to decree-holder
Full Text
(1) Where any money payable under a decree of any kind is paid out of Court, or decree of any kind is otherwise adjusted in whole or in part to the satisfaction of the decree-holder, the decree-holder shall certify such payment or adjustment to the Court whose duty it is to execute the decree, and the Court shall record the same accordingly.
(2) The judgment-debtor or any person who has become surety for the judgment-debtor also may inform the Court of such payment or adjustment, and apply to the Court to issue a notice to the decree-holder to show cause, on a day to be fixed by the Court, why such payment or adjustment should not be recorded as certified; and if, after service of such notice, the decree-holder fails to show cause why the payment or adjustment should not be recorded as certified, the Court shall record the same accordingly.
(2A) No payment or adjustment shall be recorded at the instance of the judgment-debtor unless—
(a) the payment is made in the manner provided in rule 1; or
(b) the payment or adjustment is proved by documentary evidence; or
(c) the payment or adjustment is admitted by, or on behalf of, the decree-holder in his reply to the notice given under sub-rule (2) of rule 1, or before the Court.
(3) A payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognized by any Court executing the decree.
Plain English Summary
Prohibits the executing court from recognizing any out-of-court payment or compromise unless certified by the decree-holder or recorded upon application of the judgment-debtor within the strict 30-day limitation period.
Key Legal Elements
- Certification Duty on Decree-Holder (Sub-rule 1): Required to certify satisfaction/part-satisfaction.
- Application by Judgment-Debtor / Surety (Sub-rule 2): Informing court and seeking show cause notice.
- Strict Proof Standards (Sub-rule 2A): Must be in Rule 1 mode, proved by documentary evidence, or admitted.
- Total Non-Recognition of Uncertified Payments (Sub-rule 3): Executing court is statutorily blind to uncertified payments.
- 30-Day Limitation Window: Under Article 125 of the Limitation Act, JD must apply within 30 days of payment.
Practical Note
The Trap of Out-of-Court Settlements: 1. Landmark Ruling - Sultana Begum v. Prem Chand Jain (1997) 1 SCC 373 & Padma Ben Banushali v. Yogendra Rathore (2006) 12 SCC 138: The Supreme Court ruled that under Rule 2(3), the executing court has NO jurisdiction to inquire into an uncertified adjustment or uncertified payment. Even if the judgment-debtor alleges fraud or produces cash receipts, the executing court cannot recognize it if not certified under Rule 2. 2. Article 125 Limitation: The judgment-debtor must file the application under Order XXI Rule 2(2) within 30 days of the out-of-court payment. If filed on day 31, it is barred by limitation and execution for the full decretal amount will proceed! 3. Golden Practice: Never pay cash out of court without simultaneously getting the decree-holder to sign and file a joint application under Order XXI Rule 2 CPC recording satisfaction.
हिंदी पाठ
(1) जहां किसी भी प्रकार की डिक्री के अधीन देय कोई धन न्यायालय के बाहर चुकाया जाता है, अथवा किसी भी प्रकार की डिक्री को डिक्रीदार की तुष्टि के लिए पूर्णतः या भागतः अन्यथा समायोजित (Adjusted) किया जाता है, वहां डिक्रीदार ऐसे संदाय या समायोजन को उस न्यायालय में प्रमाणित (Certify) करेगा जिसका कर्तव्य डिक्री का निष्पादन करना है, और न्यायालय उसे तदनुसार अभिलिखित करेगा।
(2) निर्णय-ऋणी अथवा उसका प्रतिभू भी न्यायालय को ऐसे संदाय या समायोजन की सूचना दे सकेगा और डिक्रीदार को कारण बताओ नोटिस जारी करने का आवेदन कर सकेगा।
(2क) निर्णय-ऋणी के कहने पर कोई संदाय या समायोजन तब तक दर्ज नहीं किया जाएगा जब तक कि: (क) संदाय नियम 1 में दी गई रीति से न किया गया हो; या (ख) दस्तावेजी साक्ष्य (Documentary evidence) द्वारा साबित न हो; अथवा (ग) डिक्रीदार द्वारा स्वीकार न किया गया हो।
(3) कोई भी संदाय या समायोजन, जो पूर्वोक्त रूप में प्रमाणित या अभिलिखित नहीं किया गया है, डिक्री का निष्पादन करने वाले किसी भी न्यायालय द्वारा मान्य नहीं किया जाएगा (Shall not be recognized)।